21/03/2016 BBC Business Live


21/03/2016

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This is Business Live from BBC News with Sally Bundock

:00:07.:00:09.

President Obama gets ready for crucial talks on his historic

:00:10.:00:18.

Live from London, that's our top story on Monday, 21st March.

:00:19.:00:35.

Mr Obama's visit is an important step in the normalisation

:00:36.:00:37.

But how far can the two sides go in deepening trade ties.

:00:38.:00:44.

Also in the programme: the Prime Minister of Cambodia has

:00:45.:00:47.

And European stocks open lower as the oil price drags commodity

:00:48.:00:53.

And we'll be meeting the man who says he's come up

:00:54.:01:03.

with a revolutionary way of mapping our world.

:01:04.:01:05.

Ian Hetherington was a pioneer of the gaming industry -

:01:06.:01:07.

now he's firmly focused on 3D mapping technology but is this

:01:08.:01:10.

And today we want to know how do you go about boosting your

:01:11.:01:20.

What do you think about buying "likes" or "followers".

:01:21.:01:23.

President Obama has arrived in Havana -

:01:24.:01:45.

the first US presidential visit to Cuba in 88 years.

:01:46.:01:47.

Mr Obama will meet President Raul Castro later today and then speak

:01:48.:01:51.

at an event focused on entrepreneurship.

:01:52.:01:56.

US-Cuba ties were frozen in 1960, when the US broke off diplomatic

:01:57.:01:58.

relations and imposed a trade embargo after Cuba's revolution

:01:59.:02:01.

It's estimated the trade embargo has cost the Cuban economy 1.1

:02:02.:02:14.

Obama normalised diplomatic and economic ties in December 2014

:02:15.:02:18.

but the embargo cannot be fully lifted without approval

:02:19.:02:21.

Yesterday, the US hotel company Starwood became the first American

:02:22.:02:26.

firm to agree a deal with the Cuban authorities since the revolution

:02:27.:02:31.

of 1959, agreeing to spend millions renovating hotels in Havana.

:02:32.:02:36.

Many in Cuba now hope the country is on the verge of a new economic

:02:37.:02:39.

era and it's estimated that between 20 and 30 percent

:02:40.:02:42.

of the workforce is now privately employed in the communist state.

:02:43.:02:47.

As part of the Obama administration's attempt

:02:48.:02:53.

to normalise trade relations with Cuba, regular airline service

:02:54.:02:55.

between the two countries is set to be introduced.

:02:56.:03:07.

Speaking to Jon Sopel, JetBlue's CEO said the competition

:03:08.:03:09.

among with his rivals for the new routes was unprecedented.

:03:10.:03:14.

At the moment you have the odd charter flight going in there. When

:03:15.:03:20.

you think about the potential for Cuba and

:03:21.:03:21.

become the largest market in the Caribbean. That is all very well but

:03:22.:03:32.

is there the infrastructure to run it? Infrastructure will have to be

:03:33.:03:36.

expanded. If we think about hotels, the Hotels in Cuba are pretty good.

:03:37.:03:43.

There will have to be some new hotels being built.

:03:44.:03:49.

Economist Cornelia Meyer joins us now.

:03:50.:03:54.

A massive day in the sense that a US president is in Cuba now,

:03:55.:04:00.

doing speeches and touring around. It has not happened in 88 years. It

:04:01.:04:09.

is quite unprecedented. What is really important here is the

:04:10.:04:13.

business story. Not unlike Iran, there is a

:04:14.:04:14.

