Turkey

Executives in Turkey's tourism sector are likely to have a spring in their step these days. Figures from the Ministry of Culture and Tourism for July have put the country on course for a record-breaking year thanks to an insatiable inflow of foreigners. However, while some analysts argue that Turkey has yet to realise its full potential as a tourist magnet, translating potential into reality can be a tricky and costly task.

Turkish economists can afford a smile or two these days, particularly after last week's meeting of the Executive Board of the International Monetary Fund (IMF) gave the country a qualified thumbs up. Turkey is making good progress under its IMF stand-by arrangement, triggering the release of another $661m loan package. However, while a positive development, this move still highlights the need to address a number of domestic problem areas.

Turkish rail authorities have endured a barrage of criticism over the past few days, after a high-speed train hurtled off its tracks last week, leaving 37 dead. Two further railway disasters then followed, with collisions between trains, a minibus and a car. Now, with the condition of the rail system under great public scrutiny, many onlookers are wondering to what extent the accident reflects the more general state of Turkey's transport infrastructure.

The visit of the Israeli deputy prime minister to Ankara last week came as a respite for the tension that has been simmering over the last couple of months between Israel and Turkey. Whilst officials have long tried to talk down the gravity of friction over Palestine, the visit was nonetheless intended to patch up and reconfirm old ties. However, the question is whether recent tensions mark a broader trend in otherwise close bilateral political relations.

When the European Union's much-anticipated aid package to Cyprus was unveiled last week, reactions were decidedly mixed among both Turks and Turkish Cypriots. While any steps to end the economic isolation of the Turkish side of the island - and its dependency on the "mother country" - are welcome in Ankara, it seems that there is still a long way to go before a serious revival of Turkish Cypriots' fortunes can take place.

Meeting on the margins of the NATO summit in Istanbul earlier this week, the Greek and Turkish defence ministers discussed still further measures to reduce their respective military's deployments in the Aegean. With Greece also expressing strong support for Turkey's European Union membership bid and a host of other steps aimed at rapprochement underway, the two old rivals seem to be taking every opportunity these days to declare their newfound friendship. Meanwhile, although this is good for peace in general, it is also bringing some important economic benefits. Central in these is a plan for a gas pipeline between the two countries that may see Turkey become an important intercontinental energy hub.