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While i completely agree with the problem that children face in school, i dont see a dilema for you. Why should you force her to excel in art if she has no inclination for it, only so as to retain her grade or rank? Your role should be make sure she excels in those she is good at, while making sure she is averages in the rest.
We may not be able to change the school/institution/process but we can definitely provide a nuturing environment at home.
Hima