Within this document, public sector projects available for foreign funding are classified by sectors. The nature of foreign financing may vary depending on the status of the project.

While there are projects which require new foreign loans, some ongoing projects need additional foreign loans. The former refer to the the public projects that have already been in the scope of 2000 Investment Program and have no foreign credit utilisation so far whereas the latter are public sector projects that have already been materialised to some extent through foreign credit utilisation and require further foreign loans to be completed. There are also potential projects in the pipeline which require foreign loans. This category of the projects, are those that feasibility studies are being conducted for within the scope of 2000 Public Sector Investment Program and/or that are very likely to be included in the public investment programs and initiated in the near future due to their high priorities. The last category comprise Projects for Build-Operate-Transfer (BOT) and other similar schemes. Projects which are scheduled to be realised through Build-Operate-Transfer (BOT), Build-Operate (BO) and similar models and which have not been initiated yet are cited. Summary tables including brief descriptions for each project are presented. Additional information pertaining to the projects could always be obtained both from the Undersecretariat of State Planning Organisation and relevant public agencies responsible for the execution of the projects. The most up to date information about the projects presented in this book could also be acquired through the SPO  web site  at  http://www.dpt.gov.tr.   For  further  correspondence   and   questions,  refer to key contact persons on page 116.

Turkey is a fast-developing country with a relatively high annual population growth rate of approximately 1.6 per cent and with an urbanisation rate of 4.5 per cent. In order to meet the development needs of this rapidly growing population, estimated to reach 80 million by the end of the next two decades, Turkey devotes nearly 25 per cent of her GNP to the total investments every year. The ratio of private sector investments to the GNP is almost 20 per cent, while that of public sector is around 5 per cent.

Since the beginning of the 1980s, the public investment strategy of Turkey has been geared towards the improvement of economic and social infrastructure by gradually decreasing the share of manufacturing industry in total public sector investments. Since then, the public sector has focused particularly on the development of energy, transport and communications and agricultural and urban infrastructure. Only priority regions are excluded from this approach so as to decrease regional disparities. This process continued and deepened in the 1990-2000 period with a growing emphasis on the need to channel private sector financing even into some traditionally public sector dominated infrastructure investments via Build-Operate-Transfer model. Furthermore, in order to improve basic health conditions and to increase the number of well educated and skilled people in a rapidly growing population, a special emphasis, particularly from 1990 onwards, has been placed on increasing the investments in the health and education sectors.

Turkey’s public investment stock consists of 5,321 projects, amounting to USD 150 billion in the 2000 Public Investment Program. By the end of 1999, nearly USD 45.6 billion has already been expended. For the year 2000, total annual allowance for these projects is USD 10.3 billion, 17.5 per cent of which is scheduled to be financed through foreign loans.

In the distribution of public investment allocations for 2000 the following sectors, in the order of priority, are considered critical in fostering economic and social development:

• Education and energy sectors, and the GAP project
• Health, irrigation, potable water, and sewerage
• Organised industrial zones and small industry sites

• Projects programmed to be completed in 2000
• Urgent and emergency projects for the mitigation of earthquake damages
• Projects already been realised to a considerable extent
• Projects financed through foreign loans
• Projects linked critically to, and implemented simultaneously with other projects
• Projects aiming at reducing regional disparities

The share of agriculture within employment is around 45 per cent. Although the importance of agriculture is diminishing within the economy, the means of subsistence of an important part of the population still depends on agriculture. The agricultural production is estimated to lessen by 4 per cent in 1999.

The total length of Turkish coasts is 8,333 kilometers, usable marine area is 225 million hectars and the number of domestic water reservoirs is 1,118. However, fisheries production has been shrinking, which is attributable to excessive hunting, pollution and ecological changes.

In order to prevent pollution, which is an important factor on the shrinkage in fisheries, a Strategic Action Plan has been signed among Black Sea Countries. In addition, studies are being conducted under coordination of Turkey, with a view to preserving and improving fishery in the Black Sea.

The fishery sector is still confronted with a series of problems. The inefficiency in carrying out protective and inspection services aiming at preserving aquatic life against diseases and parasites, the inefficiency in improving animal farming and open sea fishery and the inefficiency regarding research and development activities within the inland waters and seas are some of the major issues besetting the sector. In addition, infrastructure of producers is still inefficient, cooling and deep freezing facilities at marketing stage are not at a satisfactory level, the organization of producers is still inadequate and inefficient.

