Report No. 7604-SD Bangladesh Vocational and Technical ... · Bangladesh Vocational and Technical...

Report No. 7604-SD

BangladeshVocational and Technical Education Review

June 28, 1989

Population and Human Resources DivisionCountry Department 1, Asia Region

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distibution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization.

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Excshange Rate

Taka 33.0 - US$1 Summer 1988

Fiscal Year

Government of Bangladesh July 1 - June 30

A<bbreviations and Acronyms Used

2FYP - Second Five Year PlanADAB - Association of Development Agencies of BangladeshBADC - Bangladesh Agricultural Development CorporationBITAC - Bangladesh Industrial Technical Assistance CenterBJMC - Bangladesh Jute Manufacturers CorporationBMET - Bureau of Manpower, Employment and Training (Under MOML)BRAC - Bangladesh Rural Advancement CommitteeBSCIC - Bangladesh Small and Cottage Industries CorporationBSCIC - Bangladesh Small and Cottage Industries CorporationBSS - Bittaheen Samabaya Samity (Cooperative for Resourceless

People)BTEB - Bangladesh Technical Education BoardCETA - Comprehensive Employment and Training ActGOB - Government of BangladeshIDA - International Development AgencyMOE - Ministry of EducationMOML - Ministry of Manpower and LaborNCSDT - National Council for Skill Development and TrainingNGO - Non-government OrganizationNSS II and III - National Skill SIandard (Level II and III)SCI - Small Cottage IndustrySCITI - Small Cottage Industries Training CenterSIDA - Swedish International Development AgencyTTC - Technical Training Centers (MOML Administered)VTE - Vocational-Technical EducationVTI - Vocational Training Institutes (MOE Administered)VTTI - Vocational Teacher Training InstituteYWCA - Young Women's Christian Association

FOR OFFICIUL USE ONLYBANGLADESH

VOCATIONAL AND TECHNICA FDUCATION REVIEW

Table o_. Contents

Pare No.

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . .i

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Purpose and Scope of the Review ... . . . . . . . . . . .. 1Social and Economic Setting . . . . . . . . . . . . . . . . . . 1Sector Context . . . . . . . . . . . . . . . . . . . . ... . . 6

II. STATUS OF FORNAL VTE IN BANGLADESH . . . . . . . . . . . . . . . . . 8Overview of Formal VTE . . . . . . . . . . . . . . . . . . . . 8

National Council for Skill Development and Training(NCSDT) . . . . . . . . . . . . . i . . . . . . . . . 8

Bangladesh Technical Education Board (BTEB) . . . . . . . 9Vocational Training Instit:|tes (VTI) . . . . . . . . . . . 9Technical Training Centers . . . . . . . . . . . . . . . . 9Vocational Teacher Training Institute (VTTI) . . . . . . . 10

Internal Efficiency of Formal VTE . . . . . . . . . . . . . . . 10Management . . . . . . . . . . . . . . . . . . . . . . . . 10Facilities and Equipment . . . . . . . . . . . . . . . . . 11Instructional Personnel . . . . . . . . . . . . . . . . . 13SuppoLt Staff . . . . . . . . . . . . . . . . . . . . . . 15Teacher Education . . . . . . . . . . . . . . . . . . . . 15Curriculum and Instructional Materials . . . . . . . . . . 17Student Profile . . . . . . . . . . . . . . . . . . . . . 17Student Selection, Examination and Certification . . . . . 18Cohort Analysis and Internal Efficiency Indicators . . . . 19

Costs and Finance of Formal VTE . . . . . . . . . . . . . . . . 23Unit Costs . . . . . . . . . . . . . . . . . . . . . . . . 23Financing of Formal Secondary VTE . . . . . . . . . . . . 24Conclusions . . . . . . . . . . . . . . . . . . . . . . . . 25

External Efficiency of Formal VTE . . . . . . . . . . . . . . . 25Introduction . . . . . . . . . . . . . . . . . . . . . . . 25Rationale for Evaluation of the External Efficiency . . . 27

Estimation of Returns on the Domestic Labor Market . . . . . . 29Earnings .... . . . . . . ....... . . . . . . . . 29Comparison of Wages and Wage Differentials . . . . . . . . 30Conclusions . . . . . . . . . . . . . . . . . . . . . . . 30

Estimation of Returns on the Middle East Labor Market . . . . . 31Remittances .... . . . . . ..... . . . . . . . . . 32

Estimation of Lifetime Earnings Increments Due to Formal VTE 33Results and Simulation in the Estimation of External

Efficiency .... . . . . . ...... . . . . . . . . . 34Model 1 . . . . . . . . . . . . . . . . . . . . . . . . . 35Model 2 . . . . . . . . . . . . . . . . . . . . . . . . . 35Model 3 .... . . . . . . ..... . . . . . . . . . . 35Model 4 .... . . . . . . ..... . . . . . . . . . . 35Regressions .... . . . . . ...... . . . . . . . . . 37

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Summary and Conclusions .... . . . . . . . . . . . . . . . . 42Summary .... . . . . . . . . . . . . . . . . . . . . . 42ConclusiLns . . . . . . . . . . . . . . . . . . . . . . . 43

I'l. S_TATUS OF NON-FORMAL VOCATIONAL AND TECHNICAL EDUCATION 6ND TRAINING 45Introduction . . . . . . . . . . . . . . . . . . . . . . . 45

Governmental Non-Formal Programs . . . . . . . . . . . . . . . 45Bangladesh Industrial Technical Assistance Center (BITAC) 45Directorate of Women's Affairs . . . . . . . . . . . . . . 46The Bangladesh Small and Cottage Industry Corporation

(BSCIC) .... . . . . . ..... . . . . . . . . . 46Non-Formal VTE Programs of NGOs ... . . ..... . . . . . . 48

St. Joseph Sehool for Industrial Trades . . . . . . . . . 48Rural handicrafts and cottage industries . . . . . . . . . 48Dhaka Youn6 Women's Christian Asso,iation (YWCA) .... . 49Ayesha Foundation .... . . . ..... . . . . . . . . 49Savar Peoples Health Center . . . . . . . . . . . . . . . 49

Private Non-Formal VTE Programs . . . . . . . . . . . . . . . . 50Private Non-Profit Trade Schools . . . . . . . . . . . . . 50

Summary of Non-Formal Programs . . . . . . . . . . . . . . . . 51

IV. ISSUES AND OPPORTUNITIES .... . . . . . . . . . . . . . . . . . . 54Improving the Internal Efficiency of Formal VTE . . . . . . . . 54

Vocational Training Institutes and Technical TrainingCenters .... . . . . . ...... . . . . . . . . 54

Improving the Training of VTE Teachers and Administrators . . . 57Improving the External Efficiency of Formal VTE . . . . . . . . 58

Employment of Graduates . . . . . . . . . . . . . . . . . 58Management of Vocational and Technical Training . . . . . . . . 59

National Council for Skill Development and Training(NCSDT) . . . . . . . . . . . . . . . . . . . . . . . 59

Bangladesh Technical Education Board . . . . . . . . . . . 60Local Management . . . . . . . . . . . . . . . . . . . . . 60Government Intervention in Apprenticeship Arrangements . . 60Regulation of Private Schools . . . . . . . . . . . . . . 61Role of Skill and Certification and Examination Systems . 61Role of VTE in Literacy Training . . . . . . . . . . . . . 62Role of VTE in the Development of Women . . . . . . . . . 63Primary Education . . . . . . . . . . . . . . . . . . . . 63Women in Bangladesh Society . . . . . . . . . . . . . . . 64Women's VTE in the Five Year Plans . . . . . . . . . . . . 64

V. POLICY RE'jMKNENDATIONS AND DEVELOPMENT PRIORITIES . . . . . . . . . 67Formal VTE Policy and Institutional Reform . . . . . . . . . . 67

Industry-Education Linkages . . . . . . . . . . . . . . . 67Student Entrance Requirements . . . . . . . . . . . . . 68Expansion of Formal VTE .. 68Length of Course Offerings .. 68School Size .. 68Female Participation in VTE . . . . . . . . . . . . . . . 68Curriculum Modification .. 69

Non-Formal VTE Policy Reform .. 69Accreditation of Private and Other NGO Sponsored Schools . 69

Investment Opportunities ............ . 69

LISTS OF TABLES AND DIAGRAHS

Tables in Text

Table 1.1 Labor Force Characteristics of Bangladesh and SelectedNeighboring Countries ... . . . . . . . . . . . . . . . 3

Table 1.2 Nutrition, Population and Educational Characteristics ofBangladesh and Selected Neighboring Countries . . . . . . 4

Table 1.3: The Relationship of Entry Education to Post-VTIEmployment Preferences,1988 . . . . . . . . . . . . . . . 6

Table 2.1 Efficiency of Design Capacity to Actual Output . . . . . . . . 13Table 2.2 Student to Personnel Ratios ..... . . . . . . . . . . . . 13Table 2.3 Sumnary Data on VTI and TTC Teachers . . . . . . . . . . . . . 14Table 2.4 Efficiency of VTTI Design Capacity to Graduate Output . . . . 16Table 2.5 Student to Personnel Ratios of VTTI . . . . . . . . . . . . . 16Table 2.6 Personnel Costs of VTTI Compared to Recurrent Costs

1985 - 1987 . . . . . . . . . . . . . . . . . . . . . . . 16Table 2.7 Cohort Analysis for Regular Grade II Graduates of VTIs

1986-1988 .... . . . . . . . . . . . . . . . . . . . . 20Table 2.8 Cohort Analysis for TTCs, 1986-1988 . . . . . . . . . . . . . 21Table 2.9 Hypothetical Cohort Analysis for VTIs, 1986-1988 . . . . . . . 22Table 2.10 Hypothetical Cohort Analysis for TTCs, 1986-1988 . . . . . . . 23Table 2.11 Personnel Costs Compared to Recurrent Costs

1987-1988 . . . . . . . . . . . . . . . . . . . . . . . . 24Table 2.12 Estimated Rates of Returns for TTCs for

Current Situation and Simulation Analyses . . . . . . . . 36Table 2.13 Estimated Rates of Returns for VTIs for

Current Situation and Simulation Analyses . . . . . . . . 37Table 4.1: Female Enrollment in VTE ... . . . . . . . . . . . . . . . . 66

Tables in ANNEXES

Table A.1 Projected Labor Force by Sex and Age Category, 1985(Thousand)

Table A.2 Population by Economic Category by Sex and Residence,1984-1985 (Millions)

Table A.3 Labor Force Participation Rates by Sex, Age Group,and Location 1984-1985 (Per Cent)

Table A.4 Households by Main Occupation and Sex of Household'sHead 1984-1985 (Per Cent)

Table A.5 Employed Persons 10 Years and Over by Employment Statusand Location 1984-1985 (Per Cent)

Table A.6 Employed Persons 10 Years and over by Main Occupationand Location 1984-1985 (Per Cent)

Table B.1 Average Daily Wages, without Food, by Sector, 1987/88

Table B.2 Average Daily Wage Rates in Construction, by Type ofLabor and Town, 1986/87 (Wages: Taka/day)

Table B.3 Average Daily Wages in Censtruction for Roof Hammerersby Town for Men, Women, and Children, 1986/87 (Wages inTaka/Day)

Table B.4 Average Daily Wages of Different Kinds of SkilledLabor, 1986/87

Table E.5 Alternative Indicators for Comparison of Wages betweenSkill Levels on Domestic Labor Market (Derived fromTables B.1, B.2, B.3 and B.4)

Table C.A Departures for Employment Abroad, by Country ofDestination, 1985-1988

Table C.2 Number of Bangladesh Nationals in Employment Abroad byOccupational Category, 1984 - 1988

Table C.3 Number of Bangladesh Nationals in Employment Abroad byOccupational Level, 1985-1988

Table C.4 Projections of Number of Bangladesh NationalsWorking Abroad

Table C.5 Remittances from Abroad, by Region, 1982/83 - 1987/88(Millions of Taka)

Table C.6 Minimum Salary for Bangladesh Migrant Workers forEmployment Abroad

Table C.7 Estimated Wage Ratios for Minimum Salary forBangladesh Migranit Workers for Employment Abroad(Derived from Table C.6)

Table D.A Allocation of 1000 Students in TTCs: Models 1 & 2Table D.2 Allocation of 1000 Students in Hypothetical TTCs

with 1-Year Courses: Models 3 & 4Table D.3 Allocation of 1000 Students in VTIs: Models 1 & 2Table D.4 Allocation of 1000 Students in Hypothetical VTIs

with 1-Year Courses: Models 3 & 4Table D.5 Analysis oL Rate of Return to TTCs, Assuming Fixed

Unit Costs, Employment Rate 30%Table D.6 Analysis of Rate of Return to All VTIs, Assuming Fixed

Unit Costs, Employment Rate 30%Table E.A Summary of Regressions for TTCs, All ModelsTable E.2 Summary of Regressions for VTIs, All ModelsTable E.3 Comparison of Regression Coefficients for Employment and

Completion, Models 1 and 2, TTCs and VTIsTable F.1 BSCIC Training Programs, 1987/88Table F.2 VTE Programs of the YWCA, 1988Table F.3 Private, Non-Profit Trade Schools

Piagrams

Diagram 1 Completion Rate, Employment Rate, andRate of Return for Model 1 . . . . . . . . . . . . . 38




This report is based upon the work of a World Bank/iDA mission toBangladesh in October/November 1988 as well as shorter missions in February,March, May and August, 1988. Members of thb- main mission were Frank Farner,Educator (mission leader); Robert McGough, Vocational-Technical Educator;Richard Noonan, Economist (consultant); Gert Dolbnin, Vocational Educator(UNESCO); and Hans Baritch, Vocational Educator (consultant), assisted byBashir Ahmed, resident mission, Dhaka.

BANGLADESH

VOCAfIONAL AND TECHNICAL EDUCATION SECTOR REVIEW

EMECUTIVE S Y

1. This review was designed to: (a) analyze major obstacles tointernal and externdl efficiency of formal systems of secondary level VTE; (b)identify possible reforms that would upgrade and improve the performance offormal VTE; and (c) examine alternative non-formal approaches to formal VTEwith special attention to training services that would contribute to thealleviation of poverty and increase the participation of women in training andemployment. The review takes into account the Government's stated objectivesregarding poverty alleviation, reduction of illiteracy and increased servicesto women. The review is intended to provide a foundarion of data andrecommendations which is needed for effective dialogue on reforms andinvestments in secondary VTE.

2. In order to make the most effective use of limited resources,available to carry out the review, its coverage was limited to: (a) ananalysis of national organizations that adm'.nister formal VTE systems; (b) ananalysis of Vocational Training Institutes (VTls) and Technic.l TrainingCenters (TTCs); and (c) a study of a limited sample of successful non-formalVTE programs fLd activities which have shown potential. Accordingly,polytechnics, ronotechnics, higher technical educatior institutions,apprenticeships and in-plant training have been excluded.

Background

3. By international standards and regional standards, the educationsector in Bangladesh is relatively underdeveloped. The enrollment ratio iscurrently only 60 percent in primary schooling, 18 percent in secondaryeducation, and 4 percent in higher education compared to correspondingregional averages of 73, 23, and 5 percent, respectively. Public spending oneducation amounts to less than 2 percent of GNP, in contrast to the average of2.3 percent in other South Asian countries, and 4.1 percent in East Asiancountries. In this context, it is no surprise that the Government's chiefconcern lies in the development of general education, particularly at thelower levels of the system. Vocational and technical education (VTE)nevertheless remains an important component of the Government's overallstrategy for human resource development, given the demand for skilled manoowerin the domestic economy. In recent years, for example, that subsector wasallocated the third largest share (average of about 17.7X for 1967-89) of thebudget for education, after primary and secondary education.

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4. In the public sector, the main providers of formal VTE are theMinistry of Education and Ministry of Labor. Institutions under the firstministry include four engineering colleges, 17 polytechnics, 51 vocationaltraining instituties (VTIs), 16 commercial institutes, and a number ofspecialized colleges; the combined enrollment in 1986 was about 20,000students. The Ministry of Labor supports technical training centers (TTCs).Currently, there .re 11 these in operation, with a total enrollment of over2700 full-time students and 900 part-time students.

5. The Ministry of Youth and Development also offers VTE courses toout-of-school youth. The Ministry of Social Welfare and Women's Affairs runstraining programs in production-cum-training centers. Short courses inagriculture are offered by the Ministry of Local Government and RuralDevelopment and Cooperatives as part of its integrated rural developmentprogram. Most of these training programs are non-formal in nature, and aretargeted to specific groups of people who are disadvantaged in one way oranother. A third feature is the stress on short courses in employable skills,including basic literacy and numeracy.

6. The private sector in Bangladesh also plays a rcle in providingtraining. Over 100 non-government organizations (NGOs) are active in thisfield. Given the nature of NGOs, most training programs are directed at thepoor. School-based training -- in such trades as mechanics, electricalwiring, carpentry, lathe oper.tion, welding, and so on -- occurs in about 30NGO-operated schools. It is estimated that they have annual enrollments ofless than 2000 students. Apart from NGOs, profit-making private schools alsoexist, but their impact is small. Similarly, private firms also provide someformal and informal training for their employees, but only the larger firmsare active in any meaningful way. The national apprenticeship scheme is verysmall and ineffective, with less than 300 registered apprentices in thecountry.

Malor Findings

7. In Bangladesh, formal, secondary VTE is a centralized, nationallyadministered system. It is supported and delivered by only a few Governmentorganizations. The National Council for Skill Development and Training(NCSDT), a high-level, inter-ministerial organization, is intended to providemacro-level policy direction and other national-level services but is inactiveat present. The Bangladesh Technical Education Board (BTEB), providesaccreditation, testing, trade certification and curriculum developmentservices. The delivery of training services is provided through VocationalTraining Institutes (VTI) administered by the Ministry of Education andTechnical Training Centers (TTC) administered by the Ministry of Labor andManpower. Currentiv, these institutions produce about 3,000 certified skilledworkers each year. To produce these graduates, the Ministry of Educationoperates fifty-one VTIs with a total full-time enrollment of about 3,300(1988). The Ministry of Labor and Manpower operates eleven TTCs with a totalfull-time enrollment of about 2,700 (1988) ;and a part-time enrollment of about900 (1988). Both Ministries offer two-year programs of instruction leading to

iii

National Skill Standard (NSS) III at the end of the first year and NSS II atthe end of the second year.

8. Internal Efficiency. The internal efficiency of the VTIs and TICsis relatively low by most internationally accepted standards of comparison.For example, student to teacher ratios are 7.6:1 and 12.2:1 in TTCs and VTIs,respectively. Both of these figures are lower than the 15-25 to one ratioscommonly found in other countries. Similarly, only about 50% of the designcapacity of TTCs and VTIs is being utilized. As a comparison, utilizationrates 80% to 90% are commonly expected in many other countries. These findingspoint to administrative choices which clearly influence internal efficiency:(a) choices relating to teacher to pupil ratios, student flow, and class size;(b) choices regarding types and sizes of facilities and equipment which, inturn, affect the capital and recurrent costs of operation and the types andquality of instruction; and (c) choices regarding the selection criteria,training and costs of instructional and support staff.

9. Another concern must be the effect of high dropout rates on internalefficiency. VTIs currently lose about 56X of their entering cohort by thetime the group is ready to be placed in employment. The corresponding figurefor TTCs is 37%. In one recent study, 50% of 500 students ir.terviewedindicated that they had no intent to seek employment in the area for whichthey were being trained. These findings point to a larger picture wherestudents' desire and readiness to learn are affected by such negative factorsas: (a) enrollment of uncommitted students; (b) teachers having limitedindustrial experience; ar.4 (c) course offerings that are too long in duration.

10. In Bangladesh, nearly all of these factors join forces to drive downthe internal efficiency of VTE. Concerted action by the Government will benecessary to improve this difficult situation.

11. External Efficiency. In Bangladesh, like in other countries, theimprovement of the external eificiency of VTE is of prime importance to thesystem's potential. Without gains in the external efficiency of VTE, it wouldrequire dramatic improvements in the internal efficiency to insuresatisfactory rates of return. The external efficiency of the VTIs and TTCs,is low, mostly on account of the low placement rates of students. It wasestimated that, in both types of schools, enrolling students currently haveabout a 30% rate of employment in fields related to their training. This lowrate results from the following: dropouts from year 1 to 2; dropout duringyear 2; failure of students to both take and pass the final examination;decisions by some students to not seek employment; and lack of interest byemployers in offering employment to graduates because the training is notrelated to the needs of employers. To improve external efficiency theexisting formal syFtem must tackle all of these factors.

12. Rates of Return. In order to get a more accurate measure ofexternal efficiency in the VTIs and TTCs, rates of return on were estimatedthrough a cost-benefit analysis utilizing the following input variables: (a)cchort flow rates at different levels within the schools; (b) length andduration of training programs; (c) unit costs (recurrent and capital) perstudent per year; (d) current employment rate of graduates (defined as

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percentage of enrollments who find related employment in area of theirtraining); (e) wage differentials between skilled and unskilled workers invarious trade areas in the domestic labor market; (f) percentage of employedgraduates who find employment in the Middle East; (g) estimate of remittancesfrom gradu-ites who are employed in the Middle East; (h) wage differentialsbetween skilled and unskilled workers in various trade areas and countries inthe Middle East labor market; and (i) annual and lifetime earningsincrements.

13. With careful attention to the many technical considerations whichmust be included in rate of return analysis in education and despiLe thepractice of erring on the side of overestimation, the rates of return werefound to be -4.5X andd -1.31, respectively. The fact that both rates werenegative was not surprising when one considers the low placement and the highdropout rates of the two types of institutions. Since TTCs are considered tooffer the better program through the services of better teachers andfacilities, it is ironic that they have an even lower rate of return thanVTIs. Given the low placement rate, provision of better teachers and moreadequate facilities and equipment has the unfortunate effect of lowering therate of return.

14. In a quest for remedies to improve the low return to formal VTE, theeffects of increased placement and reduced dropouts and other factors wereqtuantified and simulations of the effects of changes in the operationsstudied. The results of these analyses may be summarized as follows:

(a) Under present conditions, the VTIs and TTCs are not a productiveinvestment.

(b) Reasonable improvements in just two factors would be enough tochange the rate of return from negative to a respectable positivefigure in the 81 to 10 range. The two factors are: (a) cuttingthe duration of courses in half; and (b) raising the placement ratefrom 301 to 50%. Both of these steps are entirely within thecapacity of the system to implement. If they are coupled with suchother reforms increasing capacity utilization and deferring furthercapital investments and improving student to teacher ratios, evenhigher rates of return could be expected. Although both of thesystems suffer from low internal efficiency, it is clear thatincreases in internal efficiency cannot, by themselves, make theinvestments profitable. The ,lacement of graduates must take highpriority. On the benefit side, the main problem appears to be thelack of a clear labor market connection.

(c) On the cost side, formal VTE programs are expensive, involving asthey often do substantial expenditures on machines, equipment,materials, and tools. Substantial investments have already beenmade in high quality modern equipment. Perhaps these expenditureshave been too high, relative to what the economy can support andutilize efficiently.

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15. Although the employment of graduates is recognized as important,over the next several years, the Goveinment can only marginally influence theavailability of employment for VTI and TTC graduates. Therefore, it would bemore fruitful to re-conceptualize and re-organize the TTCs and VTIs in such away that they are more directly responsive to the needs of industry andcommerce. Such improvements would probably involve changes in the studentbody, th, faculty, the curriculum, and the management of the TTCs and theVTIs.

16. Non-Formal Secondary VTE. The non-formal secondary VTE domain inBangladesh covers a wide variety of programs operated or managed by governmentagencies, NGOs and private entrepreneurs. Although most programs are designedfor male participants, a slightly larger proportion of training spaces isoffered to females than in the formal programs. The programs also vary in thenature of the skills being imparted. Some programs are intended to promoteindustrial productivity through training and, as such, have manycharacteristics of the formal system, except that the training period often isof shorter duration--an important plus for efficiency. Other programs aredesigr,ed to teach or transfer skills to unskilled persons for use inesti.blished trade areas. Another way to classify these programs is by whetherthe program is driven by employer demand or is started in order to provideopportunities to unemployed or under-employed persons. This is a particularlyimportant point in both formal and non-formal VTE programs. Repeatedly, inmany countries, it has been demonstrated that if there is little demand, therewill be limited success. A substantial proportion of the VTE programs inBangladesh were started without sufficient evidence of demand.

17. Several points emerged from the review of a representative sample ofnon-formal VTE programs:

(a) The programs are many and varied, but in total they do not comprisea large delivery system that has the capacity to impact the nationalmanpower needs of the country. It is unlikely that the total annualnumber of trainees affected could be larger than 20,000, which in anation with a population of over 110 million and a labor force of,30 million is far short of demand.

(b) With only a few exceptions, the programs are far too small toachieve economies of scale. Few programs have more th,an even 100trainees and the modal size of a program is in the neighborhood of20 trainees. Programs with equipment that is used for only 20trainees must be considered inefficient. Similarly, any instructorqualified to train 20 trainees would also be qualified to train manymore and, therefore, instructor resources are also being under-utilized in small programs.

(c) Many programs are offering training in handicrafts and other skillsfor which the market is not firm. Far morx emphasis should beplaced on two alternative training fields: (1) service trades forwhich there is clear demand in the domestic society (i.e. tailoringand dressmaking, hair dressing, electronic repair and secretarial

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services); and (2) industrial trades, including the production ofpotential export products.

(d) Opportunities for females to receive non-formal VTE are verylimited. Even though chances for training are not as bleak as inthe formal system, that offers little solace, since an average shareof places for females is still less than one or two percent when itshould be much higher. With the high level of awareness of "womenin development" issues among many of the foreign donors currentlyparticipating in the non-formal delivery mode, it is surprising thatmore attention is not directed to the needs of girls and women. InBangladesh, there is a need for more targeted resources to meet theexpanding requirements of girls and women.

(e) Success in employment is far greater where production is coupledwith training. A feature of many of the most promising programs inthe non-formal domain is the integration of employment as a pre-condition to training. One needs only to look again at the poorrecord of student placement in the formal system to understand howmuch is lost in the post-training employment step.

(f) The non-formal sector is better than the formal systems in choosingthe right people to train. This is due in large measure to thegrade 8 entry level or less used in most non-formal programs. Grade8 entry is probably still too bigh, but is far better than theprevai'ling tendency of formal programs to escalate entry from the8th grade to even college students.

(g) The ron-formal programs are better than the formal systems inholding the duration of training to less than two years. However,many ot the non-formal programs still require more training timethan necessary. This restricts output and raises unit trainingcosts. In non-formal programs, part of the longer duration may beattributable to the fact that production is often considered part oftraining. Still, every effort should be made to cut training timeto the optimum.

Policy Recommendations and Development Priorities

Formal VTE Policy and Institutional Reform

18. As the formal VTE systems are nationally administered, there is aneed to consider the modification or establishment of several policies at thlenational level. Some of these policies may require legislative action. Thesepolicies should also be linked to major institutional reforms. Of particularimportance is the need to reconfigure, reform and reorganize the formal VTEsystem (VTIs and TTCs) to offer far shorter courses in larger and fewerinstitutions. The TTCs and larger VTIs could serve as the core of areconfigured system. The system could also include the VTTI, with expandedfunctions in training master craftsmen and also providing teacher training

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services to NGOs and industry. The BTEB, already providing valuablecurriculum development and testing services, would be an important element.All TTCs would be included. and a few of the better, more urbanized VTIs mightbe incorporated as well. These institutions should also admit as students adifferent segment of society, i.e. those with less formal education who aregenuinely interested in employment after training and more females.

19. Industrv-Education Linkages. The limited employability of graduatesis the most significant factor affecting the low external efficiency of theVTE systems in Bangladesh. Each VTE school should be required to have anactive industry advisory committee. In addition, the Government shouldestablish a high-level national advisory committee comprised of industrialleaders in Bangladesh to provide input into the provision of vocational andtechnical skills training. The memibers should be appointed by the Presidentand should have the responsibility to report to a high level once per yearregarding the human resource needs of industry.