Given that there is a lot of tourism interest, the Starwood deal is

:04:15.:04:28.

important. The Cubans drive around in these very old American cars will

:04:29.:04:30.

stop think about the smaller cars which could

:04:31.:04:38.

go in, also the Volkswagens of this world. Once the US lifts sanctions,

:04:39.:04:43.

everyone else follows. Think about what it means from the financial

:04:44.:04:47.

industry. They have been cut off from a real payment system. Coming

:04:48.:04:52.

back onto the visa system, onto the credit card systems, is very

:04:53.:04:57.

important. You see Silicon Valley firms going in there, already saying

:04:58.:04:59.

let us help you with the to set up accounts in the US. Very

:05:00.:05:09.

similar to Iran, the embargo is not fully lifted, there

:05:10.:05:09.

is a long way to go, US Congress has two

:05:10.:05:13.

pass the whole process and that in itself is not an easy road, is it,

:05:14.:05:19.

given the fact that we have an election year, it is an

:05:20.:05:26.

electioneering process right now, when will that take place? To be

:05:27.:05:30.

realistic, it may be after November. Right now, the Democrats do not have

:05:31.:05:37.

a majority in either house, so it will not be that easy.

:05:38.:05:41.

A lot of the Republicans are financed by people with strong ties

:05:42.:05:52.

to Florida which has a lot of right-wing Cuban exile is. Which

:05:53.:05:53.

side they will come out on So we might see a situation where

:05:54.:05:56.

the US Congress might decide on this after we have the presidential

:05:57.:06:07.

elections. Whoever is the next US president might not want to do this

:06:08.:06:11.

because they all have different stances on Cuba, but even if this

:06:12.:06:16.

does get past, if we have a president who is pro-Cuba, even if

:06:17.:06:22.

this does get passed by Congress, do you think the Cubans themselves are

:06:23.:06:26.

ready to seize this opportunity? It is clear the outside world is

:06:27.:06:27.

looking to invest, but are they going to take

:06:28.:06:33.

advantage? They will absolutely take advantage. A lot of them are

:06:34.:06:39.

privately employed. The GDP is quite stagnant. It is $68 billion. You

:06:40.:06:45.

have a good population pyramid, where the majority of the

:06:46.:06:47.

people are somewhere between 15 and 65.

:06:48.:06:51.

So you do have a lot of people who need to earn a living and would

:06:52.:06:55.

like to earn a better living and economic needs always will help

:06:56.:07:06.

tendencies like more business. Cornelia, it has been great to have

:07:07.:07:11.

you on the show. Thank you for your input. This is a story we are right

:07:12.:07:13.

across on the BBC. China's Central Bank governor

:07:14.:07:18.

Zhou Xiaochuan says the amount of money being taken out

:07:19.:07:26.

of the country is falling. Capital outflow has been a major

:07:27.:07:29.

concern as China struggles to try and reassure investors

:07:30.:07:31.

that it still has grip Fifa has announced China's Wanda

:07:32.:07:33.

Group as the organisation's The move comes a day after Fifa

:07:34.:07:37.

revealed a reported loss of $122 million for 2015 -

:07:38.:07:40.

its first negative result Lots of stories on the business live

:07:41.:07:43.

page. Apple is expected to launch a smaller phone today. This was a way

:07:44.:08:11.

of Apple coming at the other end of the smartphone market. It is one of

:08:12.:08:15.

the most expensive and that is the issue. When you have got one, you do

:08:16.:08:20.

not want to upgrade that soon when it costs that much money. You get

:08:21.:08:24.

into a pattern where you are you just get the upgrade and then they

:08:25.:08:28.

bring another one out. It is thought the smaller phone will have the same

:08:29.:08:30.

sort of features as the iPhone six. Oil

:08:31.:08:47.

prices today, we will talk about oil later but it is still in the news as

:08:48.:08:49.

ever. Now it was a shocker

:08:50.:08:53.

of a start to the week Yes prices plunged after some

:08:54.:08:55.

pretty extraordinary news Ali Moore is in our Asia

:08:56.:08:59.

Business Hub in Singapore. What is going on? It has been a very

:09:00.:09:08.

dramatic day in Australian politics. I have to say this whole political

:09:09.:09:25.

drama has got a long way to go. The problem for the Australian

:09:26.:09:28.

Conservative government is it cannot get a lot of what it sees as key

:09:29.:09:32.

reforms through the upper house of parliament. A whole series of minor

:09:33.:09:34.

parties and the balance of power. The Prime Minister has decided to

:09:35.:09:40.

make particular set of Labour reforms the litmus test. He said he

:09:41.:09:46.

will dissolve both Houses of Parliament and he will

:09:47.:09:50.

call an early election. On the one side there is the negative of all of

:09:51.:09:56.

this uncertainty that will happen between now and

:09:57.:09:57.

