:00:00. > :00:00.Britain". Now on BBC News, all the latest
:00:00. > :00:19.business news live from Singapore. Euphoric financial markets are out
:00:20. > :00:24.of step with economic reality, a major report warns. And, it should
:00:25. > :00:27.be a time of fasting, but food prices in Indonesia are expected to
:00:28. > :00:39.rise during the Muslim holy month of Ramadan.
:00:40. > :00:42.Welcome to Asia Business Report. A major rally in global financial
:00:43. > :00:46.markets are out of sync with a shaky economic outlook, that is the view
:00:47. > :00:51.of the bank of International settlements, that is regarded as the
:00:52. > :00:59.central bank of central banks, and focuses on regulation. In its annual
:01:00. > :01:06.report, it warned emerging markets are at risk of a runner`up in stock
:01:07. > :01:12.and property prices. `` a runner`up. I asked Michael McCarthy
:01:13. > :01:16.in Sydney why that was the case. The current concerns are that they will
:01:17. > :01:20.withdraw the stimulus to abruptly, that will knock risk assets around,
:01:21. > :01:24.and bring share markets crashing down. The BIS is pointing out that
:01:25. > :01:32.the deflation concerned markets are not as large as some would expect,
:01:33. > :01:35.and there is a great risk in keeping rates too low for too long, and
:01:36. > :01:39.borrowing goes up, and then when the rates go up, we will have an asset
:01:40. > :01:43.price crash. We have heard this before, we heard it during the
:01:44. > :01:48.financial crisis, the World Bank and others warned that low interest
:01:49. > :01:57.rates in the West were sparking inflows that were unsustainable into
:01:58. > :02:00.the emerging markets in Asia. It is not new, why aren't there more
:02:01. > :02:09.prepared for it? It is not new, you're correct, it is a long way in
:02:10. > :02:16.global markets that could break at any time. They are trained to
:02:17. > :02:21.balance it, and keeping in mind that systemic risks to banks are a key
:02:22. > :02:26.aspect of their function. China was highlighted in the report, is facing
:02:27. > :02:32.a possible banking crisis, what is that you too? Is that also due to
:02:33. > :02:36.the easing of monetary policy as well? China's economy is common to a
:02:37. > :02:39.large extent, isolated from international investment, with
:02:40. > :02:42.currency controls and inflow controls that authorities keep
:02:43. > :02:48.there, but a buoyant trade feeds into the economy in China. Any
:02:49. > :02:53.stomping on the brakes could have an impact. There is concern at BIS that
:02:54. > :02:58.the Chinese banking system is opaque, they are concerned about
:02:59. > :03:01.shadow banking taxes, and there are concerns that there will be a flow
:03:02. > :03:08.on effect through the Chinese economy. In other business news, BNP
:03:09. > :03:11.Paribas are expected to plead guilty to criminal charges of violating
:03:12. > :03:17.American sanctions with rogue nations. They are alleged to have
:03:18. > :03:21.hit $30 billion of transactions involving blacklisted countries
:03:22. > :03:25.including Iran, Sudan and Cuba. According to reports, BNP Paribas
:03:26. > :03:29.could pay a record $9 billion penalty. France plans to set up a
:03:30. > :03:36.Paris`based pay system that will use their system, it signed on Sunday
:03:37. > :03:42.with their counterpart, along to participate in the trade. Major
:03:43. > :03:45.European financial centres like London and Luxembourg have competed
:03:46. > :03:50.to trade using China's currency, which is gaining international use.
:03:51. > :03:55.The World Bank has been making loans to poor countries since it was
:03:56. > :04:00.founded in 1945, but the world 's most famous lender is now undergoing
:04:01. > :04:04.its first restructuring in nearly two decades. Starting this week, it
:04:05. > :04:10.will provide itself between 14 global practices that focus on areas
:04:11. > :04:16.like energy and agriculture. Our correspondent spoke to the cheese
:04:17. > :04:22.financial officer `` chief financial officer about the move. We set up
:04:23. > :04:29.this ambition to eradicate poverty, it is amazing. It has helped people
:04:30. > :04:35.on Earth since day one, we believe that, within our reach, we can
:04:36. > :04:38.eradicate poverty. I am happy that we can consider this objective, and
:04:39. > :04:44.I will be happier if we reach it. The World Bank president ends for a
:04:45. > :04:49.further $400 million in cost savings, where will it come from and
:04:50. > :04:52.bulletin tell job cuts? In the restructuring, within the
:04:53. > :04:56.organisation, you have to address cost issues, that is in any private
:04:57. > :05:00.sector organisation, true the government and true for an
:05:01. > :05:08.organisation like ours, we want to make the institution more efficient,
:05:09. > :05:13.then maybe job impacts, of course, but to minimise this, we have made
:05:14. > :05:18.these decisions before which have had no impact. We had to address
:05:19. > :05:23.these things regularly and properly, not every 20 years, a key issue is
:05:24. > :05:28.that we want an organisation that is, to a certain extent, a little
:05:29. > :05:32.bit too bureaucratic, driven by processes, and as rules `based, but
:05:33. > :05:38.it needs to be more productively managed. Muslims around the world
:05:39. > :05:43.began the holy month of fasting this weekend, in Southeast Asia, and in
:05:44. > :05:50.Indonesia, the world 's most populous Muslim nation, that means
:05:51. > :05:54.an increased demand for staple goods, fasting and feasting can
:05:55. > :05:58.often see prices jump dramatically in Southeast Asia 's largest
:05:59. > :06:04.economy. But, the price of food could be on the minds of voters this
:06:05. > :06:07.month. This weekend, millions of
:06:08. > :06:14.Indonesians began fasting, for the Muslim holy month of Ramadan. And,
:06:15. > :06:18.as you see pretty much every year, prices of fruits, vegetables, meats,
:06:19. > :06:24.they begin to rise, it is no different this time around. This
:06:25. > :06:34.woman has been running this stall in this market. For the last 15 years.
