Turkey - Basic Education Project

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 Unit Europe and Central Asia Regional Office  CURRENCY EQUIVALENTS (Exchange Rate Effective April 1, 1998) Currency Unit = Turkish Lira TL 226,000 = US$ I FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS APK Council for Research, Planning, and Coordination APL Adaptable Program Loan BEPP Basic Education Pilot Project ERDD Department of Educational Research and Development ETGEM General Directorate for Educational Technologies GIS Geographic Information System IT Information Technology MIS Management Information System MONE Ministry of National Education NEDP National Education Development Project NGO Non-Governmental Organization PCT Program Coordination Team UNESCO United Nations Educational, Scientific, and Cultural Organization UNICEF United Nations Children's Fund YOK Higher Education Council Vice President: Johannes Linn Country Director: Ajay Chhibber Sector Director: James Christopher Lovelace Task Team Leader: Michael Mertaugh  Turkey Basic 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 3 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 9 C. Program Description Summary 1. Program components 9 2. Key policy and institutional reforms supported by the Program I 1 3. Benefits and target population 11 4. Institutional and implementation arrangements 11 D. Project Rationale 1. Project alternatives considered and reasons for rejection 13 2. Major related projects financed by the Bank and/or other development agencies 14 3. Lessons learned and reflected in proposed project design 14 4. Indications of borrower commitment and ownership 15 5. Value added of Bank support in this project 15 E. Summary Program and Project Analyses 1. Economic 15 2. Financial 15 3. Technical 16 4. Institutional 17 5. Social 17 6. Environmental 17 7. Participatory approach 18 F. Sustainability and Risks 1. Sustainability 18 2. Critical risks 19 3. Possible controversial aspects 20  G. Main Loan Conditions 1. Agreements reached at negotiations 20 2. Dated covenants 20 H. Readiness for Implementation 21 I. Compliance with Bank Policies 21 Annexes Annex 1. Project Design Summary Annex 2. Detailed Project Description Annex 3. Estimated Project Costs Annex 4. Economic Analysis Summary Annex 5. Letter of Sector Policy Annex 6. Procurement and Disbursement Arrangements Annex 7. Project Processing Budget and Schedule Annex 8. Documents in Project File Annex 9. Statement of Loans and Credits Annex 10. Country at a Glance Map IBRD 29532  Turkey Basic Education Project in Support of the First Phase of the Basic Education Program Project Appraisal Document Europe and Central Asia Regional Office FYR Macedonia, Turkey Country Unit Date: June 1, 1998 Task Team Leader/Task Manager: Michael Mertaugh Country Manager/Director: Ajay Chhibber Sector Manager/Director: James Christopher Lovelace Project ID: TR-PE-9089 Sector: Education Program Objective Category: Human Development Lending Instrument: Adaptable Program Loan (APL) Program of Targeted Intervention: [X] Yes [ ] No Program Financing Data Total Loan Share of (US$ million) Cost Amount Bank Financing Pilot Phase (Basic Education Pilot Project) -- 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 TBD Overall 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$300 million Proposed terms: [] Multicurrency [X] Single currency, specify US$ Grace period (years): 3 [] Standard Variable [X] Fixed [] LIBOR-based Years to maturity: 15 Commitment fee: 0.75 % on undisbursed loan balances, beginning 60 days after signing, less any waiver Service charge: Nil % Financing plan (US$m): Source Local Foreign Total Government 1,829.9 191.8 2021.7 Provincial Administration 36.2 5.5 41.7 IBRD 155.0 145.0 300.0 National Donors 129.0 22.0 151.8 Total 2,150.1 365.1 2,515.2 Estimated disbursements (Bank FY/US$M): 1999 2000 2001 Annual 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  Page 2 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 education strategy. The strategy and Program are described in the Government's Letter of Sector Policy (Annex 5). The objectives of the strategy (and of the Program) are: a) to achieve universal coverage in an expanded, eight-year basic education cycle (formerly, five years), b) to improve the quality and relevance of basic education, and c) to make 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 throughout the country, b) facilitating school attendance of children who are least likely to attend school, c) reducing classroom overcrowding and double shifting, d) improving training and incentives for teachers, e) improving the supply of educational materials to basic education schools, f) introducing computer-aided learning, and g) increasing parental and community involvement in schools. BASIC EDUCATION PHASE I PHASE II PHASE III Program Phases Program Launch Consolidation Completion Development Establish capacity to implement, Continue investments. Continue investment Objective 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 to Program objectives. improve effectiveness of investments in meeting Program objectives. Key Program Outputs Key infrastructure investments Expansion of key Program objectives fully essential to meet goals of eight year investments. Educational met. compulsory education in place. and targeting initiatives remain central on the Program agenda. Benchmarks for / Provision of a basic package of Triggers to be determined Subsequent Adaptable educational materials to all for launching of Loan and Grant rural schools; Completion Phase. Financing / 30% completion of facilities upgrading for about 200 village schools; v Implement inservice teacher training for teachers and inspectors; v Carry out the monitoring and social assessment program, including the basic education public information program; Develop school infrastructure program for 2nd phase; v Finalize IT procurement for 2nd phase; / Disburse or at least commit 60% of Phase 1 APL. In addition to the above milestones, Program performance in terms of enrollment coverage and learning achievement will be closely monitored throughout the Program, and will provide the basis for identifying triggers for the subsequent phases. OSD PAD Form: July 30, 1997  Page 3 Under this submission, Board approval is sought for an APL commitment of US$600 million to support initial implementation of the Program: an initial APL of US$ 300 million to support Phase I implementation of the Program, as well as authorization for Regional management to process and approve a second, overlapping APL of US$300 million to support continued implementation of the Program, as soon as specified performance goals are met. Beyond these first two APLs, the Government has requested further Bank financing for continued implementation of the Program. A request for further financing would be prepared for Board consideration if Program 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, and class 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 to Annex 1. In monitoring Program performance, particular attention will be given to areas and children with the lowest basic education enrollment ratios and performance. Performance indicators will play an important role in ensuring 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 for moving to the second stage of APL financing include indicators such as educational inputs for provinces with the lowest enrollment rates. Program outcomes in terms of learning achievement, labor-market performance and other development impacts will take longer to observe. Permanent monitoring processes will be instituted during Program 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 objectives which the Program will support include the following: To shift administrative resources into activities aimed directly at social development and poverty alleviation, and to shift the focus of investment activities to poorer regions. (para. 4.5), and to support initiatives to upgrade education (para. 4.10). Paragraph 4.12 of the CAS describes the objective of expanded basic education more explicitly, stating that the Bank's highest priority in education is to help the Government achieve its goal of universal schooling through the eighth grade, and acknowledging the important role of the National Education Development Project and the Basic Education Pilot Project (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 important landmark was Turkey's participation in the 1990 Jomtien "Conference on Education for All," jointly sponsored by UNICEF, UNESCO, and the World Bank. Following this conference, the Government initiated discussions on possible World Bank assistance for the expansion of eight-year basic education. In 1995, the Government requested an amendment of the ongoing National Education Development Project (Loan 3192-TU) to incorporate a two-year Basic 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. The Pilot involves a new partnership of the Ministry of National Education (MONE), UNICEF, and the Bank. The Ministry developed a number of the pilot initiatives for rural schools with UNICEF assistance, and is working closely 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 basic education, and, for the first time, provided major budget resources (in the form of earmarked taxes) for the investments necessary to achieve that goal. The current level of official and public support for expanded basic education is unprecedented. An indicator of the breadth of public commitment to the Program is the amount of private, voluntary contributions for the Program, which total $500 million to date-including a $150 million contribution from the Istanbul Stock Exchange, and a $15 million contribution from a large private enterprise based in Istanbul. In spite of budgetary shortages elsewhere, the Government has already committed $1.5 billion in 1998  Page 4 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 next three school years. The Basic Education Law requires that, as of 1998, all children who complete the fifth grade will continue through the eighth grade. More generally, the law will require that all of the 6.9 million children who are currently enrolled in grades I through 5, and all children who start school in the future will remain in school through completion of the eighth grade. The Law does not require that children of basic-education age who have already left school return to school, but it is expected that many who have recently left will do so. The Government has recently introduced an open education program, using distance learning methods, to provide core basic education 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 reducing crowding 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 not attending school. The actual number of children not attending school could be considerably larger than this.' In most urban areas, school attendance is constrained primarily by inadequate classroom capacity, and inadequate numbers of teachers. In rural areas, primary schools (grades 1 through 5) are generally available, but a beneficiary assessment commissioned by the Bank in the Eastern and Southeastern provinces2 found that school attendance in those regions is constrained by household poverty, public perceptions that educational quality in village schools is low, 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 oi the isolation and difficult teaching and living conditions in remote, rural schools. Some schools in the East andL Southeast 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 oi basic 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 handicapped children. To address the teacher constraint, the Ministry plans to recruit an additional 150,000 teachers and inspectors for basic education schools, and to improve the attractiveness of rural schools by upgrading teacher housing, and providing better financial incentives for teachers in hardship areas. It also plans to experiment with teacher recruitment and assignment policies-which are currently administered centrally-to identify more effective and 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 school attendance in many rural areas is constrained by factors which affect parental demand for education. Many parents in rural areas in the East and the Southeast expressed reservations about their children's-and typically, their daughters'-attending school because they felt that the education in their village school was of low quality, or because 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 basic education, providing material incentives to children from poor households the form of free school meals, student uniforms, 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' year of birth (to eliminate overage students) estimates that the net enrollment ratio for the first five years of basic education is 94.4 percent for girls and 99.8 percent for boys -- implying a total of 184,000 girls and 7,000 boys not in 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 Oranlari ve Okul Disinda Kalan Cocuklar, by Prof. Dr. Yuksel Kavak, 1997. The Ministry's enrollment figures for the current (1997/98) school year record that there are 396,000 more boys than girls enrolled in the first five grades of basic education than girls, suggesting an even larger number of out-of-school children in the first five grades of basic education. 2 Factors Influencing School Attendance in Basic Education in Turkey, with Special Emphasis on Female Participation, Professor Dr. Niyazi Karasar, November, 1991.  Page 5 Basic Education Pilot component of the National Education Development Project (NEDP), the Ministry upgraded teacher housing in a number of remote village schools to make teacher housing units more comfortable and attractive, with better heating, lighting, sanitary facilities, and basic furniture. Many of these units are now being shared by young women teachers, who report that these improvements make their assignments more attractive and materially improve their living conditions. The extensive improvements to rural teacher housing which are planned under the Program are expected to make an important contribution to attracting and retaining qualified teachers in village schools. Beyond this, improved cash incentives are being provided for teachers who serve in the most remote and poorly equipped provinces. Under the information technology activity in the Program, the Ministry also intends to develop an interactive system of professional support for teachers, which is expected to reduce the sense of professional isolation which affects many teachers in village schools. To help overcome the handicap of low household income, the Ministry is already providing special assistance, including free uniforms and textbooks, to children in schools in low-income areas, and is in the process of developing a strategy which will address their special educational needs. These programs are being expanded under the Program. In areas where school attendance is a problem, the Program will also support school-based community activities, in order to make basic education schools a resource of the community. These actions have been found in Turkey, and in other countries to improve school attendance and learning achievement. The Program will also support an expansion of preschool education to improve children's performance once they start school, and to increase the likelihood that children will stay 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 by the Ministry under the NEDP over the past seven years. These include programs for assessment of learning achievement, curriculum development, in-service and pre-service teacher training, education management, education planning, education materials production, and computer literacy and instruction. Although early implementation of the project suffered from a number of problems, performance has improved markedly during the past two years. The Basic Education Pilot component of NEDP has served as a pilot for key actions proposed for extension under the Program, including: a) improved designs for urban schools, b) a comprehensive set of inputs to village primary schools to make them more effective, and c) extensions of some village schools to include the upper grades of basic education (grades 6 through 8), with provision for bussing students from surrounding villages. The project 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 raising children's educational performance once they start school, and in raising mothers' ability to provide for their children'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 full enrollment of the basic education age group, and improving the quality of basic education in all basic education schools 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 and provincial capacity to implement the Program, ii) creating a mechanism to monitor and evaluate the medium-term and long-term outcomes of the Program, and iii) undertaking the first wave of educational investments -- including school construction and upgrading, teacher training, and provision of educational materials -- in each province to achieve the objectives of the Program. The province-level investments made during the First Phase of the Program address only the highest-priority educational needs in each province, such as school construction to provide capacity in grades 6 through eight where none currently exists, and to decongest the most overcrowded classrooms in existing basic education schools. They also equip two basic education schools in each subprovince to provide computer 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 order of educational priorities. This work will make use of monitoring and evaluation carried out during the first phase on the educational effectiveness and cost-effectiveness of the investments carried out during the Program Launch Phase. 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, with further elaboration of pedagogical content in successive years of Program implementation. Educational equipment and materials comprise various packages of educational materials which will be provided to all schools during the first phase of the Program, as well as some items-particularly, for information technology-which will be  Page 6 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$9.1 billion. On the basis of that estimate, the Government requested World Bank financing to meet the projected gap of US$2.4 billion between the estimated total Program costs and the expected local financing, comprising US$ 4.9 billion in revenues from the new basic education taxes, US$0.2 billion from the general budget, US$1.1 billion from provincial 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. Although the Bank endorses the objectives of the Program, the scale of the Program calls for a nuanced application of APL financing. Rather than requesting Board approval of the very major funding commitment which would be necessary to significantly cofinance implementation of the entire Program, this proposal represents a more conservative, progressive approach to financing the Program. The two APLs included in this submission cover only the first two phases of Program implementation because of the need to assess the evolution of Turkey's debt service capacity as Program implementation proceeds. Under this submission, Board approval is sought for an APL commitment of US$600 million to support initial implementation of the Program: an initial APL of US$300 million to support Phase I implementation of the Program, as well as authorization for Regional management to process and approve a second, overlapping APL of US$300 million to support continued implementation of the Program, as soon as specified performance goals are met. 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) training of teachers, school principals, and inspectors scheduled to be carried out during the first year of the Program, iii) the provision of educational equipment and materials scheduled to be provided to basic .education schools during the first year of the Program, iv) the development of central and provincial implementation capacity to carry out the Program, and v) creation of a mechanism to monitor and evaluate the medium and long-term outcomes of the Program. An Adaptable Program Loan is an appropriate instrument for support of the Program because, while the Program's objectives are firmly established by the Government and endorsed by the Bank, the activities of the Program will evolve as the Program is implemented. Moreover, the external resource needs for Program implementation exceed the financing available under a single loan. The Government is committed to launching implementation of the Program 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 the activities in the second APL are fully appraised would entail an unnecessary delay in launching the first phase of the Program, which the Government very much wants to avoid. This evolutionary nature of the Program and the APL financing provides the advantage of flexibility for experimenting and making course corrections as implementation proceeds. But it also implies the need for a more extensive involvement of the Bank during implementation than a conventional investment project. In order to make the most productive use of the flexibility which the APL offers in refining the design of the Program as implementation proceeds, and in order to maintain the Bank's professional partnership across the full range of policy areas addressed by the Program, there will be a need for a continuous professional partnership as implementation progresses. This work will involve elements of both supervision and ongoing appraisal as the Program evolves. The Bank is committed to providing this partnership, and is making arrangements 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 the Program-defined as activities either carried out or committed during the first year of the Program-plus two longer-term activities for which an up-front commitment is needed: strengthened implementation capacity and development 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 be completed in the first eighteen months of Program implementation. The specific activities included in Phase I, and the subset of those activities to be financed by the first APL are described under item C, below, and in Annexes 2 and 3. The Second APL: Phase II of the Program consists of basic education investments to be carried out or committed during the second year of Program implementation. Although some new activities may be added to the Program during its second phase, the major elements of the Program are known and have been costed at $4.2 billion. A second APL of $300 million would be appraised to help finance Phase II implementation, as soon as specified performance goals for Phase I of the Program are met. The second APL is expected to finance the provision of textbooks to rural and urban slum schools, school construction and upgrading, the expansion of computer literacy  Page 7 instruction, and further training of basic education personnel. Completion of Phase I implementation on the proposed schedule will require external financing beyond this second APL. If implementation is satisfactory at that stage and if the Government still desires further Bank assistance, a request for additional financing would be prepared for Board consideration. The Triggers for Moving to the Second APL: Seven key actions, described below, are proposed as triggers for proceeding to the second APL. The first three involve important actions to improve teaching and learning conditions in the schools with the greatest educational needs. The next one is essential for establishing a reliable mechanism for monitoring the medium-term and long-term educational outcomes of the Program, and for generating feedback on Program outcomes to improve Program effectiveness as implementation progresses. The final three are designed to demonstrate the need for resources under the second APL, and the capacity to implement the second APL effectively. These triggers for progressing to the second APL are designed to demonstrate up-front the Program's commitment to eliminate the constraints to universal education, and to provide further financial support for Program implementation when it is needed. Because implementation of the full Program will require external resources beyond what these first two APLs could provide, preparation of a proposal for subsequent financing would be launched in time to provide for uninterrupted financing, assuming that Program performance up to 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 of educational materials was provided to 274 rural schools in the East and Southeast. This activity materially improved teaching and learning conditions in those schools, and in many cases appears to have led to improved school attendance. A similar package of basic educational materials is to be provided to the 30,700 other rural schools under the Program. Making this activity a trigger for moving to the second APL is designed to ensure that the least-well-equipped schools are among the first to benefit from the investments in the Program. Most of the costs of this activity are to be financed under the first APL, but some of the materials are expected to be donated by producers or private-sector sponsors. Loan financing would 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 village schools in the provinces of Sirnak, Van, Mardin, Hakkari, and Bitlis (or other provinces as agreed with the Bank). These provinces in the Southeast have the lowest rates of basic education school attendance, and suffer from high teacher turnover and teacher absence due to the difficulties of teaching and living in that environment. Under the Basic Education Pilot Project (BEPP), 15 rural schools were upgraded to provide more attractive and functional teacher housing, more effective teaching and learning conditions for classrooms, and better physical amenities for students. The improvements to these 200 schools under the first APL will be planned in consultation with teachers and the community, in order to maximize community ownership. These actions are expected to help attract and retain qualified teachers for remote rural schools. They are also expected to lead to better school attendance and better educational performance. The Government plans to upgrade about 70 percent of the 30,700 rural schools under the Program. 