16/05/2016 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


President Maduro orders a state of emergency as the United States


warns the country may be sliding towards revolt.


Live from London, that's our top story on Monday 16th May.


Amid food and power shortages, runaway inflation, protests


and political uncertainty, we'll assess what next


Norway's sovereign wealth fund says it will sue Volkswagen after the car


And here's how Europe has opened - in a big week for economic data.


And we'll get the inside track on new research into dementia.


More than a decade after the last new drug to treat the disease,


we meet the woman pioneering a potential new breakthrough


that could help millions of people around the world.


And as new photos show China's top tech workers sleeping at the office,


we want to know if you would ditch your daily commute and save on


travel time to bed down at work. You know what to do. Use the hashtag.


Hello and a very warm welcome to the programme.


Venezuela's President Nicolas Maduro has threatened to seize factories


that have stopped producing goods in protest of the government.


The country is in the grip of a severe economic crisis.


In a speech to supporters in the capital Caracas,


he said Venezuela had to recover its means


of production, to safeguard the country's economic future.


It has the world's largest oil reserves


but its economy has been severely hit by the fall in


The International Monetary Fund estimates that this year Venezuela's


inflation will rocket to 720 percent, that is more


And no surprise then that the economy will


There are now severe shortages of food, medicines and basic goods.


Our South America correspondent Daniel Gallas has more.


Average Venezuelans have grown used to getting by without some staple


food items and also some essential things like toilet paper. But now


they are having to ration water and electricity as well. The government


of President murderer it says the producers are the ones to blame.


According to him they are trying to sabotage the economy by halting


production and trying to drive production up. That is why Maduro is


trying to seize the countries and get them back to producing but the


people say it is the government that is to blame, with its price freeze.


One company, Poehler, has halted its production of beer. The government


says they are trying to sabotage the country but they say they cannot


import necessary ingredients. Venezuela is supposed to be one of


the richest countries in the world because of its oil reserves, but due


to the global fall of oil prices, this country is on the verge of


catastrophe. Jimena Blanco from Verisk


Maplecroft joins us now. Give us more perspective on what is


happening now. Nice to see you. It does sound extremely critical, very


much on edge. Explain the situation with regards to these companies that


are not able to produce goods and yet President Maduro is saying he is


going to take over and put the bosses in prison. It sounds very


dramatic. I think we are reaching a climax on a crisis that has been


developing for many years. We have reached a point where it is not just


the economic crisis, the high rate of inflation, as we have seen, a


lack of access to foreign currencies so companies can import their


primary goods to produce locally. This of course is combined with a


political gridlock that is preventing the government and the


legislature from working in a constructive fashion. And we have


mentioned the fact that the price of oil has crashed, well, not crushed,


but has been very low. It is recovering a bit. And terrible


drought conditions. Yes, in terms of the price of oil, given the spending


plans of the Venezuelan government, it is well of what it should be, and


for Maduro to maintain the spending levels of the Hugo Chavez there, it


should be $100 a barrel and it will not be there any time soon. The


drought is affecting power generation, which we have seen


translating into a shut down of the government for three days. What that


means is that basic services are not being delivered which in turn is


fuelling social unrest. At the elections at the end of last year,


Maduro's party lost its majority in the legislative body. So it is the


opposition that has the majority there, and yet he is still


controlling power. Well, Maduro and his party control the other branches


of government and there has been a very clear strategy from the


opposition in Congress to block every reform. The opposition have


tried to pass things that have gone against Maduro's government, but we


have seen the blocking of a law that attempted to release political


prisoners, for example, many of them opposition members. As the situation


continues, the opposition is going to find that its efforts to remove


Maduro from government democratically are going to be


blocked. We are in a situation where we can see an escalation of


protesting and civil unrest. Thank you for coming in and giving us


perspective as ever. It is a story we are keeping across right here on


BBC World News. Now the other business news stories.


Norway's sovereign wealth fund, the largest in the world,


plans legal action against Volkswagen over the rigging


Norges Bank Investment Management is one of VW's biggest investors


Volkswagen has already set aside $18 billion to pay for the


Nigerian unions have called for an indefinite general strike


to begin on Wednesday unless the government reverses


Prices have risen by 67% in the country, after the slump


in crude prices caused a shortage of foreign currency.


