INTR13-304 & INTR71/72-304, The Department of International Relations, SHSS, Bond University, Queensland, Australia

Several writers have commented on the possibility of a new Great Game in Central Asia once the Soviet Union dissolved into a Russian Federation and the Newly Independent States of Central Asia and the Transcaucasus region (Armenia, Georgia and Azerbaijan). The old Great Game, of course, was the 19th century contest between Britain and Russia for influence in Central Asia, with 'lesser' players including the Ottoman Empire, Persia, Tibet, Japan, Afghanistan, Mongolia and China. As we have seen in previous lectures, this 19th century Great Game had serious outcomes for Tibet, Afghanistan, and set the scene for the war between Japan and Russian in 1904-5, thereby shaping later conflict and diplomacy.

Today, there may be a new great game for influence and power in the region being played out by Russia, the US, Turkey, Iran, Pakistan, Saudi Arabia and China. From late 2001, with the strong intervention of the U.S. and the EU into Afghanistan, the potential players in the game and their relative balance has changed. From this perspective, the new states of the region will be forced to align themselves, economically, politically and militarily in an environment largely established by the contest of these various powers. From this perspective, it is no longer true to speak a power 'vacuum' (for the older formulation, see Cuthbertson 1994, pp31-2) that had been created by the withdrawal of the dominant Soviet power. Some argue that this gap will be filled by other powers, including the spectre of a resurgent and militant Islam (for the implications of this view of Islam in Central Asia, see Lecture 8). International security concerns and strategic resources, especially oil and gas reserves in Central Asia and Iraq and Iran (Paik & Choi 1997), are central components in this international competition (for some limitations to this view, see Jaffe & Manning 1998; Kemp 1998). Through early 2003, it is possible that U.S. (and allied nations) will intervene in Iraq, changing power balances in the region, with serious implications for Iran, Turkey and Saudi Arabia.

This metaphor of a 'great game' is sometimes used as a way to view the conflict in modern Afghanistan (Klass 1987), as well as a new phase of diplomatic and economic initiatives concerning Central Asia which have been launched since 1989 (Gardiner-Garden 1995a, p2; Malik 1992). Ian Cuthbertson has suggested that the US and Europe need to play a constructive game in the region, rather than passively let events unfold (Cuthbertson 1994, p42-3), a fact strongly demonstrated with the current effort to stabilise Afghanistan through 2001-2003. One of the clearest statements of this 'great game' scenario has been provided my Mohan Malik, who argues that serious instability in Central Asia could lead to new regional wars (Malik 1992a; 1992b). Other have suggested that at present Russia, China and Iran, have medium and long term converging interests in cooperating to balance influence in Eurasia and in promoting a multipolar world system (Ahrari 2001). If so, this vision received a sharp shock with the strong entry of U.S. diplomacy and military intervention into the region through 2002-2003 (see weeks 2-4). Cooperative agreements with Uzbekistan and Kyrgyzstan, based on earlier initiatives put in place through the late 1990s (Anderson & Beck 2000), and most recently Georgia, has allowed the apply renewed pressure on Iran and more especially Iraq, though Turkish cooperation on this issues remains limited and conditional (see below).

As we shall see, regional relationships in central Eurasia are complex, still in a process of change, and are set within the context of wider regional and global concerns. Regional players with considerable impact on Central Asia include Russia, the US, Turkey, Iran, Pakistan, China, India and the European Union. This lecture we will focus on the way Turkey and Iran position themselves within the region.

