02/07/2013 World Business Report

latest headlines from BBC News. Now for the latest financial news with

Sally Bundock and World Business The clock is ticking in Egypt, with

pressure mounting from all sides to solve the political crisis. We look

at the economic problems fuelling the unrest. On the back of poor

China data - does Australia need to prepare for an end to the

commodities boom? Welcome to World Business Report. I'm Sally Bundock.

Also in the programme, the next part in our series on the impact of

the changing values of currencies - we focus on the Indian rupee. As

you've been hearing the crisis in Egypt is deteriorating rapidly

after the country's President and his opponents were given an

ultimatum by the army. They told politicians to end the political

crisis within 48 hours or they will intervene. The statement was met

with cheers from tens of thousands of people who took to the streets

calling for President Morsi, who was only elected last year, to go.

A critical part of the problem is Morsi's failure to resolve the

country's worsening economic situation, sending it into freefall

Since the 2011 revolution the Egyptian economy has gone from bad

to worse. Unemployment is up, so is the budget deficit, the Egyptian

pound has lost much of its value. And a shortage of fuel leads to

long queues of traffic that can now be found outside almost every

petrol station. Our economics reporter Andrew Walker has more

detail. Some of the driving forces behind the upheaval were economic.

Two years on from the fall of ex President Mubarak, and a year after

the election of Mahmut Morsi, the economy is still a serious problem.

Fuel is in short a pro -- supply and food is expensive. TRANSLATION:

Today it costs four or �5. It is not becoming better. Prices are

becoming more expensive. Since the unrest, Egypt has seen it Thoresen

and foreign investment fall sharply. -- tourism. Negotiations for loans

from the International Monetary Fund have failed to produce an

agreement. The government has been reluctant to agree to reforms which

will be unpopular. In the meantime, it has had financial support from

cutter and favourable terms from the Libyan oil. -- Qatar. With me

is Mahmoud Youssef, a former oil trader and former owner of Mira Oil

which closed down six years ago. What is your take on the economy?

The Muslim Brotherhood of government - it continues, for

another year, there will be no economy. The country has suffered

in a year more than it could ever imagine. The economy is based on a

number of factors - tourism is one of them. It accounts for 20% of

their GDP. We have about 10 million people relying on to reason. They

have successfully destroyed. -- to reason. You mean specific parts?--

tourism. People forget that Egypt is a country of culture and history.

The Pyramids and Sphinx, cruising the Nile are the dreams of people.

People are not working. Many would argue that after 30 years of a

dictatorship, essentially, only one year after a democratic revolution

- it is a very short time. You cannot expect to have the economic

strategy in place. True. We expect the government to come with some

vision. But they only have one vision and that is to form an

Islamic country that follows their own version of Islam. I am a Muslim,

they have no vision. How can you develop anything. Clearly, the army

is trying to take control and forced politicians to sort things

out but the political mess is a mess. There is not really an

alternative? Are off course there is. The army is not trying to take

a political role. They are trying to defend the people. The people

loved the Army. We do not have an army... What I mean by the question

is that in terms of a viable alternative to President Morsi - is

there one? Egypt is a country that has a 90 million people. We have

Nobel prizewinners. We have professors at M high tea. We have a

leading economist. -- MIT. They need to be selected it properly.

People who serve the country not serve a sect. We're here to serve a

population - a whole nation. There are people there. We have 300,000

graduates per year. There is a lot to discuss but we do not have time

now. Thank you for your time. It is interesting to get your perspective.

It is a story that is developing all the time. The value of the

currency in your pocket affects your way of life. We look at the

changing values of currencies and the impact on the people who use

them. We are examining the Indian currency. Last week, it hit an all-

time low versus the US dollar. Even in packs importers and all of the

country's prospect. Is it the worse still to calm? This man is an

importer of goods in Mumbai. He imports from many countries and

sells them in the domestic market. The rupee's tumble has hit his

business hard. The Indian currency has crossed the 60 rupees to the

dollar mark and he believes it will get worse. TRANSLATION: It is

expected that the dollar could even get to 65. I have stopped all new

imports and consignments until such a time that there is some stability.

We must keep our business running but we are running at a loss. If

the business progresses and the dollar does not stabilise, it is

very difficult for us to survive as this stint goes on. Manufacturers

and other businesses that rely on imported components and materials

are also feeling the pinch of the slide of the rupee. These include

automobile manufacturers here in India right through to those who

supply the fuel they run. They are also adding to the country's import

bill which is widening India's account deficit. Some industries

could also benefit. India is often called the pharmacy to the world

and its pharmaceutical industry is a major exporter. The weakening of

the rupee could help the sector. IT companies could also gain a

competitive advantage. Experts say that a falling rupee is more bad

than good news for India. In the context of India, there are

peculiarities. One is that a large part of our exports have a very

high import component. Petroleum exports, textile exports - they all

have large import components. In that sense, the depreciation does

not help those industries so much. There is a worry that the sliding

rupee may reverse positive trends such as inflation which has been

easing the last few months could rise. India's fiscal deficit could

also take a hit and cast a dark shadow on a country trying to move

on from slowing growth last year. Markets in Asia are mixed. Some are

doing well at have news from the US and Europe as far as manufacturing

goes. The weakness in China we saw and we talk of it now. China's

weakening economic data has dented excitement over the more positive

manufacturing activities in the US and the UK. They are causing

uncertainty. We have gained in currencies and commodities. Japan

and Korea are resilient. Australia is about to keep interest rates at

the lowest level at 2.75 %. In precious metals, and gold is

climbing for a third day after slumping 23% in the previous

quarter which was its worst worse in 45 years. When we speak to

analysts and traders, they say volatility in the market will