31/05/2013 World Business Report


31/05/2013

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Those are the latest headlines from BBC World news. Time now for World

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Once thought of as an economic powerhouse, India may post the

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weakest growth rate in a decade. We will take a look at one is -- at

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what is going wrong. But none for mob, another record

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unemployment figure is expected for the eurozone with the Sun 19.5

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:00:45.:00:48.

million people out of work. -- An exciting look at all the latest

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in the world of business and money. We will be taking a look at those

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eurozone figures. We will also go live to the Asian

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pro and talk about the roller- coaster ride the Nikkei has been

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having. We'll see how it has been faring today.

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First we start with India. Just three years ago that economy was

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booming, with annual growth of more than 11% and predictions by some

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that it was on track to overtake China. How times have changed.

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Since then the rate of growth has slumped. India has been hit hard by

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the global economic slowdown and a raft of problems at home, including

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political deadlock and a string of corruption scandals that have

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deterred foreign investors. Later this morning we will get the growth

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figures for the first quarter of this year. They are expected to

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show India's economy expanded at a rate of just 4.8% between January

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and March of this year. If we use this to look at India's growth for

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the past 12 months it would come in at just 5%. That is the weakest

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rate in a decade. We will go straight to our reporter was at a

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small manufacturing plant in Mumbai. You are at an auto parts

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manufacturer. We had a company's numbers the other day and it

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highlighted how hard it is on the Indian market. It slumped. It

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reflects the general economy there? Well, there are some external

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factors that have impacted India in the last couple of years. External

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demand has dried up. Manufacturers like this one and even beat

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industry had unanimously said that India's problems are more home-

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grown. That it is government policy that has not supported manufacture

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an in fact policy has been inconsistent. Industry has been

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scared to make any big investments. Over the past year we had seen

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investments falling sharply. We have also seen less in employment

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generation. Jobs are a big worry for fresh graduates in the country.

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Another big problem is consumption. Prices have been rising. People

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have been consuming less. For the first time in a decade, and your

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car sales were down. -- annual. It is surprising. For viewers

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around the world, it must be surprising. These home-grown

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problems, have they only risen in the past three years? Three years

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ago, India was booming. We thought it was going to equal or overtake

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That is right. Between 2009 and 2011 India was growing at 8.4%. It

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is a little over a year ago that we started seeing a slowdown. That is

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when we saw government involve -- government policy in action. For

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example the Government moved on foreign direct investment in the

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retail sector. They opened it up and then had to backtrack on the

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decision. What industry is saying is that they cannot trust any

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decision the Government is making. They are scared to make any long-

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term investments. At the end of 2012 we did see the Government

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recognise that and we did see them opening up several directors --

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several sectors to foreign investment. India's finance

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minister has been travelling around the world to try and build

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investment. He has been holding meetings with industry bodies

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within the country as well. Most people from the industry say that

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they need to see a little more action on the ground. The other big

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worry is that India is scheduled to have nationwide elections next year.

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They are worried that this might derail the process of economic

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reform. We will be checking in with you

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over the next few hours, so you stay there and we will talk to you

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Japan's stock market has been recovering some ground after

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yesterday's steep falls that saw the Nikkei, the main market, down

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some 5%. We go straight to our reporter in Singapore. Great to see

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you. The Nikkei, it has been a roller-coaster ride. How is it

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faring today? It has been a crazy ride over the past week. 5.2%

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yesterday. Over the past week close to 15%. That is 1,500 points lost

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in a week of trade. Today we are seeing a rebound in Tokyo's stocks,

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but still not enough to cover for yesterday's steep downturn. Exports

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are leading the recovery, with Sony, Panasonic and listen up between 1%

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and 1.5%. The gains are being kept due to the continued strength of

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the Japanese yen, which is currently at a three-week high

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against the US dollar. If you take a look at all the markets across

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the board, it is still very cautious. Australian and South

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Korean shares inching up by midday trading. Sydney being led by mining.

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Markets in Shanghai, Hong Kong, Jakarta, Manila not as lucky. All

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in negative territory. When you speak with traders they say share

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prices are slowly gathering some upside momentum held by this

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lacklustre economic data from the US which includes GDP data, which

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was slightly less than expected in the first quarter. All pointing to

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a fragile expectation and raising expectations that the Fed will keep

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its monetary policies. I mentioned India at the top of the

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programme, but it is not the only bit of Major at news out. We are

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also waiting for unemployment figures from the countries that use

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the single currency. They are expected to show the jobless rate

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hit yet another record high for last month, reaching 12.2 %. It

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means that almost 19.5 2 million people in the eurozone are now

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jobless. One hope for job creation is the troubled European nations

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can export more outside the eurozone. In Spain exports have

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been rising, but from a low level. In these boxes there are small

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Spanish success stories. This is one of three shops of a shoe market

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-- shoemaker in the poshest part of Madrid. Elsewhere in Spain during

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the recession the company has closed for lack of around 40 shops.

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Last year they opened more shops in other countries. As the internal

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market in Spain shrinks, success in business means growing your market

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abroad. TRANSLATION: The situation now means you have to go out side

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to sell. The domestic market is shrinking and it is very difficult

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to grow your business here. All these strategies are to go out side

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and try to conquer foreign markets. Spanish exports in the first

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quarter of this year were up 4% on last year. Imports falling because

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of falling demand, Spain has turned a small deficit into a surplus.

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More Spanish goods sold abroad is a ray of light in an otherwise gloomy

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economic picture. The government has brought in a raft of economic

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reforms and a rise in exports is a sign that Spanish businesses are

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becoming more competitive. If you make the air conditioning systems

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on board trains, like this business near Madrid, your internal market

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has almost collapsed. Their business, like others he, now

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relies on trade abroad. Spanish companies' competitive edge is held

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by relatively low wages compared with northern Europe. The bosses

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here believe the Government's reforms of the Spanish economy

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still haven't gone far enough. There is a need to further it makes

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me working market more flexible. There needs to be more innovation

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and the competitiveness of companies and productivity needs to

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improve. An improvement of the education system, for instance

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technical schools. The Spanish car industry is also doing well. Like

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other manufacturers, Volkswagen's plant in Pamplona is expanding. The

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recession hit drags on and unemployment is still horribly high.

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