25/03/2016 World Business Report

Europe's trillion dollar problem - new research shows corruption is

not just an issue for the developing world.

But is business culture slowly changing for the better?

Plus: How many trillions more will it take to get Japan's economy

going. There's still no sign of movement so what more can it do?

Also coming up is the Chinese economic slowdown and will look at

the latest figures. But also the major challenge the people doing

business around the world. It's a problem usually associated

with developing economies. But a new report - commissioned

by the European Parliament- claims that corruption is also exacting

a heavy price here in Europe. According to the study, the

European Union is losing almost a trillion dollars from

its economy (990 billion euros) each That takes into account direct

losses - such as money lost on tax But it also includes indirect

effects such as companies It ranges from the blatant paying

of bribes - to more subtle corruption - for

example granting privileged access The report is calling

for the establishment of a Europe-wide prosecutor to crack

down on dodgy deals. It's also urging

a unified procurement system across the EU which could remove many of

the opportunities for corruption. Britain comes out comparatively

well in this report - with the Scandinavian countries it's among

the least corrupt in the region. The UK's Bribery Act came

into force five years ago. So far only one company has actually

been convicted - a construction firm was ordered last

month to pay 2.5 million for failing to prevent a subsidiary paying

bribes to win contracts in Dubai. However, despite the lack

of other successful prosecutions, the law has been credited with

creating a sea change in UK corporate culture, as our business

correspondent Theo Leggett reports. In the global economy, bribery by

companies and individuals is a serious problem. The getting rid of

it is a difficult process. So here is the issue, if I decide to give my

business associate a nice fat envelopes topped with cash and he

gives me a lucrative contract in return, then net is clearly a

bribe. Would fight decide to employ his cousin in my company for the

same contract, that is also a bribe. According to the world economic

Forum, because businesses around the world something like $1 trillion

every year. The bribery act 2010 was designed to give Britain the

anticorruption powers it needed. To bribe foreign official and for a

company to fail to prevent bribery carried out on its behalf. The

British government faced criticism in 2006 the dropping an

investigation into questionable payments allegedly baying -- made by

a company. It later settled corruption charges with the United

States authorities paying a fine of $400 million. Experts say there's

now been a big change in attitudes in companies doing business abroad.

They used to have to ask, strike to pay and who do I hate to. And now

they are asking how will I avoid paying. And that is a big cultural

shift. Companies are becoming much more cautious about offering or

receiving corporate entertainment. In the 1980s and 1990s, you would've

seen companies hosting lavishly at corporate events like foot all the

events and other things like that. But what we have seen is a total

change away from that and lots of company's policies prohibit offering

it or even when they can offer it, the people they want a track to the

event will say they cannot go. This new steer approach may have

advantages. Companies with strong antibribery policies so that is now

helping them to win new business. So fewer free drinks but perhaps a

reason to celebrate nonetheless. Now Japan -

where there is more evidence its massive stimulus measures are

failing to boost the economy. Consumer prices

in Tokyo slipped around a third of 1 % year on year in March -

the biggest fall in 3 years. The Bank of Japan stunned global

markets in January by introducing negative interest rates to try to

stop banks sitting on their cash. It's already pumping some 180

billion dollars into the financial system by buying

up government bonds off the banks. But it has failed to shake Japan out

of its cycle of deflation or falling prices -

and there are signs the economy is Nicholas Smith is Japan strategist

at CLSA - he's in our Tokyo bureau. A very simple question, why? The

simple fact is there is not a whole lot of loan demand in the economy.

This idea that you bring in some money and you drive down the

interest rates is a lovely idea, but when there's no demand for it or you

are actually doing is hurting profitability of the bank. If you're

depending on get, don't damage the debt through the pipes of the

economy. To what more can do? -- so what more can it do? I would take

him out and put on a desert island. Central banks not just in Japan have

come to the limit of what they can do. If you remember that we talked

about the three arrows of economics, and the first was printed

money and the second one was to spend the money. Unfortunate, we

have been lied to because we heard nothing but fiscal austerity in the

last three years. Is that austerity that is taking a percentage point

off GDP at the moment. So basically lowering taxes is what they should

be doing? While there is a plan that has been quietly abandoned at the

moment to increase the VAT and Joseph Stiglitz has been in Japan

baking the Prime Minister not to go ahead with that tax increase. That

would probably be the most important thing. We also took a supplementary

budgets at the moment. The third arrow is reform, isn't it? What are

they going to do about that in terms of reforming the financial system?

Sure. If you remember the person you associate with supply-side reform is

Ronald Reagan, and it took such a long time until we got to Clinton

that he got to take the credit for what Reagan did. Yes, it takes a lot

of time. A lot of people forget that unlike much of the rest of Asia,

Japan is a democracy and within a democracy you cannot force people to

do what they don't want to do. So one of the most important thing

would be to free up the labour market and introduce the product of

dbase to pay. I think people seem very low wages for a long time is

saying that it is a companies it's used to paying them less. Thank you.

We're going to stay in Asia because neighbouring South Korea is also

struggling with the Chinese slowdown. We're looking at the

latest growth figures. South Korea posting its GDP figures showing that

the economy is growing in the revised to .6% in 2015. The Chinese

slowdown is taking a huge toll on regional economy. It is South

Korea's largest trading partner and from the last quarter we did see an

expansion of .7%. Essentially, slowing growth is a worry. The

country is in desperate need of economic reform. To see the growth

that it enjoyed in the Asian Tiger years. I spoke to a man in South

Korea earlier and he says that this lacklustre growth below the global

average is a wake-up call for the country. Over the last five years

career's growth rate has been declining from the would've --

wonderful rate it was that. They are losing the share in the world

economy. That is not what people are used to having. Career needs to

retool the economy and build up its human capital with the new

challenges and better education that will allow them to be competitive in

the future. And that is James Rooney. But cost free, which is open

to trade, it appears open the trade with their shares trading. They are

heading for the first losing week in six. Thank you.

Japanese technology firm Sharp says its annual earnings are likely to

fall short of its forecasts - due partly to weak sales in China's

Press reports have been suggesting Sharp -

which makes displays for smartphones and TVs - might report an operating

loss of "tens of billions of yen" for the financial year ending this

month - despite its forecasts of a 10 billion yen profit.

These concerns may mean Foxconn of Taiwan lowers

Let us have a look at the market. Concentrating on Asia, there is a

small gain regardless of those depressing figures. The Hang Seng

with downward movement in the Bombay Sensex is up just a touch. Fairly

quiet times as we come to the end of the week. And that is business! The

Labour leader Jeremy Corbyn is teaching at the National Union of