Document of

The World Bank

Report No. 17877- TU

PROJECT APPRAISAL DOCUMENT

ONA

PROPOSED ADAPTABLE PROGRAM LOAN

IN THE AMOUNT OF US$ 300 MILLION EQUIVALENT

TO

THE REPUBLIC OF TURKEY

FOR A

BASIC EDUCATION PROJECT

IN SUPPORT OF THE FIRST PHASE OF

THE BASIC EDUCATION PROGRAM

JUNE 1, 1998

Human Development Sector Unit (ECSHD)FYR Macedonia, Turkey Country UnitEurope and Central Asia Regional Office

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CURRENCY EQUIVALENTS(Exchange Rate Effective April 1, 1998)

Currency Unit = Turkish LiraTL 226,000 = US$ I

FISCAL YEAR

January 1 - December 31

ABBREVIATIONS AND ACRONYMS

APK Council for Research, Planning, and CoordinationAPL Adaptable Program LoanBEPP Basic Education Pilot ProjectERDD Department of Educational Research and DevelopmentETGEM General Directorate for Educational TechnologiesGIS Geographic Information SystemIT Information TechnologyMIS Management Information SystemMONE Ministry of National EducationNEDP National Education Development ProjectNGO Non-Governmental OrganizationPCT Program Coordination TeamUNESCO United Nations Educational, Scientific, and Cultural

OrganizationUNICEF United Nations Children's FundYOK Higher Education Council

Vice President: Johannes LinnCountry Director: Ajay Chhibber

Sector Director: James Christopher LovelaceTask Team Leader: Michael Mertaugh

TurkeyBasic Education Project

CONTENTS Page Nos.

A. Program and Project Development Objectives

1. Program and project development objectives and key performance indicators 2

B. Strategic Context

1. Sector-related CAS goals supported by the project 32. Main sector issues and Government strategy 33. Sector issues to be addressed by the project and strategic choices 9

C. Program Description Summary

1. Program components 92. Key policy and institutional reforms supported by the Program I 13. Benefits and target population 114. Institutional and implementation arrangements 11

D. Project Rationale

1. Project alternatives considered and reasons for rejection 132. Major related projects financed by the Bank and/or other development

agencies 143. Lessons learned and reflected in proposed project design 144. Indications of borrower commitment and ownership 155. Value added of Bank support in this project 15

E. Summary Program and Project Analyses1. Economic 152. Financial 153. Technical 164. Institutional 175. Social 176. Environmental 177. Participatory approach 18

F. Sustainability and Risks1. Sustainability 182. Critical risks 193. Possible controversial aspects 20

G. Main Loan Conditions

1. Agreements reached at negotiations 202. Dated covenants 20

H. Readiness for Implementation 21

I. Compliance with Bank Policies 21

AnnexesAnnex 1. Project Design SummaryAnnex 2. Detailed Project DescriptionAnnex 3. Estimated Project CostsAnnex 4. Economic Analysis SummaryAnnex 5. Letter of Sector PolicyAnnex 6. Procurement and Disbursement ArrangementsAnnex 7. Project Processing Budget and ScheduleAnnex 8. Documents in Project FileAnnex 9. Statement of Loans and CreditsAnnex 10. Country at a Glance

Map IBRD 29532

TurkeyBasic Education Project

in Support of the First Phase ofthe Basic Education Program

Project Appraisal DocumentEurope and Central Asia Regional OfficeFYR Macedonia, Turkey Country Unit

Date: June 1, 1998 Task Team Leader/Task Manager: Michael MertaughCountry Manager/Director: Ajay Chhibber Sector Manager/Director: James Christopher LovelaceProject ID: TR-PE-9089 Sector: Education Program Objective Category: Human DevelopmentLending Instrument: Adaptable Program Loan (APL) Program of Targeted Intervention: [X] Yes [ ] No

Program Financing Data Total Loan Share of(US$ million) Cost Amount Bank

FinancingPilot Phase (Basic Education PilotProject) -- to be completed in Dec '98

APLs:First Phase, Program Launch 2,515 300 11.9 %Second Phase, Program Consolidation 4,172 300 7.2 %Total, Phases I & II 6,687 600 9.6%Subsequent Phases 5,045 TBD TBDOverall Total (including future requests) 11,732 TBD TBD

Project Financing Data [X] Loan [] Credit [] Guarantee [X] Other [Specify]

For Loans:Amount (US$m/SDRm): US$300 millionProposed terms: [] Multicurrency [X] Single currency, specify US$

Grace period (years): 3 [] Standard Variable [X] Fixed [] LIBOR-basedYears to maturity: 15Commitment fee: 0.75 % on undisbursed loan balances, beginning 60 days after signing, less any waiver

Service charge: Nil %

Financing plan (US$m):Source Local Foreign Total

Government 1,829.9 191.8 2021.7Provincial Administration 36.2 5.5 41.7IBRD 155.0 145.0 300.0National Donors 129.0 22.0 151.8

Total 2,150.1 365.1 2,515.2

Estimated disbursements (Bank FY/US$M): 1999 2000 2001Annual 148.4 143.8 7.8

Cumulative 148.4 292.2 300.0

Project implementation period: 3 years Expected effectiveness date: July 15, 1998 Expected closing date: June 30,2001

OSD PAD Form: July 30,1997

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A: Program and Project Development Objectives

1. Project development objective and key performance indicators (see Annex 1):

Objectives. The Basic Education Program is the Government's action program to apply its new basic educationstrategy. The strategy and Program are described in the Government's Letter of Sector Policy (Annex 5). Theobjectives of the strategy (and of the Program) are: a) to achieve universal coverage in an expanded, eight-yearbasic education cycle (formerly, five years), b) to improve the quality and relevance of basic education, and c) tomake basic education schools a learning resource for the community.

The Program aims to achieve these objectives by a) expanding the capacity of basic education schools throughoutthe country, b) facilitating school attendance of children who are least likely to attend school, c) reducing classroomovercrowding and double shifting, d) improving training and incentives for teachers, e) improving the supply ofeducational materials to basic education schools, f) introducing computer-aided learning, and g) increasing parentaland community involvement in schools.

BASIC EDUCATION PHASE I PHASE II PHASE IIIProgram Phases Program Launch Consolidation CompletionDevelopment Establish capacity to implement, Continue investments. Continue investmentObjective monitor and evaluate the Program. Use feedback from program until Program

Initiate key investments to achieve monitoring process to objectives are fully met.Program objectives. improve effectiveness of Use feedback from

investments in meeting monitoring process toProgram objectives. improve effectiveness of

investments in meetingProgram objectives.

Key Program Outputs Key infrastructure investments Expansion of key Program objectives fullyessential to meet goals of eight year investments. Educational met.compulsory education in place. and targeting initiatives

remain central on theProgram agenda.

Benchmarks for / Provision of a basic package of Triggers to be determinedSubsequent Adaptable educational materials to all for launching ofLoan and Grant rural schools; Completion Phase.Financing / 30% completion of facilities

upgrading for about 200village schools;

v Implement inservice teachertraining for teachers andinspectors;

v Carry out the monitoring andsocial assessment program,including the basic educationpublic information program;Develop school infrastructureprogram for 2 nd phase;

v Finalize IT procurement for2nd phase;

/ Disburse or at least commit60% of Phase 1 APL.

In addition to the above milestones, Program performance in terms of enrollment coverage and learning achievementwill be closely monitored throughout the Program, and will provide the basis for identifying triggers for thesubsequent phases.

OSD PAD Form: July 30, 1997

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Under this submission, Board approval is sought for an APL commitment of US$600 million to support initialimplementation of the Program: an initial APL of US$ 300 million to support Phase I implementation of theProgram, as well as authorization for Regional management to process and approve a second, overlapping APL ofUS$300 million to support continued implementation of the Program, as soon as specified performance goals aremet. Beyond these first two APLs, the Government has requested further Bank financing for continuedimplementation of the Program. A request for further financing would be prepared for Board consideration ifProgram implementation is satisfactory.

Key Performance Indicators. Program performance will be monitored for four successive levels of performance:a) educational inputs, such as the numbers of teachers recruited and trained, schools constructed and rehabilitated,and students provided with textbooks, b) process indicators, such as enrollment, dropout and transition rates, andclass sizes, c) output indicators, measuring various dimensions of learning achievement, and d) impact indicators,such as graduate eamings. Specific indicators and their rationale for inclusion are described in the attachment toAnnex 1. In monitoring Program performance, particular attention will be given to areas and children with thelowest basic education enrollment ratios and performance. Performance indicators will play an important role inensuring that the Program gives appropriate attention to these groups with the greatest educational needs.

Input indicators are expected to provide the first quantitative evidence of Program performance. The triggers formoving to the second stage of APL financing include indicators such as educational inputs for provinces with thelowest enrollment rates. Program outcomes in terms of learning achievement, labor-market performance and otherdevelopment impacts will take longer to observe. Permanent monitoring processes will be instituted duringProgram implementation, in order to track these longer-term outcomes.

B: Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goals supported by the project (see Annex 1):

CAS document number: 16992-TU. Date of latest CAS discussion: September 4, 1997. Generic CAS objectiveswhich the Program will support include the following: To shift administrative resources into activities aimeddirectly at social development and poverty alleviation, and to shift the focus of investment activities to poorerregions. (para. 4.5), and to support initiatives to upgrade education (para. 4.10). Paragraph 4.12 of the CASdescribes the objective of expanded basic education more explicitly, stating that the Bank's highest priority ineducation is to help the Government achieve its goal of universal schooling through the eighth grade, andacknowledging the important role of the National Education Development Project and the Basic Education PilotProject (BEPP) in developing an approach for this effort.

2. Main sector issues and Government strategy:

A Growing Public Consensus

Public interest in expanded basic education in Turkey has grown progressively throughout the 1990s. An importantlandmark was Turkey's participation in the 1990 Jomtien "Conference on Education for All," jointly sponsored byUNICEF, UNESCO, and the World Bank. Following this conference, the Government initiated discussions onpossible World Bank assistance for the expansion of eight-year basic education. In 1995, the Government requestedan amendment of the ongoing National Education Development Project (Loan 3192-TU) to incorporate a two-yearBasic Education Pilot Project (BEPP) and preparation of a proposed project to support universal basic education.This amendment was approved by the Board early in 1996, and the Pilot Project is now nearing completion. ThePilot involves a new partnership of the Ministry of National Education (MONE), UNICEF, and the Bank. TheMinistry developed a number of the pilot initiatives for rural schools with UNICEF assistance, and is workingclosely with UNICEF on the rural education component of the Pilot Project.

Public interest in basic education developed rapidly in 1997, culminating in Parliament's approval in August, 1997,of a new Basic Education Law. This Law established a timetable for implementation of universal eight-year basiceducation, and, for the first time, provided major budget resources (in the form of earmarked taxes) for theinvestments necessary to achieve that goal. The current level of official and public support for expanded basiceducation is unprecedented. An indicator of the breadth of public commitment to the Program is the amount ofprivate, voluntary contributions for the Program, which total $500 million to date-including a $150 millioncontribution from the Istanbul Stock Exchange, and a $15 million contribution from a large private enterprise basedin Istanbul. In spite of budgetary shortages elsewhere, the Government has already committed $1.5 billion in 1998

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for the launch of the new Program, and is vigorously proceeding with the initial stages of implementation.

The Government aims to attain the objective of universal eight-year basic education progressively over the nextthree school years. The Basic Education Law requires that, as of 1998, all children who complete the fifth gradewill continue through the eighth grade. More generally, the law will require that all of the 6.9 million children whoare currently enrolled in grades I through 5, and all children who start school in the future will remain in schoolthrough completion of the eighth grade. The Law does not require that children of basic-education age who havealready left school return to school, but it is expected that many who have recently left will do so. The Governmenthas recently introduced an open education program, using distance learning methods, to provide core basiceducation skills to young people over 15 years old who have dropped out of basic education.

The Nature of the Challenge

Capacity Expansion. Extending the duration of compulsory education from five to eight years and reducingcrowding in existing schools requires a major expansion of school capacity -- particularly for grades 6 through 8.The MONE estimates that 14.2 percent of the basic-school-age population -- a total of 1.5 million children -- is notattending school. The actual number of children not attending school could be considerably larger than this.' Inmost urban areas, school attendance is constrained primarily by inadequate classroom capacity, and inadequatenumbers of teachers. In rural areas, primary schools (grades 1 through 5) are generally available, but a beneficiaryassessment commissioned by the Bank in the Eastern and Southeastern provinces2 found that school attendance inthose regions is constrained by household poverty, public perceptions that educational quality in village schools islow, and parents' unwillingness to send their children-particularly, their daughters-to schools outside the village,Some rural classes also lack teachers, and almost all rural schools suffer from frequent teacher turnover because oithe isolation and difficult teaching and living conditions in remote, rural schools. Some schools in the East andLSoutheast have been closed in recent years because of security risks, but many of these schools are being reopened.as secure conditions are restored. In rural areas, there is a widespread shortage of capacity in the upper grades oibasic education (grades 6 through 8), and parents often cannot afford to send their children away to school.

To address the classroom constraint, the Ministry proposes to construct nearly 3,900 new basic education schools,and to add 15,300 classrooms to existing schools. Schools will also be designed to accomodate handicappedchildren. To address the teacher constraint, the Ministry plans to recruit an additional 150,000 teachers andinspectors for basic education schools, and to improve the attractiveness of rural schools by upgrading teacherhousing, and providing better financial incentives for teachers in hardship areas. It also plans to experiment withteacher recruitment and assignment policies-which are currently administered centrally-to identify more effectiveand efficient ways to deploy teachers in basic education schools.

Demand for Education. School capacity is not the only constraint to universal basic education in Turkey.Beneficiary assessment conducted in preparation for the Basic Education Pilot Project found that primary schoolattendance in many rural areas is constrained by factors which affect parental demand for education. Many parentsin rural areas in the East and the Southeast expressed reservations about their children's-and typically, theirdaughters'-attending school because they felt that the education in their village school was of low quality, orbecause they could not afford the cost (including foregone household work) of their children's school attendance.

The Program aims to address these demand constraints to basic education by visibly raising the quality of basiceducation, providing material incentives to children from poor households the form of free school meals, studentuniforms, and textbooks, and improving the incentives for teaching couples to teach in rural schools. Under the

A recent study which uses the Ministry's enrollment figures for the 1993/94 school year by students' yearof birth (to eliminate overage students) estimates that the net enrollment ratio for the first five years of basiceducation is 94.4 percent for girls and 99.8 percent for boys -- implying a total of 184,000 girls and 7,000 boys notin school -- and net enrollment ratios for grades six through eight of 51.8 percent for girls and 78.0 percent for boys-- implying a total of 953,000 girls not in school and 456,000 boys not in school. Ilkogretimde Okullasma Oranlarive Okul Disinda Kalan Cocuklar, by Prof. Dr. Yuksel Kavak, 1997. The Ministry's enrollment figures for thecurrent (1997/98) school year record that there are 396,000 more boys than girls enrolled in the first five grades ofbasic education than girls, suggesting an even larger number of out-of-school children in the first five grades ofbasic education.2 Factors Influencing School Attendance in Basic Education in Turkey, with Special Emphasis on FemaleParticipation, Professor Dr. Niyazi Karasar, November, 1991.

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Basic Education Pilot component of the National Education Development Project (NEDP), the Ministry upgradedteacher housing in a number of remote village schools to make teacher housing units more comfortable andattractive, with better heating, lighting, sanitary facilities, and basic furniture. Many of these units are now beingshared by young women teachers, who report that these improvements make their assignments more attractive andmaterially improve their living conditions. The extensive improvements to rural teacher housing which are plannedunder the Program are expected to make an important contribution to attracting and retaining qualified teachers invillage schools. Beyond this, improved cash incentives are being provided for teachers who serve in the mostremote and poorly equipped provinces. Under the information technology activity in the Program, the Ministry alsointends to develop an interactive system of professional support for teachers, which is expected to reduce the senseof professional isolation which affects many teachers in village schools. To help overcome the handicap of lowhousehold income, the Ministry is already providing special assistance, including free uniforms and textbooks, tochildren in schools in low-income areas, and is in the process of developing a strategy which will address theirspecial educational needs. These programs are being expanded under the Program. In areas where schoolattendance is a problem, the Program will also support school-based community activities, in order to make basiceducation schools a resource of the community. These actions have been found in Turkey, and in other countries toimprove school attendance and learning achievement. The Program will also support an expansion of preschooleducation to improve children's performance once they start school, and to increase the likelihood that children willstay in school at least through eight years of basic education.

The Educational Basis for the Program. Many of the actions to improve basic education quality were developed bythe Ministry under the NEDP over the past seven years. These include programs for assessment of learningachievement, curriculum development, in-service and pre-service teacher training, education management,education planning, education materials production, and computer literacy and instruction. Although earlyimplementation of the project suffered from a number of problems, performance has improved markedly during thepast two years. The Basic Education Pilot component of NEDP has served as a pilot for key actions proposed forextension under the Program, including: a) improved designs for urban schools, b) a comprehensive set of inputs tovillage primary schools to make them more effective, and c) extensions of some village schools to include the uppergrades of basic education (grades 6 through 8), with provision for bussing students from surrounding villages. Theproject amendment also included the extension of an early childhood development project for mothers and their pre-school-aged children from low-income households. This pilot project has been found to be very effective in raisingchildren's educational performance once they start school, and in raising mothers' ability to provide for theirchildren's educational, nutritional, and health needs.

Program Phasing and Proposed APL Phasing.

The Government is committed to full achievement of the Program, including the quantitative goal of attaining fullenrollment of the basic education age group, and improving the quality of basic education in all basic educationschools throughout the country. Implementation of the Program will be carried out in at least three phases:

The Program Launch Phase will initiate implementation throughout the country by: i) strengthening central andprovincial capacity to implement the Program, ii) creating a mechanism to monitor and evaluate the medium-termand long-term outcomes of the Program, and iii) undertaking the first wave of educational investments -- includingschool construction and upgrading, teacher training, and provision of educational materials -- in each province toachieve the objectives of the Program. The province-level investments made during the First Phase of the Programaddress only the highest-priority educational needs in each province, such as school construction to provide capacityin grades 6 through eight where none currently exists, and to decongest the most overcrowded classrooms inexisting basic education schools. They also equip two basic education schools in each subprovince to providecomputer literacy instruction, in order to serve as a model for other schools at subsequent stages of implementation.

The Program Consolidation Phase deepens the investment in improved school inputs at the province level, in orderof educational priorities. This work will make use of monitoring and evaluation carried out during the first phase onthe educational effectiveness and cost-effectiveness of the investments carried out during the Program LaunchPhase.

Subsequent Phases will complete the investments necessary to achieve the Program's objectives.

The Program aims to provide training to all basic education teachers, principals, and inspectors each year, withfurther elaboration of pedagogical content in successive years of Program implementation. Educational equipmentand materials comprise various packages of educational materials which will be provided to all schools during thefirst phase of the Program, as well as some items-particularly, for information technology-which will be

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provided to schools throughout the Program, as staff are trained and facilities prepared for their use.

The total costs of implementing the Government's Basic Education Program were initially estimated at US$9.1billion. On the basis of that estimate, the Government requested World Bank financing to meet the projected gap ofUS$2.4 billion between the estimated total Program costs and the expected local financing, comprising US$ 4.9billion in revenues from the new basic education taxes, US$0.2 billion from the general budget, US$1.1 billion fromprovincial administrations, and $500 million from private contributions. Since the Government's initial request,cost estimates for the Program have been revised to $11.3 billion, implying an even larger financing gap. Althoughthe Bank endorses the objectives of the Program, the scale of the Program calls for a nuanced application of APLfinancing. Rather than requesting Board approval of the very major funding commitment which would benecessary to significantly cofinance implementation of the entire Program, this proposal represents a moreconservative, progressive approach to financing the Program. The two APLs included in this submission cover onlythe first two phases of Program implementation because of the need to assess the evolution of Turkey's debt servicecapacity as Program implementation proceeds.

Under this submission, Board approval is sought for an APL commitment of US$600 million to support initialimplementation of the Program: an initial APL of US$300 million to support Phase I implementation of theProgram, as well as authorization for Regional management to process and approve a second, overlapping APL ofUS$300 million to support continued implementation of the Program, as soon as specified performance goals aremet. Phase I of the Program comprises a spectrum of activities to launch the Program: i) the school building,extensions, and improvements carried out under contracts awarded during the first year of the Program, ii) trainingof teachers, school principals, and inspectors scheduled to be carried out during the first year of the Program, iii) theprovision of educational equipment and materials scheduled to be provided to basic .education schools during thefirst year of the Program, iv) the development of central and provincial implementation capacity to carry out theProgram, and v) creation of a mechanism to monitor and evaluate the medium and long-term outcomes of theProgram.

An Adaptable Program Loan is an appropriate instrument for support of the Program because, while the Program'sobjectives are firmly established by the Government and endorsed by the Bank, the activities of the Program willevolve as the Program is implemented. Moreover, the external resource needs for Program implementation exceedthe financing available under a single loan. The Government is committed to launching implementation of theProgram without delay. Some Program activities are appraised, and are ready for financing under the first APL.Others are under development, and would be financed by the second, or subsequent APLs. Waiting until theactivities in the second APL are fully appraised would entail an unnecessary delay in launching the first phase of theProgram, which the Government very much wants to avoid. This evolutionary nature of the Program and the APLfinancing provides the advantage of flexibility for experimenting and making course corrections as implementationproceeds. But it also implies the need for a more extensive involvement of the Bank during implementation than aconventional investment project. In order to make the most productive use of the flexibility which the APL offers inrefining the design of the Program as implementation proceeds, and in order to maintain the Bank's professionalpartnership across the full range of policy areas addressed by the Program, there will be a need for a continuousprofessional partnership as implementation progresses. This work will involve elements of both supervision andongoing appraisal as the Program evolves. The Bank is committed to providing this partnership, and is makingarrangements to strengthen its field presence in order to provide this professional partnership on a continuous basis.

The First APL: The first APL would finance about 12 percent of the costs of implementing the first phase of theProgram-defined as activities either carried out or committed during the first year of the Program-plus twolonger-term activities for which an up-front commitment is needed: strengthened implementation capacity anddevelopment of a suitable mechanism for monitoring and evaluation, including assessment of learning outcomes.Although full implementation of these activities is expected to require three years, the bulk of it is expected to becompleted in the first eighteen months of Program implementation. The specific activities included in Phase I, andthe subset of those activities to be financed by the first APL are described under item C, below, and in Annexes 2and 3.

The Second APL: Phase II of the Program consists of basic education investments to be carried out or committedduring the second year of Program implementation. Although some new activities may be added to the Programduring its second phase, the major elements of the Program are known and have been costed at $4.2 billion. Asecond APL of $300 million would be appraised to help finance Phase II implementation, as soon as specifiedperformance goals for Phase I of the Program are met. The second APL is expected to finance the provision oftextbooks to rural and urban slum schools, school construction and upgrading, the expansion of computer literacy

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instruction, and further training of basic education personnel. Completion of Phase I implementation on theproposed schedule will require external financing beyond this second APL. If implementation is satisfactory at thatstage and if the Government still desires further Bank assistance, a request for additional financing would beprepared for Board consideration.

The Triggers for Moving to the Second APL: Seven key actions, described below, are proposed as triggers forproceeding to the second APL. The first three involve important actions to improve teaching and learningconditions in the schools with the greatest educational needs. The next one is essential for establishing a reliablemechanism for monitoring the medium-term and long-term educational outcomes of the Program, and forgenerating feedback on Program outcomes to improve Program effectiveness as implementation progresses. Thefinal three are designed to demonstrate the need for resources under the second APL, and the capacity to implementthe second APL effectively. These triggers for progressing to the second APL are designed to demonstrate up-frontthe Program's commitment to eliminate the constraints to universal education, and to provide further financialsupport for Program implementation when it is needed. Because implementation of the full Program will requireexternal resources beyond what these first two APLs could provide, preparation of a proposal for subsequentfinancing would be launched in time to provide for uninterrupted financing, assuming that Program performance upto that stage is satisfactory.

a. Sign contracts or otherwise arrange for the provision of a basic package of educational materials,satisfactory to the Bank, to all rural schools. Under the Basic Education Pilot Project, a basic package ofeducational materials was provided to 274 rural schools in the East and Southeast. This activity materiallyimproved teaching and learning conditions in those schools, and in many cases appears to have led toimproved school attendance. A similar package of basic educational materials is to be provided to the30,700 other rural schools under the Program. Making this activity a trigger for moving to the second APLis designed to ensure that the least-well-equipped schools are among the first to benefit from theinvestments in the Program. Most of the costs of this activity are to be financed under the first APL, butsome of the materials are expected to be donated by producers or private-sector sponsors. Loan financingwould be used if these donations fail to materialize as expected.

b. Contract for and achieve approximately 30 percent completion of facilities upgrading for about 200 villageschools in the provinces of Sirnak, Van, Mardin, Hakkari, and Bitlis (or other provinces as agreed with theBank). These provinces in the Southeast have the lowest rates of basic education school attendance, andsuffer from high teacher turnover and teacher absence due to the difficulties of teaching and living in thatenvironment. Under the Basic Education Pilot Project (BEPP), 15 rural schools were upgraded to providemore attractive and functional teacher housing, more effective teaching and learning conditions forclassrooms, and better physical amenities for students. The improvements to these 200 schools under thefirst APL will be planned in consultation with teachers and the community, in order to maximizecommunity ownership. These actions are expected to help attract and retain qualified teachers for remoterural schools. They are also expected to lead to better school attendance and better educationalperformance. The Government plans to upgrade about 70 percent of the 30,700 rural schools under theProgram. Some of this work is included in the Government-financed program which has already started.Continuation of this work is expected to be financed under the second APL. The reason for including thisaction among the triggers is to ensure that this work is initiated from the start of the Program and is carriedout to quality standards which will maximize the potential impact in attracting and retaining qualifiedteachers to these schools. Upgrading these 200 schools to the same standards as the BEPP schools isexpected to serve as a model for upgrading other rural schools in the next phase of Programimplementation.

c. Implement the agreed program of inservice training for teachers, school principals, and inspectors. Underthe BEPP, the Ministry of Education developed a program of in-service training for teachers, principals,and inspectors in the 274 rural pilot schools, to equip teachers to deal more effectively with the specialteaching challenges which they face in that environment. Under the Program, the Ministry of Educationplans to provide a similar program of training throughout the basic education system to make teachersbetter teachers and to make school inspectors and school principals change agents for the educationalinnovations which are planned under the Program. This program has been discussed and agreed with theBank. Implementation of the first phase of the agreed training program is to be financed by the first APLand implemented as a condition for progressing to the second APL.

