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Now on BBC News, all the latest business news live from Singapore. | :00:00. | :00:16. | |
The people of Japan have delivered their verdict. A victory for Shinzo | :00:17. | :00:25. | |
Abe. What does that mean for his economic reform plans? And India's | :00:26. | :00:31. | |
love affair with gold. We look at efforts to draw it away from temples | :00:32. | :00:36. | |
and homes and put it back in the economy. Good morning, Asia. Hello, | :00:37. | :00:46. | |
world. This is Asia Business Report. Japan's Prime Minister has won an | :00:47. | :00:54. | |
election in the Upper House and appears likely to extend his | :00:55. | :00:59. | |
majority. He pitched the election as a vote for his plans known as | :01:00. | :01:05. | |
Abenomics. What does it mean for his reform agenda? Earlier, I spoke with | :01:06. | :01:12. | |
a Japan economist. I think we have had some small areas of success in | :01:13. | :01:19. | |
monetary policy. The Bank of Japan has done everything to boost the | :01:20. | :01:24. | |
economy and inflation. The government itself has not really | :01:25. | :01:31. | |
done much. We haven't seen the reforms. Not even those that Shinzo | :01:32. | :01:38. | |
Abe originally alleged. Let alone those needed to keep Japan going in | :01:39. | :01:44. | |
the long-term. -- pledged. Do you think he will go ahead with more | :01:45. | :01:48. | |
economic reforms? There has been a lot of Reuters is about the rising | :01:49. | :01:53. | |
income gap, et cetera. -- criticism. Will he continue reforms as | :01:54. | :01:58. | |
promised? It is already the second election we have had during his time | :01:59. | :02:04. | |
in power. The elections in 2014 when he did the same thing. He sold it as | :02:05. | :02:13. | |
a vote on his economic policies and pledged economic reforms. Since then | :02:14. | :02:18. | |
we have not seen any economic reform accepts the Trans-Pacific | :02:19. | :02:22. | |
Partnership agreement which was already started before the election | :02:23. | :02:26. | |
is. So, I don't think we will see much in the coming years after the | :02:27. | :02:32. | |
election. And of course, global uncertainty like Brexit and in | :02:33. | :02:39. | |
China. He can blame all this negative economic outcome on that. | :02:40. | :02:44. | |
To some extent he came. I think private consumption in Japan has | :02:45. | :02:52. | |
been weak. -- he can. It has been a four-year low. You can't blame that | :02:53. | :02:56. | |
on global issues. Wages have not gone up in Japan. Inflation has been | :02:57. | :03:01. | |
high, even for Japanese standard. That is something the government | :03:02. | :03:10. | |
should have done more with. Taxes. Encouraging wage growth. This is the | :03:11. | :03:13. | |
fault of the government, clearly. Now to another election which took | :03:14. | :03:19. | |
place a week ago. Australia's Prime Minister, Malcolm Turnbull, has | :03:20. | :03:24. | |
finally declared victory, and looks set to form government again. But | :03:25. | :03:29. | |
uncertainty around the government made standard and pause what their | :03:30. | :03:39. | |
triple-A rating on watch last week. -- Standard Poor's. Earlier I | :03:40. | :03:44. | |
asked if the government will provide more uncertainty? We will see a | :03:45. | :03:52. | |
degree of uncertainty We have a government, and opposition conceding | :03:53. | :03:55. | |
defeat. We have a working majority, at least in the Lower House. One of | :03:56. | :04:00. | |
the confusing factors here is there is a Lower House majority but an | :04:01. | :04:09. | |
Upper House minority. It will be hard to pass controversial | :04:10. | :04:12. | |
legislation. We have a Prime Minister and a government but no | :04:13. | :04:17. | |
real working means of passing legislation. We see some certainty | :04:18. | :04:23. | |
for a little while. But how the government chooses to see the | :04:24. | :04:31. | |
legislation will be difficult. Last week, the credit rating was lowered | :04:32. | :04:38. | |
to a negative outlook. Do you think other agencies will follow that? | :04:39. | :04:44. | |
Some have said they and pulling to downgrade. But in this, S and P's | :04:45. | :04:54. | |
thought no other party is willing to do what needs to be done to fix the | :04:55. | :05:01. | |
budget deficit. Until those two parties, both parties, effectively, | :05:02. | :05:04. | |
can come to a solution to fix the deficit, there will remain pressure | :05:05. | :05:11. | |
on the credit rating. And I think it is likely we will see a downgrade. | :05:12. | :05:15. | |
In your view, what does the government need to do to address | :05:16. | :05:21. | |