Prospects

The basic targets are the provision of adequate and balanced nutrition of the growing population and ensuring an increase in output, productivity, exports and producers’ incomes by emphasizing those products for which a comparative advantage exists in exports. Agricultural policies will be determined in consideration of the agreement setting up the WTO and of anticipated developments in the Common Agricultural Policy of the EU.
Main targets in fisheries sector are the protection and control of natural environment, the increase of output by the effective and continuous utilization of resources, improvement of animal farming and open sea fishery, completion of the infrastructure, efficient reorganization of the institutional structure, completion of international agreements and improvement of cold-storage and freezing facilities at marketing stage of goods.R&D activities will be continued in order to increase fishery potential of inland waters, lagoons and seas.

The EU prerequisites are aimed to be met in fisheries production areas, processing units, and exports phase.

During the Sixth Plan Period, the interest of the domestic and foreign capital towards the mining sector, did not meet the expectations. The public sector has still maintained a significant weight in this sector.

In 1997, 3,457 thousand tons of raw petroleum was produced, however this figure went down to 3,224 tons in 1998, and is expected to decrease in 1999. Natural gas production, on the other hand, was 253 million m³ in 1997 that was doubled to 565 million m³ in 1998, and 745 million m³ of production is anticipated in 1999. Petroleum and natural gas imports are considerable items too; by the end of 1999, the former is expected to be 23,700 thousand tons and the latter is 13 billion m³. Some 54 per cent of the natural gas supplies was used in electricity production, 26 per cent in households, and the remaining was in industry. Within the context of diversification of natural gas supply resources, LNG imports from Algeria and Qatar has gained momentum.

Prospects

The main target of the mining sector is to gain utmost value added from underground riches and to meet raw material and energy requirements safely and economically. In recent years diversification of supply resources has been given special emphasis on this ground and investment allocation priorities are defined accordingly.

In the context of keeping the share of domestic energy resources up with meeting the total demand, activities in coal mining will continue. It is crucial that State Economic Enterprises are privatized; in a way that will ensure their competitiveness in domestic and foreign markets.

The General Directorate of Mineral Research and Exploration will be restructured as a small but of high technical capacity institution to raise productivity and quality in carrying out basic geological survey and exploration works.

Recent Developments

Due to the decrease in foreign demand as well as the shrinkage in financing resources, the rate of increase in the average production was realized as 0.1 per cent in 1998. As of the second quarter of 1999, production has been up by 0.9 per cent. Total capacity utilisation ratio was 77 per cent in 1998, and in the first half of 1999 it was realized as 73 per cent.

Relevant measures have been taken to mitigate the negative effects on the Turkish economy of financal crises commenced in Southeast Asia and prolonged to Russia. Several financial arrangements including lowering the cost of export credits to firms, transfering resources to Eximbank to meet export financing demands, lowering additional vehicle purchasing tax rates, providing appropriate credit terms to SME’s have been put into force.

Major earthquakes that took place in 1999 in Marmara region affected the whole Turkish economy adversely. The shares of this region in Turkish manufacturing industry were 53, 49 and 48 per cent in terms of value added, number of establishments and employment respectively. It is estimated that the loss of total value added is around TL. 250-300 trillion which would lower the growth rate of manufacturing industry by 1.6 per cent. Scores of institutional and financial measures have been taken to lessen the negative impact of the disasters on the economy.

The increase in manufacturing industry exports has kept on and was realized as USD 23.8 billion in 1998. There has been a decrease in 1999 exports due to the global economic crisis. The share of manufacturing industry exports in total exports was 89 per cent. Food, textiles, clothing, primary metals have been the leading export products. Manufacturing indusrty imports totaled USD 40 billion in 1998 and also decreased in 1999.

Prospects

It is of considerable importance, if a sustainable export performance is to be achieved, that the ability of Turkish industry to compete in international markets is increased partly by way of factors other than price. Closing the technology gap with the developed countries and increasing the quality of products, developing trade marks acceptable in international markets, producing environment-friendly goods and diversifying both products and markets are all therefore highly desirable.

The production and application of technology has become the basic element that determines the competitiveness of industry. Supremacy in the area of science and technology is therefore crucial to achieving a constant rise in social welfare. The importance of developments to be brought about in the organization of industry is also increasing. In this context, the use of advanced technology must be increased and greater flexibility of production must be achieved.