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d. Carry out the agreed monitoring and social assessment program, including the basic education publicinformation campaign. The monitoring and assessment component will provide vital information onmedium-term and long-term Program outcomes in terms of objective quantitative and qualitativeindicators, and public perceptions of its effectiveness. Developing this monitoring capacity up-front isvital to the longer-term viability of the Program. A detailed program of activities has been agreed for themonitoring and assessment component, including impact studies which are to be commissioned and carriedout prior to the first joint review of Program implementation, scheduled for May, 1999. This programprovides an objective basis for determining whether the implementation of this activity is on track.

e. Develop the school infrastructure program for the second phase of the Program according to criteriasatisfactory to the Bank. The second-phase infrastructure program, which is expected to be financed underthe second APL, is to be developed according to criteria which ensure the suitability of schoolconstruction, upgrading and extension in terms of cost-effectiveness of designs, cost-effectiveness of theparticular types of structure proposed, and educational priorities (focusing on school upgrading to improveschool attendance and teacher retention, and creation of additional capacity to accommodate expectedenrollment increases). The Program calls for the construction of 1,512 basic education schools and 46,944classrooms during the second phase of implementation. Clearly, the second APL could finance only amodest fraction of this program. The action specified in this trigger refers to the criteria for selecting thetype of school investments to be undertaken and the standards embodied in the prototype designs forschools. These activities are, by nature, scale free: they need to be carried out regardless of the size of theinfrastructure program.

f. Finalize specifications and bidding documents for the second phase of information technologyprocurement, as agreed with the Bank. The Ministry and the Bank are currently examining the feasibilityof several options for the second phase of information technology (IT) procurement, including thepossibility of leasing, and supply through a consortium of hardware and software suppliers. Specificationsfor the second phase of IT procurement are to be finalized on the basis of the findings of this investigation,as well as the early lessons of the first phase of IT procurement, prior to proceeding with the second APL.

g. Disburse or commit at least 60 percent of the first APL. At least US$ 180 million of the first APL is to bedisbursed or committed-i.e., contracted for-prior to proceeding with the second APL.

The proposed APLs overlap because of the nature of the activities to be financed. The first APL would financeabout 12 percent of the costs of implementing the first phase of the Program-defined as activities either carried outor committed during the first year of the Program-plus two longer-term activities for which an up-frontcommitment is needed: assessment of learning outcomes, and monitoring and evaluation. Although fullimplementation of these activities is expected to require three years, the bulk of the work is expected to becompleted in the first year of Program implementation. In order to maintain implementation momentum, financingunder the second APL would need to be available well before the completion of activities launched and contractedfor in the first phase. In particular, contracts for school construction which are to be financed under the second APLwould need to be signed by early 1999 in order for the schools to be ready for use in September, 1999. Overlappingfmancing is essential in order to avoid a delay in implementation under the country's stated implementationschedule.

Implementation Period

Because of the timing of the enrollment increases expected under the new Basic Education legislation, the Ministryaims to implement the school expansion over the next three years. Actual implementation of some aspects of theProgram could take longer than that. The scale of school infrastructure needs for the next three years implies a paceof construction which is at least five times greater than any prior construction program. There are three reasons whyimplementation of the Program is likely to improve on past performance: i) the unprecedented level of Governmentand public commitment to the Program; ii) the high priority that provincial governors are attaching to theProgram-many are diverting specialist staff from other activities to help with implementation and will continue todo so; and iii) the willingness of the central Ministry to engage substantial consultant assistance to help manageimplementation of civil works and information technology, the largest investment activities in the Program.

Even so, the Ministry's implementation schedule for the Program is very compressed. The possibility remains that

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implementation of some Program activities and achievement of the Program's quantitative and qualitative goalsmay take longer than the Ministry foresees. Some activities under the Program are also longer-term activities bytheir very nature, such as monitoring of learning outcomes. For these reasons, the Bank projects a more protractedimplementation schedule for the Program than the Government. Implementation of the initial APL is projected torequire three years, starting with effectiveness in July, 1998; implementation of the second APL is projected torequire three years, starting early in 2000. In any case, the timing of disbursements and the processing of the secondAPL, as well as the processing of subsequent financing for the Program, will depend upon the actual pace ofimplementation of the activities which the APL is financing, and the actions which serve as triggers for the secondAPL. Implementation and disbursement of the first APL and the initiation of the second APL could occur sooner orlater than this schedule projects, depending upon the actual implementation performance of the Program.

3. Sector issues to be addressed by the project and strategic choices:

The Program will support a range of initiatives to achieve the goals of the Government's basic education strategy.The design of the Program reflects an awareness that needs differ in different areas of the country. Where schoolcapacity is the major constraint, the Program will extend capacity, through a large-scale teacher recruitment andteacher training effort, and major investments in additional school capacity, particularly in grades 6 through 8.School construction under the Program will apply new school prototypes which: a) provide for the integration of theformer primary and middle-school cycles, b) are cost-effective, c) are educationally more effective than earlierschool designs, and d) are more adaptable to the needs of different regions and applications than the Ministry'sformer school designs. Where other factors appear to constrain the achievement of the strategy, particularly, inareas of the country with low rates of school attendance and high illiteracy rates, the Program will support initiativesto address those needs. Program performance will be evaluated and monitored to exploit the potential richness ofthis natural experiment, and to help improve the effectiveness of the Program as implementation progresses.Initiatives which are evaluated as successful and cost-effective will be expanded.

C: Program Description Summary1. Program Components

The Program comprises a broad spectrum of activities which promote the objectives of improved coverage, quality,and relevance of basic education, and the role of basic schools as a learning resource for the community. Thesecomprise four Program components, each of which includes several activities. (See Annex 2 for a detaileddescription of Program components, and Annex 3 for a detailed cost breakdown, and Annex 5 for the Government'sdescription of the Program):

a. Expanded Basic Education Coverage, which will support the training and recruitment of additionalteachers and the design, construction, expansion and upgrading of basic education schools.

b. Improved Basic Education Quality, which will support in-service training for teachers, inspectors, andschool principals, provision of textbooks and educational materials for basic education schools, theprovision of hardware, software, and training for information technology in basic education schools, and anumber of other initiatives designed to improve the quality of basic education.

c. Program Implementation Support, which will provide equipment and technical assistance forimplementation management, including maintenance of Program accounts.

d. Monitoring and Evaluation, which will assess the outcomes of the program against several categories ofperformance indicators, and provide continuous feedback to the Program Coordination Team (PCT) andthe related line units of the Ministry to improve the effectiveness of the Program in meeting its objectivesas implementation progresses. This component also includes support for a Monitoring Response Facility toimplement recommendations for school-based initiatives, and public media efforts to promote compliancewith and support for the Basic Education Program.

Bank resources will be used selecti'vely to help finance implementation of the Program, and will focus on fourcategories of activities: a) activities which will be carried out or committed early in the Program-for the most part,

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during the first year of Program implementation, b) activities which promote Program objectives among groups withthe lowest basic education enrollments (such as provision of educational materials to village schools), c) activitieswhich experience suggests will be essential for successful implementation (such as technical assistance formanagement support), and d) activities in which the Bank has a comparative advantage based upon experience inother countries (such as educational applications of information technology). Although the financing plan has notyet been established for the second APL, the same criteria are expected to apply. The choice of Program activitiesto be financed under the initial APL was also constrained by two other considerations: i) the prospect of obtaininggrant financing for some key Program activities-notably, the initiative to supply free educational materials, schooluniforms, and school meals to needy children; and ii) the Government's view that some Program activities need tomove ahead on a very accelerated schedule, which does not allow time for procurement under Bank-approvedprocedures. As a result, Bank financing will not be used to support the $1.5 billion program of school constructionunder Phase I of the Program, but is expected to help finance subsequent school construction carried out accordingto Bank guidelines.

FIRST-PHASE PROGRAM ACTIVITIES, COSTS AND FINANCING UNDER THE FIRST APL

ProvinclalThe Government AdmInlstration The World Bank National Donor Totml

Amount % Amount % Amount % Amount % Amount %

A. Phase I1. Expanded Basic Education Coverage

a. Constructlon and Upgrading of Baslc Education Schools 1,247.4 84.7 24.6 1.7 48.4 3.3 151.8 10.3 1,472.2 58.5b. Teacher Training and Recrultment 650.0 100.0 - - - - - 650.0 25.8

Subtotal Expanded Baielc Education Coverage 1,897.4 89.4 24.8 1.2 48.4 2.3 151.8 7.2 2,122.2 84.42. Improve BaBlc Education Quality

a. In.service Training Programs 5.8 15.7 - 31.2 84,2 - - 37.0 1.5bu Educational Materials 44.1 471 2.0 21 47.6 50.8 - - 93.7 3.7c Information Technology 28.8 14.6 14.8 7.5 154.0 78.0 - 197.6 7.9d. Assesament of Leaming Outcomes 0.1 15.8 - 0.7 84 3 - - 0.9 -

5N.2tc4al Improve Basic Educs'on Quality 78.8 24 C. 16 8 5.1 233.5 7) 9 - - 329.1 13.13. Program Implementatlon

a. Iogram Management Team 42,4 95.9 - 1.8 4.1 - 44.2 1.8b. EMIS/School Mapping 0,6 14.8 0.3 7.6 3.0 77.8 - - 3.9 0.2

Subtotal Program Impiementatlon 42.9 89.3 0.3 0.6 4.8 10.1 - - 481 1 94. Monitoring and Evaluatlon

a. Social Assesament, Monitoring and Studies 0.6 156. - 3.0 84.3 - - 3.5 0.1b. Monitoring Response Facility 1.6 16.4 8.4 83.6 - 10.1 0.4c. Basic Education Promotion 0.3 15.7 - 19 84.22 2 0.1

Subtotal Monitoring and Evaluation 2.5 16.1 - 13.2 83.9 - - 15.8 0.6otal Dlsbursement 2,021.7 80.4 41.7 1.7 300.0 11.9 151.8 6.0 2,515.2 100.0

Note: Amounts may not add up to exact totals due to rounding.

The first phase of Program implementation is defined as Program activities either carried out or committed duringthe first year of the Program, plus two longer-term activities for which an up-front commitment is needed:strengthening central and provincial capacity to implement the Program, and monitoring and evaluation-includingassessment of learning outcomes. These activities are summarized in the following table, and described in detail inAnnex 2. The first APL will finance: a) in-service training of teachers, school principals and inspectors, b)provision of a basic package of educational materials to 25,900 five-year village schools and a somewhat moreextensive package of educational materials to all 4,800 eight-year schools in rural areas, c) upgrading of about 200five-year village schools, including improved teacher housing and physical amenities, in five provinces with thelowest rates of school attendance and largest class sizes,l upgrading of about 100 eight-year rural schools in anothergroup of five provinces with low rates of school attendance, d) upgrading of about 40 basic education schools inurban slums in Ankara province, e) upgrading and equipping of computer rooms in 2,828 basic education schoolsin all 80 provinces of the country, e) assessment of learning outcomes, f) monitoring and evaluation activities, andg) implementation support. With the exception of items e and f, all are scheduled for implementation or start-upduring the first year of Program implementation

I Sirnak, Van, Mardin, Hakkari, and Bitlis (or other provinces, as agreed with the Bank).2 Kocaeli, Yalova, Batman, lgdir, and Bartin.

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2. Key policy and institutional reforms supported by the Program:

The most fundamental policy change which the Program will support is the application of initiatives to increasethe demand for education among children who -u rently have low school attendance. This represents anexplicit recognition that universal school attendance equires more than availability of school places and lawsrequiring school attendance. These demard-side ini; .tives will be expanded judiciously under the Program,and their results will be monitored and e, aluated for lessons to guide future implementation. These actions are,by nature, targeted to the poorest groups 'n the society, and their success (or failure) is likely to have animportant bearing on future strategies for poverty reduction in Turkey.

The second policy change which the Program will support (as an instrument for promoting better schoolattendance) is the development of the basic education school as a resource of the community. As a long-termgoal, the Ministry intends to do this by broadening the programs of basic education schools to include earlychildhood development activities, adult literacy education and self-enrichment courses for adults, as well asupdating of tie basic education curriculum itself-particularly, in the areas of computer education and foreignlanguage training. It implies a major change in how schools are managed-a new departure which will begradually developed and experimented with under the Program. The extension of preschool education isexpected to incorporate some of the pedagogical innovations which have been found effective in theMother/Child program, which is supported by the Bank under the NEDP. International experience shows thatactivities to involve communities in the activities of basic education schools are management intensive. Here,too, the Program will start small and concentrate on achieving success in a limited number of schools beforeattempting to generalize the model. NGOs could play a valuable role in helping to do so.

The implementation model for the Program gives the provinces a lead role in assessing and solving theireducational problems, and provides ample support to develop that capacity in the weaker provinces. TheProgram also provides training for strengthening diagnostic, management, and problem-solving capacity ofeducation officials at th, piovince and sub-province level.

The Program will seek improved efficiency and effectiveness of educational resource use through, inter alia,the application of improved school prototypes to accelerate school construction and improve the effectivenessof schools, and experimentation with new teacher incentives and teacher assignment procedures to improvegradually the efficiency of teacher deployment. The initiatives to address the demand constraints to schoolattendance will yield greater efficiency in resource allocation and use. The introduction of assessment oflearning outcomes, improved management information and assessment, and improved education planning,monitoring and evaluation under the Program are also expected to lead to long-term gains in efficiency andeffectiveness of education programs. For example, the application of better information on school effectivenessthrough assessment of learning outcomes and management information, could provide a basis for eventualfundamnental changes in how schools are managed and financed.

3. Benefits and target population:

The direct beneficiaries are expected to be the young people who will complete basic education under theProgram, and the basic education students who will benefit from better educational materials, more motivatedand more qualified teachers, less crowded classrooms, and the updated curriculum. Teachers will also benefitfrom the improved training and incentives. Indirect beneficiaries of the Program include the mothers ofchildren who are better equipped to provide for their children's health, education, and nutritional needs becauseof the Program. The Program will target the regions and groups with the lowest school attendance andeducational performance in basic education -- in particular, girls in the East and Southeast, and children frompoor gecekondu households. Provincial education administrations will also benefit from strengthened capacityto diagnose, implement and manage programs to meet their needs.

4. Institutional and implementation arrangements:

Program Management. Because the Government sees basic education as a fundamental public service,guaranteed under the Constitution, it wishes to implement the Program as much as possible within the existingpublic administrative structure. Implementation responsibility is to be shared by the Ministry of NationalEducation and the provincial administration. As described in the following paragraphs, lead roles will differ,depending on the nature of the activity. Overall management of Program implementation at the central levelwill be carried out by the existing management infrastructure of the Ministry, under the direct responsibility ofthe MONE Undersecretary, and the coordination of a Program Coordination Team which has been established

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in the MONE, headed by a Deputy Undersecretary with full-time responsibility for oversight of the Program.The Program Coordination Team will comprise five units, staffed with seconded MONE staff and consultants,respectively responsible for civil works, information technology, educational interventions, monitoring andevaluation, and Program administration. Policy guidance is to be provided by a Program Steering Committeecomprising heads of the relevant MONE Directorates. At the province and subprovince level-there are 80provinces and 921 subprovinces-the Program is to be implemented under the authority of the provincialGovernors and the Kaymakams (subprovince governors), with the Provincial Education Directors playing thelead technical role on educational matters. The provincial Governor will call upon other elements of theprovincial administration to implement particular parts of the Program, as necessary-particularly, in the areaof school construction.

School Construction, Extensions, and Upgrading. Normally, school construction, extensions and upgrading iscarried out by the provinces, according to implementation plans approved first by the Ministry's Research,Planning and Coordination Council (APK), then by the State Planning Organization and the Ministry ofFinance. Because of the vast scale of school construction and upgrading which is to be carried out under theBasic Education Program, the Ministry of National Education and the provinces have adopted a newimplementation formula, under which the provinces and the central Ministry share responsibility forimplementing school infrastructure investments. The provinces are responsible for identifying theirinfrastructure needs, and prepare initial proposals for school construction, upgrading, and extension, accordingto criteria established by the Ministry. Then responsibility for implementation is divided between localadministration and the central Ministry. The provinces and subprovinces will be responsible for extensions andupgrading of existing basic education schools, while the Ministry of National Education is to manage centrallythe construction of new schools, with the assistance, initially, of four regional teams of civil works managementconsultants.

For the school construction, extensions, and upgrading, which will be carried out under the second and thirdphases of the Program, and which are expected to be partially financed by the Bank, a new group of consultantswill be selected in consultation with the Bank and in accordance with Bank procurement guidelines. Since theschool infrastructure expansion program is expected to comprise about 50 percent new construction, and about50 percent extensions and upgrading of existing schools, this division of labor shares the task of implementingthe school infrastructure portion of the Program equally between the central MONE administration and theprovinces. Construction of new schools under the Program will be managed by the Ministry's Department ofInvestments and Construction, under the coordination of the Infrastructure Unit of the Program CoordinationTeam. School extensions and upgrading will be managed by provincial Governors, also under the coordinationof the Infrastructure Unit of the Program Coordination Team. Although the main responsibility of the fourregional teans of civil works consultants is to prepare site-specific designs and to supervise the construction ofnew schools, the consultants will also provide assistance to the provinces as needed for the implementation ofschool extensions and upgrading, as determined by the Infrastructure Unit of the Program Coordination Team.

Information Technology. The computer education portion of the Program will be implemented centrally, by theInformation Technology Unit of the Program Coordination Team, comprising staff of the Ministry's GeneralDirectorate for Educational Technologies (ETGEM), and consultants engaged under the Program. Terms ofreference for the Unit and its key consultants were agreed at appraisal. To the greatest possible extent, theMinistry will make use of its existing capacity in IT, specifically the NEDP Project Coordination Unit forprocurement of hardware and software, and ETGEM for supporting, evaluating, and monitoring the use ofcomputer laboratories in schools. The team will include well qualified IT professionals, including a full-timemanager with project management, education sector, and IT industry experience. An education technologyspecialist will be hired to provide informed, independent, expert advice to the Director of the ProgramCoordination Team, and to participate in the annual Program reviews.

Educational Interventions. With the exception of computer education, the interventions under the qualityimprovement component of the Program are to be managed by the respective line units of the Ministry -- basiceducation, teacher training, preschool education, etc. -- under the coordination of the Educational Unit of theProgram Coordination Team.

Monitoring and Evaluation. Implementation of the monitoring and evaluation of the Program is to be managedby the Monitoring and Evaluation Unit of the Program Coordination Team. Monitoring and social impactassessment are critical for guiding Program implementation and for shaping the partnership between the client

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and the Bank through various phases of the Program. The evaluation of monitoring results will be undertakenroutinely by the Ministry and the Bank. Input and process monitoring efforts will be carried out primarily bythe Program Coordination Team within the MONE, in coordination with relevant departments and provincialoffices, while impact monitoring will largely be carried out by contracted external institutions and individuals.The results of monitoring efforts will be evaluated in annual joint reviews of Program implementation, to beheld in May of each year by the MONE and the Bank, with the participation of national and internationalexperts. In addition to the flexibility of predefined activities, the Program includes a small MonitoringResponse Facility to allow for the implementation of pilot initiatives, developed in the course ofimplementation, to improve the responsiveness of the Program.

Program Administration. Generic functions of reporting, dissemination, accounting, procurement, andpreparation of withdrawal applications for the Program are to be carried out by the Administration Unit of theProgram Coordination Team, based upon inputs from the provinces and the respective line units of theMinistry. Terms of reference for the Unit and its key consultants were agreed at negotiations.

Retroactive Financing. Some of the actions under the Program were initiated prior to appraisal (May 6, 1998)and are thus not eligible for financing under the APL. But many of the actions under the Program arescheduled to be initiated between appraisal and effectiveness, which is projected to occur in mid-July, 1998. Inorder to accommodate these initial expenditures for activities financed by the APL, retroactive financing of upto US$30 million is provided in the APL for eligible expenditures incurred between appraisal (May 1, 1998)and signature of the APL. Expenditures for retroactive financing could include all Program componentsfinanced by the first APL and procured under agreed procedures, including upgrading of rural schools, trainingof basic education personnel, provision of educational materials and equipment, and equipment, materials andtechnical assistance to strengthen central and provincial implementation capacity.

D: Project Rationale

1. Project alternatives considered and reasons for rejection:

Initially, conventional loan financing was foreseen for this operation. But the scale and the evolutionary nature ofthe Government's Basic Education Program makes APL financing a more appropriate vehicle for World Bankassistance. A series of APLs offers the Government the advantage of a longer-term commitment from the Bank tosupport the Program, and provides the advantages of flexibility and a coherent framework for subsequent assistance.

An alternative approach to Bank financing was considered, in which Bank financing and disbursements would havebeen limited to a single activity, such as computer hardware and software purchases. Although it would havesimplified disbursements, this option was not pursued because it would not provide the overall Program oversightnecessary to ensure that Program objectives are met.

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2. Major related projects financed by the Bank and/or other development agencies (completed, ongoingand planned):

Sector issue Project Latest Supervision (Form 590)Ratings

(Bank-financed projects only)Implementation DevelopmentProgress (IP) Objective

(DO)Bank-financed* Upgrading of eight university-based Industrial Training Project Project Closed

technician training centers and the (FY84)development of in-service trainingprograms in industrial management.

* Refurbishing and equipping of 48 Industrial Schools Project Project Closedsecondary vocational schools and the (FY84)development of improved curricula andtextbooks for key specializations.

* Upgrading of about 500 adult training Non-Formal Vocational Project Closedcenters and related program and Training Project (FY87)materials development.

* Upgrading of 20 additional technician Second Industrial Training S Straining centers. Project (FY88)

* Development of improved teacher National Education S Straining programs, curricula, textbooks, Development Project (FY89)student assessment, and educationplanning, and amended to include aBasic Education Pilot Project.

* Expansion of Industrial Training I S Sincluding technical teacher training andtourism training.

Other development agenciesUNICEF worked closely with the MOE and the Bank in developing the Basic Education Pilot Project, and managesimplementation of the Rural Component of the Pilot Project on behalf of the MOE. Activities under this componentinclude educational materials development and teacher training for multigrade schools, and village school funds.

IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

3. Lessons learned and reflected in proposed project design:

Both the educational elements and the hardware elements of the Program reflect the lessons and experience of pastprojects. In particular, the Program will support the large-scale application of the educational activities and theprocedures for school design and school construction which were developed and found effective under the NationalEducation Development Project and the Basic Education Pilot Project. One of the lessons of the Basic EducationPilot Project was that centralized procurement for school-based initiatives can undermine the sense of localownership which is crucial for enlarged parental involvement in schools. Thus, the school-based initiatives fundedunder the Monitoring Response Facility will rely as much as possible upon local procurement. Another lesson wasthat, while school-based activities which are meant to involve parents in activities to improve school attendance andeducation quality can be effective in promoting those objectives and in providing broader benefits to thecommunity, they require considerable nurturing to ensure satisfactory results. For that reason, the Program includessufficient technical assistance to provide these time-intensive inputs when these activities are first launched in acommunity.

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Two important lessons of past Bank projects with the Ministry of National Education are, first, that technicalassistance which is seen as forced upon the Ministry is not effective, and, second, that implementation models whichbypass line units of the Ministry may succeed in procuring equipment, but tend to fail in achieving their educationalobjectives for want of ownership by key Ministry staff. In spite of the Bank's concerns about implementationcapacity during Program preparation, the Ministry feels very strongly that it must implement this Program throughits existing line units and the relevant ministerial offices at the province level. The design of the Program reflectsthis concern, by relying upon the Government's own implementation structure, and providing ample resources fortechnical assistance which the Ministry can draw upon quickly in areas where it feels it needs help. Performancemonitoring will also provide prompt Program management with prompt feedback on lagging areas ofimplementation where help is needed.

4. Indications of borrower commitment and ownership:

Public support for the Basic Education Program has grown progressively over the past decade, and is now verywidespread. Voluntary contributions for the Program totaled over $500 million, including cash and in-kindcontribution, during the past year, and Parliament approved the Basic Education Law by a wide margin after a verybrief deliberation in August, 1997. This legislation included the exceptional provision of special earmarked excisetaxes for the Program, which are expected to raise US$5.6 billion in revenues over the next three years.

5. Value added of Bank support in this project:

The Government will initiate the Program on the proposed schedule whether or not it has the support of the Bank.The Bank's involvement would help ensure that the Program embodies the best practice worldwide in addressingthe educational objectives of the Program-particularly, in raising the school attendance and performance of thegroups with the greatest educational needs. Other planned Bank initiatives are also expected to help achieve theobjectives of the Basic Education Program.

The Bank has worked closely with the Ministry of National Education over the past seven years to raise awarenessof the need for this Program, and to develop its content. In addition to providing supplementary financing whichthe Government desires for this operation, Bank support would provide the benefits of international experience withdesign and implementation of large-scale investment programs to expand education coverage and improve thequality of education.

In the course of Program preparation, the Bank worked closely with the Ministry to develop a more cost-effectivemodel for expanding school capacity. These efforts have already brought gains in cost-effectiveness, both in termsof school construction standards and the mix of types of schools to be built under the first phase of the Program.There is room for further improvements in cost-effectiveness of the infrastructure component as Programimplementation progresses. The work of the Monitoring and Evaluation component, including the cost-effectiveness study, will help maintain the effort to improve cost-effectiveness as Program implementationproceeds.