20. Associated with the establishment of the national advisorycammittee, a task force should be formed to investigate and document thevarious options to the improvement of employment opportunities in VTE. Thistask force, comprised of technical specialists and industry leaders shouldmake recommendations to the national advisory committee which in turn shouldpresent them at high levels in the Government for consideration andimplementation.

21. National Council for Skill Development and Training (NCSDT). Thereis a need to reconstitute and revitalize the NCSDT as the national agency tocoordinate skills development and training programs. It is vital that theGovernment focus upon a full reform of this organization. As it currentlyexists, it is mostly non-functional. It should he reconstituted to report toa high-level agency or organization that will have the power and linkages toeffectively coordinate the country's human resource development strategy. Itsnew responsibilities should emphasize the initiation of major policy reformsrelating to VTE and its linkages with industry.

22. Student Entrance Requirements. Most informed observers agree thatthe wrong students are often enrolled in the formal VTE programs. There is aneed to better match the needs of students to the potential employment in thenation. Evidence suggests that it would be useful to modify the entrancerequirements to allow for lower level students whu would be more willing totrain for, and accept, employment that is available upon graduation. Existingpolicies should be modified to require that enrollment be limited to thelowest prerequisite academic range which is determined for each course by theBTEB. In addition, VTE courses should be limited by established policy tostudents who have stated their intent to enter the occupation for which theywould be trained.

23. Expansion of Formal VTE. The low external efficiency beingexperienced by most of the TTCs and VTIs suggest that the Government shouldestablish policy wherein no new construction would be considered for secondaryVTE schools without clear, compelling evidence that: (a) there is a demand inthe proposed schools' areas of employability which cannot be met through

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existing VTE schools; (b) there is potential to fully enroll students who havean expressed inten for occupational craining that results in employment atthe wages currently being paid within the community; and (c) the communityinvolved would actively support the establishment of the school.

24. n_ngth of Course Offerings. TTCs and VTIs currently offer time-based training programs that are, by internationally recognized practices, toolong for the objectives and skills being taught. This practice results inhigher costs, and higher levels of dropouts. Currently, these programs aretwo years in duration. Existing policies should be modified to require thatNSS II and III courses be combined into a single, one-year course with anindustrial attachment that is limited to ree additional months. Inaddition, the Government should require tha. all students take examinations atthe end of their training to determine their individual level of certificat!on(NSS II or III), depending upon their ability to demonstrate their learnedknowledge and skills.

25. School Size. The VTIs are typically small (about 80 enrollees) andinefficient. For the foreseeable future, the Government should abandon theconcept of establishing small capacity VTE schools, such as the VTIs, in therural areas for the training of secondary studerLts in industrial trades. Amore considered approach would be establish new policies to require that VTEtraining be centralized into larger, more efficiently organized schools withresidential capacity.

26. Female ParticiDation in VTE. The participation of women insecondary, formal VTE is very limited. The Government should actively promotegreater female participation in VTE through the improvement of facilities(restrooms, dining areas, etc.), training of tea-hers and administrators,modification of curriculum to more adequately meet the needs of women, and theimprovement of recruitment and job placement systems for female students.Consideration should also be given to the establishment of a model TTC inDhaka to demonstrate the approaches needed to support improvements in femaleparticipation in VTE.

27. Curriculum Modification. The VTE curricula currently being used isnationally developed and controlled. It is judged to be fairly well managedand designed. It is, however, narrow in scope and restrictive to thepotential employment of students and graduates. The Government shouldestablish policy that requires that each school conduct an occupationalanalysis study in the employability area of that school (usually about 20 mileradius of the school) to determine the specific skills needed by the firms inthat area. This information should be used to determine a more targetedcurriculum scheme for the areas involved.

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Non-Formal VTE Policy Reform

28. Non-formal VTE courses and programs vary a great deal in theiradministrative structures, goals and clients. Therefore, it is quitedifficult to recommend policy reform that can uniformly improve the capacityof these diverse organizations to deliver VTE services.

29. Accreditation of Private and Other NGO Smonsored Schools. There isa need to establish minimum standards for facilities, equipment, curriculumand personnel who teach VTE in the private and NGO-sponsored schools. Policyshould be established requiring MOE to authorize and finance the BTEB toestablish and manage an accreditation program for all private and NGOsponsored VTE schools.

Investment Opportunities

30. With the assistance of international funding agencies, manygovernments have in the past, overinvested in secondary VTE without having ademonstrated need or an assurance of good returns on the investment. In somecountries, it may have been too early in the industrial development scheme toinvest in higher technology VTE. In others, weak management, misdirection,lack of resources and inappropriate policies may reduce the potential of theinvestment. In Bangladesh, the Government has indicated a desire to makeinvestments to build up the existing formal VTE system. The evidencepresented in the review clearly shows that there is a need to refrain fromsuch investments unless major reforms can be gained within the systems.

31. Although there is a great need to improve skills training inBangladesh, specific investments in this sector must be carefully thoughtthrough. With negative rates of return in both of the major formal systemsand only modest successes in the non-formal sector, it is difficult todetermine where investments with a reasonable return could be made. Surely,more investments in the VTI and TTC systems would not be wise.

32. In the near future, the investment approach should be experimentalin nature, foregoing further investments in infrastructure which have notproven successful. This approach would support innovative schemes which donot require heavy initial investments in infrastructure and which are clearlyin accord with the policies stated above. One way to accomplish this would beto establish a fund for the support of promising proposals which might becalled something akin to a Skills Development Fund. Proposals should besought from different segments of society--the Government, NGOs, privateschools and employers, even individuals. Criteria for choosing whichproposals would be supported and for the nature and scope of the supportshould be widely disseminated and strictly promote the principles of: (a)employment generation; experimentation; increased opportunities for women; andthe development of infrastructure only after there is a demonstrated need.The fund could extend support in both grant and loan forms depending upon theability of the programs to repay and the size of the investment needed.

x

33. In addition to the experimental programs, some investment may beneeded in infrastructure to provide girls and women with increased access toVTE. After agreement on shorter duration of courses and lower admissionstandards, selected VTIs and TTCs would be assisted to admit more women.Assistance would be provided to support the establishment of facilities (ie.latrines, day rooms, and hostels). Moreover, there is a need to recruit andtrain female instructional and counseling staff. Particular emphasis would bepaid to post-training employment. This investment may also include assistanceto establish a women's TTC in Dhaka to demonstrate appropriate approaches tothe provision of services.

I. INTRODUCTION

Purpose and Scope of the Review

1. This review is designed to identify and analyze: (a) major obstaclesto internal and external efficiency of formal systems of VTE; (b) possiblereforms that would upgrade and improve the performance of formal VTE; (c)alternative non-formal approaches to formal VTE, with special attention totraining services that would contribute to alleviation of poverty and increasethe participation of women in training and employment. The review takes intoaccount the Government's stated objectives regarding poverty alleviation,reduction of illiteracy and increased services to women. The review providesa foundation of data and recommendations for effective dialogue on reforms andinvestments in VTE.

1.1 In order to make the most effective use of limited resources, thereview has been limited to: (a) analysis of national organizations thatadminister formal VTE systems; (b) analysis of Vocational Training Institutes(VTIs) and Technical Training Centers (TTCs); and (c) study of a limitedsample of successful non-formal VTE programs or activities which have shownpotential. Accordingly, polytechnics, monotechnics, higher technicaleducation institutions, apprenticeships and in-plant training are excludedfrom the study. Since it has a major impact on the internal efficiency ofVTIs and TTCs, the Vocational Teacher Training Institute (for secondary VTEteachers) has been included.

1.2 The review involved several elements of the Government: theMinistry of Education (VTIs), the Ministry of Labor (TTCs), the TechnicalEducation Board (BTEB) and those ministries and agencies within the Governmentwhich offer or wish to offer non-formal VTE, notably the Ministries of Youthand Social Welfare. Outside the Government, the programs of NGOs and privateschools were reviewed. The Government established a task force to assist theBank in the review. This group worked closely with the Bank missions fieldedto conduct the review in 1988.

Social and Economic Setting

1.3 Bangladesh is one of the World's most difficult countries in whichto promote economic development. The reasons for this are complex--resting onmany physical, economic, social and cultural conditions and traditions. Thenation's history of VTE programs and performance mirrors these overridingconditions of the society. The population of Bangladesh, with over 100million persons, lives in an area approximately the size of Wisconsin. Butunlike that entity, the population will grow to above 200 million in 25years. Perhaps more than any other country, Bangladesh has only humanresources upon which to base its future development. Alas, the present statusof human resource development remains very weak, despite two decades ofGovernment effort and donor assistance.

2

1.4 There are few natural resources. Even agricultural production isuncertain since it is subject to annual flooding and since the continuing highrate of population growth (now estimated at 2.5g p.a.) means that land areaper person will continue to decline sharply. In 1977, there were less thanone million farms with less than 1 acre; in 1984: there were more than fourmillion. Of the nation's 10 million farms, one-quarter are less than one-halfan acre in size. These conditions are expected to worsen. By 2006, thenumber of farms will grow to 15 million on the same total number of acres andthe average size will decline from its current level of 2.3 acres to 1.5acres./1 Given these agricultural conditions and lacking significant naturalresources, the only hope for the nation for development must be found in theeconomic use of a more educated and trained populace.

1.5 The labor force of Bangladesh has many interesting characteristics.It is growing: in 1975, it was 22.5 million, now it is over 30 million.However, this growth is less than population growth and the total labor force.Th. participation rate has fallen from 32X in 1965 to 29% in 1989. The laborforce is still overwhelmingly in agriculture; now 75X down from 84% in 1965.Industry accounts for only 6% of the labor force compared with about 15% inother nations at similar levels of development. Females comprise only 7% ofthe labor force, one of the lowest levels in the world and significantly belowthe levels of nations with which Bangladesh must compete (Table 1.1). Amongthe nations shown in Table 1.1, Bangladesh is consistently the least advancedof the group. Its labor force participation rate is the lowest of thecountries and has shown a decline in the past 20 years. Regarding the percentof the labor force in industry, Bangladesh is the lowest of the countries andthis statistic is not increasing as it is in the other nations. The percentof the labor force which is female is lowest by far in Bangladesh, scarcelyhalf of the percentage even of Pakistan. These figures show the conditionsunder which VTE must operate in Bangladesh.

1 Prokaushali Sangsad Ltd., "Study on Non-Formal Education", 1988, pages 73-74.

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Table 1.1 Labor Force Characteristics of Bangladesh and SelectedNeighboring Countries

Sotoetod Cwmtries Bangla-desh

Bangle- Sri Indo- Thai- Paki- Comparatorindex desh India China Lanka nesia land stan Korea 1985 a/

Size of LaborForce Cmilllons)

1965 18.8 206.9 381 3.9 41.1 15.5 17.3 9.71975 22.5 243.5 482 4.8 50.5 20.5 21.9 13.11985 29.8 299.1 630 6.1 65.1 27.2 28.1 17.2

Labor ForceParticipationRate (<)

1965 32 32 52 35 38 50 30 341975 29 39 52 35 37 50 29 371985 29 39 58 31 38 52 30 41 47

Femates in LaborForce (X)

1965 5 31 41 25 29 48 9 291975 6 28 42 26 31 47 10 331985 7 26 43 27 31 46 12 34 34

Industry as a Xof Labor Force

1965 5 12 8 14 9 5 18 151975 5 13 12 14 12 8 17 231985 6 13 18 14 13 in 19 27 14

a/ Low income countries as defined in source

Source: World Bank: Social Indicators of Development. 1988 (1985 data is formost recent year)

1.6 Poverty, hunger and other health problems affect the ability of thenation to develop a more productive work force. The percentage of thepopu'lation living below the absolute poverty line ($111 in rural areas and$139 in urban areas) is the highest in the region and one of the highest inthe world (Table 1.2). Poverty has a negative impact on the ability of thepopulation to receive basic education and acquire vocational skills. Thepopulation is undernourished: the per capita calories per day is the lowestin the region and, unlike the other countries in the region, this statistichas declined in the last 20 years. Calories that are available are not thosewhich promote energy: proteins per day have followed the trend for caloriesdeclining from 42 in 1965 to 36 in 1985 against a target for low-incomecountries of 55 (see Table 1.2). These nutritional deficiencies also affectthe ability of children to perform in primary school and thereby constrain thereadiness of adolescents for VTE.

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Table 1.2 Nutrition. Population and Educational Characteristics ofBangladesh and Selected Neighboring Countries

Bansla-desh

Bangla- Sri Indo- Thai- Paki- ComparatorINDEX desh India China Lanka nesia land stan Korea 1985 a/

Per CapitaCalories/Day

1965 1,964 2,100 2,034 2,155 1,792 2,000 1,747 2,2551975 1,829 1,925 2,219 2,127 2,153 2,376 2,086 2,7891985 1,804 2,126 2,620 2,485 2,476 2,399 2,180 2,806 2,327

Proteins (gms.per day)

1965 42 53 51 43 36 44 49 571975 40 47 53 43 44 49 56 781985 36 51 61 46 49 43 56 67 55

PopulationGrowth Rate

1975 2.8 2.3 2.6 1.9 2.2 3.0 3.1 2.11985 2.5 2.2 1.6 1.6 2.3 2.2 3.1 1.5 1.9

Primary Enroll-ment Ratio

1965 49 74 89 93 72 78 40 1011975 73 79 126 77 86 83 46 1071985 60 92 124 103 118 97 53 94 99

Female PrimaryEnrol. Ratio

1965 31 57 86 65 74 20 991975 51 62 115 74 78 80 28 1071985 50 76 114 102 116 97 35 94 99

a/ Low income countries as defined by source

Source: World Bank: Social Indicators of Devetopment, 1988(Data shown for 1985 is for most recent year).

1.7 Education is closely related to the ability of the nation to use itshuman resources effectively for national development. For the secondary level'JTE sub-sector, the dev7elopment of primary education is the important element.Primary education in Bangladesh has had a 15-year history of assistance by theBank and also by other donor agencies. The situation is much better now thanit was at the time of independence. However, like the conditions in health andnutrition, primary level of education remains far from satisfactory. Theassistance programs of the past decade have emphasized qualitative aspects ofthe system. However, they have not been able to keep pace with the growth ofthe primary level age cohort. As a result, the enrollment ratio hasstagnated. A persistent problem in primary education is the continuinginability of the Government to attract and retain girls. As a result, theenrollment ratio for girls is about 50X. With the boys, the ratio is about

5

70%. The comparators for low income countries shown in Table 1.2 suggest howfar the nation has to go to develop the fundamental cornerstone for humanresource development--universal primary educaticn. The secondary and tertiarylevels of education are also far behind other nations and represent aconstraint on the ability to use human resources effectively. However, theselevels are not as closely related to the development of the secondary VTEsubsector. In fact, general secondary education has become a competitor ofsecondary VTE.

1.8 Population trends are critical to the nation's ability to developits human resources. In relation to the natural resource base, there are fartoo many people in Bangladesh. Unless measures are taken to reducedrastically the rate of population increase, all social sector improvementprograms are doomed to failure. Some limited progress is apparent--thepopulation growth rate has fallen from 2.8% in 1975 to an estimated 2.5% in1989. With a marginal amount of land and inhospitable climatic conditions,the need for further improvement in population trends is imperative.

1.9 To these tangible conditions of Bangladesh society which can bestated in measurable terms from sectoral experience, must be added somepsychological and socioLogical conditions which affect the role of VTE in thenation. Generations of poverty and illiteracy have caused the poor ofBangladesh to come to terms with their plight. For many, this has led tofatalistic attitude toward development measures. In VTE this has led to apragmatic posture toward employment. The fr-uitless quest for work and foodcauses many to believe that they have little hope for paid employment in themodern sector. Therefore, they do not have keen interest in education andtraining for work, such as VTE. Hopelessness becomes a major factor in mostpeople's lives leading to a cynical attitude toward the efforts of Governmentand NGOs to help. This becomes an added hurdle to the establishment of aneffective VTE system. A recent study presented the following list of socialconcerns relating to modernization: "low level of work discipline, low levelsof punctuality and orderliness, superstitious beliefs, lack of initiative,fatalism, submissiveness to authority and exploitation, low aptitude ofcooperation, lack of trust and low standards of personal hygiene."/2

1.10 Another cultural and social trait found in the society which greatlyaffects the development of effective VTE programs is the society's attitudetoward manual work. While the impoverished majority are some of the mostindustrious people in the world in their continuous search for food andshelter, those in the society who have had a taste of education beyond primaryschool often develop a strong aversion to the type of employment for whichmost VTE programs are designed. This phenomenon affects secondary level VTEby limiting the demand for entry places and causing graduates to be less thankeen seekers of related employment after they complete their training. At thehigher levels of VTE, polytechnic and university, graduates seek managerialrather than field assignments. This has had a negative effect on thedevelopment of the engineering and science cadre needed for national economic

2 Prokaushali, g2. cit., p. v.

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development. Although youth with a grade 8 or grade 10 education wouldnormally be better prepared for secondary VTE, such admission requirements maybe counterproductive to an efficient student flow in VTE. As suggested inTable 1.3, trainees with only a grade 8 education are more likely to opt foremployment as a skilled craftsman than those with grade 10 or higher.Therefore, it may be better to consider completion of grade 10 or even grade 8as a disqualification for entry into VTE.

Table 1.3: The Relationship of Entry Education to Post-VTIEmplovment Preferences.1988

HigherSkilled Technical Higher

Entry Education Craftsman Education Education Total

Grade 8 96 55 4 155SSC/HSC (grade 10 or

higher) 158 156 19 333

Total 254 211 23 488

Source: BTEB, 1988

Sector Context

1.11 By international and regional standards, the education sector inBangladesh is relatively underdeveloped. The enrollment ratio is currentlyonly 60 percent in primary schooling, 18 percent in secondary education, and 4percent in higher education compared to corresponding regional averages of73, 23, and 5 percent, respectively. Public spending on education amounts toless than 2 percent of GNP, in contrast to the average of 2.3 percent in otherSouth Asian countries, and 4.1 percent in East Asian countries. In thIscontext, it is no surprise that the Government's chief concern lies in thedevelopment of general education, particularly at the lower levels of thesystem. Vocational and technical education (VTE) nevertheless remains animportant component of the Government's strategy for human resourcedevelopment, given the demand for skilled manpower in the domestic economy.In recent years, for example, that subsector was allocated the third largestshare (average of about 17.7% for 1987-89) of the budget for education, afterprimary and secondary education.

7

1.12 In the public sector, the main providers of formal VTE are theMinistry of Education and Ministry of Labor. Institutions under the firstministry include four engineering colleges, 17 polytechrlcs, 51 vo^ationaltraining instituties (VTIs), 16 commercial institutes, and several specializedcolleges; the combined enrollment in 1986 was about 20,000 students. TheMinistry of Labor supports technical training centers (TTCs). There are 11these in operation, with a total enrollment of over 2700 full-time studentsand 900 part-time students.

1.13 The Ministry of Youth and Development also offers VTE courses toout-of-school youth. The Ministry of Social Welfare and Women's Affairs runstraining programs in production-cum-training centers. Short courses inagriculture are offered by the Ministry of Local Government and RuralDevelopment and Cooperatives as part of its integrated rural developmentprogram. Most of these training programs are non-formal in nature, and aretargeted to specific groups of people who are disadvantaged in one way oranother. A third feature is the stress on short courses in employable skills,inc'uding basic literacy and numeracy.

1.14 The private sector in Bangladesh also plays a role in providingtraining. Over 100 non-government organizations (NGOs) are active in thisfield. Given the nature of NGOs, most training programs are directed at thepoor. School-based training -- in such trades as mechanics, electricalwiring, carpentry, lathe operation, welding, and so on -- occurs in about 30NGO-operated schools. It is estimated that they have annual enrollments ofless than 2000 students. Apart from NGOs, profit-making private schools alsoexist, but their impact is small. Similarly, private firms also provide someformal and informal training for their employees, but only the larger firmsare active in any significant way. The national apprenticeship scheme is verysmall and ineffective, with less than 300 registered apprentices in thecountry.

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II. STATUS OF FORMAL VTE IN BANGLADESH

Overview of Formal VTE

2.0 In Bangladesh, formal, secondary VTE is a centralized, nationallyadministered system. It is supported and delivered by only a few Governmentorganizations. TLhe National Council for Skill Development and Training(NCSDT), a high-level inter-ministerial organization, provides policydirection and other national-level services. The Bangladesh TechnicalEducation Board (BTEB), provides accreditation, testing, trade certificationand curriculum development services. The delivery of training services isprovided through Vocational Training Institutes (VTIs) administered by theMinistry of Education and Technical Training Centers (TTCs) administered bythe Ministry of Labo_ and Manpower. Currently, these institutions produceabout 3,000 certified skilled workers each year. To produce these graduates,the Ministry of Education operates fifty-one VTIs with a total full-timeenrollment of about 3,300 (1988:,. The Ministry of Labor and Manpower operateseleven TTCs with a total full-time enrollment of about 2,700 (1988) and apart-time enrollment of about 900 (1988). Both Ministries offer two-yearprograms of instruction leading to National Skill Standard (NSS) III at theend of the first year and NSS II at the end of the second year.

2.1 Pre-service training of VTE teachers is conducted at the VocationalTeacher Training Institute (VTTI) operated by the Ministry of Education. Inaddition, many of the teachers have participated in overseas fellowshiptraining in India and other countries as well as inservice training.

2.2 National Council for Skill Development and Trainint (NCSDT). TheNCSDT was founded in 1979 through a Government Resolution authorized by thePresident. The development of the NCSDT was encouraged by the World Bank. InWorld Bank Loan 912-BD, the establishment of the Secretariat for the NCSDT wasrequired as a covenant to the loan. Under the provisions of the GovernmentResolution, the NCSDT is primarily responsible for:

(a) Establishment of trade standards;(b) Establishment ol national-level policies relating to VTE;(c) Review of national skill development needs;(d) Coordination1 of all formal and non-formal national skill

development programs; and(e) Recommendation of related legislation.

2.3 The NCSDT is comprised of high-level representatives from 18concerned ministries. The Minister of Labor and Manpower serves as thechairman of the Council. Although it has a high-level membership, it is not astatutory body. It has not met since 1984, having met only a few times priorto that time. It is generally agreed, that the Council has not been effectiveduring the past several years. The Council has the potential to provideconsiderable leadership to the establishment of a national program of humanresource development in Bangladesh. However, that potential has not beenrealized.

9

2.4 fagjAlgpdsh Technical Education Board (BTEB). The BTEB is astatutory organization established through the Technical Education Act of1967. It operates under the administrative umbrella of the Ministry ofEducation. As primarily a self-supporting organization, it collects itsoperating capital from institution accreditation ard student examination fees.It also obtains a few contracts and grants from govbrnment agencies andenterprises. The BTEB is responsible for providing:

(a) Accreditation of VTE institutions;(b) Testing and certification of VTE graduates;(c) Development of standardired curricula;(d) Testing and certification of VTE teacher training graduates; and(e) Institutional Inspections.

2.5 The BTEL is a small, relatively efficient organization with about 14btaff divided into three divisions (administrative, curriculum, andexamination divisions). The capacity to be self-sufficient through costrecovery makes the Board somewhat unique in the country. It represents a goodexample of the potential of a small, cost-effective organization to influencethe development of VTE.

2.6 Vocational Trainitg Institutes (rl'I). The Ministry of Educationoperates fifty-one VTIs at various zilla and upazilla levels. Although fourVTIs - Barisal, Pabna, Rangpur and Sylet are larger in size (typicalenrollment oi about 200 students) and are located in district towns, theremainder are generally located in rural areas with low levels ofindustrialization. These VTIs are designed to enroll about 80 students in twocurriculum areas. They may offer instruction any of thirteen curriculum areasauthorized by the BTEB to be taught in the system. These areas are asfollows: (a) welding; (b) machinist; (c) automotive; (d) farm mechanics; (e)radio & television; (f) drafting (mechanical); (g) carpentry; (h)refrigeration & air conditioning (i) masonry; (j) electrician; (k) foundry;(1) drafting (civil); and (m) dress making. The institutions are typicallylocated on about three or four acres of land. Most often they are staffedwith 3 or 4 teachers, one administrator and a like number of support staff.Often these institutes have some staff and student housing. Thirty-six ofthese VTIs have received equipment and technical assistance from SIDA (Sweden)over the past ten years.

2.7 Technical Training Centers. The Bureau of Manpower, Employment andTraining (BMET) of the Ministry of Manpower and Labor administers 11 TTCs.These Centers are located in the larger cities and have full-time enrollmentsranging from about 110 to 550. The course offerings are of two years durationwith the first year leading to NSS III and the second year leading to NSS II.The students, course structure and curricula are similar to those of the VTIs.Each year is divided into nine months of classroom and laboratory instructionand three months of industry attachment for trade-related work experience. Asin the VTIs, the BTEB authorizes the curricula used. There are about 14 tradecourses authorized for delivery in the two-year programs. The BTEB alsoexamines and certifies graduates at appropriate NSS levels. The IDA-financedVocational Training Project, Credit 912-BD, provided support for the upgrading

10

of nine of the Centers. Besides the formal course offerings, many of theCenters offer shorter, non-formal courses for industry and other Governmentorganizations. In particular, the Ministry of Youth and Employment sponsorsan evening program which provides training for about 900 out-of-school youthper year.

2.8 Vocational Teacher Training Institute (VTTI). Most of the teachersin the VTIs and TTCs are trained in the VTTI. Located in Bogra, the Institutehas excellent facilities and equipment. The Institute offers a one-yeartraining program focused upon the training of VTE teachers in pedagogy andrelated trade skills. In addition, short-term inservice courses are offered topracticing teachers and administrators on an as-needed basis. For the pastthree years the VTTI has trained about 50 new teachers per year. A moredetailed description of the institute is provided in paragraphs 2.28 to 2.30.

Internal Efficienec of Formal VTE

2.9 The internal efficiency of the VTIs and TTCs is relatively low bymost internationally accepted standards of comparison (ie. input/outputratios, dropout rates, unit costs, design capacity/actual enrollment ratios,etc.). Many of the factors that drive the internal efficiency down are quitecomplex and some are beyond the control of the administering agenicies. Thefollowing describes key elements which typically influence the internalefficiency of formal VTE institutions.

2.10 Manazement. National level administrative input into both the TTCsand VTIs is significant. Its input dictates: (a) curricula and instructionalmaterials; (b) instructional equipment; (c) budgets and financial procedures;(d) staffing criteria and selections; (e) student selection criteria; (f) mostadministrative procedures; (g) timing of instructional elements (ie. schoolday, school year, minutes per period); (h) teaching methods; (i) tradestandards; and (j) examination and certification of graduates. Localadministrations have primarily responsibilities for carrying out nationalpolicies and procedures and for providing local supervision, monitoring,payroll services and reporting.

2.11 In the VTIs, the student/administrator ratio is about 55 to one. Inthe TTCs, the ratio is about 121 to one. The difference may be attributed tothe variation in school sizes within the two systems. The VTIs, have anaverage enrollment of about 64 full-time students. Obviously, at least oneadministrator is needed in these small schools. On the other hand, the TTCshave an average enrollment of about 242 full-time students. In VTE schools ofthis medium size, typically only one or two administrators are needed toeffectively manage the services delivered. These ratios point to theinefficiencies of operating small VTE schools that do not fully utilize theavailable staff.

