Browse content similar to 30/06/2014. Check below for episodes and series from the same categories and more!
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to "working for a fair deal with Britain". Now on BBC News all the | :00:00. | :00:00. | |
latest business news live from Singapore. | :00:00. | :00:14. | |
Euphoric financial markets are out of step with economic reality, a | :00:15. | :00:20. | |
major report warns. And, it should be a time of fasting, but food | :00:21. | :00:23. | |
prices in Indonesia are expected to rise during the Muslim holy month of | :00:24. | :00:32. | |
Ramadan. Welcome to Asia Business Report. A major rally in global | :00:33. | :00:39. | |
financial markets is out of sync with a shaky economic outlook, that | :00:40. | :00:42. | |
is the view of the bank of International settlements, that is | :00:43. | :00:44. | |
regarded as the central bank of central banks, and focuses on | :00:45. | :01:03. | |
regulation. In its annual report, it warned emerging markets are at risk | :01:04. | :01:06. | |
of a run`up in stock and property prices. I asked Michael McCarthy in | :01:07. | :01:09. | |
Sydney why that was the case. The current concerns are that they will | :01:10. | :01:12. | |
withdraw the stimulus too abruptly, that will knock risk assets around, | :01:13. | :01:14. | |
and bring share markets crashing down. The BIS is pointing out that | :01:15. | :01:19. | |
the deflation concerned markets are not as large as some would expect, | :01:20. | :01:22. | |
and there is a great risk in keeping rates too low for too long, and | :01:23. | :01:26. | |
borrowing goes up, and then when the rates go up, we will have an asset | :01:27. | :01:35. | |
price crash. We have heard this before, we heard it during the | :01:36. | :01:38. | |
financial crisis, the World Bank and others warned that low interest | :01:39. | :01:41. | |
rates in the West were sparking inflows that were unsustainable into | :01:42. | :01:49. | |
the emerging markets in Asia. It is not new, why aren't they more | :01:50. | :01:55. | |
prepared for it? It is not new, you're correct, it is a long way in | :01:56. | :01:59. | |
global markets that could break at any time. They are trained to | :02:00. | :02:05. | |
balance it, and keeping in mind that systemic risks to banks are a key | :02:06. | :02:17. | |
aspect of their function. China was highlighted in the report, as facing | :02:18. | :02:20. | |
a possible banking crisis, what is that due to? Is that due to the | :02:21. | :02:27. | |
easing of monetary policy as well? China's economy is common to a large | :02:28. | :02:30. | |
extent, isolated from international investment, with currency controls | :02:31. | :02:32. | |
and inflow controls that authorities keep there, but a buoyant trade | :02:33. | :02:40. | |
feeds into the economy in China. Any stomping on the brakes could have an | :02:41. | :02:45. | |
impact. There is concern at BIS that the Chinese banking system is | :02:46. | :02:47. | |
opaque, they are concerned about shadow banking taxes, and there are | :02:48. | :02:50. | |
concerns that there will be a flow`on effect through the Chinese | :02:51. | :03:00. | |
economy. In other business news, BNP Paribas | :03:01. | :03:03. | |
are expected to plead guilty to criminal charges of violating | :03:04. | :03:05. | |
American sanctions with rogue nations. They are alleged to have | :03:06. | :03:12. | |
hid $30 billion of transactions involving blacklisted countries | :03:13. | :03:17. | |
including Iran, Sudan and Cuba. According to reports, BNP Paribas | :03:18. | :03:19. | |
could pay a record $9 billion penalty. | :03:20. | :03:27. | |
France plans to set up a Paris`based pay system that will use their | :03:28. | :03:30. | |
system, it signed on Sunday with their counterpart, along to | :03:31. | :03:33. | |
participate in the trade. Major European financial centres like | :03:34. | :03:36. | |
London and Luxembourg have competed to trade using China's currency, | :03:37. | :03:44. | |
which is gaining international use. Argentina is set to enter a | :03:45. | :03:48. | |
technical default for the second time in 15 years today as they | :03:49. | :03:52. | |
strike a last`minute deal with creditors. They were ordered by a US | :03:53. | :03:58. | |
court to make interest payments on their default in bonds which they | :03:59. | :04:01. | |
have been trying to avoid through a lengthy legal battle. They would | :04:02. | :04:05. | |
lose access to international markets if it he faults on its payments. `` | :04:06. | :04:16. | |
defaults. The World Bank has been making loans to poor countries since | :04:17. | :04:19. | |
it was founded in 1945, but the world 's most famous lender is now | :04:20. | :04:22. | |
undergoing its first restructuring in nearly two decades. Starting this | :04:23. | :04:26. | |
week, it will provide itself between 14 global practices that focus on | :04:27. | :04:29. | |
areas like energy and agriculture. Our correspondent spoke to the chief | :04:30. | :04:37. | |
financial officer about the move. It is a push to stay relevant. We set | :04:38. | :04:41. | |
up this ambition to eradicate poverty, it is amazing. It has | :04:42. | :04:47. | |
helped people on Earth since day one, we believe that, within our | :04:48. | :04:50. | |
reach, we can eradicate poverty. I am happy that we can consider this | :04:51. | :04:54. | |
objective, and I will be happier if we reach it. The World Bank | :04:55. | :05:01. | |
president aims for a further $400 million in cost savings, where will | :05:02. | :05:05. | |
it come from and will it result in job cuts? In the restructuring, | :05:06. | :05:10. | |
within the organisation, you have to address cost issues, that is in any | :05:11. | :05:12. | |
private sector organisation, true the government and true for an | :05:13. | :05:15. | |
organisation like ours, we want to make the institution more efficient, | :05:16. | :05:18. | |
