Document of

The World Bank

FOR OMCIAL USE ONLY

,(/ 3 3t- _7W

Report No. P-3956-TU

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED LOAN

IN AN AMOUNT EQTJVALENT TO US$ 57.7 MILLION

TO THE

REPUBLIC OF TURKEY

FOR AN

INDUSTRIAL SCHOOLS PROJECT

April 18, 1985

This documet has a resricted distibution and -y be used by recipients only in the perfornce oftheir officil duies. Its centents may nd therwse be disclosed withot World Bank autoriatiom.

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TURKEY

CURRENCY EQUIVALENTS

CurrencyUnit Jan. 1980 1/ Jan. 1981 Jan. 1982 Jan. 1983 Jan. 1984 Mar. 1985

US Dollar - TIL 70.00 TL 91.00 TL 139.60 TL 191.15 TL 309.20 TL 490.40

TL 1 - US$ 0.014 US$ 0.011 uS$ 0.007 uS$ 0.005 us$ 0.003 US$ 0.002

1/ Since January 1980, the rate is being adjusted for the differentialinflation between Turkey and its major trading partners. TL 420/$l (theexchange rate at the time of appraisal) was used for Parts III and IV ofchis report.

FISCAL YEAR

Republic of Turkey January 1 to December 31

LIST OF ABBREVIATIONS

DTVE Directorate of Technical andVocational Education

MOE Ministry of Education (MilliEgitim Genclik ve Spor Bakanligi)

MIT Ministry of Industry and TradeSAL Structural Adjustment LoanSEE State Economic Enterprise

FOR OFFICIAL USE ONLY

TURKEY

INDUSTRIAL SCHOOLS PROJECT

Loan and Project Summary

Borrower: Republic of Turkey

Amount: US$57.7 million

Terms: Seventeen years, including four years of grace, at thestandard variable interest rate.

Project The proposed project supports the Government's efforts toDescription: improve industrial productivity and increase the supply and

quality of skilled manpower. The project would provideequipment and refurbishment for 39 secondary-levelindustrial schools. It would also include technicalassistance for curriculum and program development, overseasfellowship training and special studies.

Benefits and The project would help meet the demand for skilled workersRisks: and junior technicians by producing some 2,500 additional

graduates annually from 1991. It would increase access totraining for low income-level groups in outlying provincesand is expected to result in an increase in the enrollmentof women in the industrial schools system. It would alsostrengthen the management and planning capacity of theMinistry of Education and would help develop curricula andnew industrial training programs in the industrialschools. There are no significant risks attached to theproject.

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

$ MillionEstimated Project Costs: Local Foreign Total

Industrial School Facilities 6.36 38.91 45.27

Curriculum and Program Development 0.25 2.64 2.89

Textbook Translation & Production 2.11 1.13 3.24

Special Studies 0.04 0.20 0.24

Incremental Recurrent Costs 2.00 - 2.00

Total Base Cost 10.76 42.88 53.64

Physical Contingencies 1.07 4.29 5.36

Price Contingencies 3.17 10.53 13.70

Total Project Cost 15.00 57.70 72.70

$ MillionFinancing Plan: Local Foreign Total

Bank - 57.70 57.70Government 15.00 - 15.00

Total 15.00 57.70 72.70

EstimatedDisbursements:

* MillionIBRD Fiscal Year 1986 1987 1988 1989 1990 1991 1992 1993

Annual 2.5 1.5 4.2 7.0 11.0 14.0 12.5 5.0

Cumulative 2.5 4.0 8.2 15.2 26.2 40.2 52.7 57.7

Staff Appraisal Report: No. 5482-TU, dated April 15, 1985.

Map; No. 18811.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRDTO THE EXECUTIVE "'ECTORS ON A PROPOSED LOAN TO

THE t PUBLIC OF TURKEYFOR AN INDUSTRIAL SCHIOOLS PROJECT

1. I submit the following report and recommendation on a proposed loanto the Kepublic of Tttrkey for the equivalent of US$57.7 million to helpfinance the foreign exchange cost of an Industrial Schools Project. The loanwould have a term of 17 years, including 4 years of grace, with interest atthe standard variable rate.

PART I - THE ECONOMY

2. An economic mission visited Turkey in June 1982, and its reportentitled "Tv .rey: Country Economic Memorandum, Recent Economic Developmentsand MediumrTerm Prospects" (No. 4287-TU) was distributed to the ExecutiveDirectors in June 1983. The report of a mission to review the financialsector, entitled: "Turkey: Special Economic Report - Policies for theFinancial Sector" (No. 4459-TU), was distributed in September 1983. A Bankmission reviewed the Gczernment's Fifth Five-Year Plan (1985-89) inAugust/September 1984 and its findings are reflected in this section.

3. lurkey is about as large as France and Germany coubined, with apopulation of around 48 million and an estimated GNP per capita of $1230 in1983. The density of population is low (78 per square kilometer ofagricultural land), and about 47 percent live in urban centers. Populationgrowth (2.2 percent per annum) is below the median for middle-incomecountries. Despite rapid economic growth in the mid-1.970s as well assubstantial emigration of workers (to Western Europe and more recently, to theMiddle East), the employment situation has deteriorated steadily with anunemployment rate currently estimated at about 19 percent. There is, however,little or no absolute poverty, although income distribution is skewed. Thereare considerable regional differences in income and large rural-urban

* disparities. Recent data indicate a probable worsening ini incomedistribution, especially of wage and salary earners, and a sharp real declinein average earnings. Educational enrollments have expanded greatly, but thelevel of adult literacy remains relatively low.

background

4. During the 1970s Turkey did not make the necessary adjustments to theshocks caused by the steep rise in oil prices, stagflation in the OECDeconomies, and the conse4 uert de'erioration of its terns of external trade.

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Until 1977 Turkey maintained high rates of economic growth by raising theshare of public investment in GDP. This was financed initially by workers'remittances and, following the quadrupling of oil prices, increasingly byshort-term borrowings. The rapid GNP growth came to an abrupt halt in 1977 asthe massive external debt burden led to a sharp deterioration increditworthiness, severe shortages of imports, and disruptions in industrialproduction with a rise in unemployment. By the end of 1979, domesticinflation had also become an issue of critical importance.

5. The Turkish authorities' response to the crisis of the late 1970s wasa major shift in development strategy in 1980, moving towards outwardorientation and giving an increased role to market forces. Policies wereadopted to expand exports and increase workers' remittances which, togetherwith liberalization of imports, encouragement of foreign investment andprudent external debt management, were aimed at alleviating the balance ofpayments constraint and import shortages. On the domestic front, theobjectives were a reduction in the inflation rate, reform of the StateEconomic Enterprises (SEEs), a more efficient financial sector, improvedresource n:obilization and better selection of investments, especially in thepubiic sector.

6. The adjustment program, wihich has been supported by the Bank throughfive structural adjustment loans, involves far-reaching changes in attitudes,institutiors, and the legal and policy framework, all of which require time toput in place. Major structural changes have been made in the exchange ratesystem, tl;e export and import regimes, the tax system, interest rate andselective credit policies and the public investment program. Implementationof Ut.e adjustment program was carried out under a military regime duringSeptember 1980 - November 1983 and since then by an elected government.

The Structural Adjustment Program -- 1980-84

7. The Turkish economy has shown an impressive response to thestructural adjustment program and actual performance met or exceeded theGoverunment's ownI targets through 1982. By contrast, results in 1983 and 1984proved to be mixed, due in part to adverse economic development; on theexternal front, slippages in the monetary program, a persistent shortfall inGovernment revenues and the renewal of inflationary pressures.

8. Real GNP expanded by 4.1 percent in 1981 and 4.6 percent in 1982. In1983, GNP growth slowed down to 3.2 percent, due in large part to the effectsof a bad harvest and a decline in the contribution of the foreign balance.The growth rate rebounded in 1984 to an estimated 5.7 percent, supported byfavorable performance in the productive sectors witlh agricultural value addedgrowing at 3.6 percent and industrial value added at 9.b percent. CapacityutiLiz-tion rates in private industry in 1984 are estimated to have risen byabout 5 percent to an average rate of 72 percent. On the expenditure side,the average annual real rate of growtlh of public fixed investment has beencontained to 3.1 percent over the 1980-84 period while the growth rate ofprivate investment has improved systematically from -17.3 percent in 1980 to4.8 percent in 1983 and an estimated 5.4 percent in 1984. Privateconsumption, which had actually fallen by 5 percent in 1980, grew at4.9 percent in 1983 and an estimated 5.0 percent in 1984. On the othier hand,helped by strict budgetary discipline, the rate of growth of publicconsumption declined from 8.4 percent in 1980 to 1.8 percent in 1983.Estimates for 1984 suggest a modest growth of 2.4 percent.

9. Through 1982, the Government met with considerable success inreducing the rate of inflation through a combination of fiscal, monetary andincomes policies. After peaking at 107 percent in 1980, the annual averagerate of increase in the wholesale price index declined to 37 percent in 1981and 27 percent in 1982. In 1983 the downward trend was reversed and theinflation rate rose to 30 percent. This rise was fueled by an expansion ofCentral Bank credits to firms and commercial banks in difficulty during thesecond half of 1983 as well as an unexpected increase in the budget deficit.The resulting liquidity expansion, in conjunction with a lowering of nominaldeposit interest rates, encouraged consumption at the expense of savings.

10. Inflation accelerated further in the first half of 1984, although itmoderated in the second half. The average inflation for 1984 is estimated ata little over 50 percent. The major factors that contributed to the worseningof the inflationary situation were the lagged impact of the expansionarymonetary policy pursued during the second half of 1983, and a significantincrease in agriculture product prices, especially of fresh fruits andvegetables, as a consequence of export liberalization and higher export marketprices. Other important inflationary factors included substantial "catch up"increases of SEE prices and higher import prices resulting from the nominaldepreciation of the Turkish lira. In addition, inflationary pressures stemmedfrom a larger than anticipated budget deficit in 1984 as a result of aslowdown in the growth of revenues. Given the tight monetary and fiscalprograms likely to be agreed upon with the IMF as part of a new standbyagreemenc (para. 25), the expectations are that inflation will decline thisyear.

