World Bank Document · OTO - Overseas Training Office, BAPPENAS PHRDP I - Professional Human Resource Development Project (Loan 3134-IND) PHRDP II - Second Professional Human Resource

Document of

The World Bank

Repot No. 13537-IND

STAFF APPRAISAL REPORT

INDONESIA

SECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

NOVEMBER 8, 1994

East Asia and Pacific Regional OfficeCountry Department IIIPopulation and Human Resources Operations Division

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CURRENCY EQUIVALENTS

(as of August 1994)Currency Unit = Indonesian Rupiah (Rp)

US$1.00 = Rp 2,155Rp I million = US$464

FISCAL YEAR/ACADEMIC YEAR

April I - March 31/July 1 - June 30

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

BAPPENAS - National Development Planning BoardBAPPEDA - Regional Development Planning AgencyBKPM - Investment Coordinating BoardBPLK - Center for Finance Education and Training, MOFBPPT - Agency for the Assessment and Application of TechnologyEEO - Educational Exchange OrganizationGOI - Government of IndonesiaLIPI - Indonesian Institute of SciencesLPND - Non-Departmental Government Research InstituteMENPAN - State Ministry of Utilization of State ApparatusMOEC - Ministry of Education and CultureMOF - Ministry of FinanceNASTOT - National Steering Team for Overseas TrainingOTO - Overseas Training Office, BAPPENASPHRDP I - Professional Human Resource Development Project (Loan 3134-IND)PHRDP II - Second Professional Human Resource Development ProjectPIU - Project Implementation UnitPJPT - 25-Year Long term Plan (PJPT 11 - 1994/95-2018/19)R&D - Research and DevelopmentREPELITA - Five-Year Development Plan (REPELITA VI - 1994/95-1998/99)S1, S2, and S3 - Bachelor's, Master's, and Doctoral Degrees, respectivelyS&T - Sciznce and TechnologySOE - Statement of ExpendituresSTAID - Science and Technology for Industrial DevelopmentTMPP - Development Planning and Management TechniquesTOEFL - Test of English as a Foreign LanguageTORs - Terms of ReferenceTPA - Academic Potential TestURGE - University Research for Graduate Education Project (Loan 3754-IND)

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TABLE OF CONTENTSPage No.

LOAN AND PROJECT SUMMARY ......................... iii

I. PROFESSIONAL HUMAN RESOURCE DEVELOPMENT ... ....... 1

A. Economic Background ................... , . . 1B. Research and Development in Science and Technology .... ......... 1C. Human Resource Sector Background ........................ 2D. Major Issues in Professional Human Resource Development ... ....... 3E. Government Policies for Professional Human Resource Development .... 4

II. BANK INVOLVEMENT AND LESSONS LEARNED ........... 6

A. Background ........................................ 6B. Lessons of Experience ................................. 7C. Bank Strategy and Rationale for Bank Involvement ................ 8

III. THE PROJECT ....................................... 9

A. Project Objectives .................................... 9B. Project Components and Description ......................... 9

Fellowships and Training .............................. 10National Steering Team for Overseas Training (NASTOT) .... ..... 15

C. Project Management and Implementation ...................... 15D. Project Monitoring and Evaluation .......................... 18E. Project Sustainability .................................. 19

IV. PROJECT COSTS, FINANCING, PROCUREMENT,AND DISBURSEMENT ................................. 20

A. Costs ............................................. 20* B. Financing . ........................................ 22

C. Procurement . ........................................ 22D. Disbursement . ...................................... 24E. Accounts, Audits, and Reports ............................ 25

This report is based on the findings of an appraisal mission which visited Indonesia in June/July 1994,comprising Messrs. M.H. You (Economist, Task Manager), Eamonn Darcy (Training Specialist), DavidClark (Economist, Consultant), Erik Thulstrup (Science and R&D Specialist, Consultant), and NaoshiKira (Project Assistant, Consultant). Peer reviewers were Messrs. William Rees, Lauritz Holm-Nielsen,and Zafiris Tzannatos. Mmes. Marianne Haug, Director, EA3DR, and Himelda Martinez, Chief,EA3PH, have endorsed the project.

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V. BENEFITS AND RISKS .............................. 26

VI. AGREEMENTS REACHED AND RECOMMENDATION ... ..... 27

LisT OF TABLES IN MAIN REPORT

1.1 Comparison of Science and Technology Statistics in Asia3.1 Consultant Services Requirements4.1 Summary of Project Costs by Component4.2 Summary of Project Costs by Category of Expenditure4.3 Financing Plan4.4 Procurement Arrangements

ANNEXES

1 Composition of the Civil Service, 1985, 1990, & 19922 GOI's Overseas Fellowships and Training during REPELITA V (1989/90-1993/94)3 Bank-Financed Education and Training Projects4 Placement Targets of Fellowships and Training Programs under PHRDP I and II by

Component, Type of Program, and Planned Distribution5 International and National Consultant Requirements6 Project Implementation Schedule7 Planned Supervision Schedule8 Project Quality Indicators and Quantitative Targets9 Monitoring and Evaluation10 Detailed Project Cost Estimates-Expenditure Accounts by Year and Project

Component11 Estimated Schedule of Disbursements12 Selected Documents and Data Available in the Project Files

CHARTS

1 Organizational Structure of PHRDP II2 Organizational Structure of OTO PIU3 Organizational Structure of MOF PIU4 Organizational Structure of STAID PIU

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INDONESIA

SECOND PROFESSIONAL HUMAN RESOURCEDEVELOPMENT PROJECT

LOAN AND PROJECT SUMMARY

Borrower: Republic of Indonesia

ImplementingAgency: Overseas Training Office (OTO), BAPPENAS; Ministry of Finance

(MOF); Agency for Assessment and Application of Technology(BPPT) representing Science and Technology for IndustrialDevelopment (STAID); and National Steering Team for OverseasTraining (NASTOT)

Poverty: Not applicable

Amount: US$69.0 million equivalent

Terms: Repayable in 20 years, including a grace period of 5 years, at theBank's standard variable interest rate

Commitment Fee: 0.75 percent on undisbursed loan balances, beginning 60 days aftersigning, less any waiver

Financing Plan: See para. 4.6 in SAR

Economic Rateof Return: Not applicable

Staff AppraisalReport: No. 13537-IND

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Estimated Costs: Local Foreign Total-------------- US$ million------------

Fellowships and Training

Overseas Training Office (OTO) 11.7 15.9 27.6Ministry of Finance (MOF) 5.5 11.7 17.2Science & Technology for Industrial

Development (STAID) 14.8 24.8 39.6

Subtotal 32.0 52.4 84.4

NASTOT 0.5 0.1 0.6

Total Base Costs 32.5 52.5 85.0

Physical Contingencies 1.6 2.6 4.2Price Contingencies 3.5 2.3 5.8

Total Costs /a 37.6 57.4 95.0

Financing Plan:

GOI 23.0 3.0 26.0IBRD 14.6 54.4 69.0

Total Costs /a 37.6 57.4 95.0

/a Inclusive of identifiable taxes and duties estimated at US$0.2 million equivalent.

Estimated IBRD Disbursements

Bank Fiscal Year 1995 1996 1997 1998 1999 2000 2001

Annual 5.0 15.0 15.0 13.0 11.0 7.5 2.5Cumulative 5.0 20.0 35.0 48.0 59.0 66.5 69.0

I. PROFESSIONAL HUMAN RESOURCE DEVELOPMENT

A. ECONOMIC BACKGROUND

1.1 Indonesia has achieved an impressive long term GDP growth rate, averagingover 6 percent annually in the past 25 years. In recent years, structural reformssuccessfully laid the foundation for the diversification of the economy and during this timeIndonesian economic growth has been led by the private sector. During the 1980s, therewas substantial industrial development with non-oil manufacturing expanding at an averagerate of over 12 percent per year. Nearly 80 percent of the increase in exports came fromlow-wage, low-technology industries, such as textiles and footwear, and natural resources-based manufactures, such as wood or basic metal products. It is generally agreed thatIndonesia cannot maintain its export growth without further structural change and a shiftin the economy toward higher value-added manufactures.

1.2 To sustain growth under the Second 25-year Long-Term Plan 1994-2018(PJPT II) will require well educated and highly skilled professional, managerial, scientificand technical staff throughout the economy, both in the public and private sectors. Furtherstructural transformation will put great demands on both government and industry. Theskill needs in key ministries will be greatly affected as the role of government continuesto change from one of regulation and control to that of implementing policies ofderegulation and developing policies that encourage and facilitate private sector growth.Government officials will be increasingly called upon to administer new governmentpolicies, such as new trade regulations and changed tax laws, with an increasinglysophisticated private sector. Decentralization of government planning and the move towardprovision of government services on a demand-driven basis will require increasing skillsand knowledge by government officials at the local level. Industry will face more complexgovernment policies and a more open internationally competitive environment.

1.3 The shift toward a more open economy and higher value-added manufactureswill also require an industrial system with a strengthening technology base and asubstantial base of well educated and trained science and technology (S&T) manpower.Such persons must be capable of keeping abreast of scientific and technological innovationsworld-wide and able to, and in a position to, adapt advanced technologies for industrialdevelopment in Indonesia in an environmentally responsible way.

B. RESEARCH AND DEVELOPMENT IN SCIENCE AND TECHNOLOGY

1.4 S&T for industrial development is still in its early stages. Indonesia islacking an industrial system with a strong technology base. As noted above the majorityof the industries that have contributed to the past economic development are lowtechnology industries; only a small portion of industry utilizes medium or high technology.Four-fifths of Indonesia's medium and large scale manufacturing firms have no scientistsor engineers educated to the 3-year post secondary diploma (D3) level or higher. Of thescientists and engineers working in industry in 1991, 45 percent had a D3 diploma,

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52 percent had a bachelor's (SI) degree, and only the remaining 3 percent had either amaster's (S2) or doctoral (S3) degree. 1/

1.5 In terms of some indicators of S&T development, Indonesia, as comparedto other countries in Asia, has a very small percentage of its GDP devoted to research anddevelopment (R&D); only a small share (20 percent) of that R&D is conducted by theprivate sector; and the number of researchers in S&T as a proportion of the population isvery low (Table 1).

Table 1.1: COMPAR1SON ON SCIENCE AND TECHNOLOGY STATISlCS IN ASmA

ResearchCountry Expenditures Ratio to GNP Government Share No. of Researchers(Year) (in US$ billion) (%) (%) (per 1,000 people)

Korea (1990) 5.0 1.9 16 3.7Taiwan (1990) 2.5 1.7 46 3.8Singapore (1990) 0.3 0.9 46 3.0India (1990) 6.1 0.8 77 0.3Indonesia (1991) 0.2 0.2 80 1.6

Source: National Science Foundation, Human Resources for S&T: The Asia Rezion, 1993.STAID/BPPT, S&T Indicators of Indonesia, 1993.

1.6 The Government of Indonesia (GOI) began to pursue technologicaldevelopment with a concentrated effort in the mid-1970s. A four-stage technologicaldevelopment model proposed during that time has since provided the direction for S&Tpolicy. These four stages are: (a) utilization of existing technology; (b) integration ofexisting technology; (c) implementation of applied research to improve existingtechnologies and development of new technologies; and (d) development of basic researchcapabilities to support applied research.

C. HUMAN RESOURCE SECTOR BACKGROUND

1.7 The development of human resources in Indonesia has in the past twodecades focused on providing basic education to the broadest segment of the population.Such sound policies have had high payoffs with regards to economic and socialdevelopment. At the same time, Indonesia's higher education system has developedrapidly from a small base in the early post-war period (enrolling about 2,000 students) toa full fledged system (1.9 million students in 1992, more than two-thirds studying in

1/ These data include state-owned enterprises as well as those in the private sector.

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private universities). The enrollment ratio grew from 1 percent in 1970 to 10.5 percentin 1993. This expansion, however, has been primarily at the undergraduate level, withonly limited graduate education programs. In 1991, there were 7,700 places in S2programs, and about 1,100 places in S3 programs. Graduate program enrollmentsconstitute 0.7 percent of total undergraduate enrollment in Indonesia, compared with2.4 percent in Thailand; 2.7 percent in Brazil; 3.3 percent in Mexico; 3.2 percent inChina; and 5.7 percent in Korea. As noted in para. 1.9, domestic graduate programs arein the process of improving and expanding.

D. MAJOR ISSUES IN PROFESSIONAL HUMAN RESOURCE DEVELOPMENT

1.8 Lack of Professional, Technical and Managerial Staff. The current stockof professional, managerial, and technical manpower is not adequate to meet the needs ofeconomic development and growth. Most employees simply did not have the opportunityfor graduate education. Even the government sector, which until recently hired mostIndonesians with a higher education, and still has the largest stock of workers with auniversity degree, does not have the stock of high level professional, managerial, andtechnical manpower needed to staff a modern economy. Of the 3.9 million civil servants(which include teachers and university staff totalling about 1.5 million) in 1992, only about17.2 percent had an academic degree and the percentage with an S2 or S3 degree wasabout 7.3 percent (of the 3.9 million) (See Annex 1.). Similar information for the privatesector is not available. There is still only a relatively small stock of high level scientistsand engineers in the economy, and almost all of them work in the public sector. Of thetotal number of persons outside the higher education system holding a degree in naturalscience or engineering, only 3.8 percent held an S2 or S3 degree in 1991. Ninety to95 percent of non-academic scientists and engineers work for government or a stateenterprise.

