Announcement of Turkey to Boost Industrial Exports on January 21, 1988

FOR IMMEDIATE RELEASE 'NorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 88/38 Contact: Fawzi Rihane (202) 473 2675 TURKEY TO BOOST INDUSTRIAL EXPORTS WASHINGTON, January 21, 1988 - Turkey will use three World Bank loans totaling $300 million to support its drive to expand industrial exports and to improve the policy and institutional framework in export finance. The lending consists of a $150 million loan for Turkiye Sinai Kalkinma Bankasi (TSKB); $50 million for Sinai Yatirim ve Kredi Bankasi (SYKB); and a $100 million to the Government of Turkey for on-lending to private export-oriented industries through eligible commercial banks. To sustain its export drive, Turkey needs to increase its industrial capacity, improve the quality of its products, diversify its exports to new markets, provide adequate finance, and intensify marketing efforts especially in highly competitive markets. The loans will provide financial support to private export-oriented projects; assist TSKB in its financial restructuring and operational diversification efforts; and enlarge the credit delivery system for investment finance by including commercial banks as intermediaries. The project includes a technical assistance component of $1.5 million for strengthening the Export Promotion Research Center, assisting the Export-Credit Bank of Turkey in setting up a trade and export credit information system, and carrying out a study of credit delivery system for industrial finance. Since 1980, the World Bank has assisted the Government of Turkey in reorienting its economy and strenghtening, among others, the financial sector through policy and institutional reforms. The impact of policy changes and export promotion on the manufacturing sector has led to an important increase in exports, particularly in manufactured goods which grew from about $1 billion in 1980 to over $7 billion in 1987. The World Bank loans are for 17 years, including four years of grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. They also carry an annual commitment charge of 0.75 percent on the undisbursed balances. Note: Money figures are in US dollars equivalents.