For months motorists have been waiting in long queues for petrol


while others have been forced to buy fuel on the black market.


Legendary investor Warren Buffett is reported to be backing


a consortium bidding for Yahoo's core internet assets.


The head of Berkshire Hathaway is among a group that


includes Dan Gilbert, the billionaire founder


Any bid would be a challenge to Verizon which is seen


as a frontrunner in the race to buy Yahoo's assets.


Today on the BBC we have special coverage, wherever you are watching


us, including in the UK. It is the BBC World On The Move Day. We are


looking at the issues of migration and how the world has changed and


what the future holds. This is on the Business Live. Page. Sarah


radio and television, is radio and television, is


broadcasting from Vietnam today. Lots of special reports from her on


the BBC News website as well and also special guests including


Angelina Jolie. The story you see there, disappointing sales from H,


rising by 5% but below the 9% that was forecast. Like many, the fashion


retailer is blaming the cold spring. They always blame the weather


because it is getting the right stuff in the right stores at the


right time and the weather doesn't help. I am glad I don't have that


job! Chinese investors have overtaken


Canadians to become the largest buyer of US homes according


to a new study. They've spent $110 billion


in the last five years. Talked us through the hotspots


because the Chinese have their eye on prime property. They do indeed.


According to the study it has been done by the real estate company Asia


Society. Of the $110 billion you are talking about, the majority has been


spent by Chinese nationals buying up residential properties in New York


and California. According to this report, buyers have been paying


substantially more on average than other international buyers. Chinese


buyers, large companies investing in commercial property in the US as


well. If you think investment level is high now, it is worth noting that


the records are predicting that it will almost double between now and


2020. By then it will be $220 billion, despite the talk of a


slowing Chinese economy and Beijing's attempts curb capital


outflows. Canadians until now were the biggest foreign buyers of


Chinese real estate and Chinese investors are buying up in Canada as


well. There is a lot of chat on social media among users right now


questioning how a Chinese student can afford to buy a luxurious


mansion with sea views in Vancouver just recently for $24 million,


reportedly. Some people have all the luck! Thank you. Quick look at the


numbers. Tokyo stocks closed higher


after news that Japan's government may postpone a planned sales tax


rise to avoid damaging We should stress that these are just


reports at the moment with no confirmation yet. Just to show you


what Europe is doing in the first hour of trade because it is set to


be a big week for economic data. Inflation figures in the UK come out


tomorrow, and unemployment, wages and retail sales data coming out


later in the week. We will look at what is expected at what is


happening in the US. But first let's go to Wall Street for the details of


what is happening there today. Another busy week in the US.


