|Project Rationale and Linkage to Country/Regional Strategy
Labor market needs. Analysis shows that the shortage of skilled workforce is a major constraint to inclusive growth. A better skilled workforce is needed to increase productivity and accelerate private sector development. Improved skills also help people access better paid jobs and earn higher income. Therefore, the vocationally skilled workforce needs to increase from the current rate of about 20% in order to reflect the needs of key economic sectors. In addition, 33% of firms in the Kyrgyz Republic identified an inadequately educated workforce as a major constraint to business development well above the regional average of 22%. These are indications that workers do not meet the labor market needs. Moreover, the low women's labor force participation rate of 53% has to be addressed to increase inclusiveness of economic growth.
Systemic imbalance. The education system as the supply side to the labor market has been increasingly characterized by a systemic imbalance in its upper- and post-secondary education levels in the last two decades. The TVET system enrolls twice as many college students studying a technician profile as students in TVET schools (95,000 TVET college students and 38,000 TVET school students respectively). These enrollment rates are not conducive to the country's needs. While there has been a significant increase in TVET college enrollment, the instruction in colleges has remained highly theoretical and is not contributing to adequately skilling the workforce. Micro, small, and medium-sized enterprises, which are providing the majority of private sector jobs, nowadays seek employees who can combine solid practical skills with an entrepreneurial mindset.
Governance and policy. In response to the labor market needs, the government has been aligning since 2015 the mandate of the Ministry of Education and Science (MOES) by integrating the Agency of Vocational Education (AVE) into the ministry structure. In this setup, AVE now governs both levels of TVET to increase the internal (access, cost, relevance, and quality) and external efficiency (meeting the current and future needs of the labor market better) of TVET. However, the synergies of this merger need to be strengthened and AVE will need help in redefining its role and engagement with the economy and in building its capacity as the TVET policy making agency of the MOES.
Lessons learned from previous projects. ADB successfully completed one TVET project in 2012, and a second TVET project is ongoing until 2017. ADB's assistance in skills development has mostly supported building capacities, improving the quality of TVET at school level, and focusing on skills which lead to immediate employment. In addition to rehabilitating and equipping schools, important labor market oriented methods and mechanisms have been introduced such as: (i) occupational standards formulation through sector skills councils, (ii) competency based training, and (iii) teachers' in-service training. However, in order for the instructors to adopt modern teaching techniques that integrate practical skills training with theoretical content, longer-term support is needed. A logical progression besides shifting the TVET focus from schools to colleges will be the additional components of employers' cooperation as well as entrepreneurship education and practice. Consequently, the program aims at decreasing the gap between economic strategy and labor market needs vis- -vis the structure and content of TVET.
Program Design. The program combines policy and investment support as the government is firmly committed to TVET reform. The policy component will support the government in developing and implementing an inclusive skills strategy to systemically anchor TVET in key economic sectors. An initial ratio of 60% policy component and 40% project component is suggested.