26/08/2011 World Business Report

Those are the latest headlines from BBC World News.

Time for the financial news. Here's Hello, everybody. I'm Aaron

Heslehurst. Welcome to the programme. We'll look at all the

latest in the world of business and money. Let's look at the headlines.

Financial markets await the great speech from Jackson Hold. Will the

world's most powerful banker pump more money into the US's flagging

economy? Naoto Kahn is stepping down as

Japan's Prime Minister. Will his successor do any better on the

economy? And rebuilding Libya - the head of

Libya's stabilisation team tells the BBC about his plans to get the

economy back on track. We'll cross over to Tokyo and talk

to Roland shortly. First, let's talk about the central bankers and

economists around the world who will meet for three days this week

in Jackson Hole, Wyoming. The annual get-together comes at a time

when economic growth around the world is slowing. In America, the

world's biggest economy, there is particular concern. Despite the

size of the problem, bankers only have limited options.

As America's central bankers gather in remote Wyoming, they may need

some inspiration from this grand landscape. With growth at just 0.8%

in the first half of this year, America's economy is faltering.

Here on the floor of the New York stock exchange, we've seen huge

volatility in the last few weeks in the price of stocks and shares, and

big drops in the stock market. That's because people are worried

about economic growth in America, about high unemployment and huge

government indebtedness. The question is, can the head of

America's central bank really do anything about these difficult

problems? The central bank has taken some big

steps to prop up the US economy, but Aaron Valdez says they are

unlike 3 do more now. There's not a big appetite in Washington for $600

billion to give a sugar high to traders down here. I don't think

we'll actually see it. And that's the problem - I think we're going

to see it Friday. Federal Reserve chairman Ben Bernanke plans to keep

interest rates near 0% for at least two years. The bank has also spent

billions buying bonds to pump money into the economy, despite criticism.

But the Fed is facing the heat because the government is more

focused on debt than stimulus spending. Economists say there are

things that could be done. Access to lower interest rates and

some sort of job stimulus paired with medium-term debt relief. It's

easy to say on paper, but obviously Washington doesn't make just

economic decisions - they make political decisions.

President Obama has promised new initiatives aimed at job creation

come September - until then, central bankers visiting the big

country will be hoping for big Let's get more on this. Bronwyn

Curtis, the head of global research as HSBC, joins me. Great to have

you with us. Everybody - all eyes and ears - seem to be on Ben

Bernanke's keynote speech later this afternoon. Hopes and

expectations - they seem so high at the moment - is there a danger that

they are so high that, if he doesn't deliver on Monday, the

markets will do that? Well, I think that is a big problem,

because he's going to talk about growth. And why it might be low for

a lot longer, and why they took that very powerful move. So I think

the problem is, he's going to tell us something we really don't want

to hear, and if that happens, then we might see another fall in the

equity markets. Bond markets, of course, will do better.

As they always do. Short and sweet, Bronwyn. Thank you for that. You'll

be be back with Martine and I to look at the newspapers from around

the world. Let's turn our attention to Japan.

The Prime Minister there, Naoto Kan, has just confirmed he will be

stepping down as the ruling party leader. It means the task in front

of what would be the sixth Prime Minister in five years is enormous,

to say the least. Let's go straight over to Roland Burke in Tokyo.

Great to have you with us. A strong yen, rebuilding, radiation, massive

public debt, and of course social- security costs - just to name a

few? These are the challenges that will be facing the next prime

minister of Japan. He'll be chosen on Monday. While that next prime

minister tries to tackle those challenges, he's going to be

hampered by the same problem that Naoto Kan has been facing - that's

what they call, here, a twisted diet. The diet, of course, is

Japan's parliament. The moment, the upper house is controlled by the

Opposition. They can delay, they can block. It means that all those

issues that the - the big issues of restoring Japan's fiscal health,

reducing the enormous public debt, while maintaining social security

in an Asian society - it means that all those issues can't be tackled.

They're just kicked down the road. Absolutely. Roland, I keep reading

and hearing, especially on the back of this announcement now, that the

race is on for the sixth prime minister in five years. It is quite

a staggering number when you look at it. But the problem analysts are

saying is that there hasn't been an administration in long enough to

set in long-term economic policy? That's right. I think when we saw

the Moody's downgrade of Japan's sovereign debt earlier this week,

that was perhaps a sign from Moody's that they don't think that

any of the likely candidates are going to have the will, or perhaps

the ability, to push through the measures that some economists say

are needed in Japan. Like, for a start, raising the sales tax from

5% to 10%. The frontrunner, as far as the public is concerned - public

popularity - is Sege Mihar, a former foreign minister. The

problem is, the public won't get a vote. It's going to be the members

of the ruling party who are in parliament, and they, perhaps, are

going to make their decision more based on the factions within that

ruling party in parliament than anything else. Really, the race is

up in the air. It sure is. OK, Roland. Great stuff,

as always. Thanks for joining us. A deal has been reached at the

United Nations to release 1.5 billion dollars of Libyan assets

from American banks. Libya's National Transitional Council has

already been outlining its strategy to stabilise the country. But of

course with so many challenges, what comes first? That's the

question. Ben Thompson put it to the head of the Libyan

stabilisation team at Libya's National Transitional Council.

