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?1 billion, Britain's Finance Minister sets up a credit line to | :00:14. | :00:22. | |
invest in India's infrastructure. Investing for the long`term. | :00:23. | :00:27. | |
Singapore's sovereign wealth fund, we hear their strategy. Thank you | :00:28. | :00:35. | |
for joining us on Asia Business Report. I Rico Hizon. India's new | :00:36. | :00:44. | |
Prime Minister has two of the UK's most senior officials in Delhi. | :00:45. | :00:49. | |
George Osborne and William Hague are visiting to discuss how British | :00:50. | :00:53. | |
companies might benefit from the new government's plans to stimulate the | :00:54. | :00:57. | |
Indian economy. Our economics editor reports from Delhi. Everyone rides | :00:58. | :01:01. | |
on the Delhi Underground, including the Chancellor of the Exchequer ` in | :01:02. | :01:05. | |
India, doing business with the new government here. And at the other | :01:06. | :01:13. | |
end of the line, here is George Osborne again for talks with | :01:14. | :01:16. | |
Narendra Modi, India's Prime Minister, whose BJP party won a | :01:17. | :01:18. | |
landslide victory in May's general election. But the British government | :01:19. | :01:25. | |
and Narendra Modi have not always been the best of friends, because of | :01:26. | :01:29. | |
the riots in Gujarat 12 years ago, when he was accused of not doing | :01:30. | :01:32. | |
enough to prevent the brutal massacre of Muslims, and Britain | :01:33. | :01:36. | |
boycotted him. Do you think that Narendra Modi harbours any kind of a | :01:37. | :01:39. | |
grudge against the British? Back in 2002, there were concerns about what | :01:40. | :01:42. | |
would happen, but they were extensively investigated. And this | :01:43. | :01:47. | |
government, this British government, took a decision in 2012, actually | :01:48. | :01:50. | |
ahead of other western nations, to re`establish contact with Narendra | :01:51. | :02:01. | |
Modi, to begin a dialogue. A British company has played an important part | :02:02. | :02:03. | |
developing Delhi's new air traffic control tower and airport, and | :02:04. | :02:06. | |
winning other valuable contracts for Britain to help modernise India is | :02:07. | :02:09. | |
what Mr Osborne and the Foreign Secretary dearly want. But it is not | :02:10. | :02:13. | |
easy. As somebody who has worked here for a long time, what are the | :02:14. | :02:19. | |
pitfalls you have to look out for? I think the pitfalls are dealing with | :02:20. | :02:21. | |
the bureaucracy, and the administrative system that is there. | :02:22. | :02:25. | |
Hopefully they are making the right moves to cut through. To grease the | :02:26. | :02:36. | |
wheels of British business is improving India's infrastructure, Mr | :02:37. | :02:38. | |
Osborne is providing ?1 billion of credit. Have you ever done anything | :02:39. | :02:41. | |
on this scale with any other country? This is the first time we | :02:42. | :02:45. | |
have ever done anything on this scale. This is all about fixing what | :02:46. | :02:48. | |
is not working, as well some other parts of the British economy, which | :02:49. | :02:52. | |
is our exports. And I think as a country we depended too much on | :02:53. | :02:55. | |
exports to the continent of Europe or to North America, you look at a | :02:56. | :02:59. | |
country like India and you see Britain has to be more part of this. | :03:00. | :03:02. | |
It is not all sunshine ` previous Indian governments have promised to | :03:03. | :03:05. | |
modernise India, and have been defeated by the elements. A typical | :03:06. | :03:11. | |
Mumbai monsoon, washing everything clean and new. It is what the Indian | :03:12. | :03:19. | |
people I have spoken to expect of Mr Modi's government, and what he has | :03:20. | :03:27. | |
promised. The world's second most populous country, determined to | :03:28. | :03:35. | |
become richer, maybe with the help and to the benefit of Britain. | :03:36. | :03:42. | |
