91801 THE WORLD BANK Turkey – World Bank Partnership Some Highlights & Results IBRD Results SYNOPSIS Turkey has eliminated extreme poverty. It has already achieved Millenium Development Goal 5 (“Improve Maternal Health”) and is well on its way to reaching other Millennium Development Goals (MDGs) by 2015. Turkey works with the International Bank for Reconstruction and Development (IBRD) towards achieving fast, sustained and equitable growth. This partnership has delivered on a number of fronts including macroeconomic stabilization; the development of a clean, sustainable, and reliable energy sector; and improved health outcomes. Challenge  Increasing competitiveness and employment: To in- crease job creation, particularly among women At the turn of the century, Turkey faced two crises and the young, Turkey aims to maintain macro- which shape its challenges today. In 1999, a 7.6 economic stability and increase private invest- magnitude earthquake struck near Istanbul, claiming tment, supported by deeper financial markets. 17,000 lives. In 2001, Turkey’s financial system Reliable and efficient energy supply also remains collapsed and the economy contracted nearly 6 a critical focus. percent. The bailout cost 15 percent of national gross domestic product (GDP).  Ensuring equitable human and social development: To better share the benefits of growth, Turkey is Today Turkey is the world’s sixteenth-largest eco- developing a more efficient social security sys- nomy, with 75 million inhabitants and per capita tem. By improving the healthcare system, the annual income above US$8,700 (2009). Since 2001, government is increasing efficiency, governance Turkey has stabilized its economy and has built its and service delivery. Education could be enhan- regional and international profile, pursuing a foreign ced by focusing on quality and employment policy based on the principle, in the words of relevant skills. Expanding pre-school education Foreign Minister Davutoğlu, of “zero problems and promoting early childhood development is with neighbors”. Accession to the European Union a key government priority. (EU), initiated in 2005, remains a firm long-term aim.  Efficient provision of high quality public services: The government is rationalizing public financial ma- Turkey’s overall development goal is stable growth nagement. Other objectives include strengthe- with increased equity and competitiveness. It wants ning governance; improving service delivery and to become an information society and to complete disaster preparedness; and regional development. European Union “harmonization”. The partnership between Turkey and the World Bank Group for 2008-11 has three main goals: October 2010 2 TURKEY – WORLD BANK PARTNERSHIP  A clean, sustainable and reliable energy “I can get all three kids of mine proper treatment sector: when they are sick which we have been unable to Turkey’s Program: Between 1990 and 2007 do as we never have enough money to take them to energy consumption and production grew a private doctor" says Melis Bozkurt, a 46-year-old domestic laborer from a poor neighborhood in nearly threefold. Market reforms improved Düzce. “Even if we went to the State Hospital, we supply security, reliability and sustainability. had to wait for hours in the line and sometimes Domestic renewable resources are being pro- returned back with empty hands as the line never moted. An Energy Efficiency Law is being got to us”. Melis is a green card holder and is also implemented. one of the first beneficiaries of the pilot-family Approach to World Bank Partnership with Turkey: medicine program implementation in Turkey. Investment operations cover electricity market management, transmission system, distribution network, gas storage, renewable energy and energy efficiency. Turkey was the first country to benefit from the Clean Technology Fund. The government’s energy strategy allows for financing through IBRD lending.  Turkey moves toward OECD health outcomes: Turkey’s Program: At the turn of the century, Turkey’s life expectancy was ten years below the average among countries in the Organization for Economic Cooperation and Development (OECD), while infant and maternal mortality rates exceeded those of most middle-income countries. Through the Health Transformation Approach Program, universal health insurance and a family medicine system have been established.  