22/07/2014 Asia Business Report

drugs offences which she had always denied. Those other

business news live from Singapore. Fuel subsidies, as we await

final count of Indonesia's collection, we look at a key

economic issues facing the new president. Subsidizing petrol has

led to a ballooning deficit, which is unsustainable for their economy.

Shanghai's shut down. A food scare in China said to be selling out of

date meat. Welcome to Asia Business Report. By

an `` I am Rico Hizon. Indonesia is set to announce the

winner of the presidential election today with almost all of the votes

counted. Most private tallies give Joko Widodo a slim lead over his

rival. Whoever takes over as president will have to tackle the

issue of fuel subsidies, the main cause of their current deficit. Now

we go to our correspondant from Jakarta.

Every year, Indonesia spends $20 billion subsidizing fuel for its

citizens. Petrol at these pumps is around 56 cents per litre, which

means that Indonesians are paying some of the cheapest prices in the

world for their fuel. This is a gas guzzling country and demand is high

with the middle class buying more than ever before. Critics say fuel

subsidies only benefit the wealthy in Indonesia and raising subsidies

is unlikely to be popular. TRANSLATION: I don't agree with the

decision to get rid of subsidies. They keep raising prices, it is

enough. TRANSLATION: I guess the subsidies must be reduced but it

would be better if they could hand back some cash to the poor in some

other way. Analysts say that the reality is that Indonesia no longer

has a choice when it comes to raising fuel prices. Subsidizing

petrol has led to a huge deficit, which is unsustainable for their

economy. It could prove to be dangerous as this country tries to

maintain economic stability in the future.

Malaysian Airlines faces a difficult road ahead as it tries to restore

its reputation in the wake of its disasters, but could the flood of

compensation claims also affect the airline's bottom line? Solicitor,

Joseph Wheeler, is an expert on this issue and he gave us his estimate on

how much the claims are likely to cost. In a loss of this size,

typically the claims could run to hundreds of millions of dollars.

White hundreds of millions of dollars. `` hundreds. And currently

they are recovering from the loss of MH370. Is there any prospect of

getting back the original compensation money given that it is

possible they are not to blame? Good as they negotiate with the

Russians, the Ukrainians or the pro`Russian separatists? Only time

will tell. History has shown us that in cases like this, that either an

admission by a government or persuasion through political efforts

can result in that sort of compensation. Or full compensation

to be payable to passengers, they would be subject to the Montreal

Convention, which covers proven losses, but does not cover all of

the losses that these families are tragically facing now. Could they be

legally negligent, given the decision was to fly through a war

zone? Negligence is a curious issue when it comes to air crash cases. It

is strictly not applicable in terms of liability of the air carrier,

except insofar as the measure of damages. But with all of this

compensation being paid, could the airline go bankrupt? There have been

a lot of questions about the financial capacity of Malaysian

Airlines, but what people must remember with the international

treaty is that the airline must be fully insured for losses of this

kind. That is mandatory under the Montreal Convention. That was,

Joseph Wheeler, an expert in aviation compensation claims and

joined us from Brisbane. Keep up`to`date with all the latest

developments into the MH17 crash right here on BBC News. Log onto our

website where you will find special coverage including news that revels

in Ukraine have handed over the flight data recorders to Malaysian

authorities. British regulators are looking over

allegations of price`fixing. The Serious Fraud Office is looking into

alleged fraudulent conduct and more than a dozen international agencies

are investigating claims of price manipulation. It is alleged that

online chat rooms were used to fix benchmark prices.

The board of Time Warner has taken steps to fend off the takeover bid

of Rupert Murdoch. Hate eliminated a petition that could have been used.

Last week they rejected a $75 billion takeover offer from the

media giant, 21st Century Fox. Yahoo has acquired an application

analytics company called Flurry to help boost advertising revenue from

smart phones. Flurry helps app developers learn more about their

users and deliver more personalized ads to them. Some are saying that

they paid up to US $300 million. A factory in Shanghai has been shut

down for selling out of date meat to restaurants across China, including

McDonald's and KFC. It is the latest in a number of food scares.

This food scare was triggered after a report on television, which said

that the supplier who was selling this meat had passed its sell by

date. Both the giants involved, McDonald's and KFC, say that when

they found out, they immediately stopped supplies and will carry out

investigations into how this could've happened in the first

place. It is the latest in a long line of food safety scares in China

that have damaged consumer confidence.

Generally speaking, foreign brands are seen as more reliable here and

in terms of KFC, this is the second safety scare for them in 12 months,

the last one was in December and sales slumped after that. With this

latest scare, with than 4000 KFC restaurants in China, they will once

again be worried that this will affect their bottom line. Technology

companies are integrating the internet with other devices. It

might be convenient to check on your laundry or adjust your thermostat

from the office. Could there be security implications? I asked Hugh

Thompson if people are ready for this level of integration. That is

the biggest thing on the mind of security professionals. As we

connect the washing machine, the refrigerator, as your card now talks

to Facebook, are we ready for this kind of interaction? Is security in

place as white or consumers... Can we trust these devices? I think that

we are starting to get to the point where we are layering security onto

those technologies, but we are just at the very beginning because it has

exploded so quickly `` car. `` in place? Now we are asking how we take

these devices and make sure they are safe. I am sure that hackers are one

step ahead of these companies. They could turn on your other than oil

float your kitchen temporarily or even control your car. `` or flood.

You have to be ahead of the curve. Some of these guys in the hacker

community are very talented but the good news is, there are a lot of

smart people who have made the security profession their career

now. It is becoming a path for smart developers, people who are excellent

in the business field and we are seeing a huge growth in the security

community to counteract that kind of hacking. This integration of devices

are already widely used in the United States. You can control your

thermostat and washing machine. Is this technology already being used

widely in Asia? It is Ground Zero. If you think about the massive

penetration of smartphones. Think of how many things are now connected to

your smart phone. Asia is a very interesting place because it is the

place that many companies are starting to run early experiments in

getting the product out to market. How do you raise productivity in

sweltering heat? In Seoul, employees are allowed to take a one hour

afternoon nap in summer. There is a catch, staff have to make up lost

time by working overtime. Before we go, here is a quick look

at the market. Asian markets are currently mixed. US equities were

treated overnight after investors were cautious over the issue in

Ukraine with Russia. The Australian index is down slightly. Thank you

for investing your time with us. I am Rico Hizon. By `` goodbye for

now. Welcome to BBC News. I'm Adnan

Nawaz. The