Indonesians go to the polls to elect a new president, it is down to two | :03:43. | :03:46. | |
candidates, Prabowo Subianto and Joko Widodo. Indonesia, the world's | :03:47. | :03:53. | |
third`largest democracy, has almost 200 million eligible voters. The | :03:54. | :03:57. | |
counting will start just after votes close, which works out to noon local | :03:58. | :04:01. | |
time in the capital of Jakarta. Workers in Greece have begun a 24 | :04:02. | :04:06. | |
hour strike in protest at continuing cuts in government spending. | :04:07. | :04:11. | |
Hospitals, tax offices, and archaeological sites are expected to | :04:12. | :04:15. | |
be disrupted by the action. The workers are protesting against | :04:16. | :04:20. | |
austerity measures including a 40% reduction in salaries and pensions. | :04:21. | :04:24. | |
The striker and sides with a visit from Greece's international | :04:25. | :04:28. | |
creditors to check on the country's International progress. The bank and | :04:29. | :04:38. | |
fund are monitoring austerity measures which were a condition for | :04:39. | :04:42. | |
a bailout worth over 300 are in US dollars. A new canal which would | :04:43. | :04:48. | |
link the Atlantic and the Pacific is one step closer to becoming a | :04:49. | :04:52. | |
reality `` $300 billion United States. The project aims to | :04:53. | :04:57. | |
challenge the Panama Canal. The alternative route will pass through | :04:58. | :05:03. | |
Lake Nicaragua, from the Pacific to the Caribbean. Hong Kong company has | :05:04. | :05:07. | |
been granted a 50 year concession to build this channel. Earlier I spoke | :05:08. | :05:13. | |
with a representative from Shipping Australia and asked him what the | :05:14. | :05:18. | |
alternative route will mean for global trade. Shipping is a | :05:19. | :05:23. | |
competitive industry at the moment and the margins are slim. With an | :05:24. | :05:26. | |
extra competitor providing a canal between the Atlantic and Pacific, it | :05:27. | :05:29. | |
should put pressure on prices and make some savings. Savings, how much | :05:30. | :05:35. | |
more economical Willis the? It is hard to say at this stage. When you | :05:36. | :05:40. | |
hear of a $45 million investment to build the canal in the first place | :05:41. | :05:44. | |
come and you know they want a return on investment, you imagine they were | :05:45. | :05:49. | |
becoming too close to the bone. But the additional channel would provide | :05:50. | :05:51. | |
an alternative to shipping companies, hitting them more | :05:52. | :06:00. | |
flexibility in their booking times and would be welcome. The Panama | :06:01. | :06:03. | |
Canal currently has a lot of offal makes and delays ships by 20 to 30 | :06:04. | :06:08. | |
hours. This new channel, as you mentioned, will make aspirations | :06:09. | :06:14. | |
more efficient. Yes, the timing is probably not the best for the | :06:15. | :06:17. | |
Nicaragua Canal, because the Panama Canal is being broadened and an | :06:18. | :06:22. | |
extra channel included at the locks. There should be fewer bottlenecks | :06:23. | :06:29. | |
when the expansion is completed. But the Nicaragua Canal has some | :06:30. | :06:32. | |
benefits. For the North Asian trade through to the east coast of USA, | :06:33. | :06:38. | |
there are 500 miles less of steaming to go through the Nicaraguan canal. | :06:39. | :06:44. | |
How important is Asian trade to this new waterway? And how will Asian | :06:45. | :06:48. | |
economies benefit from this new channel? Look, I think this is | :06:49. | :06:53. | |
really a significant than a fit to the Asian trade. For a start, the | :06:54. | :07:00. | |
new channel will be deeper and wider `` significant benefit. Even the | :07:01. | :07:05. | |
expanded Panama Canal would take the largest ships from Brazil back to | :07:06. | :07:10. | |
China and Asia. But the new canal will be able to do so. That will | :07:11. | :07:17. | |