April, and if indeed the legislation is not back, then the legislation in

:09:58.:10:04.

July. On the positive, if you take a long-term view, it

:10:05.:10:06.

Chinese markets started the week on a positive note,

:10:07.:10:17.

despite warnings over the weekend about the high level of corporate

:10:18.:10:19.

lending and the risks it poses to the economy.

:10:20.:10:23.

Japan's equities and bond markets were shut for the vernal

:10:24.:10:26.

This is how the trading day is opening up across Europe.

:10:27.:10:37.

Michelle Fleury has the details about what's ahead

:10:38.:10:39.

US investors go into a shortened trading week this Monday, with one

:10:40.:10:55.

central prop of the American economy firmly in

:10:56.:10:56.

sight, housing. The National Association of Realtors

:10:57.:10:59.

count of existing home sales, which means all the homes sales accept

:11:00.:11:08.

newly built properties. It is perhaps the broadest gauge of the

:11:09.:11:10.

health of the housing market and last week's number surprised

:11:11.:11:16.

everyone by how strong it was. Maybe the US recovery is built on strong

:11:17.:11:20.

foundations after all. Everyone is looking for this month to be another

:11:21.:11:24.

strong one, with forecasts set to rise again. If they disappoint, the

:11:25.:11:29.

markets could react badly. Joining us is Trevor Greetham, head

:11:30.:11:39.

of multi-asset A start of a new trading week, oil

:11:40.:11:51.

prices down, China in the news for good and bad reasons. Your thoughts?

:11:52.:11:56.

There has been some economic data with the manufacturing data

:11:57.:12:00.

tomorrow. I think everyone is trying to digests the central bank meetings

:12:01.:12:03.

we have had this month, the extra money printing we have had from the

:12:04.:12:06.

European Central Bank and also the fact that America's Federal Reserve

:12:07.:12:12.

seems to have gone soft on interest rate rises. What we are trying to

:12:13.:12:16.

get our heads around is whether we will see this roller-coaster we have

:12:17.:12:20.

seen over the last year, where every time the world economy feels strong

:12:21.:12:24.

enough, and the markets are upbeat enough, China says we will have some

:12:25.:12:29.

of that growth. They devalue that currency and sent shares into a

:12:30.:12:33.

tailspin. We have seen that twice now. It happened last summer and the

:12:34.:12:37.

first trading week of this year. What will determine whether we can

:12:38.:12:41.

break out of this repeating pattern or not is whether China can show

:12:42.:12:45.

some stronger growth and whether manufacturing can pick up. There are

:12:46.:12:50.

some positive sides and that is what we are watching.

:12:51.:13:01.

We had the resignation of the former party leader Iain Duncan Smith and

:13:02.:13:05.

that has reignited some of the debate here in Britain over

:13:06.:13:07.

austerity and the pace of it. We were talking about Jude 20 nations

:13:08.:13:09.

and the fact that the global economy is slowing down and perhaps

:13:10.:13:10.

it is time to loosen the austerity reigns

:13:11.:13:17.

a little bit and let the economy breeds, not so Britain. Why are we

:13:18.:13:20.

seeing this disconnect? Shanghai and people said we would

:13:21.:13:26.

all do our bit to try and boost the strength of the world

:13:27.:13:28.

economy through monetary policy and fiscal economy, and then George

:13:29.:13:33.

Osborne came back and said there were storm clouds gathering and we

:13:34.:13:37.

had to cut spending which is the opposite of what the joint statement

:13:38.:13:41.

was saying. It does feel that there is something going on here. It is

:13:42.:13:47.

called a referendum, isn't it? It is may be partly the referendum but

:13:48.:13:51.

also a desire to have a Budget surplus in

:13:52.:14:02.