2.12 In general, the local administrators of VTIs and TTCs areexperienced educators with a desire to improve their schools and servicedelivery. Some of the administrators of TTCs have received national and

international training in VTE. However, there are many in the VTIs who arenot trained extensively in VTE and do not understand the philosophies andtechnologies associated with the management of modern VTE institutions. Forexample, few administrators have an i-±derstanding of the need to invest timeand energy to develop more effective job counseling, placement and follow-upsystems in the schools. Many administrators try to operate their schoolswithout maintaining industry-education linkages or providing opportunities fortheir instructors to gain more industry experience. The limited authorityafforded these administrators by central authorities also limits their abilityto affect such improvements.

2.13 Facilities and Eguipment. With the exception of the four largerVTIs located in district towns, the facilities of the VTJs are quite similarin design. Typically, the institutes are located on three or four acres ofland in a rural environment, close to a small village. Most are constructedof concrete or brick, or a combination of both. The institute will have acouple of classrooms, and at least two laboratory/shops. In addition, theschool will have one or two administrative offices, a small library and asecure storage area. The libraries have an average of about 1,400 books andperiodicals. Often on the site, there will be some housing for theadministrator and some teachers and some accommodation for students. Mostoften the accommodations for students are limited. Since SIDA (Sweden) hasbeen assisting the VTIs for several years, at least 36 of the institutions arewell equipped for their stated instructional goals. Most of these instituteshave quantities of extra supplies and hand tools. The remaining institutes areunder-equipped and have small amounts of tooling, supplies and hand tools. Inthese non-supported institutes, the machinery is often old, obsolete and worn-out or broken.

2.14 As in the other non-supported VTIs, the four larger VTIs located inthe district towns are limited in equipment, supplies and hand tools. Thebuildings at these institutes are typically older, poorly equipped and sufferfrom many facility limitations.

2.15 As most of the VTIs are located in rural areas, they are veryexposed to the yearly floods which inundate Bangladesh each year. During thelast big flood in September 1988, it was estimated that 22 VTIs suffereddamage costing about Taka 4.84 million (about US$146,000).

2.16 TTCs are larger, more substantial schools with dormitories for allof the full-time enrolled students. Nine of the.¢a centers participated in theTechnical Education Project, Credit 912-BD, and were substantially upgradedwith new construction or modifications, equipment and technical assistance. Inthese centers the supply of equipment, small tools and supplies is adequate.

2.17 Most of TTCs are located on substantial sites in medium to largecities. The centers generally have an administrative building, office,several workshops, class rooms, audio-visual room, library and infirmary. Theprincipal and vice-principal have separate family quarters and 80% of thestaff members are also provided with family accommodation within tb' sampus.The centers typically have some facilities for indoor and outdoor games. Theworkshops are designed to support the skill-related instruction in six to

12

twelve trade areas. The audio-visual capability of the centers include movieprojectors, overhead projectors, and slide projectors. The libraries in theschools have an average of about 3000 books and periodicals. As in the caseof the VTIs, most of the construction is of concrete and brick.

2.18 The TTCs are less exposed to flooding than the VTIs. During theSeptember 1988 flood, only three (Mirpur, Bangladesh Institute of MarineTechnology /3 and Faridpur) received serious flooding. In addition, theChittagong TTC lost a roof due to related high winds. The total damage wasinitially estimated at about Taka 10 million (about US$300,000). Some repairshave taken place with about Taka 4.2 million needed to complete the repairs.In both the VTI and TTC systems, the buildings range considerably in age andcondition. Most buildings would be judged to have at least thirty years ofusable remaining life.

2.19 Maintenance of the VTIs is less than adequate. The Ministry ofEducation has established a facilities maintenance unit to provide facilitymaintenance, but it is not functioning adequately. Interviews with schooladministrators have confirmed that there is very little, if any governmentfunds available to support the maintenance of the institutes. Although localstaff often perform some simple maintenance duties, larger more costlyproblems often take several years to get resolved. This is a particularlydifficult issue as yearly floods continue to increase the maintenance needs ofthe system.

2.20 TTCs utilize the services of the Ministry of Public Works to supporttha maintenance requirements of their schools. The results here are equallydistressing. Reports suggest that it is very difficult to get adequatemaintenance services from the Ministry. As most of the TTCs are relativelynew, facility maintenance has been less of a problem than in the TTCs. Still,the system is not in place to support future maintenance requirements.

2.21 The VTI system have a design capacity of about 4,404 full-timestudents per year. Currently the ratio of output to design capacity is about.58. The TTC system have a design capacity of about 4,641 full-time studentsper year. The ratio of output to design capacity for these schools is .45(lable 2.1). These capacity estimates are based upon an assumption of singleshift operation with full-time students. In the case of TTCs, there are alsoabout 900 part-time, evening students enrolled. They should not be includedin the estimates of daytime capacity utilization. They in fact, are financedseparately by the Ministry of Youth and some student fees. For this reason,they may be considered a cost recovery program and have been treated as a non-formal VTE program within the scope of this study. In addition, there are afew upgrading courses offered in the TTCs. Although creative and important,they generate a minimum effect on the analysis and findings of this study.

3 For the purposes of this study, the Bangladesh Institute of MarineTechnology was not considered a TTC. It has specialized functions,financing, and operational procedures which make it unique and apart fromthe other TTCs in the Country.

13

Table 2.1 Efficiency of Design Capacitv to Actual Output

Design 1987 Output toCapacity Graduates Design Capacity

Institutions Number (NSS II & III) (NSS II & III) Ratio

TTC, 11 4641 2078 .451987 Data

VTI, 51 4404 2562 .581987 Data

2.22 Instructional Personnel. Of particular concern to the internalefficiency of the formal, secondary VTE systems is the instructionalpersonnel. There are currently about 250 teachers assigned to the VTIs andabout 350 teachers worlking in the TTCs. In the VTIs the student/teacher ratiois about 12 to one, whereas, in the TTCs, the ratio is less t0-n 8 to one(Table 2.2).

Table 2.2 Student to Personnel Ratios

Type Number Number Student Student Studentof Full-Time Teachers to to to Support

Institution Students Employed Teacher Admin. StaffIn Sample In Sample Ratio Ratio .atio

TTC 2662 349 7.6 121.0 6.0

VTI 3078 252 12.2 55.0 4.8

2.23 These student to personnel ratios are lower than typicallyexperienced in most international comparisons. From an efficiency point ofview, the TTCs would be considered overstaffed, while the VTIs' ratio would beconsidered slightly less than acceptable. In Bangladesh, the Governmentconsiders a ratio of 12 to 15 students to one teacher as appropriate. Mostefficient VTE systems in other countries operate with ratios of 15 to 25

14

students to one teacher, depending upon the delivery methods used and thelimitations of facilities.

2.24 VTI teachers have an average age of 27. Most have been trained atthe VTTI for one year. Less than 30% have any related industrial experienceother than the industrial attachments that they may have served during theirteacher training. Surveys suggest that about 86% have less than a four yearcollege degree. The faculty has received some inservice training and accessto foreign technical assistance from Sweden, Japan, etc..

2.25 As a group, the TTC teachers have significantly more relatedindustrial experience. About 63% have one year or more. The average age ofthese teachers is about 35. About 96% of these teachers are non-degreed(Table 2.3). TTC teachers are usually trained at the VTTI or the Bangla-German TTC. In addition, many have received short-term training in theseveral local institutions and overseas fellowship training in India, Japanand other Asian countries. As a part of the Technical Education Project, manyof the TTC teachers have also participated in various upgrading activitieswithin their respective centers. It has been estimated that at least 80% ofthe existing faculty has received some inservice or fellowship training.

Table 2.3 Summary Data on VTI and TTC Teachers

Percent PercentAver. Teachers W/ Teachers W/ Related

Number Number Age of Equivalent Industrial ExperienceType Surveyed Teachers Teachers College Degree of One Year or More

TTC 11 349 35 3% 63%VTI 51 252 27 14% 28%

2.26 A reduction in program length (two six-month modular programs) wasintroduced in 1982. In addition, the VTIs and TTCs were placed under thedirection of the Ministry of Labor. As a result of these policy changes, theGovernment experienced, in subsequent years, some teacher and student unrest.Teachers were involved in labor disputes a number of times. Students alsoprotested and demonstrated against Government moves to reduce the length ofcourses in VTIs and TTCs. These actions caused some schools to be closed forextended periods and numerous interuptions in the school's operations. It maybe concluded that many organizational decisions have been influenced by thelack of stability in these schools. For instance, the decision to reduceprogram length was reversed and the VTIs and TTCs were again placed under thedirections of two ministries. In order to affect improvements in bothsystems, a long-term stability between labor and management must be

15

maintained. In addition there is a need for strong, well-developed studentpersonnel programs in the VTE systems.

2.27 Support Staff. As is often the case in other South Asian countries,the :,umber of support staff in the schools is high. Although difficult toesAimate accurately, the VTIs currently employ about 640 support staff whilethe TTCs employ about 450 staff. The VTIs have a support staff to studentratio of about 4.8 to one. In comparison, the TTCs have a ratio of about 6 toone. In most countries, ratios of 10 to one or even higher is more acceptabledepending upon the type of school and maintenance requirements. In residentialschools there is usually a need for higher ratios than in schools with onlyday programs (Table 2.2).

2.28 Teacher Education. Although some TTC teachers are trained at theBangla-German TTC, there is only one designated teacher training collegeavailable to secondary formal VTE teachers. The VTTI was established in 1982on nearly 12 acres of land. There are 25 instructors assigned to theInstitute; all have received at least two years of overseas training inGermany or Sweden. An additional nine senior officers/teachers are listed asadministrators. The facility is designed for a capacity of about 120 full-timeand 40 part-time students. During the past three years, about 150 new VTEteachers have been graduated from this college. For the past decade, the VTTIhas been provided with equipment and technical assistance by SIDA (Sweden).The administrators of the VTTI are professionally tra4ned and haveconsiderable experience. Consequently, the VTTI has excellent potential forproviding well trained teachers to support the system.

2.29 Senior VTE administrators in Bangladesh often find that the courseofferings at the VTTI are too long and gener-alized. It is generally felt thatthe courses should be tailor made to suit the different requirements of theteachers being taught. Many of the teachers come from different backgroundsand with varying amounts of industrial experience.

2.30 The VTTI operates with relatively low enrollments. For the pastthree years, it has enrolled about 50% of its design capacity (Table 2.4). Itdoes however, have a very high graduation rate, almost 100%. Personnel ratiosat the school are high. When the teacher/administrators are considered, thestudent to teacher ratio is about 1.8 to one. The student to administratorratio is about 1.0 to one and the student to staff ratio is about one to one(Table 2.5). These ratios translate into high personnel costs. Almost 79% ofthe recurrent budget is consumed by salaries and related costs (Table 2.6).The capital costs are also quite high when compared on a per student basis.Currently, the capital costs per student enrolled is about Taka 215,879(US$6,746). This estimate excludes the cost of land.

16

Table 2.4 Efficiency of VTTI Design Capacity to Graduate Out=ut

Design k4erage No. Average No. Total No. Capacity-Instruction Capacity Graduates Part-Time Instruction output

Year Per Year per Year Graduates Years Ratio(certificate) (3 month) Taught

1985 160 58 78 77.5 .48

1986 160 60 78 79.5 .50

1987 160 61 78 80.5 .50

Table 2.5 Student to Personnel Ratios of VTTI

Type Number Number Student Student Studentof Students Teachers to to to Support

Institution Enrolled in Employed in Teacher Adnin. StaffSauple Sample Ratio /a Ratio Ratio

VTTI 61 34 1.8 1.0 1

a/ Ratio has been stable for past three years

Table 2.6 Personnel Costs of VTTI Comnared to Recurrent Costs1985 - 1987

Type (Taka) (Taka) (Taka) /a Personnelof Average Average Average Costs as

Institution Monthly Salary Monthly Salary Monthly Salary Percent ofper per Staff per Recurrent

Teacher Nember Adainistrator Cost

VTTI 1890 1833 3625 78X

a/ There are nine senior officer/teachers in category

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2.31 Curriculum and Instructional Materials. Curriculum determinationand development is a nationalized function in formal, secondary VTE. The NCSDThas the responsibility to identify the skill shortages required to support theindustrial development of the nation. The NCSDT communicates these shortagesto the BTEB as skill requirements and job standards. The BTEB has theresponsibility to translate these skill requirements and job standards intocurricula. To do this, the BTEB utilizes input from internationalorganizations, industries and universities to determine the scope and contentof the curricula. The curricula is typically translated to the Bangla andEnglish language and documented in inexpensive, yet high quality publicationswhich include theory (cognitive objective) and skill development exercises(psycho-motor objectives). These curricula are then reviewed, modified andfinally authorized for use by the TTCs and VTIs.

2.32 Currently, there are 13 courses prepared and approved for use by theTTCs and VTIs. Another 13 courses are in various stages of preparation andreview. As these courses are authorized by national authorities, each VTEinstitution must be accredited by the BTEB in order to teach one of thecourses. To be accredited, a VTE school must meet minimum criteria whichincludes having qualified staff, appropriate equipment as specified in thecurriculum, suitable facilities and adherence to the examination andcertification system maintained by the BMET.

2.33 It is noteworthy that the curricula are not designed to teach workattitudes, employee/employer relationships, and other affective objectives.Throughout the world, the primary reason for new employee failure in industryhas been attributed to poor discipline and work attitudes and the lack ofother affective skills in the work place. Indeed, interviews with employersin Bangladesh have confirmed the same finding. There is a need to considerthe inclusion of such objectives and training in future curricula.

2.34 With the exception of the need to relate the curricula to thedevelopment of affective skills, the curriculum development process for formalsecondary VTE is well controlled and fairly efficient. Notwithst.-nding theefficiency of the process, however, there is a need to consider theappropriateness of curriculum selection and its relevance to industrial needs.There is some evidence to suggest that some students have little interest inthe existing course offerings. There is also evidence that employers areoften critical of the courses being offered in both the VTIs and TTCs.Although industrial input is sought at the "standards" and "preparation"stages, the curriculum development system has not been able to translate thisinput into curriculum reievency to the world of work. Therefore, it must bejudged inadequate. To support this conclusion, it should be noted that fewschools have active advisory committees and industrial organizations haveexpressed frustration in their attempts to provide advice and input to thesystem.

2.35 Student Profile. Students enrolling in TTCs and VTIs are oftensimilar in age, background and experience. Due to the location of most TTCs,one noted difference is that more TTC students than VTI students are fromurban areas. A recent study of 488 new enrollments in VTIs, conducted by the

18

BTEB, found that about 68X of the enrollments (1987-88) were students with anSSC or HSC certificate (grade 10 and grade 12). When asked if they had anintent to become skilled craftsmen or workers, about 501 indicated that theywanted to go on to higher education. About 301 of the student's fathers havean SSC certificate or higher education. About half of the fathers work ingovernment, commerce or business. It is interesting to note that 92X of thestudents come from families who own their home. Almost 501 of the studentshave brothers or sisters who are currently enrolled in colleges oruniversities.

2.36 Student Selection. Examination and Certification. In both the VTIsand TTCs, student enrollment is limited to students who have satisfactorilypassed level 8 in the secondary school. By definition, these students must beable to read and write at fairly proficient levels. Students with higherlevels of schooling are often enrolled as well. It is not too unusual to seecollege students enrolled in VTE schools. When one looks at the literacyrates in Bangladesh, the existing student enrollment criteria places VTEstudents in the upper 25% of the society in academic skill development priorto entry into the VTE school. This policy often results in the selection ofyoung people who have limited "occupational intent" in the trade for whichthey are being trained. Many of these students intend to go on to college orinto their family's business. In some cases, VTE is a place for them to waituntil it is time to for them to go to college, etc.

2.37 There is a need for the Government to review the policy decisions inthis area. International experience has shown that: (a) students with loweracademic levels can be effectively trained and employed in most of the tradescurrently being offered; (b) literacy training can be combined with VTE toenhance the rate of return of such investments; and (c) shorter, moreintensive training can bring about higher levels of learning and retention inthe trades currently being taught. In addition, NGOs have demonstrated thatstudents with lower academic levels are more employable because they have"occupational intent" and are more willing to accept entry-level salary scalesoffered by the majority of small industries.

2.38 The BTEB has established a system for examination of the graduatesfrom the VTIs and TTCs. These examinations are conducted once each year at 49authorized testing centers, located at 38 VTIs and 11 TTCs. Other schools,including private schools come to these centers to participate in theexaminations. In each center, an examination officer (typically the head ofthe institution) is in charge of the testing service provided. Theexamination is prepared and authorized by the BTEB, which also sets rigidrules for the administration of the exam. The Board appoints an externalexaminer who is present to witness the examination process. Within eachcenter, there is an examination committee and a monitoring group which alsowitnesses the examination.

2.39 The examination consists of 1000 points. One-half of theexamination is formative and is conducted throughout the year. It is valuedat 500 points. The remaining half consists of the final examination whichcomprises two sections with a total value of 500 points. One sectioa, 100points, focuses on the testing of the student's theoretical knowledge. The

19

second section is performance-based and is valued at 400 points. In thissection, the student has at least 6 hours to demonstrate skills learned bycompleting a shop/laboratory project. It is conducted by two internalexaminers and one external examiner. The student must score at least 800points to pass the examination. A student who passes receives NSScertification at the skill level for which he or she is being tested.The BTEB has established procedures to eliminate or reduce the possibility ofdeviancy associated with the examination process. Pass rates typically rangefrom 40% to 60% of persons attempting the examination.

2.40 Cohort Analysis and Internal Efficiency Indicators. An analysis ofstudent flows in the VTIs and TTCs is useful to determine the critical factorsthat influence internal efficiency. Using input-output flow data, averagedover several years (1986-1988) to reduce error, it is possible to present flowmodels that demonstrate many comparative characteristics of the systems. Inaddition, the models also present a number of ratios that are required toestimate rates of return for specified investments (Tables 2.7 and 2.8). Inthe case of both VTIs and TTCs, the data indicates that both systems have verylow internal efficiency. The VTIs have an output-input ratio of about .278whereas the same ratio for TTCs is about .398 (Tables 2.9 and 2.10).

20

Table 2.7 Cohort Anallsis for Regular Grade II Graduates of VTIs 1986-1988

Level

Year Year 1 Year 2 Graduate Total Ref Efficiency Indicators

564 117 N A 564 D11 Empirical Calculations (Direct+--- /211 ----- ...-... 211 D12

1986 1853 1176 N A 1853 Ell Average Within-year Dropout Rate| 1289 | | '1059 ! N A ! 1289 E12 Year 1: 0.266

------ +------- ------ + Average Within-year Dropout RateYear 2: 0.112

Average Between-year Dropout Rate468 \ 134 \ NA 134 D21 Years I - 2: 0.226

+------/487 ------/111 ------/ 111 022 Average Examination Rate, Grade 11: 0.8821987 2153 / 1078 / ' N A ' 1078 E21 Average Examination Pass Rate,

1685 944 N Al 944 E22 Grade 11: 0.618+ \* + - 9'

Theoretical Calculations (Irdirect)

581 \____ 171 \ 318 318 D31 Average Gross Succession Rate1988 ------- ------ ------ Years 1 - 2: 0.568

t 2094 ' | 1198 ' ' 833 Average Gross Dropout Rate1 1513 ! 1027 !!sis | 515 G21 Years I - 2: 0.432------- +------+ 8------3+ Average Gross Completion Rate

Years 1 - 2: 0.498Average Gross Grade 11 Certification

References Rate: 0.278Dll - Dropouts, during year oneD12 - Dropouts, end of year one (before beginning of year two)Ell - Enrollments, beginning year orneE12 - Enrollments, end of year oneD21 - Dropouts, during year twoD22 - Finish year two, but do not take examinationE21 - Enrollments, beginnirig of year twoE22 - Enrollments, end of year twoD31 - Graduate, but fail examinationG21 - Graduate, and pass examination, NSS 11

2.41 Both systems are currently experiencing declining enrollments. So,the trend is toward less internal efficiency rather than significantimprovements. Furthermore, both systems suffer from significant dropouts,during and between the teaching years. This is compounded by a relatively lowpass rate by students who attempt to pass the examination for certification.

21

Table 2.8 Cohort Analysis for TTCs. 1986-1988

Level

Year Year 1 Year 2 Graduate Total Ref Efficiency Indicators

219 231 N A 219 DlI Eapirical Calculations (Direct)------/286 ------ -/ 286 D12 ----

1986 01769 131 N A ' 1769 Ell Average Within-year Dropout Rate Year 1: 0.142|1550 |800 N A | 1550 E12 Average Within-year Dropout Rate Year 2: 0.187+-- ...- ------- +------+ Average Between-year Dropout Rate: 0.232

\ \ Average Examination Rate, Grade II: 0.789\ a Average Examination Pass Rate, Grade 11: 0.781

246 \___ 164 _ NA 164 D21+------/391 a------/232 \-- /-- 232 022 Theoretical Calculations (Indirect)

1987 '1646/ '1264/ ' N A' 1264 E21 -----------------------------------! 1400 1 1100 T ! 7 m 1100 E22 Average Gross Succession Rate Years 1 - 2: 0.659+------ +------ +------+ Average Gross Dropout Rate Years 1 - 2: 0.341

a \ Average Gross Coupletion Rate Years 1 - 2: 0.536\ \ Average Gross Grade II Certification Rate: 0.383

253 \____ 209 a___ 190 190 0311988 ------- -- a--

11653' '1009 ' 86811400 ! 800! ! 6781 678 G21+- 4. _- 4- +---

D1I - Dropouts, during year oneD12 - Dropouts, end of year one (before beginning of year two)Ell - Enrollments, begrining year oneE12 - Enrollments, end of year oneD21 - Dropouts, during year two022 - Finish year two, but do not take examinationE21 - Enrollments, beginning of year twoE22 - Enrollments, end of year twoD3 - Graduate, but fail examinationG21 - Graduate, and pass examination, NS 11

22

Table 2.9 HvDothetical Cohort Analysis for VTIs. 1986-1988

Level

Year 1 Year 2 Graduate Total Ref Efficiency Indicators

266 266 Dt1 Average Study Time, Cohort: 1.568+-------/166 166 D12 Average Study Time, Dropouts: 1.138

Year ¶ 1000 / 1000 Ell Average Study Time,,734 734 E12 Year 2 Leavers: 2.000

Years Input perYear 2 Leaver: 3.146

____ 69 69 D21 Output/Input Ratio for------/ 59 59 D22 Year 2 Leavers: 0.636

Year 2 ' 568 / 568 E21 Years Input per Grade 11!498 498 E22 Graduate: 5.767+----- Output/Input Ratio for

Grade II Graduate: 0.347

168 168 D31

Grade II Certification ' 440! 272! 272 G21

References___ _D1l - Dropouts, during yesr oneD12 - Dropouts, end of year one (before beginning of year two) **Eli - Enrollments, beginning year oneE12 - Enrollments, end of year one021 - Dropouts, during year twoD22 - Finish year two, but do not take examinationE21 - Enrollments, beginning of yecr twoE22 - Enrollments,-end of year twoD31 - Graduate, but fail examinationG21 - Graduate, and pass examination, NSS II

** D12 represents both dropouts and NSS III (one year graduates). Unfortunately, descriptive data was notavailable which would allow discrimination between the two. For the purposes of the above table, D12Vds treated as dtopouts. The weakness of this figure did not prejudice the estimates of internalefficiency as the other estimates were independentlj calculated

2.42 By modeling the measured performance of both systems (Tables 2.9 and2.10), it is possible to select a hypothetical cohort of 1000 studenbs and putthem through the two systems for a clearer demonstration of the flow factorscurrently being experienced by the schools. These calculations clearlyidentify the wastage currently experienced by systems. If one discounts thenumber of dropouts between year one and two as possible NSS III employment,VTIs loses about 56% of the students prior to placing them out for employment.As a comparison, TTCs lose about 37% of cohort. In reality, the estimates forbo.h systems are a little higher because it is realistic to assume that someof the between year dropouts would not be NSS III graduates and should beincluded in the percentage of students lost through dropout or failure ofexaminations.

23

Table 2.10 Hvpothetical Cohort Analysis for TTCs. 1986-1988

Level

Year 1 Year 2 Graduate Total Ref Efficiency

142 142 Dll Average Study Time, Cohort: 1.659+-- ----/199 199 D12 Average Study Time, Dropouts: 1.265

Year 1 1000 / 1000 Ell Average Study Time, Year 2 Leavers: 2.0001858 858 E12...... Years input per Year 2 Leaver: 3.097

Output/Input Ratio for Year 2 Leavers: 0.646

123 123 D21 Years input per Grade 11 Graduate: 5.024------/113 113 D22 Output/Input Ratio for Grade It Graduate: 0.980

Year 2 1659 659 E2115361 536 E22

93 93 D31- /

Grade 1I Certification j 423330 330 G21

ReferenceDl1 - Dropouts, during year oneD12 - Dropouts, end of year one (before beinning of year two)Ell - Enrollments, begimning year oneE12 - Enrollments, end of year one021 - Dropouts, during year twoD22 - Finish year two, but do not take examinationE21 - Enrollments, beginning of year twoE22 - Enrollments, end of year twoD31 - Graduate, but fail examinationG21 - Graduate, and pass examination, USS It

** D12 represents both dropouts and NSS III (one year graduates). Unfortunately, descriptive data was notavailable which would allow discrimination between the two. For the purposes of the above table, D12 wastreated as dropouts. The weakness of this figure did not prejudice the estimates of internal efficiency asthe other estimates were independently calculated

Costs and Finance of Formal VTE

2.43 Unit Costs. VTIs have a relatively low capital cost, due in part totheir location, and the small size of the institutions. Disregarding the costof land, the per student capital cost of the system is about Taka 6,434(US$201). As a comparison, the TTCs have a much higher cost per student ofabout Taka 20,665 (US$646). This difference ref'3cts the recent investmentsin the TTCs through IDA Credit 912-BD.

24

2.44 VTls have an average recurrent cost of about Taka 9,366 (US$293) perstudent. TTCs have a cost of about Taka 11,000 (US$344) per student. Thepercentage of personnel costs to rzcurrent costs is higher in the VTIs, about65%, than in the TTCs which is about 49%. The average salary of teachers inthe VTls is about Taka 2,138 per month while in the TTCs the average isslightly higher, about Taka 2,213. The salaries of administrators arelikewise higher in TTCs. For other staff, the salaries are similar in bothinstitutions (Table 2.11).

Table 2.11 Personnel Costs Compared to Recurrent Costs1987-1988

Type Average Average Average Percentof Monthly Salary Monthly Salary Monthly Salary Personnel

Institution per per per Staff Costs toTeacher Prin/Super. Member Recurrent(Taka) (Taka) (Taka) Cost

TTZ 2213 3591 1326 49%

VTI 2138 3281 1354 65%

2.45 Financing of Formal Secondary VTE. The VTIs are financed throughthe Ministry of Education from general revenues. The budget is comprised oftwo sub-budgets, development and revenue. Most of the development budgetsupports capital expenditures while the revenue budget supports the cost ofoperation (recurrent costs). The institutes are financed directly from thenational .evel. Senior officers/teachers receive salary checks each monthwhile the remaining staff and students are paid in cash from a single checksent to the principal who, in turn, ,erves as paymaster. This system, ofcourse, has a some potential for misuse.

2.46 The TTCs are financed in an almost identical fashion. The financialcontrols are somewhat tighter, however, primarily because there are fewerschools to support and they are located in more accessible, urbanenvironments. In the TTCs, facility maintenance is provided by the Ministryof Public Works, utilizing a budget amounting to about 1% of the system'sbuilding cost. As previously mentioned, the maintenance services provided areless than satisfactory.

2.47 During the 1987-88 fiscal year, the Ministry of Education spentabout Taka 35.0 million (US$1.06 million) to support the recurrent cost

25

requirements of the VTI system. Development expenditures have, over a 12 yearperiod, averaged about Taka 43.0 million (US$1.3 million) per year.