Industrialization has been one of the basic elements of development in the Seventh Plan Period. An industrial structure will be composed, within the framework of integration with the world market and with the EU, equipped with the prerequisites of being outward oriented, having a great competitiveness and being export oriented, capable of utilization of raw material and human resources in the most rational way. The basic aims are improvement of productivity, quality and standardization, the spread of a flexible production system and utilization of modern technologies; the integration of small and big industries, and the target of a structure with high value added production.

In this context, the right climate will be provided for effective development and instead of protection policies, strategies will be followed that support the opening up of firms to foreign competition and the formation of powerful enterprises with an influence on international markets. Special attention will be attached to those sectors having troubles concerning competitiveness.

Investments geared towards R&D technological renewal, the development of new employment opportunities, the environment, increased competitiveness for small and medium-scale enterprises and the reduction of regional discrepancies in levels of development will be supported.

Technology transfer by way of foreign capital investments will be encouraged, especially, in those production areas where the utilization of high technology is greatly needed. Thus, a policy, where technology transfer and creation of technology are taken as complementary features, will be pursued.

The necessary infrastructure will be put in place in order to raise the quality of industrial commodities by spreading quality warranty systems and establishing a measuring system, which shall be internationally monitored, and an accreditation mechanism.

Support will be given to investments abroad for industrial intermediates with a view to improving competitiveness and export potential. Encouragement will be provided to the organizing of the private sector in terms of introducing and marketing of export oriented industrial commodities abroad.

Important developments have been recorded in primary energy and electricity consumption during the last 40 years. In this period, the former has increased by an average of 5.2 per cent and the latter by 11 per cent, annually. Despite these high growth rates, primary energy and electricity consumption are still quite below the levels in developed countries.

By the end of 1998, total primary energy consumption and per capita primary energy consumption reached 79 million tons and 1,245 kg of oil equivalent, respectively. Oil products constitute the largest portion with 36 per cent share in the total supply which is approximately 49 percent dependent on import resources in general.

By the end of 1998, installed and production capacity of electricity power plants reached 23,352 MW and 120 billion kWh, respectively. In 1998, electricity demand, which amounted to 114 billion kWh, was met continuously with a sufficient reserve margin. However, it is crucial to ensure the continuity of investments in order to meet the rapidly increasing electricity demand in the coming years.

In 1999, due to the economic recession and the effects of drastic earthquakes on the economy, the total primary energy consumption levelled at 79 million tons of oil equivalent and per capita consumption dropped to 1,226 kg of oil equivalent. In 1999, total primary energy production was about 35.4 million tons of oil equivalent that met 45 per cent of total primary energy demand. As of end 1999, installed and production capacity of power plants increased to 26,450 MW and 138.2 billion kWh respectively and electricity demand reached 119.5 billion kWh.

The level of investments in the sector was inadequate to meet the requirements of a growing population and a developing economy in the last period. Although the demand was doubled, investments realised after 1990 were reduced to the half that were realized in the period 1977-1987. Contribution expected from privatization and private sector participation could not be provided. Consequently, the possibility of electricity shortage for the near future has come to the agenda. Moreover, high rate of losses in distribution network is an important problem causing electricity shortage.
 

Prospects

In 2000, the total primary energy consumption is expected to increase to 83.1 million tons of oil equivalent and per capita consumption will reach 1,273 kg of oil equivalent. It is estimated that production of primary energy will be realised as 36.0 million tons of oil equivalent.

In 2000, total installed and total production capacity of the power plants are going to reach 28,542 MW and 147,482 million kWh respectively. Studies of long-term electricity demand based on alternative economic growth scenarios indicate that demand will reach 190-200 billion kWh region in the year 2005 with an installed capacity of about 40,000 MW. It is anticipated that, in the year 2010, electricity demand will increase to 280-300 billion kWh while installed capacity will be about 60,000 MW.

In other words, in order to secure the supply of energy , an additional capacity of 34,000-40,000 MW should be installed until 2010. This necessitates the realisation of a heavy investment profile of approximately USD 3.5 billion per annum. Considering the additional cost of transmission and distribution investments, this figure goes up to USD 4.5 billion per annum until the year 2010.

It is necessary to materialize these investments in a planned manner to meet electricity demand efficiently and continuously. The substantial cost of these investments makes it impossible to lay the burden entirely on the public sector of the country. Therefore, an attractive and appropriate environment has been created for private investors and entrepreneurs in order to increase the share of private sector in investments and operational activities and to assure the contribution of private financing, both domestic and foreign.

