REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE concerning the implementation of Council Regulation n° 764/2000 regarding the implementation of measures to intensify the EC-Turkey Customs Union and of Council Regulation n° 257/2001 regarding the implementation of measures to promote economic and social development in Turkey

1. The Regulations

* Council Regulation n° 764/2000 of April 2000 regarding the implementation of measures to intensify the EC-Turkey Customs Union.

Budget heading : B7-4035

Total budget : 15 Mio Euro for a period of 3 years.

General objective : to provide financial support for measures to intensify the EC-Turkey customs union, in particular the alignment of Turkish legislation on Community legislation.

* Council Regulation n° 257/2001 of January 2001 regarding the implementation of measures to promote economic and social development in Turkey.

Budget heading : B7-4036

Total budget : 135 Mio Euro for a period of 3 years

General objective : to provide financial support for measures to promote economic and social development in Turkey

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2. Summary of operations financed during the 2000 financial year

* Council Regulation n° 764/2000 of April 2000 regarding the implementation of measures to intensify the EC-Turkey Customs Union.

Project : Support to the quality infrastructure

EU contribution : 13,000,000 Euro

The overall objective of the project is to remove the regulatory barriers to trade between Turkey and the EU. This will be done through support to the efforts made by Turkey's private and public sector in the process of technical harmonisation and in aligning their quality infrastructure with that of the EU in areas of direct relevance to the Customs Union Agreement, more specifically the parts concerned with technical barriers to trade. The project is designed to take account of both the customs union and the accession criteria and as such, will be a stepping stone towards the alignment with the acquis communautaire in the area of Free Movement of Goods.

The programme is envisaged as a technical assistance project. It will provide, in a broad way, access to expertise, either for training purposes, consultancy services or the creation of awareness. This will be achieved by providing a framework for technical assistance that will consist of four components:

- Legal and technical advice on the design of legislative instruments;

- Institution building support for the strengthening of the application and enforcement of the legal instruments in question;

- The transfer of know-how to both the public and private sector;

- Awareness raising on the implications of the Customs Union Agreement for the public and private sector.

Under each of the components the following assistance instruments will be used:

- The provision of training programmes, workshops, seminars and internships.

- The provision of consultancy services.

- The provision of translation and interpretation services.

The beneficiaries of the project will provide in kind the physical facilities for use in the training programmes and workshops e.g. meeting rooms including training facilities and/or equipped working space for short-term experts.

The Turkish private sector will form the ultimate group of beneficiaries of the programme, as they will be able to profit from the enhanced conformity assessment infrastructure and the removal of technical barriers to trade. The project will seek active participation in the programme of the stakeholders in the quality infrastructure in Turkey. These will include government conformity assessment practitioners, trade and professional associations and academic institutions. The stakeholders themselves will have the possibility to propose activities for the programme, fitting with earlier defined priority areas. This will help to ensure that the stakeholders have a real interest in the programme and that it will remain flexible and responsive to their evolving and different needs.

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3. Planned indicative programme for the 2001 financial year; forecast for 2002

* Council Regulation n° 764/2000 of April 2000 regarding the implementation of measures to intensify the EC-Turkey Customs Union.

Project : Participation of Turkey to the TAIEX facility

EU contribution : 2,000,000 Euro

Objectives: Technical assistance to support the harmonisation of the Turkish legislation with the 'acquis communautaire'

The budget available under Council Regulation n° 764/2000 of April 2000 should be exhausted by the end of 2001.

* Council Regulation n° 257/2001 of January 2001 regarding the implementation of measures to promote economic and social development in Turkey

Project : GAP Regional Development Programme

EU Contribution : 43,500,000 Euro

Objectives: The overall objective of the GAP Regional Development Programme is to improve the economic and social conditions of people living in the South-East of Turkey. The programme will support national objectives such as sustained economic growth, alleviation of regional disparities, increasing productivity and employment capacity in the region. The project has three components, i.e.

1. SME Component

Activities under this component include: training of staff for SME centers, provision of information, advice and training in various fields (management, finance, accounting, marketing, internet trade) for start-ups entrepreneurs and potential Turkish and foreign investors.

2. Rural Development Component

In the South-Eastern region of Turkey, many rural households have a vulnerable subsistence livelihood, based on primitive agriculture and animal husbandry, relying on natural rainfall conditions on very limited and fragmented arable land. Cultural, social, and ethnic composition is very heterogeneous. Infant mortality is higher than the national average. By any indicator, these areas belong to the less, if not least, developed sections of Turkey. To reduce poverty and alleviate those adverse conditions a Rural Development and Micro Credit Component will be implemented. It will enhance the geographical coverage of income-generating opportunities, rural extension and advisory services, further processing and rural marketing, credit provision, and improved environmental awareness in the GAP region.