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 this action among the triggers is to ensure that this work is initiated from the start of the Program and is carried out to quality standards which will maximize the potential impact in attracting and retaining qualified teachers to these schools. Upgrading these 200 schools to the same standards as the BEPP schools is expected to serve as a model for upgrading other rural schools in the next phase of Program implementation. c. Implement the agreed program of inservice training for teachers, school principals, and inspectors. Under the 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 special teaching challenges which they face in that environment. Under the Program, the Ministry of Education plans to provide a similar program of training throughout the basic education system to make teachers better teachers and to make school inspectors and school principals change agents for the educational innovations which are planned under the Program. This program has been discussed and agreed with the Bank. Implementation of the first phase of the agreed training program is to be financed by the first APL and implemented as a condition for progressing to the second APL.  Page 8 d. Carry out the agreed monitoring and social assessment program, including the basic education public information campaign. The monitoring and assessment component will provide vital information on medium-term and long-term Program outcomes in terms of objective quantitative and qualitative indicators, and public perceptions of its effectiveness. Developing this monitoring capacity up-front is vital to the longer-term viability of the Program. A detailed program of activities has been agreed for the monitoring and assessment component, including impact studies which are to be commissioned and carried out prior to the first joint review of Program implementation, scheduled for May, 1999. This program provides 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 criteria satisfactory to the Bank. The second-phase infrastructure program, which is expected to be financed under the second APL, is to be developed according to criteria which ensure the suitability of school construction, upgrading and extension in terms of cost-effectiveness of designs, cost-effectiveness of the particular types of structure proposed, and educational priorities (focusing on school upgrading to improve school attendance and teacher retention, and creation of additional capacity to accommodate expected enrollment increases). The Program calls for the construction of 1,512 basic education schools and 46,944 classrooms during the second phase of implementation. Clearly, the second APL could finance only a modest fraction of this program. The action specified in this trigger refers to the criteria for selecting the type of school investments to be undertaken and the standards embodied in the prototype designs for schools. These activities are, by nature, scale free: they need to be carried out regardless of the size of the infrastructure program. f. Finalize specifications and bidding documents for the second phase of information technology procurement, as agreed with the Bank. The Ministry and the Bank are currently examining the feasibility of several options for the second phase of information technology (IT) procurement, including the possibility of leasing, and supply through a consortium of hardware and software suppliers. Specifications for 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 be disbursed 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 finance about 12 percent of the costs of implementing the first phase of the Program-defined as activities either carried out or committed during the first year of the Program-plus two longer-term activities for which an up-front commitment is needed: assessment of learning outcomes, and monitoring and evaluation. Although full implementation of these activities is expected to require three years, the bulk of the work is expected to be completed in the first year of Program implementation. In order to maintain implementation momentum, financing under the second APL would need to be available well before the completion of activities launched and contracted for in the first phase. In particular, contracts for school construction which are to be financed under the second APL would need to be signed by early 1999 in order for the schools to be ready for use in September, 1999. Overlapping fmancing is essential in order to avoid a delay in implementation under the country's stated implementation schedule. Implementation Period Because of the timing of the enrollment increases expected under the new Basic Education legislation, the Ministry aims to implement the school expansion over the next three years. Actual implementation of some aspects of the Program could take longer than that. The scale of school infrastructure needs for the next three years implies a pace of construction which is at least five times greater than any prior construction program. There are three reasons why implementation of the Program is likely to improve on past performance: i) the unprecedented level of Government and public commitment to the Program; ii) the high priority that provincial governors are attaching to the Program-many are diverting specialist staff from other activities to help with implementation and will continue to do so; and iii) the willingness of the central Ministry to engage substantial consultant assistance to help manage implementation 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  Page 9 implementation of some Program activities and achievement of the Program's quantitative and qualitative goals may take longer than the Ministry foresees. Some activities under the Program are also longer-term activities by their very nature, such as monitoring of learning outcomes. For these reasons, the Bank projects a more protracted implementation schedule for the Program than the Government. Implementation of the initial APL is projected to require three years, starting with effectiveness in July, 1998; implementation of the second APL is projected to require three years, starting early in 2000. In any case, the timing of disbursements and the processing of the second APL, as well as the processing of subsequent financing for the Program, will depend upon the actual pace of implementation of the activities which the APL is financing, and the actions which serve as triggers for the second APL. Implementation and disbursement of the first APL and the initiation of the second APL could occur sooner or later 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 school capacity is the major constraint, the Program will extend capacity, through a large-scale teacher recruitment and teacher 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 the former primary and middle-school cycles, b) are cost-effective, c) are educationally more effective than earlier school designs, and d) are more adaptable to the needs of different regions and applications than the Ministry's former school designs. Where other factors appear to constrain the achievement of the strategy, particularly, in areas of the country with low rates of school attendance and high illiteracy rates, the Program will support initiatives to address those needs. Program performance will be evaluated and monitored to exploit the potential richness of this 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 Summary 1. 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. These comprise four Program components, each of which includes several activities. (See Annex 2 for a detailed description of Program components, and Annex 3 for a detailed cost breakdown, and Annex 5 for the Government's description of the Program): a. Expanded Basic Education Coverage, which will support the training and recruitment of additional teachers 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, and school principals, provision of textbooks and educational materials for basic education schools, the provision of hardware, software, and training for information technology in basic education schools, and a number of other initiatives designed to improve the quality of basic education. c. Program Implementation Support, which will provide equipment and technical assistance for implementation management, including maintenance of Program accounts. d. Monitoring and Evaluation, which will assess the outcomes of the program against several categories of performance indicators, and provide continuous feedback to the Program Coordination Team (PCT) and the related line units of the Ministry to improve the effectiveness of the Program in meeting its objectives as implementation progresses. This component also includes support for a Monitoring Response Facility to implement recommendations for school-based initiatives, and public media efforts to promote compliance with 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 four categories of activities: a) activities which will be carried out or committed early in the Program-for the most part,  Page 10 during the first year of Program implementation, b) activities which promote Program objectives among groups with the lowest basic education enrollments (such as provision of educational materials to village schools), c) activities which experience suggests will be essential for successful implementation (such as technical assistance for management support), and d) activities in which the Bank has a comparative advantage based upon experience in other countries (such as educational applications of information technology). Although the financing plan has not yet been established for the second APL, the same criteria are expected to apply. The choice of Program activities to be financed under the initial APL was also constrained by two other considerations: i) the prospect of obtaining grant financing for some key Program activities-notably, the initiative to supply free educational materials, school uniforms, and school meals to needy children; and ii) the Government's view that some Program activities need to move ahead on a very accelerated schedule, which does not allow time for procurement under Bank-approved procedures. As a result, Bank financing will not be used to support the $1.5 billion program of school construction under Phase I of the Program, but is expected to help finance subsequent school construction carried out according to Bank guidelines. FIRST-PHASE PROGRAM ACTIVITIES, COSTS AND FINANCING UNDER THE FIRST APL Provinclal The Government AdmInlstration The World Bank National Donor Totml Amount % Amount % Amount % Amount % Amount % A. Phase I 1. 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 58.5 b. 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 84.4 2. Improve BaBlc Education Quality a. In.service Training Programs 5.8 15.7 - 31.2 84,2 - - 37.0 1.5 bu Educational Materials 44.1 471 2.0 21 47.6 50.8 - - 93.7 3.7 c Information Technology 28.8 14.6 14.8 7.5 154.0 78.0 - 197.6 7.9 d. 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 13.1 3. Program Implementatlon a. Iogram Management Team 42,4 95.9 - 1.8 4.1 - 44.2 1.8 b. 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 9 4. Monitoring and Evaluatlon a. Social Assesament, Monitoring and Studies 0.6 156. - 3.0 84.3 - - 3.5 0.1 b. Monitoring Response Facility 1.6 16.4 8.4 83.6 - 10.1 0.4 c. 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 0.6 otal 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 during the 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-including assessment of learning outcomes. These activities are summarized in the following table, and described in detail in Annex 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 more extensive package of educational materials to all 4,800 eight-year schools in rural areas, c) upgrading of about 200 five-year village schools, including improved teacher housing and physical amenities, in five provinces with the lowest rates of school attendance and largest class sizes,l upgrading of about 100 eight-year rural schools in another group of five provinces with low rates of school attendance, d) upgrading of about 40 basic education schools in urban slums in Ankara province, e) upgrading and equipping of computer rooms in 2,828 basic education schools in all 80 provinces of the country, e) assessment of learning outcomes, f) monitoring and evaluation activities, and g) implementation support. With the exception of items e and f, all are scheduled for implementation or start-up during 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.  Page II 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 increase the demand for education among children who -u rently have low school attendance. This represents an explicit recognition that universal school attendance equires more than availability of school places and laws requiring 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 an important bearing on future strategies for poverty reduction in Turkey. The second policy change which the Program will support (as an instrument for promoting better school attendance) is the development of the basic education school as a resource of the community. As a long-term goal, the Ministry intends to do this by broadening the programs of basic education schools to include early childhood development activities, adult literacy education and self-enrichment courses for adults, as well as updating of tie basic education curriculum itself-particularly, in the areas of computer education and foreign language training. It implies a major change in how schools are managed-a new departure which will be gradually developed and experimented with under the Program. The extension of preschool education is expected to incorporate some of the pedagogical innovations which have been found effective in the Mother/Child program, which is supported by the Bank under the NEDP. International experience shows that activities 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 before attempting 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 their educational problems, and provides ample support to develop that capacity in the weaker provinces. The Program also provides training for strengthening diagnostic, management, and problem-solving capacity of education 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 effectiveness of schools, and experimentation with new teacher incentives and teacher assignment procedures to improve gradually the efficiency of teacher deployment. The initiatives to address the demand constraints to school attendance will yield greater efficiency in resource allocation and use. The introduction of assessment of learning 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 and effectiveness of education programs. For example, the application of better information on school effectiveness through assessment of learning outcomes and management information, could provide a basis for eventual fundamnental 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 the Program, and the basic education students who will benefit from better educational materials, more motivated and more qualified teachers, less crowded classrooms, and the updated curriculum. Teachers will also benefit from the improved training and incentives. Indirect beneficiaries of the Program include the mothers of children who are better equipped to provide for their children's health, education, and nutritional needs because of the Program. The Program will target the regions and groups with the lowest school attendance and educational performance in basic education -- in particular, girls in the East and Southeast, and children from poor gecekondu households. Provincial education administrations will also benefit from strengthened capacity to 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 existing public administrative structure. Implementation responsibility is to be shared by the Ministry of National Education 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 level will be carried out by the existing management infrastructure of the Ministry, under the direct responsibility of the MONE Undersecretary, and the coordination of a Program Coordination Team which has been established  Page 12 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 and evaluation, and Program administration. Policy guidance is to be provided by a Program Steering Committee comprising heads of the relevant MONE Directorates. At the province and subprovince level-there are 80 provinces and 921 subprovinces-the Program is to be implemented under the authority of the provincial Governors and the Kaymakams (subprovince governors), with the Provincial Education Directors playing the lead technical role on educational matters. The provincial Governor will call upon other elements of the provincial administration to implement particular parts of the Program, as necessary-particularly, in the area of school construction. School Construction, Extensions, and Upgrading. Normally, school construction, extensions and upgrading is carried 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 of Finance. Because of the vast scale of school construction and upgrading which is to be carried out under the Basic Education Program, the Ministry of National Education and the provinces have adopted a new implementation formula, under which the provinces and the central Ministry share responsibility for implementing school infrastructure investments. The provinces are responsible for identifying their infrastructure needs, and prepare initial proposals for school construction, upgrading, and extension, according to criteria established by the Ministry. Then responsibility for implementation is divided between local administration and the central Ministry. The provinces and subprovinces will be responsible for extensions and upgrading of existing basic education schools, while the Ministry of National Education is to manage centrally the construction of new schools, with the assistance, initially, of four regional teams of civil works management consultants. For the school construction, extensions, and upgrading, which will be carried out under the second and third phases of the Program, and which are expected to be partially financed by the Bank, a new group of consultants will be selected in consultation with the Bank and in accordance with Bank procurement guidelines. Since the school infrastructure expansion program is expected to comprise about 50 percent new construction, and about 50 percent extensions and upgrading of existing schools, this division of labor shares the task of implementing the school infrastructure portion of the Program equally between the central MONE administration and the provinces. Construction of new schools under the Program will be managed by the Ministry's Department of Investments and Construction, under the coordination of the Infrastructure Unit of the Program Coordination Team. School extensions and upgrading will be managed by provincial Governors, also under the coordination of the Infrastructure Unit of the Program Coordination Team. Although the main responsibility of the four regional teans of civil works consultants is to prepare site-specific designs and to supervise the construction of new schools, the consultants will also provide assistance to the provinces as needed for the implementation of school 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 the Information Technology Unit of the Program Coordination Team, comprising staff of the Ministry's General Directorate for Educational Technologies (ETGEM), and consultants engaged under the Program. Terms of reference for the Unit and its key consultants were agreed at appraisal. To the greatest possible extent, the Ministry will make use of its existing capacity in IT, specifically the NEDP Project Coordination Unit for procurement of hardware and software, and ETGEM for supporting, evaluating, and monitoring the use of computer laboratories in schools. The team will include well qualified IT professionals, including a full-time manager with project management, education sector, and IT industry experience. An education technology specialist will be hired to provide informed, independent, expert advice to the Director of the Program Coordination Team, and to participate in the annual Program reviews. Educational Interventions. With the exception of computer education, the interventions under the quality improvement component of the Program are to be managed by the respective line units of the Ministry -- basic education, teacher training, preschool education, etc. -- under the coordination of the Educational Unit of the Program Coordination Team. Monitoring and Evaluation. Implementation of the monitoring and evaluation of the Program is to be managed by the Monitoring and Evaluation Unit of the Program Coordination Team. Monitoring and social impact assessment are critical for guiding Program implementation and for shaping the partnership between the client  Page 13 and the Bank through various phases of the Program. The evaluation of monitoring results will be undertaken routinely by the Ministry and the Bank. Input and process monitoring efforts will be carried out primarily by the Program Coordination Team within the MONE, in coordination with relevant departments and provincial offices, 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 be held in May of each year by the MONE and the Bank, with the participation of national and international experts. In addition to the flexibility of predefined activities, the Program includes a small Monitoring Response Facility to allow for the implementation of pilot initiatives, developed in the course of implementation, to improve the responsiveness of the Program. Program Administration. Generic functions of reporting, dissemination, accounting, procurement, and preparation of withdrawal applications for the Program are to be carried out by the Administration Unit of the Program Coordination Team, based upon inputs from the provinces and the respective line units of the Ministry. 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 are 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, retroactive financing of up to 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 components financed by the first APL and procured under agreed procedures, including upgrading of rural schools, training of basic education personnel, provision of educational materials and equipment, and equipment, materials and technical 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 of the Government's Basic Education Program makes APL financing a more appropriate vehicle for World Bank assistance. A series of APLs offers the Government the advantage of a longer-term commitment from the Bank to support 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 have been limited to a single activity, such as computer hardware and software purchases. Although it would have simplified disbursements, this option was not pursued because it would not provide the overall Program oversight necessary to ensure that Program objectives are met.  