Turkey, "long a swamp of corrupt politics and rotten economics", has produced an impressive turnaround, says Lisa Hess in Forbes. Since being elected in November 2002, prime minister Recep Erdogan has presided over the return of political stability and a dramatically improving economy. GDP growth is running at 4-5%, inflation has dropped to a 34-year low of 14.3%, interest rates have nearly halved to 26%, and the Turkish lira has recovered sharply from record lows against the dollar. Economic reforms and the absence of restrictions on foreign investors have also underpinned soaring foreign investment in the benchmark Istanbul Stock Exchange National 100 index, which has advanced by more than 70% since Erdogan's election to a record high above 20,000.
Many fund managers are also betting that Turkey's efforts to secure the reunification of Cyprus before its impending entry into the EU will prompt the latter to set a date for negotiations over Turkey's accession as early as the end of 2004, says Vito Racinelli in Barron's. A date for talks would prompt a "convergence rally" as further reforms lower interest rates, inflation and government deficits to"the EU's market-appealing averages".
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