2.48 During the same year, the Ministry of Labor spent about Taka 38.0million (US$1.16 million) to support the recurrent costs of the TTCs. TheTTCs' development expenditures, over che past eight years, have averaged aboutTaka 60.0 million (US$1.83 million) per year. Over the past decade, it isestimated that at least 80X of the Ministry of Labor's development budgetshave been provided by donor/lender inputs. The same situation exists in thedevelopment budgets for the VTIs supported by the Ministry of Education. Inthe case of the VTIs, the primary donor/lender has been Sweden. The TTCs havereceived primary inputs from Germany and IDA.

2.49 Conclusions. In general, the internal efficiency of both the TTCsand VTIs is low. As previously noted, there are many factors involved in thislow level of efficiency. Of particular concern, there are limited resourcesavailable and inadequate support for schools in the more remote areas. Manyof the schools ate also too small to be efficient. Most of the VTIs arelocated in rural areas with very limited design capacities. This situationresults in many inefficie.icies due to limited scale, access and on-goingrequirements for maintenance and administrative support at relatively highcost. As the VTI system currently operates, such institutions lack viability.

2.50 Associated with these issues, there is low enrollment tocertification levels (input to output) in almost all of the schools. It isapparent that many students enrolled in both systems have no occupationalintent in the areas for which ttey are being trained. These uncommittedstudents contribute to high dropout rates and continuing problems with studentunrest and disruption. Enrollment of such students in high-cost, specializedVTE programs is questionable.

2.51 It was a'so found that most of the instructional programs wereexcessive in duration. Many programs lose at least 50% of their potentialcapacity as a result of such inefficient time requirements. In addition,almost all of the TTCs and V!Is have high teacher to student ratios in theclassrooms. Most of the teachers have limited industrial experience.Finally, there is limited availability of guidance and counseling in theprograms.

External Efficiency of Formal VTE

2.52 Introduction. The purpose of the analysis of external efficiency ofany activity is to estimate the efficiency of that activity in relation tocriteria external to the organization within which the activity is carriedout. For a VTE system, the criteria might include employment rate of thegraduates (skilled manpower) as compared with unskilled manpower or even theearnings of graduates as compared with unskilled manpower. There may even beother criteria, depending on the rationale for the system. It should beunderstood from the beginning, however, that the training provided by the TTCsand the VTIs does not constitute general education. Eight years of primary

26

schooling is a requirement for admission, and no literacy or numeracy trainingis provided. Therefore, support to general education cannot be a rationalefor the TTCs and the VTIs.

2.53 In Bangladesh the analysis must take as its point of departure therationale for formal secondary VTE in a context in which there already existsa traditional informal pattern of skill transfer -- a kind of traditionalapprenticeship system. There are several possible rationales by whichexpenditure on a formal VTE delivery system could be justified as a productiveinvestment, depending on the circumstances prevailing in the labor market.Three possible rationales and descriptions of the associated characteristicsof the labor market are given below. Expenditure on any specific deliverysystem might be justified on the basis of any one or several of theserationales.

2.54 Firstly, there may be a shortage of skilled labor which thetraditional pattern of training is incapable of fulfilling. No difference isposited between the products of the formal system and the products of theinformal system. Full employment would be expected for skilled labor, bothfor those with formal training and for those lacking formal training. Therewould be no systematic difference in wages between those with formal trainingand those lacking formal training. This is referred to below as the "laborshortage rationale".

2.55 Secondly, the graduates of the formal training institutions wouldhave a higher employability than skilled workers lacking formal training,because of their greater flexibility and ability to learn new technologies.In this case, the products of the formal and informal training systems areposited to be qualitatively different, but not to differ in terms of theirproductivity. It would be expected that those with formal training would havehigher employment rates, at least in some sectors (eg., the modern sector),lower levels of underemployment or shorter job search time. There would be nosystematic diffe- nce in wages between those with formal training and thoselacking formal t_aining. This is referred to below as the "employabilityrationale".

2.56 Thirdly, the graduates of the formal training institutions wouldhave higher productivity than skilled workers lacking formal training. Theproducts of the formal and informal training systems are posited to bequalitatively different, and also to differ in terms of their productivity.To the extent that wages reflect productivity, it would be expected that thosewith formal training would receive higler wages than those lacking formaltraining. This may be referred to as the "productivity rationale".

2.57 Results from any empirical study depend not only on data but also oninterpretation of data and assumptions used where data are not available. Inthe present study, the data covering the labor market are particularly weak.Data about student flows and the costs of the training programs are direct(low inference) and of reasonably high quality. Data about employment ratesand earnings differentials are only indirect (high inference) and of lowquality. Assumptions enter the analysis especially in the attribution ofearnings differentials to training. Even if there were firm data indicating

27

lifetime earnings differentials between those who had completed a trainingprogram and those who had not, the research situation is so complex thatattribution of a specific proportion of the differential to the initialtraining program can only be based on assumptions about entry characteristicsof the trainees, value of subsequent training, etc. These are, of course, theusual epistemological problems with which much scientific research is fraught.

2.58 Therefore, the findings should not be presented as point estimates(eg., the internal rate of return is xX), but as a set of range estimates(eg., the internal rate of return lies between xX and yX), where the rangereflects the degree of uncertainty of the data and the assumptions and thesensitivity of the model to this uncertainty.

2.59 More importantly, however, is a second consequence. To the extentthat conclusions are based on analysis of empirical data, they are derivedfrom mathematical models, which express the assumptions about therelationships posited to exist in the data. Given such a mathematical model,it is possible, through simulation, to apply alternative assumptions and tostudy the reactions of the model. This is not only a way of learning aboutthe sensitivity of the model to uncertainty of the data but is also a way oflearning about the behavior of complex systems. In the present study, theresults of the simulation runs will constitute the Rrimary outcomes of theanalysis.

-ationale for Evaluation of the External EfficiencX

2.60 In the context of Bangladesh, given the nature of the formalsecondary VTE system and the nature of the labor market, the "labor shortagerationale" described above would not seem to be appropriate. What would haveto be demonstrated is that there is a need for the kind of skilled manpowerproduced by the secondary VTE system on a scale beyond the capacity of thetraditional system to produce it. Given the low employment rates among thegraduates, it is difficult to believe that thzLe is a great unfilled demand.Again, the low employment rates among the VTE graduates would seem to precludethe "employability rationale". That leaves the productivity as thepredominant rationale for the system.

2.61 In discarding the first two rationales, it is assumed that someexternalities, which in other contexts might be associated with formal VTE orwhich are not conveniently measured through earnings increments, are notpresent in any substantial amounts in the present case. It may be argued thatin the absence of evidence that there are significant externalities, it isappropriate to regard a comparison of the full resource costs of VTE and theprivate earnings increments as adequate for an evaluation of externalefficiency. Such an assumption does not exclude the possibility that otherrationales might be considered in the evaluation of the system. If they canbe explicitly identitied, then the conclusions of this analysis might besomewhat altered. The evidence to date has not presented many options toconsider.

28

2.62 It is sometimes argued that rate of return analysis is not asuitable tool for the evaluation of educational programs. Although sucharguments may have validity for the evaluation of many kinds of education,such as literacy programs and basic education, they are not suitable for VTE.VTE more closely corresponds to the classic human capital investment model.This type of training is not intended as and does not constitute basiceducation. It is intended as training for vocational skills. It is notintended as general education and it does not geaerally lead to furthereducation. It represents an investment in human capital. As with otherInvestments, it is intended to yield a stream of future benefits, and thesebenefits must be weighed against the costs. Moreover, since resources havealternative uses, the comparison of benefits with costs should be done in thelight of costs and benefits of alternative uses. For such comparisons wheremonetary values can be assigned to the benefits, rate of return analysis is aworthy technique.

2.63 Evaluations cannot exist in isolation; they always requirecomparisons. It is not relevant to compare skilled workers with unskilledworkers, becEuse there already exists a massive informal skill transfer systemwhich operates under very different economic conditions. The policy questionis whether or not to invest in the further expansion of the formal secondaryVTE system, taking into account the alternative delivery systems available.It is therefore not the value of the skill itself which is to be assessed butthe efficiency of the specific VTE delivery system, or the "formality" of theway in which the skill was transferred. Formal VTE training is posited tocontribute something more to the skilled worker than informal skill transfercontributes. Therefore the relevant comparison groups are skilled workers whohave received formal training (VTI, TTC level) and skilled workers who havereceived no formal training but who have learned their skills in thetraditional pattern of informal training on the job. Thus the benefit is notto be measured by wage differentials between skilled and unskilled workers butby wage differentials between skilled workers with formal training and skilledworkers lacking formal training (Annex A).

2.64 In the ideal research world, it would be possible to obtain directmeasurements of the desired earnings differentials. Such measurements couldbe obtained by a tracer study of formal VTE graduates and a control groupobtaining skills but lacking formal training. Although such a study wouldface a host of research problems, it would be possible in principle. Allmeasure involves inferences about the relationship between the theoreticalvariables under investigation and the observations made in the real world. Inthe absence of direct (low inference) evidence, it is possible to gatherindirect (high inference) evidence and to try to make reasonable assumptionsin order to generate the kind of data required. The less direct the measures,the higher the degree of inference required. The higher the degree ofinference involved, the more the results rest on assumptions.

2.65 In this study, it was necessary to make a number of assumptions.Data concerning student flows through the institutions and recurrent costs areof high quality (low inference). Those measures involve simply countingbodies and Taka. Data concerning the labor market situation of skilledworkers in general are of medium quality. Data concerning the labor market

29

situation of formal VTE graduates are of low quality (high inference). Thefigures used are as firmly based on empirical evidence as possible. Withinthe range of uncertainty of the estimates, the analysis consistently erred onthe side of overestimating rather than underestimating the returns. In doingso there was an expected tendency to overestimate the rate of return. Inaddition, the reporting was designed to fully explain and clarify theassumptions made, in order to extend the usefulness and readability of thereport.

Estimation of Returns on the Domestic Labor Market

2.66 For the purposes of this study the related emnloyment rate isconsidered a ratio of the number of students employed to the total enrolled.This ratio is sometimes confusing because much of the data available inBangladesh is based on the number of persors employed as a ratio to the numberemployed to the total number of graduates or persons passing tradecertification. This approach is misleading when one wants to generateefficiency measures that relate to the total cohort. The absence of reliabledata on employment rates of graduates from TTCs and VTIs is troublesome. Thenature of the labor market makes it highly plausible that the level of formalemployment is not high, even though rhe level of formal unemployment is low.Graduates of TTCs and VTIs must, as almost everyone else, find some source ofincome from work. They too must "hustle". In such a situation, it isdifficult to see that the TTC or VTI training can provide much of a return.Although no scientific data are available, there are formal and informalfindings from a couple of student followup surveys. In addition, interviewshave been conducted with TTC and VTI graduates, their teachers, thesuperintendents, and other informed observers. A review of these dataconsistently yield a figure of approximately 30 2er cent emnloyment in fieldsrelated to the training. Graduates themselves usually report still lowerfigures, even when asked about former classmates and others they know who havereceived TTC and VTI training. (It should be noted in this connection thatthe Swedish International Development Authority, SIDA, has recentlycommissioned a tracer study of graduates of the 36 SIDA-supported VTIs.) Inthe absence of other evidence suggesting higher rates, the figure of 30 percent was accepted as the best estimate of the related employment rate.Nevertheless, because of the uncertainty of the employment rate, an effort wasmade to carry out the analyses, in such a way as to provide alternativeestimates of the rate of return based on alternative (higher) estimates ofemployment rates.

2.67 Earnings. In the present study, no data are available on earningsdifferentials between formally and informally trained skilled workers. It wastherefore necessary to infer the earnings differentials. These differentialswere based upon wage differentials between skilled and unskilled workers. Afair amount of data are available (Annex B). In comparing wages, both wagedifferences and wage ratios must be examined. Average daily wages, withoutfood, is given in Table B.1 for selected sectors. It can be seen that thegreatest wage differential, both absolutely and relatively, is to be found inconstruction. The smallest is to be found in a comparison between skilled

30

workers in small and cottage industry atd male agricultural workers. Thelatter comparison is probably of relevance especially to graduates from theVTIs, which are located in small towns and rural areas. The mean differenceis 21.5 Taka per day, and the median is 15.5 Taka per day. The mean wageratio of skilled to unskilled worker is 1.6, and the median is 1.5.

2.68 A slightly different picture is given in Table B.2, which shows bothregional variation and variation between specific categories of skilledmanpower within the construction industry. The final categury (furthest tothe right) is "Helper (Jogali)". This category can be used for comparativepurposes as an unskilled worker. A national "mean" and "median" is computedfor each category. Each manpower category is then compared with "Helper".The differences between the means range from 38 Taka per day for masons to 29for painters. The differences between the medians range from 39 (electrician)to 31 (sanitary fitter). The wage ratios range from a high of 2.0 (mason) toa low of 1.8 (sanitary fitter and painter).

2.69 For one specific trade (roof hammerer), a comparison can be madebetween men, women, and children, as seen in Table B.3. Although this is inthe construction industry, it is not one involving high levels of skill. Mencan be assumed to possess substantially higher skill levels than children,ho-wever. llen earn approximately twice as much as children, while women earnabout 50 per cent more than children. The corresponding wage differences inabsolute terms are approximately 20 Taka per day and 10 Taka per day.

2.70 Although in general high wages and high wage differentials can befound in construction, especially for masons, a broader comparison involvingother industries reveals somewhat lower differentials, as shown in Table B.4.Such comparisons are appropriate when considering VTIs and TTCs, because mostgraduates do not work 4n the construction industry, especially those living insmall towns and villages. Comparing several categories of skilled labor withthe mean wages for helpers, agricultural workers, and weavers, it can be seenthat although masons have large wage increments, skilled workers in fisheriesand industry have smaller wages.

2.71 Comparison of Wages and Wage Differentials. A comparison of wagesand wage differentials from the different tables is shown in Table B.5.

2.72 Conclusions. On the basis of the evidence summarized in Table B.4,some conclusions may be drawn about wage increments due to skill level(skilled compared with unskilled). First, substantial variation is apparent,especially as it relates to industry. In the construction industry, wagedifferentials appear to be relatively large in both absolute and relativeterms. For the construction industry as a whole, skilled workers receivetwice as much as unskilled workers, as seen in Tables B.1 and Table B.2.Even Table B.3 provides some relevant evidence. It may be assumed that bothmen and women are more skilled than children. To the extent that wagesreflect skill level, it appears that men are more skilled than women. Inmanufacturing, by contrast, wage differences appear to be smaller in bothabsolute and relative terms, as seen in Tables B.1 and B.5.

31

2.73 As summarized in Table B.5, wage ratios tend to be somewhat lessthan 2.0. The mean wages for skilled labor probably falls in the range 50 -60 Taka per day. For unskilled labor the mean daily wage is probably in therange 30 - 40. The average simple wage differences are probably around 20 -30 Taka per day. Given the evidence at hand, it is difficult to believe thata mean wage differential between skilled labor and unskilled labor exceeds 30Taka per day. For the remainder of this study, it is assumed that the meanwage difference between skilled and unskilled workers is 30 Taka Rer day.This assumption will probably serve to allow an overestimate the returns totraining.

2.74 Having estimated the wage differential between skilled and unskilledlabor, the next step is to estimate a wage differential that could be expectedbetween those workers who have received formal training and those who have notreceived formal training, but who instead have learned their skills on the jobfollowing the traditional pattern. Under the assumption that skilled workerswith formal training have higher productivity on average than skilled workerslacking formal training, a wage differential would be anticipated. A wagedifferential between two classes of skilled workers -- one having acouired theskill through formal training, the other having acquired the skill throughinformal training on the job -- is not likely to be nearly as large as thedifferential between skilled and unskilled workers. In the present study, itis assumed that the wage differential between these two classes of skilledworkers is one half of the total differential between skilled and unskilledworkers. or 15 Taka per day. This assumptior., we will probably allow anoverestimate of the returns to formal skill training as compared withinformal.

Estimation of Returns on the Middle East Labor Market

2.75 In addition to the domestic labor market, the international labormarket must be considered. There are several published sources, which reportsomewhat different figures (Annex C), as shown in Tables C.1, C.2, C.3, andC.4. The figures are not completely consistent but nearly so. In recentyears, some 60,000 - 70,000 workers annually are in employment abroad, mostlyin the Middle East, as shown in Table C.l. The evidence in Table C.2 shows agradual decline in the number of construction workers and an increase in thenumber of workers in the category "Other", which includes categories VehicleDrivers, Engineers, Doctors, Nurses, Paramedicals, Professionals, CateringWorkers, and Miscellaneous. The distribution by skill level is shown moreclearly in Table C.3. The proportion of unskilled workers showed a decline ofsome ten percentage points between 1982 and 1986, while the proportion ofsemi-skilled workers increased by approximately the same amount. Although itis widely believed that employment in the Middle East will decline in thefuture, the combined evidence (Tables C.3 and C.4) indicates no visibledecline and suggests, if anything, a possible gradual increase, as shown inTable C.4. The slight trend shown in that table corresponds to an averageannual increase of some 2 per cent per year, although the average annualvariation is much greater, and the trend is thus highly uncertain. It is

32

therefore assumed that employment in the Middle East will continue at a levelof say (optimistically) 70,000 annually.

2.76 It may be assumed that most of the Bangladesh skilled workers in theMiddle East are men in the age range 20 - 45 years. In Table A.1 above, itcan be seen that in 1985 there were approximately 14.5 million men in that agerange employed in Bangladesh. Thus the proportion of men in that age range onthe Bangladesh labor market who work in the Middle East must be approximately70,000/14,500,000, or about 0.5 per cent. Then out of 1,000 persons in thelabor force, 5 would work in the Middle East. Therefore, it is assumed thatthere is a higher propensity for the graduates of the formal VTE system towork in the Middle East. It is also assumed that 2 per cent of the employedgraduates work in the Middle East. This is probably an overestimate, and inmaking this assumption it is likely that the rate of return will beoverestimated.

2.77 Remittances. The remittances from workers employed abroadconstitute a substantial source of foreign exchange, and it may be argued thatthis is one of the benefits accruing to formal VTE. It can be seen in TableC.5 that over the period 1982/83 to 1987/88, total remittances from abroadaveraged 21,418 million Taka per year (in constant 1988 Taka), or 669 millionUS Dollars, 9,562 USD per worker employed abroad per year. Therefore, it isassumed that remittances from a worker averages about 10,000 Dollars perworker per year.

2.78 In estimating the earnings increment to be attributed to formal VTE,the approach used is nearly the same as that used above for dome>iZc earnings.An additional assumption is involved since earnings data are given in avariety of currencies, and there is a need to avoid haAing to deal withexchange rates. Minimum wages for employment abroad are regulated, with ratesgiven in Table C.6 applying in 1988. Unless these figures are converted toTaka or US Dollars, they are not directly useful in estimating earningsincrements due to skill. The wage ratios of skilled workers to unskilledworkers is useful, however. These ratios, shown in Table C.7, suggest that onthe average, skilled workers earn between 30 and 40 per cent more thanunskilled workers in the Middle East.

2.79 It can be seen in Table C.3 that slightly more than half of theMiddle East labor force (Bangladesh nationals) is unskilled and the trend isdownward. About one third is skilled. The remainder is divided between semi-skilled and professional. Assuming that (a) the per average capita earningsof the professionals and the semi-skilled is roughly equal to that of theskilled workers, (b) the wage ratio between skilled and unskilled workers is1.4, and (c) the average remittance is 10,000 US Dollars per year, then thefollowing equation can be used to derive the mean remittance differentialbetween skilled workers and unskilled workers:

33

(Unskilled Wage)*50 + 1.4*(Unskilled Wage)*50 - US$10,000,so,

1.2*(Unskilled Wage) - US$10,000,

Unskilled Wage - US$8,333,

Skilled Wage - 1.4*(Unskilled Wage) - US$11,667,

(Skilled Wage) - (Unskilled Wage) - US$3,333.

2.80 If one follows the assumption applied for the domestic labor market,that the wage differential attributable to the formality of the skillinstruction is half of the wage differential between skilled and unskilledworkers, then the appropriate differential for the Middle East labor marketwould be US$1,667. Given the many assumptions and the uncertainty associatedwith each, and in keeping with the decision to prefer overestimation of thebenefits to underestimation, it is appropriate to attribute the entire wagedifferential between skilled and unskilled labor (US$3,333) to formal VTE.This attribution will almost certainly tend to overestimate the rate ofreturn.

Estimation of Lifetime Earnints Increments Due to Formal VTE

2.81 Having daily estimated earnings increments between formally-trainedand informally trained skilled workers, the next step is to estimate annualearnings increments and lifetime earnings increments. Malony (1986), discuss -ing employment and unemployment, notes that agricultural workers put in onlyabout 185 days of work per year, and handloom weavers put in 200 days a year.'ndustrial workers reportedly work about 250 days per year, a figure whichtakes into account work disturbances and religious and other holidays. Toconvert the daily wage increment to an annual increment, it is assumed thatthere are 280 working days per year.

2.82 In the absence of longitudinal data on earnings of graduates offormal VTE, it is necessary to estimate lifetime earnings increments from thecross sectional data at hand, namely the earnings increments estimated above.Investments in almost all kinds of capital gradually depreciate. Machineswear out, new technologies are introduced, markets change, etc. The sameprocess generally applies to investments in human capital. New techniques andnew technologies make the original investment in human capital worth less andless. For a modern dynamic economy, it is sometimes argued that technicaltraining usually has a lifetime of about seven years. In a less dynamiceconomy, the lifetime of a technical training would be longer. The same logicwould apply to more dynamic sectors and less dynamic sectors, respectively.It is assumed that TTC and VTI training in Bangladesh has a lifetime of 30years. The annual earnings increment attributed to formal VTE above istherefore assumed to accumulate for a period of 30 years without diminutiondue to depreciation.

34

Results and Slmulation in the--Es&imaj:ion of External-Efficiency

2.83 The estimated rates of return for both school systems are quite low.Based upon the above assumptions the rates of return on VTI and TTC trainingare -1.32X and -4.49X, respectively. Such low rates suggest that seriousconsideration should be given to the possible reorganization and restructuringof the schools to provide mor%. opportunity for improved returns on theGovernment's investment in VTE.

2.84 Estimation of the internal rate of return on investment in formalVTE permits a consideration of the consequences of making changes in theenvironmental conditions and in the internal operation of the system. Thefollowing questions can be explored: what would happen to the rate of returnif:

(a) the employment rate could be increased without incurring costincreases;

(b) the completion rate could be increased without increases incosts;

(c) the course could be shortened from two years to one year at thesame annual unit cost and with the same qualitative outcomes;and,

(d) some costs could be reduced or eliminated without changes inqualitative outcomes?

2.85 A number of simulation analyses were carried out based uponvariations in the data used in the rate of return analysis. The value of suchanalyses lies in (a) showing the sensitivity of the estimated rate of returnto errors in the data or the assumptions and (b) suggesting the relativeeffectiveness of various changes that might be made to improve the externalefficiency of the system. In the present study, a number of simulationanalyses were carried out. Four factors were manipulated in the simulationanalyses:

(a) the employment rate, varied in steps of 10 percentage pointsfrom 20 to 100 per cent;

(b) the completion rate, increased for VTIs from the current 57 percent to 70, 80, and 90 per cent and for TTCs from the present66 per cent to 80 and 90 per cent;

(c) the duration of the course, reduced from the present two yearsto one year; and

(d) the level of capital costs, reduced from the present values tozero.

35

2.86 Model 1. Model 1 corresponds as nearly as possible to the presentsituation in TTCs and VTIs. The co-rse is two years, with a terminal exam(Grade III) at the end of the first year and another (Grade II) at the end ofthe second year. The completion rate can be increased with constant unitcosts. That is, as fewer students drop out and additional students continue tothe second year, the total cost rises but the cost per student per year isconstant.

2.87 Model 2. Model 2 is identical to Model 1 except that increases inthe completion rate are not accompanied by cost increases. That is, asadditional students continue to the second year, no additional costs areincurred. The unit cost (per student per year) decreases and the total isconstant. The true situation in the event of increases in the completion ratewould probably be somewhere in between Model 1 and Model 2, but Model 2 showsthe outside limit of what could be accomplished by merely increasing thecompletioin rate.

2.88 Model 3. Model 3 posits that the two-year course currently givencan be reduced to one year without reduction in content or quality and withoutincreases in cost.

2.89 Model 4. Model 4 is identical to Model 3 except that it is assumedthat for a period of years, all capital costs can be treated as sunk costs andvalued at zero. Although reduction of capital costs to zero i. -ot a viablealternative in the long run, very substantial investments have already beenmide in machines and equipment, and it may be possible to dramatically cutcapital spending for some years. Model 4 shows the outside limits of whatcould be accomplished by a reduction of capital costs.

2.90 Altogether, for the TTCs the total number of simulation analysesdone was:

(4 Models)*(3 Completion Rates)*(9 Employment Rates) - 108,

and for VTIs,

(4 Models)*(4 Completion Rates)*(9 Employment Rates) - 144,

for a grand total of 252 simulation analyses. Each of these analyses resultsin a data point. Together they enable the generation of a set of eightproduction functions, one for each model, for TTCs and VTIs.

2.91 Some of the results of the simulation analyses suggest thatimprovements must be made in both the internal and external efficiencies inorder to bring about acceptable rates of return. Improvements in only oneside of the equation would not be effective and would result in additionalinvestments being made without an appreciable improvement in the rates ofreturn. The estimated rates of returns of these analyses are given in Table2.12 for the TTCs and Table 2.13 for VTIs. Results are given only for

36

employment rates of 30, 50, 70, and 90 per cent. The tables show the rates ofreturn for each model, for three or four completion rates, and for four levelsof employment. The starred (*) rate of return indicates the present actualsituation. On the basis of these data points, three kinds of analyses can bedone:

(a) Regression of the rate of return on the completion rate;

(b) Regression of the rate of return on the employment rate; and

(c) Regression of the rate of return on both completion rate andemployment rate the solution of the resulting equations for theconstruction of rate of return production functions.

Table 2.12 istimated Rates of Returns for TTCs forCurrent Situation and Simulation Analyses

Employment Rate (X)Completion ----------------------------------------

Model Rate (X) 30 50 70 90

1 66 -4.49 * -1.74 0.33 2.0680 -4.16 -1.35 0.78 2.5690 -3.97 -1.12 1.04 2.86

2 66 -4.49 -1.74 0.33 2.0680 -3.73 -0.86 1.33 3.1790 -3.24 -0.28 1.99 3.91

3 66 -0.33 3.38 6.40 9.1180 0.42 4.34 7.57 10.5090 1.00 5.09 8.50 11.61

4 66 8.63 15.70 22.23 28.5280 9.98 17.70 24.91 31.8690 11.06 19.32 27.08 34.57

Note: "*" indicates the estimated current actual rate of return.

37

Table 2.13 EstImated Rates of Returns for VTIs forCurrent Situation and Simuiation Analyses

Employment Rate (X)Completion --------------------------------------

Model Rate (X) 30 50 70 90

1 57 -1.32 * 2.02 4.66 6.9670 -0.77 2.69 5.46 7.8880 -0.43 3.13 5.98 8.4990 -0.13 3.50 6.44 9.03

2 57 -1.32 2.02 4.66 6.9670 -0.27 3.30 6.17 8.7080 0.46 4.21 7.26 9.9690 1.14 5.06 8.28 11.16

3 57 3.64 8.59 12.91 16.9670 5.16 10.69 15.63 20.3180 6.03 11.92 17.23 22.3090 6.87 13.12 18.82 24.27

4 57 8.72 15.83 22.41 28.7470 10.85 19.00 26.65 34.0480 12.09 20.88 29.18 37.2090 13.30 22.74 31.68 40.33

Note: n*n indicates the estimated current actual rate of return.