Page 14 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned): Sector issue Project Latest Supervision (Form 590) Ratings (Bank-financed projects only) Implementation Development Progress (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 training programs in industrial management. * Refurbishing and equipping of 48 Industrial Schools Project Project Closed secondary vocational schools and the (FY84) development of improved curricula and textbooks for key specializations. * Upgrading of about 500 adult training Non-Formal Vocational Project Closed centers and related program and Training Project (FY87) materials development. * Upgrading of 20 additional technician Second Industrial Training S S training centers. Project (FY88) * Development of improved teacher National Education S S training programs, curricula, textbooks, Development Project (FY89) student assessment, and education planning, and amended to include a Basic Education Pilot Project. * Expansion of Industrial Training I S S including technical teacher training and tourism training. Other development agencies UNICEF worked closely with the MOE and the Bank in developing the Basic Education Pilot Project, and manages implementation of the Rural Component of the Pilot Project on behalf of the MOE. Activities under this component include 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 past projects. In particular, the Program will support the large-scale application of the educational activities and the procedures for school design and school construction which were developed and found effective under the National Education Development Project and the Basic Education Pilot Project. One of the lessons of the Basic Education Pilot Project was that centralized procurement for school-based initiatives can undermine the sense of local ownership which is crucial for enlarged parental involvement in schools. Thus, the school-based initiatives funded under the Monitoring Response Facility will rely as much as possible upon local procurement. Another lesson was that, while school-based activities which are meant to involve parents in activities to improve school attendance and education quality can be effective in promoting those objectives and in providing broader benefits to the community, they require considerable nurturing to ensure satisfactory results. For that reason, the Program includes sufficient technical assistance to provide these time-intensive inputs when these activities are first launched in a community.  Page 15 Two important lessons of past Bank projects with the Ministry of National Education are, first, that technical assistance which is seen as forced upon the Ministry is not effective, and, second, that implementation models which bypass line units of the Ministry may succeed in procuring equipment, but tend to fail in achieving their educational objectives for want of ownership by key Ministry staff. In spite of the Bank's concerns about implementation capacity during Program preparation, the Ministry feels very strongly that it must implement this Program through its existing line units and the relevant ministerial offices at the province level. The design of the Program reflects this concern, by relying upon the Government's own implementation structure, and providing ample resources for technical assistance which the Ministry can draw upon quickly in areas where it feels it needs help. Performance monitoring will also provide prompt Program management with prompt feedback on lagging areas of implementation 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 very widespread. Voluntary contributions for the Program totaled over $500 million, including cash and in-kind contribution, during the past year, and Parliament approved the Basic Education Law by a wide margin after a very brief deliberation in August, 1997. This legislation included the exceptional provision of special earmarked excise taxes 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 addressing the educational objectives of the Program-particularly, in raising the school attendance and performance of the groups with the greatest educational needs. Other planned Bank initiatives are also expected to help achieve the objectives of the Basic Education Program. The Bank has worked closely with the Ministry of National Education over the past seven years to raise awareness of the need for this Program, and to develop its content. In addition to providing supplementary financing which the Government desires for this operation, Bank support would provide the benefits of international experience with design and implementation of large-scale investment programs to expand education coverage and improve the quality of education. In the course of Program preparation, the Bank worked closely with the Ministry to develop a more cost-effective model for expanding school capacity. These efforts have already brought gains in cost-effectiveness, both in terms of 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 Program implementation 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 implementation proceeds. 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 of expanded basic education to aggregate economic performance and personal earnings (Annex 4). Rates of return for education 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 the benefits 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 for the computer literacy investments under the Program. Evaluations of home-based preschool education programs in Turkey have documented significant and enduring benefits in terms of improved school attendance and performance. 2. Financial There are major recurrent budget implication of the various interventions which the Program will support to expand and improve basic education. In many applications, there are several options-school extensions, new schools,  Page 16 bussing, multiple-shift schools, boarding schools, etc.-which would promote the desired result, but which differ significantly 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 it will be very important to refine this information as the Program is implemented in order to adjust the mix of Program interventions to maximize educational effectiveness and minimize investment and recurrent costs. This is the role of the economic analysis and the strengthened school planning which are to be carried out under the Program. 3. Technical Textbooks. There is an issue of textbook selection and textbook approval which needs to be resolved before textbooks are provided to schools under the Program. In general, parents purchase textbooks for their children's use in school, but low-income parents in most rural areas and in some urban slum areas cannot afford them. Most children in rural schools and many in urban slum schools do not have textbooks. To address this problem, the Ministry is in the process of providing textbooks for children whose families cannot afford to buy textbooks. This support will be extended under the Program. Financing of this initiative is planned for the second APL, in order to allow time for resolution of issues of textbook selection and approval. Educational Effectiveness of School Investments. There are inevitable tradeoffs involved in the choice among different 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 Program implementation proceeds. In urban areas, there are important choices to be made between smaller schools which are closer to the communities they are intended to serve, and larger schools with lower unit costs, but possibly lower educational effectiveness. In spite of the compulsory nature of basic education under the new law, some parents may not be willing to send their children to more distant schools, although these may be cheaper and easier to provide. Parental participation is also less likely to be successful for large and more distant urban schools than for smaller, 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 and extensions and improvements to centralized bussing schools in rural areas. In general, the Ministry prefers this strategy over an approach which would provide a complete eight-year basic education in as many villages as possible (by upgrading schools in each village and adding capacity in grades 6 through 8), because it considers that it is easier and cheaper to provide high-quality basic education in larger, centralized schools-especially, under the Ministry's new policy of offering subject-based teaching (rather than classroom based teaching) beginning in grade five. Because it would relocate the schooling venue for some children, this policy is likely to lead to smaller numbers of children enrolled in many village schools. The Program will monitor very closely the educational effectiveness, as well as the cost effectiveness of the various Program interventions to expand the coverage of basic education. Where the chosen approach appears not to be working or to be unnecessarily costly, the monitoring and evaluation 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 reduce class sizes to 30 students per class in all basic education schools. Although there is scientific evidence that very large class sizes discourage school attendance and make it difficult to offer quality education, the gains from smaller class size are not continuous. Ever-smaller class sizes do not lead to continuing gains in the quality of education and learning achievement. The Program target of 30 students per class appears reasonable, but it will be important to monitor the educational gains and cost-effectiveness of this policy as the Program is implemented. investrnents in smaller class size are clearly warranted for classes which are currently above 50 or 60 students per class, but further investments to reduce class size may not be warranted in terms of better learning outcomes. The same consideration applies to the Ministry's plan to eliminate multiple-shift use of basic education schools. In planning school investments under the Program, the highest priority should be given to ensuring that all children of basic education age are in school. This question of priorities has particular importance because of the scale of effort which would be required to achieve the Ministry's goals of reducing class size and eliminating double shifting. The investments in new classrooms required to achieve these goals are almost as large as the total infrastructure investments planned under the Program -- in excess of $7 billion -- whereas the investments to provide the needed additional 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 subsequent loans do so. In order to be able to do so, the criteria for building new schools or extending existing schools under the second and subsequent phases of the Program would need to reflect this priority.  Page 17 4. Institutional Teacher Deployment. The expansion of basic education envisioned under the program will require the deployment of about 190,000 new basic education teachers and administrative and support personnel. Unless appropriate incentives are provided and institutionalized, there is a likelihood that a significant number of teaching positions will remain unfilled. The Program is addressing this risk by providing more attractive salary supplements for teachers in difficult teaching conditions, and by experimenting with new procedures for teacher recruitment and assignment which give provinces a greater role. The effectiveness of these measures will be monitored under Program implementation, and further measures will be developed, if necessary, to ensure that all basic education classes have qualified teachers. 5. Social The project proposes major remedies to reduce interregional, urban/rural, gender and other social imbalances in access to quality basic education. Poverty, both at the household and at the community level, is closely linked to educational opportunities. The Program explicitly aims at improving the access of poor households to eight-year basic education. To the extent that low household income is a constraint to school attendance, the Program aims to improve 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 the Program to improve the quality of basic education -- including the visible improvement of existing rural schools and teacher housing -- are expected to contribute to improved school attendance. Other Program initiatives to develop the school as a resource for the community and to expand preschool education are also expected to involve the community more fully in their schools, and to contribute to better school attendance. The gains which the Program achieves in school attendance will particularly benefit girls and the poor, because it is girls and children from poor households who are most likely not to attend school. The social risks of the Program can best be reduced through transparent Program implementation in which mechanisms for continuous social assessment and social impact monitoring are brought together with facilities to pilot innovative educational practices for improved targeting of the poor. Doing such assessment in a participatory manner 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 promotion campaign which is included under the Monitoring and Evaluation component will also help build support for and compliance 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 dispersed nature of the Program. However, the baseline situation for new school sites will be reviewed under the Program and mitigation 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 a Handbook for Basic Education School Buildings which was developed with Bank assistance in preparation for the Program. These standards have been reviewed by the Bank team, and found satisfactory. All buildings constructed and rehabilitated under the Program will be required to comply with these standards. Government and Banks supervision of Program implementation will ensure that these standards are respected. No involuntary resettlement will be involved in Program implementation. The MONE has confirmed that no involuntary resettlement will occur under the Program, and has instructed all of the provincial administrations, in identifying sites for new schools under the Program, to select only sites which are vacant public lands owned by the Ministry or the Treasury. Given the urgency with which the Government aims to complete the physical infrastructure for the project, the Ministry is committed to avoiding land acquisition as this would require extensive time for legally required consultations and court decisions. In case private contributions are made for school  Page 18 buildings, the MONE, from its own funds, would pay private individuals who will contribute their vacant land for school 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 is girls and children from poor households who are most likely not to attend school. Social assessment played an important 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 of education stakeholders, including school administrators, teachers, students, local governments, local representatives of central government as well as the media. A systematic survey and two participatory seminars organized in late 1997 and early 1998 aimed to identify the educational issues as perceived by local administrators of the relevant ministries. The results of this work are incorporated in the management design of the Program. The results 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% of parents and students. A total of 15,000 respondents were interviewed to seek their assessment of each component of the 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 separate boarding 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' school attendance in the East and Southeast which was commissioned by the Bank in 1991, in that it aims to raise school attendance by providing better quality education, by expanding school capacity in grades 6 through 8, and by measures to attract and retain qualified teachers. The design of the Program also reflects the lessons from numerous studies conducted by the MONE and the evaluations of pilot projects implemented with the Bank, other donors, and civil-society organizations. Subsequently, social impact assessments were carried out for the many pilot efforts that have 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 Pilot Project 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 personnel costs, and operation and maintenance costs of the new facilities. The full Program would require about 150,000 additional basic education staff-a significant increase from current levels. At current unit costs, this would raise the real teacher salary bill from $1.3 billion currently to approximately $2.1 billion. In addition, the Program is sponsoring 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 will add over $100 million to the annual cost of running basic education schools. The incremental maintenance/renewal costs for the information technology equipment (estimated at 10% of the investment cost per annum) plus building maintenance (estimated at 2% of construction investment costs) add up to another US$117 million annually, once the 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 to mobilize and sustain these recurrent resources. The proposed approach of financing the Program in phases -- this first phase represents less than a fifth of the total Program, and would generate incremental recurrent costs of about US$130 million -- also provides a test of the durability of public support for the Program. Continuation of Bank financing beyond this first phase will require continued broad support -- including budget support -- from the public and the Government. The fact that the Program enjoys broad political and public support is expected to help ensure the longer-term sustainability of the Program.  Page 19 2. Critical Risks (reflecting assumptions in the fourth column ofAnnex 1): Risk Risk Risk Minimization Measure Rating Annex 1, cell 'from Outputs to Objective" * The high expectations established by the S Establishment of a suitably staffed Program Government's Basic Education Program Coordination Team to coordinate specialized could exceed the Ministry's implementation consultant teams. Provision of undesignated capacity. TA resources to support Program implementation as needs arise. * There is a risk that Program investments may M Training and software development will be not be fully effective due to lack of monitored as integral Program elements to be complementary inputs (as training or sure that they keep up with the needs of educational software), or of the necessary Program investments. The availability of recurrent budget support. recurrent budgets will be monitored; the mix of new school investments will be altered, if necessary, to reflect recurrent budget availability. * The information technology hardware and M The information technology activity provides software provided under the Program could for the renewal of hardware and software as the suffer from rapid obsolescence unless Program is implemented. Leasing arrangements updated 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 will school construction and information demonstrate up-front the Government's technology (IT) -- could displace the less- commitment to educational equity. Close visible but crucial educational and targeting supervision by the Bank-as in agreeing on initiatives under the Program criteria for specific school investments-will also provide safeguards against imbalance in the Program. . The flexibility inherent in the APL could M The monitoring and evaluation component- provide room for unintended forms of particularly, the social assessment-and implementation, rather than promoting the intensive supervision by the Bank (for which desired responsiveness in pursuing Program the Department is planning to relocate key staff objectives. 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 IT software could delay the offering of capacity, including ETGEM and the project computer 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, with resource centers may lack the capacity to at least 3-year warranty contracts. provide technical support to outlying schools. 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 Measure Risk Despite the Government's best efforts to induce S M Social assessment and popular compliance with its new compulsory eight-year participation activities under the basic education policy (including an aggressive Program will monitor public school promotion campaign, and improvements in perceptions of the Program and school quality), some parents still may not send compliance with the Program, their children-and especially their daughters-to and identify appropriate school. The mix of school investments under the strategies for improving Program Program-e.g., replacing some village schools equity and compliance. with centralized bussing schools-could unintentionally promote this outcome. A lack of cooperation among the various elements G M Leadership and personal of the MONE which are involved in the Program involvement of senior could undermine effectiveness of the Program. management of the MONE, and the creation of a highly motivated project team and steering committee will facilitate interministerial coordination. Involvement of the appropriate consultant support will also minimize the likelihood that Program implementation would be frustrated by non-cooperative behavior on the part of MONE units. Type of Risk - S (Social), E (Ecological), P ( Pollution), G (Governance), M (Management capacity), 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 and financed under the first APL, c) annual work plans for the Monitoring and Evaluation component, d) the program for assessment of leaming achievement which is to be carried out under Phase I of the Program and financed under the first APL, e) the technical specifications for information technology hardware and software for the 2,828 computer resource centers to be equipped during Phase I of the Program and financed under the first APL, f) terms of Reference for the IT, Education, Monitoring and Evaluation and Administration Units of the Project Coordination Team, g) performance indicators for Program implementation and h) use of Bank Procurement procedures 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 for review 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; and d) that records of expenditures financed under the APL be audited by June 30 of each year by independent auditors satisfactory to the Bank. He Readiness for Implementation [X] The engineering design documents for the first year's activities are complete and ready for the start of project implementation. [X] The procurement documents for the first year's activities are complete and ready for the start of project implementation. [X] The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. I. Compliance with Bank Policies [X] This project complies with all applicable Bank policies. Task Team Leader: Mich el Mertaugh (ECSHD) 6cting 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 and year basic education and improve school enrollment rates to 100%. * APK statistics financial commitment to education quality. * Progressive increase in learning * ERDD assessments the Basic Education achievements. of learning Program and achievement 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 Program basic education. enrollments is eliminated. * APK statistics is sustained. a Transition rates between grades 5 * Social assessments * Balance is maintained Achievement of the Program goals and 6 increase to 100%. * ETGEM statistics between high-visibility will occur progressively, starting with * Enrollment rates for preschool components (e.g. school the highest priority needs: increase from 7 to 16%. construction and IT) and the Program's less- Phase I (APL1): Establish capacity visible educational and to implement, monitor and evaluate targeting initiative. the Program. Initiate investments to * The monitoring and achieve Program objectives, evaluation component -- starting with the highest priority particularly social needs. assessments - is used to inform the design of Phase 2 (APL2): Continue subsequent phases of the investments. Use feedback from Program. monitoring process to improve effectiveness of investments in meeting Program objectives. Phase 3 and Subsequent Phases: Continue investment program until Program objectives are fully met. Use feedback from monitoring process to improve effectiveness of investments in meeting Program objectives. Project Development Objectives (Objective to Goal) (Phase I): Accommodate all 1998 grade 5 Actions to be taken before * PCT reports. * Implementation capacity graduates in grade 6 in the 1998/99 commitment of APL2: * Supervision and of the MONE -- at the school year and establish the capacity * Arrange for the provision of an appraisal missions. central, province and to implement, monitor and evaluate agreed basic package of sub-province levels is the entire Program. educational materials to all rural strengthened. schools.  