14/11/2013 World Business Report

BBC World News. Now for the latest financial news with Sally and World

Business Report. The Philippines Finance Minister

defends the government's response to Typhoon Haiyan and warns rebuilding

the economy will take years. Growth slows sharply in Japan, so is

Abenomics running out of steam? Welcome to World Business Report,

I'm Sally Bundock. Also, a big day for Janet Yellen, she faces a

grilling on Capitol Hill. As you have been hearing, it's been

nearly a week since Typhoon Haiyan devastated much of central

Philippines, killing at least 2200 people and displacing more than

67,000. `` 670,000. In all, about ten million people have been

affected by the disaster. As the true extent of the human tragedy

unfolds, the Philippine government is also beginning to take stock of

the economic cost. The country's Finance Secretary Cesar Purisima has

been speaking to the BBC. He started by telling us the priority for now

is to get aid to affected areas. At this stage, the focus of the

government is still on recovery and provision of basic services, such as

shelter, water, sanitation and hospital facilities. To put things

in perspective, the region that was affected accounts for 12.5% of our

GDP. We believe that, based on very preliminary Dato, there might be the

production of 8%`10%. `` data. The Philippines economy has been found

to be the most at risk, globally, from natural disasters. What is the

government doing to reduce that risk? Infrastructure is going to be

a key component. We are increasingly investing in infrastructure, 20% off

next year's budget. The approach is really to make sure that we mitigate

the impact of climate change, to a country like ours, among the top

three in the world in terms of vulnerability to natural disasters.

There is increasing criticism that the government hasn't done enough in

the rescue efforts, that they are not moving fast enough and there

wasn't enough prevention. The strength of the typhoon was like

the highest category of tornado but multiplied by 100. No country has

experienced this. The normal delivery of relief efforts are the

local government units and they were at the heart of the destruction. So,

all of the capacity on the ground was affected. In fact, there was no

communication or power. How long do you think it will take for the

Philippines to bounce back from this disaster? Many years to build

infrastructure. For example, after a typhoon, with less intensity, it

took at least one year to rebuild infrastructure. Maybe this will take

more than one year. Some of the infrastructure, under normal

circumstances, takes a long time, like transmission lines. You don't

build them overnight. That was the finance secretary of the

Philippines. Japan's economic growth rate fell

sharply in the third quarter, according to official figures out

today. Japan's GDP grew at an annual rate of 1.9% in the three months to

September. That's a bit better than forecast, but just half the 3.8% the

economy achieved in the second quarter. The figures will raise

questions about the sustainability of Japans economic recovery, which

has been motoring ahead thanks to the massive stimulus policies of

Prime Minister Shinzo Abe, known as Abenomics. Naomi Fink, Founder and

Chief Executive of Europacifica Consulting, joins me on webcam from

Los Angeles. Thanks for being on the programme. Put this number in

context today. How significant is that drop off in growth? What we are

seeing is a slowdown from several quarters of extremely high growth.

Many people view potential growth, the rate at which the economy can

grow stably, utilising all of its capital and resources, as between

zero foot `` zero .5% and 1%. We are still there for seeing a number

above the potential growth. The survey of forecasters were seized

fairly steady above potential growth to come, especially ahead of the

consumption tax hike. So, there's nothing to get overly worried about

from this one release. Talking about that consumption is tax hike, it

starts in the new year. What impact will that have, do you think? Do you

think it will dent growth? Or consumers stop spending? From the

time the consumption tax was still put in motion, over one year ago, my

outlook for the consumption tax hike was putting consumption ahead of the

hike. I think we will see some slowdown in consumption, especially

in domestic demand, following the hike. However, it does seem that

this administration is well poised to offer additional stimulus. If it

does so, the survey of forecasters notes it will `` could be a

difference of .5%. The big question is whether Sinn Soave will continue

to have the room to implement the stimulus. `` Shinzo Abe. We come

back to dependency on inflation. If it persists and we see recovery in

profits and tax revenues for the government, it should have a bit of

extra room. If inflation stalls, we will see another picture altogether.

Very briefly and in maintenance terms, how healthy is the Japanese

economy? Abenomics has been in place for a while. What's your take,

briefly? Clearly, the economy will turn structurally is not helping at

all. `` long`term structurally. Productivity is positive but the

growth rate has been declining in productivity ever since the last

decade. So, we are still in a situation where Japan needs to

recover from that blow over, over 20 years ago. So, I think this is

Shinzo Abe's challenge at the moment. Put in place reforms that

might cement the recovery once and for all will stop OK, thank you for

your time. Moving on. Someone else who has a

big challenge ahead of her. The woman the White House wants to run

the Federal Reserve faces lawmakers in a hearing on Capitol Hill today.

Dr Janet Yellen needs the approval of the Senate if she's to take over

from Ben Bernanke after he steps down in January. This report on the

day ahead. In choosing Janet Yellen for chair

of the US Federal Reserve, President Obama is asking her to set the tone

of America's monetary policy. Her credentials are solid but the task

ahead of her is anything but. We have made progress but we have a

long way to go. The mandate of the Federal Reserve is deserve all the

people. To many Americans still can't find a job and worry how they

will pay their bills and provide for their families. The Federal Reserve

can help if it does its job effectively. But before she can take

up her position here, she needs to get approval from lawmakers here,

and her reception on Capitol Hill may not be too warm. Republicans she

will get hard questions. Criticisms will focus not on her as an

individual, generally people agree she is supremely qualified for this

position, but a number of Republicans have a number of

criticisms of the Federal Reserve's policies in general and by and large

Janet Yellen supports the current slate of policies that the Federal

Reserve is pursuing. Policies like the $85 billion bond purchasers the

Federal Reserve makes every month and keeping interest rates near

zero. Letters that will be put in place by the current chair of the

central bank. `` measures put in place. She will be challenged when

she faces lawmakers on Wednesday. Despite that, she is likely to

become the next chair of the US Federal Reserve. The decisions she

makes from this building will have an effect on the United States and

economies around the world. We will be talking a lot about

central bankers in a few minutes when we review the papers. These are

the markets in Asia. Japan completely ignoring that growth

story. It's very much focused on what Janet Yellen had to say

yesterday, ahead of her Capitol Hill hearing about the US economy,

implying they will not draw back on stimulus for quite sometime. Sidhi

Singh for the papers.