The economy, which had slowed down earlier in the year as a result of monetary tightening in 2006 and political uncertainties in the spring, gained momentum after the summer elections. In the absence of shocks, growth should settle at around 6% in 2008 and 2009.

The prime minister of the Republic of Turkey,Recep Tayyip Erdogan, gives a press conference on his visit to the OECD on 21 October 2004.

The potential of small and medium-sized enterprises to contribute to growth and development is a point that has not been lost in the case of Turkey. On the contrary, as in most other countries, SMEs are the dominant form of business organisation here, accounting for over 95% of the business population, and they play a key role in driving sustainable economic growth and job creation.

A new government has been formed in Turkey. The economy has been in some difficulty. How have the markets responded to this new government?

Another exchange rate-based stabilisation has been tried and failed in Turkey. Just 14 months into a three-year programme to end decades of high inflation, the government was forced in February to abandon the currency peg that had been the anchor of its strategy, sparking an immediate devaluation of its currency, the lira, by around 30%. The programme had started out with unprecedented political backing, achieved impressive initial results and was widely believed to have a far better chance of success than many previous internationally supported programmes for Turkey. So what went wrong?