Why does Turkish Prime Minister Recep Tayyip Erdogan jump around so much? The answer is that he’s trying to keep from rolling off a log. Erdogan’s sudden policy shifts and outlandish utterances, to be sure, reflect the Turkish leader’s own labile temperament.

When he stormed out of a panel discussion with Israeli President Shimon Peres in 2009, and denounced the Israelis as “pirates” and “criminals” after the Mavi Marmara Free Gaza flotilla incident in 2010, and warned that Kurdish rebels would “drown in their own blood”, the real Erdogan surfaced. Some of his unpredictability is calculated, to be sure, an Anatolian approach to haggling. But there is a deeper source of Erdogan’s volatility, and that is the precarious condition of Turkey itself.

“The ‘Turkish model’ emerges as nations face transformation,” ran a March 3 headline by the Chinese state news agency Xinhua. That is a tale told most eagerly by the Turkish government. “Turkey could be an example for its political, socio-cultural and economic progress achieved in recent years, Atilla Sandikli, president of the Istanbul-based Wise Men Center for Strategic Research (BILGESAM),” told Xinhua on the occasion of a visit to Egypt that week by Turkish President Abdullah Gul.

Soberer heads in Turkey look at this in askance. The online Hurriyet Daily News on March 15 tried to catalogue the innumerable mentions of the “Turkish model” for “entertainment value”, and cited the following:

A headline from the Jerusalem Post: “A Turkish model for Egypt?” Or the essay in America’s National Journal: “What is the Turkish model?” The Daily Star in Cairo phrased the question differently in its headline: “Is there a Turkish model?” The Wilson Center in Washington DC apparently thinks there is. On that think-tank’s website you can find the tome: “Egypt and the Middle East: The Turkish Model”. At the Brookings Institution, a think-tank a few blocks away, there appeared less certainty: “An Uneven Fit? The Turkish Model and the Arab World” is that outfit’s contribution. With typical German conciseness, a think-tank there offered us simply, “The Turkish Model”.

All the talk about the “Turkish model” would seem less vapid if only the world could make sense of what Erdogan is up to. He was among the first world leaders to demand the departure of Egyptian president Hosni Mubarak. He first denounced the thought of military intervention against Libya’s Muammar Gaddafi regime, and then – after it became a fait accompli – insisted that he had advised Gaddafi to step down all along.

When Saudi Arabia sent troops and tanks to quell Shi’ite protests in Bahrain, in an apparent proxy battle with Iran, Erdogan warned against a new “Battle of Karbala”, the 680 CE conflict at which the Umayid Caliph killed Husain ibn Ali, the martyr of Shi’ite Islam.

Returning from a visit to Russia, Erdogan said that his remarks had been misinterpreted, and that he was not speaking about the Sunni-Shi’ite conflict in Bahrain at all, but rather about the loss of life in Libya.

Erdogan has left Arabs in particular deeply confused. The simplest explanation of Erdogan’s unseemly haste in denouncing Mubarak is financial. Turkey is the most immediate beneficiary of Egyptian instability. In short, Erdogan is not a hegemon but a spoiler.

According to the Turkish Zaman news site on March 6:

Recent uprisings in North Africa and the Middle East are having a major impact on tourist destinations in those areas, while also having a beneficial effect on the Turkish tourism sector, with Turkish travel agencies already receiving a higher-than-usual volume of calls from European countries … Turkey is among the top 10 tourist destinations in the world, currently sitting in eighth place. In 2010 about 27 million tourists visited the country, and the tourism sector contributed around $21 billion to the national income … Naturally, as the tourism industry is sensitive to violence and security concerns, the recent uprisings from Tunisia to Yemen have already led to a reshuffling of major tourist destinations.

Zaman added, “Recent events have caused many tourists to cancel their reservations in countries where there is unrest in favor of alternative destinations such as Turkey … by the substitution effect, the number of tourists expected to visit Turkey in 2011 should be higher than preceding years due to the violence in Tunisia, Egypt and Libya … about 35 percent of the 1.5 million French and 1 million Italian tourists that were supposed to go to Tunisia are heading towards Turkey. A similar proportion applies to the Egyptian case as well.”