Turkish transport sytem is mainly based on highway transport. Ninety-five per cent of domestic passenger transport and 80 per cent of domestic freight transport were realised on highways within the Sixth Five-year Development Plan period covering 1990-1994.

During this period, transportation investments ranked first in total public investments with a share of 30.6 per cent. On sub-sectoral basis, the share of highway investments including motorways in public transport investments was 80 per cent while remaining 20 per cent was shared among railways, maritime, airways and pipeline sub-sectors. The main reason of highway investments holding the largest share was that the on-going motorway investments alone had 47 per cent share in transport investments during this period.

In 1999, which was the fourth year of the Seventh Five-year Development Plan, 23 kms of motorways together with connection roads were put into service and the total motorway network added up to 1,724 kms. The length of asphaltic concrete paved roads, which should be 15,000 kms for state and provincial roads with respect to the daily average traffic of 500 heavy vehicles, could only reach 6,664 kms (incl.motorways) by the end of 1998. This causes high maintenance and repair outlays on highways.

Existing railway system could not meet transport demand sufficiently because of poor condition of railway infrastructure as well as inefficient public railway operator. In 1996, a 10-year restructuring plan aimed at providing efficient and commercially based rail services was prepared. Restructuring plan envisages a Railway Law and annual performance contracts between the government and the rail operator in which public service obligations could be redefined. Also, railway operator is to be restructured as independent business units for passenger, freight, workshops and infrastructure. A draft Railway Law has been prepared but has not been passed yet. In 1999, rail operator established new departments for passenger, freight and workshops but these departments have not become independent business units.

In 1999, investments focused on track renewal and limited progress was made on two new railway construction projects. Izmit Four-line Railway Project has been completed except signalling installations. A loan agreement has been reached with the Japanese credit institution OECF, to fully finance Bosphorus Railway Tube Tunnel part of Marmara Project.

As of 1999, the tonnage of Turkish merchant fleet excluding leased ships reached 10.4 million DWT. However, due to the existing composition of the fleet, the Turkish ships could not sufficiently participate in maritime transport of cargoes.

Container traffic, which recorded a significant upturn in recent years, and total tonnage of loading and unloading activities at Turkish harbours increased to 1,442,000 TEU and 158 million tons region respectively.

The number of airports operated by the General Directorate of State Airports Administration (DHM?) reached 37 by the end of 1999. Total passenger traffic mainly intensified at Atatürk, Antalya, Esenboğa, A.Menderes and Dalaman Airports arrived at 31.6 million, 18.5 million of which was international.

The Turkish Airlines (THY) modernized its fleet in recent years and has had one of the youngest fleets of the world. The number of aircrafts it owns increased to 73 and seating capacity to 11,770.

The Turkish Governments, as a general policy, have been putting a special emphasis on the more widely participation of private sector in the field of civil aviation. As a consequence, particularly after the Civil Aviation Legislation of 1983, the number of private domestic airlines, standards of their fleets and their market shares have substantially increased. In 1999, private sector airlines’ market share in international passenger traffic was as high as 33 per cent.

In spite of the these developments, the present organisation of the civil aviation authority has been neither conducive to effective control over the civil aviation activities nor responsive to the needs of ever improving sector. Therefore, restructuring of the Civil Aviation Authority as a capable and autonomous body seems to be a must. Moreover, private aviation companies could not achieve a stable structure and for this reason, loss of finance and confidence caused by closing down of the firms rather frequently affects the sector adversely.

The shutdown of Irak-Turkey Crude Oil Pipeline as a result of the Gulf Crisis in August 1990 has not only affected Turkey’s pipeline transport adversely, but also hindered programs of other investments planned in the sector for the first half of the 1990s. Although Irak-Turkey Crude Oil Pipeline was partially put into operation for limited oil export for six months by the end of 1996, adverse effects of its shutdown over the economy still continue.

Studies are underway for diversifiying natural gas sources and increasing the supply volumes in order to meet increasing gas demand. Within the context of these studies; agreements were reached with the Russian Federation for 30 BCMA of gas, with Algeria and Nigeria for 4 and 1.2 BCMA equivalents of LNG import respectively. Besides, Natural Gas Purchase and Sale Contract was signed with Iran for 10 BCMA. The need for new natural gas pipelines and storage facilities in order to diversify the natural gas supply sources and to secure the supplies keeps up its significance.

