Reforms and investments help overhaul Peru education

As diversification efforts to reduce dependence on mineral resources continue, the education sector remains a top priority for the government under President Ollanta Humala. The challenges facing the education system are sizeable, as decades of underinvestment have resulted in a significant infrastructure deficit and persistently low quality. Since taking up office in 2011, the Humala government has initiated large-scale reforms aimed at improving educational outcomes through four strategic pillars: improving learning for all, reducing the infrastructure gap, strengthening the teaching profession and modernising governance practices. Now as the country moves closer to general elections, due to take place in 2016, continuity in education policies has never been more important. “One of the top priorities of the country is increasing investment in human capital; all institutions play a major role in improving access and quality,” Fernando D’Alessio, president of Centrum Catolica, told OBG. “Both aspects need to be further incentivised by state authorities in order to ensure that inclusion doesn’t result in a deterioration of quality standards.”

System

The Peruvian basic education system comprises three levels. Children under the age of six attend preschool, at least one year of which is mandatory. Primary education consists of six years of schooling for students from six to 11 years of age. Secondary education, for students aged 12-16, consists of a five-year block divided into two cycles, with the majority of schools offering the same block to all of its students. The first cycle, which lasts two years, is general and the same for all students. Along with primary education, it is mandatory. In the second, three-year cycle, students must choose between courses in science, humanities or technology. According to the Ministry of Education ( Ministerio de Educación, MINEDU), in 2015 enrolment at the basic education level was in excess of 7.5m students.

For its part, tertiary education falls into three categories. Universities offer five-year programmes up to doctorate degrees, while non-university institutes offer programmes in pedagogic, technical or artistic areas that last up to a maximum of three years. Finally, higher education technical productive institutes (institutos de educación superior técnico productivos, IESTPs) offer technical or vocational training. In 2015 total enrolment at the tertiary level surpassed 1.15m students, up from roughly 636,533 in 2005, according to figures from the National Education Council (Consejo Nacional de Educación, CNE). The private sector operates predominantly at the tertiary level, unlike at the basic education level, and it accounted for approximately 73% of all university enrolment in 2015.

Progress

The past decade has seen Peru make significant advances. According to figures published by MINEDU, in the decade leading up to 2014 enrolment in pre-schools increased from 60.4% to 81.3% and from 70.6% to 82.9% at secondary schools. Though smaller, an increase was also visible at the primary level, with enrolment rising from 91.2% to 92.9%. In the same period, the percentage of those aged 13-19 who did not complete basic education decreased from 20.9% to 13.2%.

Advances have also been made in reducing the significant infrastructure deficit, particularly in rural areas. The deficit of secondary schools in rural parts decreased from 515 in 2002 to 69 in 2015, according to MINEDU, representing an important step towards expanding access to education among marginalised segments of the population. The student-teacher ratio at the primary level declined from 22:1 in 2005 to 15:1 in 2015, according to MINEDU, and from 14:1 to 12:1 at the secondary level in the same period. Meanwhile, the percentage of primary schools which provide access to the internet increased significantly from 10.7% in 2009 to 32.9% in 2015 and from 27.8% to 59.7% for secondary schools. Moreover, the ratio of students per computer decreased from 9:1 in 2011 to 7:1 in 2015 at the secondary level.

Work Ahead

Despite these advances, there is a substantial amount of work ahead. The level of schooling among Peruvians remains relatively low. MINEDU reported that the average number of school years for Peruvians from 25-64 years old stood at 9.9 in 2014, up only slightly from 9.4 in 2005. Among 25-34 year olds, however, the average rises to 11.1, reflecting the increase in access to education for the younger generation. Although visible progress was made in reducing dropout rates at the basic education level, at 13.2% in 2014, there is still considerable room for improvement. A large percentage of these, or 41.5% in 2014, abandoned school for financial reasons, according to MINEDU, suggesting the need to expand access and retention rates in low-income communities. At the tertiary level, even though access to education expanded significantly in the decade to 2014 – gross enrolment among 17-21 year olds rose from 44.5% to 64.7% – according to MINEDU, the disparity between rural and urban settings remains dramatic. In 2014 enrolment in urban settings reached approximately 74.5% compared to a much lower 29.7% in rural settings.

