The Middle East

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.

Perhaps after viewing the down-to-the-wire construction troubles of this summer's Olympic Games in Athens, Qatar's planners have been taking a more long-term view when it comes to the 2006 Asian Games. Scheduled to come under starters' orders in December of that year, gearing up the country's infrastructure to meet the challenge is already underway. As a spin off, Qatar is also heading for an up-to-the-minute electricity distribution system.

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.

With news coming mid-month that Qatar has retained its position as the richest of all Arab countries, it was perhaps no surprise that a leading international ratings agency then decided to upgrade its country outlook for the state. With major investment projects in the pipeline, alongside a continuing flow of foreign investment, the statistics are certainly looking good for the months to come.

Amidst this year's positive news on inflation, economic growth, exports and industrial output, certain Turkish officials could perhaps be forgiven a little for allowing themselves a little slack earlier this year when they wondered out loud if the country really needed a new IMF programme. Yet talk of the Fund's imminent departure from Turkish affairs - after several decades of involvement - now seems highly premature. As the Treasury geared up to meet this week's huge domestic debt redemption, it was time to remember that while the recovery may have been underway for some time now, there are still some significant burdens for the country to shoulder - and for which the IMF still seems badly needed.