WASHINGTON, July 2, 2007—The World Bank Board of Executive Directors approved a EUR367.3 million (approximately US$500 million) Competitiveness and Employment Sector Development Policy Loan (CEDPL) for Turkey.
The CEDPL supports the Turkish Government’s program of legal, institutional, and structural development to promote growth and the generation of employment. The program includes recent and ongoing actions and policies in five broad areas—with a focus on microeconomic and institutional reforms:
- Maintaining the enabling macroeconomic framework that has underpinned Turkey’s recovery following the 2001 crisis as well as the ongoing sustained phase of rapid economic growth that began in 2002 and continues to date.
- Improving the investment climate to foster higher investment and productivity. An important achievement in this area has been the continued successful implementation of Turkey’s major privatization program, which contributes to increased competitiveness, investment and productivity, while also raising fiscal revenues. Increased investment and productivity are critical to maintain rapid growth and generate more formal sector jobs, especially as the Turkish economy continues its structural transformation away from agriculture, and growing numbers of young people will continue entering the labor market each year.
- Laying the foundations for overhauling labor market regulations so that hiring formal sector workers becomes more attractive for private employers and workers find it more attractive to work in the formal sector.
- Consolidating the soundness of the financial sector and increasing access to investment credit and other forms of investment capital.
- Increasing private sector capacity to innovate; promoting the adoption of new technologies and quality standards; and identifying policies for upgrading the skills of the labor force—with a view to maintaining and strengthening private sector competitiveness over the medium and long term.
“We are very pleased to continue supporting Turkey’s strong program of economic reforms and policies with this loan. The benefits to Turkey from this program are great—in terms of increased investment, higher productivity, and, most importantly, more and better jobs, including more formal sector jobs,” said Ulrich Zachau, Country Director for Turkey, following World Bank approval of the CEDPL. “The adoption of Turkey’s new mortgage law, which will allow more people in Turkey to own their homes at lower cost, is just one example of the major reforms the authorities have undertaken as part of the program that this Loan supports. I congratulate the Turkish authorities on implementing these very important policies and reforms, which, I am confident, will help sustain rapid economic growth and increase income levels and improve the well being of people in Turkey.”