Brighter Times for Turkey?
Monday, August 13, 2007 : PermalinkBusinessWeek- Turkey’s stocks are appreciating at a rapid clip. Straddling Europe and Asia, Turkey teeters between Western secular democracy and ancient traditional culture. But this vast nation of 73 million has a modern, robust economy and may one day join the European Union.
The incumbent Justice & Development Party’s (AKP) resolute, general election victory in mid-July appears to indicate that Turkish voters support the party’s fiscal reforms, which have resulted in economic stability and growth for the past five years. Prime Minister Recep Tayyip Erdogan’s program of budget discipline and EU membership talks also seemed validated by the public, and they rewarded him with another five-year term.
Indeed, in response to AKP gaining an unprecedented 47% of the popular vote, the Istanbul Stock Exchange (ISE) soared to an all-time peak and the Turkish currency, the new lira, reached a six-year high the day after the election.
However, Turkey’s emerging-market status and its long history of political turmoil means it remains subject to many investment risks. Between the powerful military, right-wing nationalists, secular leftists, Kurdish separatists, and Islamic fundamentalists, Turkey seems permanently embroiled in social and political crises.