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Bangladesh has one of the largest primary school systems in the world, with over 16 million children enrolled in over 80,000 primary schools. Considerable progress has been made in improving access to free and compulsory formal and nonformal primary education. Gross and net enrollment rates in primary education improved from 93.7% and 87.2% in 2005 to 103.5% and 93.9% respectively in 2009. Bangladesh was one of the few countries to achieve gender parity up to the secondary level by 2005. Despite significant progress in access, high internal inefficiencies persist - high student dropout and repetition rates, low completion and high student and teacher absenteeism. Two rounds of national student assessment indicate low student achievements of students in grades 3 and 5, although the results are improving. The Education for All: National Plan of Action II (NPA II), 2007 notes major weaknesses in indicators of classroom achievement and a growing quality divide between rural and urban schools.

The Government's National Education Policy (NEP) envisages to address the above systemic issues. It plans to (i) achieve education for all (EFA) by 2015; and (ii) ensure that every child is able to start primary school by 2011. NEP will help to enhance primary school education by reducing disparities between different types of schools, which will help to upgrade the workforce to meet national economic goals. There is an urgent need to reduce targeted rural and urban poverty by supporting the expansion and improvement of primary school education in disadvantaged locations in rural communities and urban slums, thus generating enhanced employment possibilities. The major internal benefits foreseen are: reduced repetition and dropout, improved completion rates of primary schooling, enhanced net enrolment rates from inclusive interventions for out-of-school children, and improved transition rates to secondary level education, all as a result of improved quality and relevance of education in schools with initial input deficits.

The government's Program will build on PEDP II, which is jointly funded by the Government and 11 development partners (DPs), including ADB as the lead DP. PEDP II established a strong foundation for a SWAp by bringing the government and DPs for the first time under one program from the previously 27 projects including 8 funded by different DPs in primary education. PEDP II has achieved the following: (i) mainstreaming minimum service standards across government administered primary schools through the introduction of primary school quality level (PSQL) standards; (ii) fair, transparent, and efficient teacher recruitment system for government primary schools which was also commended by Transparency International; (iii) introduction of results based management (RBM) which has led to the publication of the Annual Sector Performance Report covering progress on key performance indicators (KPIs) and PSQL indicators; (iv) initiation of the school level improvement plans (SLIPs) including school grants to support decentralized planning to address needs of participating schools; and (v) introduction of the terminal examination at the end of Grade 5, and implementation of the national student assessment every alternate year to assess progress on student achievements in grades 3 and 5.

Lessons identified from PEDP II including those from the Sector Assistance Performance Evaluation (SAPE) done in December 2008 are applied in the government's Program design: (i) carefully analyze the trade-offs between improvements in access and quality since quality improvement is a slower process that requires more direct support to schools and classrooms; (ii) mainstream core activities with built-in flexibility and provision to pilot and upscale implementation to ensure more sustainability; (iii) build on the improvements in governance under PEDP II (improved teacher recruitment, introduction of RBM, introduction of school improvement planning) with a funding modality more closely aligned with the government system, and greater focus on results; (iv) broaden and deepen the government implementation capacity by nurturing leadership at all levels, strengthening coordination at the Ministry of Primary and Mass Education (MoPME) level, and targeting high quality technical assistance (TA); (v) further reduce transaction costs through more stringent partnership arrangements; and (vi) provide adequate flexibility and time for preparation, transitional arrangements, and sequencing of reforms.

The proposed government's program which will be supported by the Project will build on PEDPII achievement and experience. It will (i) broaden the scope to include one year pre-primary and non-formal and second chance primary education; (ii) deepen quality improvement through improved teaching and learning practices in the classroom including improved assessment; (iii) enhance school governance, accountability and community mobilization; (iv) provide targeted support to disadvantaged groups and locations; (v) institutionalize human resource development (HRD) to incentivize the system and enhance capacity; (vi) deepen and institutionalize RBM and monitoring and evaluation mechanism at all levels; (vii) target and ensure effective utilization of TA and capacity support at all levels within an emerging decentralization framework; and (viii) enhance sub-sector management, coordination and greater alignment with the country system.

PEDP III will support the government's program using a project lending modality. This is best suited as: (i) interventions are more of investment nature and incremental steps toward reforms, rather than structural policy reforms, and (ii) the fiduciary environment requires close oversight by ADB, and therefore is not suitable for the use of program lending. However, to align with the salient features of the government's Program under a SWAp, PEDP III has incorporated the following innovative features.