25/03/2014 World Business Report

charges including the killing of a policeman. Those are the latest

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

Bundock and World Business Report. Russia's economy grinds to a halt as

the Ukraine crisis takes a heavy toll. Capital outflows are expected

to soar to $70 billion. Chinese President Xi Jinping travels

to France to try to revive flagging trade ties and sign potentially

blockbuster deals. Welcome to World Business Report.

I'm Sally Bundock. Also in the programme, we head to Istanbul to

hear from Greeks who moved there in search of work.

Russia says it expects investors to have moved up to $70 billion worth

of assets out of the country in the first three months of this year.

It's the clearest sign yet that investors are nervous as fears grow

of the impact tighter sanctions will have on the Russian economy. There

are also warnings of stagnant growth and rising inflation. The economy

grew by just 1.3% last year. Ilya Ponomarev was the only one of 445

Russian deputies in the State Duma who voted against Crimea joining

Russia. He says the crisis provides an excuse for poor economic

policies. They think that for Russia it is a big mistake what we have

done. One of the reasons why President Putin went so far and so

quickly was to disguise the problems that we have in our economy. Now

economic growth is virtually stalled in Russia. With this huge patriotic

uprising, people 's attention is shifted from the internal problems

and now we are thinking about Crimea and greater Russia and retaining

pieces of land and so on. With me is Otilia Dhand, Vice

President of Teneo intelligence. Everybody is starting to comment on

the impact that the sanctions will have on Russia, if they brought out

further. What is your take on how the Russian economy is doing? The

growth of the economy has been slowing down for several months,

especially in the last quarter of 2013. There is a single reason why,

but a combination of weak domestic demand and the completion of the

project in Sochi that had been driving investment in the country.

The crisis does provide a good excuse for Vladimir Putin's economic

performance. It will be used for several quarters to come. Russian

officials were saying yesterday that within this month it is more than

likely that $70 billion worth of capital will have left Russia. That

is more than the whole of last year. Should we be concerned about what

impact that will have? That documents a loss of confidence of

foreign investors in Russia. That is in terms of the financial system as

well as direct investment. These investments would have come from

either Germany or Italy or the country is now opposing Russia's

expansion into Crimea. This is likely to have a further effect on

the investment part of the GDP for Russia. It is hard to restore the

confidence of foreign investors once you have lost it. Now it looks that

there is nothing to restore confidence in terms of how

negotiations are going on between Russia, the US, and the EU,

especially with this sort of G`7 gathering going on. The next meeting

will definitely exclude Russia and it will not be in Russia but it will

be in Brussels in June. There is the argument that sanctions against

individual sectors, mining or gas for example, are not needed in order

to hit Russia hard in terms of economic growth or performance in

general. Our exclusion from international institutions, the

magnitude of political risk that is now associated with Russia, all hits

our investment in the economy. We have seen three months Russia going

from an emerging market that was very resilient and insulated from

the effects of what was expected to be the largest effect `tapering in

the US. It has gone to a poor performing economy. He's the leader

of the economy many believe will dominate the world in the coming

years. So when Chinese President Xi Jinping arrived in Europe at the

weekend the world paid attention. The man who runs the globe's second

biggest economy is mainly here to talk about trade. The EU is China's

most important trading partner, with imports and exports now worth well

over a billion euros a day. On Tuesday the tour moves to France and

our correspondent there, Hugh Schofield, looks ahead to the

Chinese presidents travel diary this week.

(INAUDIBLE) France, is preparing a sumptuous

welcome. The President will be in New York and then Paris for a state

dinner on Wednesday. Nothing is confirmed but it is hoped that

Airbus may clinch a major deal to sell 150 passenger jets to China, a

deal linked possibly with a new Airbus factory there. Other

contracts are also being looked at by Paris. The carmaker Peugeot will

sign a long forecast steel. The Premier will travel to Brussels by

the first visit by a Chinese premier to EU institutions. Anti`dumping

legislation will be on the agenda. When we have announcements of deals

will update you. The people of Greece are celebrating

185 years since independence from the Turkish Ottoman Empire. But for

some Greek people, it will not be a holiday. During the turbulent

economic times in recent years, many people from Greece opted to move

abroad in their hunt for work. And, despite a negative history between

the two nations, many set their sights on Turkey. But was it a good

move? Selin Girit sent this report from Istanbul.

This is one of the symbols of the booming Turkish economy. Turkish

Airlines now flies to over 100 countries and has an annual growth

of 20%. Its success is attracting pilots from all over the world.

Especially from Greece. There is a recession in my country. It has had

a serious effect on aviation. A previous company could not sustain

an acceptable level of salaries and a major decision to leave my

country. I settled with my wife here and will have a career here in

Istanbul. More Greeks are leaving their country to settle abroad.

Istanbul is becoming one of the most popular destinations for these

people. It is estimated that in the last couple of years almost 1000

Greeks have come to settle in the city. It is not only the booming

Turkish economy that attracts these people. The family groups play a

part in their decision as well. My grandmother was from the Asian side

of Istanbul. Two years ago I lost my job in Athens. I was a secretary in

a big company. I thought that it was a big opportunity for me to leave

Athens and come to stumble. The Turkish `Greek business Council says

there are Greeks working in every sector here. There are many Greeks

working in tourism, hospitals, banking. To Turkish banks are owned

by Greece. Greeks are coming to open restaurants, bars, and even

musicians of Greece. Once a year, the Greek community in Istanbul pour

out onto the streets to celebrate an ancient tradition. This young Greek

student of sociology joins the carnival. There are more

opportunities. You can find scholarships, you can easily find a

job. I thought it would be a better place for me to settle. With the

economic crisis back home, it seems that the number of Greeks living in

Istanbul is set to increase. Let's look at the financial markets in

Asia. A lot of this news from the US and

slowing manufacturing output has had an effect here. There are reports on

consumer confidence and housing data later today. Markets were hit in the

US. We will talk through the papers in a moment. Stay with us.

There are plans to expand shale gas fracking in the UK. Research suggest

they should learn from mistakes overseas. Some have already been