11. Commercial bank interest rates, which were deregulated in July 1980,have increased substantially and are now positive in real terms. As a result,total bank deposits increased by 72 percent in 1980 over 1979, and in 1981this trend accelerated, with total deposits growing by 103 percent and timedeposits by 274 percent. Growth in total deposits slowed after 1982, and in1983 and 1984 they grew at 53 percent and 42 percent respectively. Thebankruptcy in late June 1982 of a major non-bank financial institution shookdepositor confidence and was followed by a shift of funds into the largerbanks. The Government averted an immediate crisis in the banking sector andundertook actions to reform and strengthen the financial sector as a whole. Anew banking law was enacted in June 1983 which covered many of therecommendations made in the Bank's report on the Financial Sector(No. 4459-TU). These included measures to reduce the undercapitalization ofbanks, place limits on the real assets and investments of banks, link theestablishment of branches to the level of a bank's equity, reduce theinterlocking between banks and corporations, introduce a deposit insurancescheme, and increase the role of the Central Bank in the supervision of thebanking sector. A new law is currently before Parliament which will furtherthe banking reform process by introducing standardized accounting for banksand improved procedures for handling non-performing loans. The Governmentalso took a major step towards reducing the cost of intermediation by reducingthe financial transactions tax from 15 percent to 3 percent. Separately, theGoverniment has reduced the level of withholding tax applicable to interestpayments on deposits and bonds from 20 percent to 10 percent. Other importantdevelopments in the financial sector include measures undertaken to revitalizethe capital markets, for which IFC has provided technical assistance, and thesale of revenue-sharing certificates linked to the income from selected publicfacilities (e.g. the Bosphorus bridge).

- 4 -

12. The Government is committed to maintaining an interest rate structurefor deposits which is positive in real terms. Time deposits have beenyielding more or less positive real returns since end-1983, with interestrates ranging from 45 to 53 percent depending upon the term of the depo'it.While positive real interest rates have provided an incentive to save, theyhave also meant high borrowing costs. Nominal interest rates range from 60 to80 percent on non-preferential credits, in part because of the highintermediation costs of the commercial banks and their widely prevalentpractice of requiring compensating balances. The interest rate differentialsbetween preferential and non-preferential credits and among preferentialcredits are large and need to be reduced. The Government has reaffirmed itsdetermination to achieve positive real rates on all lending by a combinationof bringing down inflation and phasing out interest rate subsidies onpreferential credits. In January 1985, it eliminated preferential interestrates on short-term export credits. High market interest rates, together withthe limited availability of credit, have led to considerable liquidityproblems for the private business sector, particularly for businessessupplying the domestic rarket. Measures are also needed to lower theoperating costs of banks, which are well above prevailing levels in comparablecountries.

13. In the fiscal area, progress was evident from 1980 to 1982 but therehave been slippages in 1983 and 1984. The budget deficit to GNP ratio wasreduced from 5.3 percent in 1980 to 2.1 percent in 1982, and the Public SectorBorrowing Requirement (PSBR) dropped sharply from 12.6 percent of GNP to6.9 percent over the same period. However, the revenue to GNP ratio has beendeclining over the past three years. From a high of 20.3 percent in 1981, ithas fallen sharply to an estimated 15.6 percent in 1984. Largely because ofthis significant shortfall in revenues, overall fiscal perforiance hasworsened since 1983 even though government expenditures have been considerablycurtailed (from 24.2 percent of GNP in 1980 to an estimated 20.8 percent in1984) and budgetary transfers to SEEs as a percentage of GNP have fallensteadily (from 4.8 percent in 1980 to an estimated 1.6 percent in 1984). l'iebudget deficit is estimated at 5.2 percent of GNP in 1984 and the PSBR at8.8 percent. The downward trend in the Government revenue to GNP ratiohighlights the urgency of mobilizing additional public resources. As a stepin this direction, the Government introduced a Value Added Tax (VAT) inJanuary 1985.

11L_ Improvements in the balance of payments were systematic through 1982with the current account deficit decreasing from $3.3 billion (5.7 percent ofGNP) in 1980 to gl.2 billion (2.2 percent of GNP) in 1982. However, in 1983the current account deficit widened to about $2.1 billion (4.2 percent of GNP)as merchandise exports and workers' remittances fell short of targets.Exports rebounded strongly in 1984, growing by 25 percent in dollar terms to$7.1 billion. Remittances, too, registered a higher than expected increase,reaching $1.9 billion (up by 24 percent). Concurrently, there was a continuedlarge inflow of deposits through the Dresdner scheme ($550 millioia in 1984).Under this scheme the Dresdner Bank collects deposits from Turkish workers inGernany and automatLcally places these funds at the disposition of the CentralBank of Turkey, which guarantees the deposits and pays an interest ratecommensurate with the Euro-market rate. However, these increases were offsetby a sharp rise in merchandise imports to $1U.8 billion (up by 16 percent indollar terms). As a result, the current account deficit in 1984 wasconsiderably higher than projected, reaching $2.1 billion (4.3 percent ofGNP), or about the same level as il 1983.

15. On balance, merchandise export performance has been impressive overthe 1980-84 period, growing at an average annual rate of about 26 percent indollar terms. This growth has been led by the manufacturing sector and hasinvolved a rise in the share of exports to the Middle Eastern countries.Industrial exports, comprised primarily of processed foods and textiles, haverisen from 36 percent of total exports in 1980 to 72 percent in 1984. Theseresults were achieved by a combination of indirect (flexible exchange ratepolicy and import liberalization) and direct (tax rebates, preferentialcredits) measures to enhance the relative profitability of exports and offsetthe traditional bias towards producing for the domestic market. The flexibleexchange rate policy was one of the most important factors contributing to thegrowth of exports, together with the penetration of Turkish products in MiddleEast markets.

16. On the import side, the 1982-83 period was marked by a relativestability in the growth of merchandise imports, mostly due to exogenousfactors. Imports fell by 1.0 percent in dollar terms in 1982 and rose by only4.4 percent in 1983. This reflected price decreases in both oil and non-oilimports. Merchandise imports, however, increased substantially in value in1984. The increase has been most significant in some of the groups (e.g. rawmaterials and consumer goods) that have been subjected to major liberalizationin terms of both a lowering of tariff rates and a significant removal ofquantitative restrictions.

Medium-Term Prospects

17. The Government's Fifth Five Year Plan (1985-89) was approved by theGrand National Assembly in July 1984. The Plan reaffirms the Government'sdetermination to pursue an outward-oriented development strategy and toliberalize the economy by relying increasingly on market forces for allocationdecisions. The public sector is targeted to play a supportive role byconcentrating its ir.vestments in infrastructure rather than manufacturing,while the private sector is to be encouraged to play a leading role in thegrowth of manufacturing and exports. Some of the key targets are:

(i) an average annual GNP growth rate of 6.3 percent;

(ii) an average annual real rate of growtn of merchandise exports of10.6 percent;

(iii) an average annual real rate of growth of merchandise imports of8.2 percent;

(iv) an average annual real rate of growth of 10.9 percent in privateinvestmaent and b.8 percent in public investment; and

(v) a declining external debt service ratio, from 2t percent in 1984to around 18 percent in 1989.

- 6 -

18. While the overall thrust of the Plan is in accord with the goals ofthe structural adjustment program, certain targets seem optimistic in view ofboth past performance and the immediate prospects for the economy. The Bank'sprojections indicate the need for a continuation of the stabilization programwell into 1987, implying a lower growth rate in GDP for the early years of thePlan and a return to a higher growth path only in 1988. Key economicvariables in the Bank's latest projections for the period 1985-89 arepresented in Table 1:

Table 1; TURKEY - SELECTED ECONOMIC INDICATORS, 1983-89

1982 1984 A 1985 1989 eal Groeuth Reite teal Growth RiteUnit. ctual ftt. Projected 1982 193 198E 1955-89

12) U1)

i?r /b 1983 1t b 114b6 12112 127U0 15899 5.U 3.7 5.7 5.bAgrtculture 2o58 2132 1202 :4111 b.4 -0.1 1.e 3.0Industry 1099 3391 3588 4732 5.U 7.b Y.b 7.0Service. 0.2JI 3929 b179 2771 9.1 4.0 1.3 5.7

Con-msption 958 212Cm 10539 22Y9OU 3.9 4.1 .8El 5.1FPiad nvoateont 2111 2220 240U 3I 3.5 J.U I.A 7.5

tLperte ot *Lud. durrent S n ¶7214 1I10 8541 17579 2..u 13.9 23.1 9.9leporte of juod J715 10759 1151J1 11307 -uA. 1 12.0 15.5 7L2

Trade balance -3507 -315b Z959 -3733

Lurrent accounet balanc Current a -2122 -2135 -1750 -2W3

Ratiostnve.r-ent/C2Il 1.9.11 15.1 18.9 20.USavLnog/CDP - 1.5 17.2 17.4. 19.5LaPorta of goods/bP , I.J 14.b 11.9 25.4Current Account deftcitlWUP lb Z -4.2 -4.1 -2.8 -I.bDebt -erv-c. ratio fc : 71b.U 2S.u 21.7 19.8sPublic fiod bnreesent/ : 9U.3 5bIY 57. E2.bToctal fs.-d L.nveetent

itee:

G-a. capital req-red/d C--rrent $ - 1b98 4190 Iaik 5901

/a At market prices; components are expressed at factor cost and will not addup due to exclusion of indirect taxes and subsidies.

/b Based on constant TL.T7 Total Debt Service (excluding short-term) /Exports of Goods and NFS plus

Workers' Remittances./d Includes net IMF.