save them many days of steaming. Singapore's sovereign wealth fund | :07:18. | :07:24. | |
says its investments grew at a slower pace last year. In 2013 it | :07:25. | :07:28. | |
what stakes in many sectors but delivered much lower returns to | :07:29. | :07:31. | |
shareholders. Our correspondent has more. One of the world's largest | :07:32. | :07:36. | |
sovereign wealth funds. They have stakes in many different set is and | :07:37. | :07:41. | |
businesses, ranging from Chinese banks to telecommunication firms, | :07:42. | :07:47. | |
Coffey and nuts, and even infant formula. Temasek has its hands in | :07:48. | :07:52. | |
varied set it as a key part of Singapore's economy `` varied | :07:53. | :07:59. | |
sectors. Last year, returns have been hit by exposure to the banking | :08:00. | :08:03. | |
sector in China, where shares have fallen. The heads of its investment | :08:04. | :08:08. | |
division blamed this on short`term market volatility. China, in spite | :08:09. | :08:12. | |
of all the talk, we still see growing at around 7% per year. We do | :08:13. | :08:17. | |
see China offering as attractive returns in the medium term. So | :08:18. | :08:22. | |
really our focus is on a number of check to make sectors in China which | :08:23. | :08:25. | |
we think will benefit from those returns. You can see our investments | :08:26. | :08:30. | |
in the consumer sector and juice companies and food companies, in | :08:31. | :08:35. | |
technology, Ali Barba, so on and so forth. All these companies we think | :08:36. | :08:40. | |
will benefit from the growth of the Chinese economy. You are one of the | :08:41. | :08:44. | |
world's largest sovereign wealth funds, but you returns in 2013 | :08:45. | :08:49. | |
underperformed the broader market. Shouldn't you be doing a lot better? | :08:50. | :08:54. | |
Sometimes to get the superior long`term returns, you have to | :08:55. | :08:59. | |
invest at times and accept short`term market volatility. You | :09:00. | :09:03. | |
know, you mentioned that the Chinese market has been depressed for the | :09:04. | :09:06. | |
last year, but that has actually given us opportunities to make | :09:07. | :09:09. | |
high`quality investments. And we think we will generate superior | :09:10. | :09:12. | |
returns for the long`term. So I really don't think one year is the | :09:13. | :09:17. | |
right length to look at us from a performance perspective. If you take | :09:18. | :09:20. | |
five or ten years, we have delivered returns in line with or in excess of | :09:21. | :09:25. | |
our cost of capital. You remain committed to the investment in the | :09:26. | :09:30. | |
controversial company which was bought from the Thai Prime Minister | :09:31. | :09:36. | |
Shinawatra. Lots of political uncertainty in Thailand, any plans | :09:37. | :09:45. | |
to get rid of this stake? Shincorp as an investment, and the underlying | :09:46. | :09:48. | |
company, we are happy with the performance. In an emerging market | :09:49. | :09:53. | |
which builds on our theme of growing middle income population. We have | :09:54. | :09:56. | |
had political uncertainty in the past. What is more important thrust | :09:57. | :09:59. | |
is the operations of the company, Howard is doing, and ultimately, | :10:00. | :10:05. | |
that is what drives longer term returns `` what is important for us | :10:06. | :10:08. | |
is the operations of the company, how it is doing. He is keen to | :10:09. | :10:14. | |
stress that the lower returns are a blip in the bigger picture. | :10:15. | :10:18. | |
Temasek's strategy is to be an investor in it for the long haul. It | :10:19. | :10:22. | |
wants its shareholders to share in that journey. Thank you for | :10:23. | :10:26. | |
investing your time with us. The top stories this hour: Brazil | :10:27. | :10:39. | |
are out of the World Cup. The host nation was humiliated by Germany in | :10:40. | :10:42. | |
the first semi`final, losing | :10:43. | :10:43. |