Document of The World Bank FOR OFFICIAL USE ONLY ILEP W P Report No. P-3713-TU REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPME' TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$72.2 MILLION TO THE REPUBLIC OF TURKEY FOR AN AGRICULTURAL EXTENSION AND APPLIED RESEARCH PROJE March 19, 1984 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TURKEY CURRENCY EQUIVALENTS Currency Unit Jan. 1980 1/ Jan. 1982 Jan. 1983 January 1984 US Dollar - TL 70.00 TL 139.60 TL 191.15 TL 309.20 TL 1 - US$ 0.014 US$ 0.007 US$ 0.005 US$ 0.003 1/ Since January 1980, the rate is being adjusted for the differential inflation between Turkey and its major trading partners. TL 270/$1 (the December 1983 exchange rate) was used for Parts III and IV of this report. FISCAL YEAR Republic of Turkey March 1 to February 28 (through 1981) March 1 to December 31 (1982) January 1 to December 31 (from 1983) LIST OF ABBREViATIONS EIC - Extension Information Center GDAA - General Directorate of Agricultural Affairs of MAFRA ICB - International Competitive Bidding MAFRA - Ministry of Agriculture, Forestry and Rural Affairs M&E - Monitoring and Evaluation MPWR - Ministry of Public Works and Resettlement PAU - Project Administration Unit in GDAA's Department of Externally-Financed Projects SEE - State Economic Enterprise SEKER - Turkish Sugar Factories, an SEE SMS - Subject Matter Specialist SPO - State Planning Organization TCZB - Agricultural Bank of Turkey TEKEL - Tea & Tobacco Monopoly, a Parastatal TOPRAKSU - Land and Water Development Agency of MAFRA TZ - Teknik Ziraat, the Field Extension Service of GDAA VGT - Village Group Technician FOR OFFICIAL USE ONLY TURKEY AGRICULTURAL EXTENSION AND APPLIED RESEARCH PROJECT Borrower: Republic of Turkey. Beneficiary. The General Directorate of Agricultural Affairs (GDAA) of the Ministry of Agriculture, Forestry, and Rural Affairs Amount: US$72.2 million (including capitalized front-end fee). Terms: Seventeen years including four years of grace, with standard variable interest rate. Project Description: The project would finance reorganization and strengthening of the GDAA extension services in 16 provinces, together with support to six major research institutes of GDAA serving the project area. Benefits and Risks: The project is intended to be a first step in a program to improve methods of agricultural extension and applied research ultimately on a nationwide basis. It is expected to increase agricultural productivity and agricultural incomes in the project area, contribute to institution building within GDAA, and to permit testing and refinement of techniques prior to their extension to the whole country. While many of the reforms to be introduced have been successfully applied on a pilot basis in previous Bank projects, they involve changes in the way staff have operated over many years and there is a risk that they may not be fully accepted. There is also a risk of delays due to procedural problems or inadequate budgetary support. However, the support of Government for the reforms, and arrangements made for annual review of work program and local budgetary allocations, should reduce these risks. Finally a mid-term review provides an opportunity for adjustments in light of experience. To achieve maximum benefits, the reforms introduced under this project should be supplemented by further reforms, to improve the efficiency and effectiveness of the extension and research systems. Two ministerial working groups will be established to develop proposals for such further reforms. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii- US$ Million Estimated Project Costs Local Foreign Total Extension Service Buildings, Vehicles & Equipment 52.6 26.4 79.0 Incremental Staff & Operational Costs 32.9 15.6 48.5 Sub-Total 85.5 42.0 127.5 Extension Information Center Buildings, Vehicles & Equipment D.5 0.7 1.2 Incremental Staff & Operational Costs 1.5 1.7 3.2 Sub-Total 2.0 2.4 4.4 Applied Research Buildings, Vehicles & Equipment 5.0 7.3 12.3 Incremental Staff & Operational Costs 4.1 3.5 7.6 Sub-Total 5.1 10.8 19.9 Project Management and M&E Monitoring and Evaluation 0.8 0.2 1.0 Project Management 0.0 0.1 0.1 Sub-Total 0.8 0.3 1.1 Training In-Service o.4 - 0.4 Overseas - 11.3 11.3 Sub-Total 0.4 11.3 11.7 Technical Assistance 0.2 1.5 1.7 Total Base Costs 98.0 68.3 166.3 Physical Contingencies 5.7 1.4 7.1 Price Contingencies 20.0 12.3 32.3 Total Project Costs 123.7 1/ 82.0 205.7 Front-End Fee - 0.2 0.2 Total Financing Required 123.7 1/ 82.2 205.9 1/ Includes $8.0 million equivalent of taxes and duties. --iii- US$ Million Financing Plan: Local Foreign Total Bank - 72.2 72.2 International Fund for Agricultural - 10.0 10.0 Development (IFAD) Government 123.7 - 123.7 123.7 82.2 205.9 $l Estimated Bank Disbursement Bank FY 1985 1986 1987 1988 1989 1990 Annual 9.2 16.6 15.5 13.7 10.0 7.2 Cumulative 9.2 25.8 41.3 55.0 65.0 72.2 Economic Rate of Return Not applicable Appraisal Report No. 4818-TU dated March 13, 1984 I INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMNENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF TURKEY FOR AN AGRICULTURAL EXTENSION AND APPLIED RESEARCH PROJECT 1. I submit the following report and recommendation on a proposed loan to the Republic of Turkey for the equivalent of US$72.2 million to help finance an Agricultural Extension and Applied Research Project. The loan would have a term of 17 years including 4 years grace, with interest at the prevailing rate. The International Fund for Agricultural Development (IFAD) is expected to co-finance the project with a loan of US$10 million equivalent. PART I - THE ECONOMY 1/ 2. An economic mission visited Turkey in June 1982, and its report entitled "Turkey: Country Economic Memorandum, Recent Economic Developments and Medium-Term Prospects" (No. 4287-TU) was distributed to the Executive Directors in June 1983. The report, in addition to analyzing Turkey's medium-term prospects and overall creditworthiness, presents a synthesis of earlier special economic reports on aspects of Turkey's adjustment process. The report of the mission to review the financial system, entitled: "Turkey: Special Economic Report - Policies for the Financial Sector" (No. 4459-TU), was distributed in September 1983. An economic mission visited Turkey in January 1984 to review the economic developments of 1983, the 1984 Annual Program and selected structural adjustment issues. The findings of this mission are reflected in this section. 3. Turkey is about as large as France and Germany combined, with a population of around 46 million and an estimated GNP per capita of $1540 in 1981. The density of population is low (78 per square kilometer of agricultural land), and about 45 percent live in urban centres. Population growth (2.2 percent per annum) is below the median for middle-income countries. Despite rapid economic growth in the mid-1970s as well as substantial emigration of workers (to Western Europe and more recently, to the Middle East), the employment situation has deteriorated steadily with an unemployment rate currently about 18 percent. There is, however, little or no absolute poverty, although income distribution is skewed. There are considerable regional differences in income and large rural-urban disparities. Recent data indicate a probable worsening in income distribution, especially of wage and salary earners, and a sharp real decline in average earnings. Educational enrollments have expanded greatly but the level of adult literacy remains relatively low (60 percent in 1975). 1/ Parts I and II are substantially the same as Parts I and II of the President's Report on the Industrial Training Project (P-3660-TU), dated March 5, 1984. -2- Background 4. During the 1970s Turkey did not make the necessary adjustments to the shocks caused by the steep rise in oil prices, stagflation in the OECD economies, and the consequent deterioration in the terms of external trade. Until 1977 Turkey maintained high rates of economic growth by raising the share of investment in GDP. This was financed initially by workers' remittances and, following the quacdrupling of oil prices, increasingly by short-term borrowing. The rapid GNP growth came! to an abrupt halt in 1977 as the massive external debt burden led to a sharp deterioration in creditworthiness, severe shortages of imports, and disruptions in industrial production with a rise in unemployment. By the end of 1979, domestic inflation had also become an issue of critical importance. 5. The Turkish authorities' response to the crisis of the late 1970s was a major shift in development strategy in 1980, moving towards outward orientation and giving an increased role to market forces. Policies were adopted to expand exports and increase workers' remittances which, together with liberalization of imports, encouragement of foreign investment and prudent external debt management, were aimed at alleviating the balance of payments constraint and import shortages. On the domestic front, the objectives were a reduction in the inflation rate, reform of the State Economic Enterprises (SEEs), a more efficient financial sector, improved resource mobilization and better selection of investments, especially in the public sector. 6. The adjustment program, which has been supported by the Bank through four structural adjustment loans so far, involves far-reaching changes affecting all facets of the Turkish economy. It entails substantial changes in attitudes, institutions, and the legal and po:Licy framework, all of which take time and are difficult to put in place. In view of the severity of the crisis in 1979, and the urgent need to bring down inflation and stabilize the balance of payments as quickly as possible, the Government accepted the need for a temporary sacrifice of growth and social objectives. Major structural changes were made in the operation of the exchange rate regime, the tax system, interest rate policy, export strategy, the SEE sector and public investment policy. 7. The implementation of the program was carried out by a military regime which assumed power in September 1980 following a period of sustained unrest. Subsequently a Consultative Assembly was set up to draft a new constitution, which was overwhelmingly endorsed in a nationwide referendum in November 1982. New election and party laws were then promulgated, and parliamentary elections completed in November 1983. A new Government assumed office in December 1983. The Structural Adjustment Process -- 1980-83 8. The Turkish economy has shown an impressive response to the program and actual performance met or exceeded the Government's own targets through 1982. By contrast, results in 1983 proved to be rmixed, due in part to the adverse economic developments on the external front, severe slippages in the monetary program, and Government inertia in the face of upcoming elections. -3- 9. Real GNP, after falling for two consecutive years, expanded by 4.2 percent in 1981 and 4.6 percent in 1982. Growth was mainly export-led, with less than one-quarter of the growth in 1982 due to domestic demand. Demand for consumption increased by 3 percent while fixed investment grew at a modest 4.1 percent (both in real terms) in 1982, and depletion of inventories helped to expand supply. Public investment grew significantly slower than private investment, thus reversing the trend of previous years. However, unemployment continued to grow as employment opportunities did not increase fast enough to absorb the expansion of the labor force. GNP growth slowed down in 1983 to about 3.2 percent as against the target of 4.8 percent, due in large part to adverse weather conditions and a consequent decrease in agricultural value added. Industrial value added is estimated to have registered a growth of 6.6 percent as against the program target of 5.5 percent. Total fixed investment increased by about 4.2 percent. As in the previous two years, private fixed investment grew faster than public fixed investment (5.7 percent versus 3.2 percent). 10. The Government has been remarkably successful in reducing the rate of inflation through a combination of fiscal, monetary and income policies, although the downward trend was reversed in 1983. After peaking at 107 percent in 1980, the annual average rate of increase in the wholesale price index declined to 37 percent in 1981, and around 25 percent in 1982, which was the program target. In 1983, it rose to 31.4 percent, as against the program target of 20 percent. The rise was fueled by an expansion of Central Bank credits to the private sector during the second half of 1983, as the Government moved to extend credits to firms and commercial banks in difficulty. The resulting liquidity expansion, in conjunction with a lowering of nominal deposit rates, encouraged consumption at the expense of savings (consumption increased by 4.2 percent) and thus lies at the root cause of the inflation trend reversal. 