17/08/2016 Asia Business Report


17/08/2016

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Team GB has won more golds in Rio, cementing its number two spot in the

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medal table. Jason Kenny and Laura Trott

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take their gold-medal tally to ten, The US continue to top the medal

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table in the Rio Olympics. There was a fourth title

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for gymnast Simone Biles, staff at a Chinese magazine have

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gone to court to try to challenge what they call the illegal takeover

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of their publication by authorities. They allege they have been shut out

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of their own offices. And this story is

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trending on bbc.com. Chinese actor Wang Baoqiang has

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become a top trend in China after divorcing his wife,

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accusing her of having an affair The top story in the UK: the radical

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British born preacher Anjem Choudary has been convicted of supporting

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Islamic State. Another man has been convicted of the same offence.

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Now it is time for Asia Business Report.

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Cleared for take-off. After a 10-year wait, Indonesian airlines

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get the green light to fly into the United States. And protecting New

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Zealand's all-important farming industry. We speak to the minister

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who will spend millions on getting rid of these little creatures. Good

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morning, Asia. Hello, world. It is a Wednesday. Glad you could enjoy join

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us for this edition of Asia Business Report. I am Rico Hizon. Regulators

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have given Indonesian airlines clearance to fly into the US again.

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They were banned in 2007 after a downgrade mainly due to safety

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concerns following several crashes. Will the approval help repair the

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reputation of the Indonesian carriers? Our correspondent explains

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the airline's long haul flights to the milestone. It is not really

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entirely surprising. They have been working for several years to improve

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things around safety oversight, documentation and training. So it

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has been a long, hard effort but there have been setbacks, notably

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recent crashes and incidents in the last few years. So the difference

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between the FA approval and the approval of the European... Is that

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a blanket approval in the US, while in Europe it is basically depending

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on the airline? That's correct. In Europe they will cherry pick

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airlines, so Garuda Indonesia and Lionair have been taken off the

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blacklist, but in the States it is a blanket ban on. Indonesian airlines

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are free to fly to the US and in addition can form partnerships with

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US carriers including co-chairs and that kind of thing. So is this a

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game changer for the Indonesian aviation industry? It is certainly

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important because it removes I guess the Scarlet letter of Category 2

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backstabbers. Category 1 is where you want to be as a respectable

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member of the aviation community. That said, I think it is going to be

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a struggle for Indonesian carriers right now to compete in US routes

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because Indonesia is quite far from the US and it is quite competitive.

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So it won't really add much to the bottom line of a Garuda Indonesia or

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a Lion Air when they fly to the United States? Lion Air will

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probably not be doing it for quite awhile because they don't have the

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aircraft. Garuda Indonesia have said they very seriously would like to

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fly to the United States via Japan. Were they to do so, they would enter

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a very competitive market and it would be quite challenging for them

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to make money here. The real legacy of this would be Garuda Indonesia

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could partner with its sky team member Delta and work together on

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co-chairs and that sort of thing. But Indonesia has a population of

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more than 200 million people. Can't they use that as they ace,

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basically, as a gateway to the United States? -- base. It is quite

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possible, it is certainly possible that Garuda could launch direct

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services to the States. They haven't talked about this and it could be

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some years down the road. Getting Category 1 approval could be in the

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long-term quite significant for them but it would be hard to make money

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for them. They could make a go of it at some point. China's State Council

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has approved a new link between its tech heavy Shenzhen and Hong Kong

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stock exchanges. Limits on how much foreigners can invest in Chinese

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stocks would be scrapped but there would be a daily cap of $2 billion

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on the amount of money coming into Shenzhen. The dollar and the

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Japanese yen will be at the forefront of investors' mines this

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morning after the dollar fell to as low as 99.54 yen overnight. This is

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the first time it has gone through the 100 yen mark since the aftermath

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of the UK's vote to leave the European Union. The dollar also

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weakened against the euro. Let's give you an update on where they

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stand at the moment. The dollar yen cross rate at 100 .42. The euro and

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yen at 113. The Aussie dollar at 77 cents in the US Singapore dollar at

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1.33. Agriculture is one of the main pillars of the European economy, and

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that is why the government there is spending around $20 million on

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protecting it. Not in subsidies or trade tariffs but an eradication

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programme to get rid of predators like rats and feral cats. New

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Zealand's conservation Minister told me why it is so important.

