28/07/2014 World Business Report


28/07/2014

Similar Content

Browse content similar to 28/07/2014. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

lightning struck the coast of southern California. Those are the

:00:00.:00:00.

headlines. Now for the latest financial news.

:00:00.:00:19.

The Argentine debt default looming as time runs out for a deal later

:00:20.:00:26.

this week. Will there be a last`minute agreement? Latin America

:00:27.:00:31.

plays host to another leader from the east. This week, the Japanese

:00:32.:00:36.

Prime Minister, who has already struck a series of energy deals in

:00:37.:00:48.

Mexico. Welcome to the programme. Also in the programme, we focus on

:00:49.:00:52.

how the internet is radically changing the way we work. But is it

:00:53.:00:58.

always lucrative? It is an important week for Argentina. It must either

:00:59.:01:03.

pay up or default on money owed to a group of hedge fund investors due on

:01:04.:01:09.

Wednesday. It harks back to 2001, when Argentina found itself in

:01:10.:01:14.

financial turmoil. A majority of bondholders agreed to a debt swap

:01:15.:01:20.

deal at the time but some held out Andy `` and if Argentina fails to

:01:21.:01:32.

pay up... Argentina is rich in resources, has a well`educated

:01:33.:01:35.

workforce and is one of South America's largest economy is full of

:01:36.:01:41.

it has also fallen prey to a boom and bust cycle. In 2001, more than

:01:42.:01:45.

half of the possible `` population were living in poverty, triggering

:01:46.:01:50.

unrest. The country struggled with debt default and currency

:01:51.:01:55.

devaluation. By 2003, a recovery was under way and the IMF agreed to a

:01:56.:01:59.

vital new loan. Since then, Argentina has restructured most of

:02:00.:02:03.

its massive debt, offering creditors new bonds for the defaulted ones and

:02:04.:02:09.

has repaid the IMF. But some investors have not been willing to

:02:10.:02:12.

accept the debt swap offer and are instead insisting that they are paid

:02:13.:02:17.

in full. Argentina has until the 30th of July to find a solution or

:02:18.:02:23.

possibly default again. It also fears that a settlement would prompt

:02:24.:02:27.

claims from other investors, who felt shortchanged by the original

:02:28.:02:31.

debt restructuring. In the meantime, the economy is still struggling,

:02:32.:02:36.

poverty remains rife and unemployment high, with many

:02:37.:02:40.

Argentines still awaiting the benefits of the economic upturn.

:02:41.:02:51.

Thank you for joining us. Who are these so`called vulture investors?

:02:52.:03:00.

What is the likely outcome of this? This is a group of mainly hedge

:03:01.:03:08.

funds who have bought up the debt since the economic turmoil of 2001.

:03:09.:03:13.

They refused to participate in previous debt exchanges that place

:03:14.:03:19.

in 2005 and in 2010, when investors took a 65% loss on their holdings.

:03:20.:03:23.

And they have pursued Argentina in the courts for the last ten years,

:03:24.:03:31.

almost. This long`running saga has now come to an end. The US Supreme

:03:32.:03:38.

Court declined to hear Argentina's appeal and now Argentina faces

:03:39.:03:41.

possible default as soon as this Wednesday. Wednesday, they could

:03:42.:03:47.

default if they do not strike a deal with a small number of holdout

:03:48.:03:54.

lenders. Why would they choose to default when actually, it is a small

:03:55.:03:58.

number of people... The bill they would have to pay to them is not

:03:59.:04:03.

that large. Argentina is reluctant to make the payment because of a

:04:04.:04:09.

clause that was part of something that was written into the original

:04:10.:04:12.

debt exchange. This basically entitles the restructured

:04:13.:04:17.

bondholders to better terms if Argentina voluntarily makes a better

:04:18.:04:22.

offer to the holdouts. The definition of voluntarily is up for

:04:23.:04:30.

grabs, really, but Argentina said it could be open to a series of other

:04:31.:04:36.

demands and further litigation, which would be extremely costly, and

:04:37.:04:39.

it simply does not have the resources to pay everyone else who

:04:40.:04:42.

would cascade on from this holdout campaign. Briefly, if Argentina

:04:43.:04:48.

chooses to default on Wednesday, what then? The main impact would be

:04:49.:04:55.

domestic. This would deepen a recession that is already under way

:04:56.:05:00.

in Argentina, exacerbating some of the existing economic imbalances in

:05:01.:05:04.

the country such as inflation. It would put pressure on the currency,

:05:05.:05:09.

the reserve. The risk of economic contagion is actually fairly

:05:10.:05:14.

limited. There would probably be an impact on Brazil because it is an

:05:15.:05:18.

important trading partner for Argentina but really, this has

:05:19.:05:21.

already been priced in. Some form of default has been priced in by the

:05:22.:05:27.

markets already. Thank you. Very clear analysis. Something we are

:05:28.:05:32.