11. Commercial bank interest rates which were deregulated in July 1980 have increased substantially and are now markedly positive in real terms. As a result, total bank deposits increased by 72 percent in 1980 over 1979, and in 1981 this trend accelerated, with total deposits growing by 104 percent and time deposits by 263 percent. Growth in deposits slowed somewhat in 1982 and 1983. The bankruptcy in late June 1982 of a major non-bank financial institution shook depositor confidence and was followed by a shift of funds into the larger banks. The Government averted an immediate crisis in the banking sector and undertook actions to reform and strengthen the financial sector as a whole. A new banking law was enacted in June 1983. It covered many of the recommendations made by the Bank's report on the financial sector 1/, including measures to reduce the undercapitalization of banks, place limits on the real assets and investments of banks, link the establishment of branches to the level of a bank's equity, reduce the interlocking between banks and corporations, introduce a deposit insurance 1/ 4459-TU dated September 21, 1983 -4- scheme and increase the role of the Central Bank in the supervision of the banking sector. The Government also took a major step towards reducing the cost of intermediation and strengthening the inter-bank market by reducing the level of the financial transactions tax from 15 percent to 3 percent in December 1983. Separately, the Government has reduced the level of withholding tax applicable to interest payments on deposits and bonds from 20 percent to 10 percent. 12. While positive real interest rates have provided an incentive to save, they have also meant high borrowing costs. The current real interest rate for non-preferential credits is about 30 percent, and there is considerable disparity between the cost of preferential and non-preferential credits. The high interest rates, together with the limited availability of credit, have led to considerable liquidity problems for the private business sector, particularly for businesses supplying the domestic market. In order to reduce real interest rates, measures are needed to lower the operating costs of banks which are well above prevailing levels in comparable countries, in addition to a reduction in the inflation rate. 13. In the fiscal area the most notable feature is a marked retrenchment of the public sector. The budget deficit to GNP ratio, which stood at 4.6 percent in 1980, decreased to 1.2 percent in 1982, while SEE transfers as a percentage of GNP showed a steady decline from 4.8 percent in 1980 to 2.8 percent in 1982. The public sector accounts continued to show improvement in 1983. Although there was a shortfall in tax revenues, this was more than offset by savings in expenditure, so that the ratio of budgetary deficit to GNP further declined to about 0.5 percent. Transfers to State Economic Enterprises (SEEs) as a percentage of GNP also registered a decline to 2.6 percent in 1983. However, total profits of SEEs at TL52 billion were somewhat lower than expected, implyi;ng a slight increase in the ratio of their financing requirement to GNP. 14. On the external account, the flexible exchange rate policy under which the Turkish lira has been adjusted daily since May 1981, contributed to an unprecedented export growth in 1981 to $4.7 billion, or 63 percent higher in dollar terms than the 1980 level. The increases were concentrated in manufactured goods (a rise of nearly 120 percent). Product groups with the largest increases included textiles, clothing, cement, iron and steel, and non-electrical equipment. Exports in 1982 reached $5.75 billion, about 22 percent above 1981, despite a significant decline in export prices, particularly agricultural products. Manufactured exports were the major source of expansion, as exporters continued to make inroads into the Middle East. In 1983 exports grew by an estimated 13.6 percent in volume but their value remained unchanged compared with 1982 at $5.8 billion, because of a sharp downward movement in export prices. 15. A new and rapidly growing source of foreign exchange is income earned from construction contracts in the Middle East and North African countries (with a gross value of around $12 billion in 1983). These activities are expected to add to the normal flow of workers' remittances, which remained -5- strong throughout 1981 but declined in 1982 and 1983, reflecting the appreciation of the US dollar vis-a-vis European currencies as well as the impact of the recession in Western Europe. 16. The shortfall in earnings from exports and workers' remittances in 1983 was partially offset by a less-than-expected increase in the value of imports, which reached $9.0 billion as compared to the programmed level of $9.7 billion. The net result was a substantial increase in the current account deficit to t1.8 billion in 1983 (3.5 percent of GNP) as against $1.0 billion in 1982 (1.9 percent of GNP). The New Economic Program 17. The new Government announced its economic program in December 1983. The major structural measures are in line with objectives contained in the 1980 reform program. They are designed to push the structural adjustment process firmly forward, and to reaffirm the Government's will to pursue policies designed to open up the economy and reduce the level of distortions. Export growth and inflation control remain central to the new program. The measures include: (i) a reorganization of the Government's administrative machinery, including a reduction in the number of ministries and the simplification of procedures; (ii) a substantial import liberalization which eliminates approximately 78 percent of quantitative restrictions in trade-weighted value terms, reduces significantly tariffs on a large number of items and imposes a levy on luxury goods imports aimed at feeding a low cost housing fund; (iii) a reaffirmation of the need to export; (iv) a substantial liberalization of the foreign exchange regime through simplification of procedures and freeing of restrictions; (v) an interest rate policy designed to provide a real rate of return thereby encouraging savings, while at the same time freeing the lending rates set by the commercial banks with the exception of the rates on certain preferential credits; (vi) a major step towards reduction in the inordinately large spread between deposit and lending rates by lowering the withholding tax from 20 percent to 10 percent and the financial transactions tax from 15 percent to 3 percent; and (vii) a reaffirmation that the State Economic Enterprises will, with some exceptions, be free to set their own prices according to the requirements of the market. -6- Medium-term Prospects 18. Preliminary projections prepared by the recent Bank Economic Mission indicate the need for a continuation of the stabilization program until 1985, followed by a growth strategy aiming at about 5.5 percent per annum GDP growth consistent with a manageable balance of payments. 1/ Two basic assumptions on the sustainability of export growth and on fiscal discipline have guided the projections. The continued growth of exports is based on the view that conditions that have made possible the 1981-82 upsurge are not temporary. Specifically, the projections assume continuation of a flexible exchange rate policy, export incentives and import liberalization. They also assume that the monetary and fiscal policy restraints will not be relaxed to a point that will revive inflation, thus disrupting the basic shift in development strategy. Table 1: Turkey - Projection of Selected Eccnomic Indicators 1981 1982 1983 1985 1990 Average Annual Real Growth Rate Units Actual Actual Estimate Projected 1981 1982 1982-85 1985-90 GDP 1980 TL b 4500 4723 4880 5334 6927 4.4 4.9 4.0 5.4 Consumption 3755 3886 4050 4299 5487 1.9 5.0 4.3 5.0 Fixed Investment 878 908 946 1083 1441 4.2 3.0 5.4 5.9 Exports of Goods Current $ m 4703 5746 5800 8552 18986 79.0 22.4 4.3 9.0 Imports of Goods 8933 8843 9000 12166 24932 10.2 -1.5 6.5 7.1 Trade Balance -4230 -3097 -3200 -3614 -5946 Current Account Balance Current $ m -2076 -1010 -1808 -1763 -2104 Ratios Investment/GDP Z 24.1 22.1 22.4 22.3 22.8 Savings/GDP x 18.9 18.6 19.0 19.5 20.6 Exports of Goods/GDP x 8.9 10.4 9.5 10.4 12.4 Current Account Deficit/GDP x -3.5 -1.9 -3.5 -2.6 -1.7 Debt Service Ratio a/ % 13.8 23.7 24.3 24.6 24.1 Public Fixed Investment/ X 60.9 60.6 60.3 57.5 50.0 Total Fixed Investment a/ Total Debt Service including Debt Relief - Exports of Goods and NFS plus Workers' Remittances. Source: State Planning Organization for actuals and IBRD Projections. 19. The projections of key economic variables for the period 1984-1990 are presented in Table 1. Merchandise exports are projected to continue to grow at 9.0 percent in real terms into the late 1980s with manufactured exports projected to grow at 11 percent per annum. The scenario assumes an 1/ The Fifth Five Year Development Plan (1984-88) was postponed by one year until the new Government took office. According to the present schedule, the new Fifth Five Year Plan, which will cover the period 1985-89, will be ready in draft form by mid-1984. -.7-. improvement in the pace of import liberalization in order to reduce the profit bias against exports. Merchandise imports are projected to grow slowly in real terms through 1984 and then to pick up from 5-6 percent to an average of a little over 7 percent for the 1985-90 period in line with the growth of demand. 20. The current account balance, under these assumptions, would show a deficit for 1984-85 in the $1.6-1.8 billion range. As higher rates of growth are achieved, the trend would be reversed for the 1985-90 period, and Turkey's current account deficit would increase again. The terminal year 1990 would show a deficit of $2.1 billion (1.7 percent of GNP), as compared to a 1985 projected deficit of $1.76 million (2.6 percent of GNP). 21. The projected capital account would remain manageable throughout the projection period given the need to restrain the growth of debt and maintain a reasonable debt service ratio. This would permit Turkey to meet the amortization and interest payments arising from the $9.2 billion of debts rescheduled between 1978-82 and maintain an exchange reserve equivalent to two months' imports. 22. The projections indicate a GDP growth of 4 percent per annum for 1982-85 (stabilization period), and a higher figure of 5.4 percent per annum for 1985-90 (growth period). The achievement of these growth rates will be necessarily dependent on the growth of the productive sectors, namely agriculture and manufacturing. Private investment is expected to grow at an average annual rate of 7.1 percent during 1982-85 and 11 percent during 1985-90. As a corollary, the growth of public investment is expected to slow down from a high of 7.8 percent per annum in real terms during 1980-82 to a more moderate 3.3 percent during 1982-85 and eventually to 3.1 percent per annum for 1985-90. This is consistent with the framework of achieving the medium-term goal of an approximately equal balance in the ratio of private and public fixed investment by 1990. 23. Turkey's medium-term prospects are highly dependent on export sustainability which depends partly on exogenous factors such as world economic outlook and movements in world prices. In case the annual average export growth during 1985-90 reaches only 7 percent 1/ with manufactured exports growing at 9 percent, it will lead to a more difficult but manageable balance of payments situation, more external borrowing, a lower level of imports (between 5-6 percent per annum), a lower growth path (GDP growth of 4.5 percent per annum) and a higher debt service ratio (26-27 percent per annum). In a sense this scenario, rather than projecting a stabilization period followed by a return to normal growth path, suggests that stabilization growth rates will continue throughout the period. Under these conditions there is very little chance of absorbing the unemployed. However, given the Government's emphasis on export promotion, there is presently good reason to support the scenario described in paras. 19-22. 1/ Somewhere between historical growth rate (1960-1979) achieved prior to the adoption of outward-oriented strategy and growth rate projected in para. 19. -8- External Debt and Creditworthiness 24. At the end of 1978, Turkey's debt reached $7.5 billion in short-term debt and $6.8 billion of medium- and long-term debt. Service payment obligations (mostly on short-term debt) were $5.1 billion (including arrears), or nearly three times the value of merchandise exports in 1977. Between 1978-1980 Turkey rescheduled some $9.2 billion of outstanding obligations through a series of rescheduling arrangements concluded with official and commercial creditors. Approximately $6.0 billion of short-term debt, including $2.6 billion in convertible Turkish lira deposits and bankers credits and $1.2 billion of non-guaranteed suppliers credits, were consolidated into medium-term loans or partially converted into Turkish lira obligations. 25. Following the resolution of the debt crisis, inflows were mostly from official sources -- major creditors being the OECD countries, the World Bank and the IMF. Of the total debt outstanding of $18 billion at end-1982, 87 percent constituted medium- and long-term debt. Based on the growth scenario outlined earlier, debt outstanding and disbursed as a percent of GDP is projected to fall from 34 percent in 1982 to 31 percent in 1985 and 26 percent in 1990. Short-term debt as a percentage of total debt outstanding fell from 51 percent in 1978 to 13.0 percent in 1982. 26. Debt service obligations are likely to be high over the coming years. The debt service ratio increased to 23.7 percent in 1982 and 24.3 percent in 1983 from about 14 percent in 1981 as a result of a large repayment of previously rescheduled debt under the earlier OECD agreements. Projections beyond 1983 show a debt service ratio of 24.6 percent in 1985 and 24.1 percent in 1990. The debt burden should remain manageable provided current policies are successfully implemented, the export drive is sustained, and Turkey continues to receive further support from international commercial and official sources. There are some recent encouraging signs of Turkey's ability to enter the commercial market for medium-term loans. In July 1983 the Central Bank of Turkey received a $200 million five-year syndicated loan for balance of payments needs. Negotiations are under way to raise an additional $350 million medium-term loan this year from commercial banks with increased participation from European banks. 