Source: State Planning Organization for actuals and IBRD projections.

19. Bank projections indicate a GDP growth of 5.6 percent per annum onaverage for the Plan period, with a low of 4.9 percent in the initial year ofthe Plan (stabilization period) and a high of 6.3 percent for the final year(growth period). Ach_evement of these growth rates will depend on theperformance of the productive sectors, namely agriculture and manufacturing.This in turn will depend to a large extent on the Government's determinationto constrain the growth of the public sector in line with public resources andto create a more favorable investment climate for the private sector. Thistranslates itself into a projected real growth per annum in public fixedinvestment of about 5.0 percent on average for the Plan period, starting witha modest increase in the early years. The comparable figure for private fixedinvestment is 10.6 percent or a little more than twice the growth rate forpublic fixed investment. These figures are consistent with the need to meetthe infrastructure requirements of the economy through the public investmentprogram, while providing for the capacity expansion of the private sectornecessary to meet the export and growth targets.

20. Merchandise exports are projected to grow at an average 9.4 percentper annum in real terms. Merchandise imports, on the othier hand, areprojected to grow more slowly in real terms through 1986 and then pick up toan average 7.5 percent per annum in the terminal years of the Plan. On theseassumptions, the current account deficit is projected to decrease through 1986as stabilization policies act to contain import growth while encouragingexports. As higher growth rates set in during the middle of the Plan period,the trend would reverse and the current account deficit would rise moderatelythrough the end of the Plan. The terminal year 1989 would show a deficit ofapproximately $2.0 billion as compared to a 1985 figure of ¢1.7 billion. Theprojected capital account is seen to remain manageable throughout the periodeven in the face of some sharp increases in the amortization payments in1985-87 arising from the debts rescheduled during the 1978-80 period and animposed constraint on foreign exchange reserves equivalent to at least twomonths' imports. Consistent with the above is an average debt service ratiofor medium and long-term credits for the Plan period of 21.7 percent.Including short-term debt the average debt service ratio for the Plan periodis 23.7 percent. Gross capital inflows required in 1989, on theseassumptions, would be about $5.9 billion, or about 38 percent higher than theamount in 1984. Such an inflow is consistent with a decreasing debt serviceratio from 1986 onwards.

21. The mediumrterm scenario presented above is, of course, only one ofmany possibilities and is used specifically to illustrate Turkey's potentialin the light of the Government's own development strategy. Given Turkey'sprogress in the structural adjustment program, the favorable response whichthis has evoked from the international financial community and the presentview of future resources and export market possibilities, the Government'ssomewhat more ambitious Plan targets would be feasible provided they aresupported by slightly higher export growth rates and greater success in themobilization of public resources. This may be more difficult to achieve inthe early (stabilization) phase of the Plan.

22. In view of the sensitivity of the projections to the assumptions ofexport and import growth rates, a downside risk case has also been developed.With Turkey's export performance heavily dependent on exogenous factors such

as the world economic outlook and movements in international prices, a slowergrowth of merchandise exports (an average of 6.9 percent over the Plan period)would lead to a more difficult but still manageable balance of paymentssituation, more external borrowing, a lower GDP growth (averaging about4.8 percent per annum) and a higher debt service ratio (22-24 percent perannum). In such a situation the Government would have little chance ofabsorbing the unemployed and imp-oving tangibly the average standard ofliving. However, given the Government's emphasis on export promotion and thedetermined efforts to counter the bias towards producing for the domesticmarket, there is good reason to support the perspective set out in themediumrterm scenario presented in paragraphs 18 to 21.

External Debt and Creditworthiness

23. At the end of 1978, Turkey had $7.2 billion in short-term debt and$7.0 billion in medium and long-term debt. Between 1978 and 1980, Turkeyrescheduled some $9.2 billion of outstanding obligations through a series ofrescheduling arrangements concluded with official and commercial creditors.Approximately $6.0 billion of short-term debt, including $2.6 billion inconvertible Turkish lira deposits and bankers' credits and $1.2 billion ofnon-guaranteed suppliers' credits, were consolidated into medium-term loans orpartially converted into Turkish lira obligations. Following the resolutionof the debt crisis, inflows were mostly from official sources -- majorcreditors being the OECD countries, the World Bank and the IMF. Of theestimated total debt outstanding of $22.7 billion at end-1984, 81 percentconstituted medium and long-term debt (including IMF). Short-term debt as apercentage of total debt outstanding fell from 51 percent in 1978 to about11 percent in 1982, then increased to 14 percent in 1983 and to an estimated18 percent in 1984. Much of this growth in the stock of short-term debt isdue to the inflows associated with the Dresdner Bank scheme (para. 14). Atend-1984 the outstanding liabilities associated with the Dresdner scheme areestimated to amount to $1.8 billion, which would represent about 45 percent ofTurkey's short-term external obligations and 8 percent of its totaloutstanding debt. Based on the growth scenario outlined earlier, debtoutstanding and disbursed as a percentage of GDP is projected to fall from anestimated 41 percent in 1984 to 32 percent in 1989. This translates into atotal debt outstanding forecast for 1989 of $30.6 billion, with short-termdebt constituting about 23 percent of that total. Dresdner scheme inflows areprojected to be around $600 million per annum throughout this period and toaccount for a large part of the rise in the ratio of short-term debt to totaldebt outstanding.

24. The debt service ratio for medium and long-term credits (in relationto exports of goods and non-factor services and workers' remittances)increased from about 14.6 percent in 1981 to a peak of 28 percent in 1983 as aresult of a large repayment of previously rescheduled debt under the earlierOECD agreements. Debt service obligations are likely to be high over thecoming years and would average about $3.8 billion per year in 1985-89.However, the debt service ratio is seen to decrease from an estimated25 percent in 1984 to 19.8 percent in 1989. The debt burden should remainmanageable provided current policies are successfully implemented, the exportdrive is sustained, and Turkey continues to receive further support fr minternational commercial and official sources. There have been -ricouraging

signs of Turkey's ability to enter the market for commercial borrowings. FromDecember 1983 to November 1984, Turkey had secured a little over $500 millionfrom commercial credits, constituting about 23 percent of the total externalcredits received during this period. The Central Bank of Turkey recentlycompleted the syndication of a $500 million multi-component medium-term (sevenyears) facility involving a large number of U.S., European, Japanese andMiddle Eastern commercial banks as lead managers.

25. Turkey's economic program has been supported by the IMF through aseries of standby arrangements. A three-year standby arrangement in an amountequivalent to SDR 1250 million was approved by the IMF's Board and becameeffective on June 18, 1980. The Government purchased the full amountauthorized under the arrangement. The Government also purchasedthree-quarters of a SDR 225 million one-year standby arrangement which wasapproved by the LMF in April 1984 and replaced an earlier one-year arrangementterminated at the request of the Government. Discussions are presently underway on a further one-year standby arrangement.

PART II - BANK GROUP OPERATIONS IN TURKEY

26. Through March 31, 1985 the Bank and IDA have lent $5383.5 million l/to Turkey, through 81 projects. Agriculture accounts for 19 percent of fundslent, industry and DFCs for 24 percent, power for 13 percent, structuraladjustment and program loans for 32 percent, and urban development,transportation, education, tourism and technical assistance for the remaining12 percent. Disbursements for all sectors combined (excluding structuraladjustment loans) average 49 percent of appraisal estimates, as compared to50 percent for Tunisia and 49 percent for Morocco. As of March 31, 1985, IFVcommitments to Turkey totalled about $239 million, of which about $64 millionwere still held by IFC. Annex II provides a summary statement of Bank loans,IDA credits and IFC investments as of March 31, 1985.

27. Bank lending is aimed at supporting Turkey's medium-term objectivesof restructuring the Turkish economy by placing more reliance on market forcesand adopting a more outward-oriented strategy. The main vehicle for theBank's operational discussions with the Government has been the structural

* adjustment lending (SAL) program. SAL V, which was approved in June 1984,completed the series of five loans which the Bank had indicated would be themaximum to a country. Significant progress has been achieved in the past fiveyears, but the task of restructuring is by no means over. The next phase willinvolve the broadening and deepening of the adjustment process at the sectorallevel. Recent economic developments have underlined the need for acontinuation of the stabilization program without giving up the goals of

1/ Net of cancellations.

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sectoral adjustment. Hence the emphasis of Bank lending in the post-SALperiod would be on striking an appropriate balance between sectoral adjustmentlending designed to be quick disbursing and support.ve of policy reforms inthe major sectors, and carefully formulated project lending focussing on highpriority projects principally in the agriculture, energy and transport sectors.

28. Efforts have already been initiated to develop a series of sectcoralaGjustment loans for the major sectors over the next few years, starting withagriculture. The loans for the agriculture sector would help to support amediumrterm action program aimed at increasing the growth of primaryproduction and exports, rationalizing public investment and strengthening asectoral institutions. Sectoral adjustment lending would also supportmeasures to address the structural problems of the financial sector andenhance the utilization of industrial capacity in the public and privatesectors, keeping in view the scope for the "privatization" of publicly-heldassets in the manufacturing subsectors. Other sectors where sectoraladjustment loans could be developed include energy and transport.

29. Project lending, which will continue to make up the majority of thelending operations, will be designed to support and strengthen the adjustmentprocess. A portion of project lending would be earmarked for the constructionor rehabilitation of key projects in the energy sector. Other projects wouldbe guided by the major policy objectives of the Government, which includegeneration of foreign exchange (including improving productivity in exportindustries and providing essential infrastructure for exports), improvement ofinstitutional efficiency, non-inflationary output growth and amelioration ofthe social costs of adjustment (including provision of social infrastructureand employment generation, with some emphasis on the least developed provincesin Eastern Turkey).