1.9 Improving Domestic Graduate Education Programs. In recent years,domestic graduate programs have been expanded and improved, to a large extent withBank funding (para. 2.3). There are now graduate faculties in 22 public and 37 privateuniversities and institutions. The graduate programs tend to be in business, business-related fields and economics, particularly in the private universities, with fewer programsin S&T. The flow of high level graduates out of the educational system into the economyis still quite small, and does not yet contain all of the high level skills necessary for furthereconomic development. The solution up to now has largely centered on sendingIndonesians overseas for graduate education; for example, almost all of the degreefellowships provided under the existing professional human resource development project(PHRDP I) have been for overseas education. Graduate education in Indonesia has beenimproving but it is still not yet capable of producing all types of high level manpowerrequirements needed to sustain growth toward the coming century; there is still a need foroverseas fellowships in many fields of study. On the other hand, graduate education formany fields is available, in private as well as public universities. More use of appropriatehigh quality domestic graduate programs by projects with fellowship components, such asPHRDP II would not only be more cost-effective, but also beneficial for the further

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development of the country's graduate programs because it would provide the universitieswith additional qualified and motivated students.

1.10 Utilization of Civfl Service. At the same time that upgrading of civilservice staff is going on, ineffective utilization of civil service staff continues, due to aninflexible system of career development, inefficient management systems, and lowremuneration for civil servants. The inflexible system of the civil service is one reasonfor inefficient utilization of some returnees of fellowship programs.

1.11 Civil Service Fellowships-Not the Answer to Overall ManpowerShortages. The ongoing PHRDP I provides fellowships to civil servants who have at leasttwo to three years of service. Planning for the fellowships is based on what the particularagencies need and the work that the particular fellows are expected to be doing three, four,or perhaps five years later. Such a fellowship scheme does not serve the needs of theentire economy. Conservative estimates indicate that in 1993 there were approximately4,000 university teaching staff and civil servant fellows enrolled in overseas degreeprograms, almost all funded by external assistance (see Annex 2). Almost all government-funded overseas fellowships available to Indonesians have been for civil servants, and veryfew are available for individuals who are neither a civil servant nor an employee of apublic enterprise. Data for 1991 showed that about 4 percent of government scientists heldan S2 or S3, but less than 0.1 percent entered government with such a degree. Sincealmost all high level scientists and engineers work for the government, it is noexaggeration to say that currently virtually the only source of high level technicalmanpower to the economy is fellowships to government employees. A balanced strategyfor human resource development should include an increased supply of high levelmanpower for both the public and private sectors.

1.12 Furthermore, such a fellowship scheme may not be selecting the best andbrightest candidates. The processes of selecting civil servants is a limiting factor toselecting the best candidates. Open merit-based competition for available fellowshippositions would ensure that the best candidates are chosen. The likely aggregatedmanpower needs and trends used at the time of selection, to determine fields of study forfellows would need to be updated periodically. Actual job openings at the time thefellowship holder completes the degree would then determine where this individual and hisor her high level skills could best be used in the economy.

E. GOVERNMENT POLICIES FOR PROFESSIONAL HUMAN RESOURCE DEVELOPMENT

1.13 The Government has been following a balanced strategy toward educationaldevelopment. It has expanded access to primary and secondary education and theenrolment ratio now stands at 117 percent for primary education and 45 percent forsecondary. The Government has just begun implementing a nine-year basic educationprogram, which extends basic education to junior secondary education (grades 7-9), as wellas its programs to improve the quality of basic education. The Government recognizes theimportance of extended 9-year basic education as the critical foundation for humanresource development. Regarding higher education and higher level professional humanresources the Government is following a dual strategy: (a) supporting the growth and

_ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ----- --

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qualitative improvement of domestic undergraduate and graduate education in the long run;and (b) meeting immediate shortages through fellowships in the short run. TheGovernment's fellowship policy, often assisted by Bank financing, has been to upgrade thecurrent stock of manpower: retrain or upgrade existing civil servants through overseasfellowships to meet the high level manpower needs of the economy-needs that have notbeen met by the normal workings of the educational system prior to employment in thecivil service.

1.14 In the broader human resource sector, major government themes to increasethe quality of human resources and economic efficiency, including industrial developmentpolicies, have been laid out in all three major government planning documents: (a) 1993Guidelines of State Policies (GBHN); (b) Sixth Five-Year Development Plan 1994-1998(Repelita VI); and (c) Second 25-year Long-term Plan (PJPT II). In these plans, theGovernment aims to strengthen its capacity in making and managing policies and providingpublic services at national and local levels. The Government has issued three GovernmentDecrees in April 1994 on education and training for professional development designed toimprove the quality of civil service performance through better training and careerdevelopment for staff.2/ The Government intends to support the successfulimplementation of these policies by improving the capabilities of professional, technical,and managerial staff using overseas and domestic training programs.

1.15 In the S&T sector, the four-stage technological development model (para.1.6) has become the national S&T policy for the PJPT II. The Government is promotingthe increase of research and development (R&D) in both public and private sectors, andaims to increase the share of R&D financed by the private sector considerably, from thecurrent 20 percent, by the end of PJPT II in 2018/19. The immediate objectives duringRepelita VI are improving the capability to utilize, develop, and adapt and keep abreastof S&T by increasing the technology transfer capability, supported by a better quality ofhuman resources, and encouraging participatory research between public and the privatesectors. While the long-term goals for S&T development are to focus on the privatesector, short-term strategies are to strengthen goverrnent S&T institutions, particularlythe LPNDs by building up the stock of high level technical manpower in those institutes,improving their management systems, and putting an emphasis on their linkages toindustry.

2/ They are Govermnent Decrees, No. 14 on Education and Training of Position for CivilServants; No. 15 on Appointment of Civil Servants to Structural Positions; and No. 16 onFunctional Positions of Civil Servants.

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II. BANK INVOLVEMENT AND LESSONS LEARNED

A. BACKGROUND

2.1 Since the early 1970s, the Bank has financed 31 education and trainingprojects, amounting to total loans of US$1,882 million. Of these, 20 projects have beenimplemented through the Ministry of Education and Culture (MOEC) with total loans/credits of about US$1,277 million, while the remaining 11 projects have been implementedthrough several other ministries for the development of specialist and professional trainingservices with a total value of US$598 million (See Annex 3).

2.2 In the higher education subsector the Bank has taken a broad view ofsectoral needs. There have been six loans that have supported fellowship programs toincrease the current quality and quantity of high level manpower and five loans to highereducation projects designed to increase domestic capacity to produce such skills in thefuture.

2.3 The higher education projects to increase current capacity have been: (a) theFirst University Development Project (Loan 1904-IND), which supported investments tostrengthen university management and to raise the quality and number of graduates inselected fields at three specific public universities; (b) the Second University DevelopmentProject (Loan 2547-IND), which supported the establishmnent of 16 new Inter-UniversityCenters (IUCs) to develop research and advanced training capacity in emerging inter-disciplinary scientific and technological fields; (c) the First and Second Higher EducationDevelopment Projects (Loans 2944-IND and 331 1-IND), which financed three-year time-slices of broad-based subsectoral programs to address a wide range of issues; and (d) therecently approved University Research for Graduate Education (URGE) Project (Loan3754-IND), which will focus exclusively on qualitative improvements of universityresearch and graduate education through the establishment of a variety of incentivesystems, in order to improve the domestic capacity for graduate education.

2.4 The training and overseas fellowship projects to upgrade the professional,technical and managerial capacity of civil servants have been: (a) the Science andTechnology Training Project (Loan 2599-IND), which supported staff development forLPNDs and was coordinated by the Agency for the Assessment and Application ofTechnology (BPPT): and (b) the Professional Human Resource Development Project(PHRDP I, Loan 3134-IND), the precursor to the proposed PHRDP II. In addition, theBank has assisted in more specialized projects which have contained a substantial numberof overseas fellowships, including assistance to upgrade accountants and financialmanagement (Loan 2940-IND), human resources development associated with the treecrops subsector (Loan 2992-IND), and professional personnel in the Ministry of PublicWorks (Loans 2258-IND and 3112-IND).

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B. LESSONS OF EXPERIENCE

2.5 Specific lessons from previous Project Completion Reports (PCRs), ProjectPerformance Audit Reports (PPARs) and an Impact Evaluation Report 3/ have beencontinually feeding into succeeding fellowship project design. For example, useful lessonshave been learned about institutional development, such as to: (a) locate ProjectImplementation Units (PIUs) within existing structures; (b) ensure the early appointmentand continuity of key project staff; (c) ensure adequate coordination and communicationamong implementing agencies; and (d) provide pre-departure language training to overseasfellows.

2.6 The primary goal of the first PHRDP, upon which the proposed project isbased, has been to improve the quality of professional, technical, and managerial staffcapabilities. The bulk of the loan amount was devoted to overseas fellowships for civilservants, and in a few cases, employees of state-owned strategic industries, privateuniversities and hospitals. The implementation of the ongoing PHRDP I has beensatisfactory. Fellowships have been closely monitored, selected candidates were of goodquality, most completed their degrees, and virtually all returned to Indonesia. The largeamount of consultant services utilized in the project for capacity building and studies wasbeneficial. The Science and Technology for Industrial Development (STAID) componentof the project produced policy studies which have been used as inputs into implementationmeasures by the Government, Bank and other donors, and new management andadministration systems, which have either been implemented or tested on a pilot basis.Overseas Training Office (OTO) and STAID components have started longitudinal studieson the beneficiaries of their respective fellowship programs in order to improve theutilization of returnees.

2.7 Major lessons learned from the ongoing PHRDP I, as well as the Scienceand Technology Training Project (Loan 2599-IND),4/ are the importance of: (a) abalanced strategy for high level human resource development, which would support anincreased supply of high level manpower available to the entire economy, not just thepublic sector; (b) more use of appropriate domestic graduate programs, which would notonly be more cost-effective, but also beneficial for the development of such programs sinceit would provide them with additional funds as well as qualified and motivated students;(c) improved utilization of fellowship returnees; (d) more use of self-financing among theLPNDs, which make them more operationally flexible and responsive to the needs ofprivate industries; and (e) improved institutional arrangements for: (i) the overallcoordination of graduate degree training for all civil servants which is not being effectivelyaddressed by the reconstituted National Steering Team for Overseas Training (NASTOT);and (ii) the monitoring of performance for the project components to stay within budgetlimits and not to r,ommit expenditures beyond the end of the project.

3/ Impact Evaluation Report: Indonesia: Sustainability of the First and Second EducationProjects, Report No. 767, 1989.

4/ The Project Completion Report: Indonesia: Science and Technology Training Project, ReportNo. 12560.

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2.8 The design of the proposed project has incorporated the above lessons in thefollowing ways: (a) each component would provide, on a pilot basis, overseasfellowships 5/ for fresh SI graduates, on a pilot basis; (b) each component would utilizein-country graduate programs where appropriate; (c) STAID would strengthen alreadydeveloped measures, while OTO and Ministry of Finance (MOF) are developing specificmeasures, to improve the utilization of returnees from fellowship programs; and(d) NASTOT is being strengthened and supported to better perform its role.

2.9 Governments in East Asia, including Singapore, Republic of Korea, andJapan, have all made wide use of overseas fellowships to upgrade the capabilities of theirwork force and to meet the needs of a rapidly changing world economy. In most countriesthese policies are continuing. These countries see the benefits of continuing a program ofoverseas training to further their economic development, even after their own universitysystem is of high quality. Such experience would appear to justify a continued but limiteduse of overseas fellowships by the Indonesian government even as domestic universitiescontinue to develop and grow.

C. BANK STRATEGY AND RATIONALE FOR BANK INVOLVEMENT

2.10 As highlighted in the Bank's Country Assistance Strategy for Indonesiawhich was presented to the Executive Directors on April 12, 1994, human resourcedevelopment is a key objective. In line with this objective, the Bank is supporting a highereducation portfolio consisting of: (a) well-focused investment projects that address areasof specific weaknesses within a long-term policy framework, such as the recently approvedURGE project which focuses on the weaknesses of university research and graduateeducation; and (b) sectoral investment projects, such as the ongoing Second HigherEducation Development Project and the proposed Industrial Technology DevelopmentProject which would support technology development in the private sector, and which iscomplementary to the STAID component under the proposed PHRDP II.

2.11 The proposed PHRDP II is an investment program for human resourcedevelopment that focuses on specific weaknesses, namely the lack of professional,managerial, and technical personnel necessary to manage the changing economy to sustaingrowth in Indonesia. PHRDP I and other earlier related projects have focused on broad-based education and training for civil servants. The proposed PHRDP II would concludethe Bank's support for the special program of overseas fellowships for civil servants(which do not have a specific sector or project focus, e.g., university lecturers andfinancial sector experts) and provide a basis for planning a new type of competitiveoverseas fellowship program for individuals to serve the needs of the entire economy. Assuch it would complement the URGE project, which includes over 900 open merit-basedfellowships for fresh SI graduates to attend domestic graduate programs in order toimprove the quality of domestic graduate programs and to augment the flows of high levelmanpower to the economy.

5/ The URGE project includes over 900 open merit-based fellowships for domestic graduateprograms.

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2.12 Furthermore, the civil service fellowships in the proposed PHRDP II havebeen prepared within the framework of the Bank's larger involvement in Indonesia's highereducation and training strategies, overall human resource development policies, and civilservice reforms. In particular, the project would call for utilizing domestic graduateeducation for upgrading civil servants where appropriate programs exist and developingrealistic strategies for more efficient utilization of high level manpower in the publicsector.

III. THE PROJECT

A. PROJECT OBJECTIVES

3.1 The proposed project is a follow-up of the ongoing PHRDP I and has theseobjectives: to foster economic development and industrialization and facilitate policies ofderegulation and decentralization by upgrading the quality of professional, managerial, andscience and technology staff in key government ministries and agencies both at local andnational levels and, on a limited scale, in the private sector.

B. PROJECT COMPONENTS AND DESCRIPTION

3.2 The proposed project would comprise the following two components:

Fellowships and Training Component consisting of three subcomponents with a similarrange of activities but for different client groups and subject areas: (a) Overseas TrainingOffice (OTO); (b) Ministry of Finance (MOF); and (c) Science and Technology forIndustrial Development (STAID). The three subcomponents would: (a) provide domesticand overseas degree and non-degree fellowships to professional, managerial, and scienceand technology staff of key government ministries and agencies at national and local levels;(b) provide overseas fellowships in appropriate professional, managerial and technicalsubjects not yet available in Indonesia to fresh SI graduates, on a pilot basis; (c) improvereentry procedures for the utilization of past, present, and future fellowship holders; and(d) facilitate overseas degree and non-degree programs of private and public firms bymaking available such services as testing, placement, and monitoring.