In recent years, authorities and responsibilities as well as technical criteria and standards could not be clearly defined for urban rail mass transit systems and desired productivity could not be reached. Despite rapid increase in the number of automobiles, sufficient improvements could not be achieved in mass transport systems and bottlenecks in inter-city highway infrastructure have become crucial.

Prospects

In 1999, priority was given to the investments aiming at upgrading and effectively utilising the existing infrastructure as well as to the ongoing projects that are due to be completed and contribute to the sector within a relatively short period of time.

Construction of 568 kms of state highways is to be completed in 2000. One-hunderd fifty kms will be passed with asphaltic concrete and 500 kms with surface treatment.

Restructuring of the railway operator will proceed to establish independent business units for passenger, freight, workshops and infrastructure. Legal arrangements aiming at providing administrative and fiscal autonomy to the operator will be speeded up.

Within the context of restructuring, works on transfer of operation of commuter lines to the respective municipalities to increase responsiveness of commuter services to transport demands and to achieve integrity of urban transport systems will continue. This will also help downsizing of TCDD, hence increased efficiency.

The modernisation and upgrading of existing infrastructure and establishment of container terminals in appropriate centers to meet the increased demand due to containerization will be given priority. Engineering and consulting services for Bosphorus Railway Tube Tunnel project is to be tendered in 2000.

Container traffic as well as loading and unloading activities at Turkish harbours are expected to continue increasing and reach 1,650,000 TEU and 170 million tons (including 30 million tons crude oil transit) respectively by the end of the year. National port master plan will also be completed at the end of 2000.

It is estimated that the total passenger traffic at Turkish airports will reach 32 million by the end of 2000.

Activities for the diversification of natural gas supply sources will continue and alternative projects will be executed to achieve this goal.

In the Seventh Five-year Plan period of 1996-2000, establishment of a transport infrastructure consistent with environment in order to make the largest contribution possible to the development objectives through economic, rapid and safe services by creating harmonious integration among transport modes is the main goal.

For the purpose of reaching this goal, among the objectives are increasing productivity in the sector, utilisating existing capacities, effectively providing infrastructure to shift domestic freight transports from highways to railways, maritime and pipeline transport and realising of relevant legal and institutional arrangements.

A dynamic Transport Sector Master Plan considering the transport sub-systems to be consistent with economic and social development of the country and to complement each other shall be prepared and sustainable implementation of it shall be aimed.

Rehabilitation and maintenance-repair services shall be carried on without hindering, in order to benefit from existing transport infrastructure most effectively. Investments programmed for harbours and airports shall be accelerated and new capacities at key locations shall be constituted.

Privatization programs appropriate for the characteristics of transport systems and control mechanisms shall be developed and emphasis shall be laid on BOT model for the realisation of investments.

In order to ensure effective utilisation of existing motorways, harbours and airports, construction of the roads connecting these modes to main axes of highways and railways shall be given priority.

A particular emphasis will be placed on the pavement rehabilitation and improvement works on the state and provincial roads, while the ratio of asphalt concrete pavement shall be increased to cover all state roads and 85 per cent of the provincial roads within the Plan period. The length of asphaltic concrete paved roads appropriate for heavy vehicle traffic is planned to reach 8,500 km. by the end of the period.

With the investments to be completed in the Plan period, approximately 500 km. dual carriage highways shall be put into service and geometric standards of 5,500 km. of state and provincial roads shall be improved.

The construction of group village roads shall be given priority and collector rural roads and roads connecting rural roads to village centers shall be paved in accordance with a rational program. During the plan period, construction of 16,500 km. asphalt, 50,000 km. stabilised and 2,000 km. concrete village roads shall be realised.

Motorways to be constructed shall conform to the Transport Master Plan and feasibility studies shall be taken as basis; priority shall be attached to BOT model for these investments.

Modern methods of railway management to meet the demands of the clients closely and to adapt to changing market conditions shall be implemented in order to take the necessary share from the upturn of demand in railway transport.

Investment for modernisation and improvement shall be placed emphasis on so as to benefit from existing railway network at the highest level. A total of 2,000 km. road renewal and 1,300 km. electrification work, the provision of 60 electrified mainline locomotives, 250 passenger and 2,500 freight railway cars shall be materialised. Moreover, a total of 80 km. new railways shall be put into service in the Seventh Five-year Plan period.

