Turkey

The following interview with Turkish Deputy Prime Minister and Foreign Minister Abdullah Gul is taken from the forthcoming Oxford Business Group publication, Emerging Turkey 2004. For more information on how to order a copy of the most comprehensive review of the Turkish economy to date, please write to us at mail@oxfordbusinessgroup.com.

After the passage of an important European Union harmonization package through parliament in early August, many Turks had begun to wonder just how the new reforms would go down with the country's powerful military. With their powers curbed, some opposition from the generals - and their stanch secularist allies - was widely expected. However, this has so far failed to materialize, as the government has adopted a "go softly" approach to the legislation's implementation, with the public's broad support for EU membership giving the harmonization package a sound political basis.

Turkish investors and voters were in bullish mood this week, after a rash of positive economic and political news. This had sent markets higher, delighted the country’s pro-European camp and further strengthened the hand of the ruling Justice and Development Party (AKP).

Despite high level negotiations in Ankara, Russia and Turkey failed yet again to resolve a price and volume dispute over natural gas mid-July, though Turkey's energy minister suggested a settlement was still possible as the month drew to a close - and that gas shipments might even resume on August 1.

A short four months after Turkey’s pre-war refusal to allow the US permission to open a ‘northern front’ in Iraq from Turkish territory, relations between the two NATO allies reached a new low this month. This followed the July 4 detention of 11 members of Turkey’s special forces by US soldiers in the Northern Iraqi city of Sulaymaniyah. The detentions were the result of US intelligence reports that the Turkish soldiers were planning to assassinate the governor of Kirkuk. Most Turks, however, saw the raid as a retaliatory snub for Turkey’s position during the Iraq crisis - and as a move designed to undermine Turkey’s presence and influence in Northern Iraq.

In an attempt to bring Turkish law in line with requirements set forth by the European Union, the government submitted a package of laws last week to parliament. Turkey's powerful military, long a supporter of the country's drive toward EU membership, has objected to some elements in the 19-article package, considered by many observers to strike at the military's considerable political influence.