International Evaluations

Another significant challenge facing the system is the low level of quality. At the national level the education system is evaluated through the Student Census Evaluation, a tool introduced in 2007 and administered to all students. Although student performance has improved consistently since 2007, in 2014 only 43.5% of second graders reached satisfactory levels of reading comprehension, while an even lower percentage, 25.9%, reached satisfactory levels of proficiency in maths.

International evaluations have produced similar results. In the 2012 edition of the Programme for International Student Assessment (PISA), the most recent edition in which Peru participated, the country ranked last among the 65 countries evaluated. A large percentage of the students (47%) did not meet level 1, the lowest of six levels, while the vast majority (74.6%) performed below level 2. Also significant, PISA highlighted the unequal nature of the education system, with students in urban areas performing well above students from rural settings, a trend that was unchanged since PISA 2001. Hugo Ñopo, lead economist at the Education Division of the Inter-American Development Bank, told OBG, “The PISA results are a great indication of human capital formation for the country, as it tests the skills of 15 years olds who will soon be entering the labour market. The poor results are a testament to the massive challenge the country faces to improve its productivity.”

University Quality

Though not as acute, quality shortcomings are also a concern at the university level. In the 2015 QS World University Rankings for Latin America, which ranked the 300 best universities in the region, only 18 Peruvian universities made the list, compared to 89 from Brazil, 67 from Mexico, 52 from Colombia, and 39 each from Argentina and Chile. Moreover, only three Peruvian universities made it into the top 100 institutions: Pontificia Universidad Católica del Perú (19th), Universidad Nacional Mayor de San Marcos (60th) and Universidad Peruana Cayetano Heredia (64th).

Factors

Education specialists associate the poor quality of Peru’s education system with a number of factors, including low education expenditure and poor teacher performance. Between 1999 and 2011, when the current government was elected, public expenditure on education as a percentage of GDP ranged between 2.6% and nearly 3%. The figure only surpassed 3% in 2014, reaching 3.3%. “We have been through decades of not just low but also inefficient spending in education. The departure point is so low that the investment needed can only be long term. It is not something that can be accomplished in one presidential term, but with decades of consistent investment,” Ñopo told OBG.

Poor teacher performance is another factor negatively impacting the quality of education outcomes, according to MINEDU. Teachers currently earn one-third of what they earned 40 years ago and this has made the teaching career much less attractive. Furthermore, efficient management of schools has also been hampered by a lack of administrative staff. There are some 37,000 administrative workers for roughly 49,000 public schools.

Reform Path

Since coming to office, the Humala government has made education a priority. The government’s commitment to the sector is visible in the substantial increase in expenditure. The sector’s budget for 2015 totalled almost PEN22.3bn ($7.1bn), representing an increase of 23% compared to the previous year, while the 2016 budget exceeds PEN24.8bn ($7.9bn), the largest amount allocated to education in the country’s history. From 2011 to 2016 the education budget increased by 88%, according to MINEDU. The fact that the resources being allocated to the education sector continue to increase despite Peru’s economic slowdown is a clear indication of the government’s commitment to improving education and its long-term vision. The goal is for education expenditure to reach 6% of GDP by 2021.

Infrastructure

In order to address the sector’s infrastructure gap, PEN4.88bn ($1.6bn) is being allocated to investment projects in 2016, which includes improving educational centres at risk, replacing equipment, building high performance schools (colegios de alto rendimiento, COARs) and executing projects associated with the 2019 Pan American Games. While the amount is the largest ever allocated for infrastructure, the gap, which has already reached PEN63bn ($20.1bn) or around 10% of GDP, is too big to be closed quickly. If the authorities continue to invest PEN3bn ($957.6m) a year, MINEDU estimates it will be 17-20 years before the gap is closed.

In order to carry out infrastructure works the government is enlisting the help of the private sector through public-private partnerships for construction, equipment and maintenance. The private sector has been invited to participate in two categories: regular basic (initial, primary and secondary) education centres and IESTPs.