E: Summary Program and Project Analysis

1. Economic

The research evidence based on both macro- and micro-level data in Turkey confirms the major contribution ofexpanded basic education to aggregate economic performance and personal earnings (Annex 4). Rates of return foreducation quality improvement are intrinsically more difficult to estimate than for expansion of enrollments.Nevertheless, there is evidence of significant gains to improved quality of basic education. A recent analysis of thebenefits of computer literacy training, based on observed earnings differentials for computer-literate and non-computer-literate workers and on the cost of employer-provided training, estimates a very high benefit/cost ratio forthe computer literacy investments under the Program. Evaluations of home-based preschool education programs inTurkey have documented significant and enduring benefits in terms of improved school attendance andperformance.

2. Financial

There are major recurrent budget implication of the various interventions which the Program will support to expandand improve basic education. In many applications, there are several options-school extensions, new schools,

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bussing, multiple-shift schools, boarding schools, etc.-which would promote the desired result, but which differsignificantly in terms of investment costs, recurrent costs, and educational effectiveness. Existing information,including the experience of the Basic Education Pilot Project, has been used in the planning of the Program. But itwill be very important to refine this information as the Program is implemented in order to adjust the mix ofProgram interventions to maximize educational effectiveness and minimize investment and recurrent costs. This isthe role of the economic analysis and the strengthened school planning which are to be carried out under theProgram.

3. Technical

Textbooks. There is an issue of textbook selection and textbook approval which needs to be resolved beforetextbooks are provided to schools under the Program. In general, parents purchase textbooks for their children's usein school, but low-income parents in most rural areas and in some urban slum areas cannot afford them. Mostchildren in rural schools and many in urban slum schools do not have textbooks. To address this problem, theMinistry is in the process of providing textbooks for children whose families cannot afford to buy textbooks. Thissupport will be extended under the Program. Financing of this initiative is planned for the second APL, in order toallow time for resolution of issues of textbook selection and approval.

Educational Effectiveness of School Investments. There are inevitable tradeoffs involved in the choice amongdifferent types of school investments, which have major implications for both cost-effectiveness-see item F,"Sustainability and Risks"-and educational effectiveness. These will need to be carefully considered as Programimplementation proceeds. In urban areas, there are important choices to be made between smaller schools which arecloser to the communities they are intended to serve, and larger schools with lower unit costs, but possibly lowereducational effectiveness. In spite of the compulsory nature of basic education under the new law, some parentsmay not be willing to send their children to more distant schools, although these may be cheaper and easier toprovide. Parental participation is also less likely to be successful for large and more distant urban schools than forsmaller, neighborhood schools. In rural areas, the Program aims to provide the needed additional capacity-particularly, in grade 6 through 8 -- through a combination of improvements to existing village schools andextensions and improvements to centralized bussing schools in rural areas. In general, the Ministry prefers thisstrategy over an approach which would provide a complete eight-year basic education in as many villages aspossible (by upgrading schools in each village and adding capacity in grades 6 through 8), because it considers thatit is easier and cheaper to provide high-quality basic education in larger, centralized schools-especially, under theMinistry's new policy of offering subject-based teaching (rather than classroom based teaching) beginning in gradefive. Because it would relocate the schooling venue for some children, this policy is likely to lead to smallernumbers of children enrolled in many village schools. The Program will monitor very closely the educationaleffectiveness, as well as the cost effectiveness of the various Program interventions to expand the coverage of basiceducation. Where the chosen approach appears not to be working or to be unnecessarily costly, the monitoring andevaluation process will flag the problem to the management of the Program and to the Bank for corrective action.

Program Priorities. Among the Ministry's plans under the Program are to eliminate multiple-shifting and to reduceclass sizes to 30 students per class in all basic education schools. Although there is scientific evidence that verylarge class sizes discourage school attendance and make it difficult to offer quality education, the gains from smallerclass size are not continuous. Ever-smaller class sizes do not lead to continuing gains in the quality of educationand learning achievement. The Program target of 30 students per class appears reasonable, but it will be importantto monitor the educational gains and cost-effectiveness of this policy as the Program is implemented. investrnentsin smaller class size are clearly warranted for classes which are currently above 50 or 60 students per class, butfurther investments to reduce class size may not be warranted in terms of better learning outcomes. The sameconsideration applies to the Ministry's plan to eliminate multiple-shift use of basic education schools. In planningschool investments under the Program, the highest priority should be given to ensuring that all children of basiceducation age are in school. This question of priorities has particular importance because of the scale of effortwhich would be required to achieve the Ministry's goals of reducing class size and eliminating double shifting. Theinvestments in new classrooms required to achieve these goals are almost as large as the total infrastructureinvestments planned under the Program -- in excess of $7 billion -- whereas the investments to provide the neededadditional capacity in grades 6 through 8 and to rehabilitate rural schools amount to less than a third of this amount.Here, too, monitoring and evaluation are to play an important role in fine-tuning the Program as it proceeds.Although the first APL is not financing new school construction, the Government has requested that subsequentloans do so. In order to be able to do so, the criteria for building new schools or extending existing schools underthe second and subsequent phases of the Program would need to reflect this priority.

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4. Institutional

Teacher Deployment. The expansion of basic education envisioned under the program will require the deploymentof about 190,000 new basic education teachers and administrative and support personnel. Unless appropriateincentives are provided and institutionalized, there is a likelihood that a significant number of teaching positionswill remain unfilled. The Program is addressing this risk by providing more attractive salary supplements forteachers in difficult teaching conditions, and by experimenting with new procedures for teacher recruitment andassignment which give provinces a greater role. The effectiveness of these measures will be monitored underProgram implementation, and further measures will be developed, if necessary, to ensure that all basic educationclasses have qualified teachers.

5. Social

The project proposes major remedies to reduce interregional, urban/rural, gender and other social imbalances inaccess to quality basic education. Poverty, both at the household and at the community level, is closely linked toeducational opportunities. The Program explicitly aims at improving the access of poor households to eight-yearbasic education. To the extent that low household income is a constraint to school attendance, the Program aims toimprove school attendance by providing free textbooks and school uniforms to children from poor households.Because of the link between perceived school quality and school attendance, the various initiatives under theProgram to improve the quality of basic education -- including the visible improvement of existing rural schools andteacher housing -- are expected to contribute to improved school attendance. Other Program initiatives to developthe school as a resource for the community and to expand preschool education are also expected to involve thecommunity more fully in their schools, and to contribute to better school attendance. The gains which the Programachieves in school attendance will particularly benefit girls and the poor, because it is girls and children from poorhouseholds who are most likely not to attend school.

The social risks of the Program can best be reduced through transparent Program implementation in whichmechanisms for continuous social assessment and social impact monitoring are brought together with facilities topilot innovative educational practices for improved targeting of the poor. Doing such assessment in a participatorymanner with the involvement of select segments of civil society, including the universities and research institutions,and sharing the results of this effort widely, will reduce implementation risks. The basic education promotioncampaign which is included under the Monitoring and Evaluation component will also help build support for andcompliance with the Program.

6. Environmental

Environmental category: [] A [X] B [] C

Although the Program is very large, no significant environmental risks are foreseen, in view of the highly dispersednature of the Program. However, the baseline situation for new school sites will be reviewed under the Program andmitigation measures will be identified and taken as required. Environmental standards for safety, waste disposal,use of hazardous materials, esthetics and other aspects of the school construction program are codified in aHandbook for Basic Education School Buildings which was developed with Bank assistance in preparation for theProgram. These standards have been reviewed by the Bank team, and found satisfactory. All buildings constructedand rehabilitated under the Program will be required to comply with these standards. Government and Bankssupervision of Program implementation will ensure that these standards are respected.

No involuntary resettlement will be involved in Program implementation. The MONE has confirmed that noinvoluntary resettlement will occur under the Program, and has instructed all of the provincial administrations, inidentifying sites for new schools under the Program, to select only sites which are vacant public lands owned by theMinistry or the Treasury. Given the urgency with which the Government aims to complete the physicalinfrastructure for the project, the Ministry is committed to avoiding land acquisition as this would require extensivetime for legally required consultations and court decisions. In case private contributions are made for school

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buildings, the MONE, from its own funds, would pay private individuals who will contribute their vacant land forschool building purposes, in accordance with the laws of Turkey.

7. Participatory Approach:

a primary beneficiaries and other affected groups.

The gains which the Program achieves in school attendance will particularly benefit girls and the poor, because it isgirls and children from poor households who are most likely not to attend school. Social assessment played animportant role in the design of the Program, and will play an even more important role during implementation.During the preparation of the Program, the Ministry, the Bank, and other donors consulted widely with a range ofeducation stakeholders, including school administrators, teachers, students, local governments, localrepresentatives of central government as well as the media. A systematic survey and two participatory seminarsorganized in late 1997 and early 1998 aimed to identify the educational issues as perceived by local administratorsof the relevant ministries. The results of this work are incorporated in the management design of the Program. Theresults of consultations with teachers are included in new incentive mechanisms which were recently established.Large-scale, systematic surveys were also conducted with 5% of all teachers, 10% of administrators, and 1% ofparents and students. A total of 15,000 respondents were interviewed to seek their assessment of each component ofthe proposed Program. The results of these consultations are reflected in various aspects of the Program design --for example, the provision of facilities for handicapped students in basic education schools, and entirely separateboarding schools for girls in certain areas of the country.

The design of the Program reflects the findings of a beneficiary assessment of factors influencing girls' schoolattendance in the East and Southeast which was commissioned by the Bank in 1991, in that it aims to raise schoolattendance by providing better quality education, by expanding school capacity in grades 6 through 8, and bymeasures to attract and retain qualified teachers. The design of the Program also reflects the lessons from numerousstudies conducted by the MONE and the evaluations of pilot projects implemented with the Bank, other donors, andcivil-society organizations. Subsequently, social impact assessments were carried out for the many pilot efforts thathave helped shape the Program, including the BEPP, NEDP, the Computer-Based Education School Pilot Project,the Student Social Assessment Project, the Mother/Child Early Childhood Development Pilot Project, the PilotProject on the Education of Girls and Women, and the Regional Basic Education Boarding School Pilot Project.

b. Other key stakeholders:

See item 7a, above.

F: Sustainability and Risks

1. Sustainability:

The proposed investments will generate substantial incremental recurrent expenditures in the form of personnelcosts, and operation and maintenance costs of the new facilities. The full Program would require about 150,000additional basic education staff-a significant increase from current levels. At current unit costs, this would raisethe real teacher salary bill from $1.3 billion currently to approximately $2.1 billion. In addition, the Program issponsoring the expansion of enrollments in bussing schools and boarding schools, whose unit costs ($494 and $761,respectively) are considerably higher than unit costs in conventional schools ($272 per student). These changes willadd over $100 million to the annual cost of running basic education schools. The incremental maintenance/renewalcosts for the information technology equipment (estimated at 10% of the investment cost per annum) plus buildingmaintenance (estimated at 2% of construction investment costs) add up to another US$117 million annually, oncethe new facilities are operational. The aggregate incremental recurrent cost of the entire Program amounts to over$1 billion per year. Continued broad public support for the goals of the Program will be necessary in order tomobilize and sustain these recurrent resources. The proposed approach of financing the Program in phases -- thisfirst phase represents less than a fifth of the total Program, and would generate incremental recurrent costs of aboutUS$130 million -- also provides a test of the durability of public support for the Program. Continuation of Bankfinancing beyond this first phase will require continued broad support -- including budget support -- from the publicand the Government. The fact that the Program enjoys broad political and public support is expected to help ensurethe longer-term sustainability of the Program.

Page 19

2. Critical Risks (reflecting assumptions in the fourth column ofAnnex 1):

Risk Risk Risk Minimization MeasureRating

Annex 1, cell 'from Outputs to Objective"

* The high expectations established by the S Establishment of a suitably staffed ProgramGovernment's Basic Education Program Coordination Team to coordinate specializedcould exceed the Ministry's implementation consultant teams. Provision of undesignatedcapacity. TA resources to support Program

implementation as needs arise.

* There is a risk that Program investments may M Training and software development will benot be fully effective due to lack of monitored as integral Program elements to becomplementary inputs (as training or sure that they keep up with the needs ofeducational software), or of the necessary Program investments. The availability ofrecurrent budget support. recurrent budgets will be monitored; the mix of

new school investments will be altered, ifnecessary, to reflect recurrent budgetavailability.

* The information technology hardware and M The information technology activity providessoftware provided under the Program could for the renewal of hardware and software as thesuffer from rapid obsolescence unless Program is implemented. Leasing arrangementsupdated as the Program is implemented. will also be explored as a means of reducing

this risk.

Annex 1, cell 'from Components to Outputs"

* The high-visibility components-notably, M The phasing of project financing willschool construction and information demonstrate up-front the Government'stechnology (IT) -- could displace the less- commitment to educational equity. Closevisible but crucial educational and targeting supervision by the Bank-as in agreeing oninitiatives under the Program criteria for specific school investments-will

also provide safeguards against imbalance in theProgram.

. The flexibility inherent in the APL could M The monitoring and evaluation component-provide room for unintended forms of particularly, the social assessment-andimplementation, rather than promoting the intensive supervision by the Bank (for whichdesired responsiveness in pursuing Program the Department is planning to relocate key staffobjectives. to the field) will help ensure that the APL's

flexibility is used as intended.

* Delays in procurement of IT hardware and M The Ministry will use all its existing ITsoftware could delay the offering of capacity, including ETGEM and the projectcomputer instruction. coordination unit for the NEDP, to help with

implementation of the IT activity.

* Suppliers for the information technology M IT procurement is to be divided regionally, withresource centers may lack the capacity to at least 3-year warranty contracts.provide technical support to outlyingschools.

Overall Risk Rating M

Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)

Page 20

3. Possible Controversial Aspects (Project Alert System):

Risk Type of Risk Rating Risk Minimization MeasureRisk

Despite the Government's best efforts to induce S M Social assessment and popularcompliance with its new compulsory eight-year participation activities under thebasic education policy (including an aggressive Program will monitor publicschool promotion campaign, and improvements in perceptions of the Program andschool quality), some parents still may not send compliance with the Program,their children-and especially their daughters-to and identify appropriateschool. The mix of school investments under the strategies for improving ProgramProgram-e.g., replacing some village schools equity and compliance.with centralized bussing schools-couldunintentionally promote this outcome.

A lack of cooperation among the various elements G M Leadership and personalof the MONE which are involved in the Program involvement of seniorcould undermine effectiveness of the Program. management of the MONE, and

the creation of a highlymotivated project team andsteering committee will facilitateinterministerial coordination.Involvement of the appropriateconsultant support will alsominimize the likelihood thatProgram implementation wouldbe frustrated by non-cooperativebehavior on the part of MONEunits.

Type of Risk - S (Social), E (Ecological), P ( Pollution), G (Governance), M (Managementcapacity), 0 (Other)

Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)

G: Main Loan Conditions and Agreements Reached

1. Agreements Reached at Negotiations:

Agreement was reached at Negotiations on the following items: a) the Government's Letter of Sector Policy, b)revisions to the list of educational materials to be provided to rural schools under Phase I of the Program andfinanced under the first APL, c) annual work plans for the Monitoring and Evaluation component, d) the programfor assessment of leaming achievement which is to be carried out under Phase I of the Program and financed underthe first APL, e) the technical specifications for information technology hardware and software for the 2,828computer resource centers to be equipped during Phase I of the Program and financed under the first APL, f) termsof Reference for the IT, Education, Monitoring and Evaluation and Administration Units of the ProjectCoordination Team, g) performance indicators for Program implementation and h) use of Bank Procurementprocedures and documentation for National Competitive Bidding and procurement of Minor Works contracts.

2. Dated Covenants:

The following dated covenants would be provided: a) that the Ministry would develop and provide to the Bank forreview by October 31, 1998 the proposed guidelines for implementation of the Monitoring Response Facility; b)that the Ministry would provide annual progress reports on Program implementation by April 30 of each year; c)

Page 21

that the Ministry would conduct with the Bank by May 31 of each year a joint review of Program performance; andd) that records of expenditures financed under the APL be audited by June 30 of each year by independent auditorssatisfactory to the Bank.

He Readiness for Implementation

[X] The engineering design documents for the first year's activities are complete and ready for the startof project implementation.[X] The procurement documents for the first year's activities are complete and ready for the start ofproject implementation.[X] The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality.

I. Compliance with Bank Policies

[X] This project complies with all applicable Bank policies.

Task Team Leader: Mich el Mertaugh (ECSHD)

6 cting Sector Director: James Socknat (ECSHD)

Country Director: Ajay Chhibber (EC

Annex I

PROJECT DESIGN SUMMARY

TURKEY: BASIC EDUCATION PROGRAM

Naatt.v.. .. S itK ftors ..... M.t.. ri. n. to r itil PMWtAS

Sector-related CAS Goal: (Goal to Bank Mission)

Achieve universal coverage in eight- * Progressive increase in basic * SIS statistics * Sustained political andyear basic education and improve school enrollment rates to 100%. * APK statistics financial commitment toeducation quality. * Progressive increase in learning * ERDD assessments the Basic Education

achievements. of learning Program andachievement complementary social

and economic policies.

Program Development Objectives: Program Indicators:

To achieve full coverage in eight-year * The gap between boys and girls * SIS statistics * Support for the Programbasic education. enrollments is eliminated. * APK statistics is sustained.

a Transition rates between grades 5 * Social assessments * Balance is maintainedAchievement of the Program goals and 6 increase to 100%. * ETGEM statistics between high-visibilitywill occur progressively, starting with * Enrollment rates for preschool components (e.g. schoolthe highest priority needs: increase from 7 to 16%. construction and IT) and

the Program's less-Phase I (APL1): Establish capacity visible educational andto implement, monitor and evaluate targeting initiative.the Program. Initiate investments to * The monitoring andachieve Program objectives, evaluation component --starting with the highest priority particularly socialneeds. assessments - is used to

inform the design ofPhase 2 (APL2): Continue subsequent phases of theinvestments. Use feedback from Program.monitoring process to improveeffectiveness of investments inmeeting Program objectives.

Phase 3 and Subsequent Phases:Continue investment program untilProgram objectives are fully met.Use feedback from monitoringprocess to improve effectiveness ofinvestments in meeting Programobjectives.

Project Development Objectives (Objective to Goal)(Phase I):

Accommodate all 1998 grade 5 Actions to be taken before * PCT reports. * Implementation capacitygraduates in grade 6 in the 1998/99 commitment of APL2: * Supervision and of the MONE -- at theschool year and establish the capacity * Arrange for the provision of an appraisal missions. central, province andto implement, monitor and evaluate agreed basic package of sub-province levels isthe entire Program. educational materials to all rural strengthened.

schools.

Annex Ipage 2 of 4

Y.y M. P,tnacldkatWM M lWlrg ad Critieal Assump.44ioEu~~~~~~~~~~~~~~~. . .1. . . . ... . . r , , .. . . . . . .um- . - ' i6> ........... i.!--;. ;. ............. O ' i: i > ;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. , ,, .......... .... .. , , ;.,., .~~~~~~~~~~~~~~~~~~~~~~~... ..... ... I* Begin upgrading of 200 village * A suitably staffed PCT is

schools in Sirnak, Van, Mardin, established to cooriinateHakkari and Bitlis, or other implementation of theprovinces agreed with the Bank. various Program

* Implement the agreed training activities includingprogram for teachers, school consultant inputs.principals and inspectors. * Consultants are engaged

* Begin implementation of the as necessary tomonitoring and social assessment complement theprogram. Ministry's

* Develop the school infrastructure implementation capacity.program for the second phase ofthe Program.

* Finalize specifications and biddingdocuments for the second phase ofIT procurement.

* Disburse or commit at least 60% ofthe first APL.

Project Outputs: (Outputs to Objective)

1. Capacity increased to provide By the end of the entire Progra,n * SIS statistics * Effective coordinalionuniversal coverage of eight year * Construction of approximately * APK statistics between the PCT, MONEbasic education. 3,500,000 new student places * ERDD statistics line units and provinces.

nationwide. * ETGEM statistics* Rehabilitation of 35,000 existing * PCT reports * Program activities are

basic education schools in rural * Social Assessments well coordinated tcareas. * Bank staff reports ensure the availability of

(back-to-office complementary inputsBy the end of Phase I: reports, mid-term (e.g. training) to* Construction of 450,000 new reviews, ICR) accompany investmnents

student places. (e.g. computers).* Rehabilitation of 300 existing

schools in rural areas. * Educational and targetinginitiatives remain central

2. Improved teacher effectiveness. By end Progran. on the Program agenda.* The majority of teachers and * Subsequent phases of the

school principals participate in two Program are prepared andweeks of effective in-service implementedtraining per year. successfully.

* All provincial administrators andmanagers trained.

* 1,500 new inspectors hired andtrained.

By end Phase 1:* 300,000 existing teachers and

30,000 new teachers participate inin-service training programs.

* 3,000 school inspectors trained.

Annex 1page 3 of 4

-,9 N,rrt.,ve Sunir ; e Perfrmu- Iniaor Moiorn an Crtia suptilato oEaluates

3. Improved equity of access to By end Program: .educational materials. * Textbooks provided free of charge

to all students in poor households.

By end Phase I:* Education materials package

distributed to 25,900 rural schools.* Social assistance program

implemented in village schools aswell as centralized bussing schools.

4. Integration of information By end Progranvtechnology (IT) into the * Computer laboratories installed incurriculum. nearly 15,000 schools.

* 18,000 IT coordinators("formators") are trained.

* 200,000 education staff trained incomputer literacy and computer-aided instruction courses.

By end Phase I:* 2,800 IT rooms prepared and

equipped.* The number of trained IT

coordinators is doubled.

5. Strengthened institutional capacity By end Progranvwithin the Ministry of National * Channels for stakeholderEducation. consultation and systems for social

impact monitoring and evaluationstrengthened.

* Assessments of student leamingachievements implemented.

By end Phase I:* Monitoring and evaluation capacity

for the Program established.* APK's MIS system for school

planning and management updatedand staff trained.

Project Components/Sub- Inputs: (budget for each component) (Components to Outputs)components (Phase I):-

1. Expanded Basic Education US$2,033.9 million PCT and Bank * Human and financialCoverage monitoring reports resources are readily

* Construction of new schools including: available.* Renovation and upgrading of * financial * Results of monitoring

existing rural and gecekondu monitoring and evaluation activitiesschools. * disbursement are integrated into

reports Program planning.2. Improved Basic Education Quality US$302.2 million * procurement * No political interference.

* In-service training for education records * Sustained support for thepersonnel. * contracts Program.

* Distribution of education * auditsmaterials to rural schools. * evaluation reports

* Upgrading and equipping of IT

Annex Ipage 4 of 4

--i~utf. r -ey P m dnce I'd,cator, Monitoring and Crii, ica ' A ivOon..ii>4 ....f ..liii .. ...i .. .t,,iiS4i i ,, .. .Y a Io-;:

classrooms.* Provision of school meals and

uniforms to children from poorhouseholds.

3. Program Implementation Support US$47.4 million* Equipment and technical

assistance for implementationmanagement.

4. Monitoring and Evaluation US$15.6 million* Program progress monitoring

and capacity building* Monitoring Response Facility* Basic education promotion and

public relations campaign

ANNEX 1: ATTACHMENT 1

Turkey Basic Education Program

Performance Indicators and Program Criteria

I. PERFORMANCE INDICATORS

Monitoring and evaluation are particularly important in the education sector because of the need to spendpublic funds efficiently and effectively, and because of the high priority that people give to education.Monitoring and evaluation depend on having appropriate performance indicators, especially important inthe education sector where outcomes may take many years to have their real impact, as well as having aprocess of assessing impacts through consultation and participation of those most affected --- students,parents, and those working in the education sector. In the education sector, different categories ofproject performance indicators have been developed to provide feedback in the short, medium and longterm.

Project input indicators show what the project intends to provide in terms of components suchas numbers of schools built, teachers trained, and equipment provided.

Project process indicators measure what actually happens during implementation and arebenchmarks against which progress can be measured. These indicators can be conceptually divided intophysical and financial aspects.

Project output indicators measure the output for each project component in comparison towhether project goals are being achieved, and on good baseline data.

Project impact indicators illustrate development impact by measuring the impact of the projecton the Government's long-term education sector goals.

The MONE has made a commitment to monitor and evaluate the Basic Education Program(BEP) on an ongoing basis with respect to input, process, output and impact indicators. These aresummarized below. Cost estimates, schedule of activities, and institutional arrangements are alsoindicated.

(a) Input indicators will focus on civil works, computerization, and procurement ofeducational materials. They will include: (a) the establishment of prototype school designs andspecifications; (b) the pace of acquisition of sites and approvals necessary for construction; (c) theconstruction of new schools, new classrooms in existing schools, teacher housing and student boardingplaces in urban and in rural areas, by region; (d) the provision of quarterly progress reports onconstruction by the construction management and supervision unit; (e) the amount of computerequipment purchased, computer software and education materials developed; and (f) the elapsed time inprocurement processing for key project components.

(b) Process indicators will provide an insight on general educational trends and willinclude: (a) pre-school and basic education net enrollment by location (rural/urban and regional) and

Annex 1: Attachmeit Ipage 2 of 4

gender; (b) drop out, transition and, completion rates of 8-year education by location and gender and thedistribution of students continuing to secondary education; (c) number of students per class by location;(d) number of students per teacher/school administrator by location; (e) number of computerclassrooms in pre-determined standards by school and location; (f) number of computer literate students,computer instructors by location; and availability of application software and software to support thecurriculum; (g) number of months allocated for in-service training programs; (h) number of traineesattending adult education courses by location and gender; and (i) number of children in need of supportthrough the social assistance programs. Public support and commitment, as measured by public opinionsurveys, will also constitute an important process indicator in defining the participatory potential of theproject.

Cost effectiveness is an important element of the process of reforming any educational system.The indicators to monitor cost effectiveness will include: (a) public expenditures per student by regionand type of settlement, schooling, and educational activity; (b) cost per graduate; (c) cost ofeducational materials, newly constructed and rehabilitated school space per student by location; (d)educational expenditures in relationship to other public expenditures, and share in GNP; (e) share ofstudents in private schools; and (f) citizen contributions by type and region.

