Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
TURKEY
FY 1998 Economic Support Fund Request . . . . . . . . . . . . . . . . . $50,000,000 FY 1998 Development Assistance Request . . . . . . . . . . . . . . . . . $4,000,000 Introduction
Turkey is a close and valued ally of the United States. It occupies a strategic location between Eastern Europe, the Middle East and the New Independent States, and is a key member of NATO.From the establishment of the Republic until 1980, Turkey was an insulated, state-directed economy. In 1980, however, the country embarked on a new course. Increased reliance on market forces, decentralization, export-led development, lower taxes, foreign investment, and privatization became the basis for the new economic philosophy. The U.S. has an interest in encouraging and supporting the growth and stability of a western-oriented Turkey following sound, free-market and democratic policies.
The Development Challenge
The USG has not maintained a full-scale bilateral foreign aid program in Turkey since the mid-1970's. The country achieved an advanced standing in the developing world at that time and has continued to modernize. Nevertheless, the economic situation, while at times experiencing dramatic growth, has been unstable, rife with internal structural problems resulting from state intervention and bloated government bureaucracies. Economic problems are further exacerbated by excessive population growth, fueled by heavy rural to urban migration and relatively low prevalence of modern contraceptive usage. Turkey is also encountering a separatist and terrorist campaign from within the country, and this fight has resulted in alleged and confirmed human rights violations.Turkey has made substantial progress towards implementing an ambitious program for correcting the underlying macroeconomic imbalances which have plagued the economy over several years. In 1994, the Government of Turkey (GOT) was able to achieve some measure of stabilization in terms of foreign exchange and external payments. The austerity package introduced in April 1994 was inconsistently applied and failed to eliminate Turkey's high inflation rates of over 65%. A severe currency crisis during the early months of 1994 put Turkey at risk of not meeting its external debt payment commitments. However, macroeconomic policy adjustments initiated by the government in April 1994, and supported by an International Monetary Fund (IMF) standby arrangement have led to a more favorable outlook for the sustainability of debt servicing by the country. By the end of 1994, the external currency account had improved significantly, foreign currency reserves restored to pre-crisis levels, and the composition of external debt had shifted further toward medium- and long-term commitments with average maturity of more than eight years.
In 1995, the Turkish economy grew robustly. For the year, GNP rose eight percent led by manufacturing production which increased by almost 14 percent. High growth continued into the first quarter of 1996, but the growth rate for the entire year is projected to be lower than 1995 due to a slowdown in export earnings. It is not clear whether the current coalition government will be able to take adequate measures to tackle the budget deficit and rein in inflation. Key areas requiring government action are privatization of state enterprises and social security reform.
Other Donors
The principal form of U.S. assistance is through the cash transfer mechanism. The purpose is to support Turkey in implementing economic and democratic reforms. These resources, in conjunction with those provided by other donors and private lenders, enable Turkey to continue servicing its large debt, and help support its economic reform program and structural adjustment efforts.The International Monetary Fund (IMF) and World Bank have provided standby and project loans to the GOT to encourage and reward major economic reform measures. Moreover, the UN Fund for Population Activities and the International Planned Parenthood Federation support activities in less developed areas and with indigenous organizations respectively.
FY 1998 Program
USAID supports an economic policy reform program under the Economic Support Fund (ESF) cash transfer program, which has spurred a dramatic increase in exports. The ESF program dwarfs all other activities USAID finances in Turkey.The second largest program supports a focused population assistance program, which is guided by a five-year strategy. The strategy calls for a rational phase-over of activities to the GOT and the private sector by the end of the century. The strategy supports the U.S. Embassy's interest in broadening the bilateral US-Turkey relationship beyond military cooperation.