2.92 Regressions. Utilizing the above data, regressions were calculatedto generate coefficients (Annex E). The coefficients from these regressionshave been used for providing graphic displays of the relationships among thesevariables, as shown for Models 1 - 4 in Diagrams 1 - 4, respectively. The topgraph in each diagram shows the simple relationship between the completionrate and the rate of return. The second shows the simple relationship betweenthe employment rate and the rate of return. The bottom graph shows rate ofreturn isoquants showing, for given rates of return, the minimum requiredlevels of completion .iid employment.

38

DIAGRAM 1. MODEL 1- FIXED UNIT COSTS

All VTI: Fixed Unit Cost odel All TTCJ: Fixed Unn Cost Modello Pile of AMM a* 100 P R"1on1d

90- so - _

s ?- so ?

60 - w. § t

30 - AllW co Fie Ui0Cs Mdl l TTC: FiedUitCotMoe

20 - *2 5 _20 .

1.2~~~~~~~~~~~.

tO - 10 4.

I ~ ~~~~ -4- . 0 T -. So 60 70 EO 90 tOD 50 tO -iD sO 90 100

CompWW Rgkto () crwPl %

All VTts: Fixed Unft Cost Model An TT: Fie Unit Co Moe

1 3

10 = 40 -

0 - 3 . 90% EffWWynl"~30%m~i - = 0

-4*1

-2 ' . , , __ 4 - . _

Car~ 0Ra Co _wt RCA (

All VTI: Fixed Unt Cost Model All TTCs: Fixed Unit Cost Model

tt1 - 4-

10 3-

?- t clldo / o9mno

-2

30 40 so tI 70 tO tO 1oo 30 4 0 so 60 70 eo 9 1

E a 12M R%1

39-

DIAGRAM 2. MODEL 2 - FDIED TO'iAL COSTS

All Vnl: Fxed Total Cost Model AMi TrC: FIed Totad Coa Moel|Pits of Saturn boq' ~~~Ot 3D bnuws

sllo \ \ go 1011-

so _ _so -70 -O 70 -w

20- n- so0- ;_

sO - tO -_30O- . _- .30 -

50 60 70 so 90 t0 0 16 70 so so tO0Com~don ARo (%) CanofAn (%)

All VTb: Fixed Total Cost Model All TrC: Fbixd Total Cos Mode12

10 S0% ; pIDv Ui2~~~~~~~~0 Emplomnt -0S9 2

0-4

4 - 50Emp"t t5.

-1

I 4- b-3 -.

0.§ _ 4 t0 loiM

'-2 ,.4S1140 7Q00 60.00 90.00 eo c go

cUUpMo Rels (%) CotviSUofi Ag. (%I)

All TTC: Fixed Total Cost Model All VTI*: Fixed Totl Coat Model

3~~~~~~~~~~~~~~~~~~~~~~~1

Jo %cWflf jO7 90%coWI

1.14',.. 1'11

3 10 -~~~~~~~~~~~~~~~~~~~~~

-2 2

.3 1

.4~~~~~~~~~~~~~~~~~~~~~~3-1

-4

30 40 t50 60 70 60 O0 100 30 0 t50 60 76 t0 90 100

Employnt Rate (%) Employment Roe (%)

40

DIAGRAM 3. MODEL 3 - ONE YEAR COURSE

Hypoetl VTl : 1-Year Coure Hypoaetls TTCm: 1-Year Course

go 60

70 ~~~~~~~~~~~~~~~~~~~~~70so ': so: -: A

30 ~ e 70 e30tO0D 6 0 O9 o

0 ~~~~~~~~10

C*Ar%ei Raze %)CaffOgam Ri.( )

