Turkey's relationship with the West is a love-hate one. There are people in Turkey who want to open to the outside world and others who are frightened of the outside world. They don't feel secure; they think that foreigners are trying to harm or even destroy Turkey. But that's not true of the majority of Turks, who want to exercise their skills in a global market.

Turkey has had a customs union with Europe since 1996, and there's free trade in everything other than farm products and services. And Turkey has shown that it can compete. It's good at making cheap goods - household appliances, food, detergents, cheap clothes. And they make a lot of white goods, cheap TVs, washing machines, electric appliances, steel, and, recently, auto parts. And Turks are gradually moving into IT.

Historically Turkey hasn't had much success in attracting foreign investment. Slowly that is changing. There's a tradition of arbitrary decisions by government ministers and senior civil servants, which would ruin businesses from one day to the next, and which has tended to deter foreign investment. That's changing, and convergence with E.U. practices is a good thing in that it improves governance.

There was a time when Istanbul was one of the safest cities in the world, because people were afraid of the police. People are no longer as afraid of the police as they used to be. Mugging used to be almost unknown; now everybody is afraid of mugging. In that sense, the downside of liberalization is already being felt in Turkey. And of course some people are afraid of Kurdish ethno-terrorism, which worries Turks very much more than the religious sort.

Turkey's relationship with the West is a love-hate one. There are people in Turkey who want to open to the outside world and others who are frightened of the outside world. They don't feel secure; they think that foreigners are trying to harm or even destroy Turkey. But that's not true of the majority of Turks, who want to exercise their skills in a global market.

Turkey's relations with its immediate neighbors are improving. They were pretty bad for a long time - with Syria they were abominable, and with Iran they were pretty bad. In both cases Turkey sees potential for trade, especially with Iran, where it gets a lot of natural gas. In good times Iran and Turkey find mutually profitable objects of exchange, but with Syria things have been very bad; Syria doesn't have much money and never will.

We've seen in Europe after the recent terrorist attacks a certain retrogression in human rights. It depends on how threatened the Turks feel. For example, Turkey became much more tolerant towards Kurdish nationalists when the killing of Turkish soldiers stopped in southeastern Turkey and body bags stopped arriving. Now, since June there's been a revival of Kurdish attacks on Turkish troops - something like 150 people have been killed by terrorists supplied from and operating out of bases in northern Iraq. So Turks are feeling much less tolerant of Kurdish nationalism.