:00:17. > :00:18.Europe's trillion dollar problem - new research shows corruption is
:00:19. > :00:20.not just an issue for the developing world.
:00:21. > :00:32.But is business culture slowly changing for the better?
:00:33. > :00:40.Plus: How many trillions more will it take to get Japan's economy
:00:41. > :00:43.going. There's still no sign of movement so what more can it do?
:00:44. > :00:52.Also coming up is the Chinese economic slowdown and will look at
:00:53. > :00:54.the latest figures. But also the major challenge the people doing
:00:55. > :00:56.business around the world. It's a problem usually associated
:00:57. > :00:58.with developing economies. But a new report - commissioned
:00:59. > :01:01.by the European Parliament- claims that corruption is also exacting
:01:02. > :01:08.a heavy price here in Europe. According to the study, the
:01:09. > :01:12.European Union is losing almost a trillion dollars from
:01:13. > :01:15.its economy (990 billion euros) each That takes into account direct
:01:16. > :01:22.losses - such as money lost on tax But it also includes indirect
:01:23. > :01:25.effects such as companies It ranges from the blatant paying
:01:26. > :01:32.of bribes - to more subtle corruption - for
:01:33. > :01:34.example granting privileged access The report is calling
:01:35. > :01:39.for the establishment of a Europe-wide prosecutor to crack
:01:40. > :01:49.down on dodgy deals. It's also urging
:01:50. > :01:51.a unified procurement system across the EU which could remove many of
:01:52. > :01:54.the opportunities for corruption. Britain comes out comparatively
:01:55. > :01:58.well in this report - with the Scandinavian countries it's among
:01:59. > :02:01.the least corrupt in the region. The UK's Bribery Act came
:02:02. > :02:03.into force five years ago. So far only one company has actually
:02:04. > :02:06.been convicted - a construction firm was ordered last
:02:07. > :02:10.month to pay 2.5 million for failing to prevent a subsidiary paying
:02:11. > :02:13.bribes to win contracts in Dubai. However, despite the lack
:02:14. > :02:16.of other successful prosecutions, the law has been credited with
:02:17. > :02:19.creating a sea change in UK corporate culture, as our business
:02:20. > :02:33.correspondent Theo Leggett reports. In the global economy, bribery by
:02:34. > :02:39.companies and individuals is a serious problem. The getting rid of
:02:40. > :02:44.it is a difficult process. So here is the issue, if I decide to give my
:02:45. > :02:49.business associate a nice fat envelopes topped with cash and he
:02:50. > :02:52.gives me a lucrative contract in return, then net is clearly a
:02:53. > :02:59.bribe. Would fight decide to employ his cousin in my company for the
:03:00. > :03:04.same contract, that is also a bribe. According to the world economic
:03:05. > :03:10.Forum, because businesses around the world something like $1 trillion
:03:11. > :03:17.every year. The bribery act 2010 was designed to give Britain the
:03:18. > :03:22.anticorruption powers it needed. To bribe foreign official and for a
:03:23. > :03:29.company to fail to prevent bribery carried out on its behalf. The
:03:30. > :03:30.British government faced criticism in 2006 the dropping an
:03:31. > :03:40.investigation into questionable payments allegedly baying -- made by
:03:41. > :03:44.a company. It later settled corruption charges with the United
:03:45. > :03:50.States authorities paying a fine of $400 million. Experts say there's
:03:51. > :03:54.now been a big change in attitudes in companies doing business abroad.
:03:55. > :03:59.They used to have to ask, strike to pay and who do I hate to. And now
:04:00. > :04:06.they are asking how will I avoid paying. And that is a big cultural
:04:07. > :04:12.shift. Companies are becoming much more cautious about offering or
:04:13. > :04:16.receiving corporate entertainment. In the 1980s and 1990s, you would've
:04:17. > :04:21.seen companies hosting lavishly at corporate events like foot all the
:04:22. > :04:26.events and other things like that. But what we have seen is a total
:04:27. > :04:30.change away from that and lots of company's policies prohibit offering
:04:31. > :04:35.it or even when they can offer it, the people they want a track to the
:04:36. > :04:39.event will say they cannot go. This new steer approach may have
:04:40. > :04:45.advantages. Companies with strong antibribery policies so that is now
:04:46. > :04:47.helping them to win new business. So fewer free drinks but perhaps a
:04:48. > :04:50.reason to celebrate nonetheless. Now Japan -
:04:51. > :04:53.where there is more evidence its massive stimulus measures are
:04:54. > :04:55.failing to boost the economy. Consumer prices
:04:56. > :05:01.in Tokyo slipped around a third of 1 % year on year in March -
:05:02. > :05:04.the biggest fall in 3 years. The Bank of Japan stunned global
:05:05. > :05:07.markets in January by introducing negative interest rates to try to
:05:08. > :05:17.stop banks sitting on their cash. It's already pumping some 180
:05:18. > :05:18.billion dollars into the financial system by buying
:05:19. > :05:21.up government bonds off the banks. But it has failed to shake Japan out
:05:22. > :05:24.of its cycle of deflation or falling prices -
:05:25. > :05:34.and there are signs the economy is Nicholas Smith is Japan strategist
:05:35. > :05:46.at CLSA - he's in our Tokyo bureau. A very simple question, why? The
:05:47. > :05:49.simple fact is there is not a whole lot of loan demand in the economy.