2020 in this country. It means every time growth is weaker than you

:14:03.:14:06.

expect, tax revenues drop and you think you should cut spending. But

:14:07.:14:08.

you have to be concerned whether this will weaken the economy. Thank

:14:09.:14:10.

you. Still to come: We'll be meeting

:14:11.:14:12.

the man who says he's come up with a revolutionary

:14:13.:14:15.

new mapping system - You're with Business

:14:16.:14:16.

Live from BBC News. The Confederation of

:14:17.:14:19.

British Industry has published a report warning about the economic

:14:20.:14:21.

risks from Britain leaving the EU. Anti-EU campaigners have

:14:22.:14:24.

dismissed the report. Ben Thompson is our Salford studio

:14:25.:14:27.

and has been following the story. Controversial as ever, tell us more.

:14:28.:14:52.

The CBI has put a figure on leaving the EU, it says the cost of ?1

:14:53.:14:58.

billion and a million jobs would be lost. They have been criticised

:14:59.:15:03.

already. I have been speaking to Vote Leave. They say these are the

:15:04.:15:08.

worst case scenarios and based on flawed assumptions. First up this

:15:09.:15:12.

morning, I spoke to the CBI boss and I put it to her that the report says

:15:13.:15:16.

the economy would still keep on growing, even if the UK does vote to

:15:17.:15:21.

leave the EU. This is what she told me.

:15:22.:15:29.

The question is whether we would sacrifice jobs for leaving. The

:15:30.:15:35.

comparison is what we would have had otherwise and that is ?100 billion

:15:36.:15:40.

lower according to this model in 2020. Unemployment rising from 5% to

:15:41.:15:45.

between seven and 8%. These are the costs of the economy compared with

:15:46.:15:47.

staying in. EeGeo Vote Leave point out that the

:15:48.:15:56.

CBI was vocal in encouraging the UK to join the euro and we know how

:15:57.:16:02.

that turned out. They say it is based on flawed assumptions that

:16:03.:16:05.

they are the worst case scenarios and reality would be better. This is

:16:06.:16:10.

what Vote Leave told me earlier. If you read the report it states that

:16:11.:16:13.

the economy will continue to grow even on the worst case assumption, I

:16:14.:16:18.

don't accept their assumptions. Even at the worst case assumption the

:16:19.:16:22.

economy will still grow and in the medium-term, we are going to create

:16:23.:16:25.

according to their report three million more jobs. So not only are

:16:26.:16:29.

they saying that on the worst scenario, it the economy is going to

:16:30.:16:33.

grow, we are going to create more jobs. I don't understand where they

:16:34.:16:37.

are coming from. What I put to both of them that all of this is an

:16:38.:16:41.

educated guess, it is unprecedented that a country left the European

:16:42.:16:44.

Union and so for all the modelling and all the predictions and all the

:16:45.:16:48.

forecasts, this at best, is an educated guess.

:16:49.:16:58.

Our top story: President Obama is to hold talks with his Cuban

:16:59.:17:02.

counterpart on his historic visit to Havana.

:17:03.:17:05.

Trade is expected to be a major topic of discussion.

:17:06.:17:11.

More on the website. The first time this happened in 88 years.

:17:12.:17:17.

Now let's get the Inside Track on the world of location mapping.

:17:18.:17:20.

Our next guest thinks he's managed to find a revolutionary way

:17:21.:17:23.

of integrating 3D mapping into smartphone apps.

:17:24.:17:28.

EeGeo offers a unique mapping system which aims to give an immersive view

:17:29.:17:31.

The platform covers 200 million square kilometres and operates

:17:32.:17:34.

using a sliding scale monthly licence fee depending

:17:35.:17:36.

The CEO of eeGeo, Ian Hetherington, joins

:17:37.:17:42.

Thank you for coming in. Good to see. We have tried to explain it!

:17:43.:17:53.

Why don't you talk us through how it works. We have built a 3D map of the

:17:54.:17:59.

world outside and inside and users can transition between the outside

:18:00.:18:03.

view of the world similar to your dabbing drop here into buildings and

:18:04.:18:08.

into rooms, offices, and locate themselves anywhere in the world.