Turkey and Iran represent, in regional terms, two of the most populous nations, both of whom have had a longstanding cultural contact with Central Asia, and who have middle-level military and economic potentials. Turkey has a population of approximately 65.5 million, Iran of approximately approx. 64.6 million (through 2001). As we shall see, Turkey's interests in the region are conditioned by its membership in NATO, and its desire for closer economic ties with the EU, while Iran, due to its relative isolation since 1979, has tried to diversity its relationships with China, India, Pakistan, and North Korea, as well as trade ties with Japan, South Korea, Taiwan, and Germany. This isolation has been partly broken down by the more pragmatic approach by dominant government elements in Tehran since the mid 1980s, under former President Rafsanjani and even more so under President Khatami. However, until recently, Iran also found itself largely isolated from a growing pan-Arab consensus on security issues, and with the heavy armament of Saudi Arabia and Kuwait after the Gulf War, and with the early 2003 build up against Iraq, has sought greater participation in the Middle Eastern and Afghanistan. Relations with Saudi Arabia have improved to some degree through the 1990s, but have not solved Iran's regional exclusion. Unfortunately, failures in Iran's human rights record (e.g. in relation to the Bahai religious minority, see Teimourian 1994), charges of supporting terrorism, along with continued fear of the long-term implications of a radical, Islamic revolution, have meant that Iran is still the subject of serious threat perceptions by the West as well as by some Arab states. The question for U.S. and Western policy is whether Iran should be kept 'out in the cold' and weakened economically in the hopes of greater concessions from Tehran, or whether this policy is the long term destabilising, only forcing Iran in much closer regional alignments with China, Pakistan, and possibly even India. A thaw in relations between Iran and the US commenced in the 1998 period, but was not sustained through 1999. In general, the US seem through 1999-2000 seemed happy to keep both Iraq and Iran contained, both relatively weak and yet in some rough balance with each other (the dual containment policy). Events of late 2001 may have shifted this focus, with Iran and Iraq deemed as part of an 'axis of evil', predicated on their capacity to generate weapons of mass destruction, their reported support for terrorist networks, and their divergent (from the point of view of the West) political systems. If intervention against Iraq results in regime change in 2003, this will end this dual containment, leading to a need to rethink Iran's place in the region. We will look at Turkey and its regional setting in the lecture, and look at Iran further in the seminars this week.

The Turks comprised several tribal groups who entered Central Asia, breaking up in numbers of separate Turkic groups including the Kazakhs, the Oghuz in Turkmenistan, and the western Turks. The Ottoman Turks moved westward in the 14th century to create a great empire focused on Anatolia (modern Turkey). In 1453 A.D. the Ottoman Turks managed to conquer the great classical city of Constantinople (today's Istanbul), thereby destroying what remained of the Byzantine Empire. By the 17th century, the Ottoman empire controlled most of the eastern Mediterranean, all of Turkey, Greece and the Balkans, as well as small parts of Central Asia. They were at first a 'ghazi (warrior) state on the borderland of two rival religions and civilizations' (Heper & Guney 2000, p636), situated on the fringe of Europe and soon controlling much of the Islamic and Arab world.

http://www.lib.utexas.edu/maps/turkey.html

It was this historical movement of Turkish speaking peoples, influenced by Islam and elements drawn from Mongol and Persian culture, which helped create strong cultural affinities throughout the entire region of Central Asia. This Turkish linguistic and cultural element provided the background for a early 20th century conception of a modernised, unified state of Turkestan comprising all of Central Asia. Alongside this, pan-Turkic ideas (see Rubinstein & Smolansky 1995), partly influenced by the example of the secular revolution in Turkey in the 1920s, helped promote the jadid movement which sought to unify Islam and the notion of a modern nation-state. Today, Turkey can look east to a vast region with a total of some 150 million speaking Turkic-type languages (Rouleau 1993, p111). Dreams of Turkestan soon collapsed before Russian power and Soviet ideology. This idea of a greater 'Turkestan' still leaves a legacy Furthermore, these different countries, though never unified in a single nation-state (the Turkestan dreamed of by some pan-Turkic thinkers), do form part of a cultural region (Dawisha & Parrott 1994, p45; see also Taheri 1989, p224).

There were other impacts on the history of Central Asia. It was mainly Turkish control of the east Mediterranean coasts which cut off European traders from direct access to the Silk route, and which helped force European traders into the great age of sea-based exploration, though for a time Venetian trade networks remained intact. From the 15-19 centuries the Ottoman Empire played a major role in the Mediterranean and Black Seas, often as an antagonist to European or Russian interests (Goodwin 1998). The Russians, in particular, nibbled away at Turkish possessions on the Black Sea from the late 18th century onwards, allowing the Russian Empire to penetrate into the Caucasus and Central Asian region by 1878 (see Riasanovsky 1993). This empire was only dismantled at the end of the World War I, with the Soviet Union gaining greater control of much of the trans-Caucasus and Central Asia by the end of the 1920s.