30. The close macroeconor%ic and sector dialogue established with theGovernment in recent years is expected to be pursued. The econoi-- i sectorwork currently being undertaken includes a review of the five-year developmentplan and studies of housing finance, telecommunications and electronics.Topics to be covered in the future include a review of the public investmentprogram, a study focussing on the impact of structural adjustment, a review oftransport investments and studies of engineering and agro-industries.

31. In addition to this loan to Turkey, other projects being presented tothe Executive Directors this fiscal year include a loan for pulp ard paperrehabilitation, an engineering loan for urban developmenc, a proposedagricultural sector adjustment loan, and loans for a fourth power transmissionproject, a power system operations assistance project and a ports project.

32. Turkey's debt burden is projected to remain manageable throughout1985-89 (paras. 23 and 24). The Bank Group's share of Turkey's total externaldebt was 12.4 percent in 1983, is estimated at 13 percent in 1984, and isexpected to grow to about 17 percent by 1989. Official debt outstanding isprojected to increase from $11.4 billion in 1984 to $14.4 billion in 1989 andprivate medium and long-term debt outstanding is projected to increase from$5.7 billion in 1984 to $8.8 billion in 1989. The Bank group's sh_-e of totaldebt service payments is projected to increase from about 12 percent in 1983to an estimated 13 percent in 1984, and to about 17 percent in 1989.

- 11 -

33. IFC has invested in synthetic yarns, textiles, pulp and paper, glass,aluminum, cement, iron and steel products, heavy diesel engines, motor bicycleengines, piston rings, food processing and tourism. It has also invested inthe Industrial Development Bank of Turkey (TSKB) and provided guarantees foroverseas contracting firms. In addition, IFC is currently providing technicalassistance to the Government with respect to the development of the capitalmarket and a regulatory framework for leasing.

PART III - INDUSTRIAL TRAINING

34. Turkey's economic strategy adopted in 1980 entails giving anincreased role to market forces and promoting export-oriented industries,particularly in the private sector. This strategy implies an emphasis on thedevelopment of industries where Turkey possesses a comparative advantage. TheBank's report on industrialization and trade strategy 1/ identifiedskill-intensive industries as those in which Turkey should specialize.However, the low level of industrial productivity has been affected by thescarcity of skilled and technical manpower and inadequate training programs.Insufficient industrial and vocational training facilities at the secondaryschool level, the absence of formal technician training programs at thepost-secondary level, inadequate in-service industrial training programLs andthe lack of an integrated national industrial training system are importantfactors contributing to the low level of labor productivity. The proposedproject would assist the Goveriment to improve the quality and increase thenumber of skilled workers and junior technicians and strengthen the managementand planning capacity of the Ministry of Education. The other areas mentionedabove are being addressed through ongoing Bank lending at the post-secondarylevel (para 39).

35. The responsibility for pre-service training of skilled manpower andjunior technicians rests almost entirely with the Ministry of Education(MOE). The Department of Technical and Vocational Education under the MOEoversees 316 secondary-level industrial schools where some 142,000 studentsare enrolled in three and four year training programs. During the evenings,these schools also provide adult training programs for upgrading industrialskills, and some schools are used as apprenticeship training centers.

36. Manpower demand projections over the next decade indicate that therewill be an annual shortage of about 10,000 skilled workers and juniortechnicians (about 14 percent of the total annual demand). The mainobjectives of the Government for the industrial schools system are to expandthe capacity of these schools to meet the country's manpower requirements,particularly in the manufacturing and exporting sectors, and to upgradeexisting and develop new training programs. The Fifth Five-Year DevelopmentPlan (1985-89) estimates an increase in total enrollment in the industrialschools from 142,000 to 220,000, or an expansion of its share of totalsecondary school enrollment from 17 to 24 percent, over the Plan period.

1/ "Turkey: Industrialization and Trade Strategy" (No. 3641-TU), datedFebruary 18, 1982.

- 12 -

37. A number of areas for improvement in the efficiency of the secondaryindustrial schools system have been identified during the dialogue with theGovernment. These include curriculum development and upgrading, coordinationbetween schools and le-al industries, and cost control and cost recovery.Although the present curricula are basically sound, curricula for some tradespecializations require upgrading and new programs have to be developed tomeet current industrial manpower needs. The Government is introducingnecessary reforms in the curricula, one result of which is a shortenedteaching week. This would facilitate better programming of classroom timewithout reducing the utilization of equipment. Instructor training is alsorequired for the new and upgraded training programs. In addition, theindustrial schools system lacks access to modern technical textbooks, and thegeneral availability of modern reference textbooks is limited.

The Bank's Role in Education and Industrial Training

38. Bank lending in the education and training sector supports theGovernment's objective of improving industrial labor productivity, a key inputinto Turkey's economic development strategy. Bank participation in the sectorbegan in 1971 with a $13.5 million loan to the Government for an EducationProject (Loan 748-TU). This project provided equipment to 32 technicalsecondary four-year schools, a technical teacher training college, theEducational Science Equipment Production Center, and the Education, Film,Radio and Television Center. It also included the construction and provisionof equipment for twelve trade schools, six adult training centers and aManagement fraining InstiEute. The Project Performance Audit Report (No.4018) dated June 28, 1982 aoted that the educational impact of the project onsecondary technical schools was considerable, with project equipment well usedand maintained and with enrollments in these schools close to the projectedlevels. However, there were delays in the construction of new buildings. Thereports highlighted a number of problems such as poor design and constructionof school buildings and the lack of an effective project implementation unit.The experience gained from the Education Project has been taken into accountin the design of the proposed project by establishment of a ProjectImplementation Unit with well-defined terms of reference; furthermore, theproject does not call for the construction of new facilities.

39. The Bank also made a loan of $36.8 million in 1984 for an IndustrialTraining Project (Loan 2399-TU), which aims at establishing post-secondarytechnician training under the Council of Higher Education and providingin-service training for technicians and professionals through the IndustrialTraining and Development Center. It also includes fellowship training forstaff of the State Institute of Statistics responsible for the compilation andanalysis of data. Project implementation is proceeding satisfactorily. Inaddition to these loans, the Bank has supported industrial training indirectlythrough loans to specific industrial sub-sectors and to branches of industrywhich have included project or sector-related training. Bank lendingoperations in the past few years having a component of this type include loansfor the textile, sugar, steel and copper industries, as well as powergeneration and small- and mediunr-scale industries.

-- 13 -

PART IV - THE PROJECT

40. The proposed project was identified during a July 1984 mission andappraised in December 1984. Loan negotiations took place in Washington, D.C.from April 9 to April 15, 1985 with a Turkish delegation headed by Mr. TuncBilget, Chief Financial and Economic Counselor of the Embassy of the Republicof Turkey, and including representatives of HOE, the State PlanningOrganization and the Undersecretariat for the Treasury and Foreign Trade. Areport entitled "Staff Appraisal Report - Turkey: Industrial Schools Project"(No. 5482-TU) dated April 15, 1985 is being circulated separately to theExecutive Directors. A summary of the proposed project is provided at thebeginning of this rep.art and Annex III contains supplementary project data.

Project Objectives

41. The scarcity of skilled and technical manpower and the poor qualityof industrial training programs have been major factors contributing to thelow level of labor productivity in Turkish industry. A key objective for theGovernment is to improve labor productivity, with particular emphasis onmanufacturing and expcrt industries. The proposed project is consistent withthis strategy and complements initiatives taken under the Bank's IndustrialTraining Project (Loan 2399-TU) to establish technician training programs atthe post-secondary level. It aims at improving the quality and increasing thesupply of skilled manpower and junior technicians. It would also strengthenthe management and planning capacity of the Ministry of Education and wouldhelp to develop, on a national level, appropriate curricula and new trainingprograms for industrial training at the secondary school level.

Project Description

42. The project consists of the following main components:

(i) provision of equipment and refurbishment for 39 industrialschools;

(ii) technical assistance for curriculum and program development,including a specialist to assist in project management andoverseas fellowship training for instructors;

(iii) translation and production of educational materials andtechnical assistance for textbook translation, design andproduction; and

(iv) special studies in program development as well as for costcontrol and recovery in the industrial schools system.

These components are described further below.

- 14 -

43. Industrial Schools Facilities. The project would provide equipment,furniture and minor refurbishment for 39 industrial schools, selected on thebasis of support received from local industry and the adequacy of existingschool facilities. The project would include re-equipping more than 3,600student places and would create close to the same number of new trainingplaces. As a result of the project, total enrollment in these schools wouldincrease by about 9,000, producing some 2,500 additional graduates annuallyfrom 1991.

44. Curriculum and Program Development. The project would include about66 man-months of expert services to improve curricula and training materialsfor three existing trade specializations (electronics, machine tools andcomputer science) including introducing these specializations to schools notpresently providing this type of training; to develop curricula and trainingmaterials in four trade specializations new to the industrial schools program(pneumatics and industrial hydraulics, control and instrumentation,telecommunications and marine electronics); and to develop in-service trainingprograms in these specializations. The project would also provide 680man-months of fellowship training for 75 instructors required for these newand upgraded training programs. An additional six months of fellowshiptraining for one instructor in curriculum development would also be includedunder the project. Assurances have been obtained that consultants would beemployed and arrangements made for the fellowship training program byMarch 31, 1986, in accordance with a program and timetable acceptable to theBank (Loan Agreement, Section 3.03).

45. Strong links with industry have been developed at most projectschools through active School Advisory Committees which includerepresentatives from the MOE and local industries. In addition, five nationalTrade Advisory Committees have already been established to advise the MOE onappropriate curricula and program development. In order to improve industriallinks and to sharpen the focus of industrial training programs, SchoolAdvisory Committees, with terms of reference and representation acceptable tothe Bank, would be established at all project supported schools bySeptember 30, 1986 (Loan Agreement, Section 3.04(a)). Trade AdvisoryCommittees, with terms of reference and representation acceptable to the Bank,would be created by September 30, 1986 for the new trade specializations

included under the project (Loan Agreement, Section 3.04(b)). In addition, inorder to ensure the relevance of training programs to industrial manpowerrequirements, the Government would complete, by December 31, 1989, anemployment follow-up study of graduates from a number of selected industrialschools (Loan Agreement, Section 3.05).

