Browse content similar to 28/12/2015. Check below for episodes and series from the same categories and more!
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With the recent glut in oil prices, investors are eyeing Saudi Arabia's | :00:07. | :00:17. | |
Can the Kingdom find alternative sources of income? | :00:18. | :00:25. | |
And, it's been a torrid year for German car maker Volkswagen. | :00:26. | :00:28. | |
We'll take a look back at the emissions scandal that | :00:29. | :00:30. | |
A very warm welcome to word business -- World Business Report. | :00:31. | :00:51. | |
In a minute, we'll havemore on China's anti corruption crackdown | :00:52. | :00:54. | |
But first: All eyes are on Saudi Arabia, which is expected to | :00:55. | :00:58. | |
The king has already said the country wants to diversify its | :00:59. | :01:03. | |
sources of income, as it strives to cut its dependence on oil revenue. | :01:04. | :01:06. | |
The world's top oil exporter is expected to announce that it has run | :01:07. | :01:09. | |
a big deficit this year, thanks to persistently low oil prices and the | :01:10. | :01:12. | |
We're expecting more details in around six hours, | :01:13. | :01:16. | |
plus a "transformation plan" later in the month. | :01:17. | :01:18. | |
Richard Thompson is the Editorial Director at | :01:19. | :01:20. | |
He joins me alive. Thank you for joining us. In recent years the | :01:21. | :01:36. | |
government in Saudi Arabia has simply announced the budget but it | :01:37. | :01:40. | |
year they will hold a news conference to explain some of the | :01:41. | :01:46. | |
major changes, aren't they? Yeah, I mean, it is very significant because | :01:47. | :01:51. | |
of the change in oil prices. And because we have a new king from the | :01:52. | :01:55. | |
start of last year. This is his first budget. He is introducing | :01:56. | :01:58. | |
significant changes across the government. So we have the pressure | :01:59. | :02:04. | |
on Riyadh which is significant, it is 90% of their income. Saudi Arabia | :02:05. | :02:10. | |
has this role as a political and social leader in the region and so | :02:11. | :02:18. | |
Riyadh has to balance the idea of providing growth and momentum and | :02:19. | :02:22. | |
economic diversification as mentioned but also balancing its | :02:23. | :02:27. | |
books. We expect it to announce changes to spending and possibly to | :02:28. | :02:32. | |
revenue policy. It is designed to cut this huge deficit that has been | :02:33. | :02:42. | |
running. Estimates of about $133 billion US. That is about 20% of | :02:43. | :02:49. | |
GDP. Expectations are for it to next year be reduced significantly. It | :02:50. | :02:53. | |
will still be large, which is largely to do with this glut in oil. | :02:54. | :02:59. | |
That is largely Saudi Arabia's own doing. Saudi Arabia has a very | :03:00. | :03:07. | |
difficult balancing act to play, it is heavily committed to spending and | :03:08. | :03:11. | |
wants to continue to diversify and create jobs, but it has to balance | :03:12. | :03:16. | |
the books. Long-term it has to protect the position as one of the | :03:17. | :03:21. | |
biggest and most important suppliers of energy. The strategic position | :03:22. | :03:31. | |
regarding oil policy has being to keep pumping oil prices. It would | :03:32. | :03:35. | |
like to take its competitors out of the market and retain this | :03:36. | :03:39. | |
influence, because prices will start to come back up and Saudi Arabia | :03:40. | :03:43. | |
wants to be in the best position for that day. The King has said he wants | :03:44. | :03:49. | |
to diversify the economy away from such a heavy reliance on oil. What | :03:50. | :03:53. | |
areas are they hoping to diversify into? Well, one of the primary areas | :03:54. | :04:01. | |
is manufacturing, so, obviously, Saudi Arabia produces a huge amount | :04:02. | :04:05. | |
of oil and a large percentage is exported as crude oil. In refining | :04:06. | :04:11. | |
it into higher value petroleum products and taking that process | :04:12. | :04:16. | |
further down or up the value chain into manufacturing, downstream | :04:17. | :04:23. | |
manufacturing, you can create a more industrialised diversify at economic | :04:24. | :04:28. | |
base, which is a priority, downstream diversification of the | :04:29. | :04:33. | |
oil sector. They are also looking at mining, the development of non- oil | :04:34. | :04:37. | |
natural resources that Saudi Arabia has, and tourism, you know, | :04:38. | :04:45. | |
developing Saudi Arabia beyond that Hajj pilgrims, trying to get Saudis | :04:46. | :04:50. | |
to spend more in the kingdom. It is quite a wide ranging strategy that | :04:51. | :04:58. | |
they have. We will hear much more in around six hours with the details of | :04:59. | :05:04. | |
the budget. Good to hear your thoughts and thank you for joining | :05:05. | :05:06. | |
us. One of the big shocks of 2015 came | :05:07. | :05:07. | |
when Volkswagen was forced to admit that cars it had sold in North | :05:08. | :05:12. | |