Hypotetical VTI*: 1-Year Couse Hypote TICs: 1-Year Coure

25 t12 22 -OM EmWoymE 11 t

21~~~~~~~~~~~~~~~~~~~~~

1 30 20%Emo

6~ ~ ~~~~~~~~~~~~~~~~~~~~~09

~~~~~~OilAaRe (.) Ca,dn=U I.6

1o6 12 -~~~~~~~~~~~~~~~~~~~~~~~~~~1

Hypothdklll Vlls: A*Year Colln,e t0cal TTC@: 1-Year Cous1

2e~~~~~~~~~~~~~~~~0 E.Wn 2 -

24 0

3 .~~~~~~~~~~~~~1

26

20 -~~~~~~~~~~~~~~~~~~~~~~~~~

6 .

14 - i12 -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.

30 40 S0 60 70 60 t0 100 30 40 60 tO 7 U C0 100EMwmO Rae. (E_)r

41

DIAGRAM 4. MODEL 4 - ONE YEAFI COURSE ZERO CAPITAL COSTS

VTb: 1-Yea Course, Zeto Caoptl Cost TrC: 1-Yar Courme Zeo Cpm Cottoo PADof ftn10-M o MQM#

so e o

190 AMct n __ __ _ __ __ _30__ __ _ __ __ _

70 -90

50 0o

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42

2.93 An examination of the diagrams suggests that the influence of theemployment rate on the rate of return is greater than the influence of thecompletion rate. This is further clarified by a comparison of the regressioncoefficients in Tables E.A and E.2. Table E.3 shows such a comparison.Following Model 1 in that table it can be seen that a unit change in theemployment rate is associated with a change of approximately 0.2 of a unit inthe rate of return. For example, an increase in the employment rate from 30per cent to 40 per cent would (ceteris Raribus) increase the rate of return byapproximately 2 points. By contrast, an increase in the completion rate from70 to 80 per cent would increase the rate of return by only 0.6 points. Thus,according to Model 1, increases in the employment rate would be more thanthree times as effective as increases in the completion rate in raising therate of return. For VTIs, the same increase in the employment rate would leadto a 2.7 point increase in the rate of return, according to Model 1, while anincrease in the completion rate from 60 to 70 would increase the rate ofreturn by only about 1 point.

Summary and Conclusions

2.94 Summaxy. The following findings have emerged from the study:

(a) The rationale for formal VTE seems to be that it provides moreproductive workers than the informal traditional system by which young peopleare brought up into the trades.

(b) Although there is almost no open unemployment in Bangladesh,the employment level is not high. However, there is high underemployment andself-employment. There is also voluntary unemployment.

(c) There are two production cultures in Bangladesh --thetraditional and the modern. It seems that young people with formal VTE havedifficulties being absorbed into either of these labor markets, because bothof these cultures have their own sources of skilled labor.

(d) It is argued that estimation of rate of return is appropriatein the case of formal VTE, especially in the present case where increasedproductivity appears to be the leading rationale for formal VTE.

(e) Although direct measures of earnings increments due to formalVTE are not available, there is some indirect evidence. This evidence,togeth,er with appropriate assumptions, can be used to estimate the returns toformal VTE.

(f) Throughout the analyses, where assumptions have been used, anattempt has been made to err on the side of overestimation of the returnsrather than underestimation.

(g) Wage differentials have; been estimated for both the domesticlabor market and the Middle East labor market.

43

(h) The data and assumptions were also used to simulate changes inthe parameters of the system, for example increases in the internal efficiencyof the system, increases in the employment rate of graduates, and shorteningof the course from the present two years to one year.

(i) Earnings increments were estimated even for students who didnot complete the training, so that they were not considered as total "wastage"of the system.

(j) The TTCs showed a rate of return of -4.5X, and the VTIs a rateof return of -1.3X, as contrasted with a rule-of-thumb figure of about 12 percent for an investment to be considered successful. Even if the employmentrate of graduates were to increase to 50 per cent, the rates of return wouldonly go up to -1.7% and +2.7%, respectively. Not even 90 per cent employmentrates would lead to rates of return of more than 2.1% and 9.01 per cent,respectively, and no one would argue that the employment rate is that high!

(k) Further analyses, based on the results of the simulations,show that the most effective factor in promoting a high rate of return is theemployment rate.

2.95 Conclusions. On the basis of these findings, the followingconclusions can be drawn:

(a) Under the present conditions of internal and externalefficiency, the formal secondary VTE system is not a productive investment.Although efforts have been made to avoid underestimating the rates of return,it is very difficult to imagine other reasonable assumptions which would makeinvestments in TTC or VTI training grofitable.

(b) Although the systems suffer somewhat from low internalefficiency, it is clear that by itself. no increase in internal efficiency canmake the investments profitable. A possible exception is if the length of thecourse could be reduced to one year without sacrifice of quality and at thesame time cut capital expenditure could be reduced to virtually to zero. Thiswould involve a very substantial reform, however, and is highly uncertain.

(c) All equations have two sides, and in the present case one sideconcerns costs and the other concerns earnings increments. On the cost side,formal VTE programs are expensive, involving as the- often do very substantialexpenditure on machines, equipment, materials, and tools. Substantial invest-ments have already been made in high quality modern equipment. Perhaps thisexpenditure has been too high, relative to what the economy can support andutilize efficiently. On the returns side, the main problem appears to be thelack of a clear labor market connection. TTCs and VTIs cannot be made intogood investments unless more of the graduates find employment in the field forwhich they are trained.

(d) Changes in the internal efficiency will provide relativelysmaller payoffs than changes in the employment rate, assuming they latter arenot associated with substantial costs. Since Government has only marginalcontrol over the labor market, it is not likely that the labor market

44

connection can be more than marginally strengthened if recourse is made tolaws, regulations, licensing of firms, and the like. More fruitful wouldprobably be to re-orient and re-organize the TTCs and VTIs in such a way thatare more directly resgonsive to groduction needs. Such re-orientation and re-organization would involve making changes in the student body. the faculty.the curriculum. the inner processes. and the management of the TTCs and theVTIs. These are discused in Chapter IV.

45

III. STATUS OF NON-FORMAL VOCATIONAL AND TECHNICAL EDUCATION AND TRAINING

3.0 Introduction. The non-formal domain of VTE in Bangladesh covers awide variety of programs operated or managed by government agencies, NGOs andprivate entrepreneurs (Annex F). Although most programs are designed for maleparticipants, a somewhat larger proportion of training spaces is offered tofemales than in the formal programs. The programs also vary in the nature ofthe skills being imparted. Some programs are intended to promote industrialproductivity through training (i.e. BITAC) and, as such, have manycharacteristics of the formal system, except that the training period often isof shorter duration--an important plus for efficiency. Other programs aredesigned to teach or transfer skills to unskilled persons for use inestablished skill and trade areas.

3.1 Another way to classify these programs is by whether the program isdriven by employer demand or is started in order to provide opportunities tounemployed or under-employed persons. This is a particularly important pointin both formal and non-formal VTE programs. Repeatedly, in many countries ithas been demonstrated that if there is little demand, there will be limitedsuccess. A substantial proportion of the VTE programs in Bangladesh werestarted without sufficient evidence of demand.

3.2 Although no single agency is charged with compiling a census of allnon-formal VTE activities, contact with the most knowledgeable sources seemsto indicate that the number of programs may exceed 1,000. The number oftrainees involved in a single program ranges from fewer than 20 to over 1,000.There is an agency which coordinates the work of the NGOs--The Association ofDevelopment Agencies of Bangladesh (ADAB)--which comprise at least half of allnon-formal VTE activities. This organization coordinates international,national and local NGOs. Coverage includes all districts and nearly allupazillas. A map prepared in 1987 shows that there are over 500 NGOs, about200 international, 200 national and 100 local. In the paragraphs whichfollow, sample programs are described to indicate the breadth of non-formalofferings, under three headings: (a) government non-formal programs, (b) non-formal programs of NCOs, and (c) private non-formal programs. Thesecategories are not entirely discrete--NGOs and private organizations oftenoverlap. Some government non-formal programs are very similar to the formalsystems. These sample descriptions will form the basis for a discussion ofpromising models.

Governmental Non-Formal Programs

3.3 Bangladesh Industrial Technical Assistance Center (BITAC). BITACnear Dhaka, controlled by the Ministry of Industry, is designed to boostindustrial productivity in larger enterprises through: (a) advisory andconsultative services to solve particular in-plant problems; (b) disseminationof technical know-how in seminars and demonstrations; (c) advanced training ofalready employed skilled workers; (d) initial training on a limited scale of

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new entrants into technical careers; (e) prototype design for innovation; and(f) services to assist in designing new tools, jigs, etc. Both advanced andinitial training is offered in 14 week programs with three courses per year.The fee for training is Taka 1,500 per month for advanced training and Taka1,000 per month for initial training. A hostel is available for about 60trainees who come from outside Dhaka at a cost of Taka 150 per month pertrainee. Initial training is offered on a space-available basis so themajority of training is for advanced workers. The numbers of persons trainedhas been as follows in the past seven years:

Year 1982/83 1983/84 1984/85 1985/86 1985/86 1986/87 1987/88Number 206 277 396 308 262 262 296

3.4 In recent years about 701 of the trainees have come from state-ownedindustries and 301 from the private sector. Training includes boththeoretical and practical instruction. Although the numbers of trainees appearto be low in terms of both demand and the capacity of BITAC, the management ofthe center believes that addition of more trainees would detract from theother programs of the center. However, it may be characteristic of VTE inBangladesh that facilities and staff which did, in one year, handle nearly 400trainees are permitted to handle less than 300 in subsequent years. There isno provision for enrollment of women.

3.5 The BITAC model for nor.-formal training is an example of agovernment supported program closely linked to the needs of employers. Infact the training is done at the request of the employers and the trainees arealready employed so placement uncertainties are avoided. It would be good ifthe institutions in the formal system (VTIs and TTCs) adopted more of thefeatures of this model.

3.6 Directorate of Women's Affairs. The best examples of a governmentagency operating in the non-formal sector of VTE may be found in the programsof the Directorate of Women's Affairs of the Ministry of Social Welfare andWomen's Affairs. They have three major emphases: assistance to women infemale headed households (about 161 of total households); assistance toworking mothers; and a group of specific projects with potential to helpwomen. Under this umbrella, the Directorate operates: (a) a program of non-formal education for women in collaboration with the Ministry of Education;(b) skill training in collaboration with other government agencies and NGOs;(c) a credit program for working women; (d) a project in poultry raising forthe commercial market; and (e) garment making and handicrafts. In the lattertwo categories, arrangements are available to permit women to work and alsolook after their children. The Directorate also supports four hostels inurban areas where lowly paid women can receive shelter while employed byprivate enterprise. This may be viewed as a service that permits women totake employment, but it also represents a subsidy to employers.

3.7 The Bangladesh Small and Cottage Industry CorReration (BSCIC). TheBSCIC, formed in 1975, has had three IDA Credits in the past decade totallingabout $40 million. This agency is affiliated with the Ministry of Industry.

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GOB defines "small industries" to mean entities whose total investment isunder Taka 15 million. There are now some 30,000 registered firms and roughly500,000 non-registered enterprises which comprise the small cottage industry(SCI) sector. Between 4 and 5 million persons are employed and about half ofthe industrial value added is to be found in the SCI sector. About 50X of theregistered SCI establishments are located in Dhaka with other largeconcentrations in Chittagong and Kulna. The non-registered firms are morewidely dispersed. Within the SCI sector, several fields have been identifiedas having especially strong potential for growth and productivity improvement:light engineering, metal products, rural/ agro-based products and. to someextent, handicrafts. BSCIC has recently (1985) established a traininginstitute known as Small Cottage Industries Training Institute (SCITI) tooffer assistance to persons engaged in development work with small and cottageindustries. At present, most of the persons helped by SCITI are staff ofBSCIC but future plans call for more emphasis on training entrepreneurs in theSCI sector. Future plans also call for more activities outside Dhaka, butonly to the extent of about 25X of the total. This is not in keeping withthe spread of the SCI sector over the nation. However, the SCITI staff ofonly 12 administrators and instructors has developed an ambitious program for1988/89 consisting of over 20 different training programs which would beoffered in over 50 courses of one and two-week duration in Dhaka and otherlocations.

3.8 In addition to SCITI, BSCIC operates five vocational trainingcenters in regional locations outside Dhaka for training in trades andhandicrafts. Additional training is offered in other locations in thoseskills and trades not requiring fixed equipment for training. There are threemajor fields for tVis training: women's crafts, including stocking making;screen and batik printing; embroidery and garment making; handicraftscovering bamboo and cane products, pottery, leatherwork, woodwork, and flowerand candle making; and industrial crafts - carpentry and woodwork, radio andtelevision repair, house wiring and armature winding, fitting and machineshop, sheet metal, lock making, watch repair and motor cycle repair (TableF.1). Most training is of 4 months' duration although some courses are for 6months; none longer. In 1987/88, 198 courses were held in which over 3,100trainees participated. About half of the trainees were in the industrialcrafts courses and the other half were equally divided between the women'scrafts and handicrafts programs. Fortunately, the more promising fields foreconomic development appear to have the highest enrollment. The generalpolicy is that trainees are expected to find their own jobs and arepresentative training center (Narsingdhi) reports that about 601 have doneso. This placement rate is above that of the formal system institutionsmaking this delivery scheme more promising as a future investment. Adisquieting aspect of the program is that a fair amount of the effort isdirected toward crafts and skills with a limited economic potential such aspottery and candle making. Nevertheless, this model of a government agencyoffering training of reduced duration may have more potential than the currentprograms in the formal system.

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Non-Formal VTE Proarams og NG0s

3.9 St. Joseih School for Industrial Trades. The St. Joseph School,also in Dhaka, is another example of a non-formal approach to the same taskthat institutions in the formal system were created to address. Started in1954 and on its present site since 1977, St. Joseph's maintains a nearlyconstant enrollment of about 150 trainees, equally divided among 5 populartraining fields: machine shop, fitting and welding, electric wiring, enginerepair, and carpentry. As in the formal VTE institutions, completion of grade8 is a requirement for admission. Each year about 200 young males compete forthe 60 new slots which open. Again, no females are trained. Duration of thetraining is three 45-week years (VTIs average only 30 weeks per year).Trainees spend about half of their regular hours in training and the remainderas unpaid workers in the production shops of the school. Fees are Taka 60 permonth for training and Taka 600 per month for hostel in the first year,declining slightly in the second and third years to prevent dropout. Secondand third year trainees may work overtime at rates of Taka 1.0 to Taka 1.5 perhour. The school is primarily self-supporting. Costs are covered by fees andincome from production. Of course, the work of the students is really a formof training-by-doing so the unpaid nature of it is justified.

3.10 A staff of 29 including instructors, foremen and workers is used,for a staff to trainee ratio of about 5:1. Since the staff also is used tooperate the production shops, this ratio is defensible. The cost of theentire operation is about Taka 800,000 per year, of which 2/3 is salary costs.Without attempting the detailed cost/benefit processes applied to the formalprograms, it is clear that the internal efficiency is better than the VTIs andTTCs. On external efficiency, it is far better than the formal systemsbecause virtually every graduate is employed within one year in the field forwhich he was trained. The school plays an important role in placement, unlikethe institutions in the formal systems. The potential for replicability wouldbe high in the abstract but may be limited by the following factors: (a) thelimited supply of experienced and highly motivated school administrators; (b)the potential of the school is dependent on the success of the productionelement. The demand for the type of products which can be produced in such aninstitution may be limited; and (c) there may be a limit on the numbers oftrainees who meet the criteria for entrance and are willing and able to paythe rather high hostel fees. However, only factor (a) above is a confirmedconstraint, the other two can and should be tested. St. Joseph's is aChristian institution and the school rules require that boys using the hostelbe Christian but this factor is not considered to be a limit to replicability.Every effort should be made to try this model many more times in theBangladesh society.

3.11 Rural handicrafts and cottage industries. Rural handicrafts andcottage industries have a long tradition in the society. Recently anILO/UNDP-supported project was initiated in these fields. The objective is toassist in the development of home-based handicrafts, cottage industries andsmall scale industries -- the distinction between the latter two categoriesbeing the amount of capital investment required. In handicrafts, the projecthas identified ten crafts considered to have export potential but which are in

49

need of changes in product design to increase export chances. New productdesigns are being developed, new tools introduced and skills are beingupgraded. In cottage and small scale industries the emphasis is on rural foodprocessing. The project has organized a central marketing system for theproducts which extends internationally. The project is in operation in 25 ofthe 64 districts of the nation. Selection was based on existence of suitablehandicrafts and degree of landlessness of the population. Training under thisproject is offered where the trainees reside -- no schools are needed,instructors simply bring their materials and start instructing. Training isof short duration, two weeks or less, and instructors live in the villagewhere the training is held. Both males and females receive the training.This model is also used by nany NGOs.

3.12 Dhaka Young Women's Christian Association (YWCA). The YWCA operatesa reasonably effective vocational training program which prepares women foremployment in fifteen fields (Table F.2). Over 1,300 women participated inthe programs in 1988. In general, enrollment is highest in the shorter coursesand in those which are more likely to lead to employment -- English,secretarial science, typing and hair dressing. Although it is difficult todetermine the social class status of the trainees, probably most of thetrainees come from the middle class. The long-duration courses in music andart suggest that the trainees are not seeking employment. Post-trainingemployment data are not compiled, but the manager of the program believes thatthe trainees who have completed such courses as hair dressing and secretarialscience secured employment shortly after finishing training. In hairdressing, self-employment is often the means. In addition to the courseslisted in Table F.2, the YWCA also operates a craft center for needy women andgirls which produces bakery products and jute items for sale in local shopsand scbjols. The baked goods sell well, jute not well. The YWCA program is asample of seven similar programs catering exclusively to women operated byvarious NGOs in and around Dhaka.

3.13 Avesha Foundation. Affiliated with BRAC, the Ayesha Foundationoperates a textile handicrafts program which is doing well in terms of sales,mainly export products. It trains it own workers who are all female but itdoes not train anyone for other programs. From one perspective, this is not aform of VTE since it is not training for other employers, but it may be amodel for a way to both train and employ women which may be easier toreplicate than VTE.

3.14 Savar Peoples Health Center. The Savar Clinic is another program ofthis type which began as a clinic and has since added a bakery, shoemaking,jute bag making, printing, plastic product making, metal and carpentryworkshops and herbal medicine production to its program. Nearly all employeesare women, most of whom are working in areas that would be in the male domainelsewhere. The women have been trained on the job. Like the AyeshaFoundation, the Savar Clinic is really an employment generation program ratherthan VTE for future employment. The principle that employment comes first andtraining will (and does) come later is an important factor to consider in VTE,especially in Bangladesh.

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Private Non-Formal VTE Protrams

3.15 Private Non-Profit Trade Schools. The Association of Private Non-Profit Trade Schools was formed in the early 1980's with leadership from thedynamic principal of St. Joseph's school. Its current membership is 42schools or organizations with a total enrollment of slightly under 2,000.There are other schools which are not members of the Association, butgradually the majority are becoming members. The general principle underwhich schools of this type operate is Training cum Production--a noteworthyexample is St. Joseph's. Such schools are generally small. Only five of the42 have enrollment over 100. They are too small to be able to have up-to-datetools and machinery but perhaps large enough to introduce youth to the worldof hand tools and entry level skills. Most schools are supported by a donoragency, often with religious affiliations. Virtually no girls are beingtrained. The reason reported is that it is too difficult to have hostelaccommodations for both sexes. Moreover, the fields offered are thought to bein the male domain.

3.16 Choices of the fields of training to be offered in such schoolsreflect two factors: (a) employment demand and (b) feasibility of acquiringand maintaining the necessary equipment. Under this constraint the followingfields are offered with the number of schools within the 42 members of theAssociation in descending order indicated: carpentry, 27; electric wiring,24; tailoring, 18; mechanics and engine repairing (motorcycles), 15; generalmechanics, 9; welding, 9; machine shop, 8; metal work, 5; plumbing, 5. Eightother fields are offered by less than five schools. It is noteworthy that thefields are primarily related to the service needs of the society and thatfields such as weaving and other handicrafts do not prevail. About one-thirdof the schools operate three-year programs, following the pattern of theformal system. But a surprising number of the schools have opted for shorterdurations which probably is far better (Table F.3). Just as trainees in theseinstitutions are also production workers, instructors also serve as foremen ofproduction units. Supply of instructors is a continuing constraint to growth,as is financial resources for capital expenditures for training facilities andhostels. Entry of trainees is based on a maximum of grade 8 prior educationand often lower. This is an advantage in most cases, because graduates aremore inclined to accept manual employment at wages typically paid. Theschools do not conduct formal tracer studies but have anecdotal evidence ofwhat happens to their graduates. Most graduates find employment in a fewmonths after training ends. One administrator said that it is obvious thatthe trainees must get work because they have no other source of support sincethey do not come from families with money. An unanswered question is whetherthe work the trainees secure is related to their training -- the schoolmanagers believe it is, but can provide little firm evidence.

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aummary of Non-Formal Programs

3.17 Several points emerge from the foregoing description of a sample ofnon-formal VTE programs:

(a) The programs are many and varied, but in total they do not comprisea large delivery system that has the capacity to impact the nationalmanpower needs of the country. It is unlikely that the total numberof trainees affected could be larger than 20,000, which in a nationwith a population of over 110 million and a labor force of 30million is far short of demand.

(b) With only a few exceptions, the programs are far too small toachieve economies of scale. Examination of Tables F.1, F.2 and F.3which describe two of the largest segments of the non-formal sub-sector in VTE reveal that few programs have more than even 100trainees and that the modal size of a program is in the neighborhoodof 20 trainees. Programs with equipment that is used for only 20trainees must be considered inefficient. Similarly, any instructorqualified to train 20 trainees would also be qualified to train manymore and, therefore, instructor resources are also being wasted insmall programs.

(c) Many programs are offering tra'ning in handicrafts and other skillsfor which the market is not firm. Far more emphasis should beplaced on three alternative training fields: (1) service trades forwhich there is clear demand in the domestic society (i.e. tailoringand dressmaking, hair dressing, electronic repair and secretarialservices); and (2) industrial trades, including production ofpotential export products. The recent emergence of garment assemblyin the export market is an example. In even more recent months thepossibility of Bangladesh workers assembling small electronic itemshas been identified.

(d) Opportunities for females to receive non-formal VTE are almost non-existent. Even though chances for training are not as bleak as inthe formal system, that is little solace since the overallproportion of opportunities is still less than one or two percent,when it should be at least 30%. With the high level of awareness ofwomen in deveopment issues among many of the foreign donors whichparticipate in the non-formal delivery mode, it is surprising thatmore attention is not directed to the needs of girls and women. Ithas been repeatedly pointed out by the males who make policy in VTEin Bangladesh, that with insufficient resources to meet all needs,the society prefers to spend them on males. Moreover, it has alsobeen pointed out that adding opportunities for females createsproblems of hostel accommodations, latrines, demand for femaleinstructors and friction with the male participants and instructors.However, females are better able to meet some of the needs of manyof the emerging opportunities mentioned in paragraph (c) above. Forexample, virtually 100% of the employment in the new garment

52

assembly industry is for women. As computers revolutionize commerceand banking, the demand for qualified women is destined to increase.The non-formal system needs to direct far more attention to womenand this should not only include instruction in the handicraftsarea.

(e) Demonstrated success in employment is far greater where productionis coupled with training. A feature of many of the most promisingprograms in the non-formal domain is the elimination of the need toseek employment of trainees after training is completed. One needsonly to look again at the poor record of efficiency in the formalsystem (Chapter 2) to understand how much is lost in the post-training employment step.

(f) The non-formal sector is far better than the formal systems inchoosing the right people to train. This is due in large measure tothe grade 8 entry level or less used in most non-formal programs.Grade 8 entry is probably still too high, but is far better than theprevailing tendency of formal programs to escalate entry from the8th grade to even college students. A higher than necessary entrylevel has several evils: (1) persons with higher education are farmore likely to believe that they are too good to do manual work; (2)conversely, use of the higher output of the general educationsystem for low or mid-level industrial or service employment in asociety such as Bangladesh is not making effective use of thesociety's investment in general education. The struggling generalsecondary education system is only able to serve about 20X of thesociety. Surely, the nation has better use for this quintile of thepopulation than to use it in most of the types of employmentresulting from VTE. The higher levels of VTE such as polytechnicsand university programs in engineering, science and commerce are farbetter uses; and (3) a higher entry level of education automaticallyshifts most VTE opportunities away from the low income and poorsegment of the population and therefore does little for povertyalleviation. Of course, it does not follow that entry level for VTEshould be reduced below grade 5, since basic literacy and numeracyare essential for nearly all levels of VTE and employment. Manyeffective programs of VTE in other nations provide basic educationand skill training often even without any previous generaleducation. This should not become a general policy for Bangladesh.The nation's long-standing program to promote universal primaryeducation should remain the cornerstone of education policy. In thelonger run, most societies in Asia have preferred to continuegeneral education through grade 8, 9 or even 11 or 12, but thisluxury may be beyond the reach of Bangladesh in the next 20 years.

(g) The non-formal programs are better than the formal systems inholding the duration of training to less than three years. However,far too many of the non-formal programs still require more trainingtime than necessary. This restricts output and raises unit trainingcosts. Part of the longer duration is attributable to the fact that

53

production is considered part of training. Still, every effortshould be extended to cut training time to the minimum.

3.18 With recognition of the above seven points, the non-formal deliverymode provi4es a modest hope for more successful VTE programs for the future.

54

IV. ISSUES AND OPPORTUNITIES

ImDroving the Internal Efficiency of Formal VTE

4.0 Vocational Trainint Institutes and Technical Training Centers. Asdescribed in Chapter II, there are many issues which, taken as a group,severely limit the potential the existing VTI and TTC systems. Both systemssuffer from severe limitations in their capacity to obtain training-relatedemployment for graduates. There are few industrial jobs available and, forthe jobs that are available, salaries are comparatively low. This situationis even more severe in rural areas.

4.1 The following concerns and recommendations relate to the improvementof the internal efficiency of both the VTIs and TTCs:

(a) Mvne of Students Enrolled. Currently, all students must have aminimum of Level VIII schooling to enroll in the VTIs and TTCs. In fact, manystudents are enrolled at even higher academic levels. Students currentlyenrolled are often not interested in obtaining jobs as skilled workers. Thereis evidence that only about one half of the students intend to work in thearea for which they are being trained. This is a particular problem becauseit is universally accepted that VTE students must have an occupational intentif their instructional programs are to be successful. Furthermore, findingssuggest that many of these students, upon completion of training, arereluctant to accept employment at salaries typically paid by employers in thetrades taught. It is therefore recommended that the VTIs and TTCs adjust theirselection criteria and significantly lower the prerequisite academic levels ofnew enrollments.

(b) Recruitment. Guidance and Counseling of Students. There islittle effort made to recruit students into the programs. Upon entering theschools, students receive only limited guidance and counseling. Moreover,students in both systems receive only limited support in their search foremployment. There is a need to establish a career guidance and counselingprogram to support the recruitment, counseling and placement of students inVTE. There is also a need to have someone involved with the followup ofgraduates employed in order to gain feedback or. program quality and graduates'problems upon entering the workforce. An established counseling program couldprovide all of these functions. In Bangladesh, as in most South Asiancountries, there is limited acceptance of the use of such services.Therefore, it is recommended that a pilot program be initiated in one or twoVTIs and the same number of TTCs. The location of the programs should becarefully selected to ensure: (1) local support of administration; (2)adequate potential for success of the pilot effort: and (3) recognized needfor such services by the community.

(c) Industrial Experience of Faculty. As a group, the teachers inTTCs and VTIs have very little industrial experience. Many VTE teachers areyoung and inexperienced except for a short-term assignment in industry during

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their training. International experience has shown that a quality VTE systemmust have teachers with industry experience. In fact, a number of countrieshave established policies that require industry experience as a prerequisiteto employment as a VTE teacher. Other countries place higher priority onindustrial experience than pedagogical training when employing teachers. Inthese countries it is recognized that it is easier and more cost effective toprovide pedagogical training to skilled craftsmen than to providecraftsmanship training to inexperienced teachers. It is therefore recommendedthat a policy be established that ell VTE teachers must gain at least twoyears of related industrial experience either before or within the first fiveyears of employment. At the completion of the first five years, the teacherswould be asked to participate in an ongoing industrial attachment program thatwould require them to go back to work in industry for at least three monthswithin every five year period. To support these requirements, the NCSDT wouldestablish a summer attachment program for new teachers in industries. Asecond program would also be established to support the ongoing program. Inthis program, about 20% of all VTE teachers would participate in an industryattachment each year. It would be highly structured and directly related toeach teacher's specialty. It may be feasible to provide opportunities forteachers to enter into industrial attachments in other countries.

(d) Curricula Modification. Curricula of TTCs and VTIs are governedby a policy that states that only 13 industrial trades may be taught (untiladditional trades are approved by the NCSDT). Findings suggest that, in ruralenvironments, there is a need for VTI curricula to be made more relevant tothe predominately agricultural labor market. Almost by definition, thissuggests that the curricula should be more agricultural/agri-mechanics based.Currently, there is a lack of articulation between potential employers and theskills taught in the VTIs. Traditional employment in the agriculture sectorrequires a broad base of skills such as agriculture production, animalhusbandry, agri-mechanics (including pump repair), basic buildingconstruction, welding and masonry. If each rural student was trained in abroad range of these skills he or she would have a much higher potential forlocal employment. As these rural communities become more industrialized,curricula should again be modified to reflect changes in the labor market.VTIs and TTCs located near industrial complexes or in larger towns would beable to place more emphasis upon industrial trades that are relevant to theiremployability areas. Occupational analysis should be conducted in these areasto determine if the needed trades are, in f-ct, those that are being taught inthe schools at this time. In addition, the new curricula should be designedto support short, intense, and specific instructional approaches that, inturn, support student evaluation by performance-based objectives. Thesechanges will allow for the teaching of students with substantially loweracademic skills.

(e) Length of Courses. For the trades taught, the VTIs and TTCstake too much time to provide the required instruction. Currently, theinstitutions enroll students for two-year periods to acquire NSS IIcertificates. International experience has shown that such instruction can bereduced from the current two-year period to less than one year. This time-related issue is one of the most costly factors affecting internal efficiency.Obviously, there is significant loss in the internal etficiency if students

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are kept in class twice as long as necessary. It is therefore recommendedthat the length of courses in the schools be reduced to two six-month modules,each providing opportunities for students to take examinations for NSS III andII, respectively. The shorter periods of instruction would require moreintensive and specific teaching methodologies, but they should decrease thedropout rate and increase skill retention. These factors along with theincrease of student flow througih the system will significantly improve theinternal efficiency of the institutions involved. Given the existing externalefficiency factors in the VTIs and TTCs. it is unlikely that the VTIs and TTCscan move to a favorable rate of return on investment without reducing theduration of training.

(f) Industry-Education Linkages. With the exception of industryattachments and some input into curriculum design, there is little interactionbetween the VTE schools and industry. There are few industry advisorycommittees used in the institutions. Consequently, industry leaders have beenvery critical of the role that VTIs and TTCs play in the training of industryworkers for their industries. They have repeatedly cited the need to improvecurriculum, teachers, and instructional processes to make the teaching morerelevant to the 'world of work". There is a need to improve these linkages.In this regard there are a number of possible approaches.

(1) At the national level, it would be useful to establish aNational Advisory Committee on Vocational and Technical Education. This highlevel body would be organized to provide advice to the Government regardinghuman resource development needs in industry and commerce. Governmentofficials would not sit on the Committee or provide direction to the agenda ofthe Committee. It would be chaired by a nationally prominent industrialistappointed by the President and would be chartered to make recommendationsdirectly to a high-level Government body at least once per year and to publishthose recommendations in a yearly publication to interested parties. In thisway, the status and recognized importance of VTE would be raised while at thesame time, providing a systematic process for industrial input into theplanning and management of the systems.

