Turkmenistan has come round to supporting the Trans-Caspian natural gas pipeline. Turkey is taking a big stride for the Baku-Ceyhan pipeline to be a major oil and gas transit terminal in the new century. The USA says the project makes sense, but its support is still not certain at this point. Turkey’s natural gas needs until 2020 are the backbone of these oil and natural gas pipeline projects.

Ankara has shifted the direction of threat from North to South along with the ending of the cold war and changes in the concept of threat. Rather than the Red Army from the North the threat for Turkey today is the PKK from the South. The vacuum of power in Northern Iraq and the Assad regime in Syria are the instruments of this threat. Diplomatic ways having been unable to eliminate this threat for the last 14 years, Turkey, with its depleting patience, is shifting the conflict to the military field. The remedy to the danger will be found within the UN Charter. It is hoped that Syria will not take this danger lightly as it has done hitherto when the conflict was in the diplomatic field. Otherwise, military actions prepared to the minutest detail will go into force step by step. Tehran and Cairo may help to solve the problem through diplomacy again.

The first three quarters of Turkey’s 3-year stability program have been most successful, but the global financial crisis still forces Ankara to revise it. Güneş Taner strives to keep changes to the minimum and only as from 1999. If Turkey can honour its foreign investment commitments against the exodus of hot money and go on within the free market economy until the end of 1999 the latest, the money is bound to return at much better terms. Hot money leaving the emerging markets cannot possibly stay for long tied to American 30-year Treasury bonds at 3-4% interest. Ankara is determined to win this marathon with or without G-7’s help. Cooperation with Russia is part of the game.

If curbing inflation was the Yılmaz Government’s number one target, taking the economy under registration was number two, an even a bigger reform. As the deadline for registration is over, the Finance Minister explains the results involving $30 billion addition to the economy. The $4 billion cash received during registration provided transitional breathing space.

Turkey’s Republic Day would have been a milestone in the world’s energy projections for the 21^st century, but ongoing multilateral bargaining may delay it a few weeks. Will Turkey and the United States continue the very productive cooperation for the Baku-Ceyhan pipeline hitherto or will it be a sad parting of ways? If the latter what will it involve and how durable is it likely to be? What are the Turkish reactions to and trump cards for this “New Great Game”?

PKK migrates to Northern Iraq after Turkey and Syria agree to oust terrorists. The Washington agreement with Kurdish leaders meets with difficulties from the first day and the PKK migration further confuses the arrangements. Ankara’s suspicion of a Federal Kurdish State in Northern Iraq with American support accelerates its implementation of policies towards Syria, Iraq and Iran. Will a new formation emerge in the region as a result of these activities? If so, what impact will it have on developments in the region?