Highlights that we can expect coming this week. We will get some fresh


insight into the thinking of the US Federal reserve, when they released


the minutes from the April meeting. Also the US cost of living probably


went up a bit more in April as gas prices kept climbing after falling


since last year. Economic data being released this week will likely show


that both home sales and home construction increased. And finally


the US Supreme Court will issue opinions on Monday. One outstanding


case is Puerto Rico's debt crisis and the validity of a law that would


allow the US territory to restructure some of its debt issued


by public agencies in a bankruptcy type process. We have Tom Stevenson


with us, investment director at Fidelity International. So we have


just been through the things we need to keep an eye on. You are looking


at the inflation figures coming out of the United States tomorrow. Yes,


we have inflation figures on both sides of the Atlantic coming out


tomorrow but the US figures are so important because of the Federal


reserve meeting coming up in June. There is speculation about whether


that will be the second rate rise after the one that happened last


December. It seems so long ago. It has been a long wait for the second


one, absolutely. The other issue when we talk about rate rises is the


idea that they will go up consistently but very slowly, and


that has been the message from the Bank of England, which is yet to


make a move. There is so much riding on what the US Fed has said and what


they haven't said what the words indicate. Give us the longer term


outlook. Interest rates will rise slowly in the US and we only have to


look at the economic data to see why we have had the implement data


recently, which showed just 160,000 new jobs created in America and we


had expected 200,000. The economic data is sluggish, but on the other


hand, inflation is actually reasonably high. If you strip out


food and energy, inflation in the US is running at 2%. If it goes up any


more in tomorrow's figures, then I think the odds on a rate rise in


June will be increasing. And let's get your take on the news that


Norway's sovereign wealth fund, the biggest in the world, is looking to


sue Volkswagen over the emissions cheating scandal. They invest in


faults lichen. Interesting because traditionally the sovereign wealth


fund is very quiet in Norway and you don't know it is there. They are


traditionally quiet, $800 billion or so, but they have lost an awful lot


of money in false lichen. They have lost several hundred million as a


result and they are quite angry about it. In the recent report, they


singled out fault jargon -- VW for specific treatment. And I am sure


other people with money in VW will be taking note. Thank you. Still to


come on the programme: Defeating dementia. It is more than a decade


since the last dementia drug was licensed but one firm says they may


have made a significant breakthrough. We will meet their


boss. This is Business Live. From BBC News.


Before we dig deep into the brain with how it functions and


malfunctions, let's have a look at the UK economy.


The UK economy is predicted to grow at a slower rate this year and next,


that's the view of the business group the Confederation


of British Industry in their latest economic forecast out this morning.


The chairman of the CBI is in our newsroom. Good morning. Just tell us


the reasons behind your gloomy forecast. Good morning. We are


looking at a forecast of about 2% growth this year and next, down from


2.3% this year. Two key drivers for that. One, household spending is


down a little bit in recent times. And secondly, there is a rising


level of uncertainty, both at a global level, particularly around


trade from China and emerging economies, but also particularly


importantly in relation to Brexit and a lower level of investment


intentions as people are getting more cautious and dealing with the


uncertainty of that outcome. And of course the issue is that there is a


suggestion that the slow down would happen anyway, regardless of the


uncertainty related to the EU referendum. The economy is slowing


and we need to take action now, regardless of the outcome of what


happens on the 23rd of June. The one thing that we know in the


business world uncertainty reduces investment and reduces our risk


appetite and we do see an exit from Europe would reduce the level of


investment in the UK quite significantly in the short to


medium-term as people look to the best places in the world to make


their investments. Just briefly, Paul, obviously Brexit


we've discussed, but what other things would you like to see done to


help boost the UK economy? Well, I think the business community in the


UK are very focussed on growing their businesses internationally.


What we would like to see is an increase in exports, right across


the globe to Europe where we are already have 45% of our exports,


there is good opportunities, the USA is a great market, right across the


world, increase in exports would help the world enormously. Paul,


good to talk to you. A gloomy forecast for the UK economy


over the coming weeks and months, but one worth watching.


Our top story, Venezuela's President has threatened to seize factories


that have stopped producing goods in protest of the government.


The country is suffering from a deep economic crisis.


On Friday the country's leader declared


Now let's get the Inside Track on the growing global


As well as the emotional toll it takes on families,


it's also a growing financial burden on society and authorities


The estimated worldwide cost of dementia is $818 billion,


and it will become a trillion dollar disease by 2018.


In a developed county such as US, it costs


on average, close to $60,000 to look after a dementia sufferer


One company trying to bring down the cost of the disease


is Neuro Bio, they're in the process of developing a fast diagnosis


Their Chief Executive, Baroness Susan Greenfield,


Nice to see you. Nice to see you both. This is not a cure, this is


just a way of maybe being able to spot it earlier, take action earlier


and therefore, hopefully prevent some of the worst symptoms of it


further down the line? Yeah, the term breakthrough is used a lot and


I think one has to be very careful about what that actually means. On


the other hand, I think we are taking a new approach which in the


longer term could lead to an effective treatment. The dream would


be, not just to look at a so-called biomarker, that's to say a blood


test where early on you could see the problem was underway. We know


that Alzheimer's years takes 10 to 20 years underway before you get the


symptom. If you had that window to find out that something was already


happening perhaps you could intervene before the symptoms and


slow things down. The second strand we're pursuing is to stop anymore


cells dying. The medication slows things down a bit in the early


stages, that's not good enough. We need to say to someone, OK, you are


confuse and you have memory loss now and with we are going to give you a


medication and it won't get any worse. If you had a blood test that


everyone could have over a certain age, the doctor says good news and


bad news. The bad news is according to my chart in five years time, in


your case, you will probably get the symptom, but we have a medication


that stops anymore cells dying. So take it now, and then the symptoms


will never come on. That's what we are aiming to do. That would be a


breakthrough, but it is something that is not an instant one off, we


are looking at the biomarker and potential med carings and it will


take time in order to realise that dream. It takes time... It takes


time. It takes a lot of money. A lot of money. And a lot of investment.