The National Steering Team for Overseas Training (NASTOT) Component which wouldhelp NASTOT play a more effective role in formulating policy, coordinating andmonitoring the civil service fellowships and the pilot programs for fresh S1 graduates, andundertaking the studies to lead to development of a possible new merit-based nationalfellowship scheme.

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Fellowships and Training (Total Estimated Cost US$94.3 million includingcontingencies)

3.3 Domestic and Overseas Graduate Degree Programs for Civil Servants.The objective of the proposed OTO subcomponent would be to provide graduate educationand training in development planning, policy analysis, and development management forselected staff at key ministries and agencies, such as the National Development PlanningBoard (BAPPENAS), Institute for Public Administration, the Ministries of Home Affairsand Public Works, Regional Development Planning Agencies (BAPPEDAs), and selectedNGOs. The OTO subcomponent would support 166 fellows in graduate degree programs,including 49 in domestic universities, and 107 overseas.

3.4 The objective of the proposed MOF subcomponent would be to providegraduate education and training in finance and monetary policy, economic planning,financial management, and international trade for selected staff of MOF, the InvestmentCoordinating Board (BKPM), and the Ministries of Industry, Trade, and Foreign Affairs.The MOF subcomponent would support 185 fellows in graduate degree programs, 65 indomestic universities and 120 overseas.

3.5 The objectives of the STAID subcomponent would be to upgrade the qualityof S&T and related management staff in LPNDs and the Ministries of Agriculture andIndustry. The STAID subcomponent would support 130 fellowships each for domestic andoverseas graduate degree programs. The areas of study to be supported would beprioritized for S&T programs related to economic and industrial development in line withnational development objectives.

3.6 A fellow would be sent to a domestic university when an appropriate studyprogram of sufficient quality is available; if an appropriate domestic program is notavailable the fellow can be sent overseas. Neither OTO nor MOF subcomponents useddomestic graduate programs for its fellowship program during PHRDP I. The shift towardthe use of domestic programs, when appropriate programs are available, would not onlybe more cost effective, but would also help to enhance the quality of domestic graduateprograms through the participation of motivated, high-quality students. Duringnegotiations, assurances were provided that the criteria and procedures for all threesubcomponents, acceptable to the Bank, by which applicants would be directed to adomestic or overseas graduate degree program would be provided to the Bank by April 30,1995 [para. 6. 1(a)], (see Annex 4 for the distribution of domestic and overseas fellowshipsunder PHRDP I and planned for PHRDP II). In addition to the new fellowships describedabove the component would also finance the completion of S3, S2, and S1 overseasfellows whose education started during PHRDP I and who are now in training.

3.7 Domestic and Overseas Non-degree Programs. The OTO subcomponentwould also support 1,085 domestic and 50 overseas non-degree fellowships for civilservants, a very substantial change from PHRDP I (where OTO supported 450 overseasnon-degree and no domestic non-degree fellowships). The change toward such a largenumber of non-degree programs, largely domestic, is because of a new focus and newresponsibilities given to OTO. All of the non-degree programs would either be training

11

of BAPPEDA level II staff in regional development planning and management techniques(TMPP) or training or upgrading of the instructors that teach such courses. The TMPPcourses support the move toward decentralization of government decision making. Allbasic and intermediate TMPP courses are three-months long and are conducted at localuniversities. The TMPP courses are not new but have been implemented by OTO underother projects. An outside evaluation of the TMPP basic course found it to be useful andthat the skills of the participants had been significantly improved.

3.8 The MOF subcomponent would support 75 domestic and 60 overseas non-degree fellowships for civil servants. The non-degree domestic courses are new and areoffered for Si graduates who are working as junior researcher or junior trainer, or forstructural staff up to the level of echelon IV. Fields of study for the domestic non-degreeprograms would include such areas as taxation and tax auditing, property appraisal, capitalmarkets, and bank supervision. The overseas non-degree courses are refresher courses forcivil servants and returnees who have completed 2 - 3 years of work following theirreturn. The courses are mainly for staff who are working as a trainer, researcher, or inan echelon III or IV policy-making structural position and are for those who are alreadyfluent in the language of training.

3.9 The proposed STAID subcomponent would provide 50 fellowships each fordomestic and overseas non-degree programs for civil servants working in LPNDs and theMinistries of Agriculture and Industry. Domestic non-degree training would focus onmanagement and technical skills available at an acceptable quality in Indonesia, such aspersonnel management, quality assurance, or energy conservation. Overseas non-degreetraining would be carried out during three months courses which would focus on a rangeof advanced technical skills not available in Indonesia such as aeronautics, industrialpollution control, or biotechnology.

3.10 Graduate Link Programs. The OTO would develop a domestic/overseasLink program for 10 fellows for one or more domestic universities. The Link programwould provide graduate education to OTO fellows in development planning, policyanalysis, or development management, and through this process strengthen graduate studiesin these fields by assisting the domestic school develop links with an appropriate foreigninstitution.

3.11 STAID would develop four new Link programs for 10 doctorate and 51master's fellowships. The objectives of the STAID Link programs would be to:(a) improve institutional coordination between domestic and overseas universities; and(b) develop additional S&T graduate education capacity in universities relevant to the skillneeds of LPNDs and industry in Indonesia. A graduate Link program consists of acombined study program at domestic and overseas universities and in one case it wouldbe planned to have the overseas university include an overseas research institute in thecooperation. Support for developing Link programs would include the costs of curriculumdevelopment, honoraria to Indonesian university staff to ensure that they spend at least halfof their time teaching on the programs, and overseas visits. The proposed project wouldwork with domestic universities to continue to develop new graduate S&T degree programsrelevant to the needs of LPNDs. The proposed project would also work closely with the

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Sandwich program of the URGE project which provides support to domestic universitiesfor graduate education through formal collaboration with overeseas universities.

3.12 Overseas Fellowships for Fresh Domestic SI Graduates. In addition tocivil servant fellowships (paras. 3.3 - 3. 11), the OTO, MOF and STAID subcomponentswould each provide 30 overseas fellowships to fresh domestic SI graduates, on a pilotbasis. The fellowships from the OTO would be for graduate study in developmentplanning, policy analysis, and development management; those from the MOF would befor graduate study in finance and monetary policy, economic planning, financialmanagement, and international trade. The fellowships from STAID would be for S&Tgraduate programs to assist with the improvement of S&T, management and technicalskills in industry. Lessons would be learned from the experience of this pilot scheme todemonstrate how a general, national competitive fellowship scheme could be implemented.The fellowships for fresh domestic S 1 graduates would be restricted to study programs andtechnical areas not yet available in sufficient quality in Indonesia. Fellows would beselected on an open merit-based system and have available the same services and level ofsupport given to civil service overseas fellows. Selected candidates would also make theirown arrangements to reach a specified language requirement before entering project fundedpre-departure training (para. 3.19). Fellowships for fresh SI graduates would be financed100 percent by the project. During negotiations, the Government agreed to establishprocedures, acceptable to the Bank, for the selection of candidates and placement ofreturnees by April 30, 1995 [para. 6. 1(b)].

3.13 Improved Utilization of Civil Service Returnees from Domestic andOverseas Graduate Fellowships Programs. All subcomponents would improve theirreentry procedures to improve the utilization of past, present, and future returnees fromcivil service fellowship programs. OTO's pilot reentry study 6/ of its returnees showed,on the average, significant positive effects of the graduate education they received undertheir OTO fellowship. The study showed some problems of utilization: (a) almost one-fourth found themselves with no job description or formal position on their return; and(b) too many subsequent job changes were to new jobs not related to their training (overthree-fourths of the sample of returnees had subsequently changed jobs, often quite quicklyafter returning). MOF's reentry assessment 7/ pointed to, on one hand, still significantneeds for higher professional and managerial capabilities of MOF staff, but, on the otherhand, a small but significant percentage of fellowship returnees whose skills and abilitieswere not now being fully utilized in their current job. In addition to the study, there hasbeen attention drawn to administrative problems regarding some returnees whereby theoriginal work unit, where a returnee was working prior to his or her fellowship, refusedto give up the fellow even though his or her new skills could be better used elsewhere.

6/ Completed in April, 1993. A full-scale study of all of OTO's alumni, financed by USAIDis now underway.

7/ Finance Education and Training Agency, MOF, "Re-entry Assessment of Overseas Trainingin Ministry of Finance Component under the World Bank Funding", Jakarta, 1993.

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3.14 The OTO and MOF subcomponents do not have direct control over thepersonnel policies of their beneficiary institutions. The OTO and MOF subcomponentsare attempting to deal with the problems elaborated in paragraph 3.13, and therebyimprove the utilization of each returnee by: (a) requiring that each organization sendinga participant to an overseas or domestic university submit a commitment letterguaranteeing that an appropriate job description and career path be prepared for theparticipant and that an appropriate job will be available to the participant on return. OnceGovernment Regulation 14/1994 (PP14) is sufficiently elaborated its provisions regardingjob descriptions and career development may well be reflected in the guarantee letters; and(b) periodically transmitting academic progress reports and estimated completion dates tothe participant's organization so that the organization can better prepare for his or herreturn to Indonesia. To better deal with its own utilization issue MOF is preparing toimplement a pooling arrangement by which fellows upon returning to the Ministry will beallocated within the Ministry where their new skills can best be utilized.

3.15 STAID also does not have direct control over the personnel policies of itsbeneficiary institutions. Nevertheless, through the project implementation arrangementsSTAID is planning to further improve the utilization of returnees in the LPNDs and therelevant ministries to meet the objective that returnees would be given the opportunity towork to their capacity. This objective would be attained through specific measuresdesigned in the context of overall systems for all staff. General personnel systems (jobdescriptions, job performance appraisal and career planning) would be implemented inthose organizations where there is a critical mass of returned fellows. The improvementin general systems would be supplemented by the implementation of additional specificmeasures to improve the reentry and utilization of returnees, in particular, recruitment toa post relevant to their skills, training of supervisors of returnees, a reorientation programfor returnees, and a program to transfer new knowledge to colleagues. In the case of theLPNDs, the following measures would also be included where possible and appropriate:(a) returnees in BPPT and LIPI would be placed in industry as part of their training forthree to six months during the first two years after their return, during which time theywould gain potentially valuable experience and transfer knowledge to industry; and(b) returnees would be released to assist education institutes to develop Link graduatedegree programs (para. 3.1 1).

3.16 Overseas Fellowship Services to Public and Private Firms. UnderPHRDP II fellowships would no longer be provided to employees of publicly owned firms.Instead, the OTO, MOF and STAID subcomponents would offer essential services, suchas testing, placement, and monitoring, to public and private firms who wish, at the firm'sexpense, to send their employees overseas for degree or non-degree training. Theseservices would be provided free of charge to firms. OTO expects that consulting firmsspecializing in development planning, policy analysis, and development management wouldavail themselves of these services. MOF expects that as a result of the expanding natureof Indonesia's financial sector there will be considerable demand for these services.STAID expects demand for these services from public industries and from expanding,high-technology private firms. Steps would be taken to publicize the availability of supportservices for employees of firms.

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3.17 For the proposed three subcomponents, the project would finance domesticand overseas graduate degree and non-degree training programs, and project managementcosts. Also, for OTO and STAID subcomponents combined, the project would finance48 staff months of related international and 126 staff months of local consultant servicesfor studies, coordination of language training, testing and selection procedures, projectmanagement, and conducting impact studies.

3.18 Operational Procedures for the Fellowship Programs for Civil Servants(applicable to all the PlUs). The procedures would, with some modifications(para. 3.19), be administered in accordance with existing procedures which have beenrefined during PHRDP I and are considered to be satisfactory, covering such matters asnomination, selection, pre-departure training, placement, financial arrangements, andevaluation. The process of nomination for OTO, MOF and STAID fellowships wouldreflect the training priorities of their client ministries and agencies. OTO's selection offellows from those nominated would be based on the Academic Potential Test (TPA), anEnglish capability test, supplemented by academic records and competitive interview.MOF's selection of fellows from those nominated would be first based on the TPA, givenwith the cooperation of OTO, a psychological test, and an English capability test. Theavailable fellowships go to the best nominees. MOF pre-departure training would includelanguage skills, mathematics, economics, statistics and computer applications, as inPHRDP I. STAID gives a TPA test modified for its candidates; a psychological test andan English capability test; this plus the record of work performance and a competitiveinterview all make up the selection process.

3.19 A new modification is regarding pre-departure language training for OTO,MOF and STAID overseas fellowship programs. As under PHRDP I, applicants to beselected as potential overseas fellows for an English speaking country must have aminimum TOEFL score of 375. Under PHRDP I such individuals were then eligible forproject-funded pre-departure training including further language training. Under theproposed PHRDP II, individuals selected as potential overseas fellows for programsconducted in English would need to undergo further English instruction on their own. TheEnglish language standard for entrance into pre-departure training would a TOEFL scoreof 426. Once they enter project-funded pre-departure training they would undergolanguage training to bring their score to 527 to 550 which is sufficient to enter graduateprograms in English-speaking countries. This change in the language training process hasbeen designed to contribute to cost recovery in the project and test the motivation ofprospective fellows. For other languages, a similar process would be implementedwhereby prospective fellows share in the cost of reaching the level for entry to graduateprograms. In order to assist fellows who have completed graduate degrees to obtainrelevant industrial experience overseas without additional cost to the project, the projectcould approve an additional stay of one year during which the fellows would work for asalary.