Annex I page 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 cooriinate Hakkari and Bitlis, or other implementation of the provinces agreed with the Bank. various Program * Implement the agreed training activities including program for teachers, school consultant inputs. principals and inspectors. * Consultants are engaged * Begin implementation of the as necessary to monitoring and social assessment complement the program. Ministry's * Develop the school infrastructure implementation capacity. program for the second phase of the Program. * Finalize specifications and bidding documents for the second phase of IT procurement. * Disburse or commit at least 60% of the first APL. Project Outputs: (Outputs to Objective) 1. Capacity increased to provide By the end of the entire Progra,n * SIS statistics * Effective coordinalion universal coverage of eight year * Construction of approximately * APK statistics between the PCT, MONE basic 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 tc areas. * Bank staff reports ensure the availability of (back-to-office complementary inputs By 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 targeting initiatives 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 and weeks of effective in-service implemented training per year. successfully. * All provincial administrators and managers trained. * 1,500 new inspectors hired and trained. By end Phase 1: * 300,000 existing teachers and 30,000 new teachers participate in in-service training programs. * 3,000 school inspectors trained.  Annex 1 page 3 of 4 -,9 N,rrt.,ve Sunir ; e Perfrmu- Iniaor Moiorn an Crtia supti lato 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 as well as centralized bussing schools. 4. Integration of information By end Progranv technology (IT) into the * Computer laboratories installed in curriculum. nearly 15,000 schools. * 18,000 IT coordinators ("formators") are trained. * 200,000 education staff trained in computer 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 Progranv within the Ministry of National * Channels for stakeholder Education. consultation and systems for social impact monitoring and evaluation strengthened. * Assessments of student leaming achievements implemented. By end Phase I: * Monitoring and evaluation capacity for the Program established. * APK's MIS system for school planning and management updated and 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 financial Coverage 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 activities schools. * 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 the personnel. * contracts Program. * Distribution of education * audits materials to rural schools. * evaluation reports * Upgrading and equipping of IT  Annex I page 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 poor households. 3. Program Implementation Support US$47.4 million * Equipment and technical assistance for implementation management. 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 spend public 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 in the education sector where outcomes may take many years to have their real impact, as well as having a process 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 of project performance indicators have been developed to provide feedback in the short, medium and long term. Project input indicators show what the project intends to provide in terms of components such as numbers of schools built, teachers trained, and equipment provided. Project process indicators measure what actually happens during implementation and are benchmarks against which progress can be measured. These indicators can be conceptually divided into physical and financial aspects. Project output indicators measure the output for each project component in comparison to whether project goals are being achieved, and on good baseline data. Project impact indicators illustrate development impact by measuring the impact of the project on 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 are summarized below. Cost estimates, schedule of activities, and institutional arrangements are also indicated. (a) Input indicators will focus on civil works, computerization, and procurement of educational materials. They will include: (a) the establishment of prototype school designs and specifications; (b) the pace of acquisition of sites and approvals necessary for construction; (c) the construction of new schools, new classrooms in existing schools, teacher housing and student boarding places in urban and in rural areas, by region; (d) the provision of quarterly progress reports on construction by the construction management and supervision unit; (e) the amount of computer equipment purchased, computer software and education materials developed; and (f) the elapsed time in procurement processing for key project components. (b) Process indicators will provide an insight on general educational trends and will include: (a) pre-school and basic education net enrollment by location (rural/urban and regional) and  Annex 1: Attachmeit I page 2 of 4 gender; (b) drop out, transition and, completion rates of 8-year education by location and gender and the distribution 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 computer classrooms 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 the curriculum; (g) number of months allocated for in-service training programs; (h) number of trainees attending adult education courses by location and gender; and (i) number of children in need of support through the social assistance programs. Public support and commitment, as measured by public opinion surveys, will also constitute an important process indicator in defining the participatory potential of the project. 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 region and type of settlement, schooling, and educational activity; (b) cost per graduate; (c) cost of educational 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 of students in private schools; and (f) citizen contributions by type and region. (c) Output indicators will reflect educational achievements and will be measured through a number of standardized tests: (a) level of general education; (b) critical thinking: (c) level of math knowledge; and (d) level of reading knowledge. The results will be monitored by region, settlement type and gender. Output indicators will also focus on the trends with respect to teachers and schc,ol administrators. Specifically, changes in societal trends that would help produce greater demand for educational professions and increase excellence within the profession are of interest. Indicators would include: (a) applications to faculties of education, number of students of basic education in absolute and relative numbers; (b) demand for vacant teaching posts; (c) trends with respect to salaries and other benefits of educators in comparison to other state employees and by location; (d) resignations and retirements; and (e) the total number of teachers available by location, gender, type and level of education of (teachers and administrators). (d) Impact indicators are of particular importance in guiding the implementation of the Basic Education Program in the medium term and in the identification of innovative responses to monitoring efforts. The MONE intends to assess the impact of Program activities with respect to the key components of the Program. The impact monitoring activities aim at uncovering the perspectives of four key stakeholders: parents; students; teachers; and education managers. They seek to identify the sociial impacts 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, needs and expectations of key stakeholders with respect to BEP and its components. To this end, a recent baseline of administrators and students is available. Equally important, national participatory assessments of all stakeholders have been completed. Attitudinal data are also available through socilal assessment surveys for each of the stakeholder groups. The results of these surveys have already been incorporated in the design of the Program. Nevertheless, each of the existing baselines are somewhiat partial; thus a comprehensive baseline is an essential first step towards impact assessment. Baseline and  Annex 1: Attachment I page 3 of 4 its updates will provide crucial information about stakeholder satisfaction with publicly provided educational services and appropriateness of incentive structures created by the BEP. (ii) Topical Social Assessments aim at measuring BEP's effectiveness in selected areas of concern 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 Response Facility (MRF) incorporated into the Program. Results of select activities funded under the MRF will also be assessed. * Impact of pre-school education. An early assessment of the effectiveness of the existing pre-school educational facilities is needed. This will include comparisons of privately and publicly managed pre-school facilities/programs, an important input to the goal of the BEP to broaden pre-school education to enhance the quality of basic education. A small scale learning effort is planned that would rely heavily on in-depth participatory observational methods. * Impact of school based community programs. Currently, many schools are offering programs to encourage participation of parents in schools, through literacy, crafts, and other training activities. A stocktaking of these would be very important. For this purpose, a participatory study based on 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 to incorporate them in broadening the community education component of the Project. * Impact of social assistance activities: Based on a small sample of communities/school/students who are recipients of social assistance support, and in cooperation with the Social Assistance and Support Foundations at the provincial and country levels, an assessment of the effectiveness of this component will be undertaken. Many of the proposed social assistance interventions are being introduced recently and will thus require regular monitoring to allow the formulation and implementation of adaptive measures. * Working children and other groups in need of social assistance: Understanding and responding to the needs of working children is a major challenge. Substantial social assessment data are already available indicating that family expectations for children to contribute to household income hinder children's ability to attend schools. Similarly, there is evidence of the pressure children face in many 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 the type of constraints they face as a result. Since responses have to be custom tailored to the needs and constraints, 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 other new elements. A substantive first year review of educational and social issues pertaining to boarding schools, and current busing arrangements will also help guide Project-implementation. As central rural schools are created, their early impact will also need assessment. These will be conducted in a timely manner early in Program implementation through small scale in-depth studies. * Impact of the quality of school environment, reduction of class size and elimination of double shift practices. The purpose of this study is to measure impacts of changes in the physical school environment on key stakeholders. Once the first wave of school construction is completed and students spend an academic year in these schools, a comparison of old and new school environments  Annex 1: AttachmenU l page 4 of 4 will be undertaken in a controlled socio-economic environment. At the same time, the impact of the reduction of class size on educational attainment will be assessed. Likewise, effects of the gradual elimination of double shifting will be evaluated. (iii) System-wide and macro development impacts of BEP. It will be of utmost importance to be able to demonstrate the long-term developmental impacts of the medium term Program initiated 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 of Program implementation to lay the foundations for the study of these impacts. * Model preparation for medium term macro impact assessment of BEP. This will consist of an effort to prepare the model for the required assessment, as well as to establish the baseline macro data. * Baseline study with graduates. Using existing international models, an attempt will be made to follow-up the graduates of BEP, assessing the degree of success they attain in participation in higher 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 Response Facility (MRF) to support pilot initiatives from communities, educational non-governmental organizations (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 existing budgetary 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 in local education. * participation. Actions aimed at increasing the participation of parents, teachers, and civil society in general in education reform. * technical feasibility. Strategies based on improving technical aspects of the education reform 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 effective monitoring 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 90,000 270,000 Computers and sofware Outside consultants (2) 100,000 100,000 100,000 300,000 Education materials and activities 2. Process Indicators Monitoring In-house/outside consultants (2) 60,000 60,000 60,000 180,000 General education trends Cost effectiveness 3. Output Indicators Monitoring Educational 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 Monitoring a) Basic attitudes Outsourcing 500,000 500,000 1,000,000 b) Topical Social Assessments Pre-school effectiveness Outsourcing 160,000 160,000 Community programs Outsourcing 160,000 160,000 Social assistance Outsourcing 160,000 160,000 Working children Outsourcing 160,000 160,000 Innovative elements Outsourcing 180,000 180,000 School environment/quality Outsourcing 250,000 250,000 c) System-wide and macro development Macro impact asessment of BEP Outsourcing 200,000 200,000 400,000 Strategy development Outsourcing 160,000 160,000 320,000 d) Baseline study with graduates 100,000 300,000 400,000 Evaluation Outside consultants 100,000 100,000 100,000 300,000 Monitoring Response Facility Program Coordination Unit 1,000,000 3,000,000 6,000,000 10,000,000 Information/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 2,000,000 MOE Planning Capacity Building 490,000 2,600,000 3,090,000 TOTAL _ 2,900,000 9,020,000 9,050,000 20,970,000 NOTES: Approximate consultant cost (per person, full time, annual) In-house local consultants $30,000 Outside consultants $50,000  Annex 1: Attachment I Talble 2 Monitoring and Institutional Arrangements 1998 1999 2000 2001 ID Task Name Jan Jul Jan.. Jul Jan Jul Jan Jul 1 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 I 41 Institutional Capacity Building 42 In-service training for planning staff 46 Procurement of equipment for planning offices -  ANNEX 2 Turkey Basic Education Program Project Description OBJECTIVES AND CONTENT 1. The Basic Education Program is the Turkish Government's comprehensive investment program to achieve the objectives of its new basic education strategy.' The objectives of this strategy 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 education schools 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 and recruitment of additional teachers and the design, construction, expansion and upgrading of basic education schools. b. Improved Basic Education Ouality, which will support in-service training for teachers, inspectors, and school principals, provision of textbooks and educational materials for basic education schools, the provision of hardware, software, and training for information technology in basic education schools, and a number of other initiatives designed to improve the quality of basic education. C. Program Implementation Support, which will provide equipment and technical assistance for implementation management, including maintenance of Program accounts. d. Monitoring and Evaluation, which will assess the outcomes of the Program against several categories of performance indicators, and provide continuous feedback to Program management to improve the effectiveness of the Program in meeting its objectives as implementation progresses. This component also includes support for a Monitoring Response Facility to implement recommendations for school-based initiatives arising from the monitoring and evaluation process, and public media efforts to promote compliance with and support for the Basic Education Program. 3. The first and the second components respectively address the Program objectives of expanded basic education enrollments and improved basic education quality and relevance, as well 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 as Annex 5.  Annex 2 page 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 classroom capacity will contribute to improved quality of basic education by reducing classroom overcrowding and multiple-shifting. PROGRAM IMPLEMENTATION SCHEDULE AND LOAN PHASING 4. The Program duration is defined by those activities which are to achieve the objective of universal eight-year basic education. Although the Government plans to implement the Basic Education Program over the next three years to meet its enrollment targets, implementation of some 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 disbursement forecasts provided in this proposal are more conservative than the schedule which the Government intends to follow in implementing the Program. 5. APL financing of US$600 million is proposed in two overlapping APLs of US$300 million 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 more quickly). The timing of these first two APLs and the processing of subsequent financing for the Program will depend upon the actual pace of implementation of the activities which the APLs are financing, and the actions which serve as triggers for progressing to the second APL. The triggers for release of the second APL and for launching the preparation of subsequent financing are designed to demonstrate the Program's educational equity objective up front, and to respond to financing needs as implementation of the Program progresses. 6. Some activities in the Program are well developed and will be supported under the first phase of the APL financing. Other activities have been agreed as essential elements of the Program, but are still under development by the Ministry. Implementation of these activities will be supported in subsequent phases of APL financing. The level of detail provided here reflects the state of readiness of Program elements. Activities which are ready for implementation during the first phase are described in greater detail than activities which will be implemented during subsequent phases. For some of the activities, further detail is provided in Documents Available in the Program File (Annex 8). LOAN FINANCING 7. The proposed US$300 million Adaptable Program Loan (APL) would support initial implementation of the Government's Basic Education Program. The total cost of the First Phase of 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 foreign exchange 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 -- Factors Influencing School Attendance in Basic Education in Turkey, with Special Emphasis on Female Education, by Prof. Dr. Niyazi Karasar, November, 1991 -- found that some rural parents are reluctant to send their daughters to school because they consider that the education provided in their village schools is of low quality and relevance to their needs. Improving the quality and relevance of basic education is expected to lead to imnproved school attendance, as well as improved learning achievement.  Annex 2 page 3 of 14 total project cost including contingencies and taxes. The local cost including taxes amounts to about US$2,150.0 million or about 85.5 percent of total cost. The first APL of US$300.0 million will finance about 14.4 percent of total Phase I cost net of taxes and duties. The financing plan, summarized below in Table 1, is shown in further detail in Annex 3. Details of the allocation of the proceeds of the first APL, as well as the Schedule of Disbursements, are shown in Tables 6C and 6D, respectively, in Annex 6. Table 1: Proposed APL Phase I Financing (in US$million) Provincial The 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 14.5 II. Local (Excl. Taxes) 1,425.2 83.1 29.6 1.7 154.9 9.0 105.1 6.1 1,714.9 68.2 Ill. Taxes 404.7 93.0 6.6 1.5 - - 23.9 5.5 435.1 17.3 Total 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 under the first APL for these activities, although an extensive program of in-service training will be ftnanced under the second component. I.A. 1. The Ministry intends to recruit about 150,000 teachers, and inspectors to accommodate the basic education enrollment increases which are expected under the Program.3 The Ministry is working closely with the Higher Education Council (YOK) and specific universities to provide the necessary preservice teacher training for these staff, and is in the early stages of recruiting the 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 National Education and universities are collaborating to improve the quality of teacher training through redesigned curricula and foreign fellowships, as well as improved conditions at teacher training colleges. More recently, teacher training colleges have adjusted their admissions and teaching programs to meet the requirements for new teachers under the Basic Education Program. YOK has adopted a number of initiatives, including introducing new training programs for English teachers and preschool teachers, and diverting secondary school teacher trainees -- who are currently in oversupply -- to basic education. These initiatives are expected to supply 30,000 new teachers in 1998, 50,000 in 1999 and 70,000 in the year 2000, in addition to the approximately 17,000 teachers who graduate each year from teacher training programs for basic education 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 the Program is estimated at about 30,000 teachers per year in 1998-2000.  Annex 2 page 4 of 14 regulation to allow retired teachers to return to work on a volunteer basis. This provision attracted 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 which will improve the efficiency of teacher deployment. Currently, insufficient incentives for teachers to serve in poor rural areas -- especially in the East and Southeast -- lead to many unfilled teacher positions in these areas. Earlier this year, Government approved a substantial increase in pay -- amounting to a 300 percent increase in the existing hardship allowance, and a 30 percent bonus -- for teachers working in difficult areas. In addition, legislation has recently been adopted which increases teacher salaries by 18 to 40 percent over the previous teacher salary scale. I.A.4. Equally significant changes will improve flexibility in teacher assignments. The Ministry has prepared draft legislation which is under consideration by Parliament to eliminate the practice of guaranteed employment to all teachers who are married to civil servants, in the city where their spouse is employed, regardless of the demand for teachers. This excessively generous provision is responsible for an excess supply of about 18,000 teachers in the larger cities in Western Anatolia. LB. School Construction. Extensions. and Upgrading: The first APL will finance US$48.4 million for the rehabilitation and related architectural and engineering design work of about 200 village schools, 100 central village schools and 40 urban schools in the provinces of Sirnak, Van, Mardin, Hakkari, and Bitlis, (or other provinces as agreed with the Bank), while the Government and cofinanciers will finance the bulk of the Phase I infrastructure program, including the engineering work, construction management and furnishing. I.B.1. The largest category of investments under the program is the construction, furnishing and 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. The Program also provides for the rehabilitation of schools to make them more functional and attractive to the community which they are intended to serve -- thereby inducing better school attendance, as well as better quality of education. Together with the improvements in educational inputs, student assistance, and basic education promotion which are being provided under the Program, these improvements to existing schools are expected to contribute to higher school attendance. I.B.2. The capacity of the existing basic education physical plant is insufficient to accommodate many students who complete grade 5. Currently, about 535,000 of the children who complete grade 5 each year do not continue to grade 6. To accommodate this anticipated increase in enrollments, a major increase in classroom capacity is needed. Additional classrooms are 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 construct approximately 121,500 new classrooms during the next three years, providing additional space for a total of 3,650,000 students. To complement these additional classrooms, ancillary facilities for other curricular and extra-curricular activities, including laboratories, libraries, areas for administrative and support functions, will also be provided. In addition, the Ministry plans to  Annex 2 page 5 of 14 provide about 110,000 boarding places4 to house students from isolated localities in fully equipped central village schools, as well as approximately 7,200 residential units for teachers in rural areas. In addition to these investments to expand basic education capacity, much of the existing 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 to comply with prescribed norms. I.B.3. The Government intends to complete the expansion of basic education capacity under the Program by the year 2001, in three successive phases of contracts to be let during the three years of Program: 1998, 1999, and 2000. About 13 percent of the total school infrastructure program is planned for inclusion in the first phase, 37 percent during the second phase, and the remaining 50 percent during the third phase. These annual phases of contracts for school construction are distinct from the timing of the planned sequence of APLs. The timing of the three phases of school construction, extension, and upgrading is driven by the school capacity requirements for the next three school years and the civil-works contracting cycle, whereas the timing of various APLs will depend upon fulfillment of specified performance triggers and the need for external financing to supplement the Government's own resources. How closely they coincide or how much they overlap will be determined by actual implementation progress in the various elements of the Program upon which they depend. I.B.4. Because the time the Government has set for completing the first wave of construction for new schools is so compressed, it has decided to contract all Phase I schools using Government Procurement Procedures. Therefore, Bank financing during the first APL will be limited to upgrading 300 rural schools in provinces with the greatest educational needs, and 40 urban 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 school construction will be prepared as the first phase is implemented. Selection criteria for these schools and procurement procedures are to be developed in consultation with the Bank, such that expenditures on these schools could be eligible for reimbursement under the second APL, and possible 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 detail provided for the first phase than for the subsequent phases. Table 3, below, summarizes the requirements and physical targets of the component. 