Turkey entered the modern era by forcing a constitutional monarchy on its Sultans, then by a nationalistic revolt (1908-1923), led by the 'young Turks' and Kemal Ataturk (d. 1938). This revolution was unique in that it propelled Turkey into a role as a modern secular state, disposing of much of the Islamic and Ottoman legacy. At the same time, understanding that Turkey could not afford to antagonise the great Soviet power to its north, the Turkish government officially abandoned its pan-Turkic policies, rejecting any claim to help Turkic peoples in Central Asia and those under Soviet control. This policy of pan-Turkic solidarity would only be revived after 1989 in a modified and softened form (see below).

These factors help explain why Turkey, though officially neutral in World War II, was somewhat sympathetic to German victories after 1941, since this would weaken the Soviet Union (Calis 1997), and reduce Russian pressure on her north flank and soften Russian demands concerning naval access from the Black Sea into the Mediterranean. Yet since the 1930s Turkey began to see itself as a modern nation that belonged in Europe, in contrast to a 'barbaric' Russia and a 'backward' Middle East (Calis 1997).

On this basis, since the end of World War II, Turkey aligned itself with NATO and the U.S., largely as a reaction to a perceived Russian and communist threat. Since the 1960s, Turkey has pushed ahead with a 'western' alignment, seeking continued military recognition as part of NATO. However, Turkey soon found that there were limits to how far it could regard its security as fully guaranteed by this arrangement. It was greatly surprised when the U.S. withdraw its medium-range nuclear missiles from Turkey on the basis of an agreement with Russia to reduce tensions after the Cuban missile crisis of 1962. Later on, when Turkish policies disagreed with those of the US and NATO, e.g. over the invasion of Cyprus in 1974 or during its period of military rule (1980-1983; earlier coups had occurred in 1960 and 1971), Turkey would find its supply of arms curtailed from Western sources. This type of restriction also occurred again in the 1990s with German cancellation of equipment sales over Turkish treatment of its Kurdish minority, and its invasion of Kurdish territories in northern Iraq in 1995. As a result, the Turkish military has always sought to retain a strong, independent military force (and a bastion of secularism and the constitution, as well as retaining their elite-privileged position, see Heper & Guney 2000, p636).

However, Turkey in the modern period recognised the dangers of trying to directly challenge the Soviets on the battlefield. Since 1921 when an initial treaty of friendship was signed with the Soviets, Turkey has, outside of her NATO membership, sought to reduce any unnecessary bilateral tensions with Russia, though diplomatically uncomfortable with Russia's near abroad policy of the mid-1990s. On this basis, it has also avoided becoming too directly involved in the dispute between nearby Armenia and Azerbaijan, though sympathising with Azeris. However, through 2001-2002 there have been greater signs of greater economic cooperation between Turkey and Azerbaijan, including cooperation over pipelines, infrastructure development, and improvements in transportation facilities.

