Bus-sized sinkholes appearing in Turkey threaten harvest

An aerial view of a sinkhole in Konya. Sinkholes dot the drought-stricken breadbasket of the Turkish plains, worrying farmers as they multiply. (AFP)
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Updated 22 April 2021
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Bus-sized sinkholes appearing in Turkey threaten harvest

  • Sinkholes appear in drough-stricken region

KARAPINAR: Sinkholes wide enough to swallow a bus dot the drought-stricken breadbasket of the Turkish plains, worrying farmers as they spread and creep closer to residential homes.
“The drought situation is getting worse,” said farmer Tahsin Gundogdu, whose harvest includes potatoes he sells to the US food giant PepsiCo.
The 57-year-old has seen the huge holes yawn open in the past 10 to 15 years as the overuse of groundwater for irrigation takes its toll.
Dizzyingly deep, they appear when underground caverns created by drought can no longer contain the weight of the layer of soil above.
This puts farmers in a bind.
Attempts to get water by other means are more expensive, cutting farmers’ incomes. But continued reliance on groundwater will likely make the problem only worse.
Professor Fetullah Arik has counted around 600 sinkholes in the Konya plain, where he heads the Sinkhole Research Center at the Konya Technical University — nearly double the 350 counted last year.
Experts want the government to do more to address extreme drought, blaming the lack of a proper water management policy for Turkey’s woes.
Trying to cut groundwater use, farmers have been forced to water their fields more, leading to higher electricity bills.
“We usually would water the land twice a year but now we’re doing it five or six times,” said Hazim Sezer, a 57-year-old farmer in Karapinar.
But Gundogdu said some farmers still turn to illegally using groundwater for their crops.
If not addressed, drought will hurt farmers and consumers “as much as, if not worse” than the economic shock of the coronavirus pandemic, said Baki Remzi Suicmez, head of Turkey’s Chamber of Agricultural Engineers (ZMO).
“Until last year, we had never seen drought like this,” farmer Kamil Isikli agreed, adding he was more optimistic for 2021 after rain fell earlier this year.
“Farmers no longer have enough money from one month to the next to pay their bills,” Isikli said. “They can’t afford anything anymore.”
Sezer urged the government to create underground systems that redirect water to the plains that would otherwise end up in the seas.
Murat Akbulut, head of ZMO’s Konya branch, said this could offer a “significant solution” for Konya, whose Beysehir Lake has seen its water reserves shrink to 123 million tons from 450 million tons in 2020.
This drop “will lead to real irrigation issues for the plain,” Akbulut said.
Nearly 77 percent of Turkey’s water is consumed by the agricultural sector, Suicmez told AFP.
Turkey is actually facing two types of drought.
The first is meteorological, due to dry weather, and the second is hydrological, which means water levels are low in streams, reservoirs and groundwater levels.
President Recep Tayyip Erdogan hosted his first water forum last month, promising to “renew and improve the agricultural irrigation systems.”
Suicmez said a lot depended on the weather in April and May, because “if there isn’t enough rain in those months, in nearly all areas where there is dry farming, the risk of agricultural drought will continue.”
But even abundant spring rain will not make the problem go away, Suicmez warned.
This winter also saw fears over low water levels in dams, although Agriculture Minister Bekir Pakdemirli insisted last month the problem had been solved by rainfall.
He also suggested Turkey was primarily suffering from the effects of rising temperatures and climate change.
But Suicmez said while this was true, it was “not right” to blame everything on global events.
“We cannot say: ‘Oh there’s climate change, that’s why there’s drought’, when there are concrete reasons for it,” Suicmez said.
The drought’s impact is felt especially severely in the lakes region of Turkey’s southwest, geology engineer Servet Cevni said.
Experts warn Salda Lake, which NASA believes could provide clues to a crater on Mars it has just started exploring with the Perseverence rover, is also suffering.
Described as “Turkey’s Maldives” because of turquoise waters and white sand, its shoreline has receded by up to 30 meters (around 100 feet) in the past 10 years, according to the local mayor.
“We don’t have a single lake that we can say is in a good state in terms of water in Burdur province. They’re either at risk or in a really bad state,” Cevni said.
The larger Burdur Lake closer to the city center has seen water recede by 11 kilometers (6.8 miles), he said, stressing the need for an “urgent water policy.”
“Wasting water is as serious an issue as killing someone. The punishments should be just as serious,” he said.