4 The Ministry had initially proposed a heavier reliance upon regional boarding schools in the Program to meet the needs of dispersed rural population. But it found under the Basic Education Pilot Project that a more cost-effective approach for most rural areas consists of a combination of improving existing primary schools, and providing schooling for the upper grades of basic education through extensions to existing schools and bussing. Regional boarding schools will be developed under the Program only as a last resort, when distances and topography preclude bussing, and then only for the upper grades of basic education. Cost-effectiveness analysis was instrumental in developing the approach to be implemented under the component, and will play an important role in refining this model as the Program is implemented.  Annex 2 page 6 of 14 Table 3. Basic Education Program Infrastructure Investment Targets INDICATORS/TARGETS Phase I Phase II Phase IlIl Total BEP BEP Infrastructure Program (completion rate) 13% 37% 50% 100% New Construction (Number of New Student Places) 479,180 1,363,820 1,843,000 3,686,000 of 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 60,750 121,500 of 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 33,400 Number of Rural BE Schools 300 11,000 14,700 26,000 Number 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 25,600 New Residential Units Built 936 2,664 3,600 7,200 Existing 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 design of the new schools to be constructed under the first phase of school construction, and (b) school construction -- including completion of ongoing school construction projects and contracts, construction of new schools, and rehabilitation and upgrading of about 300 existing rural schools and 40 urban schools. I.B. 11. Specifically, these activities involve the following: a. Needs Assessment and School Design: Design and accommodation standards for planning basic education facilities were developed under the Basic Education Pilot Project. These norms were compiled in a Standards Manualfor School Buildings which will be used as a handbook for the construction and upgrading of schools under the Basic Education Program. The Manual also includes design norms for student boarding facilities and teacher housing, as well as the standards for furnishing and equipping each type of facility. A set of standards is also being prepared for the upgrading and extension of existing schools. Prototype school building designs, based upon the design principles and standards in the Manual, have been commissioned from architectural and engineering teams from five major national universities. These prototype designs (drawings and technical specifications) will be used for the detailed planning and construction of schools, and will be adapted to suit the specific characteristics of individual schools and sites. The detailed engineering design work for the first wave of school construction will be overseen by four regional construction management consultancies.  Annex 2 page 7 of 14 b. School Construction and Upgrading: Under Phase I, the Ministry plans to construct 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 in boarding schools, and housing for about 10,000 teachers in rural schools. This stage of the infrastructure program will also include the refurbishing and remodeling of nearly 2,828 Information Technology Resource Rooms in existing schools (Component IIA). About half of the Phase I infrastructure program is already under implementation. Building contracts for the rest of the schools are expected to be tendered and awarded by June, 1998. The Ministry expects that all Phase I construction contracts would 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 construction program will likely carry over into 1999. In addition to the new school construction, about 300 rural schools in the provinces with greatest educational needs -- about 200 five-year village schools in the provinces of Sirnak, Van, Mardin, Hakkari, and Bitlis (or in other provinces as agreed with the Bank), and about 100 centralized, eight-year rural schools in the provinces of Kocaeli, Yalova, Batman, Igdir, and Bartin (or in other provinces as agreed with the Bank) -- will be upgraded to the new standards. About 40 urban slum schools will also be upgraded to these standards in the province of Ankara. The rehabilitation/upgrading of the 340 schools is to be financed under the first APL. Partial completion of upgrading for the 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 under the second APL, and possible subsequent lending, will support investments in new school construction and upgrading. The second phase of the infrastructure program is expected to begin implementation in early 1999 and will cover about 37 percent of the total infrastructure development planned under the Program. Phase III would cover the remainder (50 percent) of the 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 basic education learning outcomes and the relevance of basic education. Under the Program, quality improvements 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 the upgrading 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 in the 1998 budget for ongoing and committed contracts, as well as TL 102 trillion (about US$450 million equivalent) for new school construction, plus TL 35 trillion for the purchase of school equipment and TL 25 trillion for site acquisition for new schools.  Annex 2 page 8 of 14 II.A. 1. In its efforts to improve education quality and the competitiveness of the country's labor force, the Ministry has introduced computer literacy and training into the basic education curriculum and plans to equip IT resource centers in all 8-year basic education schools. Turkey has already experienced rapid growth in its informatics workforce. Nevertheless, the proportion of informatics-literate workers in the total labor force remains significantly below that of other OECD and emerging economies. In light of the increasing demand for jobs requiring basic computer skills, and the technological shift towards personal computing and distributed applications, the Government has recognized the need for a strategy to promote the diffusion of computer literacy. The objective of the IT component is to enhance learning by using IT as a productive tool across the basic education curriculum. IL.A.2. The Ministry is in the process of developing specific inputs considered essential by the Bank (and following international best practice) for using technology successfully to support education reform including: a) a policy paper on why and what the Ministry intends to use IT to support various kinds of learning activities, including a clear set of goals that can be communicated to teachers, students, parents, and industry alike, b) a strategy on how to integrate IT into the curriculum, including an approach for educational software provision, methods to get students to become computer literate, the grades and courses which are to use IT, how continuous teacher training will be organized, and quality assurance, and c) a three-year model plan for schools in using IT in the curriculum each week, including competencies to be developed, software to be used, individual/group approaches, teacher training, extracurricular use of the laboratories, and community activities. II.A.3. The design of the IT activity builds upon the successful Computer Experimental School component under the National Education Development Project (NEDP), carried out since 1992 by the General Directorate for Education Technologies (ETGEM). Under this activity, ETGEM established computer laboratories and provided training for teachers in 235 primary and secondary schools across Turkey. It also developed computer-aided education programs for the vocational high schools. The Computer Experimental School component was evaluated by an international group of experts in October, 1996, and found successful in integrating IT into learning and engaging community involvement in the initiative.6 Based on this finding, the Ministry is expanding the program to an additional 182 schools, and drawing upon staff experience and expertise for the Basic Education Program. II.A.4. The Program will support the following activities under the IT component: a) training of information technology (IT) coordinators, teachers, and administrators in computer literacy courses and in computer-aided instruction through in-service training, b) a phased introduction of computer resource centers to, first, existing schools in sub-provinces with high student populations, then to regional basic education boarding schools, and subsequently to remaining basic education schools, c) Turkish educational course software provision (e.g., keyboarding, 6 The independent review of the Computer Experimental Schools under the National Education Development Project (available in the Project File) found that administrators, teachers, and students were all enthusiastically and creatively using the equipment and software provided under the project. In the schools 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 in their learning environments. In some cases, support from the Parent/Teachers Associations (PTAs) was used to upgrade equipment, provide additional hardware, and even to hire laboratory technicians.  Annex 2 page 9 of 14 curricula-based instruction, reference, tutorials, languages, dictionaries, Turkish grammar, simulations, experiments, and libraries), d) expansion of Internet connectivity and services from its current proof-of-concept stage to a more advanced operational stage, in order to allow schools to be linked to each other and Turkish educational web sites to be made available for use by teachers and students, and e) strengthening communication between IT coordinators, teachers, and universities through information bulletins, web sites, and annual, regional workshops to review best practices. III.A.4. Phase I IT Investments: During Phase I, hardware, software, and training will be provided to equip, staff, and operate 2,828 IT rooms in existing eight-year basic education schools throughout the country. At least two schools in each sub-province will be equipped with IT rooms during the first phase of the APL. The first APL will include financing for preparation of the rooms which will house the 2,828 computer resource centers, hardware, software, training of full-time coordinators orformators for each resource center, and shorter programs of training for teachers whose students will use the facilities. The Ministry is in the process of identifying secondary teachers with suitable skills to becomeformators. All are to be selected by the end of May, 1998, in time for intensive training during the summer, 1998. Training is to be provided by contracted teams of information technology experts who are experienced in educational applications. 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 teacher training costs -- largely travel, accommodations and materials development -for the first year of Program implementation. II.B.1. The Program aims to provide two weeks of in-service teacher training each year -- one week each at the beginning and end of the school year -- for approximately 305,000 basic education teachers and school principals, including those assigned to the new schools being constructed under the Program. Training will also be provided for the roughly 3,000 school inspectors and 1,236 education administrators, including provincial and sub-provincial education officials. The Bank has reviewed and agreed to the general program of training to be provided under 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 modules designed by the Ministry. Courses will cover topic areas including, inter alia, pedagogical methods, learning assessment, community participation and classroom management and communication. The training courses will also make use of the materials and training modules developed under the Pilot Program to equip teachers to teach more effectively in difficult teaching environments and to involve parents in school activities. Teachers will have the opportunity to supplement and build upon these two weeks of training during on-site visits from inspectors, and -- in rural areas -- monthly seminars held in central villages. II.B.3. Training for provincial education officials and school principals aims to strengthen management capacity at the school level, in order to improve decision-making, parental participation in school affairs, and support for teachers' professional development. The Ministry has already developed a number of in-service training courses for managers addressing education planning, communication, leadership training and the use of technology in schools. II.B.4. Counseling is an important ingredient for improving student performance and preparing students for post-basic education and employment. Extending the duration of. compulsory  Annex 2 page 10 of 14 education will greatly increase students' options and opportunities for employment and further education. Guidance counselors are important facilitators for assisting students in making informed choices among these options. The Program will address the serious shortage of guidance counselors -- who are currently employed in only one percent of urban schools -- by raising awareness of counseling issues among all staff, and particularly for those in schools without counselors. The Ministry is in the process of developing a resource guide on guidance issues, including psychological counseling and career guidance for preschool and basic school teachers and school managers, and plans to incorporate training on counseling into the in-service training curriculum for teachers and administrators. I C. Provision of Essential Teaching and Learning Materials to Rural Schools: The first APL will include US$47.6 million to provide and distribute a package of teaching and learning materials to 25,900 schools in rural areas. II.C. 1. In order to improve learning achievement in poorly equipped rural schools, the Program will provide a basic package of teaching and learning materials to nearly all rural schools for the 1998-99 school year, and a full set of required textbooks to all rural schools for the 1999-2000 school year. Many rural schools lack adequate supplies of educational materials for satisfactory teaching and learning. Children in rural schools also often lack textbooks because of household income constraints. The Basic Education Pilot provided a basic package of teaching and learning materials to 274 five-year village schools in six provinces in Eastern and Southeastern Turkey, based on a list of materials which was developed in consultation with teachers and inspectors from rural schools in those provinces. II.C.2. Phase I Teaching/Learning Materials: The basic package of educational materials to be provided to the 25,900 rural five-year schools will be based on the package which was provided to 274 rural primary schools under the Basic Education Pilot Project (costing approximately $3,000 per school). An augmented package will be provided to the 4,800 rural eight-year basic education schools, and is estimated to cost about three times as much as the package for the rural five-year schools. The lists of educational materials which will be distributed are based on those which were developed in consultation with teachers and inspectors from rural schools for the Basic Education Pilot Project. II.C.3. Phases II and III Textbooks: Although textbooks are normally purchased by households, some parents of children in rural areas cannot afford them. The Ministry plans to address this need in the second year of the Program, by providing a free set of required textbooks to all rural schools. In order to ensure the maximum choice of titles at the best price, it is planned that textbooks will be procured for all rural basic education schools by approaching the publishers of all Board-approved titles, and requesting variable discounts from the list price depending on the volume of purchase. These discounts will be translated into actual prices and provided to all provinces and subprovinces for their selection and use. On the basis of this information, the Ministry will collate requests, procure in bulk from each publisher, and contract for distribution to the provinces. The estimated cost of this procurement -- to be implemented under the second APL -- is US$15 million. IID. Student Social Aid: The Ministry expects to finance its student social aid initiative (costs estimated at US$45 million per annum) through grant funds.  Annex 2 page 11 of 14 II.D.1. The Ministry's current social aid program for improving school attendance and performance for low income students will be supported and expanded through the Program. Part of the rationale for this effort is to offset the economic burden to some households of extended compulsory education. Under this initiative, the MONE uses its network of girls' vocational schools and adult education centers to make and provide school uniforms and meals to poor students 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 children attending village five-year schools -- by inviting the involvement of NGOs and school-based community groups. IIE. Assessment of Learning Achievement: The first APL will support US$0.7 for the development and implementation of assessments of learning outcomes. II.E. 1. Analysis of the learning outcomes of the Basic Education Program is a key tool for monitoring the impact of Program interventions and tracking quality developments. This Fall, building on the existing assessment tools developed under NEDP, the Department of Educational Research and Development (ERDD) will administer representative surveys of approximately 70,000 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 and foreign language proficiency in 1999 and subsequent years. The results of the exams will be used to evaluate Program successes and shortcomings, and to make appropriate corrections in the Program. The results of the assessments will be shared with the provinces as an instrument for improving educational performance. COMPONENT III: PROGRAM IMPLEMENTATION SUPPORT III.1. The Program will be managed by a Program Coordination Team (PCT), headed by a Program Director reporting directly to the Undersecretary in the Ministry, in coordination with the relevant ministerial line units. Specialized consultants will be hired by the PCT as needed to lend expertise and implement various aspects of the Program. The PCT will contain managerial staff responsible for implementing program components in coordination with the line units. Seven managers will be recruited in the following areas: (i) infrastructure, (ii) information technology, (iii) educational interventions, (iv) monitoring and evaluation, and financial management and procurement. III.A. Support for the Program Coordination Team: The first APL will provide US$1.8 million in implementation support to the PCT in the form of specialized consulting services, study tours 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 Ministry personnel, who have adequate experience in managing and implementing educational investment projects. Some of these key staff have gained implementation experience and familiarity with Bank procedures under the National Education Development Project and the Basic Education Pilot Project financed by the Bank. However, given the magnitude and complexity of the proposed Basic Education Program, the Program and the first APL include the following consultant services: a) Procurement Specialists (lead specialist for procurement management and technical support for procurement of works, goods and services contracts), b) Financial Management Specialists (accountant/bookkeeper, financial management/disbursement specialist  Annex 2 page 12 of 14 with experience in international banking/commercial practice), c) Education Specialists (fields to be deternined as the Program develops), and d) Monitoring and Evaluation Specialists including data/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 consultants selected on the basis of their qualifications and experience for the specific assignment. Selected staff will have an opportunity to undertake training visits/tours (e.g. to observe successful basic education interventions in other countries, and to participate in procurement training at Bank Headquarters). 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, as agreed by the Ministry and the Bank, either to engage individual consultants beyond those identified above, or for institutional support in appropriate areas of Program implementation. IILB. Educational Management hqformation Systems: The first APL will provide US$3.0 million to strengthen educational management information systems, including school mapping. III.B.1 As described above (Component 1), additional capacity is required in the Ministry to strengthen 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 the Ministry's Council for Research, Planning (APK) to: a) improve the Ministry's educational information management capacity, b) train and strengthen APK technical staff in the use of state-of-the-art education management information systems, and c) acquire up-to-date computer hardware and software. COMPONENT IV: MONITORING AND EVALUATION IV.A. Social Assessment and Monitoring: Thefirst APL willfinance US$3. Ofor monitoring and evaluation of the Program. Most of the activities will continue throughout the entire Program (Phases I-III). IV.A. 1: Monitoring and social impact assessments will serve as key instruments for guiding Program implementation and development. Because of the flexible nature of the Government's Program and the APLs designed to support it, monitoring of indicators and assessments are vital for shaping the Program as it evolves. On-going evaluation will provide essential feedback for gauging progress, making course corrections, and responding to changing circumstances and lessons 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, on topics including preschool education, community-based activities (together with the related line units), 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 Information System (GIS) into the school mapping process, and the resources needed for setting up an integrated GIS/School mapping system at national and provincial levels 8 A description of the proposed indicators, studies and social assessments is included in Annex 1 Attachment 1.  