ProInversión, the state agency in charge of promoting investment, is tasked with overseeing the bidding process, with most concessions being awarded for a period of 20 years. The government is also promoting private investment through the scheme Obras por Impuestos, or Works for Taxes, a government programme that enables private sector companies to finance and execute public investment projects with tax funds that would otherwise be directed to the national Treasury. According to MINEDU, in 2013 a total of PEN11m ($3.5m) was invested under this scheme.

Coars

The government has also begun building a network of specialist schools for high achievers, known locally as COARs and modelled after the Colegio Mayor Presidente del Perú in Lima. In 2015 PEN520m ($166m) was allocated for the construction of 14 COARs in Lima, Piura, Junín, La Libertad, Amazonas, San Martin, Pasco, Huancavelica, Cusco, Ayacucho, Arequipa, Puno, Moquegua and Tacna. Subsequently, the government announced plans for the construction of an additional eight COARs in 2016, representing an investment of PEN213m ($68m), which would bring the total to 22. The goal is to have one per region. The boarding schools will provide specialised education for grades nine to 11 and, according to MINEDU, will offer international baccalaureate programmes starting in 2016.

Encouraging Teachers

Another key pillar of the current government’s plan for the sector is the revaluation of and support for the teaching profession through the establishment of a meritocratic system that provides incentives for teachers and opportunities for career advancement. To this end, in 2012 the government approved the Law of Magisterial Reform, which, among other things, introduced mandatory evaluations for teachers. Between 2014 and 2015 some 180,000 teachers were evaluated in a test that gave them the opportunity to move up the education system; 55,000 of those evaluated were promoted and received salary increases.

According to MINEDU, between 2011 and 2015 teacher salaries increased by an average of 40%, and the government aims to double that by 2021. Besides salary increases, additional bonuses are also being awarded to teachers working in difficult conditions, such as in rural areas and at schools where different grades are taught in the same classroom. A second bonus is also available to the 30% of schools across the country that make the greatest improvement. In order to attract more talent, the government has also created a scholarship specifically for promising students who want to pursue a career in teaching.

Improving Management

A series of measures are also being implemented to improve management in the education system as whole. In addition to making more resources available to school districts, MINEDU is working to increase communication among different public entities within the sector and to establish a meritocratic system for the promotion and retention of school directors. Some 15,000 school directors were already chosen based on a meritocratic system in 2014. That same year, the ministry began a performance commitment scheme in which school districts set performance goals that, if met, entitle the school to additional resources.

New University Law

At the tertiary level, a reform was also introduced in mid-2014 in the form of a new university law. The main focus of the law was the establishment of a supervisory authority, the National Superintendency of University Education (Superintendencia Nacional de Educación Universitaria, SUNEDU). Universities are now required to obtain a licence from this new entity. Under the purview of MINEDU, SUNEDU has assumed a regulatory role over all universities, both public and private. Among other things, SUNEDU is responsible for authorising the establishment of new universities and supervising quality standards of tertiary education. While SUNEDU was created with a view to improving the tertiary education system, it created a controversy at the time it was announced. Some were concerned it might infringe on the autonomy of universities and that the new body could suppress innovation within institutions.

“It is too early to evaluate the impact SUNEDU will have on the tertiary education system, since specific norms and regulations have yet to be introduced. The biggest question, however, will be whether SUNEDU becomes a quality-promotion body or rather a sanctioning body,” Mariana Rodriguez Risco, president and general director of Universidad Peruana de Ciencias Aplicadas, told OBG. “The last thing we want is for a law that was created with the purpose of improving quality to end up suppressing innovation within institutions.”