Turkey has long sought closer ties - from 1963 it developed an associational agreement with the then EEC. During 1990-1995 Turkey has pushed ahead to enter a 'trade and tariff' agreement with the European Union - by 1993 40% of its foreign trade was with Europe, as was most of its tourist and technological transfers (Mango 1993, p730. By the early 1990s, 80% of total exports were in the industrial and manufacturing areas (Rouleau 1993, p117). Turkey hoped eventually to enter the EU as a full member, though this path has been complicated by problems over the Turkish economy, over human rights (see U.S. Department of State 1997), and due to initial opposition from Greece. Relations with the European Union slipped to their lowest level in 1997-1998 with the decision by the EU Conference on expansion to give Turkey the lowest priority on joining - several prospective Eastern European countries are slated for earlier membership. Although a regular conference with Turkey was approved, issues such as improving relations with Greece and supporting UN settlements on Cyprus were quoted as prerequisites for progress on Turkish admission to the EU (Tucker 1997). The then Turkish Prime Minister, Mesut Yilmaz, then threatened to withdraw Turkey's application unless it is granted equal status to other prospective members (Barham 1997). Turkey was also refused admission to the Asia-Europe Meetings (ASEM) of 1996 and 1998. In fact, EU-Turkish relations had been at low ebb during 1997-1998. It was only in December 1999 that Turkey was formally accepted as a candidate for future membership in the EU. European concerns about problems with Turkey's legal and political system remained strong through 1999-2003 (see below), and it seems like that the status of a divided Cyprus will need to be resolved before Turkey gains full membership, something which seems extremely problematic through early 2003. In 2001 major concerns about the stability of Turkish currency and its economy also emerged, with partial recovery through 2002. Turkey hopes that progress from 2002 will lead to formal compliance to the Copenhagen criterion for membership to the EU through 2005-2007, with formal accession negotiations in 2005 (DFAT 2003), though this may be an optimistic timetable.

This 'westward' policy has only been partially affected by some return to accommodation of Islamic culture, which has allowed elements of Islamic education and custom to return into everyday life. By the early 1990s a major book in publishing and broadcasting Islamic religious and historical ideas had occurred (see Rouleau 1993, p119 for details). This trend also included the Islamisation of opposition parties, in particular with the formation of a coalition government involving the Turkish Welfare Party (Refah) in 1996-97 (Refah had only 21.3% in the December 1995 elections, but was needed to form a government). Refah gained support in particular among the poor, in underdeveloped regions, and in the southeast areas of the country (Heper & Guney 2000, p649). Former Prime Minister Necmettin Erbakan then emerged as the country's first pro-Islamist leader. This has led some secularist groups in Turkey, especially well-educated professional women, to worry about reforms which might head down the path of placing restrictions on them in the future. Many women criticised former Prime Minister Tansu Ciller (of the True Path Party) for forming a coalition with the Welfare Party (Ms. Ciller in 1996 took up the post of Deputy Prime Minister and Foreign Minister). Yet it is probably this coalition which had also moderated any tendency for Erbaken to head down the line of passing Islamic laws during 1996. Indeed, through 1980s-1990s there was very limited support for the introduction of Shari'a law within Turkey (between 1-7%, depending on the survey, see Heper & Guney 2000, p638). Indeed, support for Refah was based on its record as a clean party with little corruption, and due to its large network of social welfare support (Heper & Guney 2000, pp638-639).

Only in early 1997 were there some signs of serious tensions concerning the secular nature of the Turkish state, e.g. over a proposed law to allow women to wear the Islamic headscarf in offices and universities if they wished. Turkish army chiefs (General Cevik Bir and General Ismail Hakki Karadayi) warned the government that the military would not tolerate any moves which undermined the secular/democratic state established by Ataturk. Under the 1982 Constitution Turkey is defined as a secular state, and Article 35 of the Internal Service Act of the Turkish Armed Forces (1961) makes the army responsible for defending the Republic of Turkey as defined in the constitution (Heper & Guney 2000, p637). The opposition People's Republican Party (CHP) also expressed concern over possible Islamisation on the Iranian model. In early 1997, likewise, the mayor of Sincan, a suburb of the capital Ankara, also gave strong support to Iran and Islam in his public speeches, resulting in the army later on routing a convoy of tanks and armoured vehicles through the area in a demonstration of their power (Pope 1997). Yet Mr. Erbakan had been able to compromise: 'he has had to sign a new agreement with Israel, give his approval for the expulsion from the military of officers perceived to have Islamist leanings and to allow an elected mayor from his own party to be arrested' (Pope 1997).

However, the Welfare Party coalition did not retain power when nine parliamentarians resigned their posts, allowing a new minority government to form. In part, the failure of the Erbakan's government was based on a political campaign orchestrated by the military, and using secular business groups, labor groups, and women's groups to block any pro-religious legislation (Boudreaux 2000). The Welfare Party then came under Constitutional Court scrutiny for possibly undermining the secular nature of the Turkish state. A new Islamist Virtue Party was then created in case the older party was banned (Barham 1997). Through 1998-1999, the Turkish Constitutional Court proceeded to ban the Welfare Party (RP), as well as against other religiously based parties.

