ANDREW FINKEL, an American journalist, has been reporting from Turkey for more than 20 years. His dispatches appear in international newspapers and foreign-policy publications, as well as in the Turkish-language press. His new book, “Turkey: What Everyone Needs to Know”, looks at the past and present of a country that straddles Europe and Asia, Western democracy and Islam. Where is Turkey now in terms of its position on the world stage? It is in a confusing place. It has clearly had a good decade. It had its own [financial] crisis early at the beginning of the century and managed to get its fiscal house in order by the time the rest of the world went into recession in 2008. It has turned everyone’s head by having two years of record growth in 2010 and 2011. How did it manage that?

The banking system stayed solid and banks were lending. Turkish growth relies on consumer demand. The mean age of the population is 29 and there is an incredible bounce and resilience in the economy. When things go a little bit well people are eager to get out and spend. The downside is that people don’t save very much. There is a current-account deficit and that is the great shadow over the Turkish economy.

You are suggesting that spending is almost a national characteristic.

I think that is right! It shows a certain element of confidence in the future. Elsewhere people save for an uncertain old age, but in Turkey people spend on education, consumer products, everything. There is an eagerness to get out there.

If it is a youthful population, perhaps the people are just not old enough to start worrying about that yet?

That is part of the answer. Turkey has gone through the “tier 1” stage of reforms. The economy is on sounder footing, but in order to find its niche in the world it has to do more. For one thing it has to get more women into the workforce. At the moment [women make up] around 24%. The other priority is training the young population and providing them with viable jobs to tool up for the new century.

Suggested Reading: “Turkey: A Modern History” by Erik Jan Zürcher (2005) and “My Grandmother: A Memoir” by Fethiye Çetin and Maureen Freely (2010)

What kind of jobs would those be?

Turkey is the big economy in its region. If you discount oil and energy, it is bigger than Russia in terms of manufacturing and services. The chances are your kettle or your television was made in Turkey. Turkey makes plastics, cars and has a large tourism industry and a construction industry that can build a hotel in northern Iraq, Libya or Kazakhstan where others might find it difficult to operate.

With European markets in decline an entrepreneurial Turkey is diversifying exports. This puts it on the side of the angels. The more prosperous and peaceful Turkey’s neighbours are, the better it is for Turkey. They have an interest in the Arab spring turning out alright.

And yet?

It is struggling. Basically, Turkey has tried to redefine itself after exiting from the cold war a bit later than everybody else. During the cold war it was an island of stability in a sea of troubles. It was a NATO stalwart, a potential member of the EU and viewed its Eastern neighbours with suspicion. However, at the beginning of this century, with a new political party and a new political philosophy, it suddenly said: why don’t we abandon this cold war mentality? Why don’t we have a new policy—“zero problems with neighbours”? That is, we may not fully support Iran but we should not see them as a threat. We have Syria on our border and we need to give them an incentive to be part of the modern world and do business with us. Of course, things are not working out very well.

Suggested Reading: “Snow” by Orhan Pamuk (2004) and “Osman's Dream: the Story of the Ottoman Empire, 1300-1923” by Caroline Finkel (2006)

No, they are not.

Turkey now has egg on its face in terms of its foreign policy. It is embarrassing to remember that at one point Syria’s President Assad was best friends with Recep Tayyip Erdogan, the Turkish prime minister, and they would watch football games together. By accident or by design, Turkey has become a linchpin in a Sunni alliance in the Middle East. It is at loggerheads with Iran and the Syrian regime, but it gets along with Egypt and Tunisia. This makes many Turks nervous if only because some 20% of the population are not Sunni, but Alevis [a variant of Shi’ism].

In short, Turkey’s pragmatic policy turned out not to be pragmatic after all. So now it has adopted an ideological position on the side of freedom, supporting the overthrow of corrupt and cruel regimes. In the case of Syria, that is not such an easy prospect. Having this unstable regime on the border inflames Turkey’s own Kurdish problem, which in turn undermines its ambitions as regional peacemaker. You can’t have “zero problems with neighbours” if you have one big unresolved problem in your own country.

Suggested Reading: “Blood and Belief: The PKK and the Kurdish Fight for Independence” by Aliza Marcus (2009)

So, having discussed economic optimism and encouraging women in the workplace, we are now talking about a more dangerous situation.

Well, I am talking from Istanbul which is a thousand miles from the Syrian border. If there is simmering civil war in the south-east of the country, as there was in the early 1990s, in Istanbul you can shut your eyes and ignore it. Just less than half the economy is based around Istanbul. But you cannot ignore a full-scale war. With Syria and Turkey now exchanging artillery shells over the border, that has become a real possibility. And if you play the role of regional Sunni big brother, you are forced to take sides in Syrian politics. To some Turks, that seems a huge mistake. In practice, turning economic clout into regional leadership isn’t as easy as it may once have looked.

Suggested Reading: International Crisis Group website