27. Turkey continues to be in good standing with the IMF. A three-year standby arrangement in an amount equivalent to SDR 1,250 million was approved by the IMF's Board and became effective on June 18, 1980. The Government purchased the full amount authorized under the arrangement. The Government has also purchased SDR 56.25 million against the one-year Standby arrangement for SDR 225 million approved by the Fund in June 1983. Negotiations are nearly completed on replacing the current arrangement by a new one-year standby arrangement to commence in April 1984. -9- PART II - BANK GROUP OPERATIONS IN TURKEY 28. Through September 30, 1983 the Bank and IDA have lent $4,595.8 million /1 to Turkey, thrcugh 75 projects. Agriculture accounts for 18 percent of funds lent, industry and DFCs for 29 percent, power for 16 percent, structural adjustment Etnd program loans for 29 percent, and urban development, transportation, education and tourism for the remaining 8 percent. As of September 30, 1983, IFC commitments to Turkey totalled about $240 million, of which about $81 million were still held by IFC. Annex II provides a summary statement of Bank loans, IDA credits and IFC investments as of September 30, 1983. 29. The execution of Bank-financed projects in the public sector has been slow, due in part to weak management, limited coordination amongst ministries, staffing problems, and the serious external and domestic financial crises from 1977 to 1979. There has been notable improvement since September 1980. Nevertheless, problems persist in m.any cases, reflecting difficulties in staffing the public sector at currient salaries, over-centralized bureaucratic structures and continuing constraints on the availability of local funds. The high interest rates for working capital combined with depressed domestic demand and reluctance of investors to take the foreign exchange risk have affected the implementation of private sector projects and led to slow commitments under DFC lending. Disbursements for all sectors combined average 44 percent of appraisal estimates (excluding structural adjustment loans) as compared to 54 percent for Tunisia and 42 percent for Morocco. 30. Bank lending is aimed at supporting Turkey's medium-term objectives of restructuring the Turkish economy by placing more reliance on market forces and adopting a more outward-oriented strategy. These objectives also include increasing domestic savings and reorienting a restrained public investment program to reflect the Government's priorities of completing ongoing projects faster and emphasizing quick-yielding new investments with positive balance of payments impact. The main vehicle for the Bank's operational discussions with the Government has been the structural adjustment lending (SAL) program. Four SALs have so far been approved, the last on June 23, 1983. The success of the SAL program has highlighted the need to develop sector policy lending vehicles for continuing the policy dialogue at the sectoral level. 31. Agriculture, industry, energy and transportation will continue to be the key sectors for Bank lending with the accent being placed on improving the management of projects. In agricualture, the emphasis will be on irrigation, credit, and reform of the extension and research services. In industry (including DFCs), it will be on the promotion of exports, employment, and increasing operational efficiency. Energy projects under preparation will focus on power generation based on domestic hydro and lignite resources, as well as enhanced oil recovery and oil and gas exploration. Lending for the transport sector will focus on developing the infrastructure necessary /1 Net of cancellations. -10- to facilitate exports and improve the efficiency of operations. Projects for industrial training, urban development and public utilities may supplement these efforts. 32. The close macroeconomic and sector dialogue established with the Government in recent years is expected to be pursued. The economic and sector work undertaken recently includes studies of the agricultural and financial sectors. Topics likely to be covered in the future include a review of the next five-year development plan, including a review of major public sector projects, a study focussing on the impact of structural adjustment, a review of transport investments and studies of the agroindustries and engineering industries. 33. Loans for technical assistance for state economic enterprises, industrial training and this loan are the first three lending operations for Turkey to be presented to the Executive Directors this fiscal year. Other projects being processed include highway rehabilitation and a proposed fifth SAL. 34. The Bank Group's share of the estimated total external debt was about 13 percent in 1982, and is expected to grow to about 15.4 percent by 1985; its share of total debt service payments is projected to increase from about 9 percent in 1982 to about 14 percent in 1985. 35. IFC has invested in synthetic yarns, textiles, pulp and paper, glass, aluminum, cement, iron and steel products, heavy diesel engines, motor bicycle engines, piston rings and tourism. [t has also invested in the Industrial Development Bank of Turkey (TSKB) and provided guarantees for overseas contracting firms. In addition, IFC is currently providing technical assistance to the Government with respect to the development of the capital market and a regulatory framework for leasing. PART III - THE AGRICULTURAL SECTOR 36. While the importance of the agricultural sector in the economy is declining, it still represents about: 20 percent of GDP, about half of export earnings and about 60 percent of civilian employment. The growth rates of agricultural GDP and exports are projected to remain below that for the rest of the economy. Nevertheless, agricultural growth has a significant role to play in providing foreign exchange earnings and employment. 37. Turkish agriculture is diverse. Intensive crop cultivation is prevalent in the coastal regions which receive plentiful rainfall or are equipped with irrigation facilities. Mixed (crop and livestock) farming predominates in the eastern and central parts of the country where pastures and meadows form more than half of the agricultural land and crop production is dependant upon rainfall. In these areas much of the land is kept fallow in alternating years. While the livestock production system is largely traditional, dependent on grazing lands and low productivity systems of animal husbandry, it produces about one-third of agricultural GDP. Cereal crops occupy about two-thirds of the cultivated area, fruits and vegetables about 20 percent, industrial crops about six percent, and oil seeds, pulses, and tubers the remaining seven percent. 38. Through the 1970s, Turkey's agricultural policies were inward-looking, stressing food self-sufficiency through subsidized inputs and producer prices. This led to relatively rapid growth of production through the first half of the 1970s, but could not be maintained due to the strain placed upon the budget and competing demand for resources from the manufacturing sector. An over-valued exchange rate discouraged exporting. Exports in 1979 amounted to less than one percent of production. The foreign exchange crisis in the late seventies led to the adoption of new policies in 1980 featuring maintenance of a realistic exchange rate and reduction of agricultural subsidies. These policies, combined with improved export incentives, led to an increase in agricultural export earnings in 1980 and 1981 at an annual average rate of 29 percent. While agricultural exports continued to grow in quantity in 1982, declining international prices led to a 4 percent reduction in the value of such exports. The value of agricultural exports declined by a further 15 percent during the first nine months of 1983, due primarily to declines in export prices. The rate of growth of total agricultural production fell initially with the reduction of subsidies, under the 1980 reforms. However agricultural production rebounded in 1982 due to good weather and adjustment by farmers to a more market-oriented farming environment. In 1983, value added in agriculture fell by 0.8 percent due largely to the effects of adverse weather conditions. 39. The possibilities for growth through expansion of the cultivatable area or of livestock numbers under a system of extensive grazing were largely exhausted by the mid-1970s. Growth must now come primarily from increased productivity and changing the crop mixture to reflect better Turkey's comparative advantage. Increased productivity will require expansion in the irrigated area through improved efficiency of the implementing agencies (better planning, increased use of contractors), better extension and research programs, expanded imports of improved seeds and appropriate equipment, and increased availability of credit (particularly for small and medium-scale farmers). The demands of an export-oriented approach imply a change of -12- emphasis from food self-sufficiency to increased net agricultural contribution to the balance of trade, and thus imports of certain foods in which Turkey does not have comparative advantage must increase if food consumers are not to be penalized. Increasing agricultural exports requires appropriate pricing signals, maintenance of a competitive exchange rate, reduction of export regulations, and improved marketing. Other important issues in the sector include improved sector planning, continued progress in reduction of subsiIies, and reform of agricultural SEEs and marketing agencies. With adequate progress on these issues and continued adherence to policies designed to encourage exports, it should be possible for agricultural sector GDP to grow at about 3 percent per year over the next decade. 1/ Agricultural Extension 40. The priority that should be given to raising yields per hectare and lives.ock productivity through improved agricultural methods, requires increased attention to improving the flow of information on improved Lechnclogies to Turkey's farmers. The results of Bank-supported projects, parti li-arly the Corum-Cankiri Rural DevelopmeniL Project (Loan 1130-TU), have demo ns--rated the potential of improved extension methods to bring about zncreased yields through intensified cultivation practices and improved crop rotation patterns. Based upon these successes, the Government has decided to adopt the training and visit (T&V) extension system first demonstrated in Bank proiects as its nationwide extension system. This proposed project represents a first step toward this goal. 41. Turkey presently has an extensive network of extension services. The General Directorate of Agricultural Affairs (GDAA) of the Ministry of Agriculture, Forestry, and Rural Affairs (MAFRA) has by far the largest number of IField staff, with close to 1,000 agricultural engineers, about 5,400 agricultural technicians and about 850 home economists. Its field organization, known as Teknik Ziraat (TZ) has established offices in all 67 provinces and 631 counties of Turkey. However, partially as a result of shortcomings in the provision of extension services by GDAA, other organizations have established their own extension services. These include specialized extension services for sugarbeets, tea and tobacco established respectively by the Sugar Factories Corporation (SEKER) and the Tea and Tobacco Monopoly (TEKEL), specialists in irrigated agriculture employed by TOPRAKSU (an irrigation agency formerly in the Ministry of Village Affairs and recently transferred to MAFRA), and plant protection experts, animal breeding and disease specialists, and a forest village extension service operated by other LDirectorates of MAFRA. These parallel extension systems result in duolicz c ion of effort and force the farmer to deal with a variety of single subject advisors. However, consolicdation of these services prior to improvement of the services of the general extension system would result in reduction in the quality of specialized extension advice received by farmers. The Go7ernment has agreed to establish (as a condition of loan effectiveness) a ministerial working group to develop plans for reorganizing the diverse extension services (draft Loan Agreement Sections 4.09 and 7.01(e)) and has reviewed with the Bank the intended work program for this task. The 1/ More detailed information on the agricultural sector is given in Report 4204-TU entitled "Turkey - Agricultural Development Alternatives for Growth with Exports dated June 30, 1983. -13- plans developed will be discussed with the Bank by June 30, 1986. Meanwhile, the proposed project will focus on the TZ extension service, in view of its overriding size and the steps alreaidy taken for its improvement. 