Annex 2 page 13 of 14 adequately staff itself to coordinate the relevant activities across various departments of the MONE and its local offices. IV.A.2. The results of monitoring efforts will be evaluated in a participatory manner at several levels. First, the Project Coordination Team will evaluate the results jointly with the relevant departments of the MONE. It will also share results with the provincial and sub-provincial administrators and seek their feedback. Indeed, this will be an important step in the direction of creating local level capacity for Program monitoring and evaluation. The results will also be shared through regular national seminars which the MONE will organize for consultative purposes. Joint evaluation by the Bank and the MONE will also be carried out, culminating in annual joint reviews to be held in May of each year, and including the participation of international and national consultants with expertise relevant to the Program. IV.B. Monitoring Response Facility: The firstAPL will provide US$8.4 million to establish a Monitoring 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 developments arising during implementation, and to support the development of pilot projects and initiatives, consistent with Program objectives, at the school level. Implementation of educational reform programs 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 pilot testing prior to adoption and replication; and (c) new implementation channels which require support in the short term in order to be sustainable over the longer term. The MRF will allow parent groups, school administrations and teacher groups, and branches of the Ministry of National Education involved in the planning, preparation, implementation and monitoring of the Program to apply for funding to support school-based initiatives which are consistent with the objectives of the Program. IV.B.2. The MRF will be administered by the Program Coordination Team Director and will be an integral part of the monitoring and evaluation process for the Program. The MRF project cycle will be divided into three main stages: (a) monitoring of the program and promotion of its funding possibilities, (b) screening, appraisal and approval of funding applications, and (c) implementation -- including monitoring and evaluation. During the first stage, the administrator will identify issues and opportunities that could benefit from the MRF at the same time as it informs potential recipients of the existence of MRF, including its guidelines and eligibility criteria. Parent associations, schools, and groups of teachers will be eligible to apply. Program proposals submitted by potential recipients will be screened to identify those which meet the eligibility criteria. Proposals will designate performance indicators, as well as the need for technical assistance during implementation. Following approval of proposals, staff of the PCT Team Leader would work with the recipients to develop standardized reporting systems and the procurement of goods and services as appropriate. Monitoring of progress will be carried out by the Team Leader on the basis of regular reports and field visits, with an emphasis on disseminating lessons learned throughout the country. Draft criteria for MRF proposals are included in Annex 1: Attachment 1.  Annex 2 page 14 of 14 IV.B.4 The Bank would carry out reviews of the MRF work program on an annual basis, and ex post reviews of operations -- including procurement practices, the operations of the special account, and the general MRF performance -- on a quarterly basis. The first three activities to be financed under the MRF, and thereafter all individual MRF activities costing more than $30,000 would require prior Bank review. Accounting and auditing of the MRF would be included in the overall Project financial review mechanisms. IV. C. Basic Education Promotion: The first APL will finance US$1.9 million for a basic education promotion campaign. IV.C. 1 Although public support for the Basic Education Program is currently strong, because of the complex nature of the Program, it will be necessary to communicate timely information on its objectives, activities and progress with the full range of stakeholders and the public in order to maintain the existing level of attention. While there has been extensive public debate on the expansion 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 to provide more specific information on these developments with the public. Communication is also 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 be supported under Phase I of the Program, including public opinion surveys and other instruments for measuring popular support, and information dissemination through advertisements, publications, public discussions and other media. It will be important to establish in-house capacity to evaluate the information needs of the various stakeholder groups, the nature of the information needed, the appropriate channels of communication, the consistency of the communication 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 be procured from professional consultants/firms. Services that can be procured from qualified PR consultants 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 1 page I of 1 Annex 2: Attachment 1 Preparation of the School Infrastructure Component: 1. Estimates of additional capacity requirements were developed by the Program Preparation Team, in coordination with the Ministry's Research, Planning and Coordination Council (APK). Because of the need to act rapidly to define the construction priorities for the first wave of school construction, the Ministry has relied heavily on estimates -- from both APK and provincial education authorities -- in defining its initial (CY 1998) investment plan. The Ministry is currently refining this methodology for subsequent phases of the program in order to ensure better targeting and cost-effectiveness of investments. The Program includes technical assistance and equipment, to be financed udder the APL, to strengthen the Ministry's capacity in this area. 2. Aggregate estimates for new construction during the first year were based on projections of student numbers and existing capacity. Following the passage of the Basic Education Law in August, 1997, the 80 provinces were asked to provide data on student enrollments and existing facilities in rural and urban areas for each of the 921 subprovinces. Based on these data, APK estimated the number of additional classrooms needed for each subprovince by calculating the expected enrollments for the 1998/1999 school year and, subsequently, the number of classrooms needed 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 recommended by the Ministry as a framework within which each province was to develop its school investment plan. 3. In September, 1997, the Ministry provided the provinces with instructions and criteria for preparing their 1998 school investment plans. Criteria included the physical condition and accessibility of existing schools, the availability of teachers, and options for bussing students from neighboring villages to central schools. The provincial education authorities prepared their investment proposals in consultation with the provincial Governor and other members of the Provincial General Administration Council -- an official body responsible for approving all investment plans. The provincial proposals -- including infonrnation on the number and size of new schools to be built, as well as specifics on site availability and costs -- were presented to APK in February, 1998, at a conference of provincial Governors and provincial education directors. These proposals were then cross-checked with the classroom estimates, and either accepted by the Ministry or returned to the provinces for revisions. 4. In preparation for the second and third phases of school construction, the Ministry is refining its planning methodology to improve the precision of its plans, and decision-making on the appropriate types of infrastructure investments for particular applications (e.g. whether to accommodate expected enrollment increases in a particular catchment area by enlarging capacity in an existing school, by building a new school, by bussing students to another school with available capacity, or by sending students to a regional boarding school). In addition to gathering more detailed, school-level data, the Ministry will provide the provinces with more explicit criteria -- in consultation with the Bank -- for determining the most cost-effective school investments 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 integrate them into a national plan for basic education infrastructure. The Phase II APL and possible future Bank financing are expected to support these school infrastructure investments.  Annex 3 page 1 of 4 ANNEX 3 Basic Education Program Estimated Costs of Phase I Table 3A: Project Cost by Component % % Total (USS Million) Foreign Base Local Foreign Total Exchange Costs A. Phase I 1. Expanded Basic Education Coverage a. Construction and Upgrading of Basic Education Schools 1,187.8 196.1 1,383.9 14 58 b. Teacher Training and Recruitment 650.0 - 650.0 - 27 Subtotal Expanded Basic Education Coverage 1,837.8 196.1 2,033.9 10 85 2. 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 7 d. Assessment of Learning Outcomes 0.5 0.3 0.8 40 Subtotal Improve Basic Education Quality 166.9 135.2 302.2 45 13 3. Program Implementation a. Program Management Team 43.4 0.5 43.9 1 2 b. EMIS/School Mapping 1.2 2.2 3.5 65 Subtotal Program Implementation 44.7 2.7 47.4 6 2 4. Monitoring and Evaluation a. Social Assessment, Monitoring and Studies 2.7 0.7 3.3 20 b. Monitoring Response Facility 9.1 1.0 10.1 10 c. Basic Education Promotion 2.0 0.2 2.2 10 Subtotal Monitoring and Evaluation 13.7 1.9 15.6 12 1 Total BASELINE COSTS 2,063.1 335.9 2,399.0 14 100 Physical Contingencies 75.3 24.1 99.4 24 4 Price 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 3 page 2 of 4 Annex 3 Basic Education Program Estimated Costs of Phase I Table 3B: Project Cost by Category of Expenditure % % Total (US$ Million) Foreign Base Local Foreign Total Exchange Costs I. Investment Costs A. Phase I 1. School Construction and Upgrading a. New Construction 756.0 133.4 889.4 15 37 b. Rehabilitation and Upgrading 231.1 25.7 256.8 10 11 c. School Site Acquisition 106.4 - 106.4 - 4 Subtotal School Construction and Upgrading 1,093.5 159.1 1,252.6 13 52 2. Equipment and Materials a. School. Educational and Other Equipment 15.1 35.3 50.4 70 2 b. School Fumiture 82.4 4.3 86.7 5 4 c. Information Technology IT Hardware for Basic Educaton Schools 29.8 89.3 119.0 75 5 IT Software for Basic Education Schools 3.8 11.5 15.3 75 1 EMIS 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 6 d. Bank-Financed Books, Intellectual Property and Materials Prescribed Textbooks 20.0 8.6 28.5 30 1 Library Books and Intellectual Property 5.8 2.4 8.0 30 - Teaching Materials and Supplies 12.8 5.4 18.2 30 1 Subtotal Bank-Financed Books, Intellectual Property and Materials 38.4 16.3 54.7 30 2 a. 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 1 Subtotal 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 15 3. Consultant Services and Training a. Architectural & Engineering Design Fees Bank Financed A&E Services 1.1 - 1.1 1 Non-Bank Financed A&E Services 40.2 - 40.2 - 2 Subtotal Architectural & Engineering Design Fees 41.3 - 41.3 - 2 b. Specialized Services 3.9 0.7 4.6 16 - c. In-country Training 33.2 - 33.2 - 1 d. Training Abroad 0.0 0.1 0.2 80 - e. Studies and Research 2.7 0.7 3.3 20 Subtotal Consultant Services and Training 81.0 1.5 82.6 2 3 4. 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 Costs A. Phase I 1. Incremental Salaries 650.0 - 650.0 - 27 2. 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 2 Total Recurrent Costs 681.9 4.5 686.4 1 29 Total BASELINE COSTS 2,063.1 335.9 2,399.0 14 100 Physical Contingencies 75.3 24.1 99.4 24 4 Price 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.  Annex page 3 of 4 Table 3C: Financing Plan by Project Component Provincial The Govemment Administration The Would Bank National Donors Total Amount % Amount % Amount % Amount % Amount % A. Phase I 1. 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 58.5 b. 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 84.4 Z Improve Basic Education Quailty a. In-service Training Programs 5.8 15.7 - - 31.2 84.2 - - 37.0 1.5 b. Educational Materials 44.1 47.1 2.0 2.1 47.6 50.8 - - 937 3.7 c. Inrformation Technology 28.8 14.6 14.8 7.5 154.0 78.0 - 197.6 7.9 d.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 13.1 3. Program Implementation a. Program Management Team 42.4 95.9 - - 1.8 4.1 - - 44.2 1.8 b. 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 1.9 4. Monitoring and Evaluation a. SocialAssessment, MontoringandStudies 06 15.8 - - 3.0 84.3 3.5 0.1 b. Monitoring Response Facility 1.6 16.4 8.4 83.6 - 10.1 0.4 c. BasicEducation Promotion 03 15.7 -_- 19 842 - 22 0.1 SubtotalMonitoring andEvaluation 2.5 161 - - 132 839 158 0.6 Total 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 3 page 4 of 4 Table 3D: Financing Plan by Category of Expenditure P-ovncIl1 The. Gornn-et Ad.InlItralon TheWorldBank Na.UnallDono. Total OuS. a Amount S Amount % Anount % Amount S Amount % Tons 1. Inwntmant Costs A. PhaneI 1. School Condruction and Upgrading a.Nw Const.rcon 802.5 84.1 - 151.0 15.9 954.3 37.9 160.3 b. 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 10.8 Subtotal School Construction and Upgrading 1,100.7 830 - - 739 5.8 151.8 11.4 1,328.4 52.7 208.9 2. Equlpment and Matarlan a School. Educational and Othar Equipment 54.8 97.08 1.2 2.2 - - .91 2.2 2 .0 b. Sdcool Fumitumn 8.5 100.0 - - - - - - 98.5 3.8 15.2 c. lntonma8on Technology IT Hardna fr Basic Education Scholn 21.1 15.8 - - 113.0 84.2 - - 134.2 5.3 21.1 IT SowarftorBasicEducatonSchools 2.7 15.8 - 14.5 84.2 - 17.2 0.7 2.7 EMS Hardam orAPKIP-mincI1 Units 0.5 15.7 - - 2.8 54.3 - - 3.0 0.1 0.5 EMISISchool 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 2T d. Bank-Financed Bookn, Intellectual Property and Maiterbia Precibed Textboks 4.8 15.8 - - 24.5 84.3 - - 29.1 1.2 4.f Library Books and Intellectual Propody 1 3 158 - - 89 843 - - 8.2 0.3 1.3 Teaching 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 01 Teaching 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 5.9 Subtotal Equlprment and M.Ibdaln 219.7 54.9 2.0 0.5 178.8 44.8 - - 400.4 15.9 83.1 3. CanSaUtnt Sanvicna and Training a. Anchibctural Engineaelng Oesign Fees Bank Financed A&E Sorc 052 15.8 - - 1.0 84.3 - - 12 - 0.2 Nc-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. 6.0 b.Spedalie Servicen 0.8 15.7 - - 4.1 4.3 - - 4.9 0.2 0.8 c Incuntry Training 5.8 15.7 30.8 84.3 30.8 1.5 5.8 d. 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 3T 4. Local Spacialitstnltchnicl Stafl 1.8 100.0 - - - - - - 1.8 0.1 0.3 S. 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 287.5 IU. Reurent Coata A. Phaae I 1. Incremental Salrion 650.0 100.0 - - - - - - 850.0 25.8 141.4 2. No-nyalory Incr-mnntal Opnraling Coots 0.4 100.0 - - - - - 0.4 - 0.1 3.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 27.4 147.7 Total 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 4 page 1 of 3 ANNEX 4 Basic Education Program Economic Analysis Summary Categories of Economic Analysis The economic justification for the proposed investments in expanded coverage and improved quality of basic education has several dimensions. Cost/effectiveness analysis examines which combination of the various investment options deliver the Program objectives in particular settings at least cost. Analysis of fiscal impacts describes the budget implications of the proposed investments -- particularly, for operations and maintenance of the proposed investments. Cost-benefit analysis describes the magnitude of expected benefits of the proposed investment in relation to expected costs, appropriately discounted to account for the time lag between investments and expected benefits. Each of these types of analysis has been carried out for the Basic Education Program, and will continue to be carried out as the Program is implemented. Cost Effectiveness Analysis The Ministry of National Education has calculated the annual cost of a student in basic education according to the type of school -- including the annualized cost of investment expenditures, teachers' and other staff salaries, bussing, maintenance, and other costs -- as follows:' Type of School Annual Cost per Student Grade 1 - 5 School $264 Grade 6,- 8 School $293 Grade 1- 8 School $272 Regional Boarding School $761 Regional School with Pension $733 Central Bussing School $494 Clearly, a conventional school located where children live is generally the cheapest option for providing basic education. But since unit costs rise sharply with very small enrollments, other options of bussing students to centralized schools and sending students to boarding schools can be cost-effective options in areas where population is extremely dispersed. These calculations abstract from considerations of quality of education and social preferences for different types of schools. The Ministry of National Education considers that it is difficult to offer basic education of acceptable quality in very small schools -- in part, because the hardships of teaching in small schools make it difficult to attract and retain qualified teachers. 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 National Education, 1997. (Costs as calculated at the exchange rate $1.00 = TL 126,500.)  Annex 4 page 2 of 3 serve may be more consistent with social preferences in some areas, and may lead to higher enrollments than centralized schools. The Program will monitor the cost effectiveness and the educational effectiveness of school format options in terms of both school attendance and student achievement. These findings will be used to refine the mix of school types as implementation proceeds. Analysis of Fiscal Impacts The proposed investments will generate substantial incremental recurrent expenditures in the form of personnel costs, and operation and maintenance costs of the new facilities. The full Program would require about 150,000 additional basic education staff-a significant increase from current levels. At current unit costs, this would raise the real teacher salary bill from $1.3 billion currently to approximately $2.1 billion. In addition, the Program is sponsoring the expansion of enrollments in bussing schools and boarding schools, whose unit costs are considerably higher than unit costs in conventional schools. These changes will add over $100 million to the annual cost of running basic education schools. The incremental maintenance/renewal costs for the information technology equipment (estimated at 10% of the investment cost per annum) plus building maintenance (estimated at 2% of construction investment costs) add up to another US$117 million annually, once the 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 to mobilize and sustain these recurrent resources. The proposed approach of financing the Program in phases-this first phase represents less than a fifth of the total Program, and would generate incremental recurrent costs of about US$130 million-also provides a test of the durability of public support for the Program. Continuation of Bank financing beyond this first phase will require continued broad support-including budget support-from the public and the Government. Benefit/Cost Analysis Basic Education. The research evidence based on both macro- and micro-level data in Turkey confirms the high rate of return to basic education. A recent econometric investigation of the effects of education using macro-level data showed that a one-year increase in the average educational attainment of the labor force is associated with a 0.21 percent increase in GDP.2 Micro-level findings indicate high benefits of basic education, particularly for women. Across all labor-force categories, the average private rate of return to completion of basic education is estimated 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 than those of women who have not completed basic education. The rate of return for self-employed women -- as many of the beneficiaries of the Program are expected to be -- is estimated at 14.9 percent. 2 Human Capital Approach to Economic Growth in Turkey, MS thesis by Huseyin Ergen, Middle East Technical University, Department of Economics, September, 1996. "Self-Employment, Wage Employment, and Returns to Education for Urban Men and Women in Turkey", unpublished manuscript by Aysit Tansel, Middle East Technical University Department of Economics, 1996.  Annex 4 page 3 of 3 These private financial rates of return tend to understate costs because they exclude public expenditures on basic education. More importantly, they tend to understate benefits because they exclude the non-earnings benefits of basic education, such as those associated with lower fertility, more deliberate birth spacing, and better nutrition and child health associated with higher educational attainment of mothers. (The average completed fertility of mothers in Turkey who have completed basic education is 1.9, versus an average of 4.1 for all women, and of 5.6 for illiterate mothers.) They also exclude the social benefits of education such as improved social cohesion, a more informed electorate, and a broader appreciation of the importance of Turkey's integration in the world economy. These non-monetary benefits are major expected benefits of the Program. Rates of return to education reflect the evolution of the economy in a broad sense, and are likely to change as rising incomes, changing technology, the changing pattern of trade, and other factors lead to changes in the derived demand for labor of particular skill levels. The evolution of the rate of return to basic education will be monitored as the Program is implemented. Quality Improvements: Introducing Computer Literacy. Rates of return for education quality improvement are intrinsically more difficult to estimate than for expansion of enrollments. Nevertheless, there is evidence of significant gains to improved quality. One area of quality improvement which is amenable to benefit/cost analysis is the introduction of computer literacy training. The project team estimated the benefit/cost ratio for computer literacy training, based on observed earnings differentials for computer-literate and non- computer-literate workers and on the cost of employer-provided training. (This approach understates benefits in that it omits indirect benefits such as the effects of computer literacy on the quality of teaching in other subject areas.) Even with very conservative assumptions as to benefits," estimated benefit/cost ratios for computer literacy training under the Program range from 10.5 to 26.5. Otherwise stated, the present value of estimated net benefits of the information 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 computers have 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 are assumed to remain in service an average of five years. No provision is made for the opportunity cost of the time spent in teacher training for teachers. (It is assumed that this cost is easily offset by time savings for teachers from using computers in the classroom.) In the schools which are scheduled to receive computers under the Program, it is assumed that five year's worth of school graduates become computer literate, and remain so throughout an average working life of twenty years, starting at age 19. The average class size is 43, implying that, at peak, 688,000 computer-literate students will be produced per year. No students begin training in Year 1, 344,000 begin in year 2 and 688,000 begin in Year 3. The training which will be provided under the Program is enough to make students a computer-functional editor or secretary. In the low-benefit model, it is assumed that 10 percent of graduates use computing skills in their employment. In the 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 indicate computer literacy is worth at least $8,100 to employees (in saved training and opportunity costs). The average value of computer literacy to an employer is assumed to be about half this amount, or $4,000. It is assumed that this is the earnings supplement for computer-literate graduate who use computing skills in their work.  