(2) At the local level, each school should maintain some typeof local advisory committee. The establishment and maintenance of thesecommittees should be a policy requirement of the NCSDT, supported byadministering ministries. It should also be a prerequisite for programcertification by the BTEB. The committees would meet every two months toreview the programs of the schools and to provide specific advice to upgradeor improve situations that exist. A copy of the minutes of these meetingsshould be provided to the Ministry of Education for review and action. Themembership of the local advisory committees should include only localindustrialists and skill workers who have an interest in the programs offeredat host school.

(3) There is a need to provide more flexibility and jobrelevance into the administration of the VhIs and TTCs. A pilot effort may beconsidered whereby a responsible agricultural or industrial organization orgroup of industries would be asked to administer one or more selected VTIs andTTCs for some period of time. They would agree to introduce industry-specific

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training that would incorporate improved methodology and curriculum. Thismethodology and curriculum would be prepared through maximum input fromparticipating industries. In the these pilot schools, the Government wouldagree to witness the use of an "industry-driven" approach to VTE, that is, asystem that is managed by industry to meet the perceived needs of industry.From these pilot experiments, the Government would be able to considerpossible system-wide improvements in administration of VTIs and TTCs.

Improving the TraininR of VTE Teachers and Administrators

4.2 The Vocational Teachers Training Institute (VTTI) is an welldeveloped teacher training facility. The staff is competent and the Institutehas a good administrative organization. It does, however, suffer from lowenrollment each year. In the past three years, enrollments have averagedabout 50 pre-service teacher trainees each year. The school has a capacity totrain 120 full-time teacher trainees. As a result, the unit costs of theInstitute are quite high. The costs could be substantially reduced ifadditional programs were initiated to better utilize the Institute's excesscapacity. The following programs are suggested:

(a) There is a need for stronger administrator training in VTE.Currently, the VTTI offers some short term training for administrators. It isrecommended that the VTTI expand the scope of this training to include:

(1) The establishment of a long term (one-year) senioradministrator training program for about twelveadministrators each year. Th' -ogram would includeshort-term (3-4 month) fellows training in somecountry, on-site (VTTI) theoretical training and thepreparation of a research project in administration ofVTE. Followirg the completion of training, the VTTI wouldprovide a consalting service to the graduate administratorwhereby the Institute would visit and advise theadministrator in the organization and administration ofhis school.

(2) The expansion of the in-service offerings toadministrators to include 100% of all administrators everyfive years. This ex.pansion would require the delivery ofin-service courses throughout the year to fairly largegroups of administrators. Some of these courses should betaught in local or regional locations to facilitate thetransportation requirements of the administrators.

(b) Currently, the VTTI provides teacher training for VTIs and to alesser extent to the TTCs. There is need to train Teachers from NGOs, privateschools, industrial training programs, and other ministries. It is thereforerecommended that the VTTI initiate a teacher training program for theseteachers on a cost-sharing or cost-recovery basis, depending upon the need andability of the requesting organization to share the cost of training.

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Improvins the External Efficiency of Formal VTE

4.3 Employment of Graduates. The most significant factor affecting theefficiency of the formal VTE systems is the inability of the TTC and VTIgraduates to find appropriate employment opportunities for themselves. Themost optimistic estimates of MOLM and MOE fall short of the needed percentagesrequired. Unless changes are made to improve this single factor, no increasein internal efficiency will be sufficient to improve the systems to a pointwhere they would be considered good economic investments. The administrationsof both systems have little influence on the availability of jobs for theirgraduates. Bangladesh has a national employment problem that is complex anddifficult to solve. It is not so much a problem of unemployment, but ofunderemployment and nonproductive employment. A large portion of theworkforce is employed in informal jobs that a lesser trained person could do.Often a job for which a graduate is trained is simply not available at thetime and place that is needed. In addition, many employers will not paysalaries which are expected by graduates. Optimistic estimates suggest that,on the average, this situation exists for more than 50X of the graduates.

4.4 It may be argued that the formal VTE systems are too well developed,with too much capacity, for the level of industrial development in thecountry. There is some logic to this argument. The efficiency of any VTEsystem must be measured by the ability of employers to absorb and utilize thegraduates of the system. It has already been demonstrated that, inBangladesh, this is a particular problem. However, a review of the laborstatistics suggests that this is not the situation. The formal VTE deliverysystems, in total, produces only about 3X of the trained worker requirementeach year. Instead, the available data suggests that the formal systems arenot appropriately designed and/or administered to meet the demands of industryand commerce. This finding, in turn, suggests that the systems should berestructured in many major areas. A decision not to restructure willperpetuate a continuing loss of resources which, over the decades will amountto many hundreds of millions of Taka. If it is decided to restructure thesystems to make them more responsive to the needs of industry and commerce,then a number of major policies must be reconsidered and modified as required.These policies will be more fully discussed in Chapter 5.

4.5 Unless wavs can be found to grovide a better articulation betweenthe supply and demand for trained graduates. serious consideration should begiven to eliminating a substantial groportior, of the schools from the existingsystems. This action would reduce the negative effects somewhat. Not onlywould it be uneconomical to operate an inefficient system, it would not beuseful to continue to provide failure experiences for a large percentage ofthe graduates. Such failure experiences would only create discontent on thepart of students, employers, and parents and, in the long term, reduce theenrollment and efficiency ratios even more. The following are severaladditional suggestions:

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(a) all formal VTE programs should be heavily and directlyinfluenced by the perceived needs of industry;

(b) consideration should be given to encouraging industry toparticipate more fully in the training processes. This participation sl.ouldinclude participation in the planning, decision-making, and the training andevaluation of students;

(c) consideration should be given to the provision of more types oftraining, shorter training programs, flexibility in meeting the needs ofemployers, willingness to offer off-campus courses, willingness to work withemployers to train students in industrial workstations, and industryexperience for teachers and administrators. In addition, there is a need todecentralize some authority to local schools that have the willingness andcapacity to demonstrate more creative and effective approaches to VTE servicedelivery.

Management of Vocational and Technical Training

4.6 National Council for Skill Development and Training (NCSDT). Thenational program for skill development and training in Bangladesh is difficultto coordinate. This is due in part, to a lack of planning data, resources,poor external efficiency, confusion and misinformation in the delivery oftraining services. In 1979, the Government, with assistance from the Bankestablished the NCSDT (para. 2.2). to serve as a coordinating body for skillsdevelopment and training. Unfortunately, a review of this organizationsuggests that it currently has limited flexibility and impact on the nationalskill development and training effort. As a body administered by the Ministryof Labor, it is influenced by the policies and procedures of that Ministry.These influences limit its potential to serve the needs of other ministriesand non-government organizations. As the highest level body in the countrythat is responsible for coordinating the skills development and trainingprograms, it has not been able to demonstrate that it has the capacity toarticulate manpower supply and demand issues into practical, high impactprograms that are cost effective and support the country's efforts toindustrialize. The Council seldom meets (last time is reported to be 1984)and in fact, is no longer regarded as an effective organization.

4.7 The concept of establishing a national coordinating body is soundand has been proven in mar.y other countries with similar concerns about themanagement of their human resource programs. A review of the situation inBangladesh suggests that it would be better to reconstitute the NSSDT underthe auspices of a high-level Government agency or organization that has thecapacity and willingness to initiate major policy reform in the VTE system.The Council should also be more closely linked to the planning and preparationof the Government's five-year plan which is the driving policy document forfuture development of the national workforce. In addition, the Council shouldhave better access to national planning data which is so important to itscoordinating responsibilities. Host important, the Council should be placedin an organizational framework where there would be expectations for it to

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serve as a "change agent" in the development of VTE. There is a need toinject creativity, flexibility and resources to support new ideas andprograms. The Government should support these initiatives, while at the sametime, raising the visibility of the Council to better enable it to meet thegrowing demands of industry.

4.8 Bangladesh Technical Education Board. The BTEB is a small buteffective organi::ation. It is well conceived, organized and managed.Although the Boarl has a limited capacity and staff, it has been able toestablish a low-cost organization that provides substantial impact on thequality of VTE output. It provides an appropriate range of services toschools, students and industry which is largely cost recovery. As such, itoffers a unique model of service delivery in Bangladesh. It is thereforerecommended that the capacity of the Board be expanded to include a broaderrange of quality control activities in the areas of school accreditation,student examinations, certifications, research and curriculum development.The Board currently has plans for such expansion.

4.9 As a technical organization focused upon quality control, researchand student performance, it is well positioned and viable. The strength ofthe Board lies in its targeted focus. The BTEB should not be encouraged toexpand its capacity outside this well defined scope of services.

4.10 Local Management. The administrators of VTIs and TTCs are in needof additional opportunities for training and development in: (a) philosophy ofVTE; (b) teaching methods and techniques; (c) facility layout and VTE supplysystems; (d) curriculum development; (e) administration and supervision ofVTE; and (f) student placement and personnel services.

4.11 Government Intervention in Agprenticeship Arrangements. At thistime, the apprenticeship program in Bangladesh is quite small. Officially,there are only about 200 registered apprentices in the country. Only about 20were registered last year. Actually, there are many more unreg'steredapprentices in private and public enterprises. Most firms in Bangladesh donot want to participate in the national apprenticeship scheme. Historically,apprenticeship schemes have been difficult to establish in Asia, particularlyin South Asia. Bangladesh is a good example of a country that has barriers tothe establishment of a viable apprenticeship program. Although there is anational apprenticeship law, it has little effect in practice. Employersignore the law. There are limited resources to support registeredapprentices. The management structure of the system is unstable and awkward.There are few incentives to encourage industry and industry craftsmen toparticipate in the program. Apprenticeship schemes have been proven to worksuccessfullv only if there is a perceived need on the part of the employer.,here there is a felt need, programs will operate successfully with littleintervention. Apprenticeship schemes offer the potential for training at highlevels, but such schemes typically have limited capacity to train a largenumber of workers.

4.12 There is a need to conduct a more indepth study of the potential ofapprenticeship schemes in Bangladesh. At this time, the apprenticeshipprogram functions with very low efficiency. Incentives and administrative

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structures should be upgraded to create a more responsive and effectivesystem. In particular, there is an obvious need for industry and commerce toplay a more significant role in the process.

4.13 Regulation of Private Schools. Much discussion has taken place inthe past few years regarding the Government's role vis-a-vis the private VTEschools which are beginning to be established in the country. There is a needto provide some regulation of these schools which vary widely in quality andresources. However, when contemplating Government intervention, there areseveral issues to consider. First, it is important to minimize Governmentinput to and control of Rrivate schools. The relative advantage of privateschools lies in their independence from normal government restrictions thatwould limit their flexibility and response time to community and industryneeds. Second, the private school movement in Bangladesh should be encouragedto grow and RrosRer. Once established, it can provide a significant increasein VTE capacity to the nation. It is a valuable asset if it functions well.Third, the private schools should be encouraged to be creative. By this, itis meant that the schools should offer services in a wide range of neededareas. They should also utilize creative and innovative methods for thedelivery of their services. The fact that they are private and, in somecases, profit making will force them to demonstrate useful, cost-effectiveapproaches to the delivery of VTE services.

4.14 As they currently function, they have limited impact on the humanresource needs of the country. The are usually small, specialized schoolsfocused, to a large part, on the training of workers for the Middle-East labormarkets. Most have limited resources and the quality of their servicedelivery has been challenged by the nation's education leaders. Facilitiesvary in quality from being non-existent to good. Teachers are mostly untrainedand students often suffer from the inability of the schools to deliver ontheir promises and advertisements. Therefore, it is recommended legislationor policy be introduced that requires all private schools to meet minimumfacility and staff standards in order to offer instructional programs. Thisamounts to some form of accreditation. With that in mind, it is recommendedthat the BTEB be authorized to serve as the accrediting agent for theGovernment. The BTEB has experience in this type of service and would be ableto expand its capacity to include services to the private schools.Concurrently with these requirements, the VTTI should begin to provide short-term teacher training for private schools on a cost recovery basis. Thisservice would necessarily need to be tailored to individual needs andavailability. It might be possible to offer evening courses in Dhaka tosupport the improvement of these teachers.

4.15 Role of Skill and Ce:tification and Examination Systems. The NCSDTcurrently is responsible for the establishment of skill certificationstandards. The BTEB has the responsibility to prepare examinations, examineVTE students, and to certify students who pass the NSS certificationexamination. As previously discussed, the activities of the NCSDT are lessthan adequate to support the manpower needs of the nation. The scope ofcourse offerings in all of the schools is unnecessarily restricted.

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4.16 The curriculum of each school should be tailored to theemployability of students and the needs of the industries in the respectiveemployability areas (often defined as a radius of between 20 and 50 miles,depending upon the cultural, social and mobility characteristics of theschools graduates). Curriculum acquisition, modification, and validationshould be more within the purview of the schools. The national level agenciesshould continue to assist and regulate the quality of the curricula, but moreflexibility should be given to local schools to initiate programs ofinstruction that meets local needs. Often, in other countries, local VTEschools are authorized to propose new courses as needs arise. In theirproposals, they typically have to demonstrate that they have a curriculum ofquality and access to instructional materials that will meet the needs ofemployers.

4.17 The skill testing and certification process in Bangladesh is welldeveloped and managed. It is however, relatively small. Less than 3500pers^ns are certified each year by the BTEB. The criticisms of the processshould not be so much aimed at the procedures used, as at the limited programof services and narrow scope of skills being tested. As it stands, thecertification process has little effect on the work force. Most employersknow little of the process. This is a typical problem in many skillcertification programs. The resources to support the process are limited.Typically, only formally trained graduates are allowed to sit for theexaminations. When this limitation is established policy, it often suggeststhat there is a limited view of learning and skill acquisition. There aremany approaches to learning a skill that do not require attendance at a formalVTE institution. Therefore, it is recommended that the examination process beopened to any person who is willing to pay for the right to be examined forcertification. This policy should also provide incentives to industries toencourage existing workers to sit for the examination and then to seektraining to upgrade their skills if necessary. Such a process would addcredibility to the establishment of evening schools and would significantlyincrease the impact of the certification program leading to improvedproductivity through skill enhancement.

Role of VTE in Literacy Trainine

4.18 There are more than 70 million people in Bangladesh who are poor,cannot read, write or use simple mathematical calculations. There cannot beany higher priority in the country that the eradication of poverty andilliteracy. As a process that improves a person's education and standard ofliving, VTE must be considered a useful tool to fight poverty. In fact, ithas been demonstrated that literacy training coupled with VTE more effectivelyplays a vital role in poverty alleviation than commonly believed. VTEprograms have often been used to facilitate the teaching of basic educationincluding literacy and numeracy skills. VTE is a particularly good vehicle toteach these skills because students can be taught through indirect methods andwith instructional materials which are non-threatening. As an example, thejob training programs of the Manpower Development and Training ACT (MDTA), theComprehensive Employment and Training Act (CETA) and many other programs in

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the United States often used shop manuals, magazines and parts catalogues asivistructional materials to teach reading and comprehension. Mathematics andmeasurements were often taught in shops and laboratories utilizing specificprojects requiring measurement and calculations. In this way, students saw arelevance to the learning required and felt less threatened as they had beenin more traditional approaches where they may have previously experiencedfailures. These approaches are very effective if properly implemented. Suchprograms are typically taught as adult VTE programs and are often consideredsupplemental to existing employment. In these programs evening courses arepopular. The inclusion of literacy training in VTE programs would provideopportunities to lower the entrance requirements in VTE and, at the same time,would provide a higher social rate of return on the Government's investment.

4.19 In disadvantaged populations, there is often a need to improveworker attitudes, perceptions and appreciation of structured workenvironments. Industries have long known that a lack of such skills was themost common reason for worker unrest and dismissal. In many countries,including the United States, Germany and England, the lack of proper workattitudes and self discipline are considered more damaging than lack ofpsycho-motor/cognitive skills to the potential success of the workers. Thishas been well documented as a particular problem in the training andemployment of disadvantaged populations. VTE can be used to teach suchskills. Often VTE schools can model and demonstrate appropriate workattitudes and values of work (ie. appreciation of quality, timeliness,personal hygiene and employee relations). Most effective curriculums offeraffective skill development as part of the course objectives. In Bangladesh,no affective skill development is planned for in existing VTE curriculums.

Role of VTE in the Develo_ment of Women

4.20 Primary Education. As noted in Chapters II and III, the existingformal and non-formal VTE programs do very little for the women and girls ofBangladesh. It begins with the failure of the primary education system toenroll and retain girls in grades 1 to 5. The high dropout rate for girlsfrom grades 1 and 2 is particularly important. Since primary education isconsidered a normal prerequisite for VTE, girls are, discriminated against inVTE from the outset. Moreover, the most recognized reason for the lowenrollment of girls in primary schools is lack of female teachers. Preserviceprimary teacher training could be considered a form of VTE leading to valuableemployment of women. At present only 8% of the primary teachers are female(about 13,000 of 160,000 teachers). At the same time the proportion offemales in the labor force is only 7% (Table 1.1). If opportunities foremployment as primary teachers were opened for females at the proportion ofabout 50%, another 60,000 to 70,000 jobs would result. Since females almostinvariably are better teachers than men in primary schools, the proportionshould be raised far above the 50% level resulting in both more employment ofwomen and better education of children, both boys and girls. It is ironicthat such fundamental elements in general education as female enrollment andfemale teachers in primary level would have such a profound effect on VTE.

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4.21 omen in Bangladesh Society. To fully analyze the reasons for thevirtual omission of women from VTE in Bangladesh could necessitate a lengthyreview. Although in the preceding paragraph the relationship between primaryeducation and VTE for the female population was emphasized, the problem ismore general. In the Second Five Year Plan (1980), the situation was statedforthrightly: "Social taboos, illiteracy, lack of training and unemploymenthave forced women into a precarious state of dependency".

4.22 The patriarchical nature of the nation's society creates a systemwhere the male predominates--men control property, income and women's labor.Patriarchal control is reinforced by many aspects of the kinship and politicalsystems to maintain a rigid division of labor by sex, a highly segregatedlabor force and a system of stratification which places women at the margin ofthe society and at great risk of abrupt decline of economic status. Afundamental manifestation of the protilem is early marriage--more than half ofthe female population is married by the age of 15 and over 4X of girls aregiven in marriage before age 10. These young married girls and women aretherefore removed from the labor market because they are expected to producechildren soon after they are married. The average number of births per womanis 5.6. Another problem related to early marriage is that the average agedifference between husbands and their wives is almost ten years. Thiscondition of an adult husband and a child bride contributes to thesubordination and vulnerability of the female in the family and in thesociety. Poor families are hesitant to send girls to school as this isthought of as making the marriage more costly (dowry). On the other hand, poorwomen who have been able to acquire income earning skills are believed by someto be more desirable marriage partners./4

4.23 Although entry into the labor force of adolescent or young adultfemales is constrained by many factors other than early marriage, foremost isthe production and rearing of children. But beyond this are other factors.The distance a women would travel to work is controlled by her own ability toleave children, her husbands willingness to permit his wife to travel to workand the receptivity of employers. In general, married women are not permittedto travel more than about 400 meters from the homestead. Women are alsohandicapped by conventional dress which makes riding bicycles and motorscooters difficult and thereby restricts mobility. With the above formidablearray of handicaps for women, let us now turn to the more specific issue offemale participation in VTE, both formal and non-formal.

4.24 Women's VTE in the Five Year Plans. Planning for women fares farbetter in the Government's plans than in the actual implementation of theplans. Upon Independence, the Constitution said many of the right thingsabout equality of the sexes in education, employment, electoral franchise--every sphere of life. The First Five Year Plan (1973-78) stated that equalityof opportunity between the sexes was to become a condition of all educationprograms. However, no specific route to achieve this goal was proposed. Theunique two year plan for 1978-80 included the following language: Women are

6 K. Larsson, Rural Women's Employment in Bangladesh, The World Bank, April1984

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"the most neglected segment of the nation for whom the plan intends to putmaximum emphasis of the spread of education and skill developmant throughformal and not-formal education." It was in the Second Five Year Plan (1980-85) that the Government particularly highlighted the role of women indevelopment. The women's component was part of an overall concern to reducepoverty and promote rural development in the broadest sense. Among the meanssuggested to achieve these objectives, employment generation coupled with non-formal skill training and education was to receive highest nriority. TheSecond Five-Year Plan called for stronger support for vocational and skilltraining in the following ways:

(a) A total of 187,000 (37,500 per year) women were to be trainedin animal husbandry, garment making, food processing and other fields at 250skill development training-cum production centers;

(b) Income generating activities for women were to be givenemphasis and, in particular, programs were to be designed to develop newtechnology for the improvement of traditional women's skills;

(c) Programs with household or village-based industries were to bedeveloped;

(d) Arrangements were to be made to provide women with easy creditthough the rural banking system; and

(e) A national council was to be formed to coordinate theactivities of various women's organizations and to assist the Government toformulate policies regarding the uplift and improvement of women's economicand legal status.

As a result of these ambitious plans, VTE was to be awarded the third highestbudget allocation, after primary and secondary levels of education. However,in fact, during the Second Five-Year Plan period only 56X of the allocationwas delivered./5 Looking back, only a fraction of the planned programs andfacilities were actually started, and many were dropped during the plan period(Table 4.1). The 250 skill development centers for women were never reallydeveloped. Those facilities that were created were at higher VTE levels--fourengineering colleges and 12 polytechnics (only one exclusively for women).Lower level VTE was largely overlooked. One promising program in lower levelVTE, Community Schools, was started only to be discontinued during the 1980-87period. There were to be 400 community schools, 200 for each sex. Whatappeared to be a breakthrough in Government planning turned out to be adisappointment.

5 Planning Commission, The Third Five Year Plan. 1850-90, December, 1985.

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Table 4.1: Female Enrollment in VTE

P FCivil Radio- Farm T Total E EDrafting Television Electrical Automotive Machinery 0 Male R N

VTIS WI ------------ ............ ............ ----------- - - - - - ----. ---. T and C AFeaae Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr A Female N LEnrollent 1 2 Tot 1 2 Tot 1 2 Tot 1 2 Tot 1 2 Tot L Enroll. T E

_------ . ......... ---- ........... ... .... ..... .. ... . ....

Ranupur 1 - 1 3 2 5 - - 0 - - 0 - - 0 6 252 2XNarail - - 0 - - 0 -3 3 - - 0 - - 0 3 30 10XChattak 3 - 3 - - 0 - - 0 - - 0 - - 0 3 48 6XPiroJpur - - 0 - - 0 6 3 9 1 - 1 - - 0 10 68 15XLalmanirhat - 0 O - - 0 - - 0 - - 0 -1 1 1 55 2ZParbatipur - - 0 - - 0 3 - 3 - - 0 - - 0 3 38 8XBarisaL - - 0 - - 0 -1 1 - - 0 - - 0 1 144 1XNarayangmnj - - 0 15 - 15 - - 0 - - 0 - - 0 15 66 23X

TOTAL 4 0 4 18 2 20 9 7 16 1 0 1 0 1 1 42 701 61

Note : Totat enrollment in all 51 VTIs was 2,069 of which only 42 were female -- 21.Source: Ministry of Education, Department of Technical Education

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V. POLICY RECONNENDATIONS AND DEVELOPMENT PRIORITIES

Formal VTE PolieX and Institutional Reform

5.0 As the formal VTE systems are nationally administered, there is aneed to consider the modification or establishment of several policies at thenational level. Some of these policies may require legislative action. Thesepolicies should also be linked to major institutional reforms. Of particularimportance is the need to reconfigure, reform and reorganize the formal VTEsystem (VTIs and TTCs) to of.-:,r far shorter courses in larger and fewerinstitutions. The TTCs and larger VTIs could serve as the core of areconfigured system. The system could also include the VTTI, with expandedfunctions in training master craftsmen and also providing teacher trainingservices to NGOs and industry. The BTEB, already providing valuablecurriculum development and testing services, would be an important element.All TTCs would be included. and a few of the better, more urbanized VTIs mightbe incorporated as well. These institutions should also admit as students adifferent segment of society, i.e. those with less formal education who aregenuinely interested in employment after training and more females.

5.1 Indust.y-Education Linkages. The limited employability of graduatesis the most significant factor affecting the low external efficiency of theVTE systems in Bangladesh. Each VTE school should be requi:ed to have atnactive industry advisory committee. In addition, the Government shouldestablish a high-level national advisory committee comprised of industrialleaders in Bangladesh to provide input into the provision of vocational andtechnical skills training. The members should be appointed by the Presidentand should have the responsibility to report to a high level once per yearregarding the human resource needs of industry.

5.2 Associated with the establishment of the national advisorycommittee, a task force should be formed to investigate and document thevarious options to the improvement of employment opportunities in VTE. Thistask force, comprised of technical specialists and industry leaders shouldma1- recommendations to the national advisory committee which in turn shouldpresent them at high levels in the Government for consideration andimplementation.

5.3 National Council for Skill Development and Training (NCSDT). Thereis a need to reconstitute and revitalize the NCSDT as the national agency tocoordinate skills development and training programs. It is vital that theGovernment focus upon a full reform of this organization. As it currentlyexists, it is mostlY non-functional. It should be reconstituted to report toa high-level agency or organization that will have the power and linkages toeffectively coordinate the country's human resource development strategy. Itsnew responsibilities should emphasize the initiation of major policy reformsrelating to VTE and its linkages with industry.

68

5.4 Student Entrance Reauirements. Most informed observers agree thatthe wrong students are often enrolled in the formal VTE programs. There is aneed to better match the needs of students to the potential employment in thenation. Evidence suggests that it would be ueeful to modify the entrancerequirements to allow for lower level students who would be more willing totrain for, and accept, employment that is available upon graduation. Existingpolicies should be modified to require that enrollment be limited to thelowest prerequisite academic range which is determined for each course by theBTEB. In addit in, VTE courses should be limited by establirhed policy tostudents who have stated their Intent to enter the occupation for which theywould be trained. In order to discourage attendance by students who do nothave an occupational intent, cost-sharing by students might be considered.This issue was not studied in detail in this review.

5.5 Expansion of Formal VTE. The low external efficiency beingexperienced by most of the TTCs and VTIs suggest that the Govermnent shouldest. blish policy wl"rein no new construction would be considered for secondaryVTE schools without clear, compelling evidence that: (a) there is c demand inthe proposed schools' areas of employability which cannot be met throughexisting VTE schools; (b) there is potential to fully enroll students who havean expressed intent for occupational training that results in employment atthe wages currently being paid within the community; and (c) the communityinvolved would actively support the establishment of the school.

5.6 Leneth of Course Offerings. TTCs and VTIs currently offer time-based training programs that are, by internationally recognized practices, toolong for the objectives and skills being taught. This practice results inhigher costs, and higher levels of dropouts. Currently, these programs aretwo years in duration. Existing policies should be modified to require thatNSS II and III courses be combined into a single, one-year course with anindustrial attachment that is limited to three additional months. Inaddition, the Government should require that all students take examinations atthe end of their training to determine their individual level of certification(NSS II or III), depending upon their ability to demonstrate their learnedknowledge and skills.

5.7 School Size. The VTIs are typically small (about 80 enrollees) andinefficient. For the foreseeable future, the Government should abandon theconcept of establishing small capacity VTE schools, such as the VTIs, in therural areas for the training of secondary students in industrial trades. Amore considered approach would be establish new policies to require that VTEtraining be centralized into larger, more efficiently organized schools withresidential capacity.

5.8 Female Participation in VTE. The participation of women insecondary, formal VTE is very limited. The Government should actively promotegreater female participation in VTE through the improvement of facilities(restrooms, dining areas, etc.), training of teachers and administrators,modification of curriculum to more adequately meet the needs of women, and theimprovement of recruitment and job placement systems for female students.Consideration should also be given to the establishment of a model TTC in

69

Dhaka to demonstrate the approaches needed to support improvements in femaleparticipation in VTE.

5.9 Curriculum Modification. The VTE curricula currently being used isnationally developed and controlled. It is judged to be fairly well managedand designed. It is, however, narrow in scope and restrictive to thepotential employment of students and graduates. The Government shouldestablish policy that requires that each school conduct an occupationalanalysis study in the employability area of that school (usually about 20 mileradius of the school) to determine the specific skills needed by the firms inthat area. This information should be used to determine a more targetedcurriculum scheme for the areas involved.

5.10 Facility Maintenance. Maintenance of the VTIs is less thanadequate. The Ministry of Education has established a facilities maintenanceunit to provide such services, but it is not functioning adequately. There isvery little, if any government funds available to support the maintenance ofthe facilities. As many of the facilities are located in flood plains, it isevident that the existing investments in equipment and infrastructure will bethreatened unless steps are made to ensure adequate protection andmaintenance. The Government should review the situation and initiate policyreform whereby high levels of institutional maintenance and security will beadequately financed and required.

Non-Formal VTE Policy Reform

5.11 Non-formal VTE courses and programs vary a great deal in theiradministrative structures, goals and clients. Therefore, it is quitedifficult to recommend policy reform that can uniformly improve the capacityof these diverse organizations to deliver WEE services.

5.12 Accreditation of Private and Other NGO Sponsored Schools. There isa need to establish minimum standards for facilities, equipment, curriculumand personnel who teach VTE in the private and NGO-sponsored schools. Policyshould be established requiring MOE to authorize and finance the BTEB toestablish and manage an accreditation program for all private and NGOsponsored VTE schools.

Investment Opportunities

5.13 With the assistance of international funding agencies, manygovernments have in the past, overinvested in secondary VTE without having ademonstrated need or an assurance of good returns on the investment. In somecountries, it may have been too early in the industrial development scheme toirnvest in higher technology VTE. In others, weak management, misdirection,lack of resources and inappropriate policies may reduce the potential of theinvestment. In Bangladesh, the Government has indicated a desire to makeinvestments to build up the existing formal VTE system. The evidence

70

presented in the review clearly shows that there is a need to refrain fromsuch investments unless major reforms can be gained within the systems.

5.14 Although there is a great need to improve skills training inBangladesh, speuific investments in this sector must be carefully thoughtthrough. With negative rates of return in both of the major formal systemsand only modest successes in the non-formal sector, it is difficult todetermine where investments with a reasonable return could be made. Surely,more investments in the VTI and TTC systems would not be wise.

5.15 In the near future,- the investment approach should be experimentalin nature, foregoing further investments in infrastructure which have notproven successful. This approach would support innovative schemes which donot require heavy initial investments in infrastructure and which are clearlyin accord with the policies stated above. One way to accomplish this would beto establish a fund for the support of promising proposals which might becalled something akin to a Skills Development Fund. Proposals should besought from different segments of society--the Government, NGOs, privateschools and employers, even individuals. Criteria for choosing whichproposals would be supported and for the nature and scope of the supportshould be widely disseminated and strictly promote the principles of: (a)employment generation; experimentation; increased opportunities for women; andthe development of infrastructure only after there is a demonstrated need.The fund cotild extend support in both grant and loan forms depending upon theability of the programs to repay and the size of the investment needed.