(c) Output indicators will reflect educational achievements and will be measured through anumber of standardized tests: (a) level of general education; (b) critical thinking: (c) level of mathknowledge; and (d) level of reading knowledge. The results will be monitored by region, settlementtype and gender. Output indicators will also focus on the trends with respect to teachers and schc,oladministrators. Specifically, changes in societal trends that would help produce greater demand foreducational professions and increase excellence within the profession are of interest. Indicators wouldinclude: (a) applications to faculties of education, number of students of basic education in absoluteand relative numbers; (b) demand for vacant teaching posts; (c) trends with respect to salaries andother benefits of educators in comparison to other state employees and by location; (d) resignations andretirements; and (e) the total number of teachers available by location, gender, type and level ofeducation of (teachers and administrators).

(d) Impact indicators are of particular importance in guiding the implementation of theBasic Education Program in the medium term and in the identification of innovative responses tomonitoring efforts. The MONE intends to assess the impact of Program activities with respect to the keycomponents of the Program. The impact monitoring activities aim at uncovering the perspectives of fourkey stakeholders: parents; students; teachers; and education managers. They seek to identify the sociialimpacts of the Program at large and its select components on one, or more, of the stakeholder groups.

II. SOCIAL ASSESSMENTS

The following surveys and studies are proposed for implementation during the Program:

(i) Basic attitudes of stakeholders. The main issue is to understand the attitudes, needsand expectations of key stakeholders with respect to BEP and its components. To this end, a recentbaseline of administrators and students is available. Equally important, national participatoryassessments of all stakeholders have been completed. Attitudinal data are also available through socilalassessment surveys for each of the stakeholder groups. The results of these surveys have already beenincorporated in the design of the Program. Nevertheless, each of the existing baselines are somewhiatpartial; thus a comprehensive baseline is an essential first step towards impact assessment. Baseline and

Annex 1: Attachment Ipage 3 of 4

its updates will provide crucial information about stakeholder satisfaction with publicly providededucational services and appropriateness of incentive structures created by the BEP.

(ii) Topical Social Assessments aim at measuring BEP's effectiveness in selected areas ofconcern to allow the formulation of adaptive solutions. Some of these assessments are listed below.Others will be formulated as the need emerges and can be financed through the Monitoring ResponseFacility (MRF) incorporated into the Program. Results of select activities funded under the MRF willalso be assessed.

* Impact of pre-school education. An early assessment of the effectiveness of theexisting pre-school educational facilities is needed. This will include comparisons of privately andpublicly managed pre-school facilities/programs, an important input to the goal of the BEP to broadenpre-school education to enhance the quality of basic education. A small scale learning effort is plannedthat would rely heavily on in-depth participatory observational methods.

* Impact of school based community programs. Currently, many schools are offeringprograms to encourage participation of parents in schools, through literacy, crafts, and other trainingactivities. A stocktaking of these would be very important. For this purpose, a participatory study basedon a small sample of public and private (including NGO/CSO managed) programs will be compared.The sample will be based on "successful" applications in order to maximize the lessons learned and toincorporate them in broadening the community education component of the Project.

* Impact of social assistance activities: Based on a small sample ofcommunities/school/students who are recipients of social assistance support, and in cooperation with theSocial Assistance and Support Foundations at the provincial and country levels, an assessment of theeffectiveness of this component will be undertaken. Many of the proposed social assistanceinterventions are being introduced recently and will thus require regular monitoring to allow theformulation and implementation of adaptive measures.

* Working children and other groups in need of social assistance: Understanding andresponding to the needs of working children is a major challenge. Substantial social assessment data arealready available indicating that family expectations for children to contribute to household incomehinder children's ability to attend schools. Similarly, there is evidence of the pressure children face inmany families to enter the informal labor force or the household labor force at an early age. However,there is little systematic information on the type and extent of work the children are involved in, and thetype of constraints they face as a result. Since responses have to be custom tailored to the needs andconstraints, a deeper understanding is needed. In addition, programs for children with disabilities (e.g.blind children) will be improved, expanded and their effectiveness assessed.

* Impact of rural/regional boarding schools, pension systems, bussing, and othernew elements. A substantive first year review of educational and social issues pertaining to boardingschools, and current busing arrangements will also help guide Project-implementation. As central ruralschools are created, their early impact will also need assessment. These will be conducted in a timelymanner early in Program implementation through small scale in-depth studies.

* Impact of the quality of school environment, reduction of class size and eliminationof double shift practices. The purpose of this study is to measure impacts of changes in the physicalschool environment on key stakeholders. Once the first wave of school construction is completed andstudents spend an academic year in these schools, a comparison of old and new school environments

Annex 1: AttachmenU lpage 4 of 4

will be undertaken in a controlled socio-economic environment. At the same time, the impact of thereduction of class size on educational attainment will be assessed. Likewise, effects of the gradualelimination of double shifting will be evaluated.

(iii) System-wide and macro development impacts of BEP. It will be of utmostimportance to be able to demonstrate the long-term developmental impacts of the medium term Programinitiated by the Government. However, these impacts require a longer time perspective to be visible.Therefore, it is proposed that two preparatory activities will be carried out during the first phase ofProgram implementation to lay the foundations for the study of these impacts.

* Model preparation for medium term macro impact assessment of BEP. This willconsist of an effort to prepare the model for the required assessment, as well as to establish the baselinemacro data.

* Baseline study with graduates. Using existing international models, an attempt will bemade to follow-up the graduates of BEP, assessing the degree of success they attain in participation inhigher levels of schools and/or in the labor market.

HII. MONITORING RESPONSE FACILITY (MRF): PROPOSED ELIGIBILITY CRITERIA

As described in the Project Description (Annex 2), the Program will include a Monitoring ResponseFacility (MRF) to support pilot initiatives from communities, educational non-governmentalorganizations (NGOs) and branches of the Ministry of National Educationinvolved in planning.International experience suggest that the following could be the eligible beneficiaries of a MRF:

* parents, students and teachers* school administrators

Within the overall principle of financing research and school based projects outside the existingbudgetary resources to improve the education reform program, project eligibility criteria could include:

* equity focus. Focusing on districts with low overall or low female schooling rates

* community focus. Actions aimed at increasing the involvement of the community inlocal education.

* participation. Actions aimed at increasing the participation of parents, teachers, andcivil society in general in education reform.

* technical feasibility. Strategies based on improving technical aspects of the educationreform program, in particular with regard to education quality.

* managerial feasibility. Programs based at improving management of education.

* financial feasibility. Programs based at reducing costs of education.

* monitoring and evaluation. Building new capacity for establishing effectivemonitoring and relevant evaluation.

Annex 1: Attachment 1

Table I

Monitoring and Evaluation Activities Finance Plan

Type of Monitoring and Activities _ Cost by Phases (US$)1. Input Indicators PHASE 1 PHASE 2 PHASE 3 TOTAL

Civil Works In-house consultants (3) 90,000 90,000 90,000 270,000Computers and sofware Outside consultants (2) 100,000 100,000 100,000 300,000Education materials and activities

2. Process Indicators Monitoring In-house/outside consultants (2) 60,000 60,000 60,000 180,000General education trendsCost effectiveness

3. Output Indicators MonitoringEducational achievement testing EARGED 200,000 420,000 420,000 1,040,000

Achievements with respect to educators In-house/outside consultants 150,000 150,000 300,000

4. Impact Indicators Monitoringa) Basic attitudes Outsourcing 500,000 500,000 1,000,000b) Topical Social Assessments

Pre-school effectiveness Outsourcing 160,000 160,000Community programs Outsourcing 160,000 160,000Social assistance Outsourcing 160,000 160,000Working children Outsourcing 160,000 160,000Innovative elements Outsourcing 180,000 180,000School environment/quality Outsourcing 250,000 250,000

c) System-wide and macro developmentMacro impact asessment of BEP Outsourcing 200,000 200,000 400,000Strategy development Outsourcing 160,000 160,000 320,000

d) Baseline study with graduates 100,000 300,000 400,000Evaluation Outside consultants 100,000 100,000 100,000 300,000Monitoring Response Facility Program Coordination Unit 1,000,000 3,000,000 6,000,000 10,000,000Information/Communication (IC) PCU, Consultants 60,000 120,000 120,000 300,000

Information/communication activities Outsourcing, MONE Press Office 300,000 850,000 850,000 2,000,000MOE Planning Capacity Building 490,000 2,600,000 3,090,000

TOTAL _ 2,900,000 9,020,000 9,050,000 20,970,000NOTES:Approximate consultant cost (per person, full time, annual)In-house local consultants $30,000Outside consultants $50,000

Annex 1: Attachment ITalble 2

Monitoring and Institutional Arrangements1998 1999 2000 2001

ID Task Name Jan Jul Jan.. Jul Jan Jul Jan Jul1 Input Indicators Monitoring

2 Civil Works _

3 Information Technology _

4 Education Materials/activiites i

5 Process Indicators Monitoring

6 General Education Trends

7 Cost Effectiveness

8 Output/Outcome Indicators Monitoring

9 Educational Achievement Tests

12 Achievements related to Educators

15 Impact Indicators Monitoring

16 Basic Attitudes

19 Pre-school Effectiveness

20 School Based Programs

21 Social Assistance

22 Working Children

23 Innovative Elements

25 School Environment/Quality

26 Macro-impact Modelling/Strategy Development __

27 Graduate Monitoring Study

28 Evaluation

29 Continuous __

30 Annual - -34 Information Communication

35 Publications _ _ _ _

36 Web-site ; __

37 Visual InformationfTV .____.

38 Partnerships -39 Meetings/smposia -40 Monitoring Response Facility I41 Institutional Capacity Building

42 In-service training for planning staff

46 Procurement of equipment for planning offices -

ANNEX 2

Turkey Basic Education ProgramProject Description

OBJECTIVES AND CONTENT

1. The Basic Education Program is the Turkish Government's comprehensive investmentprogram to achieve the objectives of its new basic education strategy.' The objectives of thisstrategy are: a) to achieve universal coverage in an expanded, eight-year basic education cycle,b) to improve the quality and relevance of basic education, and c) to make basic educationschools a learning resource for the community.

2. The Program comprises four components, each of which includes several activities:

a. Expanded Basic Education Coverage, which will support the training andrecruitment of additional teachers and the design, construction, expansion and upgradingof basic education schools.

b. Improved Basic Education Ouality, which will support in-service training forteachers, inspectors, and school principals, provision of textbooks and educationalmaterials for basic education schools, the provision of hardware, software, and trainingfor information technology in basic education schools, and a number of other initiativesdesigned to improve the quality of basic education.

C. Program Implementation Support, which will provide equipment and technicalassistance for implementation management, including maintenance of Program accounts.

d. Monitoring and Evaluation, which will assess the outcomes of the Programagainst several categories of performance indicators, and provide continuous feedback toProgram management to improve the effectiveness of the Program in meeting itsobjectives as implementation progresses. This component also includes support for aMonitoring Response Facility to implement recommendations for school-basedinitiatives arising from the monitoring and evaluation process, and public media effortsto promote compliance with and support for the Basic Education Program.

3. The first and the second components respectively address the Program objectives ofexpanded basic education enrollments and improved basic education quality and relevance, aswell as the objective of making basic education schools a learning resource for the community.The third and fourth components support essential activities to address all three objectives.Inevitably, there is some overlap in objectives, since the actions to improve school quality and to

The Government's description of the Program is presented in the Letter of Sector Policy, provided asAnnex 5.

Annex 2page 2 of 14

make schools a resource for the community are expected to improve school attendance as well.2

The Ministry of National Education also expects that the creation of additional classroomcapacity will contribute to improved quality of basic education by reducing classroomovercrowding and multiple-shifting.

PROGRAM IMPLEMENTATION SCHEDULE AND LOAN PHASING

4. The Program duration is defined by those activities which are to achieve the objective ofuniversal eight-year basic education. Although the Government plans to implement the BasicEducation Program over the next three years to meet its enrollment targets, implementation ofsome aspects of the Program could take longer. Some activities -- such as student assessment --are by nature longer-term activities. And as a result, the implementation and disbursementforecasts provided in this proposal are more conservative than the schedule which theGovernment intends to follow in implementing the Program.

5. APL financing of US$600 million is proposed in two overlapping APLs of US$300million each. Disbursement of the initial $300 million APL is projected to require three years,starting with effectiveness in July, 1998 (although the Ministry plans to use this amount morequickly). The timing of these first two APLs and the processing of subsequent financing for theProgram will depend upon the actual pace of implementation of the activities which the APLsare financing, and the actions which serve as triggers for progressing to the second APL. Thetriggers for release of the second APL and for launching the preparation of subsequent financingare designed to demonstrate the Program's educational equity objective up front, and to respondto financing needs as implementation of the Program progresses.

6. Some activities in the Program are well developed and will be supported under the firstphase of the APL financing. Other activities have been agreed as essential elements of theProgram, but are still under development by the Ministry. Implementation of these activities willbe supported in subsequent phases of APL financing. The level of detail provided here reflectsthe state of readiness of Program elements. Activities which are ready for implementationduring the first phase are described in greater detail than activities which will be implementedduring subsequent phases. For some of the activities, further detail is provided in DocumentsAvailable in the Program File (Annex 8).

LOAN FINANCING

7. The proposed US$300 million Adaptable Program Loan (APL) would support initialimplementation of the Government's Basic Education Program. The total cost of the First Phaseof the Basic Education Program is estimated at US$2,515.2 million including contingencies,taxes and duties. Taxes are estimated at about US$435.1 million equivalent. The foreignexchange component is estimated at about US$365.2 million equivalent or about 14.5 percent of

2 The beneficiary assessment which was carried out for the Basic Education Pilot Project -- FactorsInfluencing School Attendance in Basic Education in Turkey, with Special Emphasis on FemaleEducation, by Prof. Dr. Niyazi Karasar, November, 1991 -- found that some rural parents arereluctant to send their daughters to school because they consider that the education provided in theirvillage schools is of low quality and relevance to their needs. Improving the quality and relevance ofbasic education is expected to lead to imnproved school attendance, as well as improved learningachievement.

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total project cost including contingencies and taxes. The local cost including taxes amounts toabout US$2,150.0 million or about 85.5 percent of total cost. The first APL of US$300.0 millionwill finance about 14.4 percent of total Phase I cost net of taxes and duties. The financing plan,summarized below in Table 1, is shown in further detail in Annex 3. Details of the allocation ofthe proceeds of the first APL, as well as the Schedule of Disbursements, are shown in Tables 6Cand 6D, respectively, in Annex 6.

Table 1: Proposed APL Phase I Financing(in US$million)

ProvincialThe Government Administration The World Bank National Donors Total

Amount % Amount % Amount % Amount % Amount %

I. Foreign 191.8 52.5 5.5 1.5 145.0 39.7 22.8 6.2 365.2 14.5II. Local (Excl. Taxes) 1,425.2 83.1 29.6 1.7 154.9 9.0 105.1 6.1 1,714.9 68.2Ill. Taxes 404.7 93.0 6.6 1.5 - - 23.9 5.5 435.1 17.3Total Project 2,021.7 80.4 41.7 1.7 300.0 11.9 151.8 6.0 2,515.2 100.0

Note: Amounts may not add up to exact totals due to rounding.

COMPONENT I: EXPANDED BASIC EDUCATION COVERAGE

1.1. The first component comprises two categories of activities: a) teacher training,recruitment, and deployment, and b) school construction, extensions, and upgrading.

LA. Teacher Training. Recruitment. and Deployment: No loan financing will be used underthe first APL for these activities, although an extensive program of in-service training will beftnanced under the second component.

I.A. 1. The Ministry intends to recruit about 150,000 teachers, and inspectors to accommodatethe basic education enrollment increases which are expected under the Program.3 The Ministryis working closely with the Higher Education Council (YOK) and specific universities to providethe necessary preservice teacher training for these staff, and is in the early stages of recruitingthe first wave of teachers and other educational staff needed for the 1998/1999 school year.

I.A.2. Under the National Education Development Project (NEDP), the Ministry of NationalEducation and universities are collaborating to improve the quality of teacher training throughredesigned curricula and foreign fellowships, as well as improved conditions at teacher trainingcolleges. More recently, teacher training colleges have adjusted their admissions and teachingprograms to meet the requirements for new teachers under the Basic Education Program. YOKhas adopted a number of initiatives, including introducing new training programs for Englishteachers and preschool teachers, and diverting secondary school teacher trainees -- who arecurrently in oversupply -- to basic education. These initiatives are expected to supply 30,000new teachers in 1998, 50,000 in 1999 and 70,000 in the year 2000, in addition to theapproximately 17,000 teachers who graduate each year from teacher training programs for basiceducation teachers. In September, 1997, the Ministry of National Education also enacted a new

3 Due to teacher attrition (through retirements, resignations, etc.), the net increase in teachers under theProgram is estimated at about 30,000 teachers per year in 1998-2000.

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regulation to allow retired teachers to return to work on a volunteer basis. This provisionattracted about 1,000 additional teachers in basic education schools this year.

I.A.3. The Ministry is also in the process of implementing changes in personnel policies whichwill improve the efficiency of teacher deployment. Currently, insufficient incentives for teachersto serve in poor rural areas -- especially in the East and Southeast -- lead to many unfilledteacher positions in these areas. Earlier this year, Government approved a substantial increase inpay -- amounting to a 300 percent increase in the existing hardship allowance, and a 30 percentbonus -- for teachers working in difficult areas. In addition, legislation has recently beenadopted which increases teacher salaries by 18 to 40 percent over the previous teacher salaryscale.

I.A.4. Equally significant changes will improve flexibility in teacher assignments. TheMinistry has prepared draft legislation which is under consideration by Parliament to eliminatethe practice of guaranteed employment to all teachers who are married to civil servants, in thecity where their spouse is employed, regardless of the demand for teachers. This excessivelygenerous provision is responsible for an excess supply of about 18,000 teachers in the largercities in Western Anatolia.

LB. School Construction. Extensions. and Upgrading: The first APL will finance US$48.4million for the rehabilitation and related architectural and engineering design work of about200 village schools, 100 central village schools and 40 urban schools in the provinces ofSirnak, Van, Mardin, Hakkari, and Bitlis, (or other provinces as agreed with theBank), while the Government and cofinanciers will finance the bulk of the Phase Iinfrastructure program, including the engineering work, construction management andfurnishing.

I.B.1. The largest category of investments under the program is the construction, furnishingand equipping of new basic education schools, and extensions to add capacity to existing schools-- particularly, in grades 6 through 8, where the greatest enrollment increases are expected. TheProgram also provides for the rehabilitation of schools to make them more functional andattractive to the community which they are intended to serve -- thereby inducing better schoolattendance, as well as better quality of education. Together with the improvements ineducational inputs, student assistance, and basic education promotion which are being providedunder the Program, these improvements to existing schools are expected to contribute to higherschool attendance.

I.B.2. The capacity of the existing basic education physical plant is insufficient toaccommodate many students who complete grade 5. Currently, about 535,000 of the childrenwho complete grade 5 each year do not continue to grade 6. To accommodate this anticipatedincrease in enrollments, a major increase in classroom capacity is needed. Additional classroomsare also required to reduce overcrowding in existing classrooms and to reduce multiple shifting.To meet both these categories of needs, the Ministry of National Education plans to constructapproximately 121,500 new classrooms during the next three years, providing additional spacefor a total of 3,650,000 students. To complement these additional classrooms, ancillary facilitiesfor other curricular and extra-curricular activities, including laboratories, libraries, areas foradministrative and support functions, will also be provided. In addition, the Ministry plans to

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provide about 110,000 boarding places4 to house students from isolated localities in fullyequipped central village schools, as well as approximately 7,200 residential units for teachers inrural areas. In addition to these investments to expand basic education capacity, much of theexisting physical plant for basic education -- 30,700 rural schools and 8,700 urban schools --does not meet the Ministry's school building standards. These schools need upgrading tocomply with prescribed norms.

I.B.3. The Government intends to complete the expansion of basic education capacity underthe Program by the year 2001, in three successive phases of contracts to be let during the threeyears of Program: 1998, 1999, and 2000. About 13 percent of the total school infrastructureprogram is planned for inclusion in the first phase, 37 percent during the second phase, and theremaining 50 percent during the third phase. These annual phases of contracts for schoolconstruction are distinct from the timing of the planned sequence of APLs. The timing of thethree phases of school construction, extension, and upgrading is driven by the school capacityrequirements for the next three school years and the civil-works contracting cycle, whereas thetiming of various APLs will depend upon fulfillment of specified performance triggers and theneed for external financing to supplement the Government's own resources. How closely theycoincide or how much they overlap will be determined by actual implementation progress in thevarious elements of the Program upon which they depend.

I.B.4. Because the time the Government has set for completing the first wave of constructionfor new schools is so compressed, it has decided to contract all Phase I schools usingGovernment Procurement Procedures. Therefore, Bank financing during the first APL will belimited to upgrading 300 rural schools in provinces with the greatest educational needs, and 40urban schools in the province of Ankara, where Bank Procurement Guidelines will apply.Procurement of these works will follow Bank guidelines. The second and third phases of schoolconstruction will be prepared as the first phase is implemented. Selection criteria for theseschools and procurement procedures are to be developed in consultation with the Bank, such thatexpenditures on these schools could be eligible for reimbursement under the second APL, andpossible subsequent Bank financing.

I.B.5. The following sections describe the elements and activities (completed and planned)which comprise the school construction, extension, and upgrading program, with greater detailprovided for the first phase than for the subsequent phases. Table 3, below, summarizes therequirements and physical targets of the component.

4 The Ministry had initially proposed a heavier reliance upon regional boarding schools in the Programto meet the needs of dispersed rural population. But it found under the Basic Education Pilot Projectthat a more cost-effective approach for most rural areas consists of a combination of improvingexisting primary schools, and providing schooling for the upper grades of basic education throughextensions to existing schools and bussing. Regional boarding schools will be developed under theProgram only as a last resort, when distances and topography preclude bussing, and then only for theupper grades of basic education. Cost-effectiveness analysis was instrumental in developing theapproach to be implemented under the component, and will play an important role in refining thismodel as the Program is implemented.

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Table 3. Basic Education Program Infrastructure Investment Targets

INDICATORS/TARGETS Phase I Phase II Phase IlIl Total BEPBEP Infrastructure Program (completion rate) 13% 37% 50% 100%

New Construction (Number of New Student Places) 479,180 1,363,820 1,843,000 3,686,000of which Rural BE Schools 87,490 249,010 336,500 673,000

Urban BE Schools 391,690 1,114,810 1,506,500 3,013,000

of which Preschool 18,915 53,835 72,750 145500

Total New Classrooms Built 15,795 44,955 60,750 121,500of which Rural BE Schools 2,834 8,066 10,900 21,800

Urban BE Schools 12,961 36,889 49,850 99,700

Rehabilitation of Existing BE Schools 340 14,350 18,750 33,400Number of Rural BE Schools 300 11,000 14,700 26,000Number of Urban BE Schools 40 4,310 4,350 8,700

New Student Boarding (Rural)Number of New Places Provided 13,975 39,775 53,750 107,500

Teacher Housing (Rural) 3,328 9,472 12,800 25,600New Residential Units Built 936 2,664 3,600 7,200Existing Residential Units Upgraded 2,392 6,808 9,200 18,400

I.B. I 0. Phase I Infrastructure Investments: The first phase of school construction, extension,and upgrading comprises activities to be contracted -- and, for the most part, implemented --during the first year of the Program. Phase I activities comprise: (a) needs assessment and designof the new schools to be constructed under the first phase of school construction, and (b) schoolconstruction -- including completion of ongoing school construction projects and contracts,construction of new schools, and rehabilitation and upgrading of about 300 existing rural schoolsand 40 urban schools.

I.B. 11. Specifically, these activities involve the following:

a. Needs Assessment and School Design: Design and accommodation standardsfor planning basic education facilities were developed under the Basic Education PilotProject. These norms were compiled in a Standards Manualfor School Buildings whichwill be used as a handbook for the construction and upgrading of schools under the BasicEducation Program. The Manual also includes design norms for student boardingfacilities and teacher housing, as well as the standards for furnishing and equipping eachtype of facility. A set of standards is also being prepared for the upgrading and extensionof existing schools.

Prototype school building designs, based upon the design principles andstandards in the Manual, have been commissioned from architectural and engineeringteams from five major national universities. These prototype designs (drawings andtechnical specifications) will be used for the detailed planning and construction ofschools, and will be adapted to suit the specific characteristics of individual schools andsites. The detailed engineering design work for the first wave of school construction willbe overseen by four regional construction management consultancies.

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b. School Construction and Upgrading: Under Phase I, the Ministry plans toconstruct a total of about 479,180 new student places in basic education schools(approximately 15,800 new classrooms), as well as spaces for about 14,000 students inboarding schools, and housing for about 10,000 teachers in rural schools. This stage of theinfrastructure program will also include the refurbishing and remodeling of nearly 2,828Information Technology Resource Rooms in existing schools (Component IIA).

About half of the Phase I infrastructure program is already underimplementation. Building contracts for the rest of the schools are expected to be tenderedand awarded by June, 1998. The Ministry expects that all Phase I construction contractswould be completed and the schools ready for student occupancy by mid-September,1998 when classes are scheduled to begin, although some of the Phase I constructionprogram will likely carry over into 1999.

In addition to the new school construction, about 300 rural schools in theprovinces with greatest educational needs -- about 200 five-year village schools in theprovinces of Sirnak, Van, Mardin, Hakkari, and Bitlis (or in other provinces as agreedwith the Bank), and about 100 centralized, eight-year rural schools in the provinces ofKocaeli, Yalova, Batman, Igdir, and Bartin (or in other provinces as agreed with theBank) -- will be upgraded to the new standards. About 40 urban slum schools will also beupgraded to these standards in the province of Ankara. The rehabilitation/upgrading ofthe 340 schools is to be financed under the first APL. Partial completion of upgrading forthe 300 rural schools is one of the triggers for progressing to the second APL.