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National Steering Team for Overseas Training (NASTOT) Component (TotalEstimated Cost: US$0.7 million including contingencies)

3.20 Under the proposed project the capacity of NASTOT would be strengthenedin formulating policy, coordinating the civil service fellowship programs, monitoring thepilot fellowship programs for fresh S1 graduates, and undertaking the studies and otherpreparatory matters necessary before the Government can begin to undertake a merit-basednational fellowship scheme. The proposed subcomponent would support: (a) a larger rolefor NASTOT and its Working Groups than was undertaken during PHRDP I; and(b) research activities and study tours necessary to assist NASTOT in planning a possiblemerit-based general fellowship program for implementation after the end of PHRDP II.TORs for studies on a competitive national fellowship scheme would be sent to the Bankfor review, and comment by September 30, 1995. During negotiations, the Governmentprovided assurance that: (a) the studies would be completed by September 30, 1997; and(b) the major findings and recommendations of the studies would be discussed with theBank and the Bank's comments and suggestions would be incorporated in the final report,as appropriate [para. 6.1 (c)]. The project would finance the monitoring and feasibilitystudies to be carried out by NASTOT.

3.21 Consultant Services. The capacity of OTO, MOF, and STAID significantlyincreased during PHRDP I. The primary objectives of the proposed consultant servicesfor OTO and STAID are to continue to assist institutional capacity building, policy strategydevelopment and project implementation. Under the PHRDP II, consultant services wouldonly be used to assist ministry and agency staff who would have primary responsibility forstrictly defined tasks. The increased institutional capacity is reflected in the substantialreduction of consultant services proposed for the project. Under PHRDP I, 350 staff-months of international and 254 staff-months of national consultants have been used (forthose activities which are being continued in PHRDP II), whereas in the proposed project48 staff-months of international and 126 staff-months of national consultants would be used(see Table 3.1 on page 15 and Annex 5 for details). During negotiations, the Governmentprovided assurance that consultants for OTO and STAID would be selected by April 30,1995 under TORs acceptable to the Bank [para. 6.1(d)].

C. PROJECT MANAGEMENT AND IMPLEMENTATION

3.22 At the national level, NASTOT, chaired by the Vice Chairman ofBAPPENAS, which was established under PHRDP I, would continue to facilitate theoverall implementation of the project and would be responsible for policy formulation andcoordination. It would also coordinate and monitor the pilot programs for fresh S1graduates. The staff of the Secretariat would be responsible for the implementation of itsproject activities under the direction of the Secretary of NASTOT (see Chart 1). Duringnegotiations, the Government provided assurance that the Secretariat would be strengthenedby adding at least one professional staff by April 30, 1995 [para. 6.1(e)].

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Table 3.1: Summary of Consultants' Services

Subcomponent/Class of TA International Nationalperson-month person-month

OTOInstitutional Development 12

Project Implementation - 36

STAIDInstitutional Development 36

Project Implementation - 90

Total 48 126

3.23 The Fellowships and Training component would be managed by OTO,MOF and STAID PIUs for their respective subcomponents using the structures and manyof the experienced staff developed under PHRDP I (see Charts 2, 3 and 4).

3.24 The OTO subcomponent would be the direct responsibility of the Directorof OTO, who is concurrently Deputy Chairman for Administration in BAPPENAS. TheOTO is a non-structural entity and the staff are either BAPPENAS staff assigned to OTOposts or appointed as project staff. The MOF subcomponent would continue to becoordinated by a Steering Committee consisting of the Head of BPLK, the SecretaryGenerals of the Ministries of Finance, Industry, Trade and Foreign Affairs, and theSecretary of BKPM. The STAID subcomponent is coordinated and managed by theDeputy for Administration of BPPT as STAID Program Coordinator to whom the PIUreports. The STAID Program Coordinator and PIU are supported by the CoordinationCommittee representing beneficiary organizations and by a management assistance unit.

3.25 Some of the implementation steps for the fresh SI graduates fellowshipprogram would be carried out in common for all three fellowship components, while otherswould remain the responsibility of the separate PIUs. A committee consisting of the threefellowship implementation units plus the Directorate General of Higher Education(DGHE), under the responsibility of NASTOT, would be responsible for identifyingappropriate fields of study to be supported. Advertising for and testing of applicants, andpre-departure training of candidates would be pooled. Placement in programs andmonitoring of fellows would be carried out by each PIU. There would be cooperationbetween all PIUs regarding the placement of returned fellows.

3.26 Responsibility for overall coordination of activities and for liaison with theBank would rest with the PIU Directors who would: (a) monitor and coordinatedisbursement of the loan; (b) provide annual progress reports to the NASTOT who would

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integrate them and provide one report to the Bank; (c) raise issues requiring attentionincluding provision of the government counterpart funds; (d) submit withdrawalapplications to the Bank; (e) arrange for timely project accounts audits and technicalaudits; (f) prepare the implementation completion report; and (g) participate directly in themanagement of local and overseas staff development programs and consultant services, andrelated project performance monitoring activities.

3.27 Educational Exchange Organizations (EEOs). The PIUs for OTO, MOF,and STAID have good experience of managing fellowship and training programs underPHRDP I, and, therefore, would continue to manage the respective fellowship programs.The three PIUs are in the process of gradually transferring many of the activitiespreviously undertaken by EEOs to project staff. This transfer of responsibilities wouldcontinue during the course of the project. The aim of the project is to decrease theresponsibilities of the EEOs to essential services such as insurance cover and emergencysupport. During negotiations, the Government provided assurance that administrativearrangements for overseas fellowship management, acceptable to the Bank, would becompleted by April 30, 1995 [para. 6. 1 (f)].

3.28 Cost Recovery. Overseas fellowship program costs (including tuition,subsistence and travel) for the employees of public and private companies would be met100 percent from non-government sources. As described in para. 3.16, the project wouldmake fellowship selection, placement, and monitoring services available free of charge.In addition, the Government agreed to shorten pre-departure training to six to eight monthsfrom the current one year by raising the minimum foreign language requirement forparticipation in project funded training (e.g., in the case of English, to a TOEFL score of426 from the current 375) (para. 3.19). This is considered to be another form of cost-sharing by civil servant participants in which those who want to obtain fellowships firsthave to pay for language courses by themselves in order to meet the language requirementfor participation in a fellowship program.

3.29 Status of Project Preparation. Project proposals were submitted andrevised during project preparation, pre-appraisal and appraisal missions. Policies on civilservice fellowship training are agreed, including selection, pre-departure training,placement, monitoring and reporting criteria for fellowships, allowances and reentry.Suitable candidates are either available or are being prepared to become the first batch offellows for 1995 academic year. The outline of the scheme to implement the new pilotoverseas fellowship program for fresh domestic S 1 graduates has been agreed. Newmeasures have been agreed to further improve the utilization of returnees. Fields of studyfor Link program under STAID are being identified. The management structure for eachsub-PIU for the STAID component is being strengthened. The capacity of each PIU toimplement project activities has been increased during PHRDP I and is satisfactory.

3.30 Implementation Schedule. The proposed project would be implementedover a period of five years starting April 1, 1995 and ending March 31, 2000. A projectactivities and implementation schedule (see Annex 6) and detailed project cost estimates(para. 4.1) would serve as the basis for project implementation planning and would beupdated annually by NASTOT and the PIU Directors in cooperation with Bank Staff (see

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Annex 7 for planned Bank supervision schedule). The closing date of the project wouldbe September 30, 2000.

3.31 Environment. No negative environmental impacts of the proposed projectare expected (Class C). There are no civil works financed in the project. The fellowshipand training programs would include domestic and overseas degree and non-degreeprograms in environmental conservation and control as one of the areas of studies, andscientists and engineers studying in-country and abroad would be trained inenvironmentally sound practices within their fields. The net environmental impact wouldthus be positive.

3.32 Impact on Women. The Government intends to place a high priority onthe provision of services for women. The fellowships and training programs have setseparate targets for the coverage of female participants, which are 25 percent for OTO,20 percent for MOF, and 15 percent for STAID. In each case, the fellowship target forwomen is set at a higher ratio than the percentage of women in suitable positions in therespective component agencies. These targets would be monitored during implementation(page 3 of Annex 8).

D. PROJECT MONITORING AND EVALUATION

3.33 Performance Indicators. Detailed performance indicators (see Annex 9),agreed with the Government at negotiations, would be used as a basis for reporting.Monitoring and auditing systems would be implemented by all PIUs.

3.34 Progress Reports and Annual Review. Annual progress reports for theperiod ending March 31 each project year, would be prepared by each PIU and integratedby NASTOT for submission to the Bank by April 30 of each year. Data from theperformance indicators would be incorporated in the progress reports, as appropriate. Thereports would contain a review of the previous activities against the annual plan and makerecommendations to improve project implementation as necessary. Each year, a seminarwould be held to discuss these reports and the plan for the next year. The Bank wouldparticipate in the seminars. During negotiations, the Government provided assurance thatbeginning March 31, 1996, the annual project implementation plan would be sent to theBank for review and comments by March 31, of each year [para. 6. 1(g)].

3.35 Mid-Term Review. This would be conducted as a basis for decision onfuture investment in professional human resource development particularly for a newmerit-based national overseas fellowship scheme for the country. The mid-term reviewwould be conducted by September 30, 1997, in accordance with TORs acceptable to theBank and the report on the findings and recommendations would be furnished to the Bankby December 31, 1997 [para. 6.1(h)].

3.36 Impact Studies. The proposed PHRDP II would be a complex project withseveral very different objectives. The fellowships range from three-month training forlocal BAPPEDA officials (para. 3.7), to Master's degree program for some of best and

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brightest men and women in the country (para. 3.12). In between these extremes isgraduate degree and non-degree retraining for government officials. Proper impact studiesof these various interventions are important in principle but difficult to implement inpractice. Considerable data have already been collected about the effects of projectfellowships. All the PIUs in PHRDP I have conducted reentry studies. These studieshave largely focussed on asking former fellows, or the fellow's supervisor, if the educationis being used or whether it has made an impact on the fellow's performance at work. Theresults of the reentry studies have been successfully used to improve the programs and canbe used to some extent to identify the impact of the fellowships. There have been somecase studies compiled about fellows who became "agents of development". As part of theImplementation Completion Report for PHRDP I the PIUs are being asked to compile dataon the impact-including the economic effect of their various programs-using whateverdata have already been collected and, if feasible, adding information from additionalstudies. This work is expected to be completed soon after March 31, 1995, the closingof the PHRDP I.

3.37 All PIUs would continue the reentry studies and collect additionalinformation during PHRDP II. In particular, STAID would begin monitoring professionalcontributions such as published papers and patents. In addition, the PIUs would makestudies about the impact and, to the extent possible, the cost effectiveness or economicimpact of the various types of fellowships that they will have supported. It is too early tospecify how those studies should be made, but for planning purposes an outline of theoverall evaluation process is presented in Annex 9. The planning of these studies shouldtake place after the work of the various PIUs in compiling data and measuring the impactof fellowships under PHRDP I has been completed and evaluated. TORs for the impactstudies would be prepared and sent to the Bank by April 30, 1996 for review andcomments. During negotiations, the Government provided assurances that: (a) suchstudies would be completed not later than September 30, 1997, March 31, 1999, andDecember 31, 1999; and (b) the findings and recommendations of the studies would befurnished to the Bank for review and comments by one month after their completion[para. 6.1(i)].

E. PROJECT SUSTAINABILITY

3.38 Several features in the proposed project should increase the prospects thatsuch a program will be sustained. First, the shift toward more use of domestic universities(para. 3.6), where appropriate programs exist, and use of Link programs (paras. 3.10 and3.11) are not only highly cost-effective methods of investing in graduate education, butalso will help improve existing graduate education for the next wave of students. Second,another feature enhancing sustainability is the move toward a wider merit-based nationalfellowship scheme (para. 3.20) serving the entire economy, not just the public sector.Third, the definite progress that the various fellowship components have made and areproposing to make under the proposed PHRDP II toward better utilization of returnees(paras. 3.13 - 3.15) are all designed to expand and sustain the economic and social impactof these very expensive but potentially very important investments in human capital.

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IV. PROJECT COSTS, FINANCING, PROCUREMENT,AND DISBURSEMENTS

A. CosTs

Summany of Costs

4.1 The total cost of the proposed project is estimated at US$95.0 millionequivalent (Rp 204.8 billion), including contingencies and identifiable taxes and duties.Tables 4.1 and 4.2 summarize the estimated costs by project component and category ofexpenditure, respectively. Detailed project costs are given in Annex 10.

Table 4.1: SUMMARY OF PROJECT COSTS BY COMPONENT

% % TotalRD Billion US$ Million Foreign Base

Component Local Foreign Total Local Foreign Total Exchange Costs

Fellowships and Training

OTO 25.2 34.2 59.4 11.7 15.9 27.6 58 32

MOF 11.8 25.3 37.1 5.5 11.7 17.2 68 20

STAID 31.8 53.4 85.2 14.8 24.8 39.6 63 47

Subtotal 68.8 112.9 181.7 32.0 52.4 84.4 62 99

NASTOT 1.2 0.2 1.4 0.5 0.1 0.6 17 1

Total Base Costs 70.0 113.1 183.1 32.5 52.5 85.0 62 100

Physical Contingencies 3.5 5.6 9.1 1.6 2.6 4.2 62 5Price Contingencies 7.7 4.9 12.6 3.5 2.3 5.8 40 7

Total Costs /a 81.2 123.6 204.8 37.6 57.4 95.0 60 112

/a Inclusive of identifiable taxes and duties estinmted at US$0.2 million equivalent.