Sound macroeconomic policies have helped Approach to World Bank Partnership with Turkey: promote growth, raise incomes and reduce IBRD provided financing for the 10 year Health poverty: Transformation Program 2003-2013. It also Turkey’s Program: Structural reforms underpinned provided analytical studies e.g. Health Sector the post-2001 recovery, comprising: streng- Assessment, which was compiled jointly with thened banking regulation and supervision; in- the OECD. flation targeting; and health and social security reform (which were central to fiscal sus- Some Results tainability). These enabled Turkey to reduce the impact of the 2008 global crisis, in addition to Sound macroeconomic policies that enable monetary, fiscal and labor-market measures. resilient growth and poverty reduction. Approach to World Bank Partnership with Turkey: A Solid fiscal and debt management, consistent mone- combination of “just-in-time” advice; focused tary and exchange rate policy, and overhauled ban- reports undertaken jointly with government; king regulation and supervision have driven growth, programmatic development policy loans and improved social outcomes, and cut poverty: credit lines from IBRD. Examples: 2009  2002-07 growth averaged nearly 7 percent, cutting simulated crisis impact and response; joint poverty to 17 percent from 27 percent. reports on public financial management, labor  Public debt as a share of GDP was halved to 39 markets, inequality of opportunity, the informal percent (2008) from 78 percent (2002). economy; Restoring Equitable Growth and  Turkey was one of the few developing countries Employment loan program; and, credit able to respond to the unfolding global financial expansion to small- and medium-sized enter- crisis in 2008/09 with both discretionary fiscal prises (SMEs) and exporters. stimulus (1.2 percent of GDP) and aggressive IBRD RESULTS  3 Turkey has transformed its health system in under ten years.  Over 96 percent of the population now has health insurance coverage and 80 percent are satisfied with public health services, according to a EuroPEP Survey in 2008.  A child in Turkey is nearly three times more likely to live beyond the age of five than in 1990, as reflected in data that showed child mortality in 2008 at 23.9 per 1,000 live births compared with 60.9 per 1,000 live births in 1990. Turkey is on target to achieve MDG Goal 4 (“Reduce Child Mortality”) by 2015.  A mother is five times less likely to die in The photograph shows World Bank Group Managing Director Ngozi Okonjo-Iweala on a visit childbirth than in 1990; the maternal mortality to ITC (Invest Trading & Consulting AG). The ratio in 2008 was 19.4 deaths per 100,000 live company received financing from the Renewable births. In 1990 it was 100 deaths per 100,000 Energy Project I, and is owned by Ali Kantur, a mid- births. This means that Turkey has already scale entrepreneur: “Two years ago it was difficult achieved MDG Goal 5 (“Improve Maternal to drive past this place because of the noxious Health”), which was due in 2015. smell and the unpleasant view. Today it is an industrial facility that processes the garbage and produces energy from it in a completely environ- The World Bank’s Bank Contribu- mentally sustainable way. It is hard to believe that tion & Partnership with Turkey the bitter odor is gone, the environment is protect- ted, and on top of this we get energy out of this Turkey has pursued its development challenges with process. The change is impressive…” the IBRD as a partner. The IBRD’s role has been monetary expansion (interest rates cut by more mainly catalytic, as its finance and knowledge servi- than 10 percent). Economic growth in 2010 should ces account for a small fraction of Turkey’s total ex- exceed 6 percent. ternal financing and demand for analytic and ad- visory services. A clean, sustainable and reliable energy sector. Turkey’s energy sector is increasingly transparent Turkey is among one of IBRD’s largest five borro- and reliable, and is more secure for industry wers. The current Country Partnership Strategy for development: FY08-11 provides for US$8.1 billion in financing, of which US$6.5 billion has been committed to date.  An increase of 70 percent in electricity transmis- Between July 2009 and June 2010 alone, the World sion from 102 TWh in 2002 to 172 TWh in Bank committed US$ 3 billion in financing for Tur- 2009 and a nearly 30 percent rise in peak key, respondibg to the effects of the global crisis. capacity, from 21GW to 29.9GW.  