42. Up to now, the effectiveness of GDAA's extension services has been constrained by a number of factors,, Centralized control of budgets and work programming has discouraged interagency coordination in the field, and has resulted in excessive bureaucracy and paperwork. Administrative matters occupy a disproportionately large share of the time of the extension agents, who have been also responsible for preparation of agricultural statistics, issuance of requisition forms for fertilizer, distribution of planting materials, certification of farmers' creditworthiness, and other administrative and regulatory duties. On the other hand, work programs for actual extension work have not been sufficiently specific. In many cases TZ's technicians have carried out their work under only very vague instructions and their activities have not been adequately monitored. Their activities have concentrated on a few commodity-specific actions programmed for each county (e.g. propagation of early variety of potato, demonstration of particular techniques), and covering only one or two aspects of farmers' operations. The more general aspects of extension, including advice on farm management and answers to particular problems faced by farmers outside these commodity- specific projects, have not benefited from an organized structure of technical support. The problem has been cwa,pounded by the inadequacy of the technical and specialist expertise available to support the extension work of the county staff. As a result, the extension. agents have neither been equipped to answer the farmers' needs, nor has there been effecEive feedback from the farmers to the extension services. The links between extension and research services have been equally weak with linkages limited to occasional temporary cooperation on specific projects or ad hoc participation of researchers in training sessions for extension staff. Finally, the location of most technicians in county offices and limited availability of transportation has resulted in an over-concentration of activities in the more accessible villages and the neglect of the remainder. Agricultural Research 43. Responsibility for agricultural research in Turkey is diffused among a multiplicity of agencies. The research department of GDAA carries out research for all annual and perenial crops (except sugarbeet), and for pastures and animal husbandry in a total of 33 active research institutions and centers. The Plant Protection Directorate of MAFRA operates 9 research institutes with responsibility for research on diseases, pests, and weed control for all crops except sugarbeet. TOPRAKSU operates 10 research stations with responsibility for research on soils fertility and management and irrigation. Additional research is carried out by the General Directorate of Veterinary Affairs, SEKER, TEKEL, and the agricultural faculties of four universities. The difficulties in research planning and coordination which arise from the fragmentation among agencies are compounded by a lack of clearly formulated priorities at the national level and limited capacity in the State Planning Office or MAFRA for sectoral planning. This has led to duplication of research effort and dilution of scarce research manpower and financial resources through attempts to carry out too many projects. The Government has attempted to correct this situation through the creation of multi-agency research teams focussed on specific research projects. This -14- approach has been successful in some cases and represents a clear step forward, but problems of coordination and duplication still persist. The Government has agreed to establish (as a condition of loan effectiveness) a ministerial working group to develop medium-term plans for reorganizing and consolidating agricultural research activities and for setting research priorities (draft Loan Agreement Sections 4.09 and 7.01(e)), and has reviewed with the Bank the intended work program for this task. The plans developed will be discussed with the Bank by JLLne 30, 1986. 44. Besides the institutional problems described above, agricultural research in Turkey is also seriously impeded by a shortage of trained professionals. Only 15 percent of GDAA's research staff have a PhD or Master's degree, with the remaining 85 perce-nt having only the equivalent of a bachelor's degree with no training in research methodology. This situation seems to have been deteriorating over recent years, largely as a result of insufficient salary levels. The problem is compounded by a lack of information and publications about research methods and results outside of Turkey. Research practices are often outdated and results obtained elsewhere are not effectively utilized for local adaptation. Research is mainly carried out along commodity-specific lines, with inadequate attention paid to research on cropping patterns and rotations, economics of farm management, or appropriate farm machinery and equipment. Due to inadequate collaboration with the extension services, research findings are not adequately tested under farmers' conditions and little feedback takes place from the farmers to the research institutes, Recent Developments 45. The Government has become increasingly aware of the present shortcomings in the provision of agricultural extension and research services and a number of preliminary steps have recently been initiated to correct them. The former MAFRA General Directorates of Agricultural Research and Cotton Affairs were merged into the GDAA, the central organization of MAFRA has been streamlined under the general intra-ministerial reorganization of February 1982, and in each province a Provincial Director of Agriculture has been designated who is in charge of coordinating the activities of MAFRA's extension, plant protection, veterinary and forestry services. The incorporation in December 1983 of the former Ministry of Village Affairs into MAFRA is a major step toward improved coordination. A National Seeds Program has been instituted to augment the supply of certified seeds. A systematic pre-service training program has been established for staff newly recruited by GDAA. GDAA has also carried out a detailed review of TZ's staff resources and drawn up an extension staffing plan for each province based on the intended nationwide introduction of the training and visit (T&V) system, which had been up to now limited to a number of special units established under Bank-assisted projects. GDAA initiated in 1982 the first steps toward reorganization of TZ's existing extension services along these lines as a pilot program in six provinces. In parallel with this, starting in 1981, GDAA has set up two crash programs (second crop and fallow reduction programs) which aim at promoting the adoption of key technological innovations by integrating extension, applied research and the provision of credit. In the areas covered by these programs, additional extension staff and vehicles have been provided, the TZ extension service has been revitalized by setting clear priorities and targets, and attempts have been made to foster closer linkages between extension and research through the establishment of joint field trials. -15- Bank's Experience with Extension and Research in Turkey 46. Eight Bank-assisted projects in Turkey, already completed or under implementation, have included an extension component as a support to specific investments in infrastructure or farm development. In most cases a special project extension unit was established independently from the existing countrywide extension services. In 1969 the Seyhan Irrigation Project Stage II (Loan 587/Credit 143-TU) pioneered the training and visit system which has subsequently been extended to many Bank-supported projects in other countries. The special extension units created under the Bank-assisted projects have demonstrated the benefits which can be derived from a systematic approach to extension involving, in particular, the use of village level workers backed by more qualified staff, regular training of all staff and concentration on extension activities rather than data collection and other administrative tasks. While these units had a substantial immediate impact on agricultural production in their area of operation, their impact on the national extension system was negligible. This has changed during recent years, and the extension component of the Erzurum Rural Development Project (Loan 2094-TU) provides for the first time for the strengthening and reorganization of the Government's existing extension service rather than the creation of a separate project unit. In 1982, the Government made a decision to merge all existing project-specific extension units into the TZ extension service and to strengthen and reorganize the latter nationwide along the lines which have been successfully applied in Bank-assisted projects. 47. The 1979 Project Performance Audit Report (PPAR No.2747) on the Seyhan II Project (Loan 587-TU) attributed the initial failure of the extension component to have institutional building impact to the establishment of the project extension system as a separate unit independent from the national system. However, such separate units may have been the only practical solution to meet a pressing need for extension services at a time when Government was not committed to improving its own extension service. These pilot operations were eventually successful in demonstrating to the Government the opportunity for significant improvements in the national extension system. The PPAR (No.4265) for the Fruit and Vegetable Export Project (Loan 762-TU) reported that the extension components were weakened by inadequate research programs and weak links between extension and research. The PPAR (No.3515) for the Irrigation Rehabilitation and Completion Project (Credit 281-TU) noted that the arrangements for the extension component had not been specified in sufficient detail, based on an understanding that the success of Seyhan II would ensure the adoption of that project's extension methods in other areas. The lessons learned from these projects have been incorporated in the design of the proposed project. PART IV - THE PROJECT Project History 48. In 1980, the Government proposed to a Bank agricultural projects identification mission that the Bank finance a nationwide extension project. The mission found this proposal too ambitious and recommended instead the adoption of a phased approach with a first project covering a limited number -16- Of provinces. In May 1982, broad agreement was reached on the scope of a more limited extension project which would be prepared by GDAA. Several Bank missions provided assistance in preparation. Preparation was completed in May 1983 and the project was appraised in June 1983. A staff appraisal report 'No, 4818-TU dated March 13, 1984) is being distributed separately to the Execu ive Directors. The key features of the proposed project are listed in the Loan and Project Summary and in Annex III. Negotiations took place in Washington in February 1984, with a delegation headed by Mr. Tunc Bilget, Chief Financial and Economic Counsielor of the Turkish Embassy in Washington, and including representatives of Treasury, MAFRA, and the State Planning offica. A representative of the International Fund for Agricultural tevel oment (IFAD) participated in the negotiations. Po 4ert Objectives and Loan Features 4i9 The proposed project is intended to be the first step in a program to impro-e methods of agricultural extension and applied research ultimately on a aio-wide basis. The project is intended to increase productivity and agrc-XturL l incomes in a 16-province project area, through improvement in the flo of in-formation between farmers and GDAA's extension and research services. It is also intended to contribute to institution building in GDAA and to permit testing and refinement of methods of technology transfer prior to their extension to the whole country. Improvements in technology generation and transfer have been identified by the Bank as key priorities for further growth of the agricultural sector.I' The Government has indicated its ccmnitment to strengthening its extension and research capability and has already taken a number of steps toward this end. As noted in the previous paragraphs, this will require a number of institutional and organizational changes wihich should be expected to extend beyond the six-year implementation period of this project. 50. The project would provide isupport to the ongoing reorganization and strengthening of GDAA's extension services in 16 provinces, together with support to six major research institutes of GDAA serving the project area. The socioeconomic circumstances and systems of agriculture vary considerably between the various zones of the project area, ranging from relatively more develoced and coSmercialized provinces along the Aegean (see attached map) to the comparatively less developed provinces in the Southeastern part of the country. This would provide an opportunity for evaluating the effectiveness of various means of technology transfer in a variety of circumstances. The project area includes about 1.2 million farm families, living in some 10,370 villages and farming about 10.7 million ha. This includes about lol mil-lion ha under vineyards, orchards, and tree crops, about 0.3 million ha or vegeeable gardens, and about 6.8 million hectares of field crops (including 5.8 m-iLion ha of cereals). The project area also supports about 3.4 million _Stle and about 23.4 million sheep and goats. 