ANKARA - The World Bank and the Government of Turkey completed negotiations on a 1 billion U.S. dollars third programmatic financial and public sector adjustment loan (PFPSAL III), the World Bank said on Friday.
A statement of the World Bank said that the World Bank and the Government of Turkey today completed negotiations on a 1 billion U.S. dollar loan to support Turkey's structural adjustment reforms in the financial and public sector.
The loan, called the PFPSAL III, was expected to be submitted to the board of Executive Directors of the World Bank in Washington for consideration in June, the statement noted.
The statement said that the main objective of PFPSAL III was to provide support during 2004 to the Government of Turkey's financial and public sector reform priorities while ensuring that social programs were adequately funded and increasingly better targeted.
''Key reform priorities in the financial sector include strengthening the regulatory framework for banking, building institutional capacity at the Bank Regulation and Supervision Agency (BRSA) and Saving Deposit Insurance Fund (SDIF), further restructuring of state banks in preparation for their privatization and improving the corporate insolvency regime,'' the statement said.
The statement went on saying, ''key reform priorities in the public sector include deepening of structural fiscal policies in support of sustainable fiscal adjustment, implementing public expenditure management reforms covering budget planning and execution, financial accountability, and public liability management, and strengthening public sector governance and continuation of civil service reform.''
''Priorities for social spending include adequate expenditure for health, education and social protection in the 2004 budget and better targeting of social protection,'' the statement pointed out.
The statement went on saying, ''the principal benefits of the Loan will be to support the Government's efforts to create conditions for sustained growth and macroeconomic stability, ensure adequate social expenditure and better targeted social protection, consolidate the current stability of the banking system and positioning it for accession to the European Union (EU) and establish a better foundation for more effective government in line with EU directives and international best practice.''
The statement added that the loan terms to Turkey for the proposed 1 billion U.S. dollars PFPSAL III were a fixed spread of approximately 50 basis points over LIBOR with a maturity of 17 years and 4 years grace.
(BRC-AÖ) 21.05.2004