keeping a close eye on as this week progresses. We will update you on

:05:33.:05:37.

any deal done. This week, we are taking a look at the working lives

:05:38.:05:40.

of the Next generation, especially the ones who have been able to put

:05:41.:05:46.

their passions into paid work and are creating entirely new careers as

:05:47.:05:49.

a consequence. In India, the internet is changing the way many

:05:50.:05:54.

people work. While millions of people write blogs for fun, some can

:05:55.:05:58.

make a living for it, as long as they choose the right topic with a

:05:59.:06:03.

large audience. And in India, Bollywood blogging is a pretty

:06:04.:06:07.

popular activity. We report from Mumbai. Every week, this woman chats

:06:08.:06:19.

with Bollywood celebrities and asks them anything she likes. She is not

:06:20.:06:24.

a television presenter and this is not a television show. It is a

:06:25.:06:28.

Google hangout, a live event broadcast across the internet and a

:06:29.:06:33.

spin`off from her job as one of India's most famous bloggers. Her

:06:34.:06:39.

blog covers news and gossip mainly about the world of show business,

:06:40.:06:43.

especially Bollywood. Started as a hobby six years ago, she decided to

:06:44.:06:50.

go full`time in 2011. Now, there is so much web traffic that she has a

:06:51.:06:54.

small team of people working for her. If you want to be a good

:06:55.:06:57.

blogger, your passion should be for your art and your blog. You cannot

:06:58.:07:03.

decide to choose any topic and just get money from it. There has to be

:07:04.:07:09.

depth and content. There are millions of bloggers around the

:07:10.:07:11.

world, writing on anything you can imagine on the latest fashion trends

:07:12.:07:17.

to technology and tattoos. Some try to make money by accepting

:07:18.:07:23.

advertisements on their blog or by offering paid reviews. But the

:07:24.:07:25.

reality is that relatively few people make good money out of it.

:07:26.:07:30.

Not that it stops people from trying. Every week, you will find

:07:31.:07:35.

this 24`year`old woman in the colourful streets of Mumbai, getting

:07:36.:07:38.

her photograph taken in different outfits for her fashion blog. She

:07:39.:07:43.

has been doing this for almost one year and even though her blog

:07:44.:07:46.

receives 10,000 visits per month, she cannot make a living from it.

:07:47.:07:55.

They tend to think that I do not have enough comments on my blog

:07:56.:07:59.

sections, so they would not pay me for my opinions. I have been working

:08:00.:08:05.

for free. I have not made any money. Back in the office, we are

:08:06.:08:10.

discussing ideas with the team. Right now, only about 20% of Indians

:08:11.:08:17.

use the internet but that is increasing all of the time. While

:08:18.:08:20.

online trends are always changing, you can expect plenty more people

:08:21.:08:25.

will launch blogs about subjects they are passionate about, even if

:08:26.:08:30.

turning that hobby into a flourishing career remains a

:08:31.:08:35.

struggle. If you are watching us, you will

:08:36.:08:39.

know that last week, Japanese President `` you would know that

:08:40.:08:50.

last week, Chinese Premier Xi Jinping was in Latin America. And

:08:51.:08:54.

this week, it is the turn of Japanese Prime Minister Shinzo Abe.

:08:55.:09:00.

There is no Argentina on this itinerary but Shinzo Abe has been

:09:01.:09:03.

very busy nonetheless. He arrived in Mexico on Friday, signing a whole

:09:04.:09:08.

series of deals including in the energy sector. Since the shutdown of

:09:09.:09:13.

the country's nuclear reactors, energy has been very high on the

:09:14.:09:17.

agenda or Japan. And it comes very hot on the heels of a visit to the

:09:18.:09:25.

region by Chinese Premier Xi Jinping. They are wondering whether

:09:26.:09:29.

the billions of dollars of agreements signed by China can be

:09:30.:09:32.

matched by Japan. I do think it is more coincidental than anything else

:09:33.:09:38.

because Japan, while it is interested in the resources of Latin

:09:39.:09:41.

America, it is looking for a number of different things than China is.

:09:42.:09:45.

Certainly Shinzo Abe is after oil and gas deals but he is also looking

:09:46.:09:50.

for investment opportunities, new markets and Japanese exports,

:09:51.:09:52.

remembering that Latin America is home to some 600 million potential

:09:53.:09:58.

consumers, and it is also about diplomacy. Shinzo Abe is expected to

:09:59.:10:02.

try and rally support for Japan's bid to gain a permanent seat on the

:10:03.:10:06.

UN Security Council. Lots of areas for Shinzo Abe to cover. That is all

:10:07.:10:14.

for now. I will see you soon for the newspaper review.

:10:15.:10:29.

Thank you. And we will get to that review in a moment. First,

:10:30.:10:30.

Download Subtitles

SRT

ASS