07/07/2017 BBC Business Live


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This is Business Live from BBC News with Rachel Horne and Ben Bland.


Pressure grows on that T20 Reach G20 to tackle the migration crisis, is


more investment in Africa the answer? That is our top story. --


pressure grows on the G20. The G20 begins today, but can


leaders who represent 85% of the world's wealth come up with a plan


to solve the growing migration crisis? Also when the programme,


forget the exploding phones, because Samsung says it is on track for


record quarterly profits. We live in our Asia business hub with details.


Markets in Europe have opened and they are all down, we'll be looking


at the figures. And we'll be getting


the inside track on this weeks big financial news with the BBC's


business guru Simon Jack. Social media is buzzing


today with rumours that President Trump had trouble


securing a hotel room So today we want to know


what you have missed out Just let us know -


Use the hashtag BBCBizLive. We start in Hamburg, Germany


where as you've been hearing, leaders of the G20 group


of the world's top Concerns over free trade


and the environment But for Europe - equally pressing


is the migration crisis. Record numbers of migrants


from Sub-Saharan Africa have been heading into the EU -


increasingly across the Mediterranean via


Italy as this map shows. The final destination


for many is Germany - where migration related costs


are projected to top $100bn by 2020. Chancellor Angela Merkel has made it


clear that she thinks other countries must shoulder more


of the burden Last year alone Germany saw almost


three quarters of a million There are fears that climate change


and poverty could drive millions more Africans in particular to make


the dangerous journey to Europe Look at these numbers


and you can see why According to the World Bank -


the average income in Sub-Saharan Africa last


year was $1,504. With me is Professor Christian


Dustmann, Director of the Centre for Research Analysis of Migration


at University College London. We'll speak in a moment, I think we


can show you live the scene in Hamburg. It looks like Emmanuel


Macron just getting into a car. This is live from Hamburg where the G20


summit of leaders is taking place. All eyes are on that. A lot for them


to be discussing. Including how to deal with the migration crisis. So


let's delve into that with Professor Dustman. What do you think the


likelihood is of reaching consensus, how much common ground is there


between the leaders when it comes to the challenges, benefits and answers


to the migration crisis. Consensus on what precisely? What we're seeing


at the moment is a continuation of what started in 2015, emphasis has


shifted from Africa to the Middle East. People are fleeing war,


persecution and, increasingly, poverty. Making their way over the


Mediterranean into Europe. Now, the borders of Libya, which have been


avoiding that during the Gaddafi regime, are now not doing that any


more. This flow has to be in some way addressed. Where we can see, and


hopefully we'll see consensus, is to create situations in those countries


where these people are coming from which will make it liveable future


for these people. I think that is something where we can see hopefully


some progress at the G20. These are the leaders of some of the most


powerful and wealthy nations. There is a lot of anger among some, we can


see protests taking place on the streets. Some people feeling these


very powerful leaders are simply not doing enough. I wonder whether you


think that, for example, greater investment in Africa and supporting


those North African economies would help actually solve the deeper


problem? Well it will address the problem, it's not so much only the


economic situation in which we find these people, but instability and


insecurity. Even more so, the population projections for these


countries are quite dramatic. We have 1.1 billion people living in


Africa today. They are projected to increase to 2.8 billion in 45 years.


So the pressure will not abate. We need to address insecurity,


instability and poverty in these countries, if we want to address the


increasing migration flows from those regions. It's got to be a


long-term plan. One of the counters to the idea of immediate investment


in Africa is that once people are earning more, then they will


actually have more means to make that journey north to Europe. That


is very true, many of the very poor people who would like to migrate


don't even have the means to do so. So increasing economic wealth in


those regions, without creating security and stability, and a future


for these people, may actually at least in the short run lead to


increased migrations, and that has to be considered. We are seeing live


images from Hamburg, those protesters staging a sit in protest


in the middle of the street. It appears police are using water


cannon on them to try to get them to move on. Dave been protesting in


Hamburg since the summit began yesterday. Initially a very peaceful


protest, but then it later turned into clashes between protesters and


riot police. We can see the water cannon being used, but the


protesters seemingly not being moved by that. Determined to stay there.