Global debt marches to record high, raising risk of bond vigilantes, IIF says

Updated 8 sec ago
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Global debt marches to record high, raising risk of bond vigilantes, IIF says

  • $7 trillion rise in global debt was less than half of the 2023 increase

LONDON: The global debt-to-GDP ratio rose for the first time since 2020 last year, as the world’s debt stock hit a new year-end record of $318 trillion and economic growth slowed, an Institute of International Finance report showed on Tuesday.
The $7 trillion rise in global debt was less than half of the 2023 increase, when expectations of Federal Reserve interest rate cuts sparked a borrowing surge. The IIF warned, however, that so-called bond vigilantes could punish governments if rising fiscal deficits persist.
“The increasing scrutiny of fiscal balances — particularly in countries with highly polarized political landscapes — has been a defining feature of recent years,” the IIF said.
Market reactions to fiscal policies in the United Kingdom brought down the short-lived tenure of Prime Minister Liz Truss in 2022, while similar pressures in France ousted Prime Minister Michel Barnier last year.
Debt-to-GDP — an indicator of the ability to repay debt — approached 328 percent, a 1.5 percentage point increase, as government debt levels of $95 trillion clashed with slowing inflation and economic growth.
The IIF said it expects debt growth to slow this year, amid unprecedented global economic policy uncertainty and still-elevated borrowing costs.
It warned, though, that despite high borrowing costs and economic policy uncertainty, its forecast of a $5 trillion increase in government debt this year could rise due to calls for fiscal stimulus and larger military spending in Europe.
“I think we will likely see much more volatility in sovereign debt markets, especially in those countries where we see high political polarization,” said Emre Tiftik, the IIF’s director of sustainability research.
ROLLOVER CHALLENGE
Emerging markets, driven by China, India, Saudi Arabia and Turkiye, accounted for roughly 65 percent of global debt growth last year.
This borrowing, along with a record $8.2 trillion in debt which emerging markets need to roll over this year — 10 percent of it in foreign currency — could strain countries’ abilities to weather looming political and economic storms.
“Heightened trade tensions and the Trump administration’s decision to freeze US foreign aid, including cuts to USAID, could trigger significant liquidity challenges and curb the ability to roll over and access to FX debt,” the report said.
“This underscores the increasing importance of domestic revenue mobilization to build resilience against external shocks.”
Tiftik added that the high volatility underscored the need to increase multilateral development banks’ abilities to mobilize private capital.
Several developing economies, such as Kenya and Romania, have struggled to boost domestic revenue due to public anger over tax hikes and coming elections, respectively.


Oil Updates — crude edges up as US stockpile report counters rising supply concerns

Updated 20 min 1 sec ago
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Oil Updates — crude edges up as US stockpile report counters rising supply concerns

SINGAPORE: Oil prices rose marginally on Wednesday, bouncing off two-month lows hit in the prior session after an industry group reported US crude stockpiles fell last week.

Brent crude rose 20 cents, or 0.3 percent, to $73.22 a barrel by 7:30 a.m. Saudi time. US West Texas Intermediate crude oil futures were up 18 cents, or 0.3 percent, to $69.11.

US crude stocks fell 640,000 barrels in the week ended Feb. 21, market sources said on Tuesday, citing American Petroleum Institute data. Official US stockpile data is due later on Wednesday.

“If confirmed by the EIA later today, it would mark the first decline in US crude oil inventories since mid-January,” said ING commodities strategists in a note on Wednesday.

Analysts polled by Reuters estimated a 2.6-million-barrel increase in US crude stocks last week.

