Turkeys Turning Point: Extreme Islamic elements exerting overt influence in Turkey's politics is unlikely.

Like Brazil's, Turkey's recent national election late last year initially spooked the markets as it was perceived that anti-Western elements could take the reins of power and derail difficult negotiations aimed at solving a debt crisis. In both cases, rationality and practicality prevailed, and both markets soared. In the case of Turkey, the Islamic AK Parti's victory rattled investors as fears grew that Turkey's constitutionally secular state might become unglued from its long-held alliance with …

…oil reserves. Turkey's designs on northern Iraq are fraught with danger and possibility for Turkey. As it is, it seems that Iraq is already being carved up before the shooting begins. If all goes well in the months ahead, Turkey may finally be able to get its economic act together. Negotiations with Cyprus could clearly surprise on the upside. A positive outcome in the war on Iraq would benefit Turkey more than any other country.