Some of them feeling, perhaps, capitalism, the markets have in some


way failed some of these people, who are in a really desperate situation.


But also angry about what they would consider the insufficient action


taken by the world leaders at that G20 summit. A lot of focus on that,


they know the world will be watching. Huge media presence, with


the G20 leaders, and these protesters will no doubt have


factored that in, knowing they will get a lot of attention drawn to


their cause and the points they are trying to make.


Professor Dustmann, what reaction do you think this will garner within


the G20 leaders? I don't think this will affect much what will be


negotiated within the G20 circles. I mean... In a way some of the


arguments you see in the streets are a little bit naive. Of course we


need to help people in need, but what we have seen in 2015-2016 for


instance was that very large migration flows from countries


outside Europe lead to political radicalisation within Europe. We had


the rise of the radical anti-immigration party in Germany


and also in other European countries as a response to the migration


crisis of 2015. If that leads to political change, then clearly that


doesn't help anybody. So we can deal with migration but we have to avoid


inflows which are considered by the majority of the population is


something not sustainable. Again, it brings me to the point I tried to


make earlier, we need to address the issues and the problems in those


countries where these people are coming from. I hope we will make


progress on that at the G20. The key issue here, of course, is that much


of the instability, which is causing these migrations, is created by a


number of different actors. Not just Europe alone which can influence


that. It is many other countries which have to take responsibility.


And that is why it is so important to discuss that within the G20


meeting. Professor Dustmann from UCL, thank you very much for your


time. Let's take a look at some of


the other stories making the news. Microsoft is to cut "thousands"


of jobs worldwide as it attempts to beef up its presence


in the cloud computing sector. The technology giant wants


to strengthen its cloud computing division but is facing intense


competition from rivals such The majority of cuts are expected


to be outside the US. Luxury handbag maker,


Mulberry, has set-up a joint venture in Japan as it


continues its expansion into Asia. The company has signed a deal


with Japan's Onward Global Fashion The company will be called


Mulberry Japan and have Earlier this year, the company


launched Mulberry Asia, operating in Hong Kong,


China and Taiwan. Tesla is planning to build


the world's biggest battery in South Australia


to store renewable energy. The lithium ion battery system


will be paired with a wind farm. Repeated recent blackouts


in South Australia have sparked a political row over energy policy,


with the federal government blaming the failures on the use


of renewable technology. Samsung Electronics seems to have


recovered from both its exploding smartphone crisis and it's


corporate corruption scandal. The South Korean tech giant says it


made record quarterly Tell us more. You've been looking at


the figures. For the first time, Samsung has taken a bite out of the


Apple in terms of quarterly profits. The South Korean electronics giant


says it will make $12 billion in the second quarter, a 72% bump compared


to where it was this time last year. All because of strong demand for


memory chips. Some analysts say the company is on track to overtake


Intel is the world's biggest chip-maker in terms of sales by the


end of 2017. It's a huge turnaround from where Sansom was half a year


ago. They were coming off the scandal of exploding batteries on


the galaxy note seven. You wonder what they do with the other parts


that are OK to use. In South Korea they launched a new phone and said


the reason was because they wanted to minimise the environmental


impact. Let's look at how the markets have been getting on.