I.B. 12. Phases II and III of the Infrastructure Program. It is expected that Bank financing underthe second APL, and possible subsequent lending, will support investments in new schoolconstruction and upgrading. The second phase of the infrastructure program is expected to beginimplementation in early 1999 and will cover about 37 percent of the total infrastructuredevelopment planned under the Program. Phase III would cover the remainder (50 percent) ofthe total program, and is planned to start implementation by the year 2000.

COMPONENT 11: IMPROVED BASIC EDUCATION QUALITY

II.1 The second component comprises a number of activities designed to improve basiceducation learning outcomes and the relevance of basic education. Under the Program, qualityimprovements include: i) the introduction of information technology into the curriculum, ii)provision of educational materials and textbooks, iii) in-service training of education staff, iv)student aid to help defray the private costs of basic education to poor households, and v)assessment of learning achievement.

ILA. Information Technology (IT): The first APL will finance US$154.0 million for theupgrading of information technology rooms andfor the provision of hardware and software.

5 Government resources of TL 117 trillion (US$520 million equivalent) have already been allocated inthe 1998 budget for ongoing and committed contracts, as well as TL 102 trillion (about US$450million equivalent) for new school construction, plus TL 35 trillion for the purchase of schoolequipment and TL 25 trillion for site acquisition for new schools.

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II.A. 1. In its efforts to improve education quality and the competitiveness of the country's laborforce, the Ministry has introduced computer literacy and training into the basic educationcurriculum and plans to equip IT resource centers in all 8-year basic education schools. Turkeyhas already experienced rapid growth in its informatics workforce. Nevertheless, the proportionof informatics-literate workers in the total labor force remains significantly below that of otherOECD and emerging economies. In light of the increasing demand for jobs requiring basiccomputer skills, and the technological shift towards personal computing and distributedapplications, the Government has recognized the need for a strategy to promote the diffusion ofcomputer literacy. The objective of the IT component is to enhance learning by using IT as aproductive tool across the basic education curriculum.

IL.A.2. The Ministry is in the process of developing specific inputs considered essential by theBank (and following international best practice) for using technology successfully to supporteducation reform including: a) a policy paper on why and what the Ministry intends to use IT tosupport various kinds of learning activities, including a clear set of goals that can becommunicated to teachers, students, parents, and industry alike, b) a strategy on how to integrateIT into the curriculum, including an approach for educational software provision, methods to getstudents to become computer literate, the grades and courses which are to use IT, howcontinuous teacher training will be organized, and quality assurance, and c) a three-year modelplan for schools in using IT in the curriculum each week, including competencies to bedeveloped, software to be used, individual/group approaches, teacher training, extracurricularuse of the laboratories, and community activities.

II.A.3. The design of the IT activity builds upon the successful Computer Experimental Schoolcomponent under the National Education Development Project (NEDP), carried out since 1992by the General Directorate for Education Technologies (ETGEM). Under this activity, ETGEMestablished computer laboratories and provided training for teachers in 235 primary andsecondary schools across Turkey. It also developed computer-aided education programs for thevocational high schools. The Computer Experimental School component was evaluated by aninternational group of experts in October, 1996, and found successful in integrating IT intolearning and engaging community involvement in the initiative.6 Based on this finding, theMinistry is expanding the program to an additional 182 schools, and drawing upon staffexperience and expertise for the Basic Education Program.

II.A.4. The Program will support the following activities under the IT component: a) training ofinformation technology (IT) coordinators, teachers, and administrators in computer literacycourses and in computer-aided instruction through in-service training, b) a phased introduction ofcomputer resource centers to, first, existing schools in sub-provinces with high studentpopulations, then to regional basic education boarding schools, and subsequently to remainingbasic education schools, c) Turkish educational course software provision (e.g., keyboarding,

6 The independent review of the Computer Experimental Schools under the National EducationDevelopment Project (available in the Project File) found that administrators, teachers, and students wereall enthusiastically and creatively using the equipment and software provided under the project. In theschools visited by the evaluators it was clear that the students were utilizing the facilities on a daily basis.They understood how to operate the hardware and software, and were beginning to identify changes intheir learning environments. In some cases, support from the Parent/Teachers Associations (PTAs) wasused to upgrade equipment, provide additional hardware, and even to hire laboratory technicians.

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curricula-based instruction, reference, tutorials, languages, dictionaries, Turkish grammar,simulations, experiments, and libraries), d) expansion of Internet connectivity and services fromits current proof-of-concept stage to a more advanced operational stage, in order to allow schoolsto be linked to each other and Turkish educational web sites to be made available for use byteachers and students, and e) strengthening communication between IT coordinators, teachers,and universities through information bulletins, web sites, and annual, regional workshops toreview best practices.

III.A.4. Phase I IT Investments: During Phase I, hardware, software, and training will beprovided to equip, staff, and operate 2,828 IT rooms in existing eight-year basic educationschools throughout the country. At least two schools in each sub-province will be equipped withIT rooms during the first phase of the APL. The first APL will include financing for preparationof the rooms which will house the 2,828 computer resource centers, hardware, software, trainingof full-time coordinators orformators for each resource center, and shorter programs of trainingfor teachers whose students will use the facilities. The Ministry is in the process of identifyingsecondary teachers with suitable skills to becomeformators. All are to be selected by the end ofMay, 1998, in time for intensive training during the summer, 1998. Training is to be provided bycontracted teams of information technology experts who are experienced in educationalapplications. Most are expected to come from Turkish universities.

II.B. In-Service Training: The first APL will finance US$ 31.2 million of in-service teachertraining costs -- largely travel, accommodations and materials development -for the first yearof Program implementation.

II.B.1. The Program aims to provide two weeks of in-service teacher training each year -- oneweek each at the beginning and end of the school year -- for approximately 305,000 basiceducation teachers and school principals, including those assigned to the new schools beingconstructed under the Program. Training will also be provided for the roughly 3,000 schoolinspectors and 1,236 education administrators, including provincial and sub-provincial educationofficials. The Bank has reviewed and agreed to the general program of training to be providedunder the Program. Costs incurred as of appraisal will be eligible for retroactive financing,subject to an overall limit of $30 million.

II.B.2. Training will be administered at the provincial level by inspectors, based on modulesdesigned by the Ministry. Courses will cover topic areas including, inter alia, pedagogicalmethods, learning assessment, community participation and classroom management andcommunication. The training courses will also make use of the materials and training modulesdeveloped under the Pilot Program to equip teachers to teach more effectively in difficultteaching environments and to involve parents in school activities. Teachers will have theopportunity to supplement and build upon these two weeks of training during on-site visits frominspectors, and -- in rural areas -- monthly seminars held in central villages.

II.B.3. Training for provincial education officials and school principals aims to strengthenmanagement capacity at the school level, in order to improve decision-making, parentalparticipation in school affairs, and support for teachers' professional development. The Ministryhas already developed a number of in-service training courses for managers addressing educationplanning, communication, leadership training and the use of technology in schools.

II.B.4. Counseling is an important ingredient for improving student performance and preparingstudents for post-basic education and employment. Extending the duration of. compulsory

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education will greatly increase students' options and opportunities for employment and furthereducation. Guidance counselors are important facilitators for assisting students in makinginformed choices among these options. The Program will address the serious shortage ofguidance counselors -- who are currently employed in only one percent of urban schools -- byraising awareness of counseling issues among all staff, and particularly for those in schoolswithout counselors. The Ministry is in the process of developing a resource guide on guidanceissues, including psychological counseling and career guidance for preschool and basic schoolteachers and school managers, and plans to incorporate training on counseling into the in-servicetraining curriculum for teachers and administrators.

I C. Provision of Essential Teaching and Learning Materials to Rural Schools: The firstAPL will include US$47.6 million to provide and distribute a package of teaching and learningmaterials to 25,900 schools in rural areas.

II.C. 1. In order to improve learning achievement in poorly equipped rural schools, the Programwill provide a basic package of teaching and learning materials to nearly all rural schools for the1998-99 school year, and a full set of required textbooks to all rural schools for the 1999-2000school year. Many rural schools lack adequate supplies of educational materials for satisfactoryteaching and learning. Children in rural schools also often lack textbooks because of householdincome constraints. The Basic Education Pilot provided a basic package of teaching andlearning materials to 274 five-year village schools in six provinces in Eastern and SoutheasternTurkey, based on a list of materials which was developed in consultation with teachers andinspectors from rural schools in those provinces.

II.C.2. Phase I Teaching/Learning Materials: The basic package of educational materials tobe provided to the 25,900 rural five-year schools will be based on the package which wasprovided to 274 rural primary schools under the Basic Education Pilot Project (costingapproximately $3,000 per school). An augmented package will be provided to the 4,800 ruraleight-year basic education schools, and is estimated to cost about three times as much as thepackage for the rural five-year schools. The lists of educational materials which will bedistributed are based on those which were developed in consultation with teachers and inspectorsfrom rural schools for the Basic Education Pilot Project.

II.C.3. Phases II and III Textbooks: Although textbooks are normally purchased byhouseholds, some parents of children in rural areas cannot afford them. The Ministry plans toaddress this need in the second year of the Program, by providing a free set of required textbooksto all rural schools. In order to ensure the maximum choice of titles at the best price, it isplanned that textbooks will be procured for all rural basic education schools by approaching thepublishers of all Board-approved titles, and requesting variable discounts from the list pricedepending on the volume of purchase. These discounts will be translated into actual prices andprovided to all provinces and subprovinces for their selection and use. On the basis of thisinformation, the Ministry will collate requests, procure in bulk from each publisher, and contractfor distribution to the provinces. The estimated cost of this procurement -- to be implementedunder the second APL -- is US$15 million.

IID. Student Social Aid: The Ministry expects to finance its student social aid initiative (costsestimated at US$45 million per annum) through grant funds.

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II.D.1. The Ministry's current social aid program for improving school attendance andperformance for low income students will be supported and expanded through the Program. Partof the rationale for this effort is to offset the economic burden to some households of extendedcompulsory education. Under this initiative, the MONE uses its network of girls' vocationalschools and adult education centers to make and provide school uniforms and meals to poorstudents in urban geckeondu areas and centralized bussing schools in both urban and rural areas.The program is actively supported through donations from the public. Over the next three years,this initiative will be extended to include needy children in rural areas -- including childrenattending village five-year schools -- by inviting the involvement of NGOs and school-basedcommunity groups.

IIE. Assessment of Learning Achievement: The first APL will support US$0.7 for thedevelopment and implementation of assessments of learning outcomes.

II.E. 1. Analysis of the learning outcomes of the Basic Education Program is a key tool formonitoring the impact of Program interventions and tracking quality developments. This Fall,building on the existing assessment tools developed under NEDP, the Department of EducationalResearch and Development (ERDD) will administer representative surveys of approximately70,000 students in 500 basic education schools to assess learning achievements in four subjects:Turkish, science, math and social studies. This will be expanded to include computer literacy andforeign language proficiency in 1999 and subsequent years. The results of the exams will be usedto evaluate Program successes and shortcomings, and to make appropriate corrections in theProgram. The results of the assessments will be shared with the provinces as an instrument forimproving educational performance.

COMPONENT III: PROGRAM IMPLEMENTATION SUPPORT

III.1. The Program will be managed by a Program Coordination Team (PCT), headed by aProgram Director reporting directly to the Undersecretary in the Ministry, in coordination withthe relevant ministerial line units. Specialized consultants will be hired by the PCT as needed tolend expertise and implement various aspects of the Program. The PCT will contain managerialstaff responsible for implementing program components in coordination with the line units.Seven managers will be recruited in the following areas: (i) infrastructure, (ii) informationtechnology, (iii) educational interventions, (iv) monitoring and evaluation, and financialmanagement and procurement.

III.A. Support for the Program Coordination Team: The first APL will provide US$1.8 millionin implementation support to the PCT in the form of specialized consulting services, studytours for selected Team staff, office equipment and undesignated technical assistance.

III.A. 1. Each sub-unit of the Program Coordination Team will be staffed with seconded Ministrypersonnel, who have adequate experience in managing and implementing educational investmentprojects. Some of these key staff have gained implementation experience and familiarity withBank procedures under the National Education Development Project and the Basic EducationPilot Project financed by the Bank. However, given the magnitude and complexity of theproposed Basic Education Program, the Program and the first APL include the followingconsultant services: a) Procurement Specialists (lead specialist for procurement management andtechnical support for procurement of works, goods and services contracts), b) FinancialManagement Specialists (accountant/bookkeeper, financial management/disbursement specialist

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with experience in international banking/commercial practice), c) Education Specialists (fields tobe deternined as the Program develops), and d) Monitoring and Evaluation Specialists includingdata/information management specialist to organize the reporting requirements of the Program.It is expected that most of these specialized services will be provided by individual consultantsselected on the basis of their qualifications and experience for the specific assignment. Selectedstaff will have an opportunity to undertake training visits/tours (e.g. to observe successful basiceducation interventions in other countries, and to participate in procurement training at BankHeadquarters). Appropriate office equipment and computers will be procured for PCT staff use.

III.A.2. The first APL also includes resources for undesignated Program implementation support,to be used to strengthen implementation capacity as needs arise. These resources can be used, asagreed by the Ministry and the Bank, either to engage individual consultants beyond thoseidentified above, or for institutional support in appropriate areas of Program implementation.

IILB. Educational Management hqformation Systems: The first APL will provide US$3.0million to strengthen educational management information systems, including schoolmapping.

III.B.1 As described above (Component 1), additional capacity is required in the Ministry tostrengthen education planning for subsequent phases of the Basic Education Program and on-going system management. This activity will be financed under the APL, and will support theMinistry's Council for Research, Planning (APK) to: a) improve the Ministry's educationalinformation management capacity, b) train and strengthen APK technical staff in the use ofstate-of-the-art education management information systems, and c) acquire up-to-date computerhardware and software.

COMPONENT IV: MONITORING AND EVALUATION

IV.A. Social Assessment and Monitoring: Thefirst APL willfinance US$3. Ofor monitoringand evaluation of the Program. Most of the activities will continue throughout the entireProgram (Phases I-III).

IV.A. 1: Monitoring and social impact assessments will serve as key instruments for guidingProgram implementation and development. Because of the flexible nature of the Government'sProgram and the APLs designed to support it, monitoring of indicators and assessments are vitalfor shaping the Program as it evolves. On-going evaluation will provide essential feedback forgauging progress, making course corrections, and responding to changing circumstances andlessons learned. Monitoring will be based on four groups of indicators: input, process, output,and impact. Specialized studies and assessments will be undertaken throughout the Program, ontopics including preschool education, community-based activities (together with the related lineunits), social assistance programs, and working children and other groups in need of social aid.8

The Program Coordination Team will be responsible for monitoring activities and will

7During Phase I of the Program, APK will assess the feasibility of integrating a Geographic InformationSystem (GIS) into the school mapping process, and the resources needed for setting up an integratedGIS/School mapping system at national and provincial levels

8 A description of the proposed indicators, studies and social assessments is included in Annex 1Attachment 1.

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adequately staff itself to coordinate the relevant activities across various departments of theMONE and its local offices.

IV.A.2. The results of monitoring efforts will be evaluated in a participatory manner at severallevels. First, the Project Coordination Team will evaluate the results jointly with the relevantdepartments of the MONE. It will also share results with the provincial and sub-provincialadministrators and seek their feedback. Indeed, this will be an important step in the direction ofcreating local level capacity for Program monitoring and evaluation. The results will also beshared through regular national seminars which the MONE will organize for consultativepurposes. Joint evaluation by the Bank and the MONE will also be carried out, culminating inannual joint reviews to be held in May of each year, and including the participation ofinternational and national consultants with expertise relevant to the Program.

IV.B. Monitoring Response Facility: The firstAPL will provide US$8.4 million to establish aMonitoring Response Facility (MRF).

IV.B.1. The Program includes an innovative component, the Monitoring and Response Facility,(MRF), which is designed to provide the Program with the flexibility to respond to developmentsarising during implementation, and to support the development of pilot projects and initiatives,consistent with Program objectives, at the school level. Implementation of educational reformprograms in Turkey and other countries has shown that the monitoring process often identifies:(a) issues for further investigation, (b) promising strategies and approaches which require pilottesting prior to adoption and replication; and (c) new implementation channels which requiresupport in the short term in order to be sustainable over the longer term. The MRF will allowparent groups, school administrations and teacher groups, and branches of the Ministry ofNational Education involved in the planning, preparation, implementation and monitoring of theProgram to apply for funding to support school-based initiatives which are consistent with theobjectives of the Program.

IV.B.2. The MRF will be administered by the Program Coordination Team Director and will bean integral part of the monitoring and evaluation process for the Program. The MRF projectcycle will be divided into three main stages: (a) monitoring of the program and promotion of itsfunding possibilities, (b) screening, appraisal and approval of funding applications, and (c)implementation -- including monitoring and evaluation. During the first stage, the administratorwill identify issues and opportunities that could benefit from the MRF at the same time as itinforms potential recipients of the existence of MRF, including its guidelines and eligibilitycriteria. Parent associations, schools, and groups of teachers will be eligible to apply. Programproposals submitted by potential recipients will be screened to identify those which meet theeligibility criteria. Proposals will designate performance indicators, as well as the need fortechnical assistance during implementation. Following approval of proposals, staff of the PCTTeam Leader would work with the recipients to develop standardized reporting systems and theprocurement of goods and services as appropriate. Monitoring of progress will be carried out bythe Team Leader on the basis of regular reports and field visits, with an emphasis ondisseminating lessons learned throughout the country.

Draft criteria for MRF proposals are included in Annex 1: Attachment 1.

Annex 2page 14 of 14

IV.B.4 The Bank would carry out reviews of the MRF work program on an annual basis, and expost reviews of operations -- including procurement practices, the operations of the specialaccount, and the general MRF performance -- on a quarterly basis. The first three activities to befinanced under the MRF, and thereafter all individual MRF activities costing more than $30,000would require prior Bank review. Accounting and auditing of the MRF would be included inthe overall Project financial review mechanisms.

IV. C. Basic Education Promotion: The first APL will finance US$1.9 million for a basiceducation promotion campaign.

IV.C. 1 Although public support for the Basic Education Program is currently strong, because ofthe complex nature of the Program, it will be necessary to communicate timely information onits objectives, activities and progress with the full range of stakeholders and the public in orderto maintain the existing level of attention. While there has been extensive public debate on theexpansion of basic education from five to eight years, the expansion of boarding schools, pre-school facilities, and opportunities for community involvement in schools, there is a need toprovide more specific information on these developments with the public. Communication isalso important for reinforcing the compulsory nature of basic education in more remote areas.

IV.C.2 In order to address these needs at the outset, a range of public relations activities will besupported under Phase I of the Program, including public opinion surveys and other instrumentsfor measuring popular support, and information dissemination through advertisements,publications, public discussions and other media. It will be important to establish in-housecapacity to evaluate the information needs of the various stakeholder groups, the nature of theinformation needed, the appropriate channels of communication, the consistency of thecommunication plan, and the timing and objectives of individual information and PR activities.The creation of an in-house capacity should then allow for the formulation of specific tasks to beprocured from professional consultants/firms. Services that can be procured from qualified PRconsultants and companies would include conducting public opinion surveys, media monitoring,message development and testing, PR strategy development, building internal consensus,evaluation and impact assessment and feedback.

Annex 2: Attachment 1page I of 1

Annex 2: Attachment 1

Preparation of the School Infrastructure Component:

1. Estimates of additional capacity requirements were developed by the ProgramPreparation Team, in coordination with the Ministry's Research, Planning and CoordinationCouncil (APK). Because of the need to act rapidly to define the construction priorities for thefirst wave of school construction, the Ministry has relied heavily on estimates -- from both APKand provincial education authorities -- in defining its initial (CY 1998) investment plan. TheMinistry is currently refining this methodology for subsequent phases of the program in order toensure better targeting and cost-effectiveness of investments. The Program includes technicalassistance and equipment, to be financed udder the APL, to strengthen the Ministry's capacity inthis area.

2. Aggregate estimates for new construction during the first year were based on projectionsof student numbers and existing capacity. Following the passage of the Basic Education Law inAugust, 1997, the 80 provinces were asked to provide data on student enrollments and existingfacilities in rural and urban areas for each of the 921 subprovinces. Based on these data, APKestimated the number of additional classrooms needed for each subprovince by calculating theexpected enrollments for the 1998/1999 school year and, subsequently, the number of classroomsneeded to accommodate projected enrollments in single-shift classrooms of 30 students each.These figures were then sent back to the provinces for verification, and were then recommendedby the Ministry as a framework within which each province was to develop its school investmentplan.

3. In September, 1997, the Ministry provided the provinces with instructions and criteriafor preparing their 1998 school investment plans. Criteria included the physical condition andaccessibility of existing schools, the availability of teachers, and options for bussing studentsfrom neighboring villages to central schools. The provincial education authorities prepared theirinvestment proposals in consultation with the provincial Governor and other members of theProvincial General Administration Council -- an official body responsible for approving allinvestment plans. The provincial proposals -- including infonrnation on the number and size ofnew schools to be built, as well as specifics on site availability and costs -- were presented toAPK in February, 1998, at a conference of provincial Governors and provincial educationdirectors. These proposals were then cross-checked with the classroom estimates, and eitheraccepted by the Ministry or returned to the provinces for revisions.

4. In preparation for the second and third phases of school construction, the Ministry isrefining its planning methodology to improve the precision of its plans, and decision-making onthe appropriate types of infrastructure investments for particular applications (e.g. whether toaccommodate expected enrollment increases in a particular catchment area by enlarging capacityin an existing school, by building a new school, by bussing students to another school withavailable capacity, or by sending students to a regional boarding school). In addition togathering more detailed, school-level data, the Ministry will provide the provinces with moreexplicit criteria -- in consultation with the Bank -- for determining the most cost-effective schoolinvestments to meet local needs. On the basis of these guidelines and its more refined, school-level database, the Ministry will assess the province's school investment proposals, and integratethem into a national plan for basic education infrastructure. The Phase II APL and possiblefuture Bank financing are expected to support these school infrastructure investments.

Annex 3page 1 of 4

ANNEX 3

Basic Education ProgramEstimated Costs of Phase I

Table 3A: Project Cost by Component

% % Total(USS Million) Foreign Base

Local Foreign Total Exchange Costs

A. Phase I1. Expanded Basic Education Coverage

a. Construction and Upgrading of Basic Education Schools 1,187.8 196.1 1,383.9 14 58b. Teacher Training and Recruitment 650.0 - 650.0 - 27

Subtotal Expanded Basic Education Coverage 1,837.8 196.1 2,033.9 10 852. Improve Basic Education Quality

a. In-service Training Programs 33.5 0.0 33.5 -b. Educational Materials 63.9 27.9 91.8 30 Al

c. Information Technology 69.1 106.9 176.0 61 7d. Assessment of Learning Outcomes 0.5 0.3 0.8 40

Subtotal Improve Basic Education Quality 166.9 135.2 302.2 45 133. Program Implementation

a. Program Management Team 43.4 0.5 43.9 1 2b. EMIS/School Mapping 1.2 2.2 3.5 65

Subtotal Program Implementation 44.7 2.7 47.4 6 24. Monitoring and Evaluation

a. Social Assessment, Monitoring and Studies 2.7 0.7 3.3 20b. Monitoring Response Facility 9.1 1.0 10.1 10c. Basic Education Promotion 2.0 0.2 2.2 10

Subtotal Monitoring and Evaluation 13.7 1.9 15.6 12 1Total BASELINE COSTS 2,063.1 335.9 2,399.0 14 100

Physical Contingencies 75.3 24.1 99.4 24 4Price Contingencies 11.6 5.2 16.8 31 1

Total PROJECT COSTS 2,150.0 365.2 2,515.2 15 105

Note: Amounts may not add up to exact totals due to rounding.

Annex 3page 2 of 4

Annex 3Basic Education ProgramEstimated Costs of Phase I

Table 3B: Project Cost by Category of Expenditure

% % Total(US$ Million) Foreign Base

Local Foreign Total Exchange Costs

I. Investment CostsA. Phase I

1. School Construction and Upgradinga. New Construction 756.0 133.4 889.4 15 37b. Rehabilitation and Upgrading 231.1 25.7 256.8 10 11c. School Site Acquisition 106.4 - 106.4 - 4

Subtotal School Construction and Upgrading 1,093.5 159.1 1,252.6 13 522. Equipment and Materials

a. School. Educational and Other Equipment 15.1 35.3 50.4 70 2b. School Fumiture 82.4 4.3 86.7 5 4c. Information Technology

IT Hardware for Basic Educaton Schools 29.8 89.3 119.0 75 5IT Software for Basic Education Schools 3.8 11.5 15.3 75 1EMIS Hardware for APKjProvincial Units 0.8 1.9 2.7 72 -

EMIS/School Mapping Software and Development 0.1 0.2 0.3 75 -

Subtotal Information Technology 34.4 102.9 137.3 75 6d. Bank-Financed Books, Intellectual Property and Materials

Prescribed Textbooks 20.0 8.6 28.5 30 1Library Books and Intellectual Property 5.8 2.4 8.0 30 -

Teaching Materials and Supplies 12.8 5.4 18.2 30 1Subtotal Bank-Financed Books, Intellectual Property and Materials 38.4 16.3 54.7 30 2a. Non-Bank-FInanced Books, Intellectual Property and Materials

Library Books and Intellectual Property 0.6 0.3 0.9 30 -

Teaching Materials and Supplies 24.9 10.7 35.6 30 1Subtotal Non-Bank-Financed Books, Intellectual Property and Materials 25.6 11.0 38.65 30 2

Subtotal Equipment and Materials 195.9 169.8 365.7 48 153. Consultant Services and Training

a. Architectural & Engineering Design FeesBank Financed A&E Services 1.1 - 1.1 1Non-Bank Financed A&E Services 40.2 - 40.2 - 2

Subtotal Architectural & Engineering Design Fees 41.3 - 41.3 - 2b. Specialized Services 3.9 0.7 4.6 16 -

c. In-country Training 33.2 - 33.2 - 1d. Training Abroad 0.0 0.1 0.2 80 -

e. Studies and Research 2.7 0.7 3.3 20Subtotal Consultant Services and Training 81.0 1.5 82.6 2 34. Local Speciablsts/Technical Staff 1.8 - 1.8 - -

5. Monitoring Response Facility 9.0 1.0 10.0 10 -

Total Investment Costs 1,381.2 331.4 1,712.6 19 71

II Recurrent CostsA. Phase I

1. Incremental Salaries 650.0 - 650.0 - 272. Non-salary Incremental Operating Costs 0.3 0.0 0.4 10 -

3. Regular and Preventive Maintenance /a 31.6 4.5 36.1 12 2Total Recurrent Costs 681.9 4.5 686.4 1 29

Total BASELINE COSTS 2,063.1 335.9 2,399.0 14 100Physical Contingencies 75.3 24.1 99.4 24 4Price Contingencies 11.6 5.2 16.8 31 1

Total PROJECT COSTS 2,150.0 365.2 2515.2 15 105

\a Building and equipment maintenance.