Basis of Cost Estimates

4.2 Baseline Costs. Baseline costs are estimated at August 1994 prices.Equipment and furniture costs are based on current prices for sirnilar imported or locallyavailable items. Costs for international and domestic consultants are in line with recenteducation and training projects for appropriately qualified experts. Overseas fellowshipsare estimated at US$60,000 per trainee for master's programs and US$90,000 per traineefor doctoral programs. Overseas short-term training is estimated at US$8,000 per personfor a three-month course. Unit costs for in-country training range from US$2,000 to

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Table 4.2: SUMMARY OF PROJECT COSTS BY CATEGORY OF EXPENDrrURE

% % TotalRp Billion US$ Million Foreign Base

Component Local Foreign Total Local Foreign Total Exchange Costs

Equipment, Furniture and Materials 0.1 0.3 0.4 0.1 0.1 0.2 50 0

Fellowships ana Training and Related CostsOverseas Fellowships and Training 7.5 67.3 74.8 3.5 31.2 34.7 90 41Domestic Fellowships and Training 13.6 2.4 16.0 6.3 1.1 7.4 15 9Fellowships from the PHRDP I 3.1 27.8 30.9 1.4 12.9 14.3 90 17Pre-departure Training 6.6 3.2 9.8 3.0 1.5 4.5 33 5Fellowship Management Costs 1.8 4.3 6.1 0.9 2.0 2.9 69 3LINK Program Development 4.3 0.7 5.0 2.0 0.3 2.3 13 3Fellows' Salary 15.3 2.7 18.0 7.1 1.3 8.4 15 10

Subtotal 52.2 108.4 160.6 24.2 50.3 74.5 68 88

Consultants' ServicesInternational Consultants 0.1 1.3 1.4 0.1 0.6 0.7 86 1National Consultants 0.8 0.1 0.9 0.3 0.1 0.4 25 0

Subtotal 0.9 1.4 2.3 0.4 0.7 1.1 64 -

Research and Studies 2.8 0.5 3.3 1.3 0.2 1.5 13 2Project Management /a 14.0 2.5 16.5 6.5 1.2 7.7 16 9

Total Base Costs 74.6 117.7 192.3 34.6 54.6 89.2 61 100

Physical Contingencies 3.5 5.6 9.1 1.6 2.6 4.2 62 5Price Contingencies 7.7 4.9 12.6 3.5 2.3 5.8 40 7

Total Costs /b 81.2 123.6 204.8 37.6 57.4 95.0 60 112

/a Inclusive of expenditures for travel, consumable materials, honoraria, and operation and maintenance./b Inclusive of identifiable taxes and duties estimated at US$0.2 million equivalent.

US$3,000 per trainee for short-term programs (3 months), US$12,000 per trainee formaster's programs, to US$14,000 per trainee for doctoral programs. Project managementincludes expenditures for travel, honoraria, consumable materials, and operation andmaintenance, which are necessary for the implementation of the project.

4.3 Contingency Allowances. Physical contingencies (US$4.2 million)represent 5 percent and price contingencies (US$5.8 million) 7 percent of baseline costs.Physical contingencies of 5 percent have been allocated for all the categories ofexpenditure. Price contingencies have been calculated at 5.0 percent per year for localcosts and at 2.2 percent for foreign costs for all categories.

4.4 Foreign Exchange Costs. Foreign exchange costs are estimated at US$57.4million (representing 60 percent of total project costs) and are based on a detailed analysisof expenditures under similar projects in Indonesia. The foreign exchange percentages forthe major expenditure categories are estimated as follows: (a) equipment, internationalconsultants, overseas fellowships and training - 90 percent; (b) fellowship monitoring costs

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- 70 percent; (c) furniture - 30 percent; and (d) pre-departure training,8/ nationalconsultants, research and surveys, and in-country training - 15 percent.

4.5 Taxes and Duties. Taxes and duties are estimated at Rp 0.4 billion(US$0.2 million) based on the current 10 percent value added tax on all contracts forequipment, other goods, and materials.

B. FINANCING

4.6 The total project cost of US$95.0 million equivalent would be financed bya proposed Bank loan of US$69.0 million equivalent, covering about 73 percent of totalproject costs excluding taxes (95 percent of foreign and 39 percent of local expenditures).The Government from its annual budget would finance the remaining costs of US$26.0million equivalent, covering about 27 percent of total project costs (Table 4.3).

Table 4.3: FINANCING PLAN(US$ million)

GOI IBRD Total IBRD Share(%)

Equipment, Furniture, and Materials 0.2 0.0 0.2 0Staff Training and Development

Overseas Fellowships & Training 0.0 51.6 51.6 100Domestic Fellowships & Training 4.1 4.0 8.1 50Predeparture Training and Expenses 0.9 3.9 4.8 80Fellowship Management Costs 0.0 3.1 3.1 100Fellows' Salary 9.1 0.0 9.1 0Link Program Development 1.3 1.3 2.6 50

Consultants' Services 0.3 0.9 1.2 80Research and Studies 0.3 1.3 1.6 80Project Management 8.5 0.0 8.5 0Unallocated 1.3 2.9 4.2 69

Total 26.0 69.0 95.0 73

C. PROCUREMENT

4.7 The loan proceeds would be used to finance procurement in the followingexpenditure categories (Table 4.4):

(a) Staff Training and Development (US$73.3 million equivalent). Theexpenditures for overseas graduate degree fellowships and overseas non-

8/ This is exclusive of some training conducted abroad for which estimated 90 percent of foreignexchange was used.

23

Table 4.4: PROCUREMENT ARRANGEMENTS(US$ million)

Total costProcurement Non-Bank including

Category of expenditure procedures /a Financed /b contingencies

Equipment, Furniture, & Materials 0.2 0.2(0.0) (0.0)

Staff Training and Development 73.3 9.6 82.9(66.6) (0.0) (66.6)

Consultants' Services 1.2 1.2(1.0) (1.0)

Research and Studies 1.8 1.8(1.4) (1.4)

Project Management 8.9 8.9(0.0) (0.0)

Total 76.3 18.7 95.0(m) 7(0) (m)

Note: Figures in parenthesis are the respective amounts financed by the Bank./a Includes selection of fellows using Government administrative procedures acceptable

to the Bank, and selection of consultants and EEOs following Bank guidelines./b Includes GOI financing of equipment, furniture, & materials, fellows' salaries, and

project management costs.

degree training programs comprise actual costs for tuition, health insurance,and international travel, as well as authorized allowances in accordance withthe agreed unit costs. The expenditures for domestic graduate degree andnon-degree training programs would comprise actual costs for tuition andauthorized allowances in accordance with the agreed unit costs. Theselection of all the fellows and the award of training contracts would bemade in accordance with Government administrative procedures, acceptableto the Bank, which are mostly the same as those under the ongoingPHRDP I. For overseas fellowships, EEOs (para. 3.27) would becontracted in accordance with the Bank Guidelines for the Use ofConsultants to provide services of placement, transfer of funds andmonitoring of fellows in foreign institutions. In addition, fellowshipmonitoring costs include expenditures for monitoring trips conducted byPIU staff as part of the PIUs' efforts to reduce their reliance on EEOs anddevelop iheir institutional capacity for fellowship management.Predeparture training expenses would include expenditures for selection ofcandidates and some allowances for fellows in accordance with Governmentprocedures, as well as foreign language and other training, which would be

24

contracted directly to training providers with the terms acceptable to theBank. Link program development would cover investment costs requiredto develop Link programs, including seminars and workshops, teachingsupport, materials, and other related costs; and

(b) Consultants' Services (US$1.2 million equivalent). National andinternational consultants would be selected in accordance with the BankGuidelines for Use of Consultants for implementation support andinstitutional strengthening. Leasing of cars required by consultants wouldbe covered in the applicable consultant contract; and

(c) Research and Studies (US$1.8 million equivalent). To cultivate quality,contracts for research and studies would be awarded based on the criteriaof relevance of the topic and qualifications of the parties selected on acompetitive basis acceptable to the Bank.

4.8 Procurement Review. The following are the guidelines for procurementreview:

(a) All consultant contracts valued at or over US$100,000 for firms andUS$50,000 for individuals would be subject to prior review by the Bank.All consultant contracts under US$100,000 for firms and US$50,000 forindividuals would be subject to random post review. However, thisexception to prior Bank review shall not apply to assignments of a criticalnature such as the employment of consultants, and research and studies. Inapplying these thresholds to an EEO contract, the total cost of the contractless the cost of tuition fees is the value to be used;

(b) A timetable to complete the review of documents scheduled for prior reviewduring project implementation would be prepared by the Govermnent, nolater than March 31, 1995, and furnished to the Bank for approval; and

(c) Post reviews of Statement of Expenditures (SOEs) would be conducted onthe following basis: (i) 20 percent of contracts valued between $25,000 andbelow $100,000; (ii) 10 percent of contracts valued between $5,000 andbelow $25,000; and (iii) contracts valued below $5,000 would be reviewedon a discretionary basis.

D. DISBURSEMENT

4.9 The proposed loan of US$69.0 million equivalent would be disbursed overa period of about 5 years (Annex I 1). Disbursements are expected to be completed bySeptember 30, 2000, the Loan Closing Date. The disbursement schedule is based on theimplementation schedule and the disbursement profile for education and training projectsin Indonesia. It is somewhat faster than the standard profile for education projects inIndonesia because of the advanced capabilities of the PIUs dealing with the fellowships

25

based on their past experience. Disbursements estimated for FY95 are based on theproposed initial deposit into the project Special Account and replenishment. Disbursementswould be made as follows:

Fellowship and Training Programs:Overseas Fellowships and Training 100% of total expendituresDomestic Fellowships and Training 50% of total expendituresPredeparture Training Expenses 80% of total expendituresFellowship Management Costs 100% of total expendituresLink Program Development 50% of total expenditures

Consultants' Services 80% of total expendituresResearch and Studies 80% of total expenditures

4.10 Disbursements from the loan for all contracts above US$100,000 in valuefor firms and US$50,000 in value for individual consultants, research and studies, EEOs,pre-departure training, Link program development and fellowships, would be made againstfull documentation. All other disbursements would be made against SOEs for whichrelevant documents would be retained by responsible agencies and made available forreview as requested by visiting Bank missions. To facilitate disbursements, a SpecialAccount would be established at Bank Indonesia, or at a commercial bank acceptable tothe Bank, to be used by the specified Government project authorities under the directionof the Director General of the Budget, MOF, following established procedures. TheSpecial Account would be used for all eligible foreign and local expenditures for allcategories. Upon Loan Effectiveness and confirmation of the establishment of the SpecialAccount, the Bank, on receipt of an application from the Director General would make aninitial deposit of up to US$5.0 million, which is based on the need for funds to cover theseexpenditures on average for a period of four months. Application for replenishment of theSpecial Account would be submitted to the Bank on a monthly basis or when 20 percentof the initial deposit has been used, whichever occurs first.

E. ACCOUNTS, AUDITS, AND REPORTS

4.11 Designated Government authorities would establish project accounts for allproject expenditures, to be maintained in accordance with sound accounting practices.Accounts and documentation supporting the SOEs and Special Account would bemaintained separately. The NASTOT would consolidate and prepare the financial report.The financial statements and financial report for each fiscal year would be audited byindependent auditors acceptable to the Bank [para. 6.1 (j)]. The audit report would containa separate opinion by the auditors as to whether the SOEs, submitted during the yeartogether with the procedures and internal controls involved in their preparation, can berelied upon to support the related withdrawals. Certified copies of the financial reportson the project for each fiscal year, together with the auditors' statement, would befurnished to the Bank as soon as available, but not later than nine months after the end ofeach government fiscal year. Within six months after the completion of disbursements,the NASTOT would submit a project completion report to the Bank.

26

4.12 Technical Audit. The MOF, OTO and STAID PIUs have the primaryresponsibility to monitor all project activities and there are well developed procedures formonitoring of fellowship selection, performance, and reentry for graduate degree and non-degree programs. In addition, the routine monitoring would be added to, through theimpact studies and annual reviews. However, given the large number of beneficiaryorganizations served by each PIU, an independent, qualified firm would be hired to carryout technical audits of all aspects of graduate degree and non-degree programs, using a twoperson team. The technical audits would focus on the identification of training needs,nomination and selection of fellowship candidates, pre-departure training, monitoring offellows on programs, reentry procedures, and the award of contracts. They would havethe objectives of monitoring that all procedures are followed in a transparent manner andthat all funds are spent in accordance with agreed procedures. The audits would coveractivities in progress and post review of completed actions. These audits would beconducted annually on a random sample basis. Assurances were given at negotiations thatthe technical audits would start on April 1, 1996 and would continue to be implementedeach year thereafter, in accordance with TORs and in a manner acceptable to the Bank,and that copies of the audit reports would be furnished to the Bank for review andcomments not later than July 1 in each year [para 6. 1(k)].

V. BENEFITS AND RISKS

5.1 Benefits. The main benefits are: (a) improved quality of professional staffin key government ministries and agencies at national and local levels through a varietyof fellowship and training prograins (782 overseas fellows, including 425 currentlystudying abroad under the ongoing PHRDP I, 160 overseas non-degree trainees, 244domestic fellows, and 1,210 domestic non-degree trainees); (b) a substantial stock ofindividuals (90 fellows), chosen on merit basis through the pilot programs with overseasgraduate education in subjects not yet taught in Indonesia, available to the Indonesianeconomy; (c) an increased access to fellowship management services provided to theprivate sector by the project; (d) enhanced utilization of returned fellows; and(e) strengthened coordination among research institutes, education institutes, and industries.

5.2 Risks. The main project risks are related to: (a) the low utilization of thereturnees of fellowship programs due to the inefficient management of the civil service;and (b) the capacity of NASTOT to coordinate and monitor the fellowship and trainingactivities and control the disbursement level in order to stay within budget limits. Themeasures to alleviate these potential risks are included in the project design.