5.16 In addition to the experimental programs, some investment may beneeded in infrastructure to prcvide girls and women with increased access toVTE. After agreement on shorter duration of courses and lower admissionstandards, selected VTIs and TTCs would be assisted to admit more women.Assistance would be provided to support the establishment of facilities (ie.latrines, day rooms, and hostels). Moreover, there is a need to recruit andtrain female instructional and counseling staff. Particular emphasis would bepaid to post-training employment. This investment may also include assistanceto establish a women's TTC in Dhaka to demonstrate appropriate approaches tothe provision of services.

ANNEX A

71 Page 1

Local Labor Market Data

Table A.1 Projected Labor Force by Sex and AgeCategory. 1985 (Thousand)

Age Category Male Female

10 - 14 2,997 44215 - 19 4,122 24720 - 24 3,625 13025 - 34 6,165 18235 - 44 4,756 14545 - 54 3,345 10855 - 64 2,022 7465 + 1,670 55

Total 28,700 1,388

Source: Bangladesh Bureau of Statistics (1988): Statistical Pocket Book ofBangladesh 1987. Dhaka: Bangladesh Bureau of Statistics, p. 82.

72 ANXPage 2

Table A.2 Population by Economic Catemorv by Sex and Residence.1984-1985 (Millions)

Category Male Female Total

Total Population 49.8 47.9 97.7Dependent Population (Age < 10) 15.5 14.9 30.4Non-dependent Population (Age>-10) 34.3 33.0 67.3

Dependent Population (Age < 10) (Z of Pop) 31.1 31.1 31.1Non-dependent Population (Age>=10) (X Pop) 68.9 68.9 68.9Total (X) 100.0 100.0 100.0

Civilian Labor Force 26.8 2.8 29.6

Total (% of Total Population) 53.8 5.8 44.0Total (% of FnTa-dependent Population) 78.1 8.5 30.3

Employed 26.4 2.6 29.0Unemployed 0.4 0.2 0.6

Employed (X of Civilian Labor Force) 98.5 92.9 98.0Unemployed (Z of Civilian Labor Force) 1.5 7.1 2.0Total (X) 100.0 100.0 100.0

Not in Civilian Labor Force (NCLF) 22.9 45.2 68.1

Total (X of Population) 46.0 94.4 69.7

Housewives & Household Workers 0.1 24.7 24.8Inactive 22.8 20.5 43.3Housewives & Household workers (X NCLF) 0.4 54.6 36.4Inactive (X NCLF)) 99.6 45.4 63.6Total (%) 100.0 100.0 100.0

Source: Final Report of Labor Force Survey 1984-1985, reported inStatistical Pocketbook of Bangladesh. 1987, p. 72.

73 ANNUERAPage 3

Table A.3 Labor Force Participation Rates ba Ses. Age Grop.and Location 1984-1985 (Per Cent)

Location Age Male Female

Bangladesh 10 - 14 38.0 8.115 - 64 89.8 8.065 + 74.2 7.1All ages 78.3 8.0

Urban 10 - 14 22.2 14.415 - 64 85.4 12.165 + 58.2 2.2All ages 74.3 12.3

Rural 10 - 14 40.0 7.315 - 64 90.5 7.465 + 75.9 7.6All ages 78.9 7.4

Source: Final Report of Labor Force Survey 1984-1985, reported inStatistical Pocketbook of Bangladesh. 1987, p. 79.

Note: The labor force participation rate for rural males age 10 - 14is given in the source as 30X, but this is certainly an error.The correct figure must be closer to 40.

Table A.4 Households by Main OccuDation and Sex of Household'sHead 1984-1985 (Per Cent)

Main Occupation of Household Head Male Female

Professional, Technical, Administrative , Managerial 3.6 1.2Clerical, Sales, Services 15.2 16.7Agriculture, Forestry, Fisheries 64.3 4.0Production, Transportation 4.9 3.1Inactive 7.6 70.4Not Adequately Defined 4.2 4.4

All Occupations 100.0 100.0

Source: Final Report of Labor Force Survey 1984-1985, reported inStatistical Pocketbook of Banzladesh. 1987, p. 76.

7L

ANNEX Page 4

Table A.5 EmUployed Persons 10 Years and Over by Employment Statusand Location 1984-1985 (Per Cent)

Main Occupation Urban Rural Total

Self-Employed 33.3 39.7 38.8Employee 28.6 8.9 11.6Day Laborer 23.6 29.2 28.4Unpaid Family Helper 8.6 19.4 17.9Not Reported 5.9 2.7 3.2

Total Labor Force 100.0 100.0 100.0

Source: Final ReDort of Labor Force Survey 1984-1985, reported inStatistical Pocketbook of Banaladesh. 1987, p. 82.

Note: Columns do not sum to 100 % due to rounding.

Table A.6 Emoloved Persons 10 Years and over bv Nain, OccuDationand Location 1984-1985 (Per Cent)

Main Occupation Urban Rural Total

Professional, Technical, Administrative, Managerial 8.8 2.1 3.0Clerical, Sales, Services 46.6 17.4 21.3Agriculture, Forestry, Fisheries 8.4 65.6 57.7Production, Transportation 33.7 14.1 16.8Not Adequately Defined 2.5 0.7 0.9

All Occupations 100.0 100.0 100.0

Source: Final ReRort of Labor Force Survey 1984-1985, reported inStatistical Pocketbook of Bangladesh. 1987, p. 79.

Note: Columns do not sum to 100 X due to rounding.

75ANI- -BPage 1

Ware Related Data

Table B.1 Average Daily Wages. without Food. by Sector. 1987/88

Wages:Sector Taka/day Comment

Construction: Skilled 94 Estimate based on 5 months,onstruction: Unskilled/helper 46 Estimate based on 5 monthsL'ifference 48Wage Ratio 2.0Large Cotton Ind.: Skilled 52 Estimate based on 5 monthsLarge Cotton Ind.: Unskilled 36 Estimate based on 5 monthsDifference 16Wage Ratio 1.4Large Veg. Oil Ind.: Skilled 41 Estimate based on 5 monthsLarge Veg. Oil Ind.: Unskilled 26 Estimate based on 5 monthsDifference 15Wage Ratio 1.6Small & Cottage Ind.: Skilled 40 Estimate based on 5 monthsAgricultural male labor 33 Estimate based on 7 monthsDifference 7Wage Ratio 1.2

Mean Difference 21.5Median Difference 15.5

Mean Wage Ratio 1.6Median Wage Ratio 1.5

Source: Monthly Statistical Bulletin of Bangladesh, June 1988, pp. 10-12.

Note: These figures hide substantial regional variation. It isnot uncommon for average daily wages to vary by 50 X betweenthe highest and the lowest division, district, or principaltown.

76

ANNEX BPage 2

Table B.2 Average Daily Wage Rates in Construction. by Type ofLabor and Town. 1986/87 (Wages: Taka/day)

Type of Labor

Elec- Sanitary HelperTown Mason trician Carpenter Fitter Painter (Jogali)

Chittagong 88 81 81 79 76 48Dhaka 88 82 78 76 76 41Khulna 72 80 75 77 67 36Narayangangj 83 78 76 70 72 40Rajshahi 59 54 61 60 48 31Rangpur 68 59 54 65 60 33Sylhet 75 67 69 64 73 39

Mean 76 72 71 70 67 38Median 75 78 75 70 72 39

Mean - Helper 38 34 33 32 29 -Median - Helper 36 39 36 31 33

Wage Ratio 2.0 1.9 1.9 1.8 1.8

Source: Monthly Statistical Bulletin of Bangladesh, June 1988, p. 13.

Notes: "Mean - Helper" represents a comparison of the given categorywith Helper and is calculated as the category mean minus themean for Helper. "Median - Helper" is calculated as thecategory median minus the median for Helper.

77

ANNEX BPage 3

Table B.3 Avera2e Daily Wages in Construction for Roof Hammerersby Town for Men. Women. and Children. 1986/87 (Wages inTaka/Day)

Town Men Women Children

Chittagong 52 37 22Sylhet 50 40 28Dhaka 41 32 19Rangpur 40 35 25Khulna 40 32 17Narayangangj 38 32 24Rajshahi 35 18 14

Mean 42 32 21Median 40 32 22

Mean Compared with Children 21 11 -Median Compared with Children 18 10

Mean Compared with Women 10 -Median Compared with Women 8


78

A A BPage 4

Table B.4 Average Daily Wages of Different Kinds of SkilledLabor. 1986/87

Category of Skilled Labor

Industrial Helper Agri-Category Mason Fisheries Labor (Jogali) cultural Weaver

Dhaka 88 42 44 41 45 36Chittagong 88 63 40 48 45 41Rajshahi 59 44 36 31 31 35Khulna 72 45 60 36 31 38

Bangladesh 77 48 45 39 38 38

Difference 38 10 7 - - -Wage Ratio 2.0 1.3 1.2 - - -

Source: BBS (1988): "Monthly Indicators of Current Economic Situationof Bangladesh". Dhaka:BBS, p. 22.

Note: Difference is a comparison of the category means with the meanfor Helper, Agricultural, and Weaver (38.22). ProportionalDifference is described for Table B.1.

79

ANNEX BPage 5

Table B.5 Alternative Indicators for ComDarison of Wages betweenSkill Levels on Domestic Labor Market (Derived fromTables B.1. B.2. B.3 and B.4)

Mean Wage Simple Propor------------ Differ- tional Wage

Table/Comparison Categories Sk. Unsk. ence Dif. (X) Ratio

WAGES01

Construction (Sk/Unsk) 94 46 48 69 2.0Large cotton ind. (Sk/Unsk) 52 36 16 36 1.4Large veg. oil ind. (Sk/Unsk) 41 26 15 45 1.6Small & cottage ind./ag. labor 40 33 7 19 1.2

WAGES02

Mason/Helper 76 38 38 67 2.0Electrician/Helper 72 38 34 62 1.9Carpenter/Helper 71 38 33 61 1.9Sanitary Fitter/Helper 70 38 32 59 1.8Painter/Helper 67 38 29 55 1.8

WAGES03

Roof hammerers: men/children 42 21 21 67 2.0Roof hammerers: women/children 32 21 11 27 1.5Roof hammerers: men/women 42 32 10 42 1.3

WAGES04

Mason/Helper, ag., weaver 77 38 38 67 2.0Fisheries/Helper, ag., weaver 48 38 10 23 1.3Ind. Labor/Helper, ag., weaver 45 38 7 17 1.2

Mean 58 35 23 55 1.8Median 52 38 21 48 1.7

Source: BBS

80

ANNEX CPage 1

Migrant Worker Related Data

Table C.1 DeFartures for Employment Abroad. by Country ofDestination. 1985-1988

Year Middle East Other Total

1985 76,533 1,161 77,6941986 67,933 725 68,6581987 73,277 740 74,0171988 62,851 379 63,230


81

Page 2

Table C.2 Number of Bangladesh Nationals in Employment Abroad byOccupational Cateaorv. l9P. - 1988

Occupational Category

Skilled,Construc- Semi-skilledtion Unskilled Tech-

Year Workers Workers nicians Other Total

Number of Employees

1984 3;779 37,886 4,992 13,096 56,7531985 5,393 50,956 9,271 12,084 77,7041986 4,437 42,857 8,317 13,052 68,6631987 2,278 48,727 5,705 17,307 74,0171988 1,918 39,926 5,374 16,018 63,235

Percent of Employees

1984 7 67 9 18 1001985 7 66 12 16 1001986 6 62 12 19 1001987 3 66 8 23 1001988 3 63 8 25 100

Mean 5 65 10 20 -Median 6 66 9 19 -


Note: 1. Figures for 1986 and 1987 are preliminary. Figures for 1988are estimated by the author on the basis of data for five

2. Categories reported under "Other" include Vehicle Drivers,Engineers, Doctors, Nurses, Paramedicals, Professionals,Catering Workers, and Miscellaneous

82

ANNEX CPage 3

Table C.3 Number of Bangladesh Nationals in Employmont Abroad byOcCcuational Levtl. 1985-1988

Occupational Level

Un- Semi-skilled skilled Skilled Profes-

Year Workers Workers Workers sionals Total

Number of Eulvovees

1982 34,981 3,272 20,611 3,898 62,7621983 33,361 5,098 18,939 1,822 59,2201984 31,245 5,084 17,183 2,642 56,1541985 39,078 7,823 28,225 2,568 77,6941986 30,889 9,697 25,862 2,210 68,658

Percent of Employees

1982 56 5 33 6 1001983 56 9 32 3 1001984 56 9 31 5 1001985 50 10 36 3 1001986 45 14 38 3 100

Mean 53 9 34 4Median 56 9 33 3

Source: Statistical Pocket Book of Bangladesh. 1987, p. 86.

83

AM CPage 4

Table C.4 Projections of Number of Bangladesh NationalsWorkinr Abroad

Monthly Statistical StatisticalBulletin Pocketbook Value Used in

Year of Bangladesh of Bangladesh Regression

1982 62,762 62,7621983 - 59,220 59,2201984 56,753 56,154 56,7531985 77,704 77,694 77,7041986 68,663 68,658 68,6631987 74,017 - 74,0171988 63,235 63,235

Regression Output:

Constant - -2,976,883X Coefficient - 1,532.964R Squared = 0.183

Average Annual Increase - 2%

Table C.5 Remittances from Abroad. by Region. 1982/83 - 1987/88(Millions of Taka'

Region Tota'l National Total------------------------------------ Remit. Income Remit.

Year Middle East Europe, USA Other Current Deflator Constant

82/83 11,417 3,165 300 14,882 1.706 25,38983/84 11,514 2,811 437 14,762 1.466 21,64184/85 8,924 2,171 356 11,451 1.276 14,61185/86 12,638 3,565 408 16,611 1,205 20,01686/87 16,001 4,386 974 21,361 1.074 22,94287/88 17,066 4,850 1,992 23,909 1.000 23,909

Mean - - - - - 21,418

Source: Monthly Statistical Bulletin of Bangladesh. June 1988, p. 152.Note: Figures for 1987/1988 are estimated on the basis of 5 months.

84

ANNEX CPage 5

Table C.6 Minimum Salary for Bangladesh Migrant brkers forELmployment Abroad

With Free Food & Without Free Food &Accomodation Accomodation

Name of ---------------------------- -------- _Country Unskilled Skilled Unskilled Skilled

Bahrain BD-40 BD-60 BD-60 BD-82Iran TU-4000 TU-5600 TU-5600 TU-7200Iraq ID-65 ID-80 ID-80 ID-95Jordan JD-45 JD-55 JD-60 JD-70Kuwait KD-35 KD-47 KD-50 KD-69Libya LD-60 LD-75 LD-80 LD-95Oman OR-40 OR-62 OR-60 OR-75Qatar QR-400 QR-600 QR-600 QR-800Saudi Arabia SR-375 SR-600 SR-625 SR-800U. A. E. DH-400 DH-600 DH-600 DH-800

Source: GOB. 'Modified New Scales of Pay 1988", (Gov. Sector-General).Ministry of Finance, 1988.

Table C.7 Estimated Wage Ratios for Minimum Salary forBangladesh Mi&rant Workers for MplMent Abroad(Derived from Table C.6)

Name of With Free Food & Without Free Food &Country Accomodation Accomodation

Bahrain 1.5 1.4Iran 1.4 1.3iraq 1.2 1.2Jordan 1.2 1.2Kuwait 1.3 1.4Libya 1.3 1.2Oman 1.6 1.3Qatar 1.5 1.3Saudi Arabia 1.6 1.3U. A. E. 1.5 1.3

Mean 1.4 1.3Median 1.4 1.3

85

ANNEX DPage 1

Simulation Data

D.01 Student Flow Data. Relevant student flow data are given in TableD.1 for TTCs for Models 1 and 2. These data are derived from the analyses ofintornal efficiency. They show the number of students, per 1000 who begin acourse in Year 1, (1) who drop out during Year 1, (2) who leave after Year 1,(3) who drop out dtiring Year 2, (4) who leave after Year 2 but do not obtain acertificate, and finally (5) who complete the two-year course and obtain acertificate. All of these categories except (5) constitute what in thetraditional student flow analysis is referred to as "wastage". The first lineof figures, representing a completion rate of 66 per cent, corresponds to thefindings in the analysis of internal efficiency. They represent the presentsituation in the TTCs. The completion rate is measured as the per cent ofstudents who continue at least as far as the beginning of Year 2. In thesimulation analysis it is first posited that the completion rate is increasedto 80 per cent by assuming that 200 out of 1000 students are distributed overcategories (1) and (2), and 800 students are distributed over categories (3) -(5). Relative proportions between categories (1) and (2) and between categories(3) - (5) are left unchanged. Similarly for the 90 per cent completion rate.

D.02 In the present analysis, categories (1) - (4) are not treated as"wastage". Instead it is assumed that some amount of training, even ifincomplete, does influence productivity and has a market value. Thc relativevalue assigned to each category is indicated in the bottom row in the table(Output Value). Thus a completed training with a Grade II certificate isassigned a value equal to 2 years of training, a completed training without acertificate 1.5 years of training, etc. Only category (1) is assumed to haveno value. These value assignments are used throughout the analysis.

Table D.1 Allocation of 1000 Students in TTCs: Models 1 & 2

School LeaversGrade

Completion Year 1 Year 1 Year 2 No IIRate Dropouts Leavers Dropout Certif. Certif. Total

(1) (2) (3) (4) (5)

66% 142 199 123 206 330 1,00080% 83 117 149 250 401 1,00090% 42 58 168 281 451 1,000

Output Value 0.0 0.5 1.0 1.5 2.0 -

86

ANNEX DPage 2

D.03 Table ;.2 shows the data for TTCs for Models 2 and 3. The samecompletion rates are assumed as in Table D.l. Those wbo complete the 1-yearcourse and obtain certificates are assigned full value, equal to 2 years ofinstruction in the present system. Students who complete the year but do notobtain certificates are assigned a value corresponding to 1 year of instructionin the present system.

Taole D.2 Allocation of 1000 Students in Hypothetical TTCswith 1-Year Courses: Models 3 & 4

GradeCompletion Year 1 Year 1 IIRate Dropouts Leavers Certif. Total

(1) (2) (3) (4) (5)

66X 142 199 - - 656 1,00080% 100 100 - - 800 1,00090X 50 50 - - 900 1,000

Output Value 0.0 1.0 - - 2.0 -

D.04 Tables D.3 and D.4 show the corresponding figures for VTIs. For theVTIs, the actual completion rate as defined here (per cent entering Year 2) is57 per cent.

Table D.3 Allocation of 1000 Students in VTIs: Nodels 1 & 2

GradeCompletion Year 1 Year 1 Year 2 No IIRate Dropouts Leavers Dropout Certif . Certif. Total

(1) (2) (3) (4) (5)

572 266 166 128 168 272 1,00070% 185 115 158 207 335 1,00080% 123 77 180 237 383 1,000902 62 38 202 267 431 1,000

Output Value 0.0 0.5 1.0 1.5 2.0 -

87

ANNEX DPage 3

Table D.4 Allocation of 1000 Students in Hypothetical VTIswith 1-Year Courses: Models 3 & 4

GradeCompletion Year 1 Year 1 IIRate Dropouts Leavers Certif. Total

(1) (2) (3) (4) (5)

57% 266 166 - - 568 1,00070% 150 150 - - 700 1,00080X 100 100 - - 800 1,00090% 50 50 - - 900 1,000

Output Value 0.0 1.0 - - 2.0 -

D.05 Rate of Return for TTCs. The calculations for the rate of returnfor TTCs, assuming an employment rate of 30 per cent, is displayed in Table D.5.At the top of the table are to be found most of the parameters which can bemanipulated. The Simple Unit Cost Per Student Per Year (Taka) is taken from theanalysis of costs above. The Wage Differential, Skilled vs. Unskilled is takenas 15 Taka per dzy, as discussed above. The analysis is carried out in USDollars, and the exchange rate used is 32 Taka/US$. The Employment Rate isassumed for each simulation analysis. In the following rows, the five studentflow categories (1) - (5) are defined. Each category is represented by a column,and the cost and returns calculations are done separately for each category.The Output Value, which is described above, is represented by V(ij. TIe numberof students in each category, per 1000 who start, is represented by N(i). Theinput number of years of instruction for each category is represente<b oy Y(i).

D.06 In the first year, one unit cost is associated with all studentswho start, regardless of when and under what circumstances they leave the system.The unit cost is 31,665 Taka per student per year, and the number of studentsdropping out during the first year is 142. The total expenditure for thatcategory is thus ((.-.,666 Taka) X 142)/(32 US$/Taka) - 140,513 US$. Similarlywith the other categories. The total for all categories is given in the right-most column. The left-most column gives the discounting factor for each year.The first year is not discounted, so the discount factor is 1.0 and the totalcost is the simple sum of the columns for Categories (1) - (5). In the secondyear, those in Categories (1) and (2) draw no costs, since they have left thesystem. Dropouts in Category 1 are as.'igned no earnings increment, since theirOutput Value is 0, as discussed above. All other categories, however, areassigned a partial incremernt proportional to the Output Values. Thus Category(5) is assigned

88

ANNEX Page 4

Table D.5 Analysis of Rate of Return to TTCs. Assuming FixedUnit Costs. Employment Rate 30%

Simple Unit Cost Per Student Per Year (Taka): 31,665Wage Differential, Skilled vs. Unskilled: 15.0Taka/US$ Conversion Rate: 32.0Employment Rate, Per Cent: 30.0

Output Level

Year 2Leavers, Grade

Year 1 Year 1 Year 2 No IIDropouts Leavers Dropouts Certif. Certif. Total

(1) (2) (3) (4) (5)

Output Vasue, V(i) 0.0 0.5 1.0 1.5 2.0 -Number, N(i) 142 199 123 206 330 1,000Input Years, Y(i) 1.0 1.0 2.0 2.0 2.0 -

DiscountYear Factor Amount Amount Amount Amount Amount Total

1 1.00000 -140513 -196917 -121712 -203843 -326545 -9895312 1.04707 0 1959 -121712 -203843 -3265'Y5 -6807413 1.09635 0 1959 2422 6083 12994 257184 1.14794 0 1959 2422 6033 12994 269285 1.20197 0 1959 2422 6083 12994 281956 1.25854 0 2915 3603 9052 19334 439287 1.31778 0 2915 3603 9O^ 19334 459958 1.37980 0 2915 3603 9052 19334 481609 1.AA474 0 1959 2422 6083 12994 33890

10 1.51274 0 1959 2422 6083 12994 3548511 1.58393 0 1959 2422 6083 12994 3715512 1.X5848 0 1959 2422 6083 12994 3890413 1.73654 0 1959 2422 6083 12994 4073514 1.81827 0 1i59 2422 6083 12994 4265215 1.90385 0 1959 2422 6083 12994 4466016 1.99345 0 1959 2422 6083 .2994 4676217 2.08727 0 1959 2422 6083 12994 48963

(Continued)

89

F ~~~~~~~~~~~~~~ANNEX DPage 5(Continued)

lt 2.18551 0 1959 2422 6083 12994 5126719 2.28837 0 1959 2422 6083 12994 5368020 2.39607 0 1959 2422 6083 12994 5620621 2.50884 0 1959 2422 6083 12994 5885222 2.62692 0 1959 2422 6083 12994 6162123 2.75056 0 1959 2422 6083 12994 6452224 2.88002 0 1959 2422 6083 12994 6755825 3.01556 0 1959 2422 6083 12994 7073826 3.15749 0 1959 2422 6083 12994 7406727 3.30610 0 1959 2422 6083 12994 7755328 3.46170 0 1959 2422 6083 12994 8120329 3.62463 0 1959 2422 6083 12994 8502530 3.79522 0 1959 2422 6083 12994 8902731 3.97384 0 1959 2422 6083 12994 9321732 4.16087 0 1959 2422 6083 12994 97604

Present Discounted Value of Total Costs and Benefits: 0Present Discounted Value of Total Costs: -1670272Present Discounted Value of Total Benefits: 1670272Benefit/Cost Ratio: 1.0000Discounting Rate (Per Cent): -4.4950

the full 15 Taka/day earnings increment, Category (4) is assigned (1.5/2.0) X15 - 11.25 Taka/day, Category (3) is assigned (1.0/2.0) X 15 7.50 Taka/day,Category (2) is assigned (0.5/2.0) X 15 3.75 Taka/day. The earnings incrementfor leavers in Category (2) are calculated as follows:

Annual Annual Prop. Employ- Number of Taka/$Domestic Wage Attrib. ment Persons Excg.Earnings Differ. X to X Rate X in / RateIncrement for Categ. Categ.for Employed (OutputCategory Person Value)

- (15.00 X 280 X 0.5/2.0 X 0.3 X 199) / 32

- (4200 Taka X 0.25 X 0.3 X '99) / 32

(62685 Taks)/32

1959 US$D

90

AM=E DPage 6

D.07 For Categories (3) - (5), costs are calculated as above. In thesecond year, costs and earnings are discounted by the rate of return (Je., thediscount rate whiich equalize- costs and benefits), and the discounted sum isgiven in the right-most column. From the third year on, no costs are incurred,but all categories except Category (1) derive earnings increments from theirtraining.

D.08 For the first three years (four years for Category (1)), it isassumed that none of the trainees work on the Middle East labor market, so thecalculations of earnings increments all correspond to those given above. Inthe next three years, however, it is assumed that 2 per cent of the employedpersons in each category work in the Middle East. Then the equation given aboveis modified by making the Annual Wage Difference for Employed Person comprisetwo components, one for the 2 per cent of employed persons in the Middle Eastand one for persons on the domestic labor market. For Category (2) in the sixthyear the calculation is made as follows:

Annual AnnualAnnual Wage WageWage Differ. Differ.Differ. for 98% of fcr 2% offor - Employed, + Employed,Employed Domest.c MiddlePerson Labor East

Market LaborMarket

g - (15.00 X 280 X 98%) + (3333 X 32 X 2%)

(4116 Taka) + (2133 Taka)

- 6249 Taka

D.09 Then the rest of the equation is the same as for the domestic labormarket as given above:

- (6249 X 0.5/2.0 X 0.3 X 199)/32

- 2915 US$

91

ANNEX -DPage 7

D.10 Similar calculations are carried out for the rest of the categories,and the discounted sum is carried to the right. In the succeeding years, it isassumed that all return to the domestic labor market, so the calculations revertto the original formula for the domestic labor market. Meanwhile the discountingfactor is merely successive powers of the rate of return.

D.ll At the bottom of the table can be seen the Present Value of theTotal Costs and Benefits, the Benefit/Cost Ratio, and the Discounting Rate.The discounting rate that equalizes costs and benefits by definition the internalrate of return. The rate of return is calculated by successive approximation.If too high a rate is used, the present value of costs is higher than the presentvalue of the benefits. If too low a rate is used, the present value of benefitsis higher than the present value of costs. In Table D.5 it can be seen that inorder to equalize costs and benefits, a negative discounting rate, -4.5, mustbe used. That is, even using a zero discounting rate, costs are higher thanbenefits. By comparison, the discount rate by which other investments are judgedis typically around twelve per cent.

D.12 Rate of Return for VTIs. Table D.6 shows similar calculations forthe VTIs. The calculated rate of return is -1.3.

92

ANNEX DPage 8

Table D.6 Analysis of Rate of Return to All VTIs. Assuming FixedUnit Costs. Employment Rate 30A

Simple Unit Cost Per Student Per Year: 15,800Wage Differential, Skilled vs. Unskilled: 15.0Taka/US$ Conversion Rate: 32.0Employment Rate, Per Cent: 30.0

Output Level

Year 2Leavers, Grade

Year 1 Year 1 Year 2 No IIDropouts Leavers Dropouts Certif. Certif. Total

(1) (2) (3) (4) (5)

Output Value, V(i) 0.0 0.5 1.0 1.5 2.0 -Number, N(i) 266 166 128 168 272 1,000Input Years, Y(i) 1.0 1.0 2.0 2.0 2.0 -

DiscountYear Factor Amount Amount Amount Amount Amount Total

1 1.0000 -131338 -81963 -63200 -82950 -134300 -4937502 1.01333 0 1634 -63200 -82950 -134300 -2825323 1.02684 0 1634 2520 4961 10710 203574 1.04052 0 1634 2520 4961 10710 206295 1.05439 0 1634 2520 4961 10710 209046 1.06845 0 2431 3750 7382 15936 315187 1.08269 0 2431 3750 7382 15936 319388 1.09712 0 2431 3750 '382 15936 323649 1.11174 0 1634 2520 4961 10710 2204110 1.12656 0 1634 2520 4961 10710 2233411 1.14158 0 1634 2520 4961 10710 2263212 1.15680 0 1634 2520 4961 10710 2293413 1.17222 0 1634 2520 4961 10710 2324014 1.18784 0 1634 2520 4961 10710 2354915 1.20367 0 1634 2520 4961 10710 2386316 1.21972 0 1634 2520 4961 10710 2418117 1.23598 0 1634 2520 4961 10710 24504

(Continued)

93

ANEX DPage 9(Continued)

18 1.25245 0 1634 2520 4961 10710 2483019 1.26914 0 1634 2520 4961 10710 2516120 1.28606 0 1634 2520 4961 10710 2549721 1.30320 0 1634 2520 4961 10710 2583622 1.32057 0 1634 2520 4961 10710 2618123 1.33818 0 1634 2520 4961 10710 2653024 1.35601 0 1634 2520 4961 10710 2688325 1.37409 0 1634 2520 4961 10710 2724226 1.39240 0 1634 2520 4961 10710 2760527 1.41096 0 1634 2520 4961 10710 2797328 1.42977 0 1634 2520 4961 10710 2834629 1.44883 0 1634 2520 4961 10710 2872330 1.46814 0 1634 2520 4961 10710 2910631 1.48771 0 1634 2520 4961 10710 2949432 1.50756 0 1634 2520 4961 10710 29887

Present Discounted Value of Total Costs and Benefits: 0Present Discounted Value of Total Costs: -776282Present Discounted Value of Total Benefits: 776283Benefit/Cost Ratio: 1.0000Discounting Rate (Pex Cent): -1.3154

94

ANNE RPage 1

Regression Equations

E.01 Regressions. The regressions involving both ciompletion rates andemployment rates have the form

R - a + b(l)*E + b(2)*C + b(3)*(E2) + b(4)*(C2),

where,

R - Rate of Return,E - Employment Rate,E2 - Employment Rate squared,C - Completion Rate,C2 Completion Rate squared,a Constant, andbi - Regression coefficients for i-th variable.

E.02 The coefficients for the regression equations are given in TableE.A for the TTCq and Table E.2 for the VTIs. If R and C are taken as given andE is to be calculated, then the equations are simple quadratic equations, withE calculated as:

-bl ± SQRT(bl*bl -4b3*(a + b2*C + b4*I*I - R))E -

2b3

With this equation, the rate of return isoquants can be calculated. They aregraphed on Diagrams 1 through 4.

95

Page 2

Table E.A Summary of Regressions for TTCs. All Models

Model Constant B(E) B(I) B(E2) B(I2) R-Squared

1 -13.18 0.2011 0.0609 -0.0007 -0.0002 0.99822 -15.89 0.2042 0.1002 -0.0007 -0.0002 0.99753 -11.08 0.2560 0.0271 -0.0007 -0.0003 0.99714 -11.18 0.4335 0.0346 -0.0006 -0.0009 0.9955

Note: Rate of Return (R) is regressed on Employment Rate (E),Employment Rate squared (E2), Completion Rate (C),C,mpletion Rate squared (C2).

Table E.2 Summary of Regressions for VTIs. All Models

Model Constant B(E) B(I) B(E2) B(I2) R-Squared

1 -13.48 0.2666 0.1085 -0.0011 -0.0004 0.99762 -16.49 0.2745 0.1540 -0.0011 -0.0004 0.99483 -20.40 0.3607 0.2902 -0.0009 -0.0010 0.99244 -29.35 0.4679 0.4916 -0.0006 -0.0017 0.9893

Note: Rate of Return (R) is regressed on Employment Rate (E),Employment Rate squared (E2), Completion Rate (C),Completion Rate squared (C2).

96

ANNEX EPage 3

Table E.3 Comuarison of Regression Coefficients for Emulovment andCompletion. Models 1 and 2. TTC8 and VTIs

VTE Type Model B(E) B(C) B(E)/B(C)

TTC 1 0.2011 0.0609 3.32 0.2042 0.1002 2.0

VTI 1 0.2666 0.1085 2.52 0.2745 0.1540 1.8

97

Page 1

Non-formal VTE Data

Table F.1: BSCIC Trainina Programs. 1987/88

Complete4 On Going TotalBroad Field/ No. of No. of No. of No. of No. of No. ofName of Course Courses Trainees Courses Trainees Courses Trainees

Womens' S;illsStocking Making 4 47 1 10 5 57Screen and Batik Printing 5 68 1 16 6 84Embroidery 3 36 3 30 6 66Garment Making 33 385 11 146 44 531

Sub-Total 45 536 16 202 61 738HandicraftsBamboo and Cane Products 12 148 6 87 18 235Net Making 2 30 1 15 3 45Inlaid Woodworking 16 164 3 30 19 194Mat Making 2 33 1 20 3 53Products of palm fiber 1 10 1 10Chalk Making 1 10 1 10Flower Making 1 20 1 10 2 30Bottled Spices 1 15 1 15Candle Making 1 15 1 15Bamboo Machine Making 1 15 1 15Specialized Textiles 1 15 1 15Handloom Work 1 15 1 15Jute Bag Making 1 10 1 10

* Food Preparation from oil 1 15 1 15Doll Making 1 15 1 15Coconut Fiber Products 1 10 1 10Pottery 2 29 2 29Leather Work 2 28 2 28

Sub-Total 42 522 18 237 60 759Industrial CraftsCarpentry and Woodwork 12 135 4 40 16 175Radio and Television 35 296 12 240 47 536House Wiring and Armature 24 267 7 99 31 366Refrigeration and A.C. 1 14 1 14Housewiring 16 180 12 144 28 324Fitting and Machine Shop 16 160 6 63 22 223Welding 3 38 3 38Radio Repair 1 15 1 15

(Continued)

98

NNWEPage 2(Continued)

Motorcycle Repair 3 35 1 10 4 45Watch Repair 1 10 1 10Sheet Metal 1 10 1 10Lock Making 1 10 1 10

Sub-Total 111 1,136 45 630 156 1,766

GRAND TOTAL 198 2,194 79 1,069 277 3,263

Source: BSCIC

Table F.2 VTZ Programs of the YUCA. 1988

Fields of Training Duration Number Trained

1. Spoken English 2 2442. Sewing 6 1803. Embroidery 3 804. Oriental Cooking 1.5 1355. Bengali Cooking 1.5 436. Confectionery 1.5 927. Hair Dressing 1.5 1008. Flower Making 4 89. Batik 3 3110. Guitar 60 4511. Music 60 3412. Art (Children) 48 10813. Art (Adults) 48 2514. Secretarial Science 9 11715. Typing 3 116

Total 1,358

Source: YWCA, 1988

99

ANNEX FPage 3

Table F.3 Private. Won-Profit Trade Schools

Durationof Trainees

Training Training perName of School (Years) Spaces Year

1. Boyra Technical School 3.0 70 242. Novar Technical School 3.0 90 303. Christ Church Trade School 3.0 100 334. St.Joseph's School 3.0 140 475. Miriam Ashram Technical School 2.0 30 106. Mirpur Agr. Workshop and School 3.0 130 437. Dhamarajhika Bhuddhist Orphanage 1.0 45 458. Al-Falah Technical Program 1.5 60 409. UCEP 2.0 200 10010. Atanpu Technical School 3.0 30 1011. NCBB Voc. Training Inst. 0.5 60 12012. Seva Sang 3.0 110 3713. Christian Industrial Center 2.0 70 3514. Families for Children 1.5 20 1417. Bolha Technical Training Center 2.0 40 2018. Srijang Karigart Bidyai * # 0.5 40 8019. St. Joseph's Technical School

(Nagari) * # 0.5 40 8020. Pro. Ande Trade School * 0.5 40 8021. Notre Dame Trade School * 0.5 40 8022. Kumindi Welfare Trust Trade School 1.0 75 7523. Center for Mass Education Science

(Tangail) 3.0 50 1724. Center for Mass Education Science

(Sripur) 3.0 50 1725. Grameen Karigari Bidaloy 3.0 50 1726. Basantek Technical School 0.5 30 6027. Sadar Bahadu Nagar Trade School 0.5 30 6028. Mashani Trade School 0.5 30 6029. Church of Bangladesh Social

Development 1.0 10 1030. Terre des Hommes (Swiss) 1.0 30 3031. YMCA Trade School 1.0 24 2432. Terre Des Hommes (Netherlands) 1.0 30 3033. Brother Ivan Trade School * 0.5 40 8034. Monanaghar Trade School 1.0 40 40

(Continued)

100

ANNEX-7Page 4(Continued)

35. Ghaziou Trade School 1.0 30 3036. YMCA Vocational Technical Workshop 1.0 25 2537. SOS Youth Welfare Workshop 1.0 30 3038. Bagdha Woodcraft (MCC) 1.0 20 2039. Satkia Vocational School 1.0 20 2040. Rupsa Karigari Proshikan Kendra 0.5 40 8041. Nanail Atimkhana Trade School 0.5 40 8042. Banapara Trade School 0.5 40 80

Total 1,969 1,833

Source: Association of Private, Non-Profit Trade SchoolsNotes: A number of new schools are about to be added to the Association

* Denotes schools in a project of trade schools for the underprivileged# Established with the help of the Association

101

ANEX GPage 1

Skill Development Fund

G.0l The World Bank VTE Sector Review Mission of October-November 1988explored the status of the existing VTE programs of the nation and assessedprospects for improvements. The mission found that the existing VTI-TTC-Polytechnic structure of VTE in the formal system had many shortcomings. Thepresent situation is so unpromising that the mission cannot recommend furtherinvestment by the Bank in the formal system as it is now constituted andoperated. Details of the above are set forth in other mission working papers.

G.02 The non-formal delivery mode is being used by a few agencies, bothGovernmental and NGOs, to provide VTE services which have promise for nationaleconomic development. It is apparent, however, that certainly not all non-formalefforts are successful.

G.03 One logical option for the Bank would be to decide that the VTEsubsector is so unpromising that, after four previous projects, it is time toabandon further attempts for reform and/or improvement. However, development ofhuman resources is one of the few ways Bangladesh can have a chance for economicprogress. Therefore the mission believes that one more try should be made.

G.04 One of the persistent problems in past efforts is the creation ofsubstantial infrastructure before results can be assessed. For example, theVTI and TTC systems are replete with a ministerial superstructure and fixedinvestments in buildings, equipment and staff. A necessary feature of anyproposal to find new ways would be to try a delivery mode without heavyinvestment in such infrastructure before results can be assessed.

G.05 One way to try new ideas and avoid such commitments is to provideresources on a limited scale for a shorter time period. Some programs assistedin this way may work; others may not. An assessment of which programs work andwhich ones do not could be made before major additional resources are committed.This concept is the basic rationale for the proposed VTE Skill Development Fund.

The Fund

G.06 The objective of the Fund will be to try a variety of programs insearch for models which will work. The criteria of "what works" would be thatthe output of the VTE program would be:

(a) immediately employed in existing industry or government;

(b) prepared for productive self-employment; and/or

(c) equipped to enter industries and services as yet notestablished.

G.07 In designing the structure and operation of the Fund as fewlimitations as possible should be introduced; therefore eligibility

102

ANNEX GPage 2

for assistance under the Fund should be open to all potential providers of VTEservices who show promise of meeting the above objectives. Government and non-government agencies, groups and even individuals should be considered.

G.08 Carefully developed criteria for evaluation of proposals forassistance will be essential. A few of the most likely would include:

(d) high ratio of benefits to cost

(e) short duration of training preferred over long

(f) programs in which the beneficiaries would be drawnfrom the lower social classes would be preferred

(g) programs which train women and girls would have highestpriority since existing programs have virtually no femaleparticipants

(h) proposals which can be easily and quickly evaluatedwould be preferred

(i) as little as possible previous educational attainmentshould be required. Present programs often requirecompletion of grade 8 or 10, thereby limiting participationto more privileged segments of society which areoften unwilling to accept employment in fields forwhich they have been trained. However, this principleshould not be overworked to exclude completion ofprimary education which all segments of society areexpected under current government policies to benefit

G.09 Evaluation of proposals will be a critical factor to the success ofthe Fund. Since proposals would be coming from a wide cross-section ofgovernment and society, no single ministry or NGO could be chosen exclusivelyto do evaluation. Despite the usual shortcomings of such bodies, the onlyrational option would be an independent board created especially for thispurpose. The Board should be representative of government and non-governmentinterests. Non-government should not be limited to NGOs. The government shouldnot be limited to agencies which have been responsible for existing VTE programs(i.e. VTE and BMET). Non governmental should also include employers in theprivate sector. It might even be advisable to include expatriate representativesof interested donor agencies. It goes without saying that the problem will beto represent all of these interests without creating an large unmanageable boardas well as finding persons with enough additional time to devote to this task.Payment to Board members may be necessary and appropriate. A figure of 12 mightbe a good number to strive for.

G.10 Designation of the Chair of the Board will be an important factorin maintaining its independence and objectivity. Perhaps this should alternatesemi-annually between government and non-government representatives.

103

ANNEX GPAGE 3

G.ll A secretariat to the Board will also be essential. It wouldreasonably be expected that the Board would consider hundreds of proposals eachyear and have evaluation responsibilities for dozens of active trials at any onepoint in time. An existing agency such as Technical Education Board could beconsidered for the role of Socretariat if assurances of independence and unbiasedoperation could be provided. Every effort should be made to identify a suitableexisting body rather than creating yet another burden to the government.

G.12 Determination of the size of the Fund would be affected by suchfactors as government willingness to borrow, multi or bilateral agency provisionof necessary funds and capacity of the Board-Secretariat structure to absorbresources. Another element affecting the monetary size of the fund would bewhether it is to be a revolving account or not. On this matter it might be bestif the Fund were to have discretionary authority to decide if proposals are tobe financed on a grant or loan basis depending on the revenue potential of theprogram or other ability-to-pay measures. As a starting point for discussion,the figure $20 million might be aupro!riate, with the expectation that theseresources would be divided roughiy half-and-half between grants and loans.However, if either grants or loans are found to be politically and/oreconomically unfeasible the proportion could shift either way toward 100l.

G.13 For the loan segment of the Fund appropria-_'e repayment arrangementswould need to be developed. The essential principle to follow would be to keepthe repayment as short as possible,preferably no longer than three years for thefirst repayment installment and not more than eight years for the final repaymentinstallment. This would enable the Fund to be able to relend its resources morefrequently. Methods of repayment are important. In other such programs in othercountries to usual method is a flat amount or percentage per month for aspecified number of months. For example,lOX of the loan is repaid each month for12 months which translates to 20% interest to offset collection and borrowingcosts and to cover cases of non-repayment. If a longer repayment period isneeded,the same principle should still be followed. Provision for reschedulingof payments would be essential in view of the weak repayment potential of manyprobable users of such a fund in Bangladesh.

G.14 A fiduciary agent should be involved to handle disbursement of grantsand loans. The Secretariat should not be asked to do this function because itwould lack experience in such matters. The fiduciary agency could be involvedin that part of the proposal approval process which is related to financialmanagement capability ability and to repayment capability questions. Otherwise,the fiduciary agency should not be involved in determining which proposals arefinanced and which ones are not. A local bank, preferably one with branchesthroughout the nation could become the fiduciary agency. The fiduciary agencyshould have an ex-officio membership on the Board.

G.15 Structure and evaluation of programs conducted under proposals thatare financed by the Fund would be monitored by the Secretariat on behalf of theBoard. Each financed proposal would have a schedule for implementation whichwould spell out points in time when appraisals of outcomes would be assessed.Since the preference would be for fast impact projects a typical implementation

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ANNEX GPage 4

period might be three years with evaluation occurring at the ends of years one,two and three. Every effort should be made to design proposals which can bemonitored against quantifiable outcomes, such as numbers of participants, ratesof employment after completion of traininqg, etc.

G.16 The above paragraphs set forth general principles under which sucha Fund might operate. Some specific etamples of proposals that might besupported could include the following:

(j) A women's NGO trains urban women for employment inexisting or proposed garment industry.

(k) An employer with many untrained workers provides on-the-job training which would result in measurableimprovement in productivity.

(1) A government ministry starts a program using under-utilized facilities of a VTI in the evenings orholidays to conduct skill training in a field nototherwise offered.

(m) A small scale donor agency has a good idea for skilltraining but lacks sufficient resources for a trialand the Fund is asked to co-finance with the agency.

(n) A private individual offers a promising idea forskill training but lacks resources even to develop aproposal or enlist the help of a larger agency

(o) A proprietary vocational secondary school wishes toconduct a promising curriculum reform but lacks resourcesfor the effort.

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