On the supply side, prospects for a peace deal between Russian and Ukraine are improving, said ING, while the market also eyed the potential implications of a minerals deal between the US and Ukraine.

“This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market,” the ING strategists said.

The US and Ukraine agreed terms of a draft minerals deal central to Trump’s efforts to rapidly end the war, sources familiar with the matter told Reuters on Tuesday.

Meanwhile, dour economic reports from the US and Germany capped price gains, after pulling oil prices more than 2 percent lower on Tuesday. Brent crude closed at its lowest since Dec. 23, while WTI recorded its lowest settlement since Dec. 10.

US data showed consumer confidence in February deteriorated at its sharpest pace in 3-1/2 years, with 12-month inflation expectations surging. Meanwhile, the German economy shrank in the last three months of 2024 versus the prior quarter.

Oil prices have been buffeted by concerns that US President Donald Trump’s decisions about tariffs against China and other trading partners could add to pressure on the country’s economy.

That has eased worries about tighter near-term oil supply despite fresh US sanctions against Iran, ANZ Bank analysts wrote in a note to clients.

Even though US policy measures could drive an up to 1 million barrel-per-day reduction in Iranian crude exports, any loss in supply from the Middle Eastern nation is countered by OPEC+ members hoping to bring more supply to the market in the months ahead, Commodity Context analyst Rory Johnston said. 


Lucid CEO steps down, company expects to more than double vehicle production this year

Updated 38 min 48 sec ago
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Lucid CEO steps down, company expects to more than double vehicle production this year

BENGALURU: Electric vehicle maker Lucid Group said on Tuesday that Peter Rawlinson, its CEO for over 5 years, is stepping down from the role, and forecast its vehicle production will more than double this year, sending the company’s shares up 10 percent in extended trading.

Through his 12-year tenure as part of the top brass at Lucid, Rawlinson helped launch the company’s Air models and guided it through its public offering.

The company’s operating chief, Marc Winterhoff, will take the position of interim CEO.

Saudi Arabia’s Public Investment Fund is the majority shareholder in Lucid Group via Ayar Third Investment Co., and in October it invested an additional $1.5 billion into the EV producer.

“Now that we have successfully launched the Lucid Gravity, I have decided it is finally the right time for me to step aside from my roles at Lucid,” Rawlinson said.

The firm also forecast vehicle production this year to be around 20,000, compared with around 9,000 cars it made in 2024.

Andres Sheppard, senior equity analyst at Cantor Fitzgerald, said the CEO transition is “surprising” but not unexpected given the company’s previous underperformances, adding that the production forecast is “encouraging.”

The company hired veteran finance professional Taoufiq Boussaid as its chief financial officer last month. Boussaid previously helped reduce debt load for his former company.

As the EV demand in the US remains uncertain, Lucid has been trying to diversify its product lineup and step into the SUV market with the Gravity model, going toe-to-toe with Tesla’s model X and Rivian’s R1S vehicles.

The success of the Gravity SUV is seen as crucial to Lucid’s long-term outlook, as it burns through cash ramping up production while its Air sedans have seen price cuts due to slower demand.

“They (Lucid) still have an amazing product. Now it’s just a matter of can they turn the company around, can they increase demand and production with the Gravity, and really that’s going to bridge the gap to their mid-size vehicle in 2026,” Sheppard said.

The company continues to lose tens of thousands of dollars per vehicle, while rivals such as Rivian move aggressively to cut costs in a bid to make profits.

Lucid reported revenue of $234.5 million, beating Wall Street expectations of $214.2 million, according to data compiled by LSEG.

It posted a loss of $397.2 million in the quarter ended Dec. 31, compared with a loss of $653.8 million a year ago.

Demand for pure battery cars in the US has been slow as people gravitate more toward cheaper hybrids owing to high interest rates and economic uncertainty.


Saudi Arabia raises $2.36bn in euro bonds, including inaugural green tranche 

Updated 26 February 2025
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Saudi Arabia raises $2.36bn in euro bonds, including inaugural green tranche 

RIYADH: Saudi Arabia has raised €2.25 billion ($2.36 billion) through a euro-denominated bond sale, including its first green tranche, as part of its Global Medium-Term Note Issuance Program. 