27

VI. AGREEMENTS REACHED AND RECOMMENDATION

6.1 During negotiations, the Government provided assurances that:

(a) criteria and procedures, acceptable to the Bank, by which applicants wouldbe directed to a domestic or overseas graduate degree program would beprovided to the Bank by April 30, 1995 (para. 3.6);

(b) procedures for the selection of candidates and placement of returnees,acceptable to the Bank, under the fresh domestic SI graduate programwould be established by April 30, 1995 (para. 3.12);

(c) (i) a study on the establishment of a competitive national fellowship schemewould be completed by September 30, 1997; and (ii) the major findings andrecommendations of the study would be discussed with the Bank and theBank's conmments and suggestions would be incorporated in the final report,as appropriate (para. 3.20);

(d) consultants would be selected by April 30, 1995 under TORs acceptable tothe Bank (para. 3.21);

(e) the Secretariat for NASTOT would be strengthened by adding at least oneprofessional staff by April 30, 1995 (para. 3.22);

(f) administrative arrangements for overseas fellowship management, acceptableto the Bank, would be completed by April 30, 1995 (para. 3.27);

(g) beginning March 31, 1996, a project implementation plan would be sent tothe Bank, for comments, annually by March 31 of each year (para. 3.34);

(h) a mid-term evaluation would be conducted by September 30, 1997 inaccordance with TORs acceptable to the Bank, and the report on thefindings and recommendations would be furnished to the Bank by December31, 1997 (para. 3.35);

(i) impact studies would be completed not later than September 30, 1997,March 31, 1999, and December 31, 1999;

(j) satisfactory arrangements for the establishment of the Special Account, andthe necessary organizational structure for its operation, includingappropriate accounting and auditing procedures would be made (para. 4.11);and

28

(k) technical audits would start to be carried out on April 1, 1996 and wouldcontinue to be implemented each year thereafter, in accordance with TORsand in a manner acceptable to the Bank, and the copies of the audit reportswould be furnished to the Bank for review and comments not later than July1 in each year (para. 4.12).

Recommendation

6.2 Subject to the above agreements and conditions, the proposed project issuitable for a Bank loan of US$69.0 million equivalent to the Republic of Indonesia fora term of 20 years, including a grace period of five years, at the Bank's standard variableinterest rate.

29Annex I

Page 1 of 2

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Composition of the Civil Service, 1985, 1990, & 1992

1985 1990 1992

Number % Number % Number %

By SexMale 2,108,065 71.3 2,544,424 67.5 2,642,255 66.9

Female 848,017 28.7 1,226,862 32.5 1,307,871 33.1

By EducationPrimary School 598,113 20.2 546,277 14.5 547,074 13.8

Junior Secondary School 384,268 13.0 393,661 10.4 402,902 10.2

Senior Secondary School 1,601,718 54.2 2,201,593 58.4 2,319,700 58.7

College (DI-DiII & Bachelor's) 248,503 8.4 368,783 9.8 390,993 9.9

University (Master's) 123,390 4.2 258,794 6.9 289,167 7.3

University(Doctorate)/l 90 0.0 187 0.0 290 0.0

By AgeUnder 21 years 5,427 0.2 7,798 0.2 7,709 0.2

21-25 years 353,635 12.0 266,514 7.1 176,975 4.5

26-30 years 575,610 19.5 813,853 21.6 719,763 18.2

31-35 years 561,401 19.0 774,439 20.5 859,744 21.8

3640 years 450,385 15.2 632,197 16.8 709,715 18.0

41-45 years 404,841 13.7 470,541 12.5 514,204 13.0

46-50 years 318,079 10.8 404,526 10.7 423,187 10.7

Over 50 years 286,704 9.7 401,417 10.6 538,829 13.6

By LocationCentral Civil Service 2,571,113 87.0 3,291,100 87.3 3,453,901 87.4

Regional Civil Service 384,969 13.0 480,165 12.7 496,225 12.6

By PositionStructural 247,865 8.4 205,008 5.4 203,473 5.2

Functional 1,218,808 41.2 1,839,226 48.8 1,940,823 49.1

Others 1,489,409 50.4 1,727,051 45.8 1,805,830 45.7

By Grade (Golongan)Grade 1 703,827 23.8 609,733 16.2 611,228 15.5

Grade II 1,925,364 65.1 2,538,043 67.3 2,663,718 67.4

Grade m 309,337 10.5 590,009 15.6 639,809 16.2

Grade IV 17,574 0.6 33,500 0.9 35,371 0.9

TOTALS 2,956,082 100.0 3,771,285 100.0 3,950,126 100.0

Source: BAKN/I These figures are likely to be understated.

3(

Annex 1Page 2 of 2

INDONESIASECOND PROFESSIONAI, HIJMAN RESOURCE DEVELOPMENT PROJECT

Composition oof the Ci il Service, 1985-1992

4. 000.000 ___

3,500.000

g 3,000,000 - __

2,500,000 El U.v.mty (Maatei & PK.D)

2 Cofeep (DI-DIII & Bach e r)

o U Somor S.conday School

: 2,000,000 El _b _orSecooduy Schoo

1 Pn..y School

1.500,000-

1,000,000-

500,000

0 1985 1986 18 9 19 9 1991 - 1992

Year

Sourrc:ESK

INDONESIASECOND PROFESSIONAL HUMAN RESROUCE DEVELOPMENT PROJECr

GOI's Overseas Fellowships and Training during Repeita V (1989/90-1993/94): Nmnber of Departures per Year

Average per year

Type of Program 1989/90 1990/91 1991/92 1992/93 1993/94 during Repelita V

Loan Grant Loan Grant Loan Grant Loan Grant Loan Grant Loan Grant

Graduate Degree ProramsDoctorate (S3) 198 2 245 28 456 24 253 38 192 42 269 27

Master's (S2) 769 18 846 65 1,368 109 805 144 580 125 874 92

Sub-total 967 20 1.091 93 1.824 133 1.058 182 772 167 1.142 119

Bachelor Degree & Non-degree ProgramsBachelor(SI) 196 56 259 0 836 0 99 0 201 1 318 11

Non-degree 857 1,192 1,219 423 828 1,078 1,160 1,076 1,349 1,003 1,083 954

Sub-total 1.053 1.248 1.478 423 1.664 1.078 1.259 1.076 1,550 1.004 1.401 966

Total 2,020 1,268 2,569 516 3,488 1,211 2,317 1,258 2,322 1,171 2,543 1,085

Source: Cabinet Secretariat (SEKKAB) and NASTOT, 1994.

32

Annex 3

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Bank-fimanced Education and Trahinng Projects

Loan/ Year of Year of Project Agency AmountCredit Board Actual (less cancellations) /a

Number Approval Closing IBRD IDA-(USS mnillion) -

Projects with MOEC219 1970 1976 First Education MOEC /b 4.5387 1973 1981 Third Education MOEC 13.5

1237 1976 1981 Fourth Education MOEC 24.11433 1977 1984 First Teacher Training MOEC 17.81486 1977 1984 Nonfonnal Education MOEC 8.3869 1978 1985 Polytechnic MOEC 49.0

1904 1980 1987 First University Development MOEC 43.12101 1982 1990 Second Teacher Training MOEC 79.12102 1982 1988 Second Textbook MOEC 24.92290 1983 1990 Second Polytechnic MOEC 106.02355 1983 1990 Second Nonfornal Education MOEC 43.02472 1984 1990 Secondary Education and Mgmt Training MOEC 76.62547 1985 1993 Second University Development MOEC 146.32944 1988 1993 Higher Education Development MOEC 133.33158 1990 -- Second Secondary Education and Mgmt MOEC 154.23311 1991 -- Second Higher Education Development MOEC 150.03431 1991 - Third Nonfornal Education MOEC 69.53448 1992 - Primary Education Quality Improvement MOEC 37.03496 1992 - Primary School Teacher Development MOEC 36.63754 1994 - University Research for Graduate Education MOEC 59.8 =

Subtotal of Projects wit MOEC 1,209.7 6Z0

Pro*ects with Other Ministries288 1972 1978 Second Education (Agriculture Training) MOA/c 6.3

1692 1979 1985 Second Agricultural Training MOA 34.72258 1983 1988 Public Works Manpower Development MOPW /d 29.82341 1983 1992 Third Agricultural Training MOA 62.92599 1985 1993 Science and Technology Training MORT /a 93.02705 1986 -- ManpowerDevelopmentandTraining MOM/f 58.12940 1988 - Accountancy Development MOF /g, MOEC 113.02992 1988 -- Tree Crop Human Resource Development MOA 18.43112 1989 - Public Works Institution Dev. & Training MOPW 36.13134 1989 -- Professional Human Resource Development BAPPENAS, MOF, BPPT/h 117.53721 1994 - Skills Development MOM 27.7 =

Subtotal of Projects th Other Ministries 591.2 6.3

GRAND TOTAL 1,800.9 73.3

/a 'The amount less cancellation" applies only to the projects which were closed (with "Year of Actual Closing").The amount for other ongoing projects was taken from the Staff Appraisal Reports.

/b MOEC - Ministry of Education and Culture/c MOA - Ministry of Agriculture/d MOPW - Ministry of Public Works/c MORT -Ministry of Research and Technology/f MOM - Ministry of Manpower/g MOF - Ministry of Finance/h BPPT - Agency for the Assessment and Application of Technology

33

Annex 4Page 1 of 3

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Placement Targets of Fellowships and Training under PHRDP I and II by PIU and Type of Program

PHRDP I PHRDP IIPIU and Type of Programn SAR Appraisal /a

October 89 August 94

Overseas Training OMce (OTO)

Overseas Programs Doctoral (S3) 37 15Master's (S2) 620 122Non-Degree 450 50Sub-total 1,107 187

Domestic Programs Doctoral (S3) 0 0Master's (S2) 0 49Non-Degree 0 1,085Sub,total 0 1,134

Overseas/Domestic Master's (S2) 0 10LINKPrograms Sub-otal 0 10

Total for OTO 1,107 1,331

Mlrnstry of Finance (MOF)Overseas Programs Doctoral (S3) 60 15

Master's (S2) 120 135Non-Degree 120 60Sub,total 300 210

Domestic Programs Doctoral (S3) 0 15Master's (S2) 0 50Non-Degree 0 75Sub,tatal 0 140

Total for MOF 300 350

Science and Technology for Industrial Development (STAID)Overseas Programs Doctoral (S3) 72 55

Master's (S2) 305 105Bachelor (SI) 171 0Non-Degree 232 50Subtotal 780 210

Domestic Programs Doctoral (S3) 20 40Master's (S2) 181 90Bachelor (SI) 92 0Non-Degree 73 50Subtotal 366 180

Overseas/Domestic Doctoral (S3) 0 10LINK Programs Master's (S2) 0 51

Sub-total 0 61

Total for STAID 1,146 451

GRAND TOTAL 2,553 2,132

/a Each project implementation unit would have 30 owrae nmastees felowships earmarked for fresh S I graduates. In addition,the project would finance fellowships which started under PHRDP I with the total of 102 doctoral, 13S mastees, and185 bachelor degree fellows for the three project implementation unita.

34

Annex 4Page 2 of 3

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Placement Targets of Fellowships and Training under PHRDP I and II by Type of Program

PHRDP I PHRDP IIType of Program SAR Appraisal /a

October '89 August 94

Overseas Fellowships

Doctoral (S3) 169 85Master's (S2) 1,045 362Bachelor (S1) 171 0Non-degree 802 160Sub-total 2,187 607

Domestic Proerams

Doctoral (S3) 20 55Master's (S2) 181 189Bachelor (SI) 92 0Non-degree 73 1,210Sub-total 366 1,454

Domestic/Overseas LINK Programs

Doctoral (S3) 0 10Master's (S2) 0 61Sub-total 0 71

GRAND TOTAL 2,553 2,132

la Each project implementation unit would have 30 overseas master's fellowships earmarked for fresh Sl graduates.In addition, the project would fuiance fellowships which started under PHRDP I with the total of 102 doctoral, 138 mastand 185 bachelor degree fellows for the three project implementation units.

2iDON~

SZCOND PRO VSSIONAL HUMAN RISOURCE DEVELOPMNT PROJECT

P__nnd Dielnade of Jelwdba mmd Tralnin sown Beneficary MlndIre and Aghvdue in

Fd1 huylmneail Uskit & 0ner PhFwbuDipe Dm Train= z LINK Praus lb Told

B _esiy 16andry/Apocy Doctncl ?JS'a Noodqee Dockgal Mtees NaonFoe Dokel

0Th 1duflh mF d Trlafh kMmdnsim Aaude & Sebpoedthnvedrim 15 92 s0 49 425 631

BAPPEDA 660 660

Freh Si C1_duh 30 30

smb4kw 11~~~~I LU H A 12 .11LiLI

MOF FeUeddl md Traun Adbhcty of _ 7 30 30 4 16 31 113

K udyafFwepAffu 1 15 1 17

1mby otflu_y 3 25 10 4 16 20 73

1dely OTra& 3 20 10 4 9 17 63

BKPl 1 15 10 2 9 7 U

Fsth SI ra&Mn 30 30

LI 111 LI H 71 1 1 L7

BAKOSURTAIAL 1 1 2

BATAN 9 8 9 14 35 2 77

BPPT 19 21 10 15 13 9 37

BPS 3 16 12 31

LAPAN 8 10 2 6 26

LIPI 11 11 24 6 34 36

BPIS 1 2 3

R&D Cdo im Mh ety of nbAh y & Apruim 5 7 5 S IS 5 43

Fh Sl1 O1wk_b_ 30 30

A*4"d a~~~~~I LaI a H L I 2

Gra_d Ten I5 3a 1" 55 139 1,218 18 61

/a TbI pnned I d ibe is eubjead to revam bind an tee &diu compebitvw adediat poem.

lb The sloetha of LINK progam mw afas wmAd depmd cn t hie of Dd o be qipporele&

Ic The mIi idb of sbdy go dvWpmU Om-6 poicy yh_ nd dewlopuut nulqmnat

/d The nqr fid of iudy we henceand mnezy poicy, esoonoc plutmgy fb-Al _moernatt, iditsad tra bde.

