The Economist Intelligence Unit's baseline political forecast for Turkey over the next five years is that the religiously conservative Justice and Development Party (AKP) led by the prime minister, Recep Tayyip Erdogan, will remain in government after the general election, which is expected to be held in June 2011 (the parliamentary term ends in July). We expect the political scene to remain volatile up to and beyond the general election, mainly as a consequence of the tension between the AKP and the secularist-nationalist elites, including the Republican People's Party (CHP) and sections of the military and the judiciary, who view the ruling party with suspicion because of its pro-Islamist roots. However, we believe that following the government's victory in the constitutional reform referendum in September 2010, the risk of a political crisis that could destabilise the government and undermine the confidence of the financial markets in Turkey's medium-term economic prospects has diminished.

In the referendum, a larger than expected majority (58%) voted in favour of the AKP's constitutional reform package, which increased civilian oversight of the military and overhauled Turkey's two highest judicial bodies, the Supreme Board of Judges and Prosecutors (HSYK), which is responsible for appointing judges and prosecutors, and the Constitutional Court. The military is likely to continue to keep a low profile, as its reputation has been tarnished by allegations of plots to destabilise the AKP government and the perception that the deaths of many Turkish soldiers fighting the militant Kurdistan Workers' Party (PKK) could have been avoided. The hardline secularist chief prosecutor of the Supreme Court of Appeals, who launched a lawsuit to try to close the AKP during 2008, warned the AKP in October 2010 against another attempt to lift the ban on women wearing the Islamic-style headscarf in universities and public offices. However, the Constitutional Court would probably be reluctant to take up another petition to close the party.

The agenda of the 2011 election is likely to be set by the AKP, based on calls for increased democratisation and a new constitution to replace the current 1982 military-inspired constitution. If the AKP wins a third term, it may try to introduce a presidential system, giving executive powers to the president. This will be hard to achieve, as it will encounter significant political opposition. The debate surrounding such far-reaching institutional change is likely to be a divisive one. However, we believe that it is unlikely to affect Turkey's overall political stability, as illustrated by the September referendum. That campaign was hard fought but generally peaceful and both the CHP and the smaller, right-wing Nationalist Action Party (MHP) immediately acknowledged the legitimacy of the result.