Note: Amounts may not add up to exact totals due to rounding.

Annexpage 3 of 4

Table 3C: Financing Plan by Project Component

ProvincialThe Govemment Administration The Would Bank National Donors Total

Amount % Amount % Amount % Amount % Amount %

A. Phase I1. Expanded Basic Education Coverage

a. ConstructionandUpgradingofBasicEducationSchools 1,247.4 84.7 24.6 1.7 48.4 3.3 151.8 10.3 1,472.2 58.5b. Teacher Training and Recwitment 650.0 100.0 - - - - - - 650.0 2S.8

Subtotal Expanded Basic Education Coverage 1,897.4 89.4 24.6 1.2 48.4 2.3 151.8 7.2 2,122.2 84.4Z Improve Basic Education Quailty

a. In-service Training Programs 5.8 15.7 - - 31.2 84.2 - - 37.0 1.5b. Educational Materials 44.1 47.1 2.0 2.1 47.6 50.8 - - 937 3.7c. Inrformation Technology 28.8 14.6 14.8 7.5 154.0 78.0 - 197.6 7.9d.Assessmentof LearningOutcomes 0.1 15.8 - - 0.7 84.3 - - 0.9

Subtotal Improve Basic Education Quality 78.8 24.0 16.8 5.1 233.5 70.9 - - 329.1 13.13. Program Implementation

a. Program Management Team 42.4 95.9 - - 1.8 4.1 - - 44.2 1.8b. EMIS/School Mapping 0.6 14.6 0.3 7.6 3.0 778 - - 3.9 0.2

Subtotal Program implementation 42.9 89.3 0.3 0.6 4.8 101 - - 48.1 1.94. Monitoring and Evaluation

a. SocialAssessment, MontoringandStudies 06 15.8 - - 3.0 84.3 3.5 0.1b. Monitoring Response Facility 1.6 16.4 8.4 83.6 - 10.1 0.4c. BasicEducation Promotion 03 15.7 -_- 19 842 - 22 0.1

SubtotalMonitoring andEvaluation 2.5 161 - - 132 839 158 0.6Total Disbursement 2,021.7 804 41.7 17 3000 11.9 151.8 6.0 2,515.2 100.0

Note: Amounts may not add up to exact totals due to rounding.

Annex 3page 4 of 4

Table 3D: Financing Plan by Category of Expenditure

P-ovncIl1The. Gornn-et Ad.InlItralon TheWorldBank Na.UnallDono. Total OuS. a

Amount S Amount % Anount % Amount S Amount % Tons

1. Inwntmant CostsA. PhaneI

1. School Condruction and Upgradinga.Nw Const.rcon 802.5 84.1 - 151.0 15.9 954.3 37.9 160.3b. R.habilitatio- and Upgrading 191.a 722 - - 73.9 27.8 - - 205.7 10.8 41.8

Shool Sbi Acuisition 10.4 100.0 - - - - - - 106.4 4.2 10.8Subtotal School Construction and Upgrading 1,100.7 830 - - 739 5.8 151.8 11.4 1,328.4 52.7 208.92. Equlpment and Matarlan

a School. Educational and Othar Equipment 54.8 97.08 1.2 2.2 - - .91 2.2 2 .0b. Sdcool Fumitumn 8.5 100.0 - - - - - - 98.5 3.8 15.2c. lntonma8on Technology

IT Hardna fr Basic Education Scholn 21.1 15.8 - - 113.0 84.2 - - 134.2 5.3 21.1IT SowarftorBasicEducatonSchools 2.7 15.8 - 14.5 84.2 - 17.2 0.7 2.7EMS Hardam orAPKIP-mincI1 Units 0.5 15.7 - - 2.8 54.3 - - 3.0 0.1 0.5EMISISchool Mapping Software and Dvlopnmnt 0.1 15.8 - - 0.3 84.3 - - 0.3 - 0.1

Subotal In,ormmtlon Technology 24.4 15.8 - - 130.4 84.3 t154.8 62 2Td. Bank-Financed Bookn, Intellectual Property and Maiterbia

Precibed Textboks 4.8 15.8 - - 24.5 84.3 - - 29.1 1.2 4.fLibrary Books and Intellectual Propody 1 3 158 - - 89 843 - - 8.2 0.3 1.3Teaching Maltaan and Supplin 2.9 157 - - 15.7 843 - - 18.6 0.7 2.9

Subtohti Bank-Fln.an d Books, Intellectual Property and Mateoals 8.8 15.7 . 47.0 84.3 55.8 2.2 8.8*. Non-BankFi.nanc.d Books. Intellectual Propary and Mabalail

Ubrary Books and Int loc-Ial Property 0.9 100 0 - - 09 S 01Teaching Metodaln and Supplino 3443 9405 2.0 5.5 - - - - 3.3 1.4 5.7

Subtt on-Bank-Financ-d Book, Intellectual Property and Materials 35.2 54.8 2.0 5.4 - - - 37.2 1.5 5.9Subtotal Equlprment and M.Ibdaln 219.7 54.9 2.0 0.5 178.8 44.8 - - 400.4 15.9 83.13. CanSaUtnt Sanvicna and Training

a. Anchibctural Engineaelng Oesign FeesBank Financed A&E Sorc 052 15.8 - - 1.0 84.3 - - 12 - 0.2Nc-Bank Financed A&E Ser.ions 40.2 100.0 - - - - - - 402 1.6 63

Subtota Archedurl & Engineerdng Design FPae 40.4 97.0 - - 1.0 2.4 . - 41.4 1. 6.0b.Spedalie Servicen 0.8 15.7 - - 4.1 4.3 - - 4.9 0.2 0.8c Incuntry Training 5.8 15.7 30.8 84.3 30.8 1.5 5.8d. Training Abroad 0.0 157 - 02 842 - - 0.2 - 0.0.. Studios and Research 0.8 15.8 - - 3.0 843 - - 3. 0.1 0.8

Slbtotal Con-utant Saroia and Training 47.5 54.9 - - 300 45.1 - - W 3.4 3T4. Local Spacialitstnltchnicl Stafl 1.8 100.0 - - - - - - 1.8 0.1 0.3S. Monitfong Rsponse Facility 1.8 15.8 - 8.4 84.3 - - 10.0 0.4 1.6

Total nveatent Coa." 1,371.3 75.1 2.0 01 3000 16.4 1518 8.3 1,825.1 72.b 287.5IU. Reurent CoataA. Phaae I

1. Incremental Salrion 650.0 100.0 - - - - - - 850.0 25.8 141.42. No-nyalory Incr-mnntal Opnraling Coots 0.4 100.0 - - - - - 0.4 - 0.13.Regular and Prcentiv Maintnancaa - - 25.7 100.0 - - - 23.7 1.8 8.2

Tobl Recaurrnt Coa 50.4 94.3 397 5.7 - - - - 80.0 27.4 147.7Total Dlsbun-m-nt 2,021.7 80.4 41.7 1.7 300.0 119 151.8 8.0 29515.2 100.0 435.1

a Suilding and equipm-nt noint-n-nc.

Note: Amounts may not add up to exact totals due to rounding

Annex 4page 1 of 3

ANNEX 4

Basic Education ProgramEconomic Analysis Summary

Categories of Economic Analysis

The economic justification for the proposed investments in expanded coverageand improved quality of basic education has several dimensions. Cost/effectiveness analysisexamines which combination of the various investment options deliver the Program objectives inparticular settings at least cost. Analysis of fiscal impacts describes the budget implications ofthe proposed investments -- particularly, for operations and maintenance of the proposedinvestments. Cost-benefit analysis describes the magnitude of expected benefits of the proposedinvestment in relation to expected costs, appropriately discounted to account for the time lagbetween investments and expected benefits. Each of these types of analysis has been carried outfor the Basic Education Program, and will continue to be carried out as the Program isimplemented.

Cost Effectiveness Analysis

The Ministry of National Education has calculated the annual cost of a student inbasic education according to the type of school -- including the annualized cost of investmentexpenditures, teachers' and other staff salaries, bussing, maintenance, and other costs -- asfollows:'

Type of School Annual Cost per StudentGrade 1 - 5 School $264Grade 6,- 8 School $293Grade 1- 8 School $272

Regional Boarding School $761Regional School with Pension $733

Central Bussing School $494

Clearly, a conventional school located where children live is generally the cheapest option forproviding basic education. But since unit costs rise sharply with very small enrollments, otheroptions of bussing students to centralized schools and sending students to boarding schools canbe cost-effective options in areas where population is extremely dispersed.

These calculations abstract from considerations of quality of education and socialpreferences for different types of schools. The Ministry of National Education considers that itis difficult to offer basic education of acceptable quality in very small schools -- in part, becausethe hardships of teaching in small schools make it difficult to attract and retain qualifiedteachers. On the other hand, smaller schools which are closer to the students they are meant to

1996/97 Ogretim Yili Ilkogretim Kurumlari ile Ilgili Iststiskiki Bilgiler, Ministry of NationalEducation, 1997. (Costs as calculated at the exchange rate $1.00 = TL 126,500.)

Annex 4page 2 of 3

serve may be more consistent with social preferences in some areas, and may lead to higherenrollments than centralized schools. The Program will monitor the cost effectiveness and theeducational effectiveness of school format options in terms of both school attendance and studentachievement. These findings will be used to refine the mix of school types as implementationproceeds.

Analysis of Fiscal Impacts

The proposed investments will generate substantial incremental recurrent expenditures inthe form of personnel costs, and operation and maintenance costs of the new facilities. The fullProgram would require about 150,000 additional basic education staff-a significant increasefrom current levels. At current unit costs, this would raise the real teacher salary bill from $1.3billion currently to approximately $2.1 billion. In addition, the Program is sponsoring theexpansion of enrollments in bussing schools and boarding schools, whose unit costs areconsiderably higher than unit costs in conventional schools. These changes will add over $100million to the annual cost of running basic education schools. The incrementalmaintenance/renewal costs for the information technology equipment (estimated at 10% of theinvestment cost per annum) plus building maintenance (estimated at 2% of constructioninvestment costs) add up to another US$117 million annually, once the new facilities areoperational. The aggregate incremental recurrent cost of the entire Program amounts to over $1billion per year. Continued broad public support for the goals of the Program will be necessaryin order to mobilize and sustain these recurrent resources. The proposed approach of financingthe Program in phases-this first phase represents less than a fifth of the total Program, andwould generate incremental recurrent costs of about US$130 million-also provides a test of thedurability of public support for the Program. Continuation of Bank financing beyond this firstphase will require continued broad support-including budget support-from the public and theGovernment.

Benefit/Cost Analysis

Basic Education. The research evidence based on both macro- and micro-level data inTurkey confirms the high rate of return to basic education. A recent econometric investigationof the effects of education using macro-level data showed that a one-year increase in the averageeducational attainment of the labor force is associated with a 0.21 percent increase in GDP.2Micro-level findings indicate high benefits of basic education, particularly for women. Acrossall labor-force categories, the average private rate of return to completion of basic education isestimated at 9.6 percent, on the basis of data from the 1989 Household Labor Force Survey.Earnings of working women who have completed basic education are 52 percent higher thanthose of women who have not completed basic education. The rate of return for self-employedwomen -- as many of the beneficiaries of the Program are expected to be -- is estimated at 14.9percent.

2 Human Capital Approach to Economic Growth in Turkey, MS thesis by Huseyin Ergen, Middle EastTechnical University, Department of Economics, September, 1996.

"Self-Employment, Wage Employment, and Returns to Education for Urban Men and Women inTurkey", unpublished manuscript by Aysit Tansel, Middle East Technical University Department ofEconomics, 1996.

Annex 4page 3 of 3

These private financial rates of return tend to understate costs because they excludepublic expenditures on basic education. More importantly, they tend to understate benefitsbecause they exclude the non-earnings benefits of basic education, such as those associated withlower fertility, more deliberate birth spacing, and better nutrition and child health associated withhigher educational attainment of mothers. (The average completed fertility of mothers in Turkeywho have completed basic education is 1.9, versus an average of 4.1 for all women, and of 5.6for illiterate mothers.) They also exclude the social benefits of education such as improvedsocial cohesion, a more informed electorate, and a broader appreciation of the importance ofTurkey's integration in the world economy. These non-monetary benefits are major expectedbenefits of the Program.

Rates of return to education reflect the evolution of the economy in a broad sense, andare likely to change as rising incomes, changing technology, the changing pattern of trade, andother factors lead to changes in the derived demand for labor of particular skill levels. Theevolution of the rate of return to basic education will be monitored as the Program isimplemented.

Quality Improvements: Introducing Computer Literacy. Rates of return for educationquality improvement are intrinsically more difficult to estimate than for expansion ofenrollments. Nevertheless, there is evidence of significant gains to improved quality. One areaof quality improvement which is amenable to benefit/cost analysis is the introduction ofcomputer literacy training. The project team estimated the benefit/cost ratio for computerliteracy training, based on observed earnings differentials for computer-literate and non-computer-literate workers and on the cost of employer-provided training. (This approachunderstates benefits in that it omits indirect benefits such as the effects of computer literacy onthe quality of teaching in other subject areas.) Even with very conservative assumptions as tobenefits," estimated benefit/cost ratios for computer literacy training under the Program rangefrom 10.5 to 26.5. Otherwise stated, the present value of estimated net benefits of theinformation technology investment under the Program ranges from $6.6 billion to $16.6 billion.

4 It is assumed that sixteen thousand schools are provided with computers, that computershave an estimated life of five years, and maintenance costs equal to 5 percent of purchase price per year.Computer training costs are estimated as teacher costs and teacher training costs. Trained teachers areassumed to remain in service an average of five years. No provision is made for the opportunity cost of thetime spent in teacher training for teachers. (It is assumed that this cost is easily offset by time savings forteachers from using computers in the classroom.) In the schools which are scheduled to receive computersunder the Program, it is assumed that five year's worth of school graduates become computer literate, andremain so throughout an average working life of twenty years, starting at age 19. The average class size is43, implying that, at peak, 688,000 computer-literate students will be produced per year. No studentsbegin training in Year 1, 344,000 begin in year 2 and 688,000 begin in Year 3. The training which will beprovided under the Program is enough to make students a computer-functional editor or secretary. In thelow-benefit model, it is assumed that 10 percent of graduates use computing skills in their employment. Inthe high benefit model, it is assumed that 25 percent of graduates use computing skills in their work.Information collected during preparation missions from informatics firms and associations indicatecomputer literacy is worth at least $8,100 to employees (in saved training and opportunity costs). Theaverage value of computer literacy to an employer is assumed to be about half this amount, or $4,000. It isassumed that this is the earnings supplement for computer-literate graduate who use computing skills intheir work.

Annex 5Page 1 of 8

THE REPUBLIC OF TURKEYMINISTRY OF NATIONAL EDUCATION

OFFICE OF THE MINISTER

May 26, 1998

RE: Basic Education Program, Turkey

Mr. James D. WolfensohnPresidentThe World Bank1818 H Street, N.W.Washington D.C., 20433U.S.A.

Dear Mr. Wolfensohn,

This Letter of Sector Policy sets out the main featul-es of the Government of Turkey's BasicEducation Program. The Program represents a significant and unprecedented landmark inTurkish history and our efforts to invest in humani resources in order to prepare ourpopulation for the challeniges of integration in the global economy. Basic education, andparticularly the expansion of our five year compulsory cycle to eight years, is a centerpieceof the Government's curr-ent Five-Year Development Plan (l996-2000).l Under ourstrategy, we seek to achieve universal attendance in eight-year basic education and toimprove significantly the quality of basic education. In order to fulfill these objectives, theProgram pays particular attentioni to ensuring the full access to basic education for allchildren up to 14 years old. The Government hereby requests the World Bank's assistance,in the form of a series of Adjustable Program Loans, with an initial commitment of US$ 600million and a first APL of US$ 300 million, to support the implemenitation of this initiative.

The intention of the Ministry is to start the processing of the second phase of the Loan assoon as the following objectives are accomplished: a) arranging the provision of the basicpackage of educational materials to all rmral schools; b) staltilg the upgrade about 200village schools in agreed provinces; c) implementing the in-service training program forteachers, school principals, and inspectors, d) carrying out the monitoring and socialassessment prOgram; e) providing a plan for,.he school infi-astructure program; f) finalizingspecifications and bidding documents for the second phase of the IT procurement; and g)committing 60% of the Loan.

The Government of Turkey and the World Bank have a long history of collaboration andproductive dialogue on basic education, which provides a strong foundation for ourpartnership under the new Program. Beginning with the 1990 Jomtien "Conference onEducation for All," jointly sponsored by the World Bank, UNICEF and UNESCO, theGovernment initiated discussions witlh the Bank on possible assistance for a program to

Seventh Five Year Development Plan 11996-2000). State Planning Organisation: 1995, Ankara, p. 221.

4,

Annex 5Page 2 of 8

Government initiated discussions with the Bank on possible assistance for a program toexpand compulsory basic education in Turkey. Elements of the Government's strategy forbasic education, including quality improvements in teacher training and curriculumdevelopment, were included in the system-wide National Education Development Project(NEDP) which was approved by the Bank's Executive Board in 1990.

In 1995, the Government requested support for a Basic Education Pilot Project (BEPP), byamendment to NEDP, in order to develop and test more tailored programs for theexpansion of the compulsory basic education cycle. This Project has been underimplementation since 1996 through partnership between the Ministry of NationalEducation (MONE), UNICEF and the WorLd Bank. Activities -- including capacityexpansion through renovation and upgrading of existing school facilities, and targetedinterventions to improve school attendance in rural areas -- have provided valuable lessonsand experience.

In August 1997, the Government greatly facilitated and accelerated its efforts to implementeight-year basic education, through parliamentary approval of Law No. 4306 for BasicEducation. The law mobilizes significant resources for a major investment in schoolfacilities through earmarked taxes, establishes a timetable for the Program, and streamlinesprocedures to allow for swift action and implementation.2 This framework legislationensures political and fiscal commitment to the Program, and has engaged the interest andsupport of the public. Voluntary cash and in-kind contributions from the public haveincreased to unprecedented levels and amount to a notable share of the resources availablefor the first year of the Program.

The Government's Program adopts a broad approach to basic education, and defines itsbenefits as reaching far beyond those which directly affect students in the classroom, tothose which involve the families who are enriched by the education of their children, andtheir own participation in educational activities. Under the Program, schools are envisagedto be resource centers which will be accessible to the local community. Complementaryactivities which prepare children for basic school and facilitate educational attainment,including the extension of access to early child development programs, literacy and skilldevelopment for adults are also incorporated. The Program, which is designed to beimplemented in three phases, aims to achieve the following:

(i) Expanding universal 8-year basic education;(ii) Improving the quality of educational instruction and materials, including

computer-aided teaching and leaming;(iii) Strengthening management capacity to provide basic education; and(iv) Monitoring and evaluation to guide the implementation of the Program.

Since the passage of the Basic Education Law last August, considerable progress has beenmade toward the implementation of these objectives. In preparation for the Program, theMONE undertook a number of feasibility studies and consultations with key stakeholdersto define objectives and actions further. In December 1997, the Minister of National

2 The details of the Program are included in the MONE's publication: Eight-Year Compulsory Basic Education, December29, 1997.

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Education appointed a technical team for program preparation to coordinate the overallpreparation of the Programn in close collaboration with the relevant ministerial line unitsand the provincial offices of the Ministry. In March, 1998, it elevated the head of the teamto the position of Deputy Undersecretary in order to facilitate effective implementation,Through the team, the Ministry has defined the core activities to be initiated during the firstphase of the Program, and has begun to identify activities for the second and third phases.

The shift to a compulsory eight year basic education system requires investments in keyinputs -- facilities and teachers. Capacity expansion is needed both to bring all children ofschool age into the system, and to relieve current overcrowding. Largely due to economicreasons, some school age children in rural zeas as well as in urban slums (gecekondu) donot attend school and girls enrollments are much lower than boys. Primary schools aregenerally available in rural areas, but high teacher turnover due to difficult livingconditions and, in some cases, security concerns -- limit access. There is also a shortage ofbasic school capacity for 6-8 grades particularly in many villages , and not all students haveaccess to centralized basic education schools through bussing, or boarding schools.

Our priorities under the Program are to provide capacity for the student population which isnot in basic education and to relieve overcrowding in both rural and urban areas. This willbe phased in over the next three years, such that current fifth graders will continue on tosixth grade in the 1998 school year. An estimated 30,650 new classrooms will be neededover the next three years to allow all students to continue on to 6-8 grades, and 50,000classrooms will be needed to accommodate students in all grades who are currently notattending school. Additional classroom capacity will be added to alleviate overcrowdingand to reduce gradually the number of double-shift schools. Universal coverage will befacilitated through the creation of new school capacity, better teacher recruitment andincentives, and improved public information about basic education. Quality improvementsare also targeted at raising student, parental interest and involvement in schools andpromoting attendance.

We are addressing the need for added capacity in two ways, through new construction andthe renovation of existing schools. Because of the urgency of the Program, and the need toprovide an estimated 479,180 student places by the start of the 1998 school year, theGovernment has mobilized an extensive effort to identify needs and initiate constructionfor the first phase of the program.

Preparation has been greatly facilitated by the compilation, under the Pilot Project, of aStandards Manualfor School Buildings, which establishes and updates the Ministry'sdesign norms for schools -- including classroom furnishings, boarding facilities, andteacher housing where appropriate. Based on the Manual, the MONE commissionedprototype designs for school construction from architectural and engineering teams fromfive national universities, which will be used for detailed planning and school construction.

Planning for the first wave of construction has been conducted through provincial officialsof the Ministry. Because of the need to act swiftly to define the construction priorities forthe first phase of the Program, the Ministry has relied on estimates to develop itsinfrastructure plan. We are currently refining this methodology for subsequent phases of

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the Program, in order to ensure better targeting and cost-effectiveness of investments, andto incorporate measures for long-term strengthening of its school planning capacity into theProgram.

We plan to construct approximately 15,795 classrooms during the first phase of theProgram, and an additional 105,705 during the second and third phases. This is anunprecedented effort in Turkey, and requires close coordination within the MONE, and itsprovincial offices. Construction will be supervised by four separate regional constructionmanagement consultancy firms, which have already been contracted.

Under the Program, we plan to act quickly ao renovate a large number of village schoolswhich are in need of renovations and upgrading. In addition to the MONE renovation, a setof 300 rural and central village schools and about 40 urban schools are scheduled forupgrading during the first phase of the Program through the Bank's financing. TheMinistry is currently in the process of identifying priority areas, and will rely on itsprovincial offices to identify the needy schools. Following selection, a needs assessment,involving teachers and parents, will be conducted to plan the remodelling. Construction ofthe Bank financed schools will be carried out by local contractors.

The availability of highly qualified and motivated teachers is an essential requirement forthe success of the Program. We have undertaken a number of important measures to staffthe new schools and to improve the overall efficiency of teacher allocation across Turkey,including (i) systemic reforms of pre-service teacher training; (ii) temporary measures --including the use of volunteer retired teachers -- to increase teacher supply; and (iii)changes to regulations on teacher assignment and compensation, which have already beenadopted.

Restructuring of pre-service teacher training, initiated under the National EducationDevelopment Project (NEDP) in 1990, has increased the quality and flexibility of thetraining system, enabling it to adapt to the needs of the Program. NEDP has fostered aclose collaboration between the Higher Education Council (YOK), and the MONE, toimprove the quality of teacher training, through redesigned curricula and study abroadfellowships, as well as improved conditions at teacher training colleges. This is a majorreform that has refocused faculties of education into teacher training. The MONE and YOKare also coordinating closely to improve human resource planning over the short and long -term.

As a result, YOK is also adjusting admission policies of faculties of education and teachertraining programs to meet MONE needs -- and particularly for the imnmediate requirementsof the Basic Education Program. MONE estimates that it will need to hire 150,000 newteachers over the next three years to reach its targets under the Program. In response, YOKhas adopted a number of initiatives, including introducing new training prograrns forEnglish teachers and pre-school teachers, and adapting certification programs for secondaryschool teachers --who are currently in oversupply -- to basic education. These initiatives areexpected to train an additional 30,000 to 40,000 teachers annually over the next three years,in addition to the approximately 17,000 teachers who graduate annually from educationprograms. The MONE has also made provisions to allow retired teachers to return to work

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on a volunteer basis.

We are also in the process of implementing changes in personnel policies, which willgreatly improve the allocation of teachers. Insufficient incentives for teachers to serve insome rural areas lead to significant imbalances in teacher supply, and constrain studentattendance. To address this issue, last fall the Government approved a substantial increasein compensation for hardship ranging from 60 to 150 percent for teachers working indifficult areas. In addition legislation which became effective on April 4, 1998 increasedteacher pay by another 18 percent over the existing teacher pay scale.

The Program aims to expand access to basi. education rapidly, while simultaneouslyimproving education quality to improve learning achievements and prepare our children forthe challenges of the twenty-first century. The revised basic education curriculum includeselements, including foreign language and computer literacy training, which are specificallydirected at enabling students to compete more effectively in the global marketplace and tofurther contribute to the social and economic progress of Turkey.