/a The myJ fibdd of utdy we cmae and angmeuin

Ii

36

ANNEX 5

INDONESIA

SECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

TEcHNIcAL ASSISTANCE REQUIREMENTS

Implementing RequirementsExpertise Required Agency (Person/month)

A. Implementation Support

Local Experts1. Academic Placement (1) OTO 362. Mgt. information and implementation STAID 90

Subtotal 126

B. Institutional Development

International Experts1.Project management (1) OTO 122.Program development/monitoring STAID 36

Subtotal 48

TOTAL 174

INDONESIA: SECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT - OTO Fellowships and Training

199519 1997 1990 1999 2000ID Name Qf I | Qf2 | Qt3 | 4Qt I | 2Qe 3 Qf 2 | 3Qtr4 |Ql I | 2 Qt3 | 4 Qtr I | 2 Qt3 Qtr4 QtI 2 3 42 Over Fdbshp Propm& - -

2 Batdfl I

3 Selaws of carodadali

4 Pdeutme Iffup tiu A p t

5 15 &cWW dWu fdimn I I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

6 47 tws deg fiows

7 25 nmsdepwIm

la Applimb &pp-A m

11 73 5 depsMws - -12 25 min-Jqmpe~II Tum..I _I s

1 tmti 1T T0 114 _i 0 - -& I-14

is Sab.wofmaddu

16Aempas

17 2 nomwdwspn

19 Bs" 2 | -

26 200amdpp~u ) _

21 App - -p--AFI

27 215 3m pubm- ow1i-f . L LibI j - F -

INDONESIA: SECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT - MOF Fellowships and Trainimg

1995 1996 2"997 1 199S 19"9 2000ID Name QTI Qt2 3 Q4 QC 2 QC 3 Qt 4 Qt I Qt 2 Qt 3 T 4 IQ 2 Qt2 3 Q 4 Qtr I Q 2 Qt 3 QT 4 Qtl Qt 2 QT3 QT4I Ov Fa oshup PrograrTms

2 B ti 3 hih 1I_ _j_ i _ _ _ _ _ _ _ __|

3 S dc-ieb & p vrdeparI- ln p ;;'g

4 Apphcahxlio pwc-s & prep.Iso;

5 Econuf n fim mas e r i . fr'ln _ ' :

6 15 imrr& p ' pibpan ts:

7 40 ID8me.dqpCtk12oWSI .7 dota dV k0casi

9 Batdc2 2 - - -

20 Sdecu-m & pe-dqmrnx bqp fwrulm

I I Appb mi pI I q !

12 E c luwig fi *' m_ Ii13 S i i Ft_ _ _ _ i rpersi_

14 40 mm&Ws degree Wkpc

16 ihi1d 3 lo I = - - 1i -r

17 sd c *m & pme-deperblre 14q 0

IIAppbt2aFoc .e & xq-rmi

21 EOmU llb s I 9 1 I20 IS nn-cree puti F I [I

2 4 . _ _ t ' t i [ ! | ! | [ t I t 4 , t j~~~I ~

226 40 fiWees degre Mows t . i _i

L2 B,, 4 I0 I 23 Sdekchm & yrrt,p~U hik s miw

24 Ap,plcbtsm x-s&Ppareph catzm

26 2non-dtwep.la aps2s I I '

27 IS5 madepw Mw s "am

2 _ _ _ _ _ _ _ _ _ __c_ _ _ _ _ _ _ - -I p_ __eW1L L __ _

INDONESIA: SECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT - MOF Fellowships and Training

ID Name I 2 Qt 3 Qtr 4 [ Qtr I |Qt 2 |Qt 3 |Qt 4 tr I Qtr 2 |Qr 3 t, 4 |Qr I3 Qtr 4 |Qt I |QtI Qr 2 |Qtr 3 |t 4

29 Darmsbc TrauuPg Prvgr * . !- - * * I-

31 Seicm ofdcuredron-degreie dtuI

32 Appbcado p--ms & xpmpon I

33 7 d qmm I d I

34 15 wAs es d_em Mme _

35 IS nin -diu I

36 B9h 2 ,w

37 Sdedin otdpdqiunon-dagm Imbdi

36 AppWbc- p & 1 - -mX5

39 8 doal dore __l ws

W X 3~~~i > -=- -_ 3Ii -

F S D I ' m I I t 11~~~~!

40 3I5 Idas <Kum o I$

41 IS _ a-dqe p I I

43 Sdscbw odvm%-dapee maddat4 _ _ _ _Is _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ II

,17 Batch 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

10 Sdeftm of g candidates~~~~~~~~~~~~~~~~~~~~~~~~1;

INDONESIA: SECOND PROFESSIONAL NIDIA RESOURCE DEV-ELOPH4ENT PROJECT - STAID FetLowships and Training

1993 1996 1997 1199 1999 2000ID Name I 2 ~~~~~~~~~~~~~~~~~~~t3 4~t]~~ I Qq2 Qr3 4 ( I Qt2 1 U3 1 Zr4 1 ZrI I(2 1 3 1( 4 1( I I 2 1 Zt3 12 4 (tII Qtr 2 3 4t

I Ovnea Felowship Program

2 Batch IP

3 Selectio of cniae

4 Predepartuwre lngag trainin &peparaio

3Ilnoncm-degree partcpants_

6 30-sntmes degre felowc*

7 30 &dcm-al degree feDS u

a Batch 2 -

9 Sd-as A pradepmne lanuage fu

tO Appbca-a pua & aq-amesa

Ij Il10non-degeep-~ n

1 4 Batch 3

135 Seletio & predepamoe lagae ua _______

16 Appheatmo pesms & puquabrcI ______________

1 7 tO no-degeepariiat

lB33 maids. dwe felow

19 Batch 4and 5

20 Selection, applictio, & peaao

21 t10so-degreepartcipants

22 Selecion applicaio & prearaio

23 tOrson-degreeparticipants,

24 Domesti Troosg Progras

25 Batch 1 _______________________________________________

26 Selection ofcniae

27 Apphcatio proese & preparaio

22 13 doctoal degre fellows

29 25 mastcer' degre felows

INDONESIA: SECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT - STAID FetLowships and Training

19" - I ~19%17 9 1993 1~ 2OM t ID Nam QU 2 | 3 | 4 Qtr I I Qtr32|tr l,4 | Qtr IQtr2 2Qtr3 t 4 Qtr I Qt2 3 t 4 Qtr I Qtr2 Qtr330 10 nos4cx&pen C I

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43 15 n'-&'' pubajNl (inddu )

44 13 r 1 ( ne1 r

45 RemnofR * D -v * ' .

47 Prorwmnt ofqa pment

48 Dtdopmal ofroay d.ym syn'

49 Dldo 1 -cof-nyp pengin

50 On.ftbmw pwge Th avuuo of retzoa

SI Densgnofreeunrystudb

52 Roeomy oI _x'ua'

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55 Mainbmm -ofreeniy dateby ute