Transmission expansion and upgrades have At the end of June 2010, IBRD’s lending portfolio enabled an estimated additional 4.6 million consisted of 18 active projects with total net households to receive improved power supply. commitments of US$5.7 billion. The investment port-  The reliability of electricity supply nearly folio supports the energy sector (35 percent), fi- doubled. There were 12,675 hours fewer nancial and private sector development (32 percent), electricity interruptions in 2008 than in 2004. urban development (22 percent), transport (3 per-  Renewable energy grew dramatically. Electricity cent) and health and education (3 percent). produced from privately owned renewable generation facilities more than doubled. Turkey highly values the World Bank’s technical analysis, advice, international expertise and ex- perience. These analyses, advice and assistance are 4 TURKEY – WORLD BANK PARTNERSHIP carried out with the government and a broad range Moving Forward of stakeholders. Major analytic tasks have focused on longer-term structural and institutional issues e.g. The World Bank is committed to continuing being a Investment Climate Assessments, a Country Econo- strong partner of Turkey. Our goal is to help mic Memorandum on Informality, a Female Labor improve the lives of the Turkish people. Dialogue Force Participation Study, Public Expenditure, and with stakeholders will inform the development of the Food Safety. The government also actively uses the next Turkey-World Bank Country Partnership World Bank in seeking quick response policy advice Strategy (FY12-16). on particular issues, e.g. Human Development Tech- nical Assistance on social security and health reform Turkey’s partnership with the World Bank in the and feedback on the draft fiscal rule. area of sustainable shared growth includes “just-in-time” advice on global good practice (e.g. fiscal and Partners financial management); joint sector work focused on reducing reliance on capital inflows (e.g. Savings Strong working relations with civil society are an Country Economic Memorandum); and increasing important part of the Turkey-World Bank part- productivity and exports (e.g. investment climate nership. Academia, think tanks, private sector asso- reports). ciations and businesses, as well as non-govern- mental organizations (NGOs), are engaged in the Programmatic development policy loans from the analytical and policy work the World Bank under- Bank are expected to underpin the approach, focu- takes with the authorities. Recent analytical reports sing on high-impact reforms, such as fiscal conso- which focused on female labor force participation lidation and public financial management, and inequalities of opportunities are examples of commercial regulation and labor market regulation, work which has been widely discussed with aca- and improved access to medium and long term demia, NGOs and private sector participants. finance. World Bank credit lines to SMEs and exporters are expected to contribute to increase The European Commission is also a key partner in growth and jobs. Turkey. With its delegation in Ankara, seven the- matic working groups have been established to On human development, the recent implementation support the government’s sector strategies as effect- of legislation on social security and universal health tively as possible. insurance will be important for institutional sustainability and delivery of results. An emerging The IBRD has a strong partnership with the United priority is education quality and skills (particularly of Nations, especially with UNICEF and UN Develop- the young) focused on increasing employment and ment Programme (UNDP). A Welfare Monitoring labor productivity. Reducing deep seated inequalities Survey, which assesses the impact of the economic of opportunity – which accounts for at least a third slowdown on household welfare, has been of Turkey’s wealth disparity – remains a long-term conducted jointly with UNICEF. Environmental challenge. management and climate change is an area of close coordination with UNDP, with UNDP taking the Turkey has set out to strengthen its contribution to lead on climate change work for the government. local, national, and global environmental sustain- nability, reflecting its increasing global leadership Collaboration with IFC and EBRD resulted in the profile. The broadening of the electricity develop- preparation of Turkey’s clean technology invest- ment policy lending program to include energy effi- ment plan allowing Turkey to access the Clean ciency, climate change and environmental sustain- Technology Fund. Close cooperation with nability reforms is expected to strengthen the Germany’s KfW and UNDP has also been effective Turkey-World Bank partnership further. This in providing technical assistance to improve energy expansion may also encompass adaptation to cli- efficiency in Turkey. mate change (e.g., for cities and natural resource management). IBRD RESULTS  5 A related area of continued partnership is earth- while the reinforced and modernized hospitals serve quake preparedness and disaster risk management. over 25,000 patients daily. This project has been The World Bank supports the Istanbul Seismic Risk internationally recognized as one of the largest and Mitigation and Emergency Preparedness Project. It most