One challenge for Libya - what is a Libya without Gaddafi? Most of our

population - over 80% - have been born at the time when Gaddafi was

in power. Therefore, that's a big challenge in terms of how people

are willing to move away from a dictatorial environment and work

together. So that is a big challenge for the population that

has to be there. Secondly, for the Government that is going to be

place, whether it is transitional - it's always going to be a

government which is responsible for governing, and not, in a sense,

just the placating people. You have to take responsibility. You have to

lead. But what for the priorities? How do you get the country and the

economy back on track? First, we have to be able to go fast or

unfreeze the assets that are Libyan assets abroad. They are substantial.

The numbers are over US$100 billion. There will be a government that

provides security and justice, a government that will provide a

decent, clean, transparent governance. And a government that

basically will promote private investment, whether it is foreign

or it is national. For more of that interview, and of

course all the business issues in the Middle East, you can watch

Middle East Business Report on BBC World News on Friday at 1930 GMT,

and Saturday at 2230 GMT. Let's take a look at some of the

other business stories making headlines today.

Japan's core consumer prices unexpectedly rose by 0.1% in July.

That's compared to the previous year - despite expectations that

the index would fall by the same amount. Higher energy prices were

behind the increase. The index includes oil products, but it

excludes volatile food prices. Japan's economy has been plagued by

years, as we know, of deflation. JP morgue Chase will pay $88

million to settle allegations of an apparent violation of rules of

transferring assets of countries sanctioned by the US Government.

The case involved a loan involving an Iranian shipping company and

over 1,000 fund transfers from Cuban nationals which were

processed by JP Morgan. The bank says the violations were

unintentional. Spain will hold an extraordinary

cabinet meeting later on Friday to approve measures to reduce the

country's deficit. The meeting is expected to focus on stimulating

the labour market. Spain's unemployment rate is 21%, which is

more than double the European average. The measures will include

changes to work contracts and plans to rechange -- retrain young people.

Not change - just retrain them! There are the markets there. All

eyes on the US Fed meeting and the keynote speech from Ben Bernanke

later on today. Will he or won't he? That's the question. I'll be

back with Martine very shortly to take a look at the newspapers from

Here in the UK, secret MI5 files just released provide new

information about how the writer PG Woodhouse broadcast from Germany

during the war. The author of Jeevs and Wooster books was branded a

trader after making a series of infamous broadcasts for the Nazis.

Wartime France - the Nazis occupying Paris. MI5 files recount

the story of one teenage girl caught up. Antonia Hunt helped the

French Resistance, but became close to an officer of the Gestapo and

working in their Paris office. After the war, the Gestapo officer

sought her out, saying she promised to marry him. Her father, a well-

known brigadier, asked MI5 to investigate - discreetly. It's very,

very clear to the interrogator, who's obviously quite seasoned in

this, that she's holding things back. They don't press. I think

partly because the retired brigder had asked for her not to be exposed

unnecessarily. Also revealed - new details on PG Woodhouse and his

broadcasts for the Nazis. This previously secret MI5 file released

today focuses on Worker Plaque, at German who'd worked in Hollywood in

the '20s and '30s before being based in Paris during the Second

World War. There, he was a close contact of PG Woodhouse.

Plaque's file reveals Woodhouse tried to downplay their

relationship. He worried how much he be paid. He also tried to claim

his broadcasts, directed at America, weren't so bad because America was

not yet in the war. Years later when he was knighted,

Woodhouse hoped that this was a sign the past had been forgotten.

The release of these files shows that the secrets of the past do not

The RAF says its Red aner andoes display team will fly in an eight-

aircraft formation instead of nine, after losing a plane in a fatal

crash last Saturday. The whole Hawk T1 fleet had been grounded since

Flight Lieutenant Jon Egging died in Bournemouth.

These are our headlines here at BBC World News.

Libyan rebels have tightened their grip on Tripoli. Fierce fighting

has centred on Colonel Gaddafi's compound in the heart of the

capital. A deal has been struck at the UN to

release $1.5 billion of Libyan assets to meet urgent humanitarian

needs. Japan's Prime Minister, Naoto Kan,

has resigned. He's been widely criticised for his response to the

tsunami in March, and the nuclear meltdown at Fukushima that followed.

People living on America's east coast are preparing for Hurricane

Irene, the storm that's already inflicted damage on the Bahamas.

It's expected to hit New York and Boston over the weekend.

Time for us to have a look at the stories that are making head around

the world this morning. We start with the Gulf News, which has got

this rather fetching picture of Colonel Gaddafi - captioned

"Wanted." It says in there somewhere, "Dead or alive." You can

see the bounty on his head. The papers are also reporting of wild

rumours that are flying around Tripoli about the dictator's

whereabouts. There's even one suggesting that he's hiding among

the animals at the city's zoo. No animal impersonations, please.

won't do anything! Follow the money, so the saying goes. Libya's rebels

are investigating allegations of possible corruption of the

country's $65 billion skov rn wealth fund. The Wall Street