Turkey - Economic development (Vol. 1 of 5) : Main report

Report No. 316a-TU The Economic Development FILE COPY of Turkey (In Five Volumes) Volume 1: Main Report April 22, 1974 Country Programs Department II Europe, Mfddle East and North Africa Region Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for oificial use only by the lank Group, It may not be published, quoted or cited without Bank Croup authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS Prior to August 9, 1970 US $1.00 = TL 9.00 TL 1.00 = us $0.11 August 9, 1970 to December 22, 1971 us $1.00 = TL 15.00 TL $1.00 = US $o.067 After December 22, 1971 US $1.00 = TL 14.00 TL 1.00 US $0.07  VOLUME I MAIN REPORT Table of Contents Page No. BASIC DATA ....................... LIST OF TEXT TABLES ................................. LIST OF CHARTS ....... . ......... LIST OF MAPS ....................... SUMMARY AND CONCLUSIONS .. .................. i - xxviii Chapt. 1 DET1I1OPMENT STRATEGY AND GROWTH 1950-1973 .......... 1 The Social Development of the Population ........... Pattern and Pace of Growth .................. 8 Investment, Consumption and Savings ............. 13 Capital Intensity, Enployment and Productivity ..... 15 Public Finance .......................... ........ 18 Trade, External Payments and Debt . ..... ... 19 Chapt. 2 THIRD PLAN DEVELOPMENT STRATEGY 23 Third Plan Macroeconomic Targets and Policies 24 Sectoral Development Policies and Targets 27 Planning Techniques ....................... 30 Chapt. 3 MfDIUM AND LONG TERM PROSPECTS 32 Competing Objectives of the 3trategy 32 Medium Term Prospects: The Mission's Assessment ... 34 Long Term Prospects ........ 4..........* ..... 3 Chapt. 4 POLICIES FOR GROWTH AND STABILITY ...... 47 Price Stabilization Policies .............. 0*.... Monetary Policy ....... .50 Financial Policy. 53 Fiscal and Borrowing Policies.... 54 Public Investment and Incentive Policy 56 Exchange and Trade Policies .62 Social Policies .........O*..... 000 64 This report was prepared by a mission which visited Turkey during 24 April to 20 May 1973. The mission was composed of Eddmond Asfour (Chief of Mission), Christian Merat, Yves Franchet, HRam Chopra, Dharma Kumar, D.C. Rao and Hiwhoa Moon (General Economists), Harry Walters (Agricultural Economist), Jose Dumoulin (Agricultural 9pecialist), James Theberge (Industrial Economist, Con- sultant), Dieter Havlicek (Transport Economist), Richard Gregory (Loan Officer), and Rosalie Clare (Se -|etary). Support to the mission was also extended by Bertil Walstedt (on the chapter on industry), by James Fish (energy and electric power), by Charles Blitzer (Development Research Center, in developing a pro- gramming model) and by G. Garcia dos Santos (Economic Analysis and Projections, in developing a two-gap model).  List of text tables Table No. Volume I - Main Report 1. Indexes of growth and structural changes 1950-72 2. Changes in the consumption pattern of the country. 3. Incremental capital-output, and capital-labor ratios 4. Macro-economic targets ano achievements of the development Plans 5. Growth prospects 1973-77. 6. Balance of payments projects 1972-1977. 7. Sensitivity analysis on medium-term balance of payments prospects. 8. Long-term macro-economic prospects. 9. Public fixed investment. 10. Fixed investment by State Economic Enterprises. Volume II - Domestic and external finance 11. Public fixed investment (annual averages). 12. Central Government expenditure and tax revenue- 13. Central Government expenditure 1l. Structure and growth ol' tax revenue. 1). Growth of non-financial SEE's 16. Composition and importance of SEE's. 17. Public fixed investment. 18. Public finance in the Third Plan. 19. Private investment and financing. 20. Additional costs of Bank credit. 21. Changes in monetary assets and liabilities. 22. Allocation of increase in outstanding credits. 23. Outstanding credits to public sector. 24. Bank loans and deposits. Average outstanding end of 1963 and 1972. 25. Domestic public debt, 1963 and 1972. 26. Long-term government bond sales. 27. Export price as % of domestic wholesale price, 28. Relative movements of domestic and import prices. 29. Finance the current deficit of the balance of payments and debt service. 30. Balance of payments projections 1972-1977. Volume III - Major social and economic sectors 31. Distribution of economically active population. 32. Growth of employment 1962-72. 33. Projections of labor supply and demand outside agriculture 3h. Labor balances in Europe. 35. Forecast Of foreign workers in Germany. 36. Literacy in Turkey. 37. Primary school enrolment. 38. Supply of technical manpower. 39. Enrolment ratios at various levels of education: Third Plan targets. )(. Growth of urban areas and urbanization ratios.  41. Ratio of households -ith piped drinki,ng wiater. 42. F49,l of fu,nds of t,he Bankin,g ;,ysq,t,e,e 1y rpgions,. 43. Tukiih Bankig systpm: 1:971 p,r capita lrip g by r,egion. h. In,,d,ex of valpe adde.d n gro,w,tt _4ze's gri,c, ture by major sectors. 45. Relati.e siggif ic,a pe of 1gricl u,rajl su,,seSt,rs. ,46. ,Production of mjor i,ndustrial crops. 47. SO, 1s,tima.tves of7 the gr9y.ljj ratqe of pro,,d,ction of anim,,l. products dwing ,t,ie Plan perids,. 48. L,and,-<e ch4anges. 4~9. In,vIes.tmpt in agriculture ty main objeq,tiv,,,e,s, during t,h.e First and S,epo,p ?1.axnrs. 50. Pe4ak p,riod s,rpJus labor in agril