Thereafter, coalitions of secular-oriented parties (especially the Democratic Left Party, the Nationalist Action Party, and the Motherland Party) took government (Heper & Guney 2000, pp646-647). In early 2002, then Prime Minister Bulent Ecevit's party, Democratic Left Party (DSP), had two main coalition partners, Deputy Prime Minister Mesut Yilmaz's center-right Motherland Party (ANAP) and Deputy Prime Minister Devlet Bahceli's far-right Nationalist Action Party (MHP), indicating once again the need to keep a stable coalition intact. The government parties also negotiated security and penal laws in order to make them more compatible with EU human rights demands, to limit the use of the death penalty, and more recently to allow Kurdish publication and broadcasting with Turkey. At the same time, there is still a concern with Turkish national identity and with security: -

Former President Suleyman Demirel and then Prime Minister Bulent Ecevit remained extremely concerned about Islamic influence in Turkey, and at a meeting of the National Security Council in late January 1999 urged all political parties not to use religion in future elections (Turkish Daily News 1999). Former leader of the banned Welfare Party, Necmettin Erbakan, wanted to run as a candidate for a new party in the 1999 elections. However, this posed legal problems since according to a former head of the Constitutional Court, leaders of banned parties are not supposed to be founders, members, or directors of new parties, and are not eligible to run for a seat in Parliament. (Turkish Daily News 1999b) Article 312 of the Penal Code prohibits speeches which might provoke hatred or violence (Cevik 2000), especially on religious grounds, a factor of importance for the later leadership of Tayyip Erdogan of the now ruling Justice and Development Party (see below).

These events have led to very serious concerns within Turkey and Europe about limits on the freedom of religious expression in Turkey (Cevik 2000; Kinzer 2000), limits which effect workings of the electoral system. On this basis, European officials have in the past argued that of the 13 nations which are candidates for EU membership, only Turkey is insufficiently democratic to meet EU requirements (Kinzer 2000). Religion and religious issues will remain a covert concern in the political life of Turkey, and interact with limits to political freedom. Through 1999-2001, the new Virtue (Fazilet) Party (led by Recai Kutan) only secured about 15% of the vote, and emerged as a more moderate party unlikely to challenge the secular credentials of the state (Heper & Guney 2000, p639, p647).

However, after major economic crises through 2001, as well as political scandals, and the failing heal of the Prime Minister, the coalition government collapsed through late 2002, in part due to infighting about a leader to replace Ecevit (BBC 2002). This led to elections in which, surprising, the mildly Islamist Justice and Development Party won elections (acronyms are AK or AKP). This party received over one third of the national vote (just over 34%), with the second runner being the strongly secular Republican People's Party receiving, receiving approx. 19% of the votes (BBC 2002). However, it should be noted that most other parties did not pass the 10% limit required for representation, thereby routing the older government parties such as the True Path Party (CHP) and the Nationalist Action Party (MHP), with the Democratic Left Party performing extremely poorly. On this basis, the vote demonstrates a strong protest element, indicating disillusionment with most political parties, rather than a strong affiliation to the Justice and Development Party. It should be noted that approximately 80% of the electorate voted, a quite high level (DFAT 2003). Nonetheless, because of the small votes for other parties, the Justice and Development Party controls almost, but not quite, the two thirds majority (363 out of 55) in the parliament needed to amend the constitution (BBC 2002; DFAT 2003). The Turkish system has a single 'unicameral parliament' (The Turkish National Assembly, TGNA), with 550 parliamentarians, while the President (Head of State) runs for seven years (with President Ahmet Necdet Sezer running from May 2000). Governmental policy, however, is run through the Prime Minister and the Council of Ministers, a Cabinet style body (DFAT 2003).