Annex 5 Page 1 of 8 THE REPUBLIC OF TURKEY MINISTRY OF NATIONAL EDUCATION OFFICE OF THE MINISTER May 26, 1998 RE: Basic Education Program, Turkey Mr. James D. Wolfensohn President The World Bank 1818 H Street, N.W. Washington D.C., 20433 U.S.A. Dear Mr. Wolfensohn, This Letter of Sector Policy sets out the main featul-es of the Government of Turkey's Basic Education Program. The Program represents a significant and unprecedented landmark in Turkish history and our efforts to invest in humani resources in order to prepare our population for the challeniges of integration in the global economy. Basic education, and particularly the expansion of our five year compulsory cycle to eight years, is a centerpiece of the Government's curr-ent Five-Year Development Plan (l996-2000).l Under our strategy, we seek to achieve universal attendance in eight-year basic education and to improve significantly the quality of basic education. In order to fulfill these objectives, the Program pays particular attentioni to ensuring the full access to basic education for all children up to 14 years old. The Government hereby requests the World Bank's assistance, in the form of a series of Adjustable Program Loans, with an initial commitment of US$ 600 million 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 as soon as the following objectives are accomplished: a) arranging the provision of the basic package of educational materials to all rmral schools; b) staltilg the upgrade about 200 village schools in agreed provinces; c) implementing the in-service training program for teachers, school principals, and inspectors, d) carrying out the monitoring and social assessment prOgram; e) providing a plan for,.he school infi-astructure program; f) finalizing specifications 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 and productive dialogue on basic education, which provides a strong foundation for our partnership under the new Program. Beginning with the 1990 Jomtien "Conference on Education for All," jointly sponsored by the World Bank, UNICEF and UNESCO, the Government 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 5 Page 2 of 8 Government initiated discussions with the Bank on possible assistance for a program to expand compulsory basic education in Turkey. Elements of the Government's strategy for basic education, including quality improvements in teacher training and curriculum development, 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), by amendment to NEDP, in order to develop and test more tailored programs for the expansion of the compulsory basic education cycle. This Project has been under implementation since 1996 through partnership between the Ministry of National Education (MONE), UNICEF and the WorLd Bank. Activities -- including capacity expansion through renovation and upgrading of existing school facilities, and targeted interventions to improve school attendance in rural areas -- have provided valuable lessons and experience. In August 1997, the Government greatly facilitated and accelerated its efforts to implement eight-year basic education, through parliamentary approval of Law No. 4306 for Basic Education. The law mobilizes significant resources for a major investment in school facilities through earmarked taxes, establishes a timetable for the Program, and streamlines procedures to allow for swift action and implementation.2 This framework legislation ensures political and fiscal commitment to the Program, and has engaged the interest and support of the public. Voluntary cash and in-kind contributions from the public have increased to unprecedented levels and amount to a notable share of the resources available for the first year of the Program. The Government's Program adopts a broad approach to basic education, and defines its benefits as reaching far beyond those which directly affect students in the classroom, to those which involve the families who are enriched by the education of their children, and their own participation in educational activities. Under the Program, schools are envisaged to be resource centers which will be accessible to the local community. Complementary activities which prepare children for basic school and facilitate educational attainment, including the extension of access to early child development programs, literacy and skill development for adults are also incorporated. The Program, which is designed to be implemented 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 been made toward the implementation of these objectives. In preparation for the Program, the MONE undertook a number of feasibility studies and consultations with key stakeholders to 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, December 29, 1997. 4 2  Annex 5 Page 3 of 8 Education appointed a technical team for program preparation to coordinate the overall preparation of the Programn in close collaboration with the relevant ministerial line units and the provincial offices of the Ministry. In March, 1998, it elevated the head of the team to 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 first phase 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 key inputs -- facilities and teachers. Capacity expansion is needed both to bring all children of school age into the system, and to relieve current overcrowding. Largely due to economic reasons, some school age children in rural zeas as well as in urban slums (gecekondu) do not attend school and girls enrollments are much lower than boys. Primary schools are generally available in rural areas, but high teacher turnover due to difficult living conditions and, in some cases, security concerns -- limit access. There is also a shortage of basic school capacity for 6-8 grades particularly in many villages , and not all students have access to centralized basic education schools through bussing, or boarding schools. Our priorities under the Program are to provide capacity for the student population which is not in basic education and to relieve overcrowding in both rural and urban areas. This will be phased in over the next three years, such that current fifth graders will continue on to sixth grade in the 1998 school year. An estimated 30,650 new classrooms will be needed over the next three years to allow all students to continue on to 6-8 grades, and 50,000 classrooms will be needed to accommodate students in all grades who are currently not attending school. Additional classroom capacity will be added to alleviate overcrowding and to reduce gradually the number of double-shift schools. Universal coverage will be facilitated through the creation of new school capacity, better teacher recruitment and incentives, and improved public information about basic education. Quality improvements are also targeted at raising student, parental interest and involvement in schools and promoting attendance. We are addressing the need for added capacity in two ways, through new construction and the renovation of existing schools. Because of the urgency of the Program, and the need to provide an estimated 479,180 student places by the start of the 1998 school year, the Government has mobilized an extensive effort to identify needs and initiate construction for the first phase of the program. Preparation has been greatly facilitated by the compilation, under the Pilot Project, of a Standards Manualfor School Buildings, which establishes and updates the Ministry's design norms for schools -- including classroom furnishings, boarding facilities, and teacher housing where appropriate. Based on the Manual, the MONE commissioned prototype designs for school construction from architectural and engineering teams from five national universities, which will be used for detailed planning and school construction. Planning for the first wave of construction has been conducted through provincial officials of the Ministry. Because of the need to act swiftly to define the construction priorities for the first phase of the Program, the Ministry has relied on estimates to develop its infrastructure plan. We are currently refining this methodology for subsequent phases of 3  Annex 5 Page 4 of 8 the Program, in order to ensure better targeting and cost-effectiveness of investments, and to incorporate measures for long-term strengthening of its school planning capacity into the Program. We plan to construct approximately 15,795 classrooms during the first phase of the Program, and an additional 105,705 during the second and third phases. This is an unprecedented effort in Turkey, and requires close coordination within the MONE, and its provincial offices. Construction will be supervised by four separate regional construction management consultancy firms, which have already been contracted. Under the Program, we plan to act quickly ao renovate a large number of village schools which are in need of renovations and upgrading. In addition to the MONE renovation, a set of 300 rural and central village schools and about 40 urban schools are scheduled for upgrading during the first phase of the Program through the Bank's financing. The Ministry is currently in the process of identifying priority areas, and will rely on its provincial offices to identify the needy schools. Following selection, a needs assessment, involving teachers and parents, will be conducted to plan the remodelling. Construction of the Bank financed schools will be carried out by local contractors. The availability of highly qualified and motivated teachers is an essential requirement for the success of the Program. We have undertaken a number of important measures to staff the 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 been adopted. Restructuring of pre-service teacher training, initiated under the National Education Development Project (NEDP) in 1990, has increased the quality and flexibility of the training system, enabling it to adapt to the needs of the Program. NEDP has fostered a close collaboration between the Higher Education Council (YOK), and the MONE, to improve the quality of teacher training, through redesigned curricula and study abroad fellowships, as well as improved conditions at teacher training colleges. This is a major reform that has refocused faculties of education into teacher training. The MONE and YOK are 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 teacher training programs to meet MONE needs -- and particularly for the imnmediate requirements of the Basic Education Program. MONE estimates that it will need to hire 150,000 new teachers over the next three years to reach its targets under the Program. In response, YOK has adopted a number of initiatives, including introducing new training prograrns for English teachers and pre-school teachers, and adapting certification programs for secondary school teachers --who are currently in oversupply -- to basic education. These initiatives are expected 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 education programs. The MONE has also made provisions to allow retired teachers to return to work 4  Annex 5 Page 5 of 8 on a volunteer basis. We are also in the process of implementing changes in personnel policies, which will greatly improve the allocation of teachers. Insufficient incentives for teachers to serve in some rural areas lead to significant imbalances in teacher supply, and constrain student attendance. To address this issue, last fall the Government approved a substantial increase in compensation for hardship ranging from 60 to 150 percent for teachers working in difficult areas. In addition legislation which became effective on April 4, 1998 increased teacher pay by another 18 percent over the existing teacher pay scale. The Program aims to expand access to basi. education rapidly, while simultaneously improving education quality to improve learning achievements and prepare our children for the challenges of the twenty-first century. The revised basic education curriculum includes elements, including foreign language and computer literacy training, which are specifically directed at enabling students to compete more effectively in the global marketplace and to further contribute to the social and economic progress of Turkey. Quality improvements are inextricably linked to our objective of reaching universal participation in basic education. High quality teachers, schools and materials improve the overall value and attractiveness of education to families, and are essential for maintaining and encouraging attendance and parental involvement. Similarly, targeted programs for disadvantaged groups, including free of charge provision of educational materials and school meals, serve both to increase attendance and improve student performance. Under the Program, quality improvements include training of education staff, provision of education materials, textbooks, and information technology, and targeted programs to assist students coming from low income families. The flexible Program design, including the incorporation of a 'Monitoring Response Facility' allows for the development of additional quality-enhancing activities during implementation in response to local needs and initiatives. We plan to advance the skills and motivation of education staff across the system, including inspectors, teachers, principals and provincial officials of the MONE. In accordance with our approach to basic education, training programs for all staff will emphasize the role of educators as leaders within the local community. Inspectors are the key players responsible for organizing and implementing in-service training activities for teachers and education managers, and for providing on-site support to teachers through school visits. We will continue and expand these activities under the Program, through the hiring of additional inspectors -- in order to provide teachers with more frequent contact and mentoring opportunities. Training for education managers and principals aims to strengthen management capacity at the school level, in order to improve decision-making, parental participation and support for teachers' professional development. Improvements in local level management will enhance school performance. We have already developed a number of in-service training courses for managers addressing education planning, communication, leadership training and the use of technology in schools. 4 5  Annex 5 Page 6 of 8 Counselling is an important ingredient for improving student performance and preparing students for post-basic education and employment. Expansion of five year compulsory basic education cycle to 8 years will greatly increase students' options and opportunities for employment and further study. The Ministry is in the process of developing a resource guide on guidance issues, including psychological counselling and career guidance for teachers and school managers, and plans to incorporate training on guidance and counselling into the in-service training curriculum for teachers and administrators. We aim to raise education quality and, in particular, to enable students from very low income families to have high quality educa .on by providing them with basic education school materials. Building an infornation workforce is an important challenge for us as we implement our strategy for economic development based on open competitive markets. Our young population is potentially the nation's greatest competitive asset, provided that the talent and skill-base central to an information-based economy can be developed. In light of the increasing demand for information-oriented jobs that require basic informatics skills, and the technological shift towards personal computing and distributed applications, we recognize the need for a strategy to broaden the diffusion of computer literacy. From an equity as well as an efficiency perspective, informatics literacy can play a pivotal role in our economic and social development by adding a greater technological element to the service and manufacturing sectors. The Ministry of National Education intends under the BEP "that all basic education age students have access to computers in the learning process" in order to attain computer literacy, support and enhance the existing curricula, and open the computer laboratories to the local community as technology-intensive learning environments. Under the Program, we seek to enhance learning by using IT as a productive tool across the basic education curriculum. Instructional use of IT can have various objectives, ranging from imparting basic skills in routine applications such as data entry or word processing, to facilitating learning in other subjects (foreign languages, science, math, etc.,) to conveying more advanced skills such as Internet research, or programming. These objectives are not mutually exclusive, but they do imply different learning outcomes, and have different operational requirements. In preparation for the Program, we are currently developing essential documents for the use of technology to support education reform including: (i) a policy paper for the rationale and plans for using IT to support various kinds of learning activities, including a clear set of goals that can be communicated to teachers, students, parents, and industry alike; (ii) a strategy paper on methods for integrating IT into the curriculum, including approaches for educational software provision, teaching computer literacy, organizing continuous teacher training, and quality assurance; and (iii) a 3-year model plan for schools in using IT in the curriculum each week, including competencies to be developed, software to be used, individual/group approaches, teacher training, extracurricular usage of the laboratories, and community activities. 6  Annex 5 Page 7 of 8 School quality will be additionally improved through greater parental involvement and participation 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 to support local initiatives consistent with the Basic Education Program. The MRF will provide direct support to schools to facilitate the implementation of innovative projects which will be approved based on pre-defined set of criteria, and help them respond to special 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 and assessments 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 low income students will be supported and expanded through the Program. Under this initiative, the MONE uses its network of girls vocational schools and adult education centers to make and provide school uniforms and meals to poor students. The program is actively supported through donations from the public. Evidence illustrates that the provision of social aid positively impacts school attendance and student performance. We intend to extend the coverage of the program under the Basic Education Program to include all bussing schools, as well as to rural primary schools and pre-schools. We intend to implement the Basic Education Program by mobilizing and harnessing the existing capacity and resources of the Ministry of National Education. A Program Coordination Team (PCT), headed by a full-time team leader reporting directly to the Undersecretary in the Ministry, will administer the Program in coordination with the relevant ministerial line units. The PCT will also interact closely with MONE provincial offices. Specialized consultants will be hired by the PCT as needed to lend expertise in the implementation 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) information technology, (iii) education, (iv) monitoring and evaluation, and (v) financing and procurement. We will rely on monitoring and social impact assessments as key instruments for guiding Program implementation and development. On-going evaluation will provide us with essential feedback for gauging progress, making course corrections, and responding to changing circumstances and lessons leamed. Monitoring will be based on four groups of indicators: input, process, output, and impact. Specialized studies and assessments will be undertaken throughout the Program, on topics including pre-school education, community- based education programs, social assistance programs, and working children and other groups in need of social aid. We will also implement on-going assessments of learning achievements, building upon the exams and evaluation tools developed under the National Education Development Project. Other studies will be formulated as need emerges and can be financed through the Monitoring Response Facility. Monitoring will be carried out by the Program Coordination Team together with MONE line units. 7  Annex 5 Page 8 of 8 We will evaluate the results of monitoring efforts in a participatory manner at several levels. First, the Program Coordination Team will evaluate the results jointly with the relevant MONE line units, as well as the provincial and sub-provincial education administrators. This will be an important mechanism for creating local level capacity for Program monitoring and evaluation. The results will also be shared with the regular national seminars the MONE holds for consultative purposes. Joint evaluation by the Bank and the MONE will also be periodically conducted. Analysis of the learning outcomes of the Basic Education Program is a core monitoring and evaluation activity. This Spring, building on the existing assessment tools developed under NEDP, we plan to administer representativ2 surveys to assess learning achievements in four subjects: Turkish, science, math and social studies. This will be expanded to include computer literacy and foreign language proficiency in 1999 and subsequent years. The results of the exams will be useful tools for identifying Program successes and shortcomings, and adjusting Prograrn interventions accordingly. As evidenced by the wave of voluntary contributions, and intense public interest and debate, 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 regularly share timely information on its objectives, activities and progress with the public in order to maintain the existing level of attention. Communication is also important for reinforcing the compulsory nature of basic education in more remote areas. In order to address these needs, we have incorporated a range of public relations activities into the program, including information dissemination through advertisements, publications, public discussions and other media activities. These activities will benefit from our experience under the Basic Education Pilot Project, and the feedback provided by the on-going monitoring and evaluation activities included in the Program. The Basic Education Program provides us with an historic opportunity to invest in our future and to prepare our children for the challenges of the twenty-first century. Through our efforts to achieve universal access to eight-year basic education and to improve education quality, we will elevate Turkey's stature and competitiveness in the international community. Our partnership with the World Bank in this effort will strengthen our prospects for success. Sincerely yours, Hikmet Ulugbay Minister of National Education 8  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 Bank would be carried out in accordance with the following Bank Guidelines: (i) procurement of works and goods -- Guidelines: Procurement Under IBRD Loans and IDA Credits, January 1995, revised January and August 1996, and September 1997 (Procurement Guidelines); and (ii) specialist/consultant services/training -- Guidelines: Selection and Employment of Consultants by World Bank Borrowers, dated January 1997, revised September 1997 (Consultant Guidelines)). Works, goods and services which are not financed by the Bank would be procured in accordance with arrangements agreed between the financier and the Government. The Government's high commitment to the project prompted the issuance last August 1997, by virtue of Basic Education Law 4306, of a Procurement Protocol agreed between the Ministry of National Education (MONE) and the Ministry of Finance in order to facilitate procurement processes for the implementation of the BEP. However, a number of key provisions of this Protocol are inconsistent with Bank Procurement Guidelines. The Protocol as approved by Government had not incorporated the recommendations of the Bank's Country Procurement 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 Development Business 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 local newspaper, 30 days prior to availability of bidding documents. 2. Implementation responsibility is to be shared by the Ministry of National Education and its Provincial Offices. Policy guidance is to be provided by a Program Steering Committee comprising heads of the relevant MONE Directorates. Overall management of Program implementation at the central level will be carried out by the existing management infrastructure of the MONE under the direct responsibility 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, respectively responsible for civil works, infornation technology, educational interventions, monitoring and evaluation, and Program administration. The PCT is reinforced by MONE procurement specialists who have gained substantial experience in the implementation of the National Education and the Basic Education 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 provincial Governors 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 new construction works will be implemented by MONE. Rehabilitation and upgrading works will be the responsibility of the Provincial Offices under the general oversight of the PCT. Procurement progress will be reported to the Bank in an agreed format in semi-annual project monitoring reports. A Project Launch Seminar would be held in July 1998 to reaffirm the Borrower's and implementing units' understanding of the procurement procedures under the BEP.  