Quality improvements are inextricably linked to our objective of reaching universalparticipation in basic education. High quality teachers, schools and materials improve theoverall value and attractiveness of education to families, and are essential for maintainingand encouraging attendance and parental involvement. Similarly, targeted programs fordisadvantaged groups, including free of charge provision of educational materials andschool meals, serve both to increase attendance and improve student performance. Underthe Program, quality improvements include training of education staff, provision ofeducation materials, textbooks, and information technology, and targeted programs to assiststudents coming from low income families. The flexible Program design, including theincorporation of a 'Monitoring Response Facility' allows for the development of additionalquality-enhancing activities during implementation in response to local needs andinitiatives.

We plan to advance the skills and motivation of education staff across the system,including inspectors, teachers, principals and provincial officials of the MONE. Inaccordance with our approach to basic education, training programs for all staff willemphasize the role of educators as leaders within the local community.

Inspectors are the key players responsible for organizing and implementing in-servicetraining activities for teachers and education managers, and for providing on-site support toteachers through school visits. We will continue and expand these activities under theProgram, through the hiring of additional inspectors -- in order to provide teachers withmore frequent contact and mentoring opportunities.

Training for education managers and principals aims to strengthen management capacity atthe school level, in order to improve decision-making, parental participation and supportfor teachers' professional development. Improvements in local level management willenhance school performance. We have already developed a number of in-service trainingcourses for managers addressing education planning, communication, leadership trainingand the use of technology in schools.

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Counselling is an important ingredient for improving student performance and preparingstudents for post-basic education and employment. Expansion of five year compulsorybasic education cycle to 8 years will greatly increase students' options and opportunities foremployment and further study. The Ministry is in the process of developing a resourceguide on guidance issues, including psychological counselling and career guidance forteachers and school managers, and plans to incorporate training on guidance andcounselling into the in-service training curriculum for teachers and administrators.

We aim to raise education quality and, in particular, to enable students from very lowincome families to have high quality educa .on by providing them with basic educationschool materials.

Building an infornation workforce is an important challenge for us as we implement ourstrategy for economic development based on open competitive markets. Our youngpopulation is potentially the nation's greatest competitive asset, provided that the talent andskill-base central to an information-based economy can be developed. In light of theincreasing demand for information-oriented jobs that require basic informatics skills, andthe technological shift towards personal computing and distributed applications, werecognize the need for a strategy to broaden the diffusion of computer literacy. From anequity as well as an efficiency perspective, informatics literacy can play a pivotal role inour economic and social development by adding a greater technological element to theservice and manufacturing sectors. The Ministry of National Education intends under theBEP "that all basic education age students have access to computers in the learningprocess" in order to attain computer literacy, support and enhance the existing curricula,and open the computer laboratories to the local community as technology-intensivelearning environments.

Under the Program, we seek to enhance learning by using IT as a productive tool across thebasic education curriculum. Instructional use of IT can have various objectives, rangingfrom imparting basic skills in routine applications such as data entry or word processing, tofacilitating learning in other subjects (foreign languages, science, math, etc.,) to conveyingmore advanced skills such as Internet research, or programming. These objectives are notmutually exclusive, but they do imply different learning outcomes, and have differentoperational requirements.

In preparation for the Program, we are currently developing essential documents for the useof technology to support education reform including: (i) a policy paper for the rationale andplans for using IT to support various kinds of learning activities, including a clear set ofgoals that can be communicated to teachers, students, parents, and industry alike; (ii) astrategy paper on methods for integrating IT into the curriculum, including approaches foreducational software provision, teaching computer literacy, organizing continuous teachertraining, and quality assurance; and (iii) a 3-year model plan for schools in using IT in thecurriculum each week, including competencies to be developed, software to be used,individual/group approaches, teacher training, extracurricular usage of the laboratories, andcommunity activities.

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School quality will be additionally improved through greater parental involvement andparticipation in school-based activities. The Program includes an innovative component,the Monitoring Response Facility (MRF), which will allow Parent Teacher Associations(PTAs), school committees and other school based organizations to apply for funds tosupport local initiatives consistent with the Basic Education Program. The MRF willprovide direct support to schools to facilitate the implementation of innovative projectswhich will be approved based on pre-defined set of criteria, and help them respond tospecial needs, such as responding to needs of special groups of children (e.g., disabled).Activities supported through the MRF will build upon the results of the studies andassessments carried out under the monitoring and evaluation component of the Program,and allow for innovation and creativity.

Our existing social aid program for improving school attendance and performance for lowincome students will be supported and expanded through the Program. Under thisinitiative, the MONE uses its network of girls vocational schools and adult educationcenters to make and provide school uniforms and meals to poor students. The program isactively supported through donations from the public. Evidence illustrates that theprovision of social aid positively impacts school attendance and student performance. Weintend to extend the coverage of the program under the Basic Education Program to includeall bussing schools, as well as to rural primary schools and pre-schools.

We intend to implement the Basic Education Program by mobilizing and harnessing theexisting capacity and resources of the Ministry of National Education. A ProgramCoordination Team (PCT), headed by a full-time team leader reporting directly to theUndersecretary in the Ministry, will administer the Program in coordination with therelevant ministerial line units. The PCT will also interact closely with MONE provincialoffices. Specialized consultants will be hired by the PCT as needed to lend expertise in theimplementation of the various aspects of the Program.

The PCT will coordinate activities between the line units of the Ministry and the Bank.Five coordinators will be assigned in the following areas: (i) infrastructure, (ii) informationtechnology, (iii) education, (iv) monitoring and evaluation, and (v) financing andprocurement.

We will rely on monitoring and social impact assessments as key instruments for guidingProgram implementation and development. On-going evaluation will provide us withessential feedback for gauging progress, making course corrections, and responding tochanging circumstances and lessons leamed. Monitoring will be based on four groups ofindicators: input, process, output, and impact. Specialized studies and assessments will beundertaken throughout the Program, on topics including pre-school education, community-based education programs, social assistance programs, and working children and othergroups in need of social aid. We will also implement on-going assessments of learningachievements, building upon the exams and evaluation tools developed under the NationalEducation Development Project. Other studies will be formulated as need emerges and canbe financed through the Monitoring Response Facility. Monitoring will be carried out bythe Program Coordination Team together with MONE line units.

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We will evaluate the results of monitoring efforts in a participatory manner at severallevels. First, the Program Coordination Team will evaluate the results jointly with therelevant MONE line units, as well as the provincial and sub-provincial educationadministrators. This will be an important mechanism for creating local level capacity forProgram monitoring and evaluation. The results will also be shared with the regularnational seminars the MONE holds for consultative purposes. Joint evaluation by the Bankand the MONE will also be periodically conducted.

Analysis of the learning outcomes of the Basic Education Program is a core monitoring andevaluation activity. This Spring, building on the existing assessment tools developed underNEDP, we plan to administer representativ2 surveys to assess learning achievements infour subjects: Turkish, science, math and social studies. This will be expanded to includecomputer literacy and foreign language proficiency in 1999 and subsequent years. Theresults of the exams will be useful tools for identifying Program successes andshortcomings, and adjusting Prograrn interventions accordingly.

As evidenced by the wave of voluntary contributions, and intense public interest anddebate, popular support for the Basic Education Program is strong across the country.However, because of the complex nature of the Program, it will be necessary to regularlyshare timely information on its objectives, activities and progress with the public in orderto maintain the existing level of attention. Communication is also important for reinforcingthe compulsory nature of basic education in more remote areas.

In order to address these needs, we have incorporated a range of public relations activitiesinto the program, including information dissemination through advertisements,publications, public discussions and other media activities. These activities will benefitfrom our experience under the Basic Education Pilot Project, and the feedback provided bythe on-going monitoring and evaluation activities included in the Program.

The Basic Education Program provides us with an historic opportunity to invest in ourfuture and to prepare our children for the challenges of the twenty-first century. Throughour efforts to achieve universal access to eight-year basic education and to improveeducation quality, we will elevate Turkey's stature and competitiveness in the internationalcommunity. Our partnership with the World Bank in this effort will strengthen ourprospects for success.

Sincerely yours,

Hikmet UlugbayMinister of National Education

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Annex 6

Turkey Basic Education Program

Procurement Arrangements and Allocation of the Loan Proceeds

Part I. Procurement

1. This section describes the procurement arrangements under the first Adjustable Program Loan(APL) in support of the Basic Education Program (BEP). Goods and services to be financed by the Bankwould be carried out in accordance with the following Bank Guidelines: (i) procurement of works andgoods -- Guidelines: Procurement Under IBRD Loans and IDA Credits, January 1995, revised Januaryand August 1996, and September 1997 (Procurement Guidelines); and (ii) specialist/consultantservices/training -- Guidelines: Selection and Employment of Consultants by World Bank Borrowers,dated January 1997, revised September 1997 (Consultant Guidelines)). Works, goods and serviceswhich are not financed by the Bank would be procured in accordance with arrangements agreedbetween the financier and the Government. The Government's high commitment to the projectprompted the issuance last August 1997, by virtue of Basic Education Law 4306, of a ProcurementProtocol agreed between the Ministry of National Education (MONE) and the Ministry of Finance inorder to facilitate procurement processes for the implementation of the BEP. However, a number of keyprovisions of this Protocol are inconsistent with Bank Procurement Guidelines. The Protocol asapproved by Government had not incorporated the recommendations of the Bank's CountryProcurement Assessment Report for Turkey (August 1996), and, therefore, will not be used for Bank-financed elements of the Program. A General Procurement Notice was published in the DevelopmentBusiness of the United Nations in April 1998. Thereafter, for consultant contracts above US$200,000,specific procurement notices would be published in the Development Business and in a major localnewspaper, 30 days prior to availability of bidding documents.

2. Implementation responsibility is to be shared by the Ministry of National Education and itsProvincial Offices. Policy guidance is to be provided by a Program Steering Committee comprisingheads of the relevant MONE Directorates. Overall management of Program implementation at thecentral level will be carried out by the existing management infrastructure of the MONE under the directresponsibility of the Undersecretary, and under the coordination of a Program Coordination Team(PCT) headed by a Deputy Undersecretary with full-time responsibility for oversight of the Program.The PCT will comprise five units staffed with seconded MONE staff and consultants, respectivelyresponsible for civil works, infornation technology, educational interventions, monitoring andevaluation, and Program administration. The PCT is reinforced by MONE procurement specialists whohave gained substantial experience in the implementation of the National Education and the BasicEducation Pilot Projects. The PCT will be assisted by full-time Procurement Management Specialist.At the province and sub-province the Program is to be implemented under the authority of the provincialGovernors with the Provincial Education Directors playing the lead technical role on educational matters.All Bank-financed goods and services will be procured centrally by the PCT. Procurement of newconstruction works will be implemented by MONE. Rehabilitation and upgrading works will be theresponsibility of the Provincial Offices under the general oversight of the PCT. Procurement progresswill be reported to the Bank in an agreed format in semi-annual project monitoring reports. A ProjectLaunch Seminar would be held in July 1998 to reaffirm the Borrower's and implementing units'understanding of the procurement procedures under the BEP.

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3. The procurement arrangements are described in the following paragraphs. Table 6A summarizesthe project elements, their estimated costs, and the applicable procurement methods. Table 6B outlimnesthe thresholds for procurement methods and prior review. A Procurement Plan will be included in theProject Implementation Plan for the First Phase of the BEP.

(a) Procurement of Works. Works contract packages estimated to cost at least US$5.0million per contract package would be procured through International Competitive Bidding(ICB) in accordance with the Bank Procurement Guidelines. Works contracts financed by theBank are confined to (i) the rehabilitation and upgrading of about 200 existing rural primaryschools for grades 1-5 (average US$40,000 per school); (ii) rehabilitation and upgrading of about100 existing central village schools for grades 1-8 (average US$200,000 per school); (iii)upgrading of 40 urban Basic Education schools in Ankara (average US$625,000 per school); and(iv) refurbishing of 2,828 information technology (IT) classrooms in 2,451 schools (averageUS$10,000 per IT classroom). Packaging these works into large contracts suitable for ICB is notfeasible nor practical because of their limited scope, wide geographic dispersal andcharacteristics (i.e. largely consisting of building repair and upgrading work). Furthermore,Turkey has an extensive, well-developed and internationally competitive construction industrywhich would ensure that adequate competition and good quality construction is obtained. Thereare no works packages expected to be procured through ICB under the first APL. Thus, workscontracts estimated at less than US$5.0 million per package (aggregate US$25.1 million) wouldbe procured through National Competitive Bidding (NCB) in accordance with procedures anddocumentation agreed with the Bank. Contracts estimated at less than US$300,000 per package(aggregate US$62.6 million) would be procured using procedures and documentation acceptableto the Bank for the Procurement of Minor Works, based on at least three quotations obtainedfrom qualified domestic contractors responding to written requests. Non-Bank financed workSprocurement. Works contracts financed exclusively by the Government and/or other cofinanciers(aggregate US$1,130.0 million), as well as school site acquisitionldevelopment costs (aggregateUS$106.4 million) would be procured according to arrangements described under theProcurement Protocol mentioned above in paragraph 1.

(b) Procurement of Goods. Goods to be financed by the Bank consist of: (i) informationtechnology (IT) hardware and software for schools and the MONE Council of Research,Planning and Coordination (APK); (ii) office equipment for the PCT; (iii) books, librarymaterials and intellectual property; and (iv) training materials and supplies. Goods packages(consisting of IT equipment, books and educational materials) estimated to cost more thanUS$400,000 per contract package would be procured through ICB in accordance with the BankProcurement Guidelines. IT equipment and software will be procured as separate packages andusing a single-stage procurement procedure, because these hardware and software items arebasic/standard information technology goods that do not require critical compatibilitycharacteristics. Domestic Preference. In the evaluation and comparison of bids for goods, amargin of preference of 15 percent or the relevant duty (whichever is lower) would be granted inaccordance with Bank Guidelines. Specifically, library books and textbooks estimated to costless than US$400,000 per package (aggregate US$4.4 million) may be procured throughNational Competitive Bidding in accordance with documentation and procedures agreed withthe Bank. Other goods packages estimated to cost less than US$400,000 per package (aggregaleUS$900,000) may be procured through International Shopping (IS) on the basis of at leastthree quotations obtained from suppliers from two eligible source countries in accordance withBank Procurement Guidelines. Goods contracts (consisting training materials and supplies -

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aggregate US$1.1 million) estimated at less than US$100,000 per contract may be procuredthrough National Shopping (NS) on the basis of at least three quotations obtained fromdomestic suppliers in accordance with Bank Guidelines. Should there be a need to procure anygoods which: (i) would be an extension of an existing contract; (ii) must be purchased from theoriginal supplier to be compatible with existing equipment; (iii) are of a proprietary nature; (iv)must be procured from a particular supplier as a condition of a performance guarantee; or (v) arerequired to respond to a natural disaster, such goods may, with the Bank's prior agreement, beprocured in accordance with the provisions of the Bank Procurement Guidelines respective ofDirect Contracting, and would be limited to US$1.0 million in the aggregate. Non-Bankfinanced goods include school/educational equipment (e.g., for school laboratories, teaching,administrative and service facilities) and school furniture (desks, bookshelves, etc.), whichwould be procured in accordance with the Procurement Protocol mentioned above in para 1.

(c) Consultant Services. Consultant services financed by the Bank (aggregate US$9.9million) include, among others: (i) program implementation support, procurement, and financialmanagement expertise; (ii) education specialists in the areas of: educational achievement andtesting; community education; information communication and promotion programs; monitoringand evaluation; social assessment; macro impact modeling; information technology; andeducational Management Information Systems; and (iii) architectural engineering services.About half (aggregate US$4.8 million) of these consulting services would be contracted toconsultant firms and awarded on the basis of the Quality and Cost-Based Selection (QCBS)procedure. Studies and research contracts (aggregate US$3.5 million) would be awarded tofirms/institutions on the basis of Quality Based Selection (QBS) procedures. Some of theconsulting requirements (particularly, those for educational achievement and testing under item(ii) above, as well as program implementation specialists - aggregate US$1.3 million) may bebest suited to individual specialists. In such cases, individual consultants would be contracted onthe basis of the consultants' qualifications for the assignment. There may be multiplepackages under each selection method, as the assignments consist of a wide range of tasks thatare not practical to combine under single contracts. In any case, the PCT would carefully planthe consultant contract packages and consolidate those assignments which complement eachother. Non-Bank financed consulting and specialist seuices include: architectural andengineering design services for all construction works which are not financed by the Bank;construction management; and local technical and support personnel of the PCT. These serviceswould be procured following normal Government procedures.

(d) In-service Training. The MONE would develop an initial plan for carrying outseminars and in-service training workshops which would be submitted for prior review to theBank. This training plan would include, inter alia, the content, audience, schedule, location, andestimated costs. The status of the plan would be included as part of the semi-annual progressreports and would be updated and/or modified as may be mutually agreed between MONE andthe Bank, The training program expenditures (US$36.8 million aggregate) consist of: a limitednumber of study tours abroad; and local training which include, among others, the provision ofin-service training materials and handouts, subsistence and internal travel costs incurred bytrainees, trainers' fees and course preparation. The subsistence rates and trainer fees for localtraining are based on Government rates of US$5.00 per teacher per week and trainers fees ofUS$15 per week. Training expenditures would be directly reimbursed subject to presentation bythe PCT of Statements of Expenditure, which would be audited annually. Consultants tocoordinate/facilitate training seminars may be hired under individual contracts. In the case ofstudy tours and training abroad, MONE would develop an initial plan which would include the

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purpose, names/titles of participants, along with itinerary and estimated costs; proposed traininginstitution; and costs. The training plan would be submitted for prior review by the Bank. Thestatus of the plan would be included as part of the semi-annual progress reports and updatedand/or modified as may be mutually agreed between the MONE and the Bank. Expendituresrelated to such study tours including training fees, transportation and subsistence expenses of theparticipants would be disbursed against SOEs.

(e) Monitoring Response Facility (MRF). The Program includes a facility (US$10.0million) for disbursing against demand driven subproject proposals for innovative educationalactivities consistent with the objectives of the BEP. Acceptance of the subprojects will Ibesubject to evaluation criteria developed by MONE and agreed with the Bank.

(f) Operating Costs of PCT. The Program costs include the incremental operating costs: (i)for operations of the PCT consisting of, inter alia, office and computer equipment maintenance;office supplies; travel of the PCT personnel; bank charges and fees to maintain a SpecialAccount; translation and interpretation services; communication charges (including internationaltelephone calls, facsimile transmissions and electronic mail); local and international transportrelated to the project and other administrative costs as may be agreed; and (ii) salaries of PCTtechnical and support staff. All incremental operating costs would be financed by theGovernment. The PCT would include, as a separate part of the semi-annual consolidated reports,an update of the PCT expenditures to complete the information required for Program costmonitoring by the Bank.

4. Agreements at Negotiations. During negotiations, the Government agreed to: (a) preparestandard documentation for the procurement of works through National Competitive Bidding (NCBR),procurement of goods through NCB, and for the procurement of Minor Works in accordance withBank Procurement Guidelines; and (b) present this documentation for the Bank's comments an,dconcurrence prior to the issuance of bids.

5. Bank Review. The Borrower would use the following Bank Standard Bidding Documents(SBD) for procurement of works, goods and services financed by the Bank: (a) SBD - Procurement ofGoods (April 1995) for the procurement of goods under ICB; (b) SBD - Procurement of Works, SmallerContracts (January 1995), would be adapted for use under the NCB procedures, and would be submittedto the Bank in draft for review prior to its use (see para 4 above); (c) the Region's standard documentsfor the procurement of Minor Works for such works contracts; (d) Standard Bid Evaluation Form forProcurement of Goods or Works (April 1996) for the evaluation of bids procured through ICB. For theevaluation of contracts awarded under NCB procedures, the Borrower will use the NCB EvaluationFormat developed by the Eastern Europe and Central Asia Regional Department; and (e) StandardiRequest for Proposal - Selection of Consultants (July 1997) for the procurement of consultant services.

6. The Bank's prior review of procurement action would cover the following. The Terms olfReference (TOR) and consultants' qualifications for all assignments would be subject to Bank's priorreview. The Bank's prior review is expected to cover about 62 percent of all expenditures/contractsfinanced by the Bank Loan.

(a) all goods and works contracts awarded through ICB.(b) the first 3 works contracts awarded through NCB.(c) the first 3 contracts for goods awarded through NCB.(d) the first 3 Minor Works contracts.

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(f) all consulting contracts exceeding US$100,000 awarded to consulting firms.(g) all consulting contracts exceeding US$50,000 awarded to individual consultants.(h) the first five subprojects, regardless of the amount, awarded from the Monitoring

Response Facility. Thereafter, all MRF subprojects awarded exceeding US$100,000.(i) any/all contracts awarded under Direct Contracting procedures.(j) after award of contract, any material modifications or waiver of terms and conditions of

a contract resulting in an increase above 15% of the original contract amount (includingthe modifications in contracts for consulting services).

7. All project documentation which require prior-review would be reviewed and cleared by a BankProcurement Specialists and relevant technical staff. Bidding packages above the mandatory reviewthresholds are anticipated for the procurement of: (a) IT hardware and software (US$154.8 millionaggregate); and (b) books and teaching materials (US$51.0 million aggregate). All other procurementdocuments and procedures would be subject to the Bank's ex-post review on a random basis. Postreview of procurement contracts would be normally be undertaken during Bank supervision of projectimplementation, or, as the Bank may request the Borrower for particular contracts which had beenawarded by the Borrower without the benefit of Bank prior review. In such cases, the Borrower willprovide the Bank, for its review, with the relevant documentation (invitation to bid/request for proposals,instructions to bidders, conditions of contract, etc.) leading up to the culmination of the bidding process,minutes of bid opening, bid evaluation report, recommendations, and copies of the bid proposals. Thepost review will be conducted by the Bank's Procurement Accredited Staff, either during supervisionmissions or at Bank headquarters. The outcome of the post review will be communicated by the Bank tothe Borrower at the earliest possible time.

8. Procurement Monitoring/Reporting. The Borrower's PCT will keep a complete and up-to-date record of all procurement documentation and relevant correspondence in its files, which would bereviewed by Bank staff during supervision missions. Procurement Planning. Prior to the issuance of anyinvitations to prequalify for bidding or to bid for contracts, the proposed Procurement Plan for the projectshall be furnished to the Bank for its review and approval, in accordance with the provisions ofparagraph I of Appendix I to the Bank's Procurement Guidelines. Procurement of all goods and worksshall be undertaken in accordance with the Procurement Plan as will have been approved by the Bank.The Procurement Plan, which reflects the procurement arrangements, contract packaging, applicableprocedures and the scheduling of the procurement process, would be updated annually by the PCT.Monitoring reports on procurement progress would be submitted semi-annually as part of the semi-annual report on program implementation. All contracts would be listed, including contracts to be bid.Data would include type of contract, contract amount, critical dates, payments to date, and current status.Where appropriate, estimates for contracts not yet bid or signed would be included in the procurementdata.

Annex 6page 6 of 11

Table 6A: Summary of Procurement Arrangements(Amounts in US$ million)

Procurement MethodConsulting

ICB a/ NCB b/ Other Services N.B.F. c/ Total

1. School Construction and Upgradinga. New Construction - - - - 954.3 d/ 954.3

b. Rehabilitation and Upgrading - 25.1 el 62.6 f/ 178.0 d/ 265.7(21.1) (52.8) (73.9)

c. School Site Acquisition - - - - 106.4 d/ 106.4

2. Equipment and Materialsa. School, Educational and Other Equipment - - 1.5 gt - 54.6 h/ 56.1

(1.2) (1.2)b. School Furniture - - - - 96.5 h/ 96.5

c. Information Technology 154.8 - - - - 154.8(130.4) (130.4)

d. Books, Intellectual Property and MaterialsTextbooks and Library Books 31.4 5.8 i/ - - - 37.2

(26.5) (4.9) (31.4)Teaching Materials and Supplies 18.1 - 0.5 j/ - 37.2 k/ 55.8

(15.2) (0.4) (15.7)3. Consultant Services and Training

a. Architectural & Engineering Services - - - 1.2 I/ 40.2 m/ 41.4(1.0) (1.0)

b. Specialized Services - - - 4.9 n/ - 4.9(4.1) (4.1)

c. Staff and Teacher Training - - 36.5 of 0.3 p/ - 36.8(30.7) (0.2) (31.0)

d. Studies and Research - - - 3.5 qi - 3.5(3.0) (3.0)

4. Local Specialists/Technical Staff - - - - 1.8 r/ 1.8a.

5. Monitoring Response Facility - - - 10.0 S/ - 10.0a. (8.4) (8.4)

6. Incremental Recurrent Costsa. Incremental Salaries - - - - 650.0 V 650.0

b. Non-salary Operational Costs - - - - 40.0 ul 40.0

otal 204.3 30.9 101.1 19.8 2,159.1 2,515.2(172.1) (26.0) (85.1) (16.7) - (300.0)

Note: Amounts may not add up to exact totals due to rounding.Figures in parentheses are the respective amounts financed by the World Bank

Annex 6page 7 of II

Footnotes to Procurement Table 6A

a/ ICB - International Competitive Biddingbl NCB - National Competitive Biddingc/ N.B.F. - Non-Bank financed procurement.d/ Works and site acquisition/development costs financed entirely by Government and Donors.e/ Upgrading of 40 urban schools (average US$625,000 per contract) procured through NCB in

accordance with procedures and documentation agreed with the Bankf/ Upgrading of 300 dispersed rural schools (cost range: average US$40,000 - US$200,000 per

school.), and refurbishing of 2,828 IT classrooms (average US$10,000 per classroom).Procurement of Minor Works based on at least 3 quotations obtained from qualified contractors inresponse to a written invitation.

g/ Office equipment for Program Coordination Team (PCT) and Special Education equipmentprocured through International shopping (IS) procedures (less than US$400,000 per package).

h/ Goods (school/educational equipment and furniture) financed entirely by Government.i/ Books and library materials procured through NCB in accordance with procedures and

documentation agreed with the Bank (less than US$400,000 per package).j/ Training materials/handouts and supplies for training in-service programs procured through

National Shopping based on at least 3 price quotations (less than US$ 100,000 per package).k/ Government-financed procurement of teaching materials.1/ Quality and Cost Based Selection (QCBS) in accordance with Bank Consultant Guidelines.in/ Government financed construction management and architectural-engineering services.n/ Evaluation of educational outcomes. Specialists chosen on basis of QCBS procedures in

accordance with Bank Consultant Guidelines. Of this group contracts (aggregate US$1.3 million)may be awarded to individual specialists on the basis of consultant qualifications for theassignment

o/ Local training expenditure (local travel, perdiem/subsistence, and trainer fees) based onGovernment rates, disbursed directly to participants and supported by Statements of Expenditure(SOE).

p/ Study tours. Training plan reviewed by Bank. Disbursements through SOEs.q/ Studies and research contracts with firms/institutions awarded through Quality Based Selection

procedure.r/ Services of local professional staff of PCT financed entirely by Government.s/ Bank-financed - demand driven subproject proposals for innovative educational activities,

selected according to criteria agreed with the Bank, funded through the Monitoring ResponseFacility.

tl Government financed salaries of new teachers.u/ Government and Provincial Administration financed non-salary/operational current costs, including

incremental maintenance costs for buildings and equipment..