Strategic Goal: Social Stabilization
Population issues are developing into a major priority of the GOT, given that its current population of almost 61 million is expected to double by the year 2025. Surveys show that Turkish couples use less reliable traditional methods. Modern contraceptive prevalence, while increasing, is just approaching 35%, which is below countries like Bangladesh and Egypt. USAID donates approximately 90% of all GOT contraceptive commodities. Recently, the Government of Turkey has demonstrated a sense of commitment to reducing population growth. Together USAID and the GOT have developed a plan for enhancing private and public ability to meet consumer contraceptive demand independent of USAID support. Thus in FY 1995 USAID began implementing this agreed upon plan for enhancing contraceptive availability as part of a 5-year phase down strategy ultimately promoting Turkish private and public resources to take USAID's place as the main provider.The USG-approved Population Strategy for Turkey 1995-99 contemplates the following activities. The USAID program is strengthening the GOT policy environment, forging ties among private firms and facilitating increased non-governmental organization (NGO) participation. The project works to train counselors and care providers to improve their quality of services and depth of knowledge. It seeks to expand access to services by integrating them into existing health care delivery networks. Finally, on a decreasing scale, USAID provides funding for contraceptive commodities.
The program, implemented by a number of U.S. Cooperating Agencies, has seen many gains. Family planning training has been integrated into eight university teaching programs, midwifery and nursing schools, as well as the Ministry of Health (MOH) in-service family planning sites. The MOH adopted the first-ever national family planning guidelines and operates model family planning clinics throughout the country. The MOH and social security organization agreed to begin purchasing contraceptives. The USG is working with the cooperating agencies to foment more synergistic implementation and sustainable impacts. The strategy, which includes a five-year phase down approach, will provide important guidance and impetus for results.
Strategic Objective: Improved sustainability of social benefits and services Cross-cutting and Special Initiatives
This special initiative works to maintain economic and political strength and stability in Turkey. Turkey is a key ally and plays an important role in the region. While peace prospects have improved in some parts of the Middle East, hot spots are evident throughout the Caucasus, Central Asia, Cyprus and Iraq/Iran. The instability surrounding Turkey and the internal civil strife distract the government from major economic reforms. Growing religious conservatism could make reform more difficult. Inaddition, the GOT must take much more drastic steps to reform the economy, for example, through full-scale privatization and reduced government expenditures. These significant changes in the economic system require international financial support to ease the burden and maintain stability.USAID assistance will be used primarily for balance-of-payment support, including the servicing of nonmilitary U.S. and international lending institutions' debt. USAID's strategy is to provide resources, which, in conjunction with those provided by other donors and private lenders, will permit continued implementation of Turkey's economic reform program, while allowing it to continue importing the goods and services it needs for economic growth and stability.
TURKEY
FY 1998 PROGRAM SUMMARY
Strategic Objectives
Economic Restructuring Democratic Transition
Social Stabilization Cross-cutting / Special Initiatives Total Social Benefits -- -- 4,000,000 b/ -- 4,000,000 Cross-cutting / Special Initiatives -- -- -- 50,000,000 a/ 50,000,000 TOTAL -- -- 4,000,000b/ 50,000,000a/ 54,000,000 a) Economic Support Fund
b) Development Assistance
Director, Office of European Country Affairs: David Cowles
ACTIVITY DATA SHEET PROGRAM: TURKEY
TITLE: Social Benefits, 000-S003.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $4,000,000 DA
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 1999
Purpose: Improved sustainability of social benefits and services.
Background: Turkey's rapid population growth is a deterrent to its social and economic development. Turkey has a population of 61.8 million, which under current conditions will double in just 33 years. Desired fertility in Turkey is 2.1, while the actual fertility is 2.7. Although overall contraceptive prevalence is 63%, only about half of that represents modern method use. There are 11.5 million married women of reproductive age, 9.6 million of whom want to use contraceptives, but only 4.4 million of whom are using modern contraceptive methods. Thus over five million couples (over 40% of all Turkish couples) have unmet demand for modern family planning methods. The Government of Turkey (GOT) has recently demonstrated an elevated sense of commitment to population and family planning issues.