Annex 6 page 2 of 11 3. The procurement arrangements are described in the following paragraphs. Table 6A summarizes the project elements, their estimated costs, and the applicable procurement methods. Table 6B outlimnes the thresholds for procurement methods and prior review. A Procurement Plan will be included in the Project Implementation Plan for the First Phase of the BEP. (a) Procurement of Works. Works contract packages estimated to cost at least US$5.0 million per contract package would be procured through International Competitive Bidding (ICB) in accordance with the Bank Procurement Guidelines. Works contracts financed by the Bank are confined to (i) the rehabilitation and upgrading of about 200 existing rural primary schools for grades 1-5 (average US$40,000 per school); (ii) rehabilitation and upgrading of about 100 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 (average US$10,000 per IT classroom). Packaging these works into large contracts suitable for ICB is not feasible nor practical because of their limited scope, wide geographic dispersal and characteristics (i.e. largely consisting of building repair and upgrading work). Furthermore, Turkey has an extensive, well-developed and internationally competitive construction industry which would ensure that adequate competition and good quality construction is obtained. There are no works packages expected to be procured through ICB under the first APL. Thus, works contracts estimated at less than US$5.0 million per package (aggregate US$25.1 million) would be procured through National Competitive Bidding (NCB) in accordance with procedures and documentation 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 acceptable to the Bank for the Procurement of Minor Works, based on at least three quotations obtained from qualified domestic contractors responding to written requests. Non-Bank financed workS procurement. Works contracts financed exclusively by the Government and/or other cofinanciers (aggregate US$1,130.0 million), as well as school site acquisitionldevelopment costs (aggregate US$106.4 million) would be procured according to arrangements described under the Procurement Protocol mentioned above in paragraph 1. (b) Procurement of Goods. Goods to be financed by the Bank consist of: (i) information technology (IT) hardware and software for schools and the MONE Council of Research, Planning and Coordination (APK); (ii) office equipment for the PCT; (iii) books, library materials and intellectual property; and (iv) training materials and supplies. Goods packages (consisting of IT equipment, books and educational materials) estimated to cost more than US$400,000 per contract package would be procured through ICB in accordance with the Bank Procurement Guidelines. IT equipment and software will be procured as separate packages and using a single-stage procurement procedure, because these hardware and software items are basic/standard information technology goods that do not require critical compatibility characteristics. Domestic Preference. In the evaluation and comparison of bids for goods, a margin of preference of 15 percent or the relevant duty (whichever is lower) would be granted in accordance with Bank Guidelines. Specifically, library books and textbooks estimated to cost less than US$400,000 per package (aggregate US$4.4 million) may be procured through National Competitive Bidding in accordance with documentation and procedures agreed with the Bank. Other goods packages estimated to cost less than US$400,000 per package (aggregale US$900,000) may be procured through International Shopping (IS) on the basis of at least three quotations obtained from suppliers from two eligible source countries in accordance with Bank Procurement Guidelines. Goods contracts (consisting training materials and supplies -  Annex 6 page 3 of 11 aggregate US$1.1 million) estimated at less than US$100,000 per contract may be procured through National Shopping (NS) on the basis of at least three quotations obtained from domestic suppliers in accordance with Bank Guidelines. Should there be a need to procure any goods which: (i) would be an extension of an existing contract; (ii) must be purchased from the original 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) are required to respond to a natural disaster, such goods may, with the Bank's prior agreement, be procured in accordance with the provisions of the Bank Procurement Guidelines respective of Direct Contracting, and would be limited to US$1.0 million in the aggregate. Non-Bank financed goods include school/educational equipment (e.g., for school laboratories, teaching, administrative and service facilities) and school furniture (desks, bookshelves, etc.), which would be procured in accordance with the Procurement Protocol mentioned above in para 1. (c) Consultant Services. Consultant services financed by the Bank (aggregate US$9.9 million) include, among others: (i) program implementation support, procurement, and financial management expertise; (ii) education specialists in the areas of: educational achievement and testing; community education; information communication and promotion programs; monitoring and evaluation; social assessment; macro impact modeling; information technology; and educational Management Information Systems; and (iii) architectural engineering services. About half (aggregate US$4.8 million) of these consulting services would be contracted to consultant 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 to firms/institutions on the basis of Quality Based Selection (QBS) procedures. Some of the consulting requirements (particularly, those for educational achievement and testing under item (ii) above, as well as program implementation specialists - aggregate US$1.3 million) may be best suited to individual specialists. In such cases, individual consultants would be contracted on the basis of the consultants' qualifications for the assignment. There may be multiple packages under each selection method, as the assignments consist of a wide range of tasks that are not practical to combine under single contracts. In any case, the PCT would carefully plan the consultant contract packages and consolidate those assignments which complement each other. Non-Bank financed consulting and specialist seuices include: architectural and engineering 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 services would be procured following normal Government procedures. (d) In-service Training. The MONE would develop an initial plan for carrying out seminars and in-service training workshops which would be submitted for prior review to the Bank. This training plan would include, inter alia, the content, audience, schedule, location, and estimated costs. The status of the plan would be included as part of the semi-annual progress reports and would be updated and/or modified as may be mutually agreed between MONE and the Bank, The training program expenditures (US$36.8 million aggregate) consist of: a limited number of study tours abroad; and local training which include, among others, the provision of in-service training materials and handouts, subsistence and internal travel costs incurred by trainees, trainers' fees and course preparation. The subsistence rates and trainer fees for local training are based on Government rates of US$5.00 per teacher per week and trainers fees of US$15 per week. Training expenditures would be directly reimbursed subject to presentation by the PCT of Statements of Expenditure, which would be audited annually. Consultants to coordinate/facilitate training seminars may be hired under individual contracts. In the case of study tours and training abroad, MONE would develop an initial plan which would include the  Annex 6 page 4 of II purpose, names/titles of participants, along with itinerary and estimated costs; proposed training institution; and costs. The training plan would be submitted for prior review by the Bank. The status of the plan would be included as part of the semi-annual progress reports and updated and/or modified as may be mutually agreed between the MONE and the Bank. Expenditures related to such study tours including training fees, transportation and subsistence expenses of the participants would be disbursed against SOEs. (e) Monitoring Response Facility (MRF). The Program includes a facility (US$10.0 million) for disbursing against demand driven subproject proposals for innovative educational activities consistent with the objectives of the BEP. Acceptance of the subprojects will Ibe subject 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 Special Account; translation and interpretation services; communication charges (including international telephone calls, facsimile transmissions and electronic mail); local and international transport related to the project and other administrative costs as may be agreed; and (ii) salaries of PCT technical and support staff. All incremental operating costs would be financed by the Government. 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 cost monitoring by the Bank. 4. Agreements at Negotiations. During negotiations, the Government agreed to: (a) prepare standard 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 with Bank Procurement Guidelines; and (b) present this documentation for the Bank's comments an,d concurrence 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 of Goods (April 1995) for the procurement of goods under ICB; (b) SBD - Procurement of Works, Smaller Contracts (January 1995), would be adapted for use under the NCB procedures, and would be submitted to the Bank in draft for review prior to its use (see para 4 above); (c) the Region's standard documents for the procurement of Minor Works for such works contracts; (d) Standard Bid Evaluation Form for Procurement of Goods or Works (April 1996) for the evaluation of bids procured through ICB. For the evaluation of contracts awarded under NCB procedures, the Borrower will use the NCB Evaluation Format developed by the Eastern Europe and Central Asia Regional Department; and (e) Standardi Request 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 olf Reference (TOR) and consultants' qualifications for all assignments would be subject to Bank's prior review. The Bank's prior review is expected to cover about 62 percent of all expenditures/contracts financed 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.  Annex 6 page 5 of 11 (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 (including the modifications in contracts for consulting services). 7. All project documentation which require prior-review would be reviewed and cleared by a Bank Procurement Specialists and relevant technical staff. Bidding packages above the mandatory review thresholds are anticipated for the procurement of: (a) IT hardware and software (US$154.8 million aggregate); and (b) books and teaching materials (US$51.0 million aggregate). All other procurement documents and procedures would be subject to the Bank's ex-post review on a random basis. Post review of procurement contracts would be normally be undertaken during Bank supervision of project implementation, or, as the Bank may request the Borrower for particular contracts which had been awarded by the Borrower without the benefit of Bank prior review. In such cases, the Borrower will provide 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. The post review will be conducted by the Bank's Procurement Accredited Staff, either during supervision missions or at Bank headquarters. The outcome of the post review will be communicated by the Bank to the 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 be reviewed by Bank staff during supervision missions. Procurement Planning. Prior to the issuance of any invitations to prequalify for bidding or to bid for contracts, the proposed Procurement Plan for the project shall be furnished to the Bank for its review and approval, in accordance with the provisions of paragraph I of Appendix I to the Bank's Procurement Guidelines. Procurement of all goods and works shall 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, applicable procedures 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 procurement data.  Annex 6 page 6 of 11 Table 6A: Summary of Procurement Arrangements (Amounts in US$ million) Procurement Method Consulting ICB a/ NCB b/ Other Services N.B.F. c/ Total 1. School Construction and Upgrading a. 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 Materials a. 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 Materials Textbooks 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/ 1.8 a. 5. Monitoring Response Facility - - - 10.0 S/ - 10.0 a. (8.4) (8.4) 6. Incremental Recurrent Costs a. 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 6 page 7 of II Footnotes to Procurement Table 6A a/ ICB - International Competitive Bidding bl NCB - National Competitive Bidding c/ 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 Bank f/ 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 in response to a written invitation. g/ Office equipment for Program Coordination Team (PCT) and Special Education equipment procured 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 the assignment o/ Local training expenditure (local travel, perdiem/subsistence, and trainer fees) based on Government 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 Response Facility. 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 6 page 8 of 11 Table 6B: Thresholds for Procurement Methods and Prior Review Contracts Subject to Contract Value Prior Review/ US Dollans Procurement Estimated Total Value Expenditure Category (Threshold) Method SubJect to Prior Review a) Works a) Upgrading cof 40 Urban Schools $25,100,000 NCB First 3 NCB contracts (<5,000,000) $1,900,000 b) Refarbishing of 2,826 IT lassrooms and $62s600,000 MinorWorks First 3 MW contracts upgrading and rehabilitation of 200 rural schools and 100 village central schools. (c300,000) $500,000 c) 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) $154,800,000 d) 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 Funds b) Monitoring Response Facility $10,000,000 selection in none accordance with agreed criteria (>100,000) $5,000,000 S. 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: $219,800,000 Percentage of Total Expenditures Financed by Bank Loan: 62%  Annex 6 page 9 of II Part II : Disbursement 1. The proceeds of the APL would be disbursed in accordance with procedures described in the Bank's 'Disbursement Handbook". The Disbursement Categories and Percentage of Expenditures to be Financed is shown in Table 6C below. Table 6C Allocation of Loan Proceeds (Amounts in US$ million) Amount in Financing Expenditure 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 forecast is much shorter than the standard disbursement profile for Education Projects in Turkey, and is based on a detailed work program which Bank staff consider realistic. Table 6D below shows the schedule of disbursements for the First Phase of the BEP (the disbursement periods correspond to the Bank Fiscal Year - 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 to The be Provincial World National Financed The Government Administration 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 -639.1 Semester 2 0.5 74.2 60.5 135.2 774.3 -639.1 -1,278.1 Semester3 10.4 71.9 15.4 97.7 281.0 -183.2 -1,461.3 Semester4 10.4 71.9 15.4 97.7 281.0 -183.2 -1,644.6 Semester 5 9.9 3.9 - 13.8 202.4 -188.6 -1,833.1 Semester 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 6 page 10 of II 3. Use of Statements of Expenditure (SOEs). Disbursements would be made against Statements of Expenditures for: (a) works costing less than US$500,000 equivalent per contract, except for the first three contracts for works and teaching materials awarded through NCB and the first three Minor Works contracts; (b) goods costing less than US$400,000 equivalent each contract; (c) subprojects under the MRF costing less than US$100,000 equivalent; (d) services for contracts for (i) individuals costing less than US$50,000 equivalent each; (ii) firms costing less than US$100,000 equivalent each; and (e) staff training, fellowships and study tours costing less than $15,000 each. Detailed documents evidencing these expenditures would be reviewed and retained by the PCT and made available for the required audit as well as to the Bank supervision missions. Disbursements against goods and services exceeding the above limits would be made against normal documentation. Disbursement and procurement documents using SOE procedures would be retained by the PCT for a period of at least two years after disbursement and 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 US dollars at a commercial bank or a bank acceptable to the Bank. The selection process and criteria ifor selection of the commercial bank would follow the Bank standard selection procedures. The Special Account would be used under the direction of the Manager of the Program Coordination Team, following procedures established by the Bank. The Special Account will have an Authorized Allocation of US$8.0 million representing the expected advance payments (20 percent) on contracts during the peak quarter of expenditures if made exclusively through the Special Account. At the start of the project, the Special Account deposit will be limited to half (US$4.0 million) of the Authorized Allocation, and the remaining portion of the Authorized Allocation will be disbursed upon Government request when the aggregate amount of withdrawals from the Loan Account plus the total amount of all outstanding Special Commitments 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 reconciled bank statements as well as other appropriate supporting documents. The minimum application size for payments directly from the Loan Account for issuance of Special Commitments is 25% of the Special Account 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 Programn are 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, retroactive financing of up to US$30 million is provided in the APL for eligible expenditures incurred between appraisal (May 6, 1998) and signature of the APL. Expenditures for retroactive financing could include all Program components financed by the first APL and procured under agreed procedures, including upgrading of rural schools, training of basic education personnel, provision of educational materials and equipment, and equipment, materials and technical assistance to strengthen central and provincial implementation capacity. 5. Accounts and Audits. The Loan Account and the Special Account will be audited in accordance with 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 Governmenit Fiscal 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 separate opinion should mention whether the SOEs submitted during the fiscal year, together with the procedures and internal control involved in their preparation, can be relied upon to support the related withdrawal applications.  Annex 6 page 11 of 11 6. Agreements at Negotiations. The Government and the Bank agreed during negotiations that the independent auditors would mean the Treasury Controllers. The Treasury Controllers will audit the SpecialAccount, the project accounts and Statements of Expenditures.  Annex 7 page I of I ANNEX 7 Basic Education Program Project 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 6 First Bank mission (identification) 12 / 10 /19 97 12 /10 /19 97 Pre-Appraisal mission 03/23/98 03/23/98 Appraisal mission departure 04/06/19 98 04/06/19 98 Negotiations 05 /18/19 98 05 /18/19 98 Planned 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 Economist Leonardo Concepcion Senior Implementation Specialist Dena Ringold Social Policy Analyst Ayse Kudat Sector Leader, Social Development Robert Schware Senior Information Technology Specialist Ferda Sahmali Human Resources Specialist Ibrahim Sirer Procurement Specialist Dilek Barlas Counsel Hannah Koilpillai Disbursement Officer Angelita Yacat-Viray Team Assistant  Annex 8 page I of I ANNEX 8 Basic Education Program Documents 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 and December, 1997 February 1998. Ministry of National Education, Handbook for Basic Education School Buildings, November 1997. Ministry of National Education, Mid-Term Review and Evaluation Consultants' Report of Computer 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 Special Emphasis 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, Human Development 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-WFP Cooperative Program, No. 193. Paris, 1991. Human Development Reports for Turkey, 1996 and 1997. UNDP.  Annex 9 page I of 2 ANNEX 9 Statement of Loans and Credits Status of Bank Group Operations in Turkey IBRD 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 Loans TR-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 9 page 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 glance Europe & Lower- POVERTY and SOCIAL Central middle- Turkey Asia zegovina Doevelopment diamond* Populaton mid-1996 (millions) 62,7 479 1,125 GNP per capita 1996 (US$) 2,890 2,180 1,750 Lite expectancy GNP 1996 (billions US$) 184.6 1,043 1,967 Average annual growth, 1990-96 Population (%) 1.7 0.3 1.4 G G Labor force (%) 2.1 0.5 1.8 GNP pGris per I i / I primar Mlos recent estimate (latest year availabl since 1989) capita enrollmen Poverty: headcount index (% of population) Urban population (% of tofal population) 69 65 56 Life expectancy at birth (years) 67 68 67 Infant mortality (per 1,000 live births) 48 26 41 Access to sate water Child malnutrition (% of children under 5) Access to safe water(% of population) 92 Illiteracy (56 of population age 15+) 18 .. .. Turkey Gross primary enrollment (% of school-age population) 97 97 104 i Male 101 97 105 Lower-middle-income group Female 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 23.8 Exports of goods & non factor serviceslGDP 4.2 15.9 19.9 21.5 Openness of economy Gross domestic savingsSGOP 11.4 13.4 21.0 17.8 Gross national savings/GDP 17.0 17.1 22.0 18.8 Current account balance/GDP -3.5 -1.5 -1.4 -2.6 Interest payments/GDP 0.3 2.0 2.5 2.3 Savings i- mrvv Total debt/GDP 10.8 38.7 43.6 43.8 Total debt servicelexporto 11.3 35.0 31.3 25.7 Present value of debt'GDP .. . 40.8 Present 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 -Turkey GNP per capita 0.4 2.1 5.9 5.1 2.5 Lower-middle-income group Exports ot goods and services 17.5 8.4 8.0 21.7 10.4 STRUCTURE of the ECONOMY 1975 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 - GDP Imports 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 7.2 0 Private consumption 2.3 4.1 6.4 9.3 *20D95 General government consumption 3.7 3.9 5.3 5.4 Gross 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-irnpons Gross 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 wAil De incomplete. Turkey  Amrex 10 Page 2 of 2 PRICES and GOVERNMENT FINANCE 1975 1986 1995 1996 Domfc1 prw Inflation (%N) (% change) 1S0 Consumer 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 96 Current budget balance .. .. 0.1 -2.7 - GDP def. - PI Overall surplus/deficit .. .. -4.8 -9.2 TRADE 1975 1985 1995 1996 (millions US$) Export and import tevels (mill. USS) Total exports (fob: . .. 21,637 23,123 Textiles .. .. 8,404 8,570 so ooo Processed agricultural products .. .. 3,407 3.687 40,000 5 Machinery and equipment .. .. 2,346 2.966 3 Total imports (cif) .. 35,709 42.734 Food (processed agriculturai products) .. .. 2,282 2,531 20,000 Fuel and energy .. .. 4.812 6.089 10.00 Capital goods .. .. 11.437 14,969 d _ Exportprceindex(1987=100) .. .. 121 115 so 91 92 93 94 99 96 Import price index (1987=100) .. .. 116 116 g Exports m imports Terms of trade (1987=100) .. .. 104 99 BALANCE of PAYMENTS 1975 1985 1996 1996 (millions US$) Currentaccountbalanor toGDPratio Exports of goods and services 2,018 11,119 36.581 42.496 Cretacutblnet O ai % Imports of goods and services 4,979 12,661 40,601 49,070 Resource balance -2.961 -1,542 -4.020 46.574 Net income -123 -1,455 -2.815 *2.639 z Net current transfers 1,437 1,984 4,496 4,447 Current account balance, o 1 before official capital transfen -1.647 -1,013 -2,339 4.766 Financing items (net) 970 1,137 6,997 9,311 Changes in net reserves 677 -124 -4,658 4,545 Memo: Reserves including gold (mill. US$) 1,444 2,322 13.754 17.614 Conversion rate (locaVLUS$) 14.4 522.0 45,845 81,137 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1995 1996 (millions US$) Composition of total debt, 1996 Total debt outstanding and disbursed 5,059 25,998 73.779 79,789 (mill. US$) IBRD 288 3.432 4,939 4,260 IDA 144 178 130 124 A Bc 4260 B669 Total debt service 377 4,600 11,448 10,940 G 124 D IBRD 31 400 1,278 1,147 20092 5077 IDA 2 5 7 7 Composition of net resource flows 8113 Official grants 18 115 439 400 Official creditors 165 424 -1,180 -840 Privatecreditors -11 -14 46 1,080 Foreign direct investment 114 99 772 612 Portfolio equity 0 0 1,108 -983 F 41454 Word Bank program Commitments 158 838 162 255 A- IBRD E - Bilateral Disbursements 108 636 422 489 B-IDA D-Othermultilateral F-Private Prncipal repayments 12 159 882 815 C-IMF G - Short-term Net flows 97 477 -460 -326 Interest payments 21 246 396 339 Net transfers 76 231 -856 -665 Development Economics 5s20198 'Non-financial Public Sector  MAP SECTION  IERD 29532 BULGARIA S