A dynamic maritime policy shall be applied to follow world maritime sector closely, to give opportunity for arrangements to ensure adaptation to developing national and international conditions. In the Seventh Plan period, the merchant fleet is anticipated to reach 13.0 million DWT including renewals. The share obtained from world maritime transport shall definitely be raised to higher levels.

Harbour management shall be restructured harmoniously with developments in national and international trade within a modern approach. Harbour capacities shall be used at the highest level and a considerable share consistent with the geographical location of the country shall be taken from transit transports.

In parallel with the increase in container traffic, investments for new container terminals, primarily at Derince and Northern Marmara shall be materialised.

As for airport investments, priority shall be laid on raising service capacities and level of standards of existing airports, mainly Atatürk and Antalya.

In the Plan period, it is anticipated that Isparta, Bodrum, Samsun-Çarsamba and Sanliurfa conventional airports shall be completed and the number of passenger arrivals and departures at airports, operated by the General Directorate of the State Airports Administration will reach 30 million on international lines and 45 million in total, by the end of the period.

New natural gas pipeline and storage investments shall be planned to eliminate the dependency on a single source and to increase the safety of supply by increasing alternative sources. International crude oil and natural gas pipeline investments to reinforce Turkish economy and politics shall be given priority.

Urban transport investments shall be based on long-term plans integrating mass transport with land use plans.

In order to comply with the tonnage restrictions on freight transportations on inter-city highways, weight control stations shall be established.

In order to find a solution to the problems arising from insufficiencies in the organisational structure of railways, restructuring program of the General Directorate of the Turkish State Railways shall be completed and put into operation within a short time.

Harbour management shall be made ready for international competition by means of providing an autonomous structure and privatisation.

Civil aviation authority shall have an autonomous and powerful structure and be improved regarding personnel quantity and quality.

The primary objectives of Turkish tourism sector are developing a high competitive nature and productive tourism economy, meeting the expectations of local people and tourists from tourism, enriching natural and cultural beauties and providing their sustainability.

The number of beds certified by the Ministry of Tourism reached 314.000 by the end of the Sixth Plan period of 1990-1994 and the number of tourists rose 6.7 millions and tourism revenue was realised as USD 4.3 billion.

Despite a good deal of positive developments achieved during the Sixth Plan period, deficiencies regarding the important matters like bed capacity, infrastructure (sewerage, potable water, road, garbage collection and disposal, and waste treatment) and organisational problems continue to exist. Mediterranean-Aegean Tourism Infrastructure and Coastal Management Project (ATAK) is not progressing as planned owing to local administrations’ and users’ not participating in financing of infrastructure efficiently and limited public contribution.

In 1998, the number of beds certified by the Ministry of Tourism and by the Municipalities reached 321.000 and 354.000 respectively. In 1998, the number of tourists rose 9.7 millions and tourism revenue was realised as USD 7.2 billion.

Prospects

In 2000, it is expected that the number of beds certified by the Ministry of Tourism and by the Municipalities should reach 350,000 and 360,000 respectively. The number of tourists would drop to 7.5 millions while the tourism revenues would be around USD 4.5 billion in 1999 due to the negative circumstances.

At the end of the Seventh Plan period of 1996-2000, it is anticipated that the annual tourism revenue would reach USD 10.3-13.8 billion, the number of tourists visiting Turkey and the number of citizens going abroad would go up to 13-17 millions and 4.5-4.8 millions respectively. It is expected that bed capacity of hotels certified by the Ministry of Tourism would reach 800,000 with the completion of facilities which are under construction and at the project stage, by the end of the Plan period and total bed capacity should arrive at 1.3 millions together with the facilities certified by the Municipalities.

In the Seventh Plan period, it shall be the major principle to benefit from the existing superstructure more efficiently and to protect environment and natural beauties. Activities to develop culture, winter, mountain, pasture, thermal, health, yachting, golf, caravan, cruising, congress and animation tourism shall be continued in order to improve the seasonal and geographical distribution of tourism and to create new potential fields by taking changing consumer preferences of foreign markets into consideration.

In tourism region local administrations and local people shall be ensured to participate in decision making mechanisms related to tourism.

Depending on new tendencies in the demand pattern, the development of small and medium sized enterprises in the sector shall be given priority.