In a press statement, the Kingdom’s National Debt Management Center said the offering, split into two tranches, saw an oversubscription of four times the issuance size, attracting around €10 billion in orders. The green tranche, valued at €1.5 billion, carries a seven-year maturity, while the second tranche, worth €750 million, matures in 12 years. 

This marks the first time Saudi Arabia has issued a green euro bond, aligning with its broader sustainability strategy under the Financial Sector Development Program. The issuance is a step toward the Kingdom’s goal of achieving net-zero emissions and reflects its commitment to sustainable financing, NDMC said. 

“It also highlights the Kingdom’s efforts to investors and market participants, representing a significant step toward realizing the objectives of Saudi Vision 2030,” it added.   

Earlier this month, Muhannad Mufti, NDMC’s chief of portfolio management, said at the Capital Markets Forum that Saudi Arabia is considering issuing green bonds in international markets in 2025. 

The Kingdom’s debt market has grown significantly in recent years, drawing investor interest in debt instruments amid rising interest rates. 

In December, a report by Kamco Invest projected that Saudi Arabia would account for the largest share of bond and sukuk maturities in the Gulf Cooperation Council region, reaching $168 billion between 2025 and 2029. Of this, government-issued bonds and sukuk are expected to total $110.2 billion. 

Another report by Fitch Ratings noted that the GCC’s debt capital market surpassed the $1 trillion outstanding mark by the end of November 2024. 

Meanwhile, NDMC completed its February issuance of riyal-denominated sukuk at SR3.07 billion ($818 million). The Kingdom raised SR3.72 billion in sukuk in January, SR11.59 billion in December, and SR3.41 billion in November.


Pakistan in talks with IMF for up to $1.5 billion in climate financing – official

Updated 26 February 2025
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Pakistan in talks with IMF for up to $1.5 billion in climate financing – official

  • Negotiations with a four-member team currently visiting Islamabad are likely to conclude by Friday
  • IMF’s Resilience and Sustainability Facility was introduced in 2022 to help climate vulnerable nations

KARACHI: Pakistan is negotiating for additional financing of $1 billion to $1.5 billion from the International Monetary Fund (IMF) to strengthen climate resilience, a senior government functionary said on Tuesday night, as discussions between the two sides continue over the issue.

Last year, Pakistan secured a $7 billion loan under the Extended Fund Facility (EFF) to continue structural reforms and consolidate macroeconomic gains achieved in the past two years through stringent financial measures.

Ranked among the ten most vulnerable countries to climate change, Pakistan has suffered extreme weather events, including floods, droughts and heatwaves, causing significant loss of life in recent years along with billions of dollars in damage to infrastructure. The 2022 floods alone inflicted losses exceeding $35 billion, prompting the government to seek international assistance for rebuilding homes and public property while investing in climate resilience projects.

Islamabad is now looking to tap into the IMF’s climate financing under the Resilience and Sustainability Facility (RSF) and is engaged in talks with a four-member technical team that arrived in the capital on Monday.

“The IMF team is here and discussions are underway for climate financing,” said a senior government official privy to the talks, speaking on condition of anonymity. “Pakistan is seeking about $1 billion to $1.5 billion from the Fund.”

He added the ongoing discussions were expected to conclude “by Friday,” with further details likely to emerge by then.

The RSF, introduced in 2022, aims to provide longer-term, affordable financing to IMF member states facing climate-related and sustainability challenges.

Countries qualify based on their vulnerability to climate shocks and commitment to policy reforms that address these risks and enhance resilience.

The facility typically requires nations to adopt structural policies, such as regulatory reforms and climate adaptation measures, which are monitored periodically to ensure compliance with agreed objectives before disbursements are approved.

Meanwhile, another IMF team is expected to arrive in Pakistan at the beginning of March to conduct a biannual review under the $7 billion EFF program.