46. The proposed project would also include one specialist in projectmanagement, equipment procurement and program planning for a period of twoyears. This specialist would work with the Undersecretary of the Departmentof Technical and Vocational Education and the Director of the ProjectImplementation Unit (para. 49). An additional 24 man-months of fellowshiptraining would be distributed amongst nine staff of the Directorate ofTechnical and Vocational Education (DTVE) to improve their abilities inproject management, school management and equipment planning.

- 15 -

47. Textbook Translation and Producrion. In order to provide theindustrial schools system with current reterence and training materials, aboutfifty international technical textbooks would be translated into Turkiqh andprinted for distribution using MOE printing faciiities. The project wouldcover copyright acquisition fees and WO1ld include about six man-months ofspecialist services to assist the Goverament with copyright acquisition andtextbook production. In addition, fellowship training of six months' durationin textbook translation, design and printing for one DTVE staff member wouldbe provided to strengthen the DTVE's inEtitutional capacity in these areas.

48. Special Studies. Approximately lb man-months of expert serviceswould be provided to carry out studies on such areas as future programdevelopment, computer-aided learning and commercial and adult trainingprograms. The project would also include four man-months of expert servicesfor a study on cost control and cost recovery for the industrial schoolssystem.

Project Implementation

49. A Project Implementation Unit (PIU) has been established under theDepartment of Technical and Vocational Education. A Project Director has beenappointed and a procurement officer, accountant, educational adviser and dataprocessor are being hired. The PIU would coordinate the work of the threeDirectorates responsible for technical and vocational education programs,refurbishment of industrial schools and equipment procurement. Assuranceshave been obtained that the Project Implementation Unit would be maintainedwith terms of reference and staffing acceptable to the Bank (Loan Agreement,Section 3.01(b)).

Project Costs and Financing

50. The total cost of the proposed project is estimated at $72.7million. The proposed loan of $57.7 million would finance the estimatedforeign exchange component or 79 percent of total project costs. TheGoverrment would finance the balance of project costs. Equipment and goodsimported for use by government ministries are exempt from taxes and duties. Aphysical contingency allowance of 10 percent ($5.4 million) has been added tothe cost of all project items. Price contingencies, amounting to $13.7million or about 23 percent of the base cost plus physical contingencies,assume international inflation rates of 5 percent in 1985, 7.5 percent in1986, 8 percent in 1987 through 1990, and 5 percent thereafter. Totalcontingencies are $19.1 million or about 36 percent of the base cost.Technical assistance costs for specialist services include salaries, housing,relDcation and international travel costs as well as the costs of localservices such as local travel, subsistence, recruitment and overhead.

51. The incremental recurrent costs generated by the additionalrecruitment of training instructors over the life of the project is estimatedat $3.3 million equivalent, or about four percent of the 1984 recurrent budgetfor industrial schools, and 0.25 percent of the 1984 MOE budget. Theseincremental costs would be offset, in whole or in part, by the savings

- 16 -

resulting from the MOE's plans for curriculum reform which include a reductionin the teaching week from fifty to forty hours. The overall impact of theproject on the recurrent budget would likely be neutral or favorable as aresult of these measures.

Procurement and Disbursement

52. Procurenment would be carried out on the basis of internationalcompetitive bidding (ICB) except:

(i) refurbishment of existing buildings (totalling $0.7 million)and the provision of furniture (totalling t1.2 million), whichare not to be financed by the Bank, would be carried out underlocal contracts in accordance with local procedures;

(ii) equipment bid packages estimated to cost less than $100,000equivalent and aggregating to a maximum of $5.0 million, whichare not expected to interest foreign suppliers because of Lhevariety of the contents of each package, would be awarded onthe basis of competitive bidding advertised locally, inaccordance with local procurement procedures acceptable to theBank;

(iii) sundry itemr not exceeding $50,000 in each contract andaggregating a maximum of $1.0 million equivalent would bepurchased on the basis of a minimum of three quotations;

(iv) books and copyright privileges, estimated to cost less than$0.8 million, would be obtained through negotiations withpublishers; and

(v) translation and printing of educational materials, totallingabout $3.5 million, which would not be financed by the Bank,would be carried out by the MOE.

Technical assistance for consultants would be obtained in accordance with Bankguidelines.

- 17 -

Table 2: PROCUREMENT ARRANGEMENTS a/

Procurement Method TotalProject Element ICB LCB Other Cost

Refurbishment and Furniture 0.0 1.2 U.7 1.9(0.0) (0.0) (0.0) (0.0)

Equipment 53.3 5.0 1.0 59.3(48.0) (4.5) (0.8) (53.3)

Books and Copyright 0.0 0.0 0.8 0.8(0.0) (0.0) (0.7) (0.7)

Translation and Printing 0.0 0.0 3.5 3.5(0.0) (0.0) (0.0) (0.0)

Technical Assistance andStudies 2.8 0.0 1.1 3.9

(2.6) (0.0) (1.1) (3.7)Incremental Recurrent Costs 0.0 0.0 3.3 3.3

(0.0) (0.0) (0.0) (0.0)

Total 56.1 6.2 10.4 72.7(50.6) (4.5) (2.6) (57.7)

a/ Figures in parentheses are the respective amounts, in $ millionequivalent, to be financed by the Bank. Total costs include contingencies.

53. The proposed loan would be disbursed against: 100 percent offoreign expenditures and 100 percent of local expenditures (ex-factory prices)for equipment and materials (excluding furniture); 65 percent of localexpenditures for off-the-shelf equipment and educational materials (excludingfurniture); 100 percent of the foreign exchange cost of foreign consultantservices and overseas fellowships; and 85 percent of the total cost of localconsultants. The disbursement percentage for local consultants is calculatedto be approximately equivalent to the percentage resulting from covering theforeign exchange costs of foreign consultancy contracts. The proposed loanwould include retroactive financing of up to $0.4 million to cover costsincurred after January 1, 1985 for office equipment and specialist services

4 necessary for expediting start-up of the project. Because the proposedproject is in an advanced stage of preparation and involves virtually no civilworks, the implementation period would be seven years with disbursementsexpected to be completed by December 31, 1992. In order to ensure that Turkeywould have ready access to foreign exchange, a Special Account would beestablished in the Central Bank of Turkey into which an initial deposit of$2.0 million would be paid. The Special Account would be replenished againstwithdrawal applications as appropriate or when the undisbursed balance of theAccount is equal to 50 percent or less of the amount of the initial deposit.Withdrawal applications would be supported by appropriate documentation.

Accounting and Audit

54. The Government would maintain adequate records and accounts ofexpenditure under the project and would prepare a detailed report of financialactivities of the project on a quarterly basis, in an agreed format, to be

- 18 -

submitted to the Bank within 45 days after the end of each quarter. Anexternal audit would be carried out and annual audit reports would besubmitted to the Bank within six months of the end of each fiscal year (LoanAgreement, Section 4.01). For this purpose, the Bank's guidelines onfinancial reporting would be followed.

Benefits and Risks

55. The proposed project would improve the quality and increase thesupply of skilled manpower and junior technicians, and would produce some2,500 additional graduates annually from 1991. It would increase access totraining for low income-level groups in outlying provinces and is expected toresult in an increase in the enrollment of women in the indusCrial schoolssystem from the present four percent to twelve percent. It would alsostrengthen the management and planning capacity of the MOE and would helpdevelop appropriate curricula and new training programs in the industrialschools.

56. There are no significant risks attached to the project. In order toensure that quality is maintained in the industrial schools program, SchoolAdvisory Committees and Trade Advisory Committees would be strengthened.Special attention would be given to the in-service training of instructors,and a follow-up study of graduates would be undertaken. From the perspectiveof project implementation, the Government has established a PIU and appointeda well qualified director. Early preparation work undertaken by the PIU hasbeen of a high standard, and implementation is well advanced for a project atthis stage.

PART V - LEGAL INSTRUMAENTS AND AUTHORITY

57. The draft Loan Agreement between the Republic of Turkey and the Bankand the Report of the Committee provided for in Article III, Section 4 (iii)of the Articles of Agreement are being distributed to the Executive Directorsseparately. Features of special interest are listed in Annex III of thisReport. There are no special conditions of loan effectiveness.

58. 1 am satisfied that the proposed loan would comply with the Articlesof Agreement of the Bank.

PART VI - RECOMMENDATION

59. I recommend that the Executive Directors approve the proposed loan.

A. W. ClausenPresident

Attachments

April 18, 1985Washington, D. C.

