NEW YORK: Turkey has been a bright spot for emerging markets this year, nearly tripling the performance of other emerging European countries. Tim Steinle, co-manager of the Eastern European Fund, has just returned from a research trip to Turkey and reports the country's story is gaining momentum. Industrial production grew 11 percent during September compared with a year earlier, reflecting a strengthening economy, the US Global Investors - an investment-management firm that specializes in gold, natural resources, emerging markets and global infrastructure - reported Thursday. International investors are starting to take notice. Roughly $40 billion has flowed into emerging markets so far this year and just over 5 percent of those inflows ($2.3 billion) have landed in Turkey. Some Central Emerging Europe-Middle East-Africa funds already allocate half of their assets to Turkey and, recently, some “go-anywhere” global funds have increased their allocations. Some fear the strong recovery could trigger whiplash inflation but the Turkish central bank prefers to sterilize liquidity instead of raising interest rates to keep Turkey's currency, the lira, from appreciating against its peers. One former central bank governor says he hopes Turkey can follow in the fiscal footsteps of Brazil, which has been able to keep its own currency valuation under control despite rapid growth in the country's economy. The future looks bright for Turkey, but there are some potential hurdles the country must overcome. Rising consumption, especially for energy, puts a strain on Turkey's current account (i.e., the country's balance sheet) and tilts the country's trade balance toward imports. However, Turkey envisions itself as the region's energy transportation hub. About 1.5 percent of the world's oil goes through Turkish pipelines and several projects already under construction should ease the country's energy dependence on foreign sources. In addition, tariffs on the oil and natural gas passing through the pipeline should offset some of the import costs. Another hurdle is the deepening rift between the poor and the elite. Will the wider masses take advantage of the new opportunities to better their lives? The entrepreneurial predisposition and the failed social experiment of the latter ought to keep that from happening.