Emphasis shall be placed on necessary arrangements and technical measures to integrate tourism superstructure with a sufficient infrastructure, and relevant arrangements shall be made for the acceleration of ATAK Project. In addition, a dynamic and strategic Tourism Sector Master Plan (TUSAP) will be put into action to achieve a sound development in tourism the sector in the long run.

Education level of the population persists to be inadequate. According to 1990 General Census of Population, 11 per cent of male and 28 per cent of female population at the age of 6 and over are illiterate. Seventy-four per cent of literate male population consists of primary school graduates or persons without any formal education. This rate is 82 per cent for literate females. Education level of the manpower is not adequate either, only 5.2 per cent of the manpower has graduated from higher education as of 1990. Seventy-eight per cent either primary education or not graduated from any school.

Schooling rates in the 1998-1999 academic year were 10 per cent in pre-school education for 5-6 age group, 93 per cent in eight-year primary education, 58 per cent in lycees including vocational and technical schools, and 26 per cent in higher education, 17 per cent of which belongs to formal higher education.

These quantitative developments are curtailed since educational activities are carried out on half-a-day basis and in overcrowded classes especially in big cities due to population increase and internal migration as well as insufficiency of resources allocated for education at all levels.

The compulsory basic education period was extended to 8 years in 1998 in line with the Law on the Unity of Education and the minimum 9 year norm of the EU countries.

Contribution of the public and private sector agencies and institutions to the field of vocational and technical education is inadequate and this poses a serious problem. The desired level could not be attained in the efforts to improve vocational-technical formal and informal education in line with manpower requirements of the economy.

Utilization and dissemination of new technologies in education could not be adequately achieved. Among the factors that prevent obtaining the expected advantage from computer-enhanced education are software could not be developed adequately, instructors needed are insufficient or those who are trained are assigned to schools without have computer laboratories, existing computers become out of date in a short period as a result of rapid changes in technology.

Prospects

The goal of education is to bring up persons of the information age who are free, self-confident and well aware of their duties and responsibilities towards the Republic of Turkey.

Education has been the top priority sector in the Seventh Plan plan period. A well-trained young population will be the greatest advantage of Turkey as regards increase of the competitiveness of Turkey in the 21^st century as well as integration with the EU. Within this framework, an education policy shall be followed to raise a manpower comprising of people who are secular, have assimilated populist democracy, can improve national culture, be open to universal values and new ideas, inclined to scientific and technological innovation and are high-skilled, whose ability of thinking, perceiving and problem solving has developed.

It is the main principle to bring up manpower which is one of the most important elements of economic growth and social development by improving the quality and quantity of the formal and informal education system. At the stages of planning, accomplishment and supervision of on-the-job training and practical vocational training to be provided in training centres of the enterprises, necessary arrangements shall be made rapidly in the laws concerned in order to increased effectiveness of the vocational institutions and places of work.

The establishment of a structure of new and consistent vocational education within and together with the general education system is on the agenda. Fundamental principle of this restructuring will be the implementation of a vocational training system based on school-business cooperation and provision of skills, at each stages of formal and informal education. Emphasis will be laid on raising the level of formal and informal vocational and technical education to meet world standards, completing the studies carried out on professional standards and certification system, developing the relationship between school and working life, providing basic knowledge, skills and new technologies at the school, ensuring implementation in offices, and on-the-job training.

Emphasis will be placed on training skilled personnel in the fields of health, education, science-research, tourism and environment given their importance.

Health sector is one of the top priority sectors in Turkey and due to the continuous emphasis placed on it by the governments within the framework of human resource development issue, a considerable improvement has been recorded at the general health level of the society in recent years. By the end of 1999, life expectancy at birth has risen to 69 years and infant mortality rate of 0-1 age group has dropped to 36.3 per thousand. Despite considerable improvement, these indicators are not considered as adequate and a persistent effect is being devoted to their further improvement.

Public sector has continued to have the major role in health services. It owns 93.4 per cent of the bed capacity and almost the entire preventive health service units.

In order to ensure effective use of resources and increasing consumer satisfaction through expansion, continuity and quality of services in the health sector, the need for restructuring of the system with respect to finance, administration and organisation, manpower, provision of services, legislation and information persists.

Although significant developments have been recorded with respect to the number of health personnel, problems continue to exist regarding their employment and countrywide distribution. Shortage of specialists in some medical branches could not be sorted out. Forty per cent of physicians is clustered in the three biggest cities. The number of population per physician has decreased to 806 as of 1999.