1/ See Report No.4204-TU "Turkey - Agricultural Development Alternatives for Growth with Exports" dated June 30, 1983. -17- 51. The project would support two complementary approaches to agricultural extension and informat:ion transfer. The first approach would be based essentially on personal contact between extension agents and farmers and field demonstrations, along the lines which have been successfully applied under extension components of previous Bank-assisted projects and which are now endorsed by Government for nationwide application. The TZ extension service would be strengthened and reorganized so as to overcome the major shortcomings described in the preceding section. Agricultural- technicians would be posted in selected villages rather than the county towns in order to permit close contact with the farmers. These village group technicians (VGTs) would undertake an intensive program of regularly scheduLled farm visits, and would cover the whole range of farning activities in their area rather than the commodity-specific approach which prevails at Dresent. The VGTs would be closely supervised and regularly trained by teams of subject matter specialists (SMSs) at the county and province levels. Strong operational links would be established between the extension staff and the six major research institutes serving the project area so as to supply the VGTs with appropriate technology for improving crop and livestock production. h4iile TZ would retain its current administrative, regulatory and record-keeping duties, these responsiblities would be entrusted to separate staff freeing VGTs and SMSs for full time extension work. 52. Each VGT would be assigned responsibility for agricultural extension in a specified area normally consisting of several villages. For indicative planning purposes, VGTs would be allocated at the ratio of 1:250 farmers, where irrigated farming practices predominate, while in areas of more extensive agricultural production, the ratio would vary around 1:550-650 farmers, although it could be as high as 1:1,000 farmers in counties where modern farming systems are widely adopted. A number of farmers within a VGT's area of operation would be identiflied as "contact farmers" and would be regularly visited by the VGT on a fixed schedule known by other farmers who would be encouraged to join and participate. On each visit, the VGT would look at the contact farmer's fields, discuss and demonstrate improved techniques, check progress made in adopting previous recommendations and observe any technical problems the farmers may be having. The Government has agreed (draft Loan Agreement Section 4.04) to issue by September 30, 1984 revised job descriptions for extension staff in the project area in accordance with agreed extension operational methods and organizational structure (as described above). 53. This essentially labor-intensive extension method would be closely integrated with a second approach to information transfer based on the use of mass communication and audiovisual aids. Little systematic use of these for agricultural extension has been made up to now in Turkey. Under the proposed project, an Extension Information. Center (EIC) would be established in Ankara within GDAA and some of its staff stationed at the research institutes, so as to ensure adequate dissemination of existing information, the preparation of well designed and relevant audiovisual materials for use by TZ staff and coordination with the Turkish Radio and Television service (TRT) for the programming and preparation of radio and television broadcasts. EIC would prepare audiovisual aids for use by the VGTs in farmers' training and would coordinate use of mass media, particularly radio, TV and newspapers, for providing information to farmers, --158- 54. he support provided to the six major research institutes serving the project area would aim at strengthening their applied and adaptive research on commoclities and farming systems of importance in the project area so as to foster the development of improved technology packages for furthLer transfer to TZ and the farmers. Under the project, the linkages between these research institutes and TZ would be reinforced. An expanded program of field trials would be undertaken by the researchers in close collaboration with the TZ staff. The research institutes would provide tr-aining workshops to the SMS's about 8 times per year, providing for transfer of technology to extension staff and for a flow of information from the extension staff about farmers' practices and problems. Half of these workshops would be at the research instituLtes and half would be associated with visits to farmers and on-farm trials. One information coordinator from EIC would be stationed at each research institute and would coordinate dissemination of research findings to TZ staff and through the media directly to farmers. The revised job descriptions referred to in para. 52 would also incorporate the above procedures for improved extension/research linkages. 55. A monitoring and evaluatioa (M&E) capability would be established under t-he project. Staff of TZ would be trained and assigned responsibility for data collection and record keeping and preparing reports designed to assist Project management in ensuring timely physical implementation. A small M&E group recently established in GDAA's Department of Technical Cooperation would assist in training staff and developing systems for these purposes and would also undertake special studies designed to assist in adjusting the design of this and future similar projects in light of the experience gained during the early years of implementation. Particular attention would be paid to assessing the relative effectiveness of the various ratios of extension workers to farmers and different types of rass media in various parts of the country, for farmers in different socioeconomic circumstances and for different types of technical information to be dsisseminated. During the third year of the Project a mid-term review would be undertaken jointly by Government, IFAD and the Bank, to determine whether any adjustments should be made in light of experience (draft Loan Agreement, Section 4.06(b)(vi)). 56. The project would be further supported by a substantial program for local and overseas training of research and exter.sion staff, as well as by provision for about 100 man-months of consultant services to supplement local expertise during early implementation. Each SMS and VGT would attend a one-week training session during his first year of service in the project area and thereafter would attend a variety of in-service training courses throughout the project period to complement a program of fortnightly VGT training sessions and monthly SMS workshops~ About 4,700 man-months of overseas training would also be provided for project staff, including about 3,450 man-months of training designed to reduce the shortage of qualified research staff. A consulting firm or international agency acceptable to the Bank would be employed by September 30, 1984 to administer the overseas training program (draft Loan Agreement. Section 4.03(a)). The terms of reference of the extension and resear-ch working groups (paras 41 and 43) include a detailed skills assessment of M_AFRA technical staff, projections of future requirements to meet expected nation-wide programs, and preparation and discussion with the Bank by June 30, 1986 of an Action Plan for meeting these requirements. Ten man-months of consulting services are provided under the project to assist these working groups and to helpl in preparation of programs for expansion of the project concepts to other areas. *-19- Project Components 57. To permit the above developments, provisions are made in the project for: (a) recruitment of about 400 agricultural engineers, 900 agricultural technicians and some 580 drivers for the project area extension service, together with professionals and support staff for the EIC, about 100 researchers with attendant support staff for the research program, and about eight professionals and 36 enumerators for the M & E program. The Government has agreed to recruit and assign such staff in accordance with an agreed schedule (draft Loan Agreement, Section 4.01(b)(ii)). The Loan would assist in financing incremental salaries and travel allowances for such staff to permit, inter alia, expanded programs of extension field visits, field trials, researcher participation in SMS training, and M&E studies; (b) construction of some 1,600 village housing units to allow existing and incremental VGTs to be deployed in the villages, some 1,200 houses for county extension staff and about 100 additional offices for TZ in the provinces and counties, and a building for the EIC. Land for these facilities would be acquired in a timely manner (draft Loan Agreement, Section 4.07); (c) construction of additional facilities at six research institutes, including dormitories, conference rooms and cafeterias to permit conduct of SMS workshops, and additional research facilities and staff housing; (d) provision of some 1,650 motorcycles, and about 760 pickups, station wagons and minibuses to give adequate mobility to the extension field staff and EIC, about 70 vehicles and additional farm equipment and machinery for carrying out applied research, and about 4 vehicles for project management and M&E. Under the project, measures would be taken to ensure free movement by TZ staff in performance of their official duties including arrangements to make available to staff, as needed, adequately powered and properly insured motorcycles and authorizations required for their use. The Loan would assist in financing incremental operating costs for these vehicles and equipment; (e) provision of equipment for the EIC, complementary audio visual equipment for the TZ field offices, scientific periodicals and books and laboratory and audio visual equipment for the six research institutes, and office equipment, calculators and minicomputers for the M&E unit; and (f) an intensive program of inservice training for all staff involved in the project, about 4,700 man-months of overseas training, about 48 man-months of English language instructors services, and about 110 man-months of consultant services. -20- Cost 'L.stimates and Financing 58. The estimated total cost of the proposed project is $205.7 million equivalent (including $8 million in taxes), of which $82.0 million (40 percent) is direct and indirect foreign exchange. These costs include incremental staff salaries and operation and maintenance costs during a sax-year project implementation period through March 1990. The above estimates include 10 percent physical contingencies on the building construction components and about 19 percent price escalation for all compoonents. 1/ (While local costs are expected to increase at a faster rate, the floating Turkish lira automatically accommoclates the difference between loca' and foreign inflation.) Consultants costs are estimated to average about @12 150 per man-month (including salary, costs, fees, international travel_ and subsistence). Overseas training costs are estimated to average $2,400 per man-month. The proposed Bank loan of $72.2 million together with a proposed loan from the International Fund for Agricultural Development (IFAD) of C10 million would finance an amount equal to the estimated foreign exchange cost cf the project plus the front-end fee. The IFAD loan would be adminristered by the Bank. It would be a condition of effectiveness of the Bank loan that all conditions for the effectiveness of the IFAD loan have been fulfilled (draft Loan Agreement, Section 7001(a)). The remaining 60 percent of costs would be provided by the Government. The Government would by September 15 of each year, provide tLo the Bank for comment an annual updated work program and financing plan including the proposed budget allocations for the various components of the project. The Government would also inform the Bank annually of the final budget allocations approved for the project (draft Loan Agreement) Section 4.08(b)). 59, The net recurrent costs which the Government will continue to bear fol0owing the six-year project implementation period are estimated at $11.2 million equivalent in December 1983 prices, after deducting about $1.2 million equivalent of income taxes on incremental staff salaries. The Government has agreed to provide adequate budgetary funds after the end of the six-year project implementation period to maintain in the project area the extension and applied research systems introduced under the Project (draft Loan Agreement, Section 5.03). Credit and Agricultural Inputs So. Tne above cost elements exclude the additional agricultural credit and agricultural inputs which the farmers in the project area are expected to use in improving agricultural productivity following the advice of the extension staff. The Second Agricultural Credit Project (Loan 2318-TU of June 27, 1983) includes funds for financing the estimated foreign exchange component of such credit in 10 out of 16 provinces in the project over a period of about four years. Agricultural inputs are distributed partly by the private sector and partly by State Economic Enterprises. During the past years, most inputs have been available to the farmers as needed, with the exception of some specific types of seeds which have been in short supply. In order to improve this situation, the Government has decided since 1982 to allow the importation of such seeds in case of dormestic shortages and has 1/ 7e5 percent price escalation assumed in 1984, 7 percent in 1985, and 6 percent annually thereafter. amended seeds regulations to encourage the involvement of the private sector and foreign firms in their production. The Government has agreed to take all necessary action to ensure availability of adequate agricultural inputs and credit in the project area (draft Loan Agreement, Section 5.04). Procurement 61. Vehicles, agricultural equipment and machinery and audiovisual and office equipment, ($22.7 million) would be procured by ICB, with the exception of small items to be purchased in limited quantities which will be procured by local shopping with at least three price quotations for a maximum total amount of $300,000. Laboratory equipment and seed stock for livestock investigations ($1.9 