Turkey stands to gain perhaps $15 billion in tourist revenue – about three months’ worth of the country’s enormous current account deficit, or half the country’s annual oil bill. That might be the difference between another year of tolerable success and a major crisis; that is, between Erdogan’s political success and abject failure. As the Zaman report commented, “As the trade deficit is being held accountable for such a huge current account deficit, the extra tourism revenue will play a vital role in the current account balance in Turkey.”

Writing in the pan-Arab daily Asharq Alawsat on March 15, the site’s Saudi editor Tariq Alhomayed argued:

Those who believe that Erdogan is acting in this regard according to Turkey’s commercial interests are wrong. Erdogan is defending Gaddafi despite all the crimes that the Libyan leader has committed against his own people, whilst he was previously one of the first world leaders to criticize the Hosni Mubarak regime during the 25 January revolution in Egypt. However he did not take either of these positions for commercial reasons. Erdogan has responded in a different manner to the events in Libya and Egypt because he is searching for leadership, namely neo-Ottoman leadership.

But even Turkish observers cannot make sense of what a “neo-Ottoman policy” might look like. Turkish President Gul turned up in Egypt to lecture locals during the first week in March, to be sure.

A former Turkish official who has traveled with Erdogan and other top Turkish officials, though, told me, “None of this makes any sense. Erdogan goes in to see a foreign head of state and brings businessmen with him, and pushes them forward and says, ‘Do business with this guy’. Of course, you have to be a political supporter of Erdogan to be part of the delegation. Otherwise, Turkey has nothing on the ground. The embassies have no staff, there are no political people monitoring the situation, there’s no follow-through of any kind.”

Contrary to the wishful thinking in the Western media, there is nothing moderate about Erdogan’s Islamism. His government has arrested or charged about 4,300 individuals with complicity in an amorphous coup plot called “Ergenekon”, including hundreds of senior military officers, journalists and academics.

Critics denounce the “Ergenekon” case as a pretext for an Islamist coup against Turkey’s secular constitution. “Ergenekon has become a larger project in which the investigation is being used as a tool to sweep across civic society and cleanse Turkey of all secular opponents. As such, the country’s democracy, its rule of law and its freedom of expression are at stake,” a former justice minister told the New York Times.

Some analysts, like Gareth Jenkins of Johns Hopkins University, have denounced the case as a politically motivated hoax from the beginning; others allowed that there might have been a military coup in preparation. But the arrests of independent Turkish journalists of unblemished reputation this year finished off Erdogan’s credibility.

Even the US administration could not quite stomach the arrests. Last month, America’s ambassador to Turkey Francis Ricciardone told a press conference: “On the one hand there exists a stated policy of support for a free press. On the other hand, journalists are put under detention. We are trying to make sense of this.”

Hurriyet columnist Mustafa Aykal wrote on March 4, “This is just too much … what I said to myself two mornings ago, on the new wave of Ergenekon arrests, involving almost a dozen journalists. One of them was Nedim Sener, a meticulous reporter I barely know yet genuinely respect, for his exposure of the ‘deep state’ in the infamous Hrant Dink murder case. Another was Ahmet Sik, who is also known for his brave journalism on the criminals within Turkish security forces.”

To the extent that Erdogan advances his Islamist agenda, he risks a disaster for Turkey’s fragile economy. Bilgi University Professor Asaf Savas Akat, a Turkish television commentator and a long-time official of Turkey’s largest secular political party, told me in February, “Some worry that Erdogan will be not another [Iran revolution leader Ayatollah Ruhollah] Khomeini, but an [Iran President Mahmud] Ahmadinejad. Will he go in that direction? I don’t know. “

“It’s important to keep in mind that Turkey is a resource-poor country,” Akat observed. He added:

A Turkish politician can’t count on foreign exchange from resources. We have to earn it. Let’s assume the current government decides to turn Turkey into Iran. The first thing is that $30 billion of foreign exchange from tourism will disappear – directly and indirectly, that’s what Turkey gets from tourism. How are we going to buy oil? If foreigners don’t want to come to Turkey, how are we going to sell shirts?

Iran’s oil is pumped out of the ground and piped out of the country by foreigners. Ahmadinejad just has to sit there and collect the money. We have to make the yarn, and then make shirts out of the yarn, and then sell them overseas. That’s a very big constraint on us. We have a big current account deficit as it is. We are a net importer of food. We rely on the confidence of financial markets.

