With Weak Lira, Turkey Woos Foreign Firms

A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul. (AFP)
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul. (AFP)
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With Weak Lira, Turkey Woos Foreign Firms

A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul. (AFP)
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul. (AFP)

There is a silver lining to Turkey's currency crisis and the global supply chain crunch: The country is becoming an attractive alternative at the gates of Europe for foreign firms.

Turkey is seizing on its geographic advantage to woo companies as the skyrocketing cost of sea freight and pandemic-related disruptions to supply chains push some European companies to reduce their dependence on Asia, AFP said.

President Recep Tayyip Erdogan, whose policies have contributed to the lira's plunge, has promoted a new slogan for exports: "Made in Turkiye", using the country's language instead of the internationally-known "Made in Turkey".

But his vision must overcome concerns about Ankara's complicated relationship with the European Union, the independence of the judiciary and political uncertainty ahead of elections next year.

Nevertheless, Turkey's exports reached a record $225.4 billion last year, with a target of $300 billion in 2023.

"Many international companies are taking action to supply more from Turkey," Burak Daglioglu, head of the Turkish presidency's investment office, told AFP. 

He said the country offers automakers or textile companies a "competitive talent pool, sophisticated industrial competencies, well-developed services industries, perfect geographic location and state-of-the-art logistic infrastructure." 

Ikea announced last year it wanted to move part of its production to Turkey.

The Italian clothing group Benetton told AFP it wants to "increase its production volumes in countries closer to Europe, including Turkey."

Peter Wolters, vice chairman of the Netherlands-Turkey Chamber of Commerce, said the business group received "requests from the household and garden sector, textile and fashion and also yacht building industry who search for new partners in Turkey".

- Soaring freight costs-
It has become extremely expensive to ship goods from Asia.

As a result of container shortages, the cost of freight between China and northern Europe has increased nine fold since February 2020, according to the Freightos Baltic Index.

While a cargo ship can take weeks to travel from Asia to Europe, Turkey is only three days away by truck.

A study by the McKinsey consulting group published in November placed Turkey in third position among countries with the best potential for textile supplies by 2025, behind Bangladesh and Vietnam but ahead of Indonesia and China. 

"Apparel companies are also looking to change their sourcing-country mix... to secure the supply chain," the global report's authors wrote.

The report said Turkey offers "cheaper production costs due to a declining lira."

The lira has fallen by 44 percent against dollar since 2021 as the central bank -- prodded by Erdogan -- cut interest rates even though inflation was rising. 

Turkey's new net minimum wage is now equivalent to $315 -- an amount barely higher than that of Malaysia.  

Erdogan, who has been in power for two decades and seeks re-election in 2023, is betting on a weak lira to boost exports and growth, according to some observers, even if it destroys Turks' purchasing power. 

- Europe, 'friend' and 'enemy'-
The collapse of the lira is also problematic for several industries due to the country's dependence on imports for energy and raw materials. 

"It's not like Russia, for example, which has extensive raw materials," said Roger Kelly, leading regional economist covering Turkey and Russia at the European Bank for Reconstruction and Development. 

He said Turkey also faces competition from countries within the EU.

"I don't think we should ignore those countries in southeast Europe like Romania or Bulgaria, which are actually in the EU -- which helps them to a certain degree -- and also have low production costs and strong production bases as well."

Erdal Yalcin, professor of international economics at Germany's Konstanz University of Applied Sciences, said uncertainty over Turkey's judiciary and institutions is also a concern.

"We don't see big investments, even though Turkey from a purely economic perspective would be the perfect place to bring production closer to Europe," Yalcin said.

Another issue is Turkey's difficult ties with the EU, with Yalcin noting that in the rhetoric of Turkish leaders, "one day Europe is a friendly nation, the other day it's an enemy". 

He also pointed to Volkswagen's move to postpone the construction of a plant in Turkey after Ankara's Syria operation against a US-backed Kurdish militia in late 2019 before scrapping the plan during the coronavirus pandemic.

"As long as people are being killed, we are not laying the foundation stone next to a battlefield," VW CEO Herbert Diess said at the time. 

For Yalcin, no big decisions will be taken by businesses before the 2023 election and "until this uncertainty about the political future of this country is resolved". 



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.