million) would be procured under limited international bidding procedures on the basis of not less than three quotations from suppliers in eligible countries. One civil works contract with an estimated value $3.7 million equivalent, including contingencies, would be awarded through international competitive bidding (ICB). Other civil works contracts ($83.3 million) consisting of small, scattered works unliKely to be of interest to international firms, wDuld be awarded under local bidding procedures acceptable to the Bank. Furniture for buildings to be constructed under the project ($1.3 million) would be procured by local shopping with at least three price quotations. Books and periodicals ($0.3 million) would be purchased directly from overseas suppliers. Disbursments and Audit 62. For civil works and furniture IFAD would disburse against 20 percent of expenditures for TZ in three provinces in Southeastern Anatolia, while the Bank would finance 20 percent of all other expenditures. The Bank and IFAD loans would disburse on an 88:12 ratio against (i) 100 percent of foreign expenditures and local expenditures ex-factory for vehicles; (ii) 100 percent of foreign expenditures for overseas training; and (iii) 50 percent of incremental operating costs up to an aggregate disbursement of $17 million, 30 percent thereafter until aggregate disbursements reach $25 million, and 10 percent thereafter. The Bank ,.oan would also be disbursed against (i) 100 percent of foreign expenditures and local expenditures ex-factory and 80 percent of other local expenditures for equipment, books and periodicals; and (ii) 100 percent of foreign expenditures for foreign consultants and 90 percent of total expenditures for local consultants, Two revolving funds totalling $5 million equivalent ($4.4 million Bank, $0.6 million IFAD) would be established for withdrawals for civil works contracts and incremental operating costs to avoid the need for the Government to prefinance and then await Bank reimbursement (draft Loan Agreement, Schedules 6 and 7). Opening the special accounts for these revolving funds would be a condition of effectiveness (draft Loan Agreement. Section 7.01(b)). Disbursements ftr civil works contracts below $750,000, incremental operating costs, and goods procured through local shopping would be based upon statements of expenditure. 63. GDAA will maintain separate accounts for the project and would prepare at the end of each semester a detailed statement of project expenditures during the period and submit such statement to the Bank within two months after the end of each semester. In addition, an annual audit would be carried out by the Ministry of Finance inspectors, and submitted to the Bank within nine months of the end of each fiscal year (draft Loan Agreement, Section 5.02). -22- ImpIementat ion 64. The project would be administered by GDAA. Responsibility for execution and management of project operations in the field would be devolved to the TZ staff at the provincial and county levels for extension and internal M&E, and to the six research institutes of GDAA strengthened under the project. At the central level, a Central Coordinating Committee would be established, under the chairmanship of the Undersecretary of MAFRA, to ensure that field staff from the other MAFRA Directorates involved in extension and research would assist in training TZ staff and cooperate in joint projects with GDAA's researchers. The Director General of GDAA would chair a Central Executive Committee, which would meet periodically to review progress and resolve problems. One of his deputy directors would be designated as Project Coordinator. Assistance would be provided by the Ankara staff of GDAA's Departments of Extension, Research, Training, Planning and Budget, and Technical Cooperation and Coordination (for M&E). The Department of Externally Financed Projects would handle procurement (as it has in prior Bank projects within GDAA). A small project administration unit (PAU) would be established within this department, for which an engineer-architect has already been appointed. To foster improved coordination between extension and research services on a regional basis, a regiona-L coordinating committee would be established in each of the four agro-ecological zones under the project. The Government has agreed (draft Loan Agreement, Section 4.01(b)) to the establishment and maintenance of the Central Coordinating Committee, the Central Executive Committee, the regional coordination committees and the PAU, with functions and powers satisfactory to the Bark. Establishment of PAU and these coordinating committees and designation of a Project Coordinator would be a condition of effectiveness (draft Loan Agreement, Section 7.01(c)). The civil works program would be carried out under the aegis of the Ministry of Public Works and Resettlement (MPWR) which would appoint firms for architectural work, tendering and site supervision for the larger construction projects, and would handle these responsibilities with its own staff for the smaller projects. The PAU engineer-architect would represent GDAA in dealing with the architects and monitoring progress of the civil works program. He would also prepare forecasts of financial requirements. The Bank has reviewed standard drawings for the housing and office buildings and preliminary drawings; for the research buildings and EIC. Site acquisition and zoning approval have been completed for most extension buildings included in the first year construction program, and are underway for the remaindier. 65. Under the Project, four agricultural universities would also provide services for the training of TZ staff. The National Documentation Center, the Film, Radio and Television Center of the Ministry of Education, and the Turkish Radio and Television Service would provide services for staff training and operations of ETC. Signing of appropriate interagency protocols, acceptable to the Bank, governing the provision of these services would be a condition of effectiveness (draft Loan Agreement, Section 7.01(d)). 66. Based on experience under previous projects, it is expected that the construction of houses and offices for TZ would be completed by the fourth year of project implementation, while the construction of larger facilities at the research institutes and EIC would be completed by the fifth year. Incremental staff recruitment would be carried out during the first three years of project implementation, so that all VGTs zan be posted in villages by the end of the fourth year of project implementation after pre-service -23- training. Wherever possible, temporary staff housing would be used to permit deployment of staff in the villages without awaiting completion of the housing construction program. The total project implementation period would thus extend over six years so as to provide financial and technical support to the operations of the reorganized extension service for 1-2 years after it reaches its full strength. The above schedule includes allowances for the types of delays which have occurred in prior projects. GDAA indicated its intention to complete the village housing construci:ion program in 2-3 years, which could be feasible provided land acquisition and contract adjudication sre expedited. Benefits and Risks 67. The benefits from this project would result from the extension service persuading farmers to adopt improved techniques, which in most cases would also require additional expenditures for agricultural inputs, increased farm labor, and complementary infrastructure. Since it is difficult to separate the benefits resulting from the extension service from those arising from these additional on-farm costs, this type of project does not lend itself to traditional economic analysis or estim.ates of an economic rate of return (ERR). However, an indicative calculation was made which shows that even a 2 percent increase in average yields as a result of the project, built up gradually during the project period, would be sufficient to generate an ERR of 20 percent. 68. While precise allocation of benefits is difficult, improvements in Turkey's technology generation and dissemination systems have been identified as key requirements for restoring and sustaining growth in agricultural production. Effectively, all of Turkey's arable land has already been put into production. Therefore, further production growth must come from a more intensive use of existing cultivated area through fallow suppression, expanded multiple cropping and crop yield increases. The improved extension methods to be introduced under this project have already proved their effectiveness on a pilot scale in other Bank projects. For example, the strengthened extension service introduced in the Corum-Cankiri Rural Development Project (Loan 1130-TU) was instrumental in increasing wheat yields in four years from 1.5 tons/ha to 2.0 tons/ha, and barley yields from 1.4 tons/ha to 2.1 tons/ha (prior to any significant increase in irrigation). The extension service was also successful ini introducing new rotations alternating wheat with fodder crops or legumes, reducing fallow land and adding about 100,000 acres to the cropped area. Similar opportunities for improvements in rain-fed agriculture exist in many other areas of Turkey. In addition, most of Turkey's irrigated area is operated inefficiently with poor water utilization and less than optimum yields. The project's extension methods have also demonstrated their effectiveness in Bank-financed irrigation projects. Thus the presently proposed project can be expected to bring about substantial yield increases in the project area, to contribute to institution building within GDAA, and to permit testing and refinement of extension methods to be ultimately extended to the whole country. 69. The most important project risk is that the extension improvements to be introduced may not be fully adopted or permanently institutionalized. While current management of MAFRA enthusiastically supports the new systems, their introduction lnvolves changes in the way staff have operated over many years and may take some time to be fully accepted. The successes achieved in prior Bank projects may have benefitted from opportunities to select s.aff -24- most amenable to trying new methods. A second risk involves the failure to develop further research findings on which to hase extension recommendations after the currently available improvements have been adopted. The applied research and training components of the project are designed to reduce this risk. The interministerial study on the reorganization/consolidation of research services and improved priority setting methods (para 43) should help to bring about the reforms required to provide a continued flow of technical innovations to improve agricultural productivity. A third set of risks involves delays in project implementation due to problems in land acquisition, tendering or contractor performance. Allowance has been included in the implementation schedule for such delays. The risk of poor contractor performance will be reduced by prequalification requirements. The final risk involves inadequate local budgetary support. The support of the Government for the extension reforms and the arrangements made for the Bank to comment on proposed budgetary allocations (para 58) and Bank and IFAD support on a decreasing basis for incremental operating costs should reduce this risk to some extent. However, the key factor in this re!gard will be the success of the Government's overall economic management policies. PART V - LEGAL INSTRUMENTS AND AUTHORITY 70. The draft Loan Agreement between the Republic of Turkey and the Bank and the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement are being distributed to the Executive Directors separately. 71. Special conditions of Bank loan effectiveness are: (i) the effectiveness of the IFAD loan; (ii) opening of special accounts for the revolving funds; (iii) establishment of the PAU, the Central Coordinating Committee, the Central Executive Comimittee, and the regional coordinating committees and designation of the Project Coordinator; (iv) signing of interagency protocols governing provision of services to the project by other Government agencies; and (v) the establishment of the ministerial working groups on extension and research (draft Loan Agreement, Section 7.01). Other features of special interest are listed in Secticn III of Annex III. 72. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 73. I recommend that the Executive Directors approve the proposed loan. A. W. Clausen President Attachments ty Ernest Stern March 19, 1984 Washington, D.C. -25- ANEX I Page 1 of 5 T A B L E 3A PAGE L TURKEY - SOCIAL INDICATORS DATA SHEET TURXEY REFERENCE GROUPS (WEIGHTED AVERAGES) .a MOST (MOST RECENT ESTIHIATE) /b /9601b ~ lb RECENT lb MIDDLE INCOME INDUSTRIAL 1960.1-b 1970.0- ESTIMATE- EUROPE MARKET ECONOMIES ARA (THOUSAND SQ. Ki) TOTAL 780.6 780.6 780.6 AGRICULTURAL 372.3 381.8 381.8 GNP PE CAPITA (US$) 300.0 550.0 1540.0 2453.6 111L2.7 ENERGY CONSUMPTlION PE CAPITA (KILOGRAMS OF COAL EQUIVALENT) 258.0 512.0 779.0 1580.8 7500.6 POPULATION Mfm VITAL STUAISTICS POPULATION,MID-YEAR (THOUSANDS) 27509.0 35321.0 45529.0 URBAN POPULATION (X OF TOTAL) 29.7 38.4 46.7 47.8 78.2 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILL) 68.3 STATIONARY POPULATION (MILL) 119.4 YEAR STATIONARY POP. REACHED 2110 POPULATION DENSITY PER SQ. tIM. 35.2 45.2 56.9 82.0 139.0 PER SQ. KM. AGPI. LAND 73.9 92.5 116.4 157.2 514.2 POPULATION AGE STRUCTURE (X) 0-14 YRS 41.2 41.0 38.6 31.9 22.4 15-64 YRS 55.2 54.3 57.0 60.9 66.0 65 AND ABOVE 3.5 4.7 4.4 7.2 11.6 POPULATION GROWTH RATE (l) TOTAL 2.8 2.5 2.3 1.6 0.8 URBAN 6.1 5.1 4.1 3.4 1.4 CRUDE BIRTH RATE (PER THOUS) 43.1 37.9 33.2 25.0 13.8 CRUDE DEATH RATE (PER THOUS) 15.8 12.2 9.2 9.1 8.9 GROSS REPRODUCTION RATE 3.1 2.7 2.2 1.7 0.9 FAMILY PLASNIt4G ACCEPTORS, ANNUAL (THOUS) .. 