Turkey
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Cash Transfer Program |
277-0410 |
10,000 |
|
10,000 |
| Total (in thousands of dollars) |
10,000 |
0 |
10,000 |
|
The Development Challenge:
In 2004, Turkey continued to make progress in pursuing challenging legislative and economic reform efforts toward building further democracy and strengthening the private sector orientation of its economy. Prime Minister Recep Tayyip Erdogan, who was elected in 2003, has sought to have the Government maintain sound economic policies and institute further reform in order to increase market confidence and create an internationally competitive economy. Turkey's current economic reform program, with support from the International Monetary Fund (IMF), has two main goals: conquer high inflation and associated macroeconomic instability, and reduce public debt. Results during 2002-2004 improved, with inflation falling to 9.3% in 2004. However, Turkey still needs to improve its investment climate and reduce the large state role in the economy, especially in basic industry, banking, transport, and communication. Foreign direct investment remains at less than $1 billion annually. In December, 2004, the EU announced its decision to begin accession negotiations with Turkey on October 3, 2005. A major political and economic issue over the coming years will be Turkey's process for acceding to the European Union (EU).
The United States supports Turkey's accession process and eventual membership in the EU, and is confident of the benefits it would bring to both Turkey and the EU. The United States believes that having Turkey firmly anchored in Europe and sharing European values will be a positive force for prosperity and democracy. The United States recognizes Turkey as a major coalition partner in the global war on terrorism, an active ally and partner in the reconstruction of Iraq and Afghanistan, and a pro-Western democracy in a troubled region. The tragic terrorist bombings in Istanbul in November 2003 only strengthened Turkey's resolve to participate with the United States in the struggle against international terrorism. Strategically located between Europe and the Greater Middle East, Turkey is a key NATO ally which has been providing important support for the stabilization and rebuilding of Iraq. Turkey's support for U.S. operations comes despite a fragile economy, tight fiscal restrictions, and a reluctant public. U.S. assistance through the Economic Support Fund helps address poverty and employment problems, which aids Turkey in complying with requirements for accession into the EU.
The USAID Program:
USG programs to address poverty and unemployment problems endeavor to help mitigate Turkey's economic losses from its anti-terrorism efforts. In FY 2005, funds will be applied to implement three activities: co-financing of the Conditional Cash Transfer Program of the World Bank's Social Risk Mitigation Project to improve education for girls and health of children; 2) anti-trafficking in persons program implemented by the International Organization for Migration to reduce trafficking and aid victims of trafficking; and 3) a U.S.-Turkey business partnering program implemented by the U.S. Chamber of Commerce to encourage bilateral trade. In FY 2006 assistance will support ongoing anti-poverty programs and micro-credit programs designed to assist the poor generate income. ESF funds will help Turkey address severe poverty and employment problems, and contribute to internal stability.
Other Program Elements:
A water resource management plan for the city of Istanbul continues to be developed under a USAID centrally-funded activity implemented by Mississippi State University.
Other Donors:
Other major donors to Turkey include the EU and World Bank. Turkey has also received large-scale lending from the IMF to address its economic difficulties.
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