Erdogan’s Islamist Justice and Development Party (AKP) remains a minority, and its ability to govern rests on the capacity of his government to deliver higher consumption to Turks who – when they are employed – are barely getting by. Unemployment by fair measure is closer to 25% than the official rate of 10%: only 22% of Turkish women sought employment in 2009, down from over 34% in 1988, despite better female education and a sharp drop in fertility, that is, better qualifications and greater opportunity.

By contrast, 54% of South Korean women work. Adjusting for the absence of women in the workforce, unemployment is catastrophically high. As smallholding agricultural shrinks, women who no longer can work on the family farm simply sit at home. Almost half of Turkish workers, moreover, find employment in the so-called informal economy.

Turkey’s only resource is human capital. Unlike the diploma mills of the Arab Middle East that grind out graduates qualified to do little more than stamp each other’s papers, many Turkish universities uphold international standards.

Turkey’s elite educational venues, though, are a bastion of secularism. They are the most Western of the country’s institutions. And they are the goose that lays golden eggs for the Turkish economy. Privately, many Western-educated Turkish professionals have told me that they will emigrate if Erdogan tries to impose Islamic law.

Many already have left. According to one study, “The last few years have witnessed an increase in the number of highly qualified professionals and university graduates moving to Europe or the CIS [Commonwealth of Independent States] countries. Today, it is estimated that there are approximately 3.6 million Turkish nationals living abroad, of whom about 3.2 million are in European countries, a substantial increase from 600,000 in 1972.”

Turkey is holding its own, but just barely. It has made inroads in the lower end of the manufacturing spectrum, but largely abandoned earlier hopes of competing with the Asians in high-tech industries. Turkish construction companies are prominent in Russia, and Turks or their Turkic cousins from Central Asia make up most of the 11 million foreign workers in Russia. Erdogan, the former businessmen, travels with Turkish executives in tow and puts them in front of foreign leaders when they bid for construction work (those businessmen who support him politically, that is).

But Turkey’s economic profile in no way resembles the Asian success stories. Its overall birth rate is below replacement and its population is aging extremely quickly. A country with a fast-aging population is supposed to save more; individuals do this by foregoing consumption, and countries do this by exporting and saving the proceeds.

Unlike China and the East Asians with their enormous export surpluses and savings rates, Turkey still runs a current account deficit at a dangerous 7%-10% of gross domestic product (GDP) , and depends on short-term money markets to finance it. The current account deficit is matched by an enormous deficit in the state social security system, whose annual shortfall is about 5% of GDP. The social security problem reflects outlandishly generous terms to retirees offered by previous governments.

Time is not on Turkey’s side. Educated Turks in the more developed West have a fertility rate of about 1.5, the same as Western Europe; the Kurds in the country’s impoverished east have four or five children. Kurds, whose independence movement has cost tens of thousands of dead over the past 30 years, may become the majority within two generations. If Turkey holds together at all, it will be quite a different place.

Erdogan’s most apocalyptic utterances refer to Turkey’s own future, and to problems that are neither imaginary nor exaggerated. “They want to eradicate the Turkish nation,” he alleged in 2008. “That’s exactly what they want to do!”

The “they” to whom Erdogan referred in his speech, to a women’s audience in the provincial town of Usak, refers to whoever is persuading Turkish women to stop bearing children. Turkey is in a demographic trap. Its birth rate has fallen, and its population is aging almost as fast as Iran’s. Erdogan sees nothing less than a conspiracy to destroy the Turkish nation behind the fertility data. “If we continue the existing trend, 2038 will mark disaster for us,” Erdogan repeated in May 2010.

In the long run, we are all dead, but the Turks are all old, and the Kurds may inherit Anatolia. In some ways Erdogan’s impassioned Islamism responds to the danger that Turkey will turn gray and decline like the nations of Western Europe. But every attempt to advance the Islamist agenda runs into land mines. That is why Erdogan’s tone suppurates with desperation.

The Turkish model is fragile in the short run, and unsalvageable in the long run. Turkey may be the envy of the Muslim Middle East, but that says more about the misery of the others than the happiness of Turkey itself.