Ensuring Quality

On a more immediate basis, SUNEDU is expected to curb the establishment of low-quality universities. Since 1996, when a law aimed at promoting investment in the education sector offered tax incentives to for-profit tertiary institutions, the number of new universities, in particular private institutions, grew exponentially and with little supervision. According to the National Chancellor’s Assembly, the number of universities in the country almost doubled in the period from 2000 to 2013, increasing from 72 to 140, with private institutions growing by 123% and public institutions by a much smaller 50%. Since then the private sector has been predominantly active at the tertiary level. In 2013, 89 of the 140 universities in the country were private, and as of 2015 private universities accounted for some 73.4% of enrolment, according to data from the CNE, significantly above the public share of enrolment (26.6%). The profitability of the market has also attracted a number of foreign universities, some without a formal campus, including Chile’s Universidad de Tarapacá and Mexico’s Instituto Tecnológico de Monterrey, both of which offer online degrees. “Although Peru has a substantial number of universities, it lacks quality institutions. The discrepancy in quality between institutions is marked,” Mario Rivera, member of the CNE, told OBG. The proliferation of low-quality institutions was in large part a result of a weak accreditation system, which until recently was still voluntary. “The most important step we need to take as a country now is to establish public policies that promote and incentivise quality, and the accreditation process is an area we have yet to develop enough to feel its impact on the quality of the system,” Rivera told OBG. As of September 2015, 60 majors delivered by 23 universities and four tertiary education schools had received accreditation, according to data from the National System of Evaluation, Accreditation and Certification of Education Quality (Sistema Nacional de Evaluación, Acreditación y Certificación de la Calidad Educativa, SINEACE).

Skills Mismatch

Elevating the quality of universities is not the only challenge facing tertiary education. “There is a mismatch between the educational sector and the labour market, both in terms of degrees and skills,” Rodriguez told OBG. Students pursuing higher education tend to opt for universities, leaving the country’s need for technically trained professionals unfulfilled, a trend that affects the industrial, mining and export-oriented sectors disproportionately. In 2015 university education accounted for 55.8% of enrolment at the tertiary level, compared to 32% and 12.2% for professional institutes and technical training centres, respectively. “There is an urgent need to explore ways to strengthen the link between the university and private sector companies. The dialogue between these two actors is crucial to enabling students to acquire the skills needed before entering the labour market,” Rodriguez told OBG. While most agree that internships are one of the most effective tools for students to acquire the necessary skills for the labour market, this still remains an underdeveloped area in the country, and strengthening this relationship will require the private and public sectors to join forces.

“Private sector companies need to be more proactive in developing internships that help develop relevant skills, and these efforts need to be coupled with incentives from the public sector, for example, by allowing for unpaid internships,” Rodriguez said.

Technical Training

A proposed bill for institutes and technical centres, put forward by MINEDU and currently waiting for approval by Congress, is expected to be another step in the right direction. If passed, the new bill will allow technical education institutions to receive the same credits as traditional universities, which means that they will no longer be treated as second-tier schools.

Among the measures the new bill aims to introduce is the establishment of licensing procedures and an accreditation system for institutes, as well as a framework to enable students at such schools to transition to universities. Another recent initiative in this area is Ponte en Carrera, an online platform launched in the summer of 2015 by MINEDU, in cooperation with the Ministry of Labour and IPAE, a private sector institution, to provide students with information on study programmes and institutions.

Access

With enrolment at the tertiary level continuing to increase, the gap in access between urban and rural settings is another immediate challenge for the Peruvian government. Initiatives such as the National Scholarship and Educational Credit Programme, established in 2012, are helping to expand access to tertiary education among high-performing underprivileged students. The programme has handed out more than 45,000 grants between 2012 and 2015, representing an investment of some PEN800m ($255.4m). Meanwhile, a growing number of other financing options have also become available to students, including Lumni, a private sector student financing initiative that arrived in Peru in 2013.

Outlook

As Peru experiences a slowdown in its natural resource-based growth, improving the local education system will be crucial to the country’s efforts to diversify its economic model and eventually transition to a knowledge-based economy.

The reforms set in motion by the current government should be viewed as the initial steps of a long-term effort that will require continuity in education policies for decades to come. “The right efforts are being made,” Ñopo told OBG. “The challenge now is ensuring that these efforts are sustained for the next two decades, when we will be able to reap the benefits of the investments made now.” While the presidential elections in 2016 add a degree of uncertainty over the future, there seems to be enough political will to carry the current reform efforts forward.