Overnight in Asia... Traders have been watching political


tensions on the Korean peninsula, falling oil prices and were also


awaiting a key employment report indices loosing out to the bond


markets - central banks calling for a tightening


of monetary policy - soon they will start to turn


off the flow of easy money to the markets -


that has made bonds more attractive - driven up the yield investors can


get from bonds which means some are turning from equities


to bonds - explaining some And Samira Hussain has


the details about what's ahead It's the first Friday in July, which


means it is jobs day for the US. The latest snapshot of America's labour


market will be released. The unemployment rate currently stands


at 4.3%, economists are not expecting it to change. Analysts


will be looking closely at both the labour participation rate and to see


if wages have increased. Ahead of the US Federal reserve Janet Yellen


will testify to US lawmakers next week and on Friday the American


central bank will issue its semiannual report outlining recent


policy decisions and describing its plans for reducing its asset


holdings. By law the Fed has to testify twice a year and issues a


formal report on the state of the economy and monetary policy. Usually


it is issued simultaneously with the chair's testimony, but this year the


report will be issued a few days ahead of time. Joining us now is


Richard Fletcher, business editor at the times. We mentioned the US jobs


figures out later. What are analysts expecting? They are closely watching


job figures to give a snapshot of the US economy. We expect 179,000


non-farm payroll jobs to be created, then there will be a focus on


average earnings, expected to come in at 0.3%. The overall unemployment


figure, which we expect will stay at 4.3%. It's what this tells us about


the US economy, particularly what that means in terms of whether the


Fed will eventually reach its forward target of a third rate rise


this year. At the moment there is very little chance of a rate rise


when they next meet, only 18% chance in September, according to how the


markets are pricing. It's going to give us, hopefully, some clue about


what's happening to the US economy and what it might mean in terms of


rate rises. It comes back to the whole sell-off of equities and


what's happening in the bond market. Let's talk about the bond market,


we've seen a rise in the bond markets. As yields have gone up they


are looking more attractive to investors. The German ten year bond


is trading at an 18 month high. With the ECB minutes we had earlier this


week, there is this feeling the ECB is going to turn off the taps is a


bit sooner than the market had expected. We've also seen here in


the UK split among the MBC. There is a feeling that globally we will see


a tightening of monetary policy. There will be some people who say,


you know, about time. Because this loose monetary policy has been in


place for so long that the concern is, if there was another chopped the


system the are almost all the way into emergency mode. How do you turn


this off after such a long period of loose monetary policy? That is


interesting. For the central bankers it's about how you do that without


causing too much of a shock to the market. Oil doesn't know if it up or


down, it's volatile at the moment. It has been volatile for oil at the


moment. One of the big movers has come out and said, the changes we


have seen in the US because the costs in production of shale


falling, we will look at oil trading in this tight band. We've seen it


trading in this $45 - $55 band for a long time. That's probably set to


continue, a bit up and down on a daily basis but we do appear to be


quite range bound. When it comes to investing it is all about timing and


not leaving it too late, it ties in with rumours about President Trump


at the G20 apparently struggling to get a hotel room. Have you ever left


it too late, for investment or otherwise? I'm a terrible investor


so I have definitely left it too late. I am a nervous traveller so I


booked my hotel and get to the airport at least a day in advance. I


know the feeling, having once missed a flight and the stress of that.


Richard, thank you very much. Richard Fletcher, there. Coming up


with a look at the mega trade deal between Europe and Japan and if free


trade is back on the global agenda. This is Business Life from the BBC.


The food delivery firm Deliveroo has said it will pay sickness and injury


benefits to its 15,000 riders in the UK if the law is changed.


At the moment the firm says, the law prevents it from offering


enhanced rights because it classifies its riders


Let's get more from our business correspondent Theo Leggett.What


As you know Deliveroo is a company that takes restaurant food and


delivers it direct to customers. It uses a network of cyclists and


mopeds and riders mainly to deliver the food and they work flexibly. So


they can work when they want, log on, get jobs to them and work for


other people as well. As a result Deliveroo classifies them as


self-employed. So they are not eligible for holiday pay and


sickness benefit. What Deliveroo has done, is, in submission to the


government which is reviewing how employment law works with regards to


the gig economy, it says if the category of workers is changed it


might be prepared to offer more benefits than it currently gets. Why


is there an issue with the current law. It hasn't kept up with the way


the economy has changed especially the development of the gig economy.


