10/01/2014 Asia Business Report


10/01/2014

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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lawful. Now on BBC News, all the latest

:00:00.3:59:59

business news live from Singapore. Japan's Prime Minister looks set to

:00:00.:00:18.

pledge billions of dollars of aid during his visit to Africa.

:00:19.:00:24.

And cooking with gas - why feeding a family in India is becoming a tough

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task. We start today with the Japanese

:00:27.:00:41.

Prime Minister, who is visiting the African state of Ivory Coast as part

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of a trip to the continent. His trip will be the first by a Japanese

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Premier in eight years and is aimed at boosting his international

:00:51.:00:54.

profile. -- boost to the country 's international profile. He is set to

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visit Mozambique and Ethiopia. He will be accompanied by a delegation

:01:01.:01:04.

of business executives from up to 29 companies. Japan is a major donor to

:01:05.:01:07.

Africa and has pledged an estimated $14 billion in aid over the next

:01:08.:01:12.

five years. It is expected to spend billions more in private investment.

:01:13.:01:18.

I asked what exactly the prime minister is doing in Africa.

:01:19.:01:28.

This is a sign that he would like Japan to take Africa much more

:01:29.:01:31.

seriously and would like Japanese companies to look harder at Africa

:01:32.:01:34.

for investment opportunities, and as a new market. In the past, Japan has

:01:35.:01:37.

looked at Africa as a place where perhaps they were sold a lot of

:01:38.:01:40.

second-hand Japanese cars and also gave a lot of aid, but it has not

:01:41.:01:44.

been seen as a market for Japanese products. As we have seen with China

:01:45.:01:51.

in the last few years, Africa is growing very fast. Many African

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economies are growing extremely fast at the moment, and people are

:01:56.:01:58.

starting to see Africa in a very different way. That is what the

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Prime Minister is trying to push. Do not look at Africa as a place where

:02:05.:02:08.

we just give money to help, but look at it as an opportunity.

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Do you think part of the reason for the trip is to try to counter

:02:14.:02:15.

China's growing influence? How successful do you think Japan would

:02:16.:02:22.

be at that? Japan has been in Africa longer than

:02:23.:02:26.

China. If you go to African countries, you will see the

:02:27.:02:29.

ubiquitous Toyota Hilux everywhere you go. African countries are very

:02:30.:02:33.

familiar with Japanese products, but it is China that has been making the

:02:34.:02:36.

big inroads, particularly with consumer products. I do not think

:02:37.:02:48.

they will be competing head-to-head. But another part of this, with the

:02:49.:02:52.

rivalry with China, what the prime minister has been doing since he

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came into power is trying to get Japanese companies to look

:02:56.:02:57.

elsewhere, not just investing in China. Japan is very dependent on

:02:58.:03:05.

China as its biggest export market, but he would like Japanese countries

:03:06.:03:08.

to look elsewhere. Southeast Asia, India, Africa, South America, to try

:03:09.:03:11.

to counterbalance the dependence on the Chinese market.

:03:12.:03:22.

To India, where one of the nation's biggest expenses is subsidising fuel

:03:23.:03:30.

for its people. In an attempt to offset the recent hike in fuel

:03:31.:03:33.

prices, they are considering raising the quantity of gas they provide

:03:34.:03:38.

every family. But it is an election year - are they trying to appease

:03:39.:03:41.

citizens, and can they afford the exercise?

:03:42.1:16:26

On course for delivery. This woman receiving her second gas

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cylinder in less than one month. Feeding a family of eight people has

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been a struggle for her over the last couple of years. Her son, the

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sole breadwinner, does not earn enough to support a huge family. A

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recent hike in cooking gas prices has made life even more difficult.

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TRANSLATION: How can anyone afford such an expensive cooking gas

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cylinder? I prepare the evening meal in the morning to avoid using extra

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cooking gas. The recent hike in nonsubsidised

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cooking gas prices has impacted many families across the country.

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Over 33 million households still use cooking gas cylinders. Distributors

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say that there is growing public anger against price hikes.

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When there is a price increase, the customer issues that resentment at

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the distributor level, because they cannot contact the oil industry. As

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the first contact person, we have to face the wrath of the customer.

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The government provides a subsidy for nine cooking gas cylinders

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consumed by every household annually. With an election in the

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offing, it wants to do more. That could come at a high price.

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The government loses nearly $12 on every subsidised cooking gas

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cylinder that is sold in the market like these. Despite that, there is

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tremendous political pressure to increase the subsidy for cooking

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gas. That could be a tough task, considering that the overall

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finances of the government are not in good shape.

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India's oil subsidy bill is already running higher than the government

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had accounted for in this financial year.

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This means any move to increase the cooking gas subsidy would further

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squeeze the government exchequer. With the recent local state

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elections, the ruling party suffered a heavy defeat.

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With elections around the corner, the current leadership is desperate

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to woo voters. But with the economy not in good

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health, the government will find out that it simply does not have the

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money to provide help to those suffering the hard cost of living.

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China has released its latest trade numbers for December and the

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official data says exports rose less than forecast from last year, while

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imports were up by over 8%. Several car brands have posted

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record sales. Luxury car demand has been growing in emerging markets

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such as China and India as income levels rise.

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Carmakers have also benefited from a recovery in the US, one of the

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biggest markets for luxury cars. After America's crippling recession,

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was largest economy seems to be recovering. The jobless rate in the

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US fell to its lowest rate in five years. Later today, they will lease

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the December jobs data, with markets around the world likely to react

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well if the numbers continue to tell a positive story.

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Despite the gains in the US labour market, the problem of the long-term

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unemployed remains severe, which is a big ongoing challenge for

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America's economy. This woman has been out of work for

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nine months. She has exhausted her unemployment benefits, and has very

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little left in the bank. I woke up one day and was not as

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positive as I once was. I was wondering what was wrong with me

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that I was not able to find a job. It starts to get you down on

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yourself, to be honest. I had gone through fits of depression here and

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there. It is hard, a struggle. I am not the type to not work. I need to

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be a productive member of society, and be around people.

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She does not have a job interview today, it is heading out to

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personally drop off her resume at a company she knows has an opening.

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Her way of setting herself apart from the competition. This career

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coach has seen many people like her. America's job market is improving,

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but prospects are tough longer you have been out of work.

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Imagine what happens when you have been out for a few years, and you

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are going out to the marketplace and are competing against individuals

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who are freshly unemployed, given that the market is opening up, you

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have people who are working and looking to make a change and you are

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competing against them. There are more than 4 million

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Americans that have been out of work six months or longer. The sheer

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number of long-term unemployed is having a ripple effect on the US

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economy, because of these workers are not earning to their full

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potential. It is less money in their pockets

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that they can spend on groceries, clothing, gas, bills, rent,

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mortgages. These are people that are a drag on our economy as a whole. It

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is this kind of spending that creates more employment in the first

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place. Despite the months of searching, she

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remains optimistic. Perhaps the next time she walks into this building,

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she will do it as an employee. That jobs report is being eagerly

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watched by many investors in Asia because they are fairly cautious, as

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you can see. Some gains, but fairly mixed because of declines in Korea

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and Australia. The China Dato was fairly mixed as

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well, investors not knowing what to make of that, but -- the China Dato.

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