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Introduced mammalian predators are one of the most significant problems

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that we face. We are an economy that relies on primary industry, our

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predators cost us an estimated $3.3 billion in terms of lost

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productivity, and introduced weeds cost a further $1.3 billion. For

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every day that passes, that will cost us more. The big problem with

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primary industry is that possums in particular spread bovine

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tuberculosis, which renders our cattle as carriers of this disease.

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So we spend about three quarters of the money we spend on it in trying

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to keep this disease from crossing over into other species. That is why

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it is such a vital goal to achieve. That is a huge loss to the economy,

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more than 3 billion US dollars but critics are saying this programme

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could be an ecological blunder. The intention is to unrealistic,

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bordering on the irrational. It is not irrational and you always have

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the lunatic fringe that come in and try and destroy a vision, with no

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science, no backing and a lot of emotive nonsense. We don't pay

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attention to that. We go for evidence based. And at the moment

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what we can see is that this is an achievable goal. My Department of

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conservation has already cleared 150 offshore islands of predators and we

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are doing very well. And we have confidence that with the elegy

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gains, with science and innovation, that we will be able to reach these

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goals -- technology gains. We are involving community level groups to

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make their communities and areas of predator free and we believe that

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with staged outcomes we will be able to achieve predator free by 2050

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goals. The government is saying that you will only be spending around 20

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million US dollars to start this whole initiative. But there are some

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groups that are saying it could cost in the billions, costing the

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government much more, into the billions of dollars. And this could

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hurt the Budget going forward. The $28 million that we have invested as

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an initial investment in predator free New Zealand will be matched by

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philanthropic, business and other partnerships. For example, one of

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the groups that we have in New Zealand has invested $100 million

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over ten years in predator control and other conservation initiatives.

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The people in New Zealand understand that this is a problem we need to be

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able to solve together. It is by working together collaboratively,

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along with science and research, and all New zealanders, that we will

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achieve this goal. That was New Zealand's conservation Minister

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Maggie Barry. Asia's growth rate compared to the rest of the world

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may stand out there is one downside. Companies moving to the region take

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advantage of that growth often cannot find the right employees or

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talent to fill their needs. We find out what one multinational companies

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doing to address the shortage. It may look like fun and games, but

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there is something very serious at work here. Gary is a part of it, a

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young employee at a big multinational firm who is here as

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part of a leadership training programme. Our day-to-day work is

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all about work, but here they give us an opportunity to really

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understand yourself more, about your career passion. And I know more

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about my role in this company, and also about how it can benefit my own

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career. The company providing best training is pharmaceutical giant

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GlaxoSmithKline, who are investing considerable resources here. Asia is

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a really important growth area for us. I think we signalled that when

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we announced we were going to build a new headquarters in Singapore for

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all of Asia. At just building a building is the answer. It is about

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the people we put in the building. What we want to do is have people

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running Asia from Asia who understand Asia. So these talent

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programmes are all about building the capability for people to do just

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that. They are unusual in their approach. Many other firms are

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struggling. Skyscrapers in Singapore's financial district,

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Housing corporate firms, that need to fill them up with employees. But

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just how to find them and hang on to them is a challenge. According to a

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recent survey most employers in Asia say they are more likely to hire an

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expensive expatriate, because they say there is a shortage of

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candidates in key sectors such as engineering, finance, accountancy

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and human resources. Of employers reporting difficulty in filling

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jobs, the highest percentage of them are in Asia, well above the global

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average. The younger demographic and continued economic growth are Asia's

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deke assets but when it comes to finding the right talent it can also

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be a big disadvantage. Which means scenes like these are going to

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become more commonplace in offices around the region. Let's have a

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quick look at the markets. Asia is mixed in early we can trade, after

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equities fell and comments by the Fed regulators could raise interest

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rates as early as next month. The Nikkei 225 is up due to gains in the

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energy sector. Thank you so much for investing your time with us.

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