Your history, you have been an academic all your life, you were at


Oxford University and a few years ago, neuro biothere and became a


limited company and you are with a privaty run company. It is a huge


change for you? One could devote a programme to talking about how


science is funding and the different agendas and the different


expectations and the pr and cons, but over the last three years, I


have learnt a huge amount about the private sector and what it has


allowed us to do is be really innovative. You have to take perhaps


more chances than you would if you were getting research cash.


The more you have, the more you can do in parallel and if you could do


things in parallel, you can pursue various avenues. We have had angel


investment which is in the hundreds of thousands, we can't go to big


pharmaceuticals yet because they are risk averse, they want to investment


large amounts of money for clinical trials. I think it has been called


the value of death by some pessimists. That's where we are bes


and that's where you want single millions.


Baroness Greenfield it is fascinating to talk to you. You have


to come back another day... I'm there. I'm there.


Thank you. Cable and Wireless -


one of the oldest names in telecommunications,


with roots going back to 1852 is being bought


by an American media giant today. Liberty Global have snapped up


what amounts to the remaining part of C, a business with a strong


presence across Latin America It is an acquisition vital


to Liberty Global's media ambitions. Earlier I spoke to Liberty Global's


Chief Development officer and started by asking


why they are acquiring Multiple reasons, it is a high


growth business which is well positioned to meet pent up demand


for its services across the region. Secondly, it adds tremendous scale


to our existing businesses in the region. We have two businesses in


Puerto Rico and Chile. Scale is important because in today's


environment, it is necessary for us to be able to do that, in order to


innovate and invest for customers. Obviously you are getting biggerment


you're sprawling across the globe in a more prevalent way. Many people


watching, customers might think, is that better for me or worse for me?


In terms of the competition, is there strong competition in the


markets you're going in? For our customers, hopefully it is exciting


news. We have tended to accelerate innovation and investment. Virgin


Media is a good example. We announced an investment programme to


expand our network. So hopefully more of the same and we can


accelerate things. The fact there is strong competition is important for


the customer, but in terms of your hopes of getting through into a


market where there is a lot of regulation and a lot of competition


issues, that makes it easier, presumably? No, if you step back and


look at it one of the primary reasons for us doing this, the


region actually has a lot of pent up demand for our products. When you


look at number of people who take a broadband product or the number of


people who have paid television, it is lower than the equivalent in


Europe, so over time we would hope they converge.


Tom Stephenson Investment Director


These are photos of Chinese tech workers who sleep at the office.


There is not always time to go home and rest. Some amazing pictures.


These guys bunked down in the office! I don't quite think the BBC


would approve of us doing that, but and they look very tall actually.


There you go, Ben, there is hope for you. Oh my goodness! No. That's so


not allowed. We asked our viewers to get in touch with us about this. A


viewer says, "Sleep in the office, oh no, home cures refreshes the


mind." You have got to have a break? I remember 25, 35 years ago when I


lived in Japan, long commutes and people having to work late so they


created capsule hotels! Literally, a coffin in which you sort of put your


body to sleep and came out and went to the office in the morning. I


guess, China is going to have to do something similar. Well, my team


works overnight for that early morning show which you saw a clip


of, they grab a power nap, but they are never in their underies at the


desk. This really is no work-life balance. You are at the office...


For a lot of people in China, that's their life. They move from the


countryside to the cities to get the jobs and they live in a dormitory


provided by the company. So that's their life. Tom, time is ticking by.


What do you want to look at next, the Financial Times, here comes


Jacksonville, what's that about? This is about costs. Financial


services, losing many jobs and the City of London and New York in


particular losing jobs, but interestingly the jobs are not


going, they are just leaving the City because the cost of running


back offices in big cities like London and New York has gone up 10%,


12% in the last 18 months according to this story. Unsurprisingly


companies are looking at moving out to cheaper locations and


Jacksonville seems to be the location of choice in America. The


technology means that you don't have to be in the busy place. Tom, that's


it from us. We will see you again soon. That's it from us. Have a good




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