65.6 66.6/c USERS (X OF MARRIED WOMEN) 5.3/d 3.0 38.0o7. FOD AND NUTRITIO INDEX OF FOOD PROD. PER CAPITA (1969-71-100) 96.0 100.0 111.0 108.4 112.4 PER CAPITA SUPPLY OF CALORIES (X OF REOUIREMENTS) 115.0 111.0 122.0 129.6 134.4 PROTEINS (GRAHS PER DAY) d5.U 80.0 86.0 92.3 99.0 OF WHICH ANIMAL AND PULSE 25.0 23.0 25.0/f 34.6 61.4 CHILD (AGES 1-4) DEATH RATE 50.0 31.2 19.8 10.4 0.4 NEALTH LIFE EXPECT. AT BIRTH (YEARS) 50.5 56.6 62.4 67.2 74.9 INFANT MORT. RATE (PER TiHOUS) 189.5 147.5 119.2 71.4 10.7 ACCESS TO SAFE WATER (%POP) TOTAL .. 52.0 75.0.. URBAN .. 51.0 70.0/. RURAL .. 53.0 so.0 .. ACCESS TO EXCRETA DISPOSAL (X OF POPULATION) TOTAL .. .. URBAN ..20. A URAL .. .. POPULATION PER PHYSICIAN 2800.0 2230.0 1630.0 1094.4 553.6 PUP. PER NURSING PERSON 16310.0/h 1880.0 1130.0 762.5 182.9 POP. PER dOSPITAL BED TOTAL 600.0 490.0 500.0/f 334.0 119.8 URBAN 340.0/h 310.0 3OO.0d7 216.0 143.2 RURAL 5100.0/h 5910.0 6240.0i7 ADMISSIONS PER HOSPITAL BED .. 20.2 22.3/f 20.0 17.7 iOUSILG AVERAGE SIZE OF HOUSEHOLD TOTAL 5.7/i 5.9 URBAN .. .. RURAL .. .. AVERAGE NO. OF PERSONS/ROOM TOTAL 2.4/i 2.2 URBAN 2.D7I 1.9 RURAL 2.77 .. ACCESS TO ELECT. (% OF DWELLINGS) TOTAL 29.0 41.1 57.0 URBAN .. 78.2 RURAL 2.0 18.0 . ANEX I -26- Page 2 of 5 T A B L E 3A PAGE 2 TURKEY - SOCIAL INDICATORS DATA SHEET TURKEY REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b 1960.-b 19 7-b RECENT /b MEDDLE INCOME INDUSTRIAL 1960 1970/ bESTIMATE- EL'ROPE MARKBT ECONCHIES EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 75.0 110.0 101.0 102.2 101.5 MALE 90.0 124.0 110.0 107.2 103.3 FEMALE 58.0 95.0 93.0 97.9 103.3 SECONDARY: TOTAL 14.0 27.0 37.0 56.5 89.2 MALE 20.0 38.0 49.0 63.4 84.5 FEMALE 8.0 15.0 24.0 48.9 86.0 'JOCATIONAL (X OF SECONDARY) 17.7 13.7 22.3 22.4 18.3 PUPIL-TEACHER RATIO PRIMARY 46.0 38.0 27.0 24.7 20.2 SECONDARY 19.0 28.0 23.0 22.1 14.4 ADULT LITERACY RATE (Z) 38.0 51.3 60.0 69.7 98.9 COImPTION PASSENGER CARS/THOUSAND POP 1.7 3.9 11.5/g 52.9 356.5 RADIO RECEIVERS/THOUSAND POP 49.1 87.7 96.4 165.5 1085.4 TV RECEIVERS/THOUSAND POP 0.0 1.8 75.3 124.2 449.5 NEWSPAPER ("DAILY GENERAL INTEREST-) CIRCULATION PER THOUSAND POPULATION 51.3 40.6 89.1 96.3 331.3 CINEMA ANNUAL ATTENDANCE/CAPITA 1.1 7.0 1.9/e 2.9 3.5 LABOR FORCE TOTAL LABOR FORCE (THOUS) 13782.0 15829.0 19737.0 FEIMALE (PERCENT) 40.2 37.0 36.4 34.5 36.1 AGRICL'LTL'RE (PERCENT) 78.5 67.7 53.5 40.7 6.2 INDUSTRY (PERCENT) 10.5 12.1 12.8 23.4 37.8 PARTICIPATION RATE (PERCENT) TOTAL 50.1 44.9 43.4 42.0 45.5 MALE 58.7 55.7 54.4 55.2 59.0 FEMALE 41.2 33.6 32.0 29.1 32.5 ECONOMIC DEPENDENCY RATIO 0.9 1.0 1.0 0.9 0.8 iEme DISTRIBUTION PERCENT OF PRIVATE TNCDME RECEIVED BY HI'GHEST 5% OF HOUSEHO1.DS 33.0/d 32.8/k .. HIGHEST 20% OF HOUSEHOLDS 61.07w 60.67k .. .. 43.1 LOWEST 20% OF HOUSEHOLDS 4.27T 2.97k .. .. 5.5 LOWEST 40% OF HOUSEHOLDS 1O.67T 9.47V .. 16.5 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 342.0/e RURAL .. .. 270.07e ESTIMATED RELATIVE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN RURAL .. .. 220.0/e 409.0 ESTIMATED POP. BELOW ABSOLUTE POVERTY INCOME LEVEL (Z) URBAN .. .. .. RURAL . .. NOT AVAILABLE NOT APPLICABLE N 0 T E S /a The group averages for each indicator are populationrweighted arithmetic means. Coverage of couneries among the indicators depends on availability of data and is not uniform. lb Unless otherwise noted, Data for 1960 refer to any year between 1959 and 1961; -Data for 1970" between 1969 and 1971; and data for "Most Recent Estinate" between 1979 and 1981. /c 1974; /d 1963; /e 1975; If 1977; Ig 1976; lh 1962; /i 1965; / 1975: Ik 1968. May 1983 ANNEX 1 -27- Page 3 o~f5 tut hth-egh the data .rr Iroon fis c-e gcrlyJodged th. -.c soloteie e eIbe I to l. ho -Itd thee thy cepra be oeoatna coeprabl hocoso f t1he lok foAodarie Lc ttont aud ocptcedby differntcnnr. ci .-llectlo the dat, Thoe data Ar. enibiaa efsi to The reernov troue are Ii ho no owr groupof-teobetcatry .ed (0) A .-ntty gruP with .oenhtt high., avrgotr.. than the -notry rsep of the robjrt ounty (xcet fo 0006 (cOo Oi Oxprtee' goupmitr. "idde litee Noth 9ric.an bid-e act'Ladean he---.of eronch oAtlieierg grOup hl, dot fSiha.nd .to,flo th1,R cag of nmotrie amno the indicator. depen. o the -oiiabiLity of data AMd i. rot o-it-. raio. era he P00k IttOunai tq.he.l Pnoolatinn perPhotltt rpoci divodod by tuce of pret-tiNO -Tutaf - 7-ta Iuf... rO ocprelg ad a... od Li.lad aetor; 1960, phytioLoOS. pualiroed, or. a mdLica etai At -fL.-",lt l.-I. un7 .d 190 da.praiore onc PeA--e - Peplauton d"irie hy eb., of K-eblthe Ugtuiri-fthu-t ufAaroutr l ae -dt reeporily or permaenty suSod--i ldae oat eitt use.pocoinrr n for orope. ponture.-,maket And kth-rbo gard_t o, to li failur; 19b0, .u..i. L" iiale 1900 atd MDN dat.. Porooltinn rErlept Sd-ta.urx.cdop -.. PNPLCldte (te"ta, artn,en rra) iotedbythirrnPmotir tote nf Ioapittl bade ClIP Pl 1031* 1107 - ISPper..Pit. eatae t ..u.r.ti raketap riote,) Alabi in ..pahii act prOrate getaro and epotltcd i,ell en OOiruLued by ane ooocni. ..ttta .e World took itlae 11979- I baei.l r.hgbilitato ce0v . lpiral. ere .stabhIMMt. penaeaaZlp e"tdfe 1960. MD7, end 19"1 Onto. by or Iea n.e oysca . -ttbili.an.- Pr-rdtg Prinipatf ecdo .OIe Art ore Otocla,d,d total banIIale., m e. letnd. heath aNd E58507 CINSSCSFIO9 POt CAPITA - totuL ap n --euprire nf ooet.al - e .Ice te__r ot Perm_ueIp etoffed by a ph"L.etr-fn (by e eeigol 7ru3yexoy(06 an 1igui to, per n..nturl. gas oud hydnn-. .-gI.ar ..i.ant toAree LdWI f*, *ta.) nbitb of .e to-petioc ar.Rmdaaie eci and Octhereal aIecL-tIty) 10 klloOr-n of col 9iria per opgta, P..oid. a Ideitedragoo adt fonILifIA. 1or I t*ttel 19Sf. 1970, and £980 det. lnb.u hopitel. inotod Wgaft teieig eg bheitaise en ree focpitala, loca or rort (toPtele.I eW Radll M a-P,taty eeae POPiLfATCOSI Add VrCAL STAT STCR71 OeoAkIseUd h-spitals are Liredd enip ondr t .t. 1 Intl tralaii'~ cet -eod.) -hof JIni 1; 1960. 1970, And 19Sf Adtieeiiee ran II.1t Seg - Totai t.he. of dtrete. te o diochegee Urbac PepuINtIPA fo t nftotal) - Rati of orbat to totalpe1 tte differoat drfilltias of-oh crt a offeoc n.-pe-bility of data 841515 -awoganetrt; 1960, 19I70, ted 1981 Uao -eRc o hoehl (een e n ed-ttl aria, nod reJrul Pu i. in. L r 006 Cottopll rJrtiao. Are bu..ad In 1980 edtiraIn ..Ile A boader or iLae y nrme eec he tede la totAL po iii_' i nod er ad thi .cruity And f-rthlty tWhe eonheid for Mtt.tieiaL perPeec. lerel ese lif.10 rapatoty At birth ioceio iutroenr - peLfpnr e o. to all arte..ted peo attfd cam .-cIe ..Plre. hon. lore. end female life. aupeoteno subiticieg At 77.5 dclige rpeetlrey. ThaLitege co1ad om..eet treOcna- ror.Te aaor for f-a fllay rare "Ie har Obre lorein -wlord Pea- orn.uglslto 10 fortility noOrdlog. to i n. loo and ;eat (e-Ily tauct itnot rrato eetee aa.eba o ua ploexig pefomae. Ra-h exatry LA" h.sc amf n of the.- nOn C raiaieiigenbeiorticty ivN qer Vca I&6et _ebI-aIL:e of mortaity ..d f-rilit7 trends fnn prolation lpare-s of tta,or , ceo ro-a d-nLiege nrpeeoee.y. auo- T. t io wpafti.ttO there in ra groeth cl bfiiitiVi is eL ual i t..he dr-h rte, and sin the age 80060108 troanrclet onotI-t Thie is onhe-d only cft.. fertiLIty rstae WNt. E-oro1an SAtIo. d_olt_ to the rplacmet lt_1 of anit oat roprd-ti.ou rat, utcPicy onl-tta.rl.n feao-G_o toal. ci eml _ah gen_rtio of _s rePi.... itaNif etlrti. Theeuitr orlmn f l goa theprmrylee typreuamtofrepegt PoPalait.ILrOtc L. tinatd ante-aie of the projecte rh.reIt- pri-ay sloiaoperuloti-e; -LLayioldn rhild-e ege b-Il ito ofthe paltill In the yr- 20000, tod the rtof -Li-c of Iecr %bt adjocond frdifrntiegh f ncyfcrta. o Orr taIaa reoalo1 nae h nt Oorroe -Palone .. .Ace uil r hm r br teo foa ocn oW. pouato Nie il e aco. hd 7creloo -tti. Yeot-;L- an irmel -. CelAlao on aoo rn. ar totalareal1960 1970 aodISSO rta.pipile ceaol at LT tu 17 Iears of at.; orrpeeo eaAs on ol 1960, 1970 and IPOdt.fcafnlrtlaoaIrroro 2eaaoar ocOcltalef PnoolattOO Me IrootuPe (toroeci - Children (014 yetrl.) nerkIng-ogl 115- itoad rohtoh Ltrtr . orohrprarsek; peaetNe 64 -anr), ed rcttrn (65"l pHrene -) on pecoec f aid-rear rt_1ura depert-rto up -eoeday rittc. peolto1960. 1970, .Acu ali1 da-a Iot-toh Iaio - ertar. tadrmcoat-Toa tdaa .atdI PnnloaoOroh kate -0eoet -Ittl - nta g th rat ar f total aid- Pria-y and -erod-T leI.- dI. la bysehaen tahnefth n peto papeLani fo 1606.' 1960- d.at 1970-91. Orpandiog aor pmnl.tiao Irooh Rae. crst - arb.a - .e-Ia a-et rate of arbe drlinorunoott)- Liteat Mlt Aah oredcterfo P. lato... for 15-60.L190-70. Lan17RSt a eonap tttl dl ooe,asAgNd 15 PoA. te n-W. Yoor pnplte;060 90 n 1981 fc. lRet10PTION' Crude beac taco (oar thogond)- lroe doths per thoonad o i d-y- rPseeoerCas 0c thoattd ro.eaa) - P--acs or Rowl-r a ptotic1960, 170 end 192dta aeeato .0 tin eittprea ;ebld clier.here m fertIlIty rate; tolpfrepe aoccee vedin iv 1960. 1970. ,5 bruadoact to gerrd oahio P.r th-.eo of pSaat aIedes e- lyf 1. Ilaa..d rraeOveeeIa on60tctoOend to pue- caIn realatain of WeIa trail LAp plti A-Mo.vnre tu-a (thou.-del - bataIonera ao.pbr.socto i rfeto; data for rena Ieore -y ext he -Wenbl. cie mett ofbrhoorlderI.. Aede aaepicea uf tiooai fetip piaex_ocontle ahiiehoA li-tattup progra,, TO heteivure Irer nheaaOef rorulatloof - ~~~~~TV r-c ...o for bresit..et to tcaOlrOteonun - enot percat cf eorto eoeci - lsroooee ci arnednerorl poOir pe zhe.eced ppn(etav1 toladT,ociieaacdOr TV ei-a. ae of rtld-lrvaing woo(17-44 eere I to ate itch-torldor oIn oatre i,v-yar ao rfortt a TV ec n.ei effet. oil arrad anrt I Sue Ovegrou.-- uraao ir aln(o iaaarrlro)-She theaerg FOOD tOO NITRITIfO olrla 0 c alyonee t-oe oe-eaer, d.ianod noA pertJAdrl aooual yrodtntlao of all food cauditias. Productlatenolo...dec .eed and to oe daily" tt it appar At lxet foar tiLr Ara. feed i an IeotclNde year he.. Ca-ldlie- coe prte-ty Sande (e.. 10.0aoa teraonat rlo eSa Al APo,ti r f eagarara ntcea of ougar ud'tat cr. dIble And -outair aret n tioket cld durtog the pou. modin ..eio - drOn-ta nOn e -cnffn aUd toe Are ealdedf. Aggrogc prndutiot of Seth -orcr is abile ralts. hate on tai.-ia .-.rug prodao prttc raighto; 1961-65, 1970, ad 198f late IdOt FOtOt Par ...t xrl 00. osgr-I (o.eca roioat) - Coepteti. oilbr MaP Iteaudol-itnlolyrtonpra.teide erargyeqoiroato Of"ifoo Aapleealal 0conr e tAN per foc. and aoomytlapd o ecludisa horatre pteeat,or.. cce day. Oralahle epphicc oapnle.de.attopo. otr Lmporto lace popaleto. nof ALl ag.#. bfnl i ain.- co.tte-. oe a I'ooa,ad the L.i tcek. lie saplite .Iclde -aL. U ted -And.,.e.. rutrble; 1960. 1970 Aod 195£ dat. qa fLne oed in food pro-cefo, tdoeeindnruca. -FaLb.,o for. an PerAnege of teaL imbar fr- ~alr~ntarnrse,tintedby rA0 heed on phyatiogi-al nod for roraa next) - L.bnr font in fanmig. foretr. otente ead ot,vt and nei th __rid.rtng tinmoc bepttr.hdy_rigte. f Ah.gc P,rr..,. of ta1 labor tort; 19Sa. 1979 en leSI daga. tc cAli era diatribaiit ofpo.acn. ed alu 10 Merrect for toet lboer (fo -Let - LAthur Parr ieetg -oatbutte..emarg athoeod lavc; 19165 970 gld 1980 data ond incitity Ia n - .e anprorg f rocal laor ferm:lOo per caflt earnlp f onoteto(aea .e.ey- roctcou ofper tapita 1970 AMt 1981 dat. at tupply af fond per day. tat -pl ffo Ia dlofioed an abort . l, Mti IiaSaelaret -. ttt.1cl.adtml Iriielee S"anoatefrAi -totrice e.lbahisd by U(SDA p-ride . ton e-iot,u a totY rate eta eertedenatl raa.en mRe lab'fr alocoa ff60 gree of tota Proteo par day aat 10 aen of exl-a snd retou ftonI., solo Aao feaa. Pop-lato of all ugra rratigely pulex prtt,a nbtoh 10 grec htoaid be .nteaI Otti Tha..90 90 adIN aa moe. ar'eedo lt prtle ae erancrdsone ararthet thee. f 75 treat of ota-IP ptont and 23 rsnoittgec-oetutrofinpPALAtioc and i. Itime treed. A of eximal prtegceanevorgo o h cid rprdb Mf in thc te-alte reOe oicL aat ThIrd Iad me.d S- 1 IIt.L Ico.y 19 't' ,I IP.db Y 61-65,190 9nd 00 dat. toetaSOedayOcl Ratio fP..nlaIAII onder 11 AMd 65- ne1 t Chill (teec 1-6) bOc RAte (our tho,-ad) - cAtoel cthe PerIhut t tupnet. sPrct nee(oh £ ta adOl - .titod- yvri- ago trup 14 pure. t rilidex Co Ue agegvaap;furoe=oaoic pentc vOet00prst.poec Rpret,adPoarect A ecran o rooort. dta araed on life t.blea; 1960. 