that? Both parties have said within a decade they might come back to a | :05:22. | :05:25. | |
budget balance. But there will be a debt that goes with that. There are | :05:26. | :05:29. | |
structural problems. We spend too much money during the mining boom | :05:30. | :05:34. | |
years. Welfare programmes, tax cuts, they went through during those | :05:35. | :05:38. | |
times. Of course, the mining boom faded, revenue fell, but we still | :05:39. | :05:43. | |
have the same amount of spending. Hard decisions need to be made, | :05:44. | :05:46. | |
increased spending, decrease taxes, or maybe both. Unfortunately there | :05:47. | :05:54. | |
is no sufficient wheel to do that. It is not inevitable, but likely, | :05:55. | :06:02. | |
there will be a downgrade in the credit rating. We have to wait till | :06:03. | :06:06. | |
we have someone who is ready to do it. We could come out of trouble by | :06:07. | :06:12. | |
pure luck. We don't know. Both parties have to find a way to suit | :06:13. | :06:17. | |
the political will to make changes needed to bring a balance to the | :06:18. | :06:22. | |
budget. In other business news, the world's top 20 economies have | :06:23. | :06:31. | |
growing protectionism and a downgrade in trade. The G20 had | :06:32. | :06:36. | |
concerns over the slow overall recovery. They say protectionism has | :06:37. | :06:42. | |
been rising since the crisis. New trade restrictions averaged the | :06:43. | :06:45. | |
highest monthly average registered since it was monitored. Whether | :06:46. | :06:54. | |
buying it at festivals, giving it as a wedding gift, or ceremonies, | :06:55. | :07:01. | |
Indians love gold. 20,000 tons of aid are thought to be stashed away | :07:02. | :07:06. | |
in people's homes, businesses, or in vaults. -- it. But this pushes up | :07:07. | :07:13. | |
the import bill. The government is offering incentives to get it | :07:14. | :07:16. | |
recycled and put back on the economy. We have the story. | :07:17. | :07:21. | |
One of India's holiest Hindu shrines. 100,000 daily visitors. | :07:22. | :07:31. | |
They don't only pray but give generously. The temple's collection | :07:32. | :07:39. | |
boxes have amassed billions of dollars worth of cash and jewellery, | :07:40. | :07:47. | |
and especially, bold. -- gold. Some covers the temple walls, others, | :07:48. | :07:53. | |
kept in Treasuries, but it doesn't help the Indian economy. Now, the | :07:54. | :07:58. | |
government is tried to get more gold into banks. -- trying. Temples are | :07:59. | :08:06. | |
crucial to the government's plans of retrieving gold. They could have $1 | :08:07. | :08:10. | |
trillion worth of yellow metal stashed away in private lockers and | :08:11. | :08:15. | |
safe-deposit boxes across the country. This is the richest temple | :08:16. | :08:21. | |
in India and already has 700 tons of gold. People are bringing more | :08:22. | :08:27. | |
everyday. This is one of the first temples to sign up to this. It gets | :08:28. | :08:32. | |
interest payments on the gold at hands over. It says it makes sense. | :08:33. | :08:40. | |
-- it we need to store it in a safe spot. Instead of keeping it in our | :08:41. | :08:49. | |
Treasury. It helps with the interest we get. It is a safe way to do it. | :08:50. | :08:57. | |
It also helps us produce costs. Temple gold will often end up here, | :08:58. | :09:02. | |
melted down and made into bars that banks can trade. They need to reduce | :09:03. | :09:08. | |
what they need to bring in from abroad, that is the idea. Most of | :09:09. | :09:15. | |
India's gold is not in temples, but homes, in the form of jewellery. Is | :09:16. | :09:24. | |
this where they need to focus? The housewife trusts the bank. Once she | :09:25. | :09:28. | |
knows this is something she can do with her gold jewellery she is no | :09:29. | :09:34. | |
longer wearing, she can give it to the bank, put it in a deposit, and | :09:35. | :09:40. | |
earn interest on it. But it is exactly the cause gold is so popular | :09:41. | :09:44. | |
that it is proving hard to tempt Indians to hand it over. Gold has | :09:45. | :09:48. | |
always been seen as a way to store wealth and it shows no sign of | :09:49. | :09:56. | |
losing its shine. BBC News, southern India. Let's take a quick look at | :09:57. | :10:03. | |
the market before we go. Japan's Nikkei has gone 3% higher after the | :10:04. | :10:09. | |
landslide victory by Prime Minister Shinzo Abe. Australia markets are | :10:10. | :10:14. | |
also up by 1.5%. They are taking the due from Wall Street where Standards | :10:15. | :10:22. | |
and Poors flirted with a record high on Friday at. That is it with this | :10:23. | :10:26. | |
edition of Asia Business Report. Thank you for watching. | :10:27. | :10:39. |