then maybe job impacts, of course, but to minimise this, we have made | :05:19. | :05:21. | |
these decisions before which have had no impact. We had to address | :05:22. | :05:34. | |
these things regularly and properly, not every 20 years, a key issue is | :05:35. | :05:38. | |
that we want an organisation that is, to a certain extent, a little | :05:39. | :05:41. | |
bit too bureaucratic, driven by processes, and as rules`based, but | :05:42. | :05:43. | |
it needs to be more productively managed. Muslims around the world | :05:44. | :05:55. | |
began the holy month of fasting this weekend, in Southeast Asia, and in | :05:56. | :05:58. | |
Indonesia, the world 's most populous Muslim nation, that means | :05:59. | :06:00. | |
an increased demand for staple goods. Fasting and feasting can | :06:01. | :06:09. | |
often see prices jump dramatically in Southeast Asia 's largest | :06:10. | :06:14. | |
economy. But, the price of food could be on the minds of voters this | :06:15. | :06:22. | |
month. Now we go to our correspondant. | :06:23. | :06:25. | |
This weekend, millions of Indonesians began fasting, for the | :06:26. | :06:28. | |
Muslim holy month of Ramadan. And, as you see pretty much every year, | :06:29. | :06:31. | |
prices of fruits, vegetables, meats, they begin to rise, it is no | :06:32. | :06:36. | |
different this time around. This woman has been running this stall in | :06:37. | :06:45. | |
this market for the last 15 years. She says that this time around, | :06:46. | :06:53. | |
prices have gone up about 20%. Over here, you can see the major staples | :06:54. | :06:56. | |
of the Indonesian market, soya beans, that can be fried or boiled, | :06:57. | :07:04. | |
they go in soups. Over here, these bright red chilies, an important | :07:05. | :07:07. | |
part of Indonesian cuisine, but this year, the price rises are coming | :07:08. | :07:10. | |
against the backdrop of a presidential election. Many of the | :07:11. | :07:17. | |
street vendors here have been telling me that this time around, | :07:18. | :07:20. | |
they have not seen politicians come out to promise them lower prices in | :07:21. | :07:24. | |
the way that they normally do in the Muslim holy month of fasting. But | :07:25. | :07:30. | |
what they have seen is party members coming out to try to get votes from | :07:31. | :07:35. | |
their preferred candidates. The economy is a major issue in this | :07:36. | :07:38. | |
election. Whoever becomes Indonesia 's next president will have to | :07:39. | :07:41. | |
tackle the challenge of rising prices for this country. | :07:42. | :07:51. | |
India's new government will deliver its first budget next month, one | :07:52. | :07:55. | |
issue that will be under focus is the gap between what India sells | :07:56. | :07:58. | |
abroad and what it buys in for its own needs. It imports more than it | :07:59. | :08:05. | |
exports, which makes the economy vulnerable, as businesses try to | :08:06. | :08:07. | |
find markets abroad, they are worried. Now we go to our | :08:08. | :08:19. | |
correspondant. For the past 30 years, the | :08:20. | :08:22. | |
components made here have been sold around the world. Finding their way | :08:23. | :08:25. | |
into products like microwave ovens and machines used in hospitals. | :08:26. | :08:29. | |
Customers include global giants like Siemens and General Electric. | :08:30. | :08:35. | |
Despite the strong credentials, business is proving difficult. This | :08:36. | :08:42. | |
computer charger will be exported to countries like Germany, Canada and | :08:43. | :08:48. | |
France. Over the last few years, the cost of manufacturing these products | :08:49. | :08:51. | |
in India is often more expensive compared to other Asian countries, | :08:52. | :08:54. | |
because of that, the price tends to be higher. Due to these reasons, | :08:55. | :09:00. | |
buyers in America and Europe find some Indian made products less | :09:01. | :09:05. | |
attractive. The property is not really going down, it is time to | :09:06. | :09:09. | |
find a customer, and because of the global competition, costs are | :09:10. | :09:16. | |
reducing. The value of goods that they export is a sensitive topic. | :09:17. | :09:28. | |
Every month, it imports more than it sells abroad. Figures change | :09:29. | :09:31. | |
monthly, but recently, the gap has been about $10 billion. This has | :09:32. | :09:41. | |
been a cause for serious concern. To counter it, the government put curbs | :09:42. | :09:46. | |
on imports of gold. The yellow metal is the second biggest item on | :09:47. | :09:51. | |
India's import list after oil. It help to narrow the trade deficit. | :09:52. | :09:56. | |
Rather than restricting what comes in, the new government wants to | :09:57. | :09:59. | |
focus on increasing what goes out by giving a big push to home`grown | :10:00. | :10:07. | |
manufacturing. To achieve that, it is pursuing the idea of exporting | :10:08. | :10:09. | |
high`value products for military and defence. The Exporters are hoping | :10:10. | :10:16. | |
that next month 's budget will give them some temporary reprieve, | :10:17. | :10:21. | |
perhaps, with more tax rebates. But, more important, is India's new trade | :10:22. | :10:26. | |
policy due later in the year. The long`term plan is what the countries | :10:27. | :10:29. | |
manufacturers need to fill in the crucial trade gap. | :10:30. | :10:36. | |
You can get more of our stories and updates on the website, that is it | :10:37. | :10:39. | |
for this edition of Asia Business Report. We have Sport Today coming | :10:40. | :10:46. | |
up next. Thank you for watching. I'm Adnan Nawaz. The top stories | :10:47. | :10:49. | |
this hour. Iraqi government forces are continuing an offensive to | :10:50. | :10:52. | |
recapture the city of Tikrit, which Sunni insurgents seized earlier this | :10:53. | :10:54. | |
month. It's not | :10:55. | :10:55. |