:18:09.:18:14.

Why would I need a 3D map? If I have got Google Maps and I'm confident

:18:15.:18:20.

with it... And it is free. Why do I need your maps? It is about

:18:21.:18:25.

visualisation and orientation, how many times have you got lost in a

:18:26.:18:29.

shopping mall? How many times have you wondered where you are in an

:18:30.:18:33.

airport or museum or out on the street? How many times do you I see

:18:34.:18:37.

people come out of the Tube station with a mobile phone wondering where

:18:38.:18:41.

they are and which way they are facing? Those are the problems we

:18:42.:18:45.

solve. Surely the future for this company is not going to be about

:18:46.:18:50.

mapping the outdoors, but mapping indoors, places like museums, if

:18:51.:18:55.

you're mapping banks and shops, offices for example, aren't you

:18:56.:18:58.

going to run into problems with Government intelligence agencies

:18:59.:19:00.

with police forces around the world because you are effectively giving

:19:01.:19:04.

criminals, you know, an online recognisy. They don't even need to

:19:05.:19:10.

go in to find the best ways to get in or out of a building would be? I

:19:11.:19:14.

don't think we are providing any information that's not in the public

:19:15.:19:20.

domain anyway. Well, it would be. The way we combat that problem

:19:21.:19:23.

because we have customers who have concerns about these sorts of

:19:24.:19:28.

things. Basically, it is like being on your network inside the BBC. So

:19:29.:19:33.

the security is at that level and not at our level. The security would

:19:34.:19:36.

be with the buildings themselves? Absolutely. We have customers with

:19:37.:19:42.

sensitive information who, but see the value in our proposition. So if

:19:43.:19:48.

you look at customers like NTT and Sisco, they are providing solutions

:19:49.:19:52.

to some very, very advanced businesses and we have that problem.

:19:53.:19:56.

Also you have got customers like Disney for example, Walt Disney and

:19:57.:20:01.

those organisations. Your customers really are businesses, aren't they?

:20:02.:20:05.

Yes. This is a business to business idea? It is at the moment. We are

:20:06.:20:11.

relying on piggy backing their business proposition, it means

:20:12.:20:16.

something to their consumers. But later in the year we will be going

:20:17.:20:22.

to the consumers directly. You have to accumulate an enormous amount of

:20:23.:20:25.

data which you are doing and you have done various countries in the

:20:26.:20:28.

world, but in terms of the time it takes and the expense, are you, you

:20:29.:20:32.

are a private company, are you actually covering your costs at this

:20:33.:20:36.

point, where are you at? So, you look at a solution like Google w I

:20:37.:20:42.

respect, but they are spending billions of dollars a year. We are a

:20:43.:20:45.

company of 25 people. Highly talented people, so we have to solve

:20:46.:20:50.

that problem in a different wail. So we take data from many, many sources

:20:51.:20:54.

and it doesn't matter to us what form it comes in, our technology

:20:55.:21:02.

turns that into this streamable, straight... What is stopping Google

:21:03.:21:08.

click of a switch? You are out of click of a switch? You are out of

:21:09.:21:12.

business, aren't you? Well, I like to think not because if you look at

:21:13.:21:17.

a company like NTT they chose us and they chose us for a good reason. We

:21:18.:21:22.

have got the validation from the commerce sector and we have got

:21:23.:21:24.

validation from consumers. They just love it. All right, we will watch

:21:25.:21:29.

this space. Thank you for coming and we shall keep an eye on how you

:21:30.:21:31.

progress. When is a like on Facebook a real

:21:32.:21:34.

like and when has it been bought? That's a question being asked

:21:35.:21:38.

on social media in Asia this week with the Prime Minister of Cambodia,

:21:39.:21:45.

Hun Sen, forced to deny he has That's because the leader

:21:46.:21:48.

of the relatively small Asian nation That's in a country with an internet

:21:49.:21:51.

penetration rate of just 9%. That compares to

:21:52.:21:58.

the UK, for example, where Prime Minister David Cameron's

:21:59.:22:01.