successful seismic retrofitting programs in the is strengthening critical public facilities for earth- world. It attracted attention of the European Invest- quake resistance while supporting measures for ment Bank and the Council of Europe Develop- enforcing building codes and land use regulations. ment Bank, who are providing parallel financing to To date, 418 public buildings have been retrofitted this effort. or reconstructed. Retrofitted schools serve about 1 million students and have over 33,300 teachers, LEARN MORE – Turkey Country Economic Memorandum – Second Programmatic Public Sector (CEM) 2010 on Informality: Causes, Development Policy Loan (PPDPL 2): Consequences, Policies http://web.worldbank.org/external/projects/m http://www.worldbank.org.tr/WBSITE/EXTE ain?pagePK=64283627&piPK=73230&theSiteP RNAL/COUNTRIES/ECAEXT/TURKEYE K=40941&menuPK=228424&contentFed=yes XTN/0,,contentMDK:22601373~pagePK:1411 &Projectid=P088837 37~piPK:141127~theSitePK:361712,00.html – Turkey-OECD/World Bank Review of the – Turkey Restoring Equitable Growth and Turkish Health System: Employment Programmatic Development http://www.worldbank.org.tr/WBSITE/EXTE Policy Loan (REGE-DPL): RNAL/COUNTRIES/ECAEXT/TURKEYE http://www.worldbank.org.tr/external/default/ XTN/0,,contentMDK:22081093~pagePK:1497 main?pagePK=51187349&piPK=51189435&the 618~piPK:217854~theSiteP SitePK=361712&menuPK=64187510&searchM – Turkey National Grid Transmission Project: enuPK=2864467&theSitePK=361712&entityID http://web.worldbank.org/external/projects/main =000262044_20100212105956&searchMenuPK ?pagePK=64283627&piPK=73230&theSitePK=40 =2864467&theSitePK=361712 941&menuPK=228424&Projectid=P048852 – Turkey Access to Finance for SMEs Project: – Turkey Renewable Energy Project: http://www.worldbank.org.tr/external/projects http://web.worldbank.org/external/projects/mai /main?pagePK=64283627&piPK=73230&theSi n?pagePK=64283627&piPK=73230&theSitePK= tePK=361712&menuPK=361745&Projectid=P 40941&menuPK=228424&Projectid=P072480 107173 – Turkey Gas Sector Development Project: – Turkey Access to Finance for SMEs Project- http://web.worldbank.org/external/projects/mai Additional Financing n?pagePK=64283627&piPK=73230&theSitePK= http://www.worldbank.org.tr/external/projects 40941&menuPK=228424&Projectid=P093765 /main?pagePK=64283627&piPK=73230&theSi – Turkey Electricity Generation Restructuring and tePK=361712&menuPK=361745&Projectid=P Rehabilitation Project:: 107173 http://web.worldbank.org/external/projects/main? – Turkey Access to Finance for SMEs Project- pagePK=64283627&piPK=73230&theSitePK=40 Second Additional Financing 941&menuPK=228424&Projectid=P085561 http://www.worldbank.org.tr/external/projects – Turkey Electricity Distribution Rehabilitation /main?pagePK=64283627&piPK=73230&theSi Project:: tePK=361712&menuPK=361745&Projectid=P http://web.worldbank.org/external/projects/main 108140 ?pagePK=64283627&piPK=73230&theSitePK=40 – Turkey Second Access to Finance of Small and 941&menuPK=228424&Projectid=P096801 Medium Size Enterprises Project. – Turkey Energy Community of South East 6 TURKEY – WORLD BANK PARTNERSHIP http://www.worldbank.org.tr/external/projects/m Europe (APL #2): ain?pagePK=64283627&piPK=73230&theSitePK http://web.worldbank.org/external/projects/main? =361712&menuPK=361745&Projectid=P118308 pagePK=64283627&piPK=73230&theSitePK=40 – Turkey Fourth Export Finance Intermediary 941&menuPK=228424&Projectid=P094176 Loan Project – Turkey Energy Community of South East http://www.worldbank.org.tr/external/projects Europe (APL #3): /main?pagePK=64283627&piPK=73230&theSi http://web.worldbank.org/external/projects/main? tePK=361712&menuPK=361745&Projectid=P pagePK=64283627&piPK=73230&theSitePK=40 096858 941&menuPK=228424&Projectid=P096400) – Turkey Health Transition Project:: – Turkey Private Sector Renewable Energy and http://projportal.worldbank.org/servlet/secmai Energy Efficiency Project: n?menuPK=109012&theSitePK=213348&piPK http://web.worldbank.org/external/projects/main? =69345&pagePK=112935&PSPID=P074053 pagePK=64283627&piPK=73230&theSitePK=40 – Turkey Health Transformation and Social 941&menuPK=228424&Projectid=P1125780 Security Reform Project:: http://projportal.worldbank.org/servlet/secmai Link to IBRD work in country/sector: n?menuPK=109012&theSitePK=213348&piPK – Turkey Country Office website of IBRD =69345&pagePK=112935&PSPID=P102172 http://www.worldbank.org.tr – Programmatic Public Sector Development – Turkey Country Partnership Strategy for FY 08-11 Policy (PPDPL): http://www.worldbank.org.tr/WBSITE/EXTE http://web.worldbank.org/external/projects/main? RNAL/COUNTRIES/ECAEXT/TURKEYE pagePK=64283627&piPK=73230&theSitePK=40 XTN/0,,menuPK:361725~pagePK:141132~piP 941&menuPK=228424&Projectid=P071052 K:141105~theSitePK:361712,00.html