USAID Role and Achievements to Date: USAID has provided funds for population programs in Turkey since the 1960s. Today's USAID assistance focuses on sustaining a reduced rate of population growth and a financially sustainable program, able to continue in the absence of donor resources. To achieve this end, USAID and the U.S. Embassy in Ankara, developed a five-year strategy for 1995-1999. According to the strategy, the assistance budget will be phased down to insignificant levels by the end of 1999. The program focuses on policy, management development, training education, communication and service delivery. Thirty-five percent of the 1996 USAID population assistance budget was earmarked for contraceptive commodities for the public sector. The strategy also includes a phase-out plan for commodities, whereby the GOT will assume full responsibility for procurement of contraceptives by the year 1999. The convergence of a number of factors have created ideal conditions for impact in Turkey. The most salient factor is the GOT's elevated sense of commitment to population and family planning issues and the willingness to develop the role of the commercial and non-government sectors -- an endeavor seen to promote program sustainability. The GOT, commercial sector, and non-governmental organizations have all requested technical assistance in reaching their individual and mutual goals -- contributing to the increasingly productive partnership between USAID and Turkey. The coordination of the program rests with a Joint Programming Team comprised of USAID/Washington and U.S. Embassy representatives.
Description: USAID's activities focus on increasing the availability and effective use of quality family planning and reproductive health services; improving Turkey's self-reliance in family planning and reproductive health by enhancing the public and private sector ability to meet consumer demand for these services independent of USAID support. There are three USAID strategic approaches for achieving the program's strategic objectives: 1. Strengthen policy and GOT budgetary support for the family planning program; 2. Improve the quality of family planning and reproductive health services in the public and private sectors; 3. Expand access to family planning and reproductive health services and information in the public and private sectors.
Host Country and Other Donors: The Turkey's Ministry of Health, the Social Insurance Organization (SSK), NGOs and the commercial sector collaborate with USAID programs. With USAID as the lead donor both in financial and programmatic terms of the program, several other donors contribute to the program. The United Nations (UN) endorses an integrated approach to improve maternal, child and family planning services and focusses on underserved populations, covering the most remote 28 provinces in eastern and southeastern Turkey. The International Planned Parenthood Federation (IPPF) supports the Family Planning Association of Turkey (FPAT), its local affiliate, in supporting varioussmall projects, mostly educational activities, aimed to religious leaders, adolescents, men, and policy-makers. The Japanese International Cooperating Agency (JICA) plays a limited role, in funding the establishment of a high-tech studio for the development of audio-visual materials for the MOH. In addition, The European Union (EU) and the German Technical Cooperation Assistance (GTZ), have recently committed small grants to local NGOs to carry out small scale family planning service delivery projects. Finally, the World Bank supports a large five year health sector loan, however, it does not focus on population and family planning.
Beneficiaries: This effort seeks to directly benefit women of reproductive age, their husbands and children through helping them meet their desired family size and improving the health status of women and children. Indirectly, this effort seeks to benefit the entire population of Turkey by reducing the population pressures on the economy, environment, housing and social services.
Principal Contractors, Grantees, or Agencies: Cooperating groups are: the Johns Hopkins Program for International Education in Reproductive Health (JHPIEGO), the Johns Hopkins Population Communication Services (PCS), the Futures Group International through the Social Marketing Project (SOMARC) and through OPTIONS for Population Policy Project, Pathfinder International, Access to Voluntary and Safe Contraception (AVSC) International, Management for Sciences for Health through the Family Planning Management Development Project (FPMD), John Snow Incorporated through the Family Planning Logistics and Management Project (FPLM) and through Family Planning Service Expansion And Technical Support Project (SEATS).
Major Results Indicators: Baseline TargetsNational strategic plan for None (1994) Implemented (1999) the family planning
Modern contraceptive prevalence 35% (1993) 45% (1999)
Use of long-term methods 3% (1993) 9% (2000) (Depo-Provera, etc.)
Discontinuation rates of 55% (1993) 30% (1999) modern contraceptives
Abortion rates (per 100 19 (1993) reduced (1999) pregnancies)
Family planning line item in No (1994) Yes (1999) MOH annual budget
% of modern contraceptives provided by private sector 0% (1996) 95% (1999)
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