The new government, ironically, could not be ruled at first by Tayyip Erdogan because of a prior conviction, a factor which initially stopped him being elected into parliament. From December 2002, constitutional reform (approved by President Sezer through 31^st December 2002) allowed Erdogan to take a seat in the house, leading to his assumption of the office of Prime Minister through 12^th March 2003, taking over from colleague Abdullah Gul (Australian 2003; DFAT 2003). He has committed his government to respecting the secular constitution of Turkey, to continuing the move toward full membership of the EU, a renewed interest in regional stability, and an agenda aimed at dealing with the damaged economy. He has stated that his government will respect human rights, and 'will not impose Islam on anyone' (BBC 2002). The issue of whether to support the creation of a northern front against Iraq, however, whereby over 62,000 U.S. troops could be deployed (Filkins 2003), has been highly controversial and through 18 March 2003 was still resisted by the parliament, which had turned down the plan by a narrow margin in early March 2003 (see further below). According to Dexter Filkins, many government leaders had thought the plan would eventually pass, but had miscalculated strong resistance with the ruling Justice and Development Party (Filkins 2003).

In the past the Turkish government has been very pro-Western, and some Middle Eastern critiques have viewed it as essentially a U.S. proxy (such were early criticisms from the Khomeini regime in Iran), a view supported by statements by the Turkish Foreign Policy Institute in Ankara in 1993, which suggested that Turkey's main enemies were to the south and southeast, and one possibility was to try to extent the NATO area to cover the Persian Gulf (Mango 1993, p728). Furthermore, this pro-Western policy allowed Turkey to engage in trade deals with Israel, and an emerging security cooperation between Turkey and Israel, a policy which has also been widely criticised in some Middle Eastern circles Turkey recognised the state of Israel in 1948 and retained good relations ever since, though it has also supported the demand for a state of Palestine (Rouleau 1993, p114). This has led to complicated Turco-Arab relations and tensions along the Turkish-Syria border (see Bezanis 1996a & 1996b). Turkey has also charged that Syria has been training Kurdish rebels, an issue that had only been resolved with accords signed in October 1998. Furthermore, the U.S. hoped to placate Turkey and retain it as a powerful ally in the Middle East and Cental Asia (Barham 1997), while after September 2001 it was viewed as one of the main Western allies in the region.

However, Turkey has not received complete recognition as a modern democratic state immediately ready to enter into a closer political association with Europe. This has largely been based on several factors that remain a challenge through 2000-2003: -

These problems should not be exaggerated. Turkey's potential as a growing capitalist economy has led to considerable trade and investment with the West, with Germany in particular, followed the U.S. and Russia (DFAT 2003). Turkey's possible role in a new regional order, with Turkey as a member of NATO, certainly has given it some leverage with both America and the EU. Likewise, Turkey has supported the international intervention in Afghanistan, itself strongly sensitive to religiously formed patterns of terrorism. In March 2002, U.S. Vice-President Dick Cheney has promoted the idea of Turkey leading ongoing peace-keeping force in Afghanistan, and has offered financial aid in support of this idea of around $228 million (Association Press 2002). Turkey took up this role, commanding the International Security Assistance Force (ISAF), focused mainly on Kabul, after Britain gave up the role, once again demonstrating a concern with regional stability in Central Asia.

Turkey is in fact seen as a valuable strategic balancer in Middle Eastern and Central Asia affairs. Turkey has also tried to utilise its position in relation to being a 'front line' state in relation to terrorism. In March 2002, the then Prime Minister 'speaking at a European Union summit meeting, urged the bloc to give efficient support for Turkey's fight against terrorism', and wanted Turkish 'terrorist groups such as the Kurdistan Workers Party (PKK) and the Revolutionary People's Liberation Party-Front (DHKP-C)' on Europe's list of terrorist organsations (Turkish Daily 2002). In general, Turkey has sought to assimilate, with limited success, the Kurdish minority (Houston 2001), and has sought to avoid any extension of the idea of a Kurdish state centred on a fractured northern Iraq, and issue that will return into prominence in the mid-2003 period.

