TURKEY - Ali Babacan.

The Minister of Economy now aged 38, Babacan was before the November 2002 elections the chief salesman of AKP's market-friendly approach. The youngest member of Erdogan's cabinet, he started work for the family business at the age of six. He took pride in 2004 in announcing that Turkey's economy in 2003 expanded by 5.8%. He has managed to cut inflation to a single digit. The last time Turkey had single-digit inflation was in September 1972.

As the economy minister Babacan succeeded Kemal Dervis, a World Bank veteran brought to the government in early March 2001 by then premier Bulent Ecevit to help lift the Turkish economy from the worst recession in its modern history. Dervis, now head of UNDP, gives the AKP government valuable advice.

The easing of inflation has led the Central Bank to cut interest rates several times in the past three years. In short, as Babacan says, Turkey's economy is on track to meet economic requirements for EU accession. In 2004 Babacan was quoted as saying: "A continuation of [GDP] growth through the five-year term of the current government in 2007 would enable Turkey to exceed its economic requirements for entering the...[EU]. The message to Europe is that Turkey will exceed all economic expectations to become a member".

The predominantly Muslim country is eager to join the EU and has carried out sweeping political changes over the past four years as it tries to meet EU standards. Ankara has abolished the death penalty and has granted greater cultural rights to Kurds, who are not recognised as an official minority.

Integration with Europe will be important for the country's development on both the economic and political fronts, Babacan said in 2004, adding: "When we asked people three years ago why they wanted to join Europe, they cited economic reasons. Now the reasons they give relate to human rights and freedoms... Failure to integrate Turkey's economy with the surrounding region and with Europe will create problems of stability and security".

While less than 5% of Turkey's external trade involves the neighbouring markets of the Middle East, more than 50% of the country's trade involves Europe. Babacan says: "This has implications that go well beyond economics". The government has implemented much of the legal reforms required by the EU. The other two challenges ahead are reducing public debt and integrating the informal economy. Babacan said in early 2004: "We must change people's attitudes, old habits and long-held habits about the law. The informal economy reduces our tax collection base".

Ankara is trying to eliminate long-standing bureaucratic bottlenecks to the economy. Babacan says: "We used to have 19 steps required to set up a company in Turkey. Now there are only three steps and they can be finished in a day". While such steps might be perceived as aimed at helping foreign investors, Babacan says domestic companies had shown great enthusiasm at the changes.

Before going into politics, Babacan worked for QRM, a Chicago-based financial consultancy, and then ran the family's textile distribution business. He was also advising the mayor of Ankara on project finance. A graduate of the prestigious Kellogg business school in the US, Babacan is quick to emphasise the importance of having more "experienced ministers" as colleagues. He was quoted by the FT on Dec. 2, 2002 as saying: "People in countries like Turkey always look for a single person to do all the magic things, but coming from Kellogg, which is famous for its team-work approach, I think we will do a great job of running things".

During the World Bank and IMF meetings in Dubai in September 2003, Babacan and US Treasury Secretary John Snow developed good rapport. At a separate meeting held between the two, Snow and Babacan signed an agreement whereby the US was to lend Turkey $8.5 bn to support its economy.

Secretary Snow said the money was intended to support Turkey's economic reforms and to mitigate the economic impact on Turkey of the Iraq war. He said: "Turkey is a valuable regional ally...[of the US and] serves as a valuable example of a strong and economically stable democracy in the Islamic world".

The agreement signaled an attempt to put the bitter divisions that surfaced over Iraq behind them. Babacan called it "a concrete symbol of Turkish-American relations". It also came as Ankara considered Washington's request for 10,000 Turkish soldiers to help relieve the burden on the American-led occupation force in Iraq. But the US later stopped pursuing the matter because of strong Kurdish opposition to Turkish military presence in Iraq.