16/11/2012 World Business Report


16/11/2012

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which appeared to suppress dissent. Those are the headlines. Now it is

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Hello, everybody. Welcome to the programme. Your chance to catch up

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on all the latest in the world of business and money. The headlines:

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Barack Obama and Republican leaders tried to break the deadlock over

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tax and spending that could spell disaster for the US.

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In Asia, Japan averts a fiscal cliff as it passes a crucial bill.

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Plus IT and the Stasi prisons. The Swedish furniture giant addressees

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claims it used forced labour in Let's talk about the US a first.

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Barack Obama meets with congressional leaders later for the

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first time since the election. Topping the agenda, attempts to

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break the deadlock over the budget. The fear is that without a deal,

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the US economy will fall of a fiscal cliff. We are talking about

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tax cuts and government spending. They will expire on 31st December.

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The billions of dollars will be taking out of the economy if they

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are not replaced. The US could lose more than 2 million jobs. GDP could

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be cut by 0.5 %. The country could be pushed into recession. It is

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taking its toll on businesses. This report from New York.

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Upstate New York, they are assembling parts for planes here.

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Both for commercial planes and military, it takes precision

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unskilled work. Manufacturing has all but disappeared here. This firm

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has created much-needed jobs. Despite the recession, business is

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good. Around 90 people work here, from all the local area. It wants

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to expand more. The firm is worried about the future. It has been

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putting off big investment decisions over the concern as to

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what the next few weeks could bring. By this man told me that the

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uncertainty has taken its toll already.

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The US Air Force is one of his biggest customers. The package of

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tax rises and spending cuts include a big reduction in defence spending.

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That would be hit business here. In terms of buying new equipment, we

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have had discussions with key staff. Leigh have to wait and see. We must

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wait until this situation is resolved. Then begin make a

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decision about how much equipment we buy. -- we can make. Many firms

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are sitting on cash reserves across America. They're waiting for

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direction as to when and where to invest it. Will lawmakers reach a

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deal? Will the economy fall over the edge? We will get a compromise.

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We will get a temporary solution to the most important items. We will

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not hit an extreme form of fiscal cliff. That will buy some time to

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negotiate a more comprehensive agreement. That is little help for

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this form. It may get past the deadline but it does not do much to

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inspire confidence. We are at their mercy of Washington. Hopefully they

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will do the right thing. Those concerns about the fiscal clef have

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been affecting investors' minds for days now. -- fiscal cliff. The

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markets are calling this the wall of worry. Is there really a belief

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that Kong this will not get to an agreement? -- Congress. The

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expectation is that they will. We have seen many times that when

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there is a deadline, whether it is extending the debt ceiling or

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whatever, and they eventually reach an agreement. The market is jittery

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at the moment. Until the election was out the way, markets when

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thinking about it. Now that has happened we are focused on it. Is

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it a valid point that something has to be done? The numbers are

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staggering. The US deficit has topped one trillion dollars of the

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year. The US government has been spending one trillion dollars more

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than what it Aaron's. It is a dinner 16.2 trillion dollars of

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debt. -- more than it earns. It is sitting and 16.2 trillion dollars.

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The markets will think that they have to get a grip on this. The US

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is not as bad as Europe. The economy is still struggling. The

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problem is being pushed down the road. We are taking the old tin can.

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Thank you. We will talk to you later of when we look at the

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International newspapers. Japan has dealt with its own budget crisis.

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There was a huge bond issue to help pay for government spending next

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year. The opposition were demanding early elections as a condition of

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their support. Great to see you. Just in the nick of time, right?

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That is right. As with most political things, the lawmakers

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here have approved the crucial build. That ensures the Government

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does not run out of money at the end of this month. This Bill will

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allow the Government to borrow additional money by selling bonds

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to pay for a large chunk of its expenses. The approval is helping

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to lift markets. The only one in the region making gains. The

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opposition had previously stalled the bill, demanding elections first.

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The Prime Minister has already done that. He indicated on Wednesday

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that he was ready to dissolve parliament and hold snap elections.

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He is expected to make a formal announcement any time soon,

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possibly later today. This comes as fears mount that the economy may be

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heading towards recession. There is a warning that the economy is

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showing signs of weakness. There are concerns about the health of

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the third largest economy in the world. Production has fallen.

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Exports remain weak. This is due to slowing global demand.

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One fiscal Cliff a verdict, all eyes on the US.

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That you for joining us from Singapore.

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Moving on, Swedish furniture chain IKEA will publish a report later

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today into allegations that it used forced labour by East German

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political prisoners due in the 1970s and 1980s. Members of the

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Stasi police say they were made to force people to walk on furniture.

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-- work. Let get more. This is a Stasi political prisoner. There are

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102 cells here. Some of them had more than one occupant. They were

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political prisoners. It is a pretty bleak place. In the floor below, an

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isolation cell where light is kept out and sound is kept out. Complete

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silence and darkness to break people's minds. The allegation is

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that IKEA, by giving contracts to make furniture to the East German

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government, benefited from the labour of these people. These

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political prisoners would work in prison workshops. That work then

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benefited IKEA. So runs the allegation. Act here had contacts

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to produce the forager here. -- IKEA. They did not ask he was

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producing the furniture. They did not ask about the conditions. That

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means you are responsible for who you are dealing with. If you are

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dealing with the dictatorship and you do not have a look at the

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conditions that your furniture, for example, is produced in, you are

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responsible. It must be said that IKEA a denies the allegation.

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They'd take it so seriously that they have got an outside firm of

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accountants to investigate the matter. If those outsiders say that

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I t a had nothing to do with what the prisoners dead and no knowledge

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of who was fulfilling the contracts, but maybe the end of the matter. --

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IKEA had nothing to do with what the prisoners did. If they say that

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IKEA should have known the conditions of the workers

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fulfilling a contract, the people in these cells may get their

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lawyers into action. They will expect compensation.

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We will keep a cross that story. The Nikkei is up to present. They

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