- 19 - Annox 1

TABLE A Page 1 of 5ThUS? - OC01*1. INDICATUSS DATA SMUTTOEs! "RonzacE in cezaamo AvgS)

MUST (mT RECUII 1575*75 ) 1

'TAI EUROLZ twASNZ; 2 SCXuOE

TOTAL 780.6 780.6 60.6.A JIOILTURAL 366.7 381.3 330.9

ow m CAPT (M1) 240.0 40.a 1370.0 2345.3 11071.0

(%.LoSAS or OIL QUIVALENT) L70.0 362.0 s5.0 1122.8 4996.9

pomm -M nra auilPOPULATIOI.mD-TMEA (TUOM) 2730.0 35321.0 46459.0U AM POPULATION (I OF TOTAL) 21.7 32.9 43.9 46.1 73.3

POPULATION cnORmeu.nou iU mm 20D0 (HILL) 65.4STATOURT PUIPATION (MILL) 110.8POPULATION IUMT 1.8

POULIATION DElInPER Sq. MN. 35.2 45.2 S6.2 82.1 139.3PE sQ. M. aC!I. LAM 74.6 92.5 119.3 156.9 519.2

POPUIATION aGE STRUCTUU CZ)0-14 135 41.2 4L.0 38.2 31.6 22.1

15-4 IRS 35.2 54.3 57.3 61.1 ".165 AND AmO 3.5 4.7 4.4 7.1 11.7

POPULATION CAGIE RATE (Z)TOTAL 2.8 2.5 2.3 1.6 0.3MBt" 6.1 3.6 4.3 3.7 1.3

CR;De *IRT RATE (PrR Td05) 43.1 37.9 30.9 23.6 13.3CRUDE OWATR RATE (PER SOBS) 15.8 12.2 3.5 6.8 9.2tYS RPRODOICTION RATE 2.9 2.6 2.2 1.6 0.9

EANILT PLAMNIauznros. AaL (TWS) .. 65.6USERS (Z oF HARR=D ICND) 5.3 Ic 32.0 Id.c 3B.0 /f

row AN wnlrxIDEX oP FOOD PRDD. PER CAPI(196-71-100) 96.0 100.0 115.0 114.5 114.1

PER CAPITA SUMT OFCs.ohxzS (i Or RCXRnmN) 115.0 111.0 122.0 1#2.6 132.3PREINS (MANS PER DAY) 85.0 0O.0 36.0 S9.7 96.5

OF WHBICH ADIAL AND PULSE 25.0 23.0 25.0 A 34.5 61.3

HILD (ACES 1-4) OEATS RATE 47.0 23.0 9.0 5.2 0.4

LIE ECXPECT. AT lRTB (TEANS) 50.5 55.9 62.7 67.4 74.9INFANT lOIT. RATE (PER T730) 184.0 127.0 33.0 54.2 10.3

ACCESS TO SAM AlER (SaOP)TorAL .. 52.0 75.0 lbUR .. 51.0 70.0 nRwAL .. 33.0 0.0W .

ACCESS TO EUCKTA DXSvoSuL(2 OF POPULATIDN)

TOTAL .. ..ass~~~~~~ ... 20.0 /it

RURAL --*

POPULATION ME PNSiCIDa 2800.0 2230.0 1630.0 1065.3 553.7PoP. PER IRSIHO FERSON 16300.0 /1 1330.0 1130.0 764.4 166.9POP. PER HOSPITAL BED

TOaL 600.0 490.0 490.0 /f 326.3 120.8URBA 360.0 /l 270.0 Ik 270.0 7 201.5 143.1RURAL 5100.0 71 so60.0 i 5650.0 7A

AMSSIOBS PU OITAL B0 20.2 22.3 I 20.0 17.8

AVERzAE SIZE or EULsEOLDTOTAL 5.7 /1 5.9

RURAL .. ..

AVEAGE NO. OF PERSOKS/RODIToTaL 2.4 /I 2.2DRAN 2.071 1.9

RUtAL 2.7l ..-

ACCESS TO ELECT. (Z OF WELIJNCS)TOTAL 29.0 41.1 57.0 ..U".. 73.?

RURAL 2.0 18.0

- 20 - Annex 1T A R L t 3A Page 2 of 5

TURnM - SOCIAL IClOASO DATA mNt TTUREY aEFN GROUPS (IEhONED AVRRAOU g

HOST (HOST RECET CSTIUTC) ARCCCNT NIOL INCOME IUSTAL

196Ob- 197Ob- ESlTi IR TWX0PC HAM RCOI110IS

IDUCATIGEADJUSBTD ENROLLXMNT RTIOS

PRIMARY9 TOTAL 73.0 110.0 102.0 101.1 101.3MALE 90.0 124.0 110.0 105.3 103.0FDMALE 58.0 95.0 95. 0 g6.7 102.7

SECONDARYs TOTAL 14.0 27.0 42.0 39.1 90.3MLEa 20 0 38.0 57.0 68.9 84.6 .FUMLE 6.0 13.0 28.0 30.6 87.8

VOCATIONAL CE OF SECONDARY) 17.7 13.7 22.3 21.6 17.9

PUPIL-TEACHNER RATIO dPRIMARY 46 0 39 0 28.0 25.1 20.2SECONDARY 19.0 2860 20.0 20.5 13.0

ADULT LITERACY RATE (C) 38.1 51.3 68.8 fn 75.6 99.1

PASSENGER CARS/TIOUSAND POP 1.7 3.9 11.5 3 54.7 367.2RADIO RECEIVERS/THOUSAND POP 49.1 87.7 96.4 164.9 1090.7TV RCEIVERSG/THOUSAND POP 0.0 1.8 75.3 123.8 451.0NEWSPAPER ("DAILY GENERAL

INTEREST,) CIRCULATIONPER THOUSAND POPULATION 51.3 40.6 69.1 1 96 3 331 2

CINEIIA ANNUAL AlTENDAiCE/CAPITA 1.1 7.0 1.9 ft 2.9 3.6

TOTAL LABO FORCE (THOUS) 13782.0 15829.0 20137.0FINALE (PERCENT) 40.2 37.0 36.4 34.5 36.2AGRICULTURE (PERCENT) 78.5 67.7 53.5 60.7 6.2INDUSTRY (PERCENT) 10.5 12.1 12.8 23.3 37.7

PARTICIPATION RATE (PERCENT)TOTAL 50.1 44.8 43.3 42.9 45.7MALE 58.7 55.7 54.3 34.7 59.3FEIALE 41.2 33.6 32.0 31.0 32.7

ECONOMIC DEPENDENCY RATIO 0.9 1.0 1.0 0.9 0.7

IIUI DISTEIN9TIONPERCENT OF PRIVATE INCQIERECEIVED BY

HICHEST 5 OF HOUSEHOLDS 33.0 /c 32.8 /dHIGHST 2CR OW HOUSENOLDS 61.0 le 60.6 7d 43.1LOWEST 202 OF BOUSEHOLDS 4.2 7F 2-9 7T . '. 5.4LOWEST 401 OF HOUSEHOLDS 10.6 9 .4 7i .. 16.4

POVERTY UST -ESTIMATED ABSOLUTE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN 342.0 /fRURAL 270.0 WE

ESTIMATED RELATIVE POVERTY INCOMELEVEL (US$ PER CAPITA)

DURANRURAL 220.OIf , f

ESTIMATED POP. BELOW ASOLUTEPOVERTY INCOME LEVEL (2)

URJANRURAL

NOI AVAILABLENOT APPLICABLE

N o T E S

/a The group averages for each indicator are populatIon-weightad aritbetic means. Cowerqe of countrias aMo theindicators depends on availablilty of data and te not uniform.

/b Unlese otharwise noted, 'Data for 1960" refer to any year betwen 1959 and 1961; Data for 1970 between 1969 and1971; and data for -Host Recent Eetiate- between 1980 and 1982.

/c 1963; /d 1968; /e Agee 15-44; ff 1978; tB 1977; /h 1976; /1 1962; /3 1979; Ik 1972; /1 1965; /a 1975; /n Age. 11and over.

JUNm. 1984

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i-in taslte anal'naletbe a"Id"""n .ne dF flaSI

us- ftaPe e -i.. Iis li 764 RAects c' ts

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1- hll eeaea

n-ac aa S - (-iie c-megI- neiacsai-t -c 1 1 s0 VVV n-It eiIa u 1 -'sans- i - ai L a~ cliilks -Ins cin c-ct-a ea a sue cp enic laneanaa 1-in n-a-i - b)iutjiP!-IPaciaS

asaeas a.en.aaia- i-i- -VISa in-ac - liVe. Vecia 'ii,-.e i 'qcc'ne a ..-ii- seen sea asnuesass as -secc-iiaaa i-en-ti si-f asaeasn ci sc-s-en a pa-us. sal -ia-ce a-me - actainek sail aen easui cpa:

WI- VVV.~ce.t seep e -saa-n- eal -,.s - 1ii~tls W"~Fb'ifVVVI... ' .I-a 'a- -incaesiTi-i ti a -eaea-Ce cs - n'e fe ac

aa-i es ac a'c-- e- ea 'aa isIi-at.- -Cc -ieccisia. _ 1 - -tapV VVaI -ch.aa anVVVvV - I~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~-t, ceeeCcsli a

-VVV eae i eaC 71,' ta-.-e-'aic'.'tlac cF '.ae " - - 'ec enVeseesq4bt 0- AVVV -11- "mae bae-ssi _-icc-c.1"n'cc 'a aa a-ie.' Vc-abe 1- W

acipCeaa- aV icaseat In~~1. _ 'aaa.at. - d1 a-cl- sc pt,ue ia -c .

se liii- - F-S - an-a in -a iics1iil _slieI ats. at sac .. 1P .ccieaas.tl eia.fma le1

c'n-usei-ess -a c-i - -ci a- icA aas-' 4- iic-ec n.- asia caiii-iS sI-ia-i-'e '-see *m,- .-s i

pat P Ps ". lacp J1 ne-e a ses i iiiale t '-laIrsV - e -c -eju-.sse is Mas

ie-m- S w~i-s-i lecace n-ieiS Ae~e'C tnes an c-it-nJ-ct`P ncna sc-e'alme .-W-a-

a p f seietf.e prs elasiah aiec1 1 aiaacsn -et Plstceasetqi-aV i-ins n an eae nste- stecla eea~s- n -eepit c an-e- EwVVUVioViesii4%ltiteLlt'ile.Tfl 'na-tac ascis-eas se inasiSeiliel'a n aiceeie i-ia-li-asunia ~ ~ ~ C as-ccb aa16 naa-a - i. ei 0 &auese- 'aa i kin-c