Annex 6page 8 of 11

Table 6B: Thresholds for Procurement Methods and Prior Review

Contracts Subject toContract Value Prior Review/

US Dollans Procurement Estimated Total ValueExpenditure Category (Threshold) Method SubJect to Prior Review

a) Worksa) Upgrading cof 40 Urban Schools $25,100,000 NCB First 3 NCB contracts

(<5,000,000) $1,900,000b) Refarbishing of 2,826 IT lassrooms and $62s600,000 MinorWorks First 3 MW contracts

upgrading and rehabilitation of 200 rural schoolsand 100 village central schools.

(c300,000) $500,000c) New Construction $954,300,000 NBF not appricable

(n. a)d) Rehabilitation and Upgrading $178,000,000 NBF not applicable

(n.a)e) Site Acquisition $106,400,000 NBF not applicable

(n.a.)2. Goods

a) School and PCT Office Equipment $900,000 is none($400,000)$600,000 NS none

(b100,000)b) School Eqluipment and Furniture $151,100,000 NBF not applicable

(n.c.)c) Information Technology Equipment $154,800,000 ICB All ICB contracts

(ds r400,000) $154,800,000d) Textbooks and Library Books $31,400,000 [C All [CB contracts

(>400,000) $31,400,000$5,800,000 NCB First 3 NCB contracts(a400,000) $1,000,000

e) Teaching/Training Materials/Supplies $18,100,000 ICB All ICB contracts(>400,000) $18,100,000$500,000 NS none

(<100,000)$37,200,000 NSF not applicable

(n.a.)3. Consultant Sergices a$d Traininct

a) Architectural & Engineering $1,200,000 QCBS All contracts US$100,000 and above$600,000

Architectural & Engineering $40,200,000 NBF not applicable(nS$t)

b) Specialized Services $3,600,000 ) CBS All contracts US$100,000 and above(>100,000) $3,500,000

$1,300,000 Individuals A)l contracts US$50,000 and above(>50,000) $1,000,000

$1,800,000 NSF not applicable(ncs.)

c) Staff Training Costs $36,800,000 SOEs none(n.a.)

d) Studies and Research $3,500,000 OBS All contracts US$100,000 and above(>100,000) $2,000,000

4. Educational Fundsb) Monitoring Response Facility $10,000,000 selection in none

accordance withagreed criteria

(>100,000) $5,000,000S. Incremental Recurrent coats

a) Teacher Salaries $650, 000,000 NSF not applicable(n.e.)

b) Operational/Maintenance Costs $40,000,000 NSF not applicable(n.ea.)

TOTAL COSTS $2,515,200,000

Total Amount of Contracts Subject to Prior Review: $219,800,000Percentage of Total Expenditures Financed by Bank Loan: 62%

Annex 6page 9 of II

Part II : Disbursement

1. The proceeds of the APL would be disbursed in accordance with procedures described in theBank's 'Disbursement Handbook". The Disbursement Categories and Percentage of Expenditures to beFinanced is shown in Table 6C below.

Table 6C Allocation of Loan Proceeds(Amounts in US$ million)

Amount in FinancingExpenditure Category US Dollars Percentage

1 Civil Works: Rehabilitation of Rural/Urban Schools 67,200,000 84%

2 Equipment, Books and Teaching Materials: 166,700,000 100 % of foreign expenditure;100 % of local expenditure (ex-factory);84% of expenditure for locally procured items

3 Consultant Services 7,600,000 84%

4 Training, Fellowships and Study tours 28,200,000 84%

5 Goods, works and services for subprojects 8,400,000 84%under the Monitoring Response Facility

6 Unallocated 21,900,000

Total 300,000,000

2. The proposed Loan would be disbursed over a period of three years. The disbursement forecastis much shorter than the standard disbursement profile for Education Projects in Turkey, and is based ona detailed work program which Bank staff consider realistic. Table 6D below shows the schedule ofdisbursements for the First Phase of the BEP (the disbursement periods correspond to the Bank FiscalYear - July I to June 30). The Loan Closing Date will be June 30, 2001.

Table 6D: Schedule of Disbursements(Amounts in US$ million)

Financing Available Costs toThe be

Provincial World National Financed The GovernmentAdministration Bank Donors Project Cumulative

Amount Amount Amount Total Costs Cash Flow Cash Flow

Semester 1 0.5 74.2 60.5 135.2 774.3 -639.1 -639.1Semester 2 0.5 74.2 60.5 135.2 774.3 -639.1 -1,278.1Semester3 10.4 71.9 15.4 97.7 281.0 -183.2 -1,461.3Semester4 10.4 71.9 15.4 97.7 281.0 -183.2 -1,644.6Semester 5 9.9 3.9 - 13.8 202.4 -188.6 -1,833.1Semester 6 9.9 3.9 - 13.8 202.4 -188.6 -2,021.7

Total 41.7 300.0 151.8 493.5 2,515.2 -2,021.7 -2,021.7

Annex 6page 10 of II

3. Use of Statements of Expenditure (SOEs). Disbursements would be made against Statementsof Expenditures for: (a) works costing less than US$500,000 equivalent per contract, except for the firstthree contracts for works and teaching materials awarded through NCB and the first three Minor Workscontracts; (b) goods costing less than US$400,000 equivalent each contract; (c) subprojects under theMRF costing less than US$100,000 equivalent; (d) services for contracts for (i) individuals costing lessthan US$50,000 equivalent each; (ii) firms costing less than US$100,000 equivalent each; and (e) stafftraining, fellowships and study tours costing less than $15,000 each. Detailed documents evidencingthese expenditures would be reviewed and retained by the PCT and made available for the required auditas well as to the Bank supervision missions. Disbursements against goods and services exceeding theabove limits would be made against normal documentation. Disbursement and procurement documentsusing SOE procedures would be retained by the PCT for a period of at least two years after disbursementand made available to Bank staff and external auditors.

4. Special Account. To facilitate timely project implementation, the Borrower would establish,maintain and operate, under terms and conditions acceptable to the Bank, a Special Account in USdollars at a commercial bank or a bank acceptable to the Bank. The selection process and criteria iforselection of the commercial bank would follow the Bank standard selection procedures. The SpecialAccount would be used under the direction of the Manager of the Program Coordination Team, followingprocedures established by the Bank. The Special Account will have an Authorized Allocation of US$8.0million representing the expected advance payments (20 percent) on contracts during the peak quarter ofexpenditures if made exclusively through the Special Account. At the start of the project, the SpecialAccount deposit will be limited to half (US$4.0 million) of the Authorized Allocation, and the remainingportion of the Authorized Allocation will be disbursed upon Government request when the aggregateamount of withdrawals from the Loan Account plus the total amount of all outstanding SpecialCommitments entered into by the Bank shall be equal to or exceed the equivalent of US$8.0 million.Replenishment applications would be submitted at least every three months, and will include reconciledbank statements as well as other appropriate supporting documents. The minimum application size forpayments directly from the Loan Account for issuance of Special Commitments is 25% of the SpecialAccount authorized allocations.

Retroactive Financing.. Some of the actions under the Program were initiated prior to appraisal (May 6,1998) and are thus not eligible for financing under the APL. But many of the actions under the Programnare scheduled to be initiated between appraisal and effectiveness, which is projected to occur in mid-July,1998. In order to accommodate these initial expenditures for activities financed by the APL, retroactivefinancing of up to US$30 million is provided in the APL for eligible expenditures incurred betweenappraisal (May 6, 1998) and signature of the APL. Expenditures for retroactive financing could includeall Program components financed by the first APL and procured under agreed procedures, includingupgrading of rural schools, training of basic education personnel, provision of educational materials andequipment, and equipment, materials and technical assistance to strengthen central and provincialimplementation capacity.

5. Accounts and Audits. The Loan Account and the Special Account will be audited in accordancewith the Bank Guidelines: Financial Reporting and Auditing of Projects Financed by the World Bank,March 1982. The Government will provide the Bank, within six months of the end of each GovernmenitFiscal Year, with an audit report of such scope and detail as the Bank may reasonably request, including a.separate opinion by the independent Auditor on disbursements against certified SOEs. The separateopinion should mention whether the SOEs submitted during the fiscal year, together with the proceduresand internal control involved in their preparation, can be relied upon to support the related withdrawalapplications.

Annex 6page 11 of 11

6. Agreements at Negotiations. The Government and the Bank agreed during negotiations thatthe independent auditors would mean the Treasury Controllers. The Treasury Controllers will auditthe SpecialAccount, the project accounts and Statements of Expenditures.

Annex 7page I of I

ANNEX 7

Basic Education ProgramProject Processing Budget and Schedule

A. Project Budget (US$000) Planned Actual(At final PCD stage)

$359.50 $293.60

B. Project Schedule Planned Actual(At final PCD stage)

Time taken to prepare the project (months) 6 6First Bank mission (identification) 12 / 10 /19 97 12 /10 /19 97Pre-Appraisal mission 03/23/98 03/23/98Appraisal mission departure 04/06/19 98 04/06/19 98Negotiations 05 /18/19 98 05 /18/19 98Planned Date of Effectiveness 07 / 15 /19 98 07 / 15 /19 98

Prepared by: Ministry of National Education

Preparation assistance: National Education Development Project (Loan 3192-TU)

Bank staff who worked on the project included:Name Specialty

Michael Mertaugh Principal Education EconomistLeonardo Concepcion Senior Implementation Specialist

Dena Ringold Social Policy AnalystAyse Kudat Sector Leader, Social Development

Robert Schware Senior Information Technology SpecialistFerda Sahmali Human Resources SpecialistIbrahim Sirer Procurement SpecialistDilek Barlas Counsel

Hannah Koilpillai Disbursement OfficerAngelita Yacat-Viray Team Assistant

Annex 8page I of I

ANNEX 8

Basic Education ProgramDocuments in the Project File*

Government:

Ministry of National Education, IT Policy Paper, 1998.

Ministry of National Education, Strategy Paper on the Integration of IT into Curriculum, 1998.

Ministry of National Education 3-year Model Plan for Schools in Using IT, 1998.

Ministry of National Education, Basic Education Program, February 12, 1998.

Ministry of National Education, Eight-Year Compulsory Basic Education, December 29, 1997.

Ministry of National Education, Basic Education Program Progress Reports, October andDecember, 1997 February 1998.

Ministry of National Education, Handbook for Basic Education School Buildings, November1997.

Ministry of National Education, Mid-Term Review and Evaluation Consultants' Report ofComputer Experimental Schools Project, November, 1996.

Republic of Turkey, Law No. 4306, August, 1997. (8 year Compulsory Basic Education Law).

Republic of Turkey, Law No. 4359, March, 1998.

World Bank:

Turkey: Informatics and Economic Modernization, World Bank Country Study, 1993.

Karasar, N., "Factors Influencing School Attendance in Basic Education in Turkey with SpecialEmphasis on Female Participation," World Bank, November 1991.

Potashnik, M., Adkins, D., " Cost Analysis of Information Technology Projects in Education:Experiences from Developing Countries" Education and Technology Series, HumanDevelopment Department Education Group, Volume 1, No. 3, 1996.

Priorities and Strategies for Education: A World Bank Review, 1995.

Schware, R., Jaramillo, A. "Technology in Education, the Turkish Experiment," Information* Technology for Development, Volume 8, No. 1, 1998.

Means, B., Olsen, K. "Technology's Role in Education Reform," U.S. Department of Education,Office of Educational Research and Improvement, Washington, D.C., September 1995.

Other

Fidan, N., and Baykul, Y., "Meeting Basic Learning Needs in Primary Education Schools,UNICEF, 1991.

Kagitcibasi, C., "The Early Enrichment Project in Turkey." UNESCO-UNICEF-WFPCooperative Program, No. 193. Paris, 1991.

Human Development Reports for Turkey, 1996 and 1997. UNDP.

Annex 9page I of 2

ANNEX 9

Statement of Loans and Credits

Status of Bank Group Operations in TurkeyIBRD Loans and IDA Credits in the Operations Portfolio

Difference Between

expected

original Amount in uS$ Millions and actual

Loan or Fiscal disbursements a/

Project ID Credit Year Borrower Purpose

No. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd

Number of Closed Loans/credits: 202

Active LoansTR-PE-9072 IBRD42350 1998 REP. OF TURKEY PRIV. OF IRRIGATION 20.00 0.00 0.00 20.00 1.20 0.00

TR-PE-45073 IBRD40890 1997 GOVERNMENT OF TURKEY OIL PIPELINE ENG. 5.00 0.00 0.00 4.00 2.50 0.00

TR-PE-9095 IBRD42010 1997 REPUBLIC OF TURKEY PRIM HEALTH CARE SER 14.50 0.00 0.00 14.50 2.10 0.00

TR-PE-35759 IBRD39420 1996 GOVERNMENT OF TURKEY PUBLIC FINAN. MGT. 62.00 0.00 0.00 59.73 20.63 19.23

TR-PE-38091 IBRD4048A 1996 GOVERNMENT OF TURKEY ROAD IMPR. & SAFETY 150.00 0.00 0.00 140.30 12.37 0.00

TR-PE-38091 IBRD40490 1996 GOVERNMENT OF TURKEY ROAD IMPR. & SAFETY 100.00 0.00 0.00 57.39 12.37 0.00

TR-PE-9076 IBED3802A 1995 GOVERNMENT HEALTH II 136.17 0.00 0.00 119.44 67.51 0.00

TR-PE-9093 IBRD38936 1995 ANTALYA WATER SUPPLY AND ANTALYA WATER SUPPLY 100.00 0.00 0.00 88.18 15.19 0.00

TR-PE-9102 IBRD3728A 1994 GOT PRIVATIZATION IMPLEM 82.81 0.00 27.25 51.84 76.58 4.10

TR-PE-9023 IBRD3567A 1993 REPUBLIC OF TURKEY E. ANATOLIA WATERSHE 62.48 0.00 0.00 53.60 45.65 0.00

TR-PE-9064 IBRD3541A 1993 GOVERNMENT EMPLOYMENT & TRAININ 48.82 0.00 0.00 45.26 28.65 0.00

TR-PE-9064 IBRD3541S 1993 GOVERNMENT EMPLOYMENT & TRAININ 18.18 0.00 0.00 .30 28.65 0.00

TR-PE-9065 IBRD3565A 1993 MUN. OF BURSA/BUSKI BURSA WATER & SANITA 85.61 0.00 20.00 51.51 21.85 0.00

TR-PE-9065 IBRD3565S 1993 KUN. OF BURSA/BUSKI BURSA WATER & SANITA 31.39 0.00 0.00 .07 21.85 0.00

TR-PE-9065 IBRD3566A 1993 MUN. OF BURSA/BUSKI BURSA WATER & SANITA 7.84 0.00 0.00 7.43 21.85 0.00

TR-PE-9099 IBRD3511A 1993 GOVT. OF TURKEY EARTHQUAKE RECONSTRU 58.90 0.00 0.00 54.42 56.41 27.61

TR-PE-9044 IBRD3472A 1992 REPUBLIC OF TURKEY AGRIC. RESEARCH 34.70 0.00 0.00 26.46 30.10 -.90

TR-PE-9044 IBRD3472S 1992 REPUBLIC OF TURKEY AGRIC. RESEARCH 14.30 0.00 0.00 .16 30.10 -.90

TR-PE-9097 IBRD3477A 1992 GOT TA FOR TREASURY DATA 2.12 0.00 0.00 1.48 1.49 0.00

TR-PE-9058 IBRD3296A 1991 GOV. OF TURKEY TECHNOLOGY DEVELOPME 42.30 0.00 0.00 20.51 20.49 0.00

TR-PE-9071 IBRD3345A 1991 TEAS/TEDAS TEK RESTRUCT. 69.88 0.00 0.00 44.85 82.02 0.00

TR-PE-9071 IBRD33451 1991 TEAS/TEDAS TEK RESTRUCT. 40.00 0.00 0.00 37.18 82.02 0.00

TR-PE-8974 IBRD3177S 1990 REPUBLIC OF TURKEY AG.EXTN. II 40.50 0.00 0.00 1.40 13.39 .91

TR-PE-9029 IBRD3192A 1990 GOVERNMENT OF TURKEY NATIONAL EDUCATION D 57.28 0.00 0.00 51.89 52.16 0.00

TR-PE-9029 IBRD3192S 1990 GOVERNMENT OF TURKEY NATIONAL EDUCATION D 17 58 ".00 0.00 .22 52.16 0.00

Annex 9page 2 of 2

Difference Between

expected

Original Amount in US$ Millions and actual

Loan or Fiscal disbursements a/

Project ID Credit Year Borrower Purpose

No. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd

TR-PE-9061 IBRD3151A 1990 ANKARA WS&S GEN. DIRECTOR ANKARA SEWERAGE 25.13 0.00 0.00 11.06 76.26 5.53

TR-PE-9030 IBRD3057A 1989 GOVERNMENT HEALTH I 26.77 0.00 0.00 12,57 13.32 0.00

TR-PE-8988 IBRD2922S 1988 GOVT. OF TURKEY IND. TRAIN. II 71.25 0.00 0.00 3.54 3.57 0.00

Total 1,425.51 0.00 47.25 979.29 892.44 5S.58

Active Loans Clesed Loans Total

Total Disbursed (IBRD and IDA): 376.95 9,887.04 10,263.99

of which has been repaid: 9.40 6,856.52 6,865.92

Total now held by IBRD and IDA: 1,369.15 3,042.48 4,411.63

Amount sold : 0.00 3.55 3.55

Of which repaid 0.00 3.55 3.55

Total Undisbursed : 979.29 10.26 989.55

a. Intended disbursements to date minus actual disbursements to date as projected at appraisal.

b. Rating of 1-4: see OD 13.05. Annex D2. Preparation of Implementation Summary (Form 590) . Following the FY94 Annual Review of Portfolio performance

(ARPP), a letter based system will be used (HS = highly Satisfactory, S = satisfactory, U = unsatisfactory, HU = highly unsatisfactory): see proposed

Improvements in Project and Portfolio Performance Rating Methodology (SecM94-901), August 23, 1994.

Note:

Disbursement data is updated at the end of the first week of the month.

ANNEX 10

Turkey at a glanceEurope & Lower-

POVERTY and SOCIAL Central middle-Turkey Asia zegovina Doevelopment diamond*

Populaton mid-1996 (millions) 62,7 479 1,125GNP per capita 1996 (US$) 2,890 2,180 1,750 Lite expectancyGNP 1996 (billions US$) 184.6 1,043 1,967

Average annual growth, 1990-96

Population (%) 1.7 0.3 1.4 G GLabor force (%) 2.1 0.5 1.8 GNP pGris

per I i / I primarMlos recent estimate (latest year availabl since 1989) capita enrollmen

Poverty: headcount index (% of population)Urban population (% of tofal population) 69 65 56Life expectancy at birth (years) 67 68 67Infant mortality (per 1,000 live births) 48 26 41 Access to sate waterChild malnutrition (% of children under 5)Access to safe water(% of population) 92Illiteracy (56 of population age 15+) 18 .. .. TurkeyGross primary enrollment (% of school-age population) 97 97 104 i

Male 101 97 105 Lower-middle-income groupFemale 94 97 101

KFY ECONOMIC RATIOS and LONG-TERM TRENDS

1975 1985 1995 1996

GDP (billions US$) 46.7 67.2 189.3 182.1 Economic raftos-Gross domestic investmenttGOP 17.9 16.5 25.5 23.8Exports of goods & non factor serviceslGDP 4.2 15.9 19.9 21.5 Openness of economyGross domestic savingsSGOP 11.4 13.4 21.0 17.8Gross national savings/GDP 17.0 17.1 22.0 18.8

Current account balance/GDP -3.5 -1.5 -1.4 -2.6Interest payments/GDP 0.3 2.0 2.5 2.3 Savings i- mrvvTotal debt/GDP 10.8 38.7 43.6 43.8Total debt servicelexporto 11.3 35.0 31.3 25.7Present value of debt'GDP .. . 40.8Present value of debt/exportl . . 164.8 .Indeb edness

1975-85 1986-96 1996 1996 1997-00(average annual growth)GDP 3.1 3.9 7.2 6.8 4.5 -TurkeyGNP per capita 0.4 2.1 5.9 5.1 2.5 Lower-middle-income groupExports ot goods and services 17.5 8.4 8.0 21.7 10.4

STRUCTURE of the ECONOMY1975 1985 1996 1996

(Ail oftGre 35.8 20.4 16.4 17.4 Growth rates of output and investment (%/)

Industry 19.9 27.1 30.5 27.9 Manufacturing 12.5 17.7 21.0 18.0 20

Services 44.3 52.5 53.2 54.7 0-20 91 Dl 2 93 v 95 9S

Private consumption 79.1 79.8 68.2 70.6 *40

General govemment consumption 9.5 6.8 10.8 11.6 GOI - GDPImports of goods & non factor services 10.7 19.0 24.4 27.5

1975-85 1986-96 1995 1996(average annual growth)Agriculture 0.9 1.3 1.0 4.8 Growth rates of exports and Imports(%)Industry 3.2 4.7 7.4 6.4 40

Manufacturing 3.7 5.3 11.7 6.4 20

Services 4.2 3.9 6.2 7.20Private consumption 2.3 4.1 6.4 9.3 *20D95

General government consumption 3.7 3.9 5.3 5.4Gross domestic investment 0.2 4.4 31.8 0.2 40

Imports ot goods and services 2.6 9.5 29.6 19.0 Exports 0-irnponsGross national product 2.7 4.0 8.2 6.9

Note: 1996 data are preliminary estimates. Figures in italics are tor years other than those specified.I he diamonds show tour Key indicators in the country (in boid) comparedt with its income-group average. It data are missing, the diamond wAilDe incomplete.

Turkey

Amrex 10Page 2 of 2

PRICES and GOVERNMENT FINANCE

1975 1986 1995 1996Domfc1 prw Inflation (%N)(% change) 1S0Consumer prices 19.2 45.7 93.6 78.8 .Implicit GDP deflator 20.5 52.1 87.0 78.3 100

Govemment finance so(% of GOP) 0 I I

Current revenue .. .. 20.8 21.8 91 92 93 94 95 96Current budget balance .. .. 0.1 -2.7 - GDP def. - PIOverall surplus/deficit .. .. -4.8 -9.2

TRADE1975 1985 1995 1996

(millions US$) Export and import tevels (mill. USS)Total exports (fob: . .. 21,637 23,123

Textiles .. .. 8,404 8,570 so oooProcessed agricultural products .. .. 3,407 3.687 40,000 5

Machinery and equipment .. .. 2,346 2.966 3

Total imports (cif) .. 35,709 42.734Food (processed agriculturai products) .. .. 2,282 2,531 20,000

Fuel and energy .. .. 4.812 6.089 10.00Capital goods .. .. 11.437 14,969 d _

Exportprceindex(1987=100) .. .. 121 115 so 91 92 93 94 99 96Import price index (1987=100) .. .. 116 116 g Exports m importsTerms of trade (1987=100) .. .. 104 99

BALANCE of PAYMENTS1975 1985 1996 1996

(millions US$) Currentaccountbalanor toGDPratioExports of goods and services 2,018 11,119 36.581 42.496 Cretacutblnet O ai %Imports of goods and services 4,979 12,661 40,601 49,070Resource balance -2.961 -1,542 -4.020 46.574

Net income -123 -1,455 -2.815 *2.639 zNet current transfers 1,437 1,984 4,496 4,447

Current account balance, o 1before official capital transfen -1.647 -1,013 -2,339 4.766

Financing items (net) 970 1,137 6,997 9,311Changes in net reserves 677 -124 -4,658 4,545

Memo:Reserves including gold (mill. US$) 1,444 2,322 13.754 17.614Conversion rate (locaVLUS$) 14.4 522.0 45,845 81,137

EXTERNAL DEBT and RESOURCE FLOWS1975 1985 1995 1996

(millions US$) Composition of total debt, 1996Total debt outstanding and disbursed 5,059 25,998 73.779 79,789 (mill. US$)

IBRD 288 3.432 4,939 4,260IDA 144 178 130 124 A Bc

4260 B669Total debt service 377 4,600 11,448 10,940 G 124 D

IBRD 31 400 1,278 1,147 20092 5077IDA 2 5 7 7

Composition of net resource flows 8113Official grants 18 115 439 400Official creditors 165 424 -1,180 -840Privatecreditors -11 -14 46 1,080Foreign direct investment 114 99 772 612Portfolio equity 0 0 1,108 -983 F

41454Word Bank program

Commitments 158 838 162 255 A- IBRD E - BilateralDisbursements 108 636 422 489 B-IDA D-Othermultilateral F-PrivatePrncipal repayments 12 159 882 815 C-IMF G - Short-termNet flows 97 477 -460 -326Interest payments 21 246 396 339Net transfers 76 231 -856 -665

Development Economics 5s20198

'Non-financial Public Sector

MAP SECTION

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