It is against this background that we can see the Turkish model is often presented as the preferred one for development for Central Asian states: i.e. a secular, relatively stable pro-Western approach (see for example Bal 1997; Cuthbertson 1994, p38), and idea which has been revived in the post-2001 period. Proponents of this approach, however, often forget the poor human rights legacy of Turkey, its problems with ethnic minorities, and past claims of collusion between a powerful Turkish mafia and elements in the government. Likewise, its economy, though developing, is not strong enough to provide a major input into development in the Central Asian States. Furthermore, the almost completely secular approach of the early Turkish Republic after 1923 was so extreme that it has in the 1980s and 90s had to gradually allow some return of Islam into political life. Such entirely secular approaches would probably lead to mass protests in most states of Central Asia, where Islam is engaged in a kind of renaissance. Likewise, the state of Turkey suffered from high inflation (60-70% through the early 1990s), unwise fiscal policies (printing too much money), and a very high foreign debt ($56 billion in 1993, see Mango 1993, p743). This means that its high economic growth from 1981-1993, (between 6 and 8%, Rouleau 1993, p117) has not fully provided the level of social stability and modernisation it had hoped for. The economy tends to confirm to an export led- cycle through the 1980s, with a strong need for inputs of investment and short-term capital flows through the 1990s to sustain growth and reform (Ertugrul & Selcuk 2001). After a shrinkage in the economy through 2001, Turkey has returned to modest growth in 2002, but combined with some increase in inflation (around 35% on CPI figures), and unemployment rated at somewhere between 8.5% officially, but perhaps realistically closer to 15% (DFAT 2003). Likewise, a large informal and undeclared (not-taxed) sector of the economy, viewed as at least 20% of GDP, has been a problem for government financing (DFAT 2003). From this perspective, it is a somewhat flawed developmental model.

From January 2000, Turkey reached agreements with the World Bank for further structural reform to their economy, resulting in expected agreements of up to US$750 million to support changes in 'public expenditure management, agriculture, energy, social security and privatization'. (Turkish Daily News 1999b) From 1999, the International Money Fund also began programs in Turkey designed to bring inflation under control (currently running at 26%), but slow reform in the Turkish banking sector led to 12 of these major banks needing support from the Turkish government, with the IMF and the EU providing $11.2 in fresh loans in November 2000 (Zeihan 2001), topped up later to an entire package of over $16 billion (Australian 2003). Problems with the Turkish economy emerged in force through February and March 2001. A row between President Ahmet Sezer and Bulent Ecevit made these issues public on 21^st February 2001, sparking off a flight of investment and a drop in value of the Turkish lira of over one third (Zeihan 2001). Events through 2001 demonstrated the need for serious reform of the banks, which would then be privatised, as well as the sale of 51% of the state telecommunications company (Fraser 2001). Through 2002, the financial crisis has been slowly stabilised, but renewed IMF and EU efforts were needed to stabilise the economy. Bearing in mind Turkey's key strategic location, there are fears that a 2003 war against Iraq could seriously damage the fragile economy, unless buffered by substantial U.S. aid.

To date, Turkey has pursued constructive engagement with all Central Asian states, being especially active in trade, investment, education and cultural contacts. Hundred of protocols and agreements have been signed on areas such as 'banking, industry, agriculture, trade, aeronautics, education, publishing, academic and military training', and Turkey has begun 'flooding the Central Asian republics with journals, books, and television programs beamed via a French-built satellite station' (Rouleau 1993, p112). Yet, in the modern world, physical proximity does not provide the advantages it once did, with Central Asia wishing to open to a wide range of global influences, including stronger engagement with European and East Asian economies.

