By PETER BATE

A report issued on the eve of the April Summit of the Americas in Santiago, Chile, found that the region's public schools are mired in crisis. Rather than contributing to progress, the report stated, they are reinforcing poverty, perpetuating inequality and holding back economic growth.

The report, which was prepared by a task force of education experts from Western Hemisphere nations, described the split personality of Latin America's educational system:

"Students from the region's top private schools perform at levels comparable to schools in industrialized countries. . . Public school students, in contrast, perform dismally by any standard. Latin America's future will be bleak until all its children are provided real opportunities for decent education."

How could a worthy social undertaking like public education go so wrong? This is one of the questions plumbed in Facing Up to Inequality in Latin America, the 1998-99 edition of the IDB's report on economic and social progress in the region.

In contrast to other regions of the world, where there is a lack of schools, or where families are simply too poor to afford formal education for their children, Latin America has long overcome the problem of access to schools. "Interestingly enough, in Latin America almost all children start going to school when they are six or seven years old," says Eduardo Lora, senior research economist in the IDB's Office of the Chief Economist and one of the report's main authors. "What is startling is that they quit so quickly."

Using recent studies based on comparable household surveys from countries around the world, the report reconstructed the educational track record of Latin youths in different social categories. It found that nearly all children in South American countries enrolled for the first year of school. But by the fifth year, nearly 40 percent of the poor had dropped out, while 93 percent of the richest kids were still in the system. By the ninth year, only 15 percent of the poorest students remained in school, compared to 58 percent of the richest. Performance was even worse in low-income Central American countries.

The region's poor families are still faced with having to choose between putting their children to work or making a long-term and uncertain bet on education. As a result, it is not unusual for a Latin American child to drop out of school by the age of 10 or 11. This explains why the typical worker in this region has only had an average of 4.8 years of schooling. In Southeast Asia the work force has an average of more than six years of education.

But at the other end of Latin America's social spectrum, the well-heeled can attend private schools where students spend twice as many years in class than their public school counterparts.
At the point when students enter the work force, the differences in income between university-educated Latin Americans and their less-fortunate counterparts is large but not dismal. But as the university graduates rise through the managerial and professional ranks, their incomes will steadily increase, while illiterate people barely see their salaries change. By the time both groups reach retirement age, better-educated Latin Americans may be earning 10 times more than their unschooled brethren.

Historic baggage. In a certain sense, Latin America has entered the era of the knowledge-based economy carrying the wrong sort of historic baggage. Blessed with a great abundance of natural resources, its countries in the past had few incentives to invest heavily in human capital. Producing more oil, copper or beef did not necessarily require better-educated citizens.

When the region's governments saw that their countries were lagging behind, they began to pour money into public education. But while their intentions were noble, the long-term result in almost every country was a highly centralized and rigid system that cannot respond to citizens' demands for ever-improving services.

Among the common traits of these systems, says the IDB's Lora, is that all key decisions are made by bureaucrats in a capital city, usually far from where parents, teachers and school administrators can have any influence. Moreover, these systems do little to encourage schools to improve teaching or to enroll and retain more children.

In most cases, budgeting guidelines bear no relationship to communities' needs or to the number of children attending a given school. At best, resources are allocated by how big a staff a school district has or by simply repeating previous budgets. At worst, they may reflect the political clout of a mayor or a teachers union.

Push for quality. During this decade the region's governments have faced increasing social pressure to reverse the declining quality of education. The political importance of the issue, which is frequently mentioned as a major concern in Latin American public opinion surveys, was reflected in the Summit of the Americas, where the heads of government of the Americas urged the IDB to double its lending for education projects. The Bank plans to devote at least $5 billion to that sector over the next five years.

The IDB report cites examples of Latin American countries that have started to experiment with programs that could help put their public schools back on track. Several have launched decentralization plans designed to inject a degree of accountability and competition into their systems--and thereby bring decisions down closer to the families they serve.

In Bolivia, Brazil, El Salvador and Nicaragua, parents are serving on local school boards to take on responsibilities that include picking principals, managing funds or evaluating teachers. Other countries are experimenting with school nutrition programs to improve poor children's health, or instituting longer school hours that free their mothers to work. More traditional approaches for keeping poor children in school, such as subsidizing textbooks, uniforms or transportation, have had mixed results.

Some countries are breaking new ground by offering scholarships and even vouchers to entice the poor to keep their kids in school. In Mexico, an ambitious program gives qualifying children a cash transfer and school supplies if they maintain an 85 percent attendance record. Brazil's Poupança-Escola program seeks to reduce repetition and dropout rates through a savings plan that deposits 100 reals in a student's bank account for every grade the child passes.

How long do improvements in school attendance and educational quality take to pay off in terms of reducing the gap between the rich and the poor?

Not that long, says Lora, who argues that benefits could be seen quickly if Latin American children could increase their average years of schooling to 10 from the current five. "The interesting thing is that the effects of education are multiplicative. One might think that improving one generation's education is like helping them climb one rung on a ladder. Rather than a leg up, it's more like rising in an elevator," he says.