Per - . a -s- hecit'c-hst- 'atee-csal aae ndsicInlie npt n aic,- a meAll--VI -I"- --- W'Id. ... . A ' I

ii meeni n a-an 1.- - fVVI se_ s.p-n. 'CaVu uiinei cselcs 1 -a

ftv"3~~~~ A. dVPVVV -71VVpm*in'c-e 'e ccaea sa -

Caaeec ~ ~ ~ ~ ~ ~ ~ dVV01. l a-aVeii-I sVae 4 eedt esccIen'accs in'c V

'ci a fe&i -.. Fiftcin p .cjja.pma jc wVa iac.l f 'e'tle V-aadea si acici iatia t caceaie -li.ai

inMM a- n nc esitte-ea aele'-a a Vc ien'ae.i i eha ali5- eciii -zsa,sal

- 22 -

NX I

- O OA

Ibpuaioi 46.5 milli (0982)Or Per Capita: *11370 (19M2)

_tMM I F Amiler In:mme (2) Smu of ca Ihrl't Prims (2)Cilim WSt (at amtt 19D3 prie) (at carst prie)

7sdicatm at awrmt wcas)1910 19S5-70 1970-75 1975-83 19K3-W3 i 1965 197U 1975 1910 1983 c/ dl

IAIL AOMUl

Cma d tic pcdict sI 52,934 6.6 7.5 2.B 4.2 1I0.0 IOD.0 1OD.0 10.0 100.0ArinAtue 10.332 3.1 4.4 2.7 1.9 30.7 26.4 26.2 21.4 20.0Irkntiy b/ 13.527 9.5 9.5 2.8 6.5 16.6 17.2 II.0 28.6 25.4setica 29.0U5 8.2 Lo 3.7 3.7 42.9 4b.5 46.0 44.3 411.6

Co.uawtiai 43,879 5.8 7.0 2.7 4.9 86.6 S2.8 85.2 81.8 83.4Grm ijawbut 10.914 11.7 12.9 .b -4.8 16.7 2D.1 23.3 26.4 2D.1Exarta of gios and11W 5.746 7.9 7.3 4.4 33.2 6.1 5.8 6.1 7.1 15.5_apart. of g1 e aE 8.E4 2 11.2 13.8 -3.1 11.3 7.4 8.7 14.5 15.2 19.0

GrCm natl wAizp 9,761 11.6 11.9 Z.4 0.3 15.8 18.8 18.1 18.3 -

_urP kniml 1er (2) Cqitimi of iHdwdis Tr1dn (Z)(At o mtat 1908 prim) (at cunwit pinea)

e83 1972-75 1975-83 183-3 1972 1975 1980 1983

;X IIW d/

Ihmdise qts 5.728 -6.1 2.8 37.0 10D.0 1o.0 1w.0 wo.PriamY 2.070 -*3 4.0 18.7 72.6 64.1 64.0 36.11inrria pmun 3.655 -5.8 0.9 61.0 27.4 35.9 36.0 63.9

ld.aine ts 9.235 It.2 1.2 11.4 100.0 0.0 100.0 10.0A%Viazltae ad ivestock 138 27.9 -23.8 56.1 2.2 4.3 0.7 1.5

.i me q cNriyg 196 17A 6.8 24.9 1.2 1.6 L8 2.2et1 3.665 5.4 11.0 4.3 9.9 17.1 4L8 39.7

l hihzy ad meapiit 2,445 14.0 -12.1 26.8 45.0 35.6 18.2 26.4Other izktrial gocts 2.178 9.9 4.5 10.6 41.7 41A. 30.5 30.2

1978 1979 l1 1981 182 1983 e/

MM1w AMD 1£RS 3( i

GM deflator (1983 - lIW) 29.0 49.4 10D.0 142.1 181.7 237.8E-h_ Ort 24.3 31.1 76.0 111.2 162.6 225.5

eot price in 63.0 78.2 10.0 95.8 87.6 82.04woct prim ine 61.2 71.9 30.0 91.3 90.9 85.0

r_ of Ltade in 102.9 898.8 100.0 97.5 96.3 9b.5

An X of (MP(At cgeat prices)

196 197D 1975 1980 L093 e/

PtElC FDWZ=

(Igmat remue 15.0 22.6 22.0 19.8 19.8rmet e _maitme 10.0 IL8 12.6 11.5 9.5

Swph () or deficit (-H -2.0 -2.3 -0.4 -4.f -0.5iui.st epi_ icu;n 4.7 5.7 4.2 3.9 4.7Truufi 5.0 7.5 5.5 9.2 6.1Foreip fimjag 1.8 1.6 0.3 0.2 -0.9

1965-70 1970-75 1975-40 19D-83 ej

w prar r (2) 6.8 7.7 2.6 4.0GNP per capita pMuth rate (Z) 6.1 5.u 0.3 -0.7 f/

10O8 2.9 2.9 5.7 4.8 flHetgizl sav rawe (20 28.2 19.5 3D.8 28.6ltop elanti ity 1.7 1.8 -1. 1 2.7

a/ At _* pris; aUts we _eia. et t ad wtl fct nadd da to eclsi.n. of net iadihct tams a subaidie.b/ liaudes mng d qa irg. aaring, d eletrcitty. Vs. m .-nw.c/ At amcmt t 198D picad/In acaavia with Tukijh Goermmu's seifi xa hic h nac raomtible with SM';s.; Ptawial.l 198D-82.

- 23 -

nUE? - rAdm CUr ttmi. L La. M EDSlit.I at We peoss

rhgsaistiaml 67.3 mutli.n (110kw be, cVit: 381232 (1901)

Actha bilwts 3lo eiss1772 19 iSW 1981 1911 l953 fls1 T19 5"; 91111w

V eAt es oif .& IWS Ol 23Y 1 4i2? 32DD WO 229U 2005 151 174 IW 1 11:31Espmt. maks & IS I53 33 41n OUb 7144 9141 W1113 15 133? 3d75

Imsrts oi 4k IWs SW W 225 d7Y11 971ib gb1l IlJ 1209 0 13349 11 717 2917

1ks' .ttasm 79 1694 207L Wm 2157 35V I9 1bA 17r2 12 2117Not tr.ts 4t - - - _ _ _ _ _ _ _

14 ONset tc t Polaws 15 -3i3 -3372 -392 -315 -212 -2135 -175 -IIb -Idw0 -2154

Uinmt priv lwammt Ia 3I5 3i IIU 30W 210 2rA 313 3n2 415

rPbli. 512x (F.'.) A 294 431b 2350 227 2504 2155 2111) 2977 J1d7 354 359'Atiatan m iU k-1L7 -414 3 -W3 bD -1513 -1034 -1713 -3ffl -2441 -2ZFAblSe PaT (neC) lb 177 392 2 il 1 .47n IDD 0(2 L3b 122 3207 1113 1Ib348kw cq.eaI Ic 252 -2357 U11 41i 3D 1IJ 1570 40 23D 1 53 49aChw ii r't 1- - iI. ) -i -111 -a -111 -41 -5 -E7 -115 -1U2 [o 1

IdtaesiM4nl sinun U25 me tID 105 191 2253 3l30 1273 'i 33 iDb3R__n- mitiuofirts 1 2 2 2 3 3 3 1 7 2

1972 1975 179 1 195I 193 13ass; DtS 'imE

Gums dusbnint )4 5W3 4W3 fd 23b 21 2345 2341 1750Official eF s - - - - 33a0 31 130

faul 2e9 227 S!I 512 e22 429 314SULsAl 2M8 191 492 7e 9 m 3031 & 8 3 - - - -t# utilsesUl 17 2e 95 29 23 27 24

: _--Cosis.l Ks e7 3633 id 15SS 1Zh Ile3 W2eofficial agt dits 1 122 259- 273 275 2b2 15515 25 W05 277 313 454 SC0 43Ods lciltand 27 35 15 334 147 207 UbW.ieo 47 313 32 /d 715 333 604 4t,7

DekC =notaD.u sd disksd 2as 6e7 11113 1S2 ISIz9 159M 15Nmeofficl 22I Uf 1N 1T iW W7 lB7f

SID Y2 U5 1170 1151 151 19b2 2336m4 99 15 10 195 111 157 114aduw 21 41UD S475 7571 7975 7573 7235

Featt 177 am3 3511 5173 4921 4933 407609*t ast ins iclM sA sad 354( 1D55 14M95 1570 1937 1m21 1903

Ii dat rvm /i n2 &A bJD 1019 1315 1753 2344PA.t 101 2bb 403 49 534 83 1115

_ ctsrt e3 Lb7 227 t43 7Y2 910 11e9bta1 da b smsiu a 2 enu eiof a * Ws

- awbe netsc 11.34 II.e 32.5 Ib.3 14.D 17.7 24.7

Avs.w isCst ets.- leoam (23 4.0 7.U 11.3 B_2 7.0 11.1 8.3Ufficil 4.5 e.; .0 5.9 b.7 10.0 7.7Prime..8 5.3 13.b 17.5 13.5 14.9 9..

4 here sanity of iw l1e. (7.ars 22.1 13.1 11.1 1b.0 U.3 13.2 14.2Oficial 20.U 15.7 22.1 39.1 1.5 15.4 15.0Ftlobe IL.0 7.e 7.1 4.S S.b 5.5 b.3

NW cor Lau W

35 IIID/ tocl MD 3.7 30.1 S .D 7.b 10.0 U.3 15.2IS disssni te al di isb s 0.7 1.2 0.6 1J.b 21.0 23.9 -ID dbe as-in/tVrAl te W #s 5.1 1S.9 16.7 U3.3 3.4 11.9 1i.7NA wFlual VW3 3.9 2.9 1.7 1.2 1.2 1.2 1.2M1% dutsts/tw-l p , di iAk sat 1.1 0.4 0.1 - - -NA dAt -uimIU.tsl deb sdis 0.0 0.3 0.0 D.2 0.2 0.2 U .2

. 2 of Debt 3481Lmwigtit td of Mot nI Yt

Yma, (1961Dm6 s5ca

ih'ty .tntm of dot .. stdiye W

satiris Vs 'hii 5 s ears 17.61toitio d. itind 30 yl s. 4b.3

IMtuit St-aUM of dabt Wsdi.u a)cast d 'aai fitDa year 0.1

1s All rim - esnuwl mpira dte setin I d- fid i d in tb. auk'st Vbtw S etis S,n (-uIy pbl ad pawns usa-acsd ?LT abZ).lb loUel pripaeane sad npaced dste d grc.Tc Incles ar-oes ad ins. ad in wjected Years at isdla ut IMF Slmtlse* ast D,st nI,_d eputial iula.la locIu S2.M35 iUims rf olidsld ut-to deat.7; m m a of ddonntf a m bde ID de- t mehaIi. ad eslcsA um_ est - te dlc ebt dsu prns, m-dwantnd abt.