America as "clean diesels" were in fact anything but, and could only | :05:13. | :05:16. | |
pass emissions tests with the help of some rather special, | :05:17. | :05:19. | |
and rather illegal, software. The company is still struggling with | :05:20. | :05:21. | |
the fallout from the scandal, which triggered the recall | :05:22. | :05:23. | |
of 11 million cars worldwide. And as Theo Leggett reports, | :05:24. | :05:26. | |
the subject of car emissions and what to do about them is likely | :05:27. | :05:28. | |
to prove a major theme In mid-2015 Volkswagon was riding | :05:29. | :05:45. | |
high. It had become the best selling car maker in the world. Then it all | :05:46. | :05:51. | |
went badly wrong. The company was caught using illegal software to | :05:52. | :05:54. | |
help its diesel cars pass emission testing is in the US. So, let's be | :05:55. | :06:02. | |
clear, our company was dishonest. With the EPA and the California Care | :06:03. | :06:09. | |
Act Resources Board, and with all of you. In my German words we have | :06:10. | :06:17. | |
screwed up. 11 million cars around the world were fitted with this | :06:18. | :06:21. | |
cheating software. Fixing it would cost billions. The CEO, seen here in | :06:22. | :06:26. | |
happier times, was forced to resign. What Volkswagon was doing was | :06:27. | :06:30. | |
deliberate and illegal but the scandal has highlighted a wider | :06:31. | :06:32. | |
problem with the way in which cars are tested. Simply the procedures | :06:33. | :06:37. | |
are too artificial easy to cheat, and don't really reflect what goes | :06:38. | :06:43. | |
on out in the open road. Here in Brussels, European lawmakers have | :06:44. | :06:46. | |
been working on a new and better test for some time. Not everybody is | :06:47. | :06:50. | |
happy with what they have come up with. The idea is to make sure that | :06:51. | :06:55. | |
cars are tested out on the road as well as in the lab. But | :06:56. | :06:59. | |
environmentalists said the standards are far too lenient. Governments | :07:00. | :07:04. | |
have set limits which are twice as high as were allowed in the | :07:05. | :07:07. | |
laboratory and they have delayed the introduction of those limits, so, so | :07:08. | :07:12. | |
far governments are more concerned about the interest of the car | :07:13. | :07:15. | |
industry than the health of citizens. Car companies have been | :07:16. | :07:20. | |
accused of lobbying against these rules but they say they are actually | :07:21. | :07:26. | |
in favour of them. We hope that the new testing methods, which had been | :07:27. | :07:31. | |
proposed and which were stricter than today, will be agreed sooner. | :07:32. | :07:35. | |
OK but have you been lobbying to water down the rules at any point? | :07:36. | :07:40. | |
We have just wanted to make sure that whatever is on the table is | :07:41. | :07:46. | |
realistic and technically feasible. There is no question the Volkswagen | :07:47. | :07:53. | |
scandal cast a cloud over the industry. The question is whether it | :07:54. | :07:57. | |
has a lasting impact, or whether talk of cleaning up emissions is | :07:58. | :07:59. | |
just so much hot air? Chang Xiaobing, he's chairman of one | :08:00. | :08:03. | |
of China's largest state-owned mobile operators, China Telecom, | :08:04. | :08:06. | |
is being investigated by the Mariko Oi is in our | :08:07. | :08:08. | |
Asia Business Hub in Singapore. This is a big story in China, isn't | :08:09. | :08:26. | |
it? Indeed, Alice. He was actually reported missing on Sunday by local | :08:27. | :08:29. | |
media but it has since been announced that he is being | :08:30. | :08:35. | |
investigated, suspected of violation of discipline according to a | :08:36. | :08:39. | |
statement released on the website of the central commission for | :08:40. | :08:42. | |
discipline inspection. We don't know much about this investigation. | :08:43. | :08:45. | |
According to the statement he was the former chairman of the second | :08:46. | :08:54. | |
biggest Chinese operator, before becoming the CEO of China Telecom. | :08:55. | :08:57. | |
In August, there were reports of the government was considering merging | :08:58. | :09:01. | |
these companies. Of course, he is the latest in a series of high | :09:02. | :09:05. | |
profile executives to be investigated by the authorities. In | :09:06. | :09:11. | |
fact, 70 senior officials have been investigated since Beijing started | :09:12. | :09:17. | |
to crack down on corruption. So, despite the year-end, the | :09:18. | :09:20. | |
investigation continues. Good to check in with you. Thank you. | :09:21. | :09:22. | |
Most Asian stock markets ticked up Monday - as traders returned | :09:23. | :09:25. | |
Chinese shares are rising on news that lawmakers have agreed to start | :09:26. | :09:29. | |
Oil prices have rebounded from multi-year lows while mainland | :09:30. | :09:40. | |
Leading insurers have said they'll pass on to customers | :09:41. | :09:58. | |
a 100% of the savings made from a government crackdown | :09:59. | :10:02. |