11/03/2016 Asia Business Report


11/03/2016

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Now on BBC News all the latest business news live from Singapore.

:00:00.:00:15.

The European Central Bank cuts rates even further. Is it a sign of things

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to come in Asia? And how India is looking to private investment for

:00:24.:00:26.

more innovation in its struggling health system.

:00:27.:00:34.

Welcome to Asia Business Report. There's been a major intervention by

:00:35.:00:43.

the ECB to try to revive the eurozone's flagging economies. In a

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move that surprised the financial markets, the ECB cut three interest

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rates and announced it was pumping an extra 20 billion euros a month

:00:54.:00:57.

into the system. But some analysts fear it may not be enough to restore

:00:58.:01:02.

growth, as our economics editor explains.

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The eurozone has an economic problem. It's six? A central bank

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that wants to print money and offer interest rates so low they are

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actually negative -- it's fixed. Mario Draghi is the man charged with

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rescuing those sickly economies that are suffering deflation and slowing

:01:21.:01:25.

growth. It's a fairly long list of measures, and each one of them is

:01:26.:01:32.

very significant and devised to have the maximum impact into boosting the

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economy and the return to price stability. So we have shown that we

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are not short of ammunition. So what does that ammunition look like? The

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ECB cut its three main interest rates to try to stimulate growth.

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The central bank is so keen to get banks lending again it lowered one

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of its key rates, the deposit rate, two -0.4%, a negative interest rate

:02:04.:02:09.

which has the effect of charging banks for depositing money.

:02:10.:02:12.

Quantitative easing, the increase in the supply of central bank money to

:02:13.:02:19.

eurozone economies, will be raised to 80 billion euros a month. That's

:02:20.:02:24.

up by 20 billion euros. Mr Draghi also revealed cheap loans to banks

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will be provided in a concerted effort to rescue ailing eurozone

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economies. Now, will it work? That's a question I put to a former

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financial regulator. I'm still not convinced it's going to pull the

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Euros own out of its medium-term problem of low growth and low

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inflation, because I think we are literally at the limit of what

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central banks can achieve by simply reducing interest rates still

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further and larger cutely operations. Mr Draghi agrees, at

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least in part, the ECB cannot be a 1-man rescue mission. Some of the

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problems are that central banks can't do it alone, governments have

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to do their bit with structural reforms and in some cases fiscal

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policy as well. For central banks, they can do more, but there are

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risks associated with some of those policies. Frankfurt, the ECB's home,

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and the place under scrutiny for unorthodox economic policies that no

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one is yet sure will actually work. Here in Asia we have recently seen

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the bank of Japan introducing negative interest rates with that

:03:35.:03:37.

same objective, to help boost growth. They meet again next week.

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There is also a Fed meeting coming up. What does the ECB decision mean

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in the wider global context? What pointers can we take for Asian

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economies? People take a lead from the markets, which viewed it quite

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negatively. The sense in the market is that we're not really sure if

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this works and we are worried they seem to be reaching the limits of

:04:03.:04:06.

what they can do with negative rates, maybe therefore the reaction

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would be slightly negative. The fact Asian central banks and the ECB as

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well have had to resort to this relatively dramatic measure, what

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does that say about growth in the world economy? Certainly growth in

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Europe and Japan isn't great, but it's more that they're worried first

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about the market volatility earlier in the year and about the

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persistently low level of inflation. In some ways the rest of

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Asia doesn't really have to worry about that. The growth rate may not

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be fabulous but it's reasonably steady, about where it has been for

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the last few years, and they do have room to loosen policy to support

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growth if they need to, something lacking in Europe. Looking at Japan,

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they have shown they have taken rates to negative territory in an

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attempt to boost growth. What does a country like Japan do, how much

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further can it get? This is the problem, the markets saw the move

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for Japan badly, the yen strengthened and if it would have

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affected it would have weakened. The Bank of Japan has made a huge effort

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in the past few years. It had some success, the labour market is tight,

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profitability is good, it is quite an achievement in Japan after 15

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years of deflation. But it's not really moving fast enough and the

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Central Bank seems to be running out of ammunition. Absolutely. What are

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the tools that central banks have? Or do the governments need to step

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in to fix these problems? The central Bank has made fairly heroic

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efforts, especially in Japan, in recent years. The structural reform

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has been lacking, especially in the case of Japan and arguably in Europe

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as well. So you need more of a concerted approach to try to boost

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growth, and that's been lacking. Briefly, what will the US Fed do

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next week? Everybody thinks they will do nothing in terms of interest

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rates but I think they should raise them, things are picking up, but I

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think they will hold off until June, maybe April, and it's a signal

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on how many times they will raise interest rates this year which is

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important. Apple has accused the US justice

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department of trying to smear the company over claims the company

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helps China access iPhones. The accusation was made as part of the

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San Bernardino shooting case. The FBI wants Apple to help them access

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the gunmen's phone but the FBI says that Apple's own data says that

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China asked them for data in the first half of 2015 and Apple

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produced data 74% of the time. The amount India spends on

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healthcare compared to the size of its economy is among the lowest in

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the world, that means private firms are stepping in for those that can

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afford it. This has inspired a whole host of companies, both big and

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small, to work on new, innovative services. But how much of a

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difference can they really make? We went to Bangalore to find out.

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It may look like a pizza delivery service, but what's actually being

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brought to people's doorsteps is a sip is dictated the rise for testing

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eyesight. -- sophisticated. One idea to tackle a complicated problem

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where hospital visits can be daunting and expensive. Getting ill

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and paying medical bills has driven more than 60 million putt Indians

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into poverty each year, so could private businesses be part of the

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answer? Bringing down costs and bringing more efficient healthcare

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services to more people. And businesses are getting new

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inventions into hospitals too, like this monitor used during pregnancy.

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Smaller unless expensive than the other machines. A mobile phone app

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can monitor the heartbreak of a fetus when it is strapped on. This

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is our first product, which we have designed to be used by low skilled

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health workers, which makes it cost-effective and good for the

:08:29.:08:33.

Indian healthcare scenario. We feel more devices like these need to come

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because 75% of the major capital equipment, and that equipment, which

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is imported, is not cost sensitive, designed for India, it is

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inefficient and not accessible to a lot of Indian cases. And it's not

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start-ups. Global giants like IBM are also bringing the latest

:08:56.:08:59.

technology here. Within India you need an amplification of a broader

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problem within healthcare, which is clinicians have very little time to

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with patients. In the US the ratio of clinicians to patients is 100 to

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one, in India it is 1600 to one, so the time pressure is greater. If we

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get the workflow right in India we know it will work anywhere in the

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world, so it's an exciting opportunity to bring this solution

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to market within India. Nearly 1 million Indians die every

:09:32.:09:35.

year because of inadequate healthcare facilities. About 700

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million people have no access to specialist care. And as the country

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grapples with growing healthcare costs, and a shortage of doctors,

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technology driven innovation and change is the only hope many Indians

:09:50.:09:56.

have for better medical treatment. Let's take a quick look at the

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markets. US markets overnight pretty much moved in the same direction as

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those in Europe where stocks initially surged on the ECB moves to

:10:05.:10:08.

cut interest rates, but fell after the ECB chief said the bank didn't

:10:09.:10:12.

see room for further rate cuts. That having an impact in Asia. Let's have

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a look at Japan. The Hang Seng down 0.4%. That anxiety and nerve is this

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likely to be across Asia today. -- nervousness. Thanks for watching.

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Stay with us.

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