- 24 -

Fg 1 of 2

SIAflB OF BUKW GWP OUAIEIA DI TWO

A. SumUIr CI BAN i.AuS AND Mt CrOT /a(a of Nth 31, 1985)

LANXI Fiscal Aww~~~~~~~~~~a unilion.) Ab!u.. Ie.. BOCM N- B.' M t3dians

Forty-due lon an fourteen credits fully disrsed ' 569.95 196.15

1268-'l 1976 Agriculture Brk ofrckey (1ZB) Agriculture Credit 54.3 26.79

1310-TU 1977 Republic of Turkey Tourism 23.0 5.701585-U 1978 Republic of lTrkey Nrthrn Frstry 86.0 43.61586-TU 1978 Republic of Turkey Livestock IV 24.0 15.271606-TU 1978 Republic of Turkey Erdanir Steel Star II 95.0 25.821741-'TU 1979 Repblic of Turkey Ports Rehabilitatiun 75.0 17.91742-TU 1979 Republic of Turkey Grain Storap 79.0 lAM1754-TU 198 lndustrinl Devlop-

tnt Bast ofhIrley (MlMs) Private Sector Textiles 65.0 15.15

1755-JU 19W ITsLrial lawest entand Credit Bait(SLl) Private Sector Textiles 15.0 6.26

lS4-U 1980 Republic of Turkey Kcaraaya Hydropar 13.0 38.331847-TJ 1980 RepubLic of Turkey Sisrbak Cotton Textiles 83.0 30.491862-'V 198u RepubLic of Turkey Livestock V 51.0 37.261916-TU 1981 Republic of Twrkey Petroleu Exploration 25.0 lL951917-TU 1981 Republic of TIukey Oil Recoaery 62.0 18.231952-TU 1981 Republic of Turwkey t In aie [satry 40.0 17.541967-U 1981 RepubLic of Turkey Secan Fnrit ad Vgetables 40.0 30.91985-11 1981 Republic of Turkey Fertilizer cmkSry

Rehbilitation 110.0 61.611998-TU 1981 State Investnt State Industrial Eeprise

Bank (UYB) Finuce 70.0 46.122093-nU 1982 T90 Exprt-Orientad Indstries 100.0 65.213094-'rU 1982 Repblic of Turkey E lrawu ai evelopast 40.0 29.902131-1U 1982 Republic of Turkey Seca Fertilizer

Rdiabiitation 38.0 3.052137-TU 1982 Republic of Tdurey Hi&u.y 71.1 40.072159-TU 1982 Isturtul later Supply

aid Ssserc C-rlDirectorate (ISO) lstabtul 9Sewrge 88.1 83.50

2317-TU 1983 TCZB Secand Agricultumal Credit 150.4 121.012322-_ 1983 Turkish Elactricity

Authyii (MO Third fl Traiissian 163.0 145.482327-TU 1983 Turkish Fetrn,es

Coporation (TW) ibrace Gas Exploration 55.2 51.242399-TU 1986 Republic ;f Turkey Industrial Traming 36.8 36.66300-iTU 1986 Republic of Turkey Tahnical Assisare for EEs 7.6 7.512405-$U 1986 Republic of Turkey Agr ontericn and Reseah 72.2 67b42433-rU 1984 Republic of Turkey IAEE Irrigatian 115.3 111.012439-TU 1984 Republic of Turkey Secand Higmay 16.4 175.782641-nIJ 1984 Republic of Turkev Fifth Structural Adjustrunt 37b.0 125.96

Total 5187.35 196.15 1619.96of utich has been repaid 651.37 15.59

Total now outstanding 4535.98 18D.56Aount sold 3.55

of itch has been repaid 3.55 - 0- - 0-

Toul ms held by Bank and xt /c 4535.98 182.56Total undisbtrsed 1619.96 - 0-

/a The status of the projects listed in Part A is described in a separate reportan all Bak/D2A finaned projcts in executionr, uich is updated twice yearlyand circulated to the Fecutive Directors on April 30 and Ocber 31.

/b Net of concellations./c Prior to eaw adjuswenctS.

- 25 -

ANNEC IIPage 2 of 2

SlATW OF BAK GOLFP OEERATIONS IN TLEKEY

B. SD lfEr (F IFC ILESnES(As of March 31, 1985)

Fiscal Ant $ MilliosYear abigLr 1hpe of Business Loan Equit Total

1964/67/69/ TiB DFC 60.00 4.77 64.7772/73/75/76/77/80/831966/69/ SIFAS Nylon Yam 3.15 1.42 4.5771/721970/71/ Viking Pulp and Paper 2.50 0.82 3.3282/831970 ALS Glass 10.00 1.58 11.581971/76/ NASAS AlumimLu 8.58 1.46 10.0483/841973 Aleniz Tourism 0.33 0.27 0.601974/77 Barusan Steel Pipes 3.60 0.49 4.091974 AKSA Textiles 10.00 - 10.001975 Kartaltepe Textiles 1.30 - 1.301975 Sasa Nylon Yarn 15.00 - 15.0o1975 Aslan Cement 10.60 - 10.601975/78/83 D[CEAS Steel 7.50 1.53 9.031976/79 Asil Celik Steel 12.00 4.00 16.001979 Ege Msan Ergines for MDpeds 2.15 - 2.151979/80/82/ ISAS Motor Vehicles & Access. 8.85 2.34 11.1984/851979/81/ 'frcva Cam Glass 33.15 3.23 36.3883/841980 NMNS& Textiles and Fibers 4.00 - 4.001981 Kirklareli

Cam SanayiiA.S. Glass Tableware 12.95 - 12.95

1982 M.A.N.Mtors MDtor Vehicles & Access. 7.87 - 7.87

1984 Pinar Food arnd Food Processing 3.90 3.90

Total Gross Comnitments 217.43 21.91 239.34Less Cancellations, Temninatioms,Exchange Adjustments, Repaynmtsaid Sales 167.24 8.31 175.55

Total Camnitents now held by IFC 50.19 13.60 63.79

Total UWdisbursed 1.69 - 1.69

- 26 -

ANNEX IIIPage 1 of 1

TURKEY

INDUSTRIAL SCHOOLS PROJECT

Supplementary Project Data Sheet

Section 1. Timetable of Key Events

(a) Time taken to prepare the project: Six months

(b) Agency which prepared the project; Ministry of Education

(c) Project first identified: July, 1984

(d) Date of Bank Appraisal Mission: December, 1984

(e) Negotiations completed: April, 1985

(f) Planned date of effectiveness: September, 1985

Section II. Special Bank Implementation Actions

None.

Section III. Special Conditions

(a) Consultants to be employed and arrangements made for the

fellowship program by March 31, 1986 in accordance with aprogram and timetable acceptable to the Bank (para. 44);

(b) School Advisory Committees and Trade Advisory Commitees, withterms of reference and representation acceptable to the Bank,to be established by September 30, 1986 (para. 45); and

(c) MOE to complete by December 31, 1989 an employment follow-upstudy on graduates from selected industrial schools(para. 45).

'N ~~~~~~~300 as.B U L G A R I A k . (7 . - S e o

E lrn Kirkr eoknp

~~~~~~~~~~~~~~~~zr = Iu

Vus ;ecc TkZtk TI

Edremit tihesir Ksu Er ANAR Yoz

keian a.

;( ?, Marmaris laon 0a a X Me r s i n _ I---

Is \_ 2Iskenderun-

- --) - Finilte \ >_ ~~~~~~~~SliIfke Anltak rnAnomur 2t

.~ ~ I IC * 4 / - ,- hi-::

3J- S YR I

, ~~~~~CYPRUS A RA B

REPU ETURKEY-_

INDUSTRIAL SCHOOLS PROJECT

k~~~~~~~~~ r

* INDUJSTRIAL SCHOOLS

ROADS4-4-'--- RAILROADS

RIVERS69NATIONAL CAPITAL

I j rr er

"I NTNAydiOnALBUDRE

301

IBRD 18811

40'Sa

L-'-°w l U. S. S. R.

HopaESamsun

s wktx J ' v ~~~~~~~~~~~~~ArtvinO _ _

\ < / 91ngdl ) l~~~~~~~~~~RE PUBLIC

S + .ee k hkaCi .

Anh~~~ka

' { b O ]~~~~~~0 00 200 300_I , , I , I Lf ~~~~~~~~~~~~~~~~~~KILOMErERS

SY R IAN 5

nm Pies@ b_nl gq.d by The lAbt Bu, e eecAww' br II c.a're ofA RaAtvBn vancRAN. Nbau rd t__ Jn cn mo do

-wf. on DIe wrnl d he It fl.V san IVem.hww Fewc Cowmuban. eslyuw

R E P U B L I C an0 ef .. 0 h'k. aynWoeff80SIflea

pOLAND1?

; | 1l; t ~ ~~ ~~~U. 5 S R.r

yser~~~~~~~~i

D L...rb / a - - J Sea °r7

tL , 'SlBUGARIA _ )

* ( *,Ankra /t 'MdiGREECE 5 T U RAKE Y ,

_ .CRfTE CYPE6 -fR EKIUBLI E

MAKCH 1985