:05:50. > :05:53.This idea that you bring in some money and you drive down the
:05:54. > :05:56.interest rates is a lovely idea, but when there's no demand for it or you
:05:57. > :06:03.are actually doing is hurting profitability of the bank. If you're
:06:04. > :06:09.depending on get, don't damage the debt through the pipes of the
:06:10. > :06:19.economy. To what more can do? -- so what more can it do? I would take
:06:20. > :06:24.him out and put on a desert island. Central banks not just in Japan have
:06:25. > :06:28.come to the limit of what they can do. If you remember that we talked
:06:29. > :06:34.about the three arrows of economics, and the first was printed
:06:35. > :06:39.money and the second one was to spend the money. Unfortunate, we
:06:40. > :06:42.have been lied to because we heard nothing but fiscal austerity in the
:06:43. > :06:47.last three years. Is that austerity that is taking a percentage point
:06:48. > :06:53.off GDP at the moment. So basically lowering taxes is what they should
:06:54. > :06:58.be doing? While there is a plan that has been quietly abandoned at the
:06:59. > :07:04.moment to increase the VAT and Joseph Stiglitz has been in Japan
:07:05. > :07:08.baking the Prime Minister not to go ahead with that tax increase. That
:07:09. > :07:13.would probably be the most important thing. We also took a supplementary
:07:14. > :07:19.budgets at the moment. The third arrow is reform, isn't it? What are
:07:20. > :07:26.they going to do about that in terms of reforming the financial system?
:07:27. > :07:32.Sure. If you remember the person you associate with supply-side reform is
:07:33. > :07:35.Ronald Reagan, and it took such a long time until we got to Clinton
:07:36. > :07:40.that he got to take the credit for what Reagan did. Yes, it takes a lot
:07:41. > :07:44.of time. A lot of people forget that unlike much of the rest of Asia,
:07:45. > :07:48.Japan is a democracy and within a democracy you cannot force people to
:07:49. > :07:52.do what they don't want to do. So one of the most important thing
:07:53. > :07:59.would be to free up the labour market and introduce the product of
:08:00. > :08:03.dbase to pay. I think people seem very low wages for a long time is
:08:04. > :08:09.saying that it is a companies it's used to paying them less. Thank you.
:08:10. > :08:12.We're going to stay in Asia because neighbouring South Korea is also
:08:13. > :08:18.struggling with the Chinese slowdown. We're looking at the
:08:19. > :08:23.latest growth figures. South Korea posting its GDP figures showing that
:08:24. > :08:28.the economy is growing in the revised to .6% in 2015. The Chinese
:08:29. > :08:33.slowdown is taking a huge toll on regional economy. It is South
:08:34. > :08:37.Korea's largest trading partner and from the last quarter we did see an
:08:38. > :08:42.expansion of .7%. Essentially, slowing growth is a worry. The
:08:43. > :08:49.country is in desperate need of economic reform. To see the growth
:08:50. > :08:55.that it enjoyed in the Asian Tiger years. I spoke to a man in South
:08:56. > :08:58.Korea earlier and he says that this lacklustre growth below the global
:08:59. > :09:06.average is a wake-up call for the country. Over the last five years
:09:07. > :09:16.career's growth rate has been declining from the would've --
:09:17. > :09:22.wonderful rate it was that. They are losing the share in the world
:09:23. > :09:31.economy. That is not what people are used to having. Career needs to
:09:32. > :09:33.retool the economy and build up its human capital with the new
:09:34. > :09:40.challenges and better education that will allow them to be competitive in
:09:41. > :09:53.the future. And that is James Rooney. But cost free, which is open
:09:54. > :09:59.to trade, it appears open the trade with their shares trading. They are
:10:00. > :10:02.heading for the first losing week in six. Thank you.
:10:03. > :10:07.Japanese technology firm Sharp says its annual earnings are likely to
:10:08. > :10:10.fall short of its forecasts - due partly to weak sales in China's
:10:11. > :10:14.Press reports have been suggesting Sharp -
:10:15. > :10:17.which makes displays for smartphones and TVs - might report an operating
:10:18. > :10:20.loss of "tens of billions of yen" for the financial year ending this
:10:21. > :10:23.month - despite its forecasts of a 10 billion yen profit.
:10:24. > :10:27.These concerns may mean Foxconn of Taiwan lowers
:10:28. > :10:45.Let us have a look at the market. Concentrating on Asia, there is a
:10:46. > :10:52.small gain regardless of those depressing figures. The Hang Seng
:10:53. > :10:59.with downward movement in the Bombay Sensex is up just a touch. Fairly
:11:00. > :11:17.quiet times as we come to the end of the week. And that is business! The
:11:18. > :11:19.Labour leader Jeremy Corbyn is teaching at the National Union of