School of Medicine Hospitals concentracted on providing general health care services besides performing their fundamental duties of educational and scientific research. This situation leads to interruptions in education and training and increase in service costs.

Number of beds amounted to 168,716 in 1999; however, its countrywide distribution is imbalanced and 38 per cent of total beds are in three big cities. Utility rate of the existing beds remains at a rather low level of 59 per cent. This rate is even below 25 per cent in district hospitals having less than 50 beds, due to incorrect choice of location, deficiencies in manpower and machinery-equipment, and the habits of the society in using services.

The rate of population covered by social health insurance was 78.6 per cent in 1999.

With a view to improve basic health services and raise the health standards of the people by ensuring accessibility to these services, enhancing effectiveness and efficiency in the provision of health services and administrative capacity of the Ministry of Health, First Health Project was put into practice in eight cities in 1990. In 1994, Second Health Project was initiated to be implemented in 23 development priority cities.

Prospects

The health system shall be restructured with respect to finance, administration and organisation, manpower, service supply, legislation and information in order to accomplish effective use of resources in health sector and enhance consumer satisfaction by ensuring continuity, quality and expansion of services.

To achieve this target a new health reform package has been implemented. In this content the major policies are as follows;

                    -social health insurance shall be widened to cover the whole population,

                - 44 hospitals (5112 beds)
                - 2 hospital expansion projects
                - 104 health clinics
                - 94 health units
                - 50 various other health related centers.

High rate of immigration from rural to urban areas causes rapid increases in the demand for further urban infrastructure. Municipalities search for external finance resources due to financial constraints, particularly in drinking water, sewerage and treatment investments which require technology transfer and considerable amount of finance. In addition to the need for new urban infrastructure, there is a problem of inefficient use of existing facilities due to insufficient skilled labour and other organisational problems.

Municipal water, sewerage and treatment facilities are the most important urban infrastructure investments which are largely financed by the central administration. There are two important sources of finance for such investments; the Municipalities Fund and investments of the State Hydraulic Works (DSI). The former is operated under the authority of the Bank of Provinces and provides grants for municipalities, while the latter cannot cover its costs in the provision of municipal water due to high inflation. These facts cause an inefficient resource allocation and limited amount of new funds for new investments.

Another important issue is neglected maintenance, repair and partial renewal works, causing water losses reaching 50 percent countrywide. For this reason, rehabilitation of existing network is quite important. There is also a need for preparing maps that cause bottlenecks in the maintenance and repair of water and sewerage networks.

Although priority is given to the provision of drinking water according to the Law on Underground Waters No: 167, because of insufficient amount of allocations there are delays in the implementation phase which increase the cost of investment particularly in the provision of water from long distances as well as surface water resources.

There is an insufficient flow of information and cooperation among institutions responsible for providing municipal water which causes problems in determining investment priorities and harmonisation.

There are also deficiencies in the conservation, planning and management of underground and surface waters. Uncontrolled construction in the areas near drinking water basins, particularly in large cities, affects resources and the quality of drinking water adversely.

Prospects

A new structure for the management of water resources whose importance are gradually increasing shall be instituted.

Meeting the drinking water need of the settlement units with none or insufficient drinking water supply shall be the primary objective.

The works shall be completed in order to meet long term municipal water requirements of cities.

Emphasis shall be placed upon activities in order to decrease water losses to reasonable levels.

Construction of municipal water, sewerage and treatment facilities shall be coordinated effectively with a special emphasis on the use of appropriate technology.

Construction of municipal water, sewerage and treatment installations through BOT model shall be encouraged.

Cooperation between the Bank of Provinces and the Municipalities shall be developed in carrying out municipal drinking water and sewerage services.

Basin-based approach shall be given emphasis in domestic waste water treatment projects to be implemented by the Bank of Provinces.

Efforts shall be initiated for water and waste water tariffs to be determined according to modern management principles to compensate the costs of operation, maintenance and repair and to generate funds for new investments.

Water and sewerage administrations shall be established in municipalities with population over 100.000.

Municipalities shall prepare infrastructure maps of utilities related to urban infrastructure and develop programs for preventing water losses.

In the planning, implementation and management of infrastructure investments regarding land and water resources, participation of  the users  in  all  respects  shall  be  ensured.    Through such measures,  the effective use of resources and existing infrastructure shall be assured and the burden on the public sector in this field shall be reduced.