People who work on behalf of companies are either categorised as


self-employed, as workers or as employees. As we go up that scale


the number of benefits you are eligible for increases. A lot of


companies in the gig economy in particular want to give their


workers classified as self-employed because then they don't have to pay


National Insurance on behalf of those workers so they can operate


more cheaply. For the workers and offers flexibility although they


don't have those benefits. The gig economy is a great area. It doesn't


fit naturally -- a grey area. It doesn't fit in any of those


classifications. So the law is being looked at to see if these workers


cannot be exploited and at the same time give them the flexibility to


work in a way that they do. Thank you very much for that. Very


interesting story continuing with the gig economy which is becoming a


huge part the economy in the UK, with zero hours contracts, people


are starting to work out how to make it work both for the employer and


the employee. You can read more about that story on the business


page. You're watching Business


Live - our top story. The G20 summit gets under


way in Hamburg today. The meeting is expected to be


divisive, as world leaders discuss a wide range of issues -


including migration, A quick look at how


markets are faring. This is how they look at the start


of the trading day across Europe, all the main indices are down shade,


and the pound below the $1.30 mark. And now let's get the inside track


on this week's big financial stories including that mega deal


between Japan and the EU and the billionaire owner


of Newcastle football club's rather unusual meeting style --


Our business editor The main focus is on Trump and Putin


but keep an eye on trade and in particular this undercurrent of


whether the US. Imposing steel tariffs. There's a story about steel


and whiskey and orange juice. President Trump has been the big


defender of the US steel industry. He's already got tough with China


about some of their steel exports to the US. It looks as if he puts wider


tariffs on steel imports, people say this trade war could be starting and


other countries will get caught in the crossfire but we have seen


between the US and China. He's been looking into a particular section,


section 232 of an old act from the 1960s saying, you can reveal imports


if this national security interest. What he is trying to say is that


they use steel in defence. It hasn't been done often before so he's using


a strange and powerful instrument to maybe put the squeeze on foreign and


steel imports into the US. The other interesting thing about the meeting


of the leaders is not just the official group gathering but what is


happening on the sidelines, we saw yesterday the meeting between EU


leaders in Japan talking about this deal that they have reached. If you


look at the backlash around the world, it seems against the odds.


The Japan deal is interesting because for one thing it did not


take a long time to do, they've been negotiating it since 2013. It will


also put out of joint analysis of French auto makers, exports of cars,


a tariff of 10% on that, for the Europeans, agricultural products, a


lot of beef is consumed in Japan, what is interesting in a Brexit


context, there seems to have been this move against free trade, a big


blockbuster deal. At the same time you see the UK is leaving the EU and


some say this is leaving precisely at the moment when they have their


mojo and their schools together on trading. Others say, people like


Japan want to do deals with important economies, the UK is one


of them and this could be a bit of a blueprint for a deal between the UK


and Japan. Speaking of the T20 another meeting is also happening in


the weekend in the UK. Business leaders are going to the Foreign


Secretary 's residence to meet with the government. Business leaders


felt they had been frozen out of the political process, their hopes and


fears about Brexit were not being listened to. And just last might the


CBI said, what we want to do is running out, we are never going to


get a trade deal done in the time available until March 20 19. What we


should do now is say early until we get a full trade steel, and it is


enforced we should stay in the single market and in the customs


union. People on the other side of the debate say this sounds like


Hotel California, you can check out any time you like but you can never


leave because this will go on for years! With spoken before about


Sports Direct. Interesting revelations. Real caucus! Sports


Direct is run by the maverick entrepreneur, Mike Ashley. He


founded this company and did fantastically well. They floated


some shares. He runs it with an iron fist and owns 70% of the shares. He


calls the shots and it turns out he also buys the shots! He had a big


boozy meeting where he drank 12 pints of lager punctuated by vodka


chasers. Apparently he drew up into the fireplace. The case in the court


at the moment is that on one of these boozy nights he said to one


investment banker, if you can double the share price give you ?15


million. It did happen and now he said it was nothing more than


banter. The other guy said, no we have a proper understanding. Very


amusing story. It's well worth the read. My Twitter question,


apparently Donald Trump had trouble finding a hotel room at the G20


because he left it too late to book. I went to the Frankfurt motor show


and ended up staying in, it was more like a monastery cell, it was like a


monastic cell. When you go to one of these big trade conventions like


Frankfurt motor show or the G20 the best hotels are booked. If you know


journalists, we go at the whim of the editor and by the time you get


there only the greatest rooms are available. And he's still got there


and did the job. -- the greatest rooms. That's it from Business Live


today. There will be more business news


throughout the day on the BBC Live webpage and on World Business


Report. We will be back on Monday, we will


see you then.


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