56 _ _f_ _ _ _ I, _ __ _ _

57 Rm ey (l :oshp & mmw ( 1)l l

58 C_bxfcrvof_ .| ! ; t t | $, | | } | I z I ^~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C-f

IJUEIA: T POFIUIaII I USAR DEWLaIT NOE CT - STAID F@t ll_ips -r Trainin

ff 1 59 111 2H9-D Q I 2 3 42 I q 3 I Ql14 I WI Q 1 1 | r4 I Q I Qk2f Qg3 |4| | I Q 3 I k4 QI Q2 3 4

* ~~~~~~~~~~~~~~~~~~~~IM

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75

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f4 qX ,_, i__ - d_ . , ' , > , '\ , - 0 |~~~~

43Annex 7

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPM[ENT PROJECT

PLANNED SUPERVISION SCIIEDULE

LengthTiming (in Weeks) Nature of Mission Team Composition

1. March 1995 1 Start-up Economist1 Training Specialist

2. September 1995 1 Full Supervision Economist1 Training Specialist

3. March 1996 1 Annual Review EconomistI Training SpecialistI S&T Specialist

4. September 1996 1 Full Supervision Economist1 Training Specialist

5. March 1997 1 Annual Review Economist1 Training Specialist

6. September 1997 1 Full Supervision Economist1 Training Specialist

7. March 1997 1 Annual Review Economisti Training Specialist

8. September 1997 2 Mid-term Review Economist2 Training Specialist1 S&T Specialist

9. March 1998 1 Full Supervision Economist1 Training Specialist

10. September 1998 1 Annual Review Training Specialist1 S&T Specialist

11. March 1999 1 Full Supervision Economist1 Training Specialist

12. September 1999 1 Annual Review Economist1 Training Specialist

13. March 2000 1 Final Supervision Economist1 ICR Preparation Training Specialist1 S&T Specialist

44

Annex 8Page 1 of 3

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Quallty Indicators

Indicator Unit of Measurement Improvement/Outcome

Fellomhlws and Training

OTO. MOFand STAIDI LeuIgth of studies Time 95% on time (u planned)2 Academic perfomance Grade point average Over 3.0 on a 4.0 point system or equivalent3 Reduced role of EBOs in placent &monitoring % cost offellowship Incresed cost-effectivenees4 Reduced role of EEOs in placement h monitoring Dependence on hPO Increued institutional cpcity

,Vtilzatz'on of RerneruRee.ry Proccese

5 Asaignment of returnees to poSt related to training Time lag between return & start Job posting before their returnofproductive work

6 Productive use of new knowledge Quality of work plan presented Highest possible use of new skillsto management/peers at quarterlyworkshops during thefirst year

R&D in LPDNs: STAID7 Amount received in competitive rearch grants AmountinRp. Amount increase8 Indonesian patents Number per,yar Increae in number9 Intenational patents Numberperyear Increse in number

10 ModeUPrototye/Software development Numberper ear Increae in numberII Research papen in international jounals Numberper,year Inaree in number12 Research papers in Indonesian joumals Numberperywar Incrase in number

Jrnowldc 7tansferoTo andMOP

13 Transfer of knowledge to peem Number of seminars All retuneea hold one or morasemirna for their peers

14 Review rticles tag;eted to usr of new knowledge Number Increae in number15 OfrLcial teching in universities A sectoral colleges Number ofcourses updated Faster introduction of new courme

contents16 Official presentations to privte sector staff Number Increase in number17 Official presentations to public sector stff Number Increase in number

45

Annex 8Page 2 of 3

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Quality Indicaton

IndiCatOr Unit of Measurned ImproVemntoutcome

IS Projec with pivat iuy Number and vaue Ireaue in nmmba19 Project with pubhlic indusies Number and value Inase in nunbr20 Projecs with mveraaties Number and value Irease in nber21 Ptojet with odhe pbhc Numberandvalue Increae in nUnber22 Review tidles taipted to inuy Number Increae in number23 Trani of inu staff Person dAs of training Incaee in mbe

24 Tranng of pblc dtw daff Person dy of training Inre in naumber

25 Offcil teaching in uiversities Nmber ofofurs updated Fasteritroduction of W4o.d

subject nates in iiesity edcion

27 Presentatios of rewdc in coty Number Increae in mnber

2S Presentstios of resarh ovas Number Increa in numbe

29 Acadmnic work in profsional societies Amount Incrse in ount

/s Subject to the Bank management decision about the inclusion of the R&D Maagemnent subcoenponent

- - - - - -

- - - - -_ -_ _ I -- 4- - -3yq D4 q A

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%T - - - - 9 - - - VAT - - - % - - - 9C1 - - - %GI - - - _ - YPdI VTIs - - - - - - - - - - - - - n - - - L - - - - - - uUUd _ T _ f

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off - - - - - - - - - - OKl - - - W> - M - - - OK - saa (Jaw '""a _w- a L

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47Annex 9

Page 1 of 4

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

MONITORING AND EVALUATION

Objectives

1. The objectives of the monitoring and evaluation activities are: (a) to monitor theimplementation of the proposed PHRDP II interventions so as to assure the project's quality, timelinessand effectiveness; and (b) to measure the impact of the project's major programs (graduate degreeprograms, TMPP, and pilot fresh SI graduate degree program) to assess their efficacy and to use theinformation gained to redesign the programs for sustainable operation. In the case of the pilot fresh SIgraduate degree program, a specific purpose is to build up the information and draw upon the experienceof the implementation to assist with the development of a new general merit-based overseas fellowshipprogram. To this end, the evaluation framework for the proposed project comprises a range ofinstruments, namely: (a) monitoring; (b) mid-term review; and (c) rigorous program impact-evaluationanalyses of the project's major programs. The Bank would review each of these evaluations at theappropriate annual reviews, and agree with the Government on any action plans or project modificationsto be undertaken as a result.

Monitoring

2. Routine Monitoring of Individual Fellowships. Progress of overseas fellows would bemonitored by the MOF, OTO, and STAID PIUs using the EEOs when they are assigned suchresponsibility. Domestic fellows would be monitored solely by the PIUs. The procedures for monitoringof fellows were refined during PHRDP I and are satisfactory. There would be further improvementsduring the second project including: formal reporting by the PIUs of their monitoring of fellows to theEEOs and to the home agencies of the fellows, on a quarterly basis; and overseas monitoring visits byPIU staff.

3. Annual Reviews. Each PIU would prepare an annual report and operational reviewwhich would analyze the actions programmed with those actually taken for: each project activity, budgetallocations and expenditures, the monitoring indicators, and progress review criteria agreed with theBank. Based on this review, an operational plan for the next year would be prepared using the sameformat.

Mid-Term Review

4. The mid-term review would be conducted by the PIUs and NASTOT with inputscommissioned to consultants as a basis for future investment in professional human resourcesdevelopment, particularly for a new merit-based national overseas fellowship scheme for the country.It would comprise inter-alia:

(a) evaluation of all program activities and their effectiveness in terms of the project qualityindicators and quantitative targets (Annex 8);

(b) a review of the impact studies for the graduate degree and TMPP programs (para. 12);

48Annex 9

Page 2 of 4

(c) an assessment of the lessons learned and issues identified at that stage from theimplementation of the pilot overseas fellowship scheme for fresh SI graduates, and fromthe studies of the design and implementation of general pre-service fellowship programsin other selected countries;

(d) a summary of financial performance compared with the original plan;(e) a summary of other implementation issues; and(f) recommendations.

Impact-Evaluation Analyses

5. PHRDP II would be a complex project with several very different objectives. Thefellowships range from three month training for local BAPPEDA officials, to help them make moreinformed local planning decisions, to graduate education for some of best and brightest men and womenin the country, to help jump-start Indonesia's technological and industrial development. In between theseextremes is the high level graduate degree and non-degree retraining to government officials, so that theycan better manage their increasingly complex tasks. Proper impact studies of these various interventionsare important and they are being attempted even though they are difficult to implement in practice.

6. A total of five studies are planned: two each for the graduate degree fellowship andTMPP programs; and one for the pilot fresh SI graduate degree program (para. 12).

7. Considerable data have already been collected about the effects of project fellowships.All the PIUs in PHRDP I have conducted re-entry studies. These studies have largely focussed on askinga former fellow, or the fellow's supervisor, if the education is being used or whether it has made animpact on the fellow's performance at work. The results of the reentry studies have been successfullyused to improve the programs and can be used to some extent to identify the impact of the fellowships.There have been some case studies compiled about fellows who became 'agents of development'. Inaddition to continuing the reentry studies, additional information will be collected during PHRDP II; inparticular STAID will begin monitoring professional contributions such as published papers and patents.As part of the Implementation Completion Report for PHRDP I the components are being asked tocompile data on the impact--including economic effect--of their various programs. This work must becompleted soon after March 31, 1995, the closing of the PHRDP I.

8. In order to reflect lessons from these on-going evaluation activities, detailed TORs forthe studies are best drawn up after the work of the various PIUs in compiling data and measuring theimpact of fellowships under PHRDP I has been completed and evaluated. At this time an outline of theprinciples of the evaluation process is presented here to assist with planning. TORs for the first studieswould be prepared for discussion with the Bank by April 1, 1996.

9. The evaluation will design and implement routine data collection and studies to evaluatethe project's major programs. The objectives of the studies are: (a) to measure the impact of graduatedegree programs on improving the performance and productivity of individual staff and of departmentsand laboratories; and (b) to carry out program evaluations of: (i) the TMPP and to assess the benefits ofthe training to participants; and (ii) the fresh S1 graduates pilot program including the post-program statusof the returnees.

49

Annex 9Page 3 of 4

10. From the beginning of the project, all PIUs would collect routine data which would beused to contribute to the studies which they would carry out later to evaluate the impact of the majorprograms (para. 12).

11. Routine Data Collection. This effort should be designed to further improve theevaluation capabilities in MOF, OTO and STAID. It will require: (a) routine and ongoing collection ofkey data for each major program; and (b) use of a common format for recording data within each PIU.The kinds of data collected will vary by major program type. Development of the core data bases wouldbe undertaken by collecting background data on a time-series of key variables. This practice of collectinga common set of variables should be institutionalized for all interventions.The data to be collected would include:

(a) the project quality indicators and quantitative targets (Annex 8);

(b) the data for fellowship programs would also include salaries, job grades, number ofpromotions, and duration since return, for primary jobs and also for secondary jobswhere this can be collected. Specifically for LPND fellowships, the data would includeresearch output utilization; and

(c) for the fresh S1 graduates program, the data would include: full background details ofapplicants and selected fellows, including wealth or income outcome of the means teststo select fellows, and other programs they applied for such as an URGE domesticfellowship; how they were selected for an overseas rather than a domestic fellowship inthe case that they applied for both; progress of pre-departure training; and progressduring their overseas program.

12. Purpose and Planning of the Studies. In addition to the routine data collected for eachmajor program, additional data would be collected through survey for each study. For the graduatedegree fellowship and TMPP programs, the studies would be completed by the mid-term review andthe completion of the project. The objective of the first studies of fellowship impact would be to evaluateprogram interventions and to improve the programs during the remainder of the project. For the freshSI graduate program, one study will be carried out when enough fellows have returned (about the endof 1998) in order for the results to be used for the design of the possible new national merit-basedoverseas fellowship scheme. The final studies of all key programs would be designed to yield concretesuggestions for improving the quality and or to evaluate the effectiveness of the major programs for long-term sustainability and as an important contribution to the Implementation Completion Report. Thesurveys for these studies would be planned as follows:

(a) (i) surveys of selected overseas and domestic S2 and S3 returnees and a control group ofstaff (including the supervisors/managers of people surveyed); (ii) tracer surveys ofTMPP graduates; and (iii) a tracer survey of the graduates of the fresh SI graduatesprogram including a control group; and

(b) a longitudinal series of information about returnees from overseas graduate degreefellowship programs would also be obtained by including in these surveys the returneeswho were sampled for the tracer surveys carried out during PHRDP I.

50Annex 9

Page 4 of 4

13. Survey Design. The design of each survey instrument, its methodology, and limitations,would be thoroughly discussed by the project staff and reviewed by the Bank (para. 8). In all caseswhere there is a second survey, the design of this will evolve from the experience of the earlier one. Thesurvey design would take into account the following considerations:

(a) the methodology should build on the experience of the tracer studies used to assess theimpact of returnees during PHRDP l;

(b) to the extent possible, the control group selected for fellowship programs should resemblethe fellows who attend programs particularly with respect to job grade and responsibility;and

(c) both quantitative and qualitative data should be measured. The quantitative data suggestedin para. 11 would be used and the additional information to be collected through thesurveys would be decided when the surveys are being designed.

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJCTi

Expenditure Accounts by Years - Totals Including Contingencies

Totals Including ContinLpendes (Rp Blllbn) Totals Including Contingendes (USS Millon)

Category of Expenditure 199S 1996 1997 1998 1999 Total 1995 1996 1997 1998 1999 Tota

Furniture, Equipment and Material 0.4 0.1 - - - 0.5 0.2 - - - 0.2

Feflowships and Training ProgrmsOverseas Fellowships and Training 12.2 26.2 27.6 152 1.5 82.7 5.6 12.1 12.8 7.1 0.7 38.4

Domestic Fellowships and Training 3.0 5.4 6.1 3.7 0.2 18.4 1.4 2.5 2.8 1.7 0.1 8.5

FellowshipsfromPPHRDPI(Loan3134-IND) 16.4 11.8 4.1 1.1 - 33.4 7.6 5.5 1.9 0.5 - 15.5

Preparture Training 4.0 3.5 2.6 0.8 0.1 10.9 1.8 1.6 1.2 0.4 0.0 5.1

Irnplmentation & Monitoring Costs 1.1 2.0 2.1 1.3 0.4 6.9 0.5 0.9 0.9 0.6 02 3.1

LinklProgramDevelopment 0.6 2.6 2.3 0.2 - 5.7 0.3 1.2 1.1 0.1 - 2.7

Fellows' Salary 4.2 6.1 6.0 4.0 0.3 20.7 2.0 2.8 2.8 1.9 0.1 9.6

Sub-total 41.6 57.5 50.8 26.4 2.5 178.7 19.3 26.7 23.6 12.2 1.2 82.9

. Technkal AssistanceInternational Consultants 0.8 0.6 - 0.1 0.1 1.6 0.4 0.3 - - - 0.7

National Consultants 0.2 0.2 0.2 02 0.2 1.0 0.1 0.1 0.1 0.1 0.1 0.5

Sub-total 1.0 0.8 02 03 0.3 2.6 0.5 0.4 0.1 0.1 0.1 1.2

Research and Studies 0.8 0.8 0.8 0.6 0.8 3.8 0.4 0.4 0.4 0.3 0.4 1.8

Project Management 3.8 3.9 4.1 4.3 3.1 19.2 1.7 1.8 1.9 2.0 1.5 8.9

Total Project Costs 47.6 63.2 55.1 31.0 5.8 201.1 21.7 28.9 25.6 14.3 2.7 93.2

Figures nay not add up due to rounding,

Y:

EKDONESASECOND PROFESSIONAL HUMAN RESOURCE DVELO PMENT PROJECT

Exp.mdkm Ateo by Comp.mmta - Teta Incudhag C _ihg.Din (US$ Mi_)

CA_qgmY of ExpiWN _ Fe_waMips ad Traha NASTOT TotlOTO MOF STAID

A. FmWbw, Eqiipmint, d Mas - - 0.2 0.2

Be Fe _wddps ad Trahg PrograhmOverusea Felk ahips md Tamig 10.7 11.5 16.2 38.4Domesbe Fe_IO w and Trum 5.5 1.1 1.9 8.5Feilowsla firm PHRDP I (LAI 3134-IND) 5.5 0.1 9.9 15.5P'm4epmtore Trainin_ 1.0 2.3 1.8 5.1lhnp1mna ha Mcwadoringcosts 0.9 1.1 1.1 - 3.1Link Prgm Dvelopm - - 2.7 - 2.7 -nFelow. Salay 3.4 1.8 4A - 9.6 rSubIotal 27.0 17.9 38.0 - 82.9

C Tedmcl Am _tancnt.naoCazdtat 0.2 0.5 0.7

Nstial CoanItu 0.1 * 0.4 _ 0.5Sub-otl 0.3 - 0.9 - 1.2

Da Ra=ra uad S8udhs 0.6 0.2 0.8 0.2 1.8

EL Project Managaumit 2.8 1.2 4.4 0.5 8.9

Total Project Cust 307 193 44.1 Q7 94.8

Taxes - 0.1 0.1 - 0.2Foreign Exchane 17.3 12.9 27.1 0.1 57A

*0

53

Annex 11

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

ESTIMATED SCHEDULE OF DISBURSEMEWFM

DisbursementsIIBRD Fiscal Year Amount per Cumulative Disbursement Profile /a

semester Amount % %

12252 5.0 5.0 7 0

19961 7.0 12.0 17 12 8.0 20.0 29 3

12221 8.0 28.0 41 62 7.0 35.0 51 14

9981 7.0 42.0 61 222 6.0 48.0 70 34

i2221 6.0 54.0 78 462 5.0 59.0 86 58

1 5.0 64.0 93 702 2.5 66.5 96 78

20011 2.5 69.0 100 86

/a Latest standard disbursement profile for education projects in Indonesia, August, 1993

54

Anneac 12

ZiDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

SELECTED DoCuMENTS AND DATA AVAABLE IN THE PROECT FILE

A. Selected Reports and Studies Related to the Sector and Project

A.1 OTO, "Pilot Reentry Study of OTO Degree Alumni," April, 1993.A.2 OTO, "Executive Summary: The TMPPD Training Impacts," July 1994.A.3 MOF, "Reentry Assessment of Overseas Training in MOF Component under World Bank

Funding," 1993.A.4 STAID, "Overseas Fellowship Program (OFP) Completion Report - Annex 1: OFP Results: An

Assessment of Performance and Impact of Returnees," May, 1993.A.5 STAID, "Science and Technology Indicators of Indonesia 1993 - 1st Edition," 1993.A.6 GOI, "Government Decree No. 14 on Education and Training of Position for Civil Servants,"

1994.A.7 GOI, "Government Decree No. 15 on Appointment of Civil Servants to Structural Positions,"

1994.A.8 GOI, "Government Decree No. 16 on Functional Positions of Civil Servants," 1994.A.9 Directorate General of Higher Education, Ministry of Education and Culture, "List of Fields

of Study for S2 and S3 in Indonesian Universities."

B. Background Papers Related to Project Preparation

B.1 OTO, "PHRDP II - Project Proposals," January, April, & July, 1994.B.2 MOF, "PHRDP H - Final Proposal," July, 1994.B.3 STAID, "PHRDP II - Project Proposals," January, April, & July, 1994.B.4 Detailed Project Cost TablesB.5 Green-cover Staff Appraisal Report, September 23, 1994

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Organizational Structure of PERDP II

National Stccring Team for Ovrsas Training(NASTO0)

nm amkmo 6 Ra4ENASDmvCwmAsw uziatwferk. H~m RAuwva, A Saow. med T.ehmaV,j

D.wd.pneWSec&w FVwtfor Lanue and Ou1tsw. BAPPEN~AS

D0100H*4 Rurme of RWVgiw Ehcmwiao Ceburv, A Sp-&, BAPPEN~ASfd w:Dr. GumiW of Hiahw Eh.cwtsomk MWaay of EdAscimw A Cukear

Okarwsov4 RPI, MOFAssietm* Miusat. II, MEANPN

DDiutyfo Trmug, L4NDqyr Eabusmufor Hmu Rmoc, BAPPENAS

Dq_uy aH,uisfw FlW ig C-pom.^S BAPPENASDqiuty C2 ureuferA& r, iox LAN PPT

Dyeod Ceairmmfeer A *i. di 'dire, OTO, BAPPEVAS tn1e1m4 Blmfeor Fereeg. Tedeical Ceepewme CakiSeateit

I NASTOT Secretariat j

Ovrseas Trainig Office (OTO) Mrundsty of Finance (O) Sciene and Tech,ologyforProjedImpkmmtaion Uni Project Im^pkemtaion Unit

Projectlmkd on Unit

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Organizational Structure of OTO Project Implementation Unit

General Director! Overseas Training Office (OTO)

_ '

Directorate I Directorate II Directorate HII Directorate IV Directorate VSelctcn Tesing Pacement & Monitoting Systems E Eabation Administration A trationg J

Clihe Mistries & Arencies:Miustries of Home Afmiars, Public

Works, Agriulture, Forestry;BAPPENAS, BAPPEDA, LPNDs;

Private Universiies

N1

Chart 3

INDONESIASECOND PROFESSIONAL HUMAN RESOURCE DEVELOPMENT PROJECT

Organizational Structure of MOF Fellowship and Training Implementation Unit

Steering Committee

Adisors: Minister of FinanceSecretary General, MOF

Chairman: Chief, BPLK, MOFSecrearv: Head, Personnel Education & Training Center

Members: Secrdary General, Ministry of TradeSecrdeary General, Ministry of Industry

Secrdeary General, Ministry of Foreign AffairsSecrdeary General, BKPM

Director of Project Implementation Ulnit (PI)QChief, Overseas Training Division, BPLK, MOF

Secretariia

Section for Section for SecSton forSelection & Preparaton Placement & Monitoring Administration & Finance

.~ ~~~~~~~. . . .. ... ... . . .

Client Ministries:Ministry of FinanceMinistry of Trade

Ministry of IndnstryMinistry of Foreign Affairs

BKPM

........ .. 0

.

iti,i f S , g itiIhI ILL

hIIIIb1 Cm

85~ ~ i