Facebook page has a mere one million likes, even though the UK has

:22:02.:22:04.

a hefty internet Thousands of likes can be purchased

:22:05.:22:06.

for just a few dollars and it's becoming a growing issue

:22:07.:22:11.

across social media platforms. Trevor is back. This is a story we

:22:12.:22:28.

mentioned at the start of the programme, what would you do to

:22:29.:22:32.

boost your presence on social media? Trevor, is it something that keeps

:22:33.:22:35.

you a wake at night? Not really, no. I'm someone who

:22:36.:22:40.

doesn't know how to use it. It is phenomenal the thought that people

:22:41.:22:44.

can buy millions of likes when you think about the fact that

:22:45.:22:48.

advertising revenue follows, popular artists, popular brands. The three

:22:49.:22:52.

million was a problem there, wasn't it? Tipped it over the edge. Let's

:22:53.:22:58.

look at the other stories. Victoria is rejoining us on the set. Let's

:22:59.:23:06.

start with Dyson, Sir James Dyson investing ?1 billion into making

:23:07.:23:11.

batteries better. Why is he going to achieve this when with elon Mus k

:23:12.:23:16.

ploughed millions of dollars on this? He is the man who brought you

:23:17.:23:22.

vacuum cleaners with the smiley face on the side. Bagless vacuum

:23:23.:23:29.

cleaners. I have a three-year-old son and I was fixing one of his toy

:23:30.:23:34.

trains and I was thinking when I was three in 197 #1rks the batteries

:23:35.:23:38.

were identical, in smartphones you have got dense energy storage, but

:23:39.:23:43.

batteries haven't come on and if you can make some kind of improvements

:23:44.:23:47.

in this direction, then it will be, it will mean much longer distances

:23:48.:23:51.

for electric cars and it will mean microgeneration at home makes more

:23:52.:23:55.

sense because part of the problem is putting it back across electric

:23:56.:23:59.

wires and losing the energy. It is about the size and the weight, isn't

:24:00.:24:03.

it? If they can be small and light and really powerful, you are on to a

:24:04.:24:07.

real winner, aren't you? If he gets this right, he will hoover up!

:24:08.:24:13.

Very good! Hoover are a separate company and it

:24:14.:24:18.

is trademarked as well. This is something we were alluding

:24:19.:24:25.

to in the market, the people's bank of China governor warning the

:24:26.:24:29.

country's corporate debt is too high. Corporate debt has risen to

:24:30.:24:38.

230%. Why do these things matter and which should we be more concerned,

:24:39.:24:41.

the level of corporate debt or level of total? Well, I think the

:24:42.:24:45.

corporate debt is the biggest concern at the moment but the things

:24:46.:24:51.

that China can do about that, they can basically force banks to swap

:24:52.:24:58.

bad loans and bad debt into equity, banks forced to raise more equity,

:24:59.:25:02.

that would take a lot of the debt levels down and the Government could

:25:03.:25:05.

take on more debt as well. The reason the markets haven't really

:25:06.:25:09.

reacted, this has been a gradually growing problem and at the margin,

:25:10.:25:15.

the news out of China is better, the Trade Minister said the March trade

:25:16.:25:18.

numbers would be better, house prices are starting to go up. Also

:25:19.:25:23.

also, household debt is very, very low in China. They save more. They

:25:24.:25:29.

are more, I wouldn't say savvy is necessarily the word, but more

:25:30.:25:32.

cautious about their money. A form of savings rather than borrowing,

:25:33.:25:37.

you don't borrow to do that. Trevor, thank you for joining us today.

:25:38.:25:42.

There will be more business news throughout the day on the BBC Live

:25:43.:25:47.

webpage and on World Business Report.

:25:48.:25:48.

Well, the weekend was pretty quiet at least on the weather front and as

:25:49.:26:14.

far as president weather goes for the next few days, there is really

:26:15.:26:18.

not much change, lots of dry weather, a bit of sunshine, clouds

:26:19.:26:24.

too. Towards the end of the week, the weather fronts we are seeing

:26:25.:26:25.

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