:06:35. > :06:41.She says that this time around, prices have gone up about 20%. Over
:06:42. > :06:46.here, you can see the major staples of the Indonesian market, soya
:06:47. > :06:51.beans, that can be fried or boiled, it goes in soups. Over here, these
:06:52. > :06:56.bright red chilies, an important part of Indonesian cuisine, but this
:06:57. > :07:00.year, the price rises are coming against the backdrop of a
:07:01. > :07:04.presidential election. Many of the street vendor is here have been
:07:05. > :07:08.telling me that this time around, they have not seen politicians come
:07:09. > :07:12.out to promise them lower prices in the way that they normally do in the
:07:13. > :07:16.Muslim holy month of fasting `` vendors. But what they have seen as
:07:17. > :07:20.party members coming out to try to get votes from their preferred
:07:21. > :07:24.candidates. The economy is a major issue in this election. Whoever
:07:25. > :07:34.becomes Indonesia 's next president will have to tackle the challenge of
:07:35. > :07:37.rising prices for this country. India's new government will deliver
:07:38. > :07:41.its first budget next month, one issue that will be under focus is
:07:42. > :07:47.the gap between what India sells abroad and what it buys in for its
:07:48. > :07:52.own needs. It imports more than it exports, which makes the economy
:07:53. > :07:58.vulnerable, as businesses try to find markets abroad, other
:07:59. > :08:01.businesses are worried. `` they are worried.
:08:02. > :08:04.For the past 30 years, the components made here have been sold
:08:05. > :08:12.around the world. Finding their way into products like microwave ovens
:08:13. > :08:16.and machines used in hospitals. Customers include global giants like
:08:17. > :08:25.Siemens and General Electric 's. Despite the use strong credentials,
:08:26. > :08:28.business is proving difficult. This computer charger will be exported to
:08:29. > :08:33.countries like Germany, Canada and France. Over the last few years, the
:08:34. > :08:37.cost of manufacturing these products in India is often more expensive
:08:38. > :08:44.compared to other Asian countries, because of that, the price tends to
:08:45. > :08:47.be higher. Due to these reasons, buyers in America and Europe find
:08:48. > :08:54.some Indian made products less attractive. The property is not
:08:55. > :09:06.really going down, it is time to find a customer, and because of the
:09:07. > :09:11.global competition, costs are reducing. The value of goods that
:09:12. > :09:15.they export is a sensitive topic. Every month, it imports more than it
:09:16. > :09:20.sells abroad. Figures change monthly, but recently, the gap has
:09:21. > :09:26.been about $10 million. This has been a cause for serious concern. ``
:09:27. > :09:31.$10 billion. To counter it, the government put curbs on imports of
:09:32. > :09:35.gold. The yellow metal is the second biggest item on India's import list
:09:36. > :09:40.after oil. It help to narrow the trade deficit. Rather than
:09:41. > :09:44.restricting what comes in, the new government wants to focus on
:09:45. > :09:50.increasing what goes out. By giving a big push to home`grown
:09:51. > :09:53.manufacturing. To achieve that, it is pursuing the idea of exporting
:09:54. > :10:00.high`value products for military and defence. Exporters are hoping that
:10:01. > :10:03.next month 's budget will give them some temporary reprieve, perhaps,
:10:04. > :10:09.with more tax rebates. But, more important, is India's new trade
:10:10. > :10:14.policy due later in the year. The long`term plan is what the countries
:10:15. > :10:21.manufacturers need to fill in the crucial trade gap.
:10:22. > :10:27.You can get more of our stories and updates on the website, that is it
:10:28. > :10:40.for this edition of Asia Business Report. We have Sport Today coming
:10:41. > :10:43.up next. Thank you for watching. Hello there, you are watching BBC
:10:44. > :10:44.News. I'm Adnan