1970 AMd 1981 -et- oehl. 00brt1160 97 n 1691 dent.if Thoal heIM OutrIetd 0t ttniorbi oIfo Albrtharf "olottalA. cr.,adrra)-t eeoal oe osf fodabe catAmias te eo eta fe otoe hurotoles L roolge, rndOur P_rlalIs pain aaoI lC u-hr fanaaprtpt aaltpIII) ecvtns.to hriraptlspaoltio.10a erxa Ic, o t Lcaty Ihc[sdi drod retiIan ft.a160 a e osdre etivS .utl nonooaca of. I tha ttfeta -on dltlnote io t 'IoutPnnt noelve rns - tuh _rhr f o oneadd tthr n po AIeppapOrttdete peer v Atoesrtottvett Ila .... gye rtecf t onalatn W oa. re.And- Ii .ft ty -1i .I. -I . rarbl- l.0000bli of.porototal a_.pha t Ia ...al errud- tyeoorao-a-U f,hLM,- h-peoa Ioreonte 0 OO resperirtppltoa toorata dteposal ray lraolad the orllction and dopocel, aih Or outbot tLaaet a otal adtfALRc Ovgo prioles and sielar ioecal iietau. st, £98 -28- ASINEX I Page 4 of 5 TURKEY - COUNTRY DATA Population: 45.5 million (1981) GNP Per Capita: US$1540 (1981) Amount Average Annual Increase 1%) Share of GDP at Market Prices (%) (million US$ (at constant 1980 prices) (at current prices) Indicator at current prices) 1982 1965-70 1970-75 1975-80 1965 1970 1975 1980 NATIONAL ACCOUNTS Gross domestic product /a 52,890 6.6 7.5 2.8 100.0 100.0 100.0 100.0 Agriculture 10,324 3.1 4.4 2.7 30.7 26.4 26.2 21.4 Industry /b 13,527 9.5 9.5 2.8 16.6 17.2 18.0 28.6 Services 26,073 8.2 8.0 3.7 42.9 46.5 46.0 44.3 Consumption 44,345 5.8 7.0 2.7 84.6 82.8 85.2 &1.8 Gross investment 10,705 11.7 12.9 0.6 16.7 20.1 23.3 26.4 Exports of goods and NFS 7,618 7.9 7.3 4.4 6.1 5.8 6.1 7.1 Imports of goods and NFS 9,778 11.2 13.8 -3.1 7.4 8.7 14.5 15.2 Gross national savings 9,250 11.6 11.9 2.4 15.8 18.8 18.1 18.3 Average Annual IrLcrease (%) Composition of Merchandise Trade (M) (at constant 1980 prices) (at current prices) 1972-75 1975-80 1972 1975 1980 MERCHANDISE TRADE /c Merchandise exports 5,746 -6.1 2.8 100.0 100.0 100.0 Primary 2,317 -6.3 4.0 72.6 64.1 64.0 Industrial products 3,429 -5.8 0.9 27.4 35.9 36.0 Merchandise imports 8,734 11.2 1.2 100.0 100.0 100.0 Agriculture and livestock 176 27.9 -23.8 2.2 4.3 0.7 Mining and quarrying 212 17.4 6.8 1.2 1.6 1.8 Petroleum 3,640 5.4 1L.0 9.9 17.1 48.8 Machinery and equipment 2,352 14.0 -12.1 45.0 35.6 18.2 Other industrial products 2,354 9.9 4.5 41.7 41.4 30.5 1978 1979 1980 1981 1982 PRICES AND TERMS OF TRADE GDP deflator (1980 = 100) 29.0 49.4 100.0 142.1 181.5 Exchange rate 24.3 31.1 76.0 111.2 162.6 Export price index 63.0 78.2 100.0 91.9 92.4 Import price index 61.2 71.9 100.0 101.8 102.6 Terms oi trade index 102.9 108.8 100.0 90.3 90.1 As Y of GDP (at cuirrent prices) 1965 1970 1975 1980 1982 PUBLIC FINANCE Current revenue 15.0 22.6 22.0 19.8 17.0 Current expenditure 10.0 11.8 12.6 11.5 8.1 Surplus (+) or deficit (-) -2.0 -2.3 -0.4 -4.8 -1.0 Investment expenditure 4.7 5.7 4.2 3.9 3.9 Transfers 5.0 7.5 5.5 9.2 6.0 Foreign financing 1.8 1.6 0.3 0.2 -0.01 1965-70 1970-75 1975-80 OTHER INDICATORS GNP growth rate (Z) 6.8 7.7 2.6 GNP per capita growth rate (T) 4.1 5.0 0.3 ICOR 2.9 2.9 5.7 Marginal savings rate (x) 28.2 19.5 30.8 Import elasticity 1.7 1L.8 -1.3 la At market prices; components are expressed at factor cost and will not add due to exclusion of net indirect taxes and subsidies. T7 Includes mining and quarrying, manufacturing, and electricity, gas, and water. /c In accordance with Turkish Government's specifications, which are not compatiLle with SITC's. -29- hNNEX I Ruoc S of S TURKEY - BALANCE OF PAYMENTS, EXTERNAL CAPITAL, AND DE3T Ia (million US$ at current prices) Popilatioc: 45.5 cillion (1981) GNP Per COpitaL: US$1540 (1981) Actual Estimated Pr-jected 1970 1978 1979 1980 1981 1982 1983 184 1985 1986 1987 bALANCO OF PAYMENTS Net exports of goods 8 NFS 342 1984 2442 4658 3476 1993 2032 2065 2305 2571 2764 Expocts of goots & NFS 754 3075 3247 4102 6416 7874 7962 9527 11214 13073 15191 IEports or goods & NFS 1096 5059 5689 8760 9892 9867 9994 11592 13519 15644 17955 Workers' re-ittances 273 983 1694 2071 2490 2187 1550 1982 2170 2409 2674 Net transfecs 91 - - - - - - - - - Cacrect accocnt balasce -58 -1741 -1771 -3207 -2076 -1010 -1808 -1587 -1763 -1976 -7051 Direct privoc-ejOVesect 92 147 200 148 129 125 127 130 144 158 174 r P.blsc FeLT (gro-s) /b 271 1017 4321 2354 2188 2076 1867 1857 1968 2318 2681 A-ortiaation on M< /b -146 -336 -414 -434 -545 -1230 -1105 -1258 -1783 -2093 -2283 Publ-c U6LT (cet) /b 125 681 3907 1920 1643 846 762 599 182 225 398 Other capital Ic 27 1061 -2410 1642 983 200 368 1059 1730 1916 1835 Chnage In reserves (- = ccrease) -186 -148 74 -503 -680 -162 550 -202 -293 -324 -356 sIeernalso.al reserves 612 874 800 1303 1889 2050 1500 1702 1991 2319 2675 Resceres an months of imports 7 2 2 2 2 2 2 2 2 2 2 Actual 1972 1977 1978 1979 1980 1981 1982 GROSS DISdURSEMENTS Gross d-sb-rsements 372 759 85' 4198 /d 2279 2116 2020 Official grants - - - - - 300 200 Concessional1 261 193 228 588 812 527 355 Bilateral 139 100 129 406 749 499 283 IDA 4 19 8 3 - - - Other Ilaltilaeral 118 74 91 179 63 23 71 Noo-coo.esx. oc. 111 566 629 3610 /d 1466 1294 1465 Official export credits 1 47 133 250 288 355 400 IBRD 25 146 165 277 313 454 665 Otch-r multiateral 27 5 35 15 150 162 147 Private 58 368 296 3068 /d 715 323 253 EXTERNA;I. DEST Scot -ststanding and disbursed 2450 4293 6322 10942 13415 13804 14296 Official 2273 3457 5489 7189 8281 8906 10123 1BRD 92 512 648 890 1158 1546 2144 IDA 99 181 188 190 189 188 187 th-er 2082 2964 4653 6109 6934 7172 7772 Private 177 63b 833 3753 5134 4898 4193 [.ebt outstandig o-clsdi.g sodosborsed 3560 7128 9879 14620 16807 17093 19561 DEBT SERVICE Total debt sevc c224 363 428 627 lOll 1231 2385 PalYcetse 161 196 264 403 405 546 1229 Interest 63 167 164 224 596 685 1155 Total debt service as X exposts of goods u NFS * woracos' remittances 11.8 10.3 10.6 12.7 16.2 13.8 23.7 Total debt service as X GNP 1.3 0.8 0.9 0.9 1.7 2.0 4.4 Average isterest rate .. new oass (X) 4.4 7.7 6.9 11.3 6.5 7.6 7.3 Official 4.5 7.7 5.6 3.5 5.5 5.3 6.2 Pr-cate 6.8 7.8 8.2 13.6 10.6 15.4 12.0 Average matority of new loans (years) 22.1 11.6 13.3 11.1 17.4 15.0 18.4 Official 26.0 12.7 15.2 25.1 16.6 16,3 21.1 Private 11.0 9.2 7.6 7.1 6.4 4.5 8.0 BANK GROUP EXPOSURE (I) IBRSD DOD/total DOD 3.7 11.9 10.2 3.1 8.6 11.2 15.0 IBRD di.bursemeota/total gross disb-rsements 6.7 19.1 18.4 6.5 13.7 25.0 32.9 IBRD debt service/total debt service /e 5.1 17.2 19.2 16.8 13.3 14.0 9.0 IDA DOD/total DOD 3.9 4.2 3.0 1.7 1.4 1.4 1.3 1DA d-soursementadtctal groan disbo-semeote 1.1 2.5 0.9 3.1 - - - IDA debt service/total debt service Is 0.4 0.6 0.5 0.4 0.3 0.2 - As fof Debt Oust-anding ct End of Most Resent Year (1982) TERMS STZUCTURE MatLrito structute of debt outstandiog (Y) Maturities dae within 5 years 39.9 Mat-rit-es doe within 10 years 79.5 Interest structure of debt outstanding (X) Interest due within first year 6.5 /a All entries os esternal dcbt are defined as in the Bank's Debtor Reporting Systee (only public and private guaranteed M6LT debt). /ob Icludes private guarante-d and son-guaranteed debt and grants. In Includes errors and emissions, and for projected years it includes oct IMF, short-tem, and -nideotif-ed capital inflows. /d Isclde.s $2,638 cillion of consolidated short-term debt. /e Taie: account of debt relief doe to debt rescheduling, sod e-cludes interest on short-term debt and privote non-guaranteed debt. -30- ANNEX II Page I of 2 STATUS OF BANK GROUP OPERATIONS Ili TURKEY A. STATEMENT OF BANK LOANS AND IDA CREDITS /a (As of September 30, 1983) Loan Amount ($ millions) /e Number FY Borrower Purpose Bank IDA Undisbursed Thirty-seven loans and fourteen credits fully disbursed 2079.0 177.4 883-TU 1973 Republic of Turkey Ceyhan Aslantas 44.0 8.0 1130-TU 1975 Republic of Turkey Rural Development 75.0 12.6 1248-TU 1976 Agriculture Bank of Turkey (TCZB) Agriculture Credit 54.3 26.8 1265-TU 1976 Republic of Turkey Livestock III 21.5 6.1 1310-TU 1976 Republic of Turkey Tourism 26.0 14.6 1585-TU 1978 Republic of Turkey Northern Forestry 86.0 49.8 1586-TU 1978 Republic of Turkey Livestock IV 24.0 17.9 1606-TU 1978 Republic of Turkey Erdemnir Steel Stage II 95.0 29.6 1741-TU 1979 Republic of Turkey Ports Rehabilitation 75.0 30.8 1742-TU 1979 Republic of Turkey Grain Storage 85.0 81.1 1748-TU 1979 TSKB Industry 60.0 9.2 1754-TU 1979 TSKB Private Sector Textiles 65.0 38.3 1755-TU 1979 SYKB Private Sector Textiles 15.0 10.3 S-15-TU 1979 Republic of Turkey Ankara Air Pollution Control 6.0 5.1 1844-TU 1980 Republic of Turkey Karakaya Hydropower 120.0 83.3 1847-TU 1980 Republic of Turkey Sumerbank Cotton Textiles 83.0 65.4 1862-TU 1980 Republic of Turkey Livestock V 51.0 45.9 1916-TU 1980 Republic of Turkey Petroleum Exploration 25.0 22.3 1917-TU 1980 Republic of Turkey Oil Recovery 62.0 37.5 1952-TU 1981 Republic of Turkey Labor Intensive Industry 40.0 31.4 1967-TU 1981 Republic of Turkey Second Fruit and Vegetables 40.0 38.0 1985-TU 1981 Republic of Turkey Fertilizer Industry Rehabilitation 110.0 97.2 1998-TU 1981 Republic of Turkey State Industrial Enterprise Finance 70.0 62.5 2093-TU 1982 TSKB Export-Oriented Industries 100.0 99.1 2094-TU 1982 Republic of Turkey Erzurum Rural Development 40.0 36.0 2131-TU 1982 Republic of Turkey Second Fertilizer Rehabilitation 38.0 37.4 2137-TU 1982 Republic of Turkey Highway 71.1 61.0 2159-TU 1982 TSKI Istanbul Sewerage 88.1 86.4 2318-TU/b 1983 TCZB Second Agricultural Credit 150.4 150.4 2321-TU 1983 Republic of Turkey Fourth Structural Adjustment 300.8 300.0 2322-TU/c 1983 TEK Third TEK Transmissiorn 163.0 163.0 2327-TU/c 1983 TPAO Thrace Gas Exploration 55.2 55.2 Total 4418.4 177.4 1812.2 of which has been repaid 439.8 11.0 Total now outstanding 3978.6 166.4 Amount sold 3.6 of which has been repaid 3.6 - 0 - - 0 - Total now held by Bank and IDA /d 3978.6 166.4 Total undisbursed 1812.2 - 0 - /a The status of the projects listed in Part A is described in a separate report on all Bank/IDA financial projects in execution, which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. /b Not yet effective. /c Became effective in November 1983. /d Prior to exchange adjustments. Ie Net of cancellations. -31- ANNEX II Page 2 of 2 STATUS OF BANK GROUP OPERATIONS IN TURKEY B. STATEMENT OF IFC INVESTMENTS (As of September 30, 1983) Fiscal Amount ($ Millions) Year Obligor Type of Business Loan Equity Total 1964 TSKB DF5 - 0.92 0.92 1966 SIFAS I Nylon Yarn 0.90 0.47 1.37 1967 TSKB II DFC - 0.34 0.34 1969 TSKB III DFC - 0.41 0.41 1969 SIFAS II Nylon Yarn 1.50 0.43 1.93 1970 Viking I Pulp and Paper 2.50 0.67 3.17 1970 ACS Glass 10.00 1.58 11.58 1971 NASAS Aluminum 7.00 1.37 8.37 1971 SIFAS III Nylon Yarn 0.75 - 0.75 1971/83 Viking II Pulp and Paper - 0.15 0.15 1972 SIFAS IV Nylon Yarn - 0.52 0.52 1972 TSKB IV DFC - 0.43 0.43 1973 TSKB V DFC 10.00 - 10.00 1973 Akdeniz Tourism 0.33 0.27 0.60 1974 Borusan Steel Pipes 3.60 0.43 4.03 1974 AKSA Textiles 10.00 - 10.00 1975 Kartaltepe Textiles 1.30 - 1.30 1975 Sasa Nylon Yarn 15.00 - 15.00 1975 Aslan Cement 10.60 - 10.60 1975 DOKTAS Steel 7.50 1.37 8.87 1975 TSKB DFC 25.00 1.23 26.23 1976/83/ 84 NASAS Aluminum 1.58 0.09 1.67 1976 TSKB DFC 25.00 - 25.00 1976 Asil Celik Steel 12.00 2.20 14.20 1977 Borusan Steel Pipes - 0.06 0.06 1978 DOKTAS Steel - 0.16 0.16 1979 Ege Mosan Engines for Mopeds 2.15 - 2.15 1979 ISAS Motor Vehicles & Accessories 8.85 0.45 9.30 1979 Asil Celik Steel - 1.80 1.80 1979 Trakya Cam Glass 33.15 3.43 36.58 1980 TSKB DFC - 1.09 1.09 1980/82/ 84 ISAS Motor Vehicles & Accessories - 1.67 1.67 i980 MENSA Textiles and Fibers 4.0 4.0 1981 Kirklareli Cam Sanayii A.S. Glass Tableware 12.99 - 12.99 1982 M.A.N. Motors Motor Vehicles & Accessories 8.41 - 8.41 1982 TSKB DFC - 0.35 0.35 1984 Pinar Food and Food Processing 3.90 3.90 Total Gross Commitments 218.01 21.89 239.90 Less Cancellations, Terminations, Exchange Adjustments, Repayments and Sales 150.94 8.30 159.24 Total Commitments now held by IFC 67.07 13.59 80.66 Total Undisbursed 11,26 1.07 12.33 -32-- ANNEX III Page 1 of 2 TURKEY AGRICULTURAL EXTENSION AND APPLIED) RESEARCH PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken by country to One year (May 1982 to May prepare project 1983). (b) Agency Preparing Project General Directorate of Agricultural Affairs of the Ministry of Agriculture, Forestry, and Rural Affairs. (c) First presented to Bank May 1983. (d) Appraisal May/June 1983. (e) Negotiations February 1984. (f) Planned Loan Effectiveness July 1984. Section II: Special Bank Implementation Actions None Section III: Special Conditions (a) Conditions of Effectiveness: (i) Effectiveness of IFAD loan (para 58); (ii) Opening of special accounts for Project revolving funds (para 62); (iii) Establishment of project administration unit, central and regional coordinating committees and designation of Project Coordinator (para 64); (iv) Signing of interagency protocols (para 65); and (v) Establishment of ministerial working groups on extension and research reorganization (paras 41 and 43). -33- ANNEX III Page 2 of 2 (b) Other Conditions: (i) Recruitment of adequate project staff in accordance with schedule acceptable to the Bank (para 57) and issuance of revised job descriptions for project area extension staff (para 52); (ii) Undertaking mid-term review of project implementation (para 55); (iii) Employment of consultants or international agency for administering overseas training (para 56); (iv) Submission not later than September 15 each year for review by Bank of annual work program and proposed budget allocations (para 58); (v) Provision of adequate budgetary funds after project completion for maintenance in project area of extension and research systems introduced under project (para 59); and (vi) Availability of adequate agricultural inputs and credit (para 60). OBRD IV5 - '/ I 33 ' ' :; .. -r IOVRDRCC 1084 BULGARIA , K i' )'r/ * >,KIRKLARELI L U A SIANO * .. L KASTAjj S.ORU . A - _v >ARTVIN , \ U.S.S.R. (5 9 -- .1 -N RZ AR f ' \ $ <- f - ~~~~~~~~~~~~ZONGULDAK v(SAMSUNf ,,-TRBO lv!KS f k,"'~~~~~~~~~~~~~~~~~~~D TEKIRDAG KOCAELIF _ %% NSatf r .. IIEUZ9 -< NV: N AMASYA GIR~~~~~~~~~~~~~~~~~~~~~~~ESUN~ VAI KOCAELIOL r ACNKRSYA.-- .. BOL -/^j_ SA < ANIRI \CORUM p A CUMUSHANE g ERZURUM r \ - ~~~~ ~ SAK AL:UK U X r 7- F ~~~~~ -- r < -- i ,<~~~~~ TOKAT _1>AR BU ILE-C- .r-K e ? ERZINCANARI. 40- CANAKKALE \ BURSA BILECIK( - - - r. _ - ISLAMIC 40 BALIKESIR -<,J .J ESKISEHIR A/ . YOZCAT JSTUNCELI B NOL m I REPUBLIC OF ANKARA , ..KRSEHIR I' TUCL MJS / VAN \ IRAN KUTAHYA H.-.. _ JBIT S MANISA AFYON ~~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~ELAZIG .. ) \ t MANISA j S AFYON t t- SNEVSEH4W KAYSE MALATYA - - iAYSER - .- MUGLA 1 1 ( H-.' z GAZANTEP_.- AGRICULTURAIYARBAKIR E NSIIRT .1) / N.-Y _N AR AYDIN1DENIZUS -- - - -A A P UNDER 11 DNZIBURDUIR SPRAINAV. OA ADYMR UE AGNTRE GAZ3A5 AGRICULTURAL EXTENSION AND MUGLA J-j,Z._TE APPLIED RESEARCH PROJECT MUGLA ~~~~~ANTALYA .t PROJECT AREA ICEL SYRIAN ARAB REPUBLIC I': HATA_ i PROVINCES UNDE Ot P ': ',S0ATO 160A- I-N ANDC 5-ES KILANTE -- 1 NTERNASDNN4 EOUNDAR - - L E 5 - 30 3,5'AARICLAL -5010. ROUNO-- 00 CLAS NOR ORL APIOTAL- -I ' 0 4~~~~~ ~~~~ ~~~~~~~~ ~~~~0 80 120 VA0 - -POICAL D--DA-SD 30 ~~~~~~~~~~~~~~~~315 4O'