3. Cultural Heritage Development Component

The GAP Region has an outstanding richness of cultural heritage. Its ancient history of mankind and its cultural varieties over the ages makes it unique in Turkey. The historical monuments in the region are generally in very poor condition. The historical monuments and archaeological sites are numerous and yet only a few of those monuments are kept properly. The primary target group of the Cultural Heritage Component is the people living in the GAP Region as well as the local government and the municipalities in charge of protecting/safeguarding and preserving the local cultural endowment and finally the Ministry of Culture, officially responsible for documentation, maintenance and enhancement of the cultural heritage.

The programme in its totality will enhance the conditions for the reduction of socio-economic disparities affecting the South-East of Turkey. It will emphasise the human dimension of development through operations at the grass roots level.

For the 2002 financial year, similar initiatives are foreseen in other poor provinces of Eastern and South-eastern Turkey.

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4. Progress on indicative programme

* Council Regulation n° 764/2000 of April 2000 regarding the implementation of measures to intensify the EC-Turkey Customs Union

Project: Participation of Turkey to the TAIEX facility

A mission of Taiex officials has been organised in Turkey. Procedures have been launched in order to associate Turkey with the other candidate countries to benefit from the next Taiex facility.

* Council Regulation n° 257/2001 of January 2001 regarding the implementation of measures to promote economic and social development in Turkey

Project : GAP Regional Development Programme

The GAP Regional Development programme was developed during the course of 2000. A feasibility study in the region was carried out by external experts in direct co-ordination with the EC Representation in Ankara, after which a Financing Proposal was drawn up. The MED Committee, on 5 December 2000, gave unanimously a positive opinion on the proposal.

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5. Evaluations carried out

The projects have not yet started. Therefore no evaluations were carried out during the reporting period.

Currently the draft Financing Agreement for the 'Support to the quality infrastructure' project is in circulation for signature by the Commission and the Turkish counterparts. The contracting procedure for the management of the programme will start immediately after the Financing Agreement is signed.

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6. Information on Turkish counterparts for the operations

Support to the Quality Infrastructure Programme

Two operational partners have been selected for the programme. From the government side the Under-secretariat of Foreign Trade, DG for Standardisation, will participate. This DG has extensive experience of working with the EU and is one of the organisations in Turkey responsible for co-ordinating the alignment of sectoral legislation.

From the private sector, the Turkish Society for Quality (KalDer) will participate. KalDer was founded in 1991 and is an independent, non-profit organisation aiming to expand awareness of total quality in industry, service and public sectors. KalDer is the main quality association in Turkey, with currently 1500 members, either individuals or companies. Through its membership network KalDer is able to involve a great number of stakeholders from the private sector for the project.

One of the activities organised by KalDer is the set-up of working groups for the transfer of know-how to the quality society. The working groups range from Calibration and Metrology to the "Learning Organisation". KalDer is one of the managing partners awarding the National Quality Award in Turkey, based on the European Quality Award Model. The National Quality Award has been extended to include an SME category, a new category for the public sector is planned. During its relatively short existence KalDer has provided training on quality issues to more than 23.000 people.

GAP Regional Development Programme

The overall partner for the project is the GAP Regional Development Administration, which is attached to the Prime Ministry in Turkey. The GAP Regional Development Administration co-ordinates a multi-sectoral, integrated regional development project, the South-Eastern Anatolian Project called 'GAP'. This project is being carried out , by the Turkish Government in nine provinces: Adiyaman, Batman, Diyarbakir, Gaziantep, Kilis, Mardin, Siirt, Sanliurfa and Sirnak.

For the implementation of the SME component of the programme the GAP Administration will sign a contract with the United Nations Development Programme's Resident Representation to Turkey (UNDP-Turkey) which has already a lot of experience in that field. For the Rural Development and Micro Credit Component the GAP Administration will sign a contract with the Development Foundation of Turkey (TKV). It is an indigenous, private, non-governmental and non-profit development organization that was incorporated in 1969 for promoting rural and agricultural development among Turkey's rural poor. The TKV system that has emerged now implements through its network of local and countrywide organizations a wide range of development projects in some twenty locations throughout Turkey. In the 'GAP' region, TKV has been implementing agricultural development projects since 1975. The thrust of activities has focused on mobilization, organization, and training so that rural people participate in, commit themselves to, and organize themselves for self-sustaining activities to improve their lives.

TKV offers support and intervention to the target group during a transition period, through five strategic pillars: human resources development and technical assistance, organization of basic inputs, assistance with further processing and marketing, access to and effective management of natural resources and appropriate rural credit. TKV is well placed for and fully supports the gender-balanced approach to development. The involvement of women is sought at all levels of project objectives. TKV has played a pioneering role in devising and implementing environmental awareness programs for duplication by government agencies.