Turkish relations with Armenia and Azerbaijan have been more complicated. Turkey has always had closer ties ethnically and politically with the Azeri people than with other Central Asians, and has generally sought to restrain Armenian successes by two policies: firstly, by the application of diplomatic pressure, including support of Gorbachev's original position that Nagorno-Karabakh must remain in Azerbaijan, and secondly, by sending arms and equipment to Azerbaijan. At the same time, there are real limits to how far Turkey can intervene in this dispute. Firstly, any large scale intervention would simply justify a Russian military presence along the borders of Armenia and the continuation of Russian military bases in the region. On this basis, Armenia in June 1994 offered bases for Russian forces on a rent-free basis (Lepingwell 1994, p77). It is in Turkey's interest not to have a Russian, or even large CIS force along its own borders. In large measure, Russia has used a range of diplomatic and military moves to largely exclude large-scale Turkish and Iranian initiatives in the region (Cuthbertson 1994, p36). Secondly, world opinion, including that of NATO and the US, does not entirely favour the Azeri position, opening Turkey to further diplomatic and economic sanctions if it intervenes too openly. Here, charges of genocide by the Turks against the Armenians in 1922 still remain a controversial issue, as seen by Turkish anger over French National Assembly's explicit recognition (in 2001) of the Armenian genocide issue. Nonetheless, Turkey has managed to avoid allowing the CIS to dominate the issue. Through early 2002 Turkey opened up a security dialogue with neighbouring states in the Caucasus (excluding Armenia), and also began a deepened cooperation with Azerbaijan.

In summary, Turkey remains a regionally powerful but troubled state, hinged between Europe, Central Asia and Middle East. Essential political and economic reform needs to continue if Turkey is to balance its hopes of future admission into the European Union alongside the maintenance of a positive international environment in the Black Sea area, Central Asia and in its relations with the Middle East. Recent changes in power relations (2001-2003) within Eurasia have given Turkey a strategic opportunity to increase its regional importance, but only by taking on certain risks. Turkey will need to retain economic and political stability to be strong enough to capitalise on this situation.

To date, Iran and Turkey have shown signs of competition for influence, but not the large-scale intra-regional conflict suggested by the Great Game model. Extra-regional factors, including the rise of international terrorism, the reconstruction of Afghanistan, and likely intervention against Iraq in 2003, have begun to change these forces in the region. Aside from factors already mentioned, indicators include: -

As we can now see, Central Asia is anything but a vacuum. In fact the 'vacuum' metaphor is a rather simplistic dynamic metaphor (derived from the mechanical sciences). From Chinese and Central Asia perspectives, vacuums, even when they exist, do not necessarily need to be filled - the demands for strategic manoeuvre and disentanglement from dangerous future obligations suggest that they should not, especially by medium powers or even by great powers uncertain of their future commitments. In any case, the changing face of Russian interests in Central Asia does not create a vacuum even in the traditional sense. As Turkey found when it hoped to capitalise on its cultural connections with the region, Central Asia is a wide and complex geographical terrain, which has an underdeveloped infrastructure, a complex ethnic, religious and political ecology, and the potential for dispersed conflict as well as nasty border incidents. All these factors mean that rather than a vacuum, Central Asia provides a thick, not easily penetrated medium for external interests. These factors have been recognized by both Turkey and Iran, both of whom have demonstrated considerable caution in recent years in their attempts to gain advantages from the region. Both have been restrained in their support for the Azeris, for example, with Iran repatriating some 100,000 refuges who fled into Iran due to the conflict with Armenia. Especially since 2001, Russia, China, U.S. and European interests represent stronger if less clearly focused influences on Central Asia than either Turkey or Iran. Turkey may be able to contain some strategic advantages from the political climate inspired by the 'war on terror', but there is no guarantee that it will be viewed as a suitable model in 2003. Likewise, if the U.S. moves against Iraq and forces regime change, then the dual containment policy (limiting the strength of both Iraq and Iran) will end, and the U.S. may begin to place extra pressures on Iran as well for further reform.

Regional uncertainties and conflict have stopped both a wider Eurasian region, or the 'fourth region' proposed by Milad Hanna (Hanna 1993) from effectively integrating. Whether constructive integration will occurs, largely depends on the mutual restraint of Russia, Turkey and Iran, and a more proactive, long-term policy being developed in the U.S., China and Europe. The future economic development of Turkey-EU relations and U.S.-Iran relations are central to progress in the region.

Associated Press "Cheney Offers Aid to Turkey for Peacekeeping Mission", 20 March 2002 [Internet Access via http://www.foxnews.com]

BBC "Turkey Timeline", BBC News, March 2003 [Internet Access at http://news.bbc.co.uk/go/pr/fr/-/1/hi/world/europe/country_profiles/1023189.stm]

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