tv Counting the Cost 2019 Ep 46 Al Jazeera November 16, 2019 1:33am-2:00am +03
al-jazeera. and to you. hello i'm adrian finnigan this is counting the cost of al-jazeera a weekly look at the world of business and economics this week we're witnessing the end of globalization as we know it briggs it make america great again make it india is this a backlash against trade or just another economic. this man is worth more than $100000000000.00 he's overtaken bill gates to become the 2nd richest man we find out how a why france like many other western nations is becoming more unequal. and can christine legarde heal the rift inside the european central bank from ultra cheap money to the way the bank votes the former head of the i.m.f.
is about to make some sweeping changes. the world's biggest trade pact was just moments from being signed off when india pulled out india's prime minister narendra modi said the deal would hurt its farmers businesses workers and consumers. the regional comprehensive economic partnership would have brought together the 10 members of the association of southeast asian nations china japan south korea strayer and new zealand the remaining nations plan to push ahead with an agreement next year at have left a door open for india it's remarkable that a deal is coming together in a world that seems to be tired of globalisation the 16 month trade war between the united states and china has yet to be a result of the progress is being made and various nations appear to be giving up on working together on trade from briggs it in the u.k. to make in india and of course president trumps make america great again what's
propelled growth for western nations has led to a backlash against china's mercantile export juggernaut globalization has limits india baulked at the prospect of the gradual elimination of tariffs which would have opened the floodgates for cheap chinese goods plus agricultural produce from australia and new zealand. so does globalization have a future that's the question we're asking this week on counting the cost and it just so happens to be the title of research from capital economics and i'm delighted to say the author of that report simon mcadam joins us now from london simon is global economist at capital economics so i would welcome to come to the course so as we said india rejected this china back to asian trade deal we've got this ongoing trade war between the u.s. and china briggs's as well still unresolved what does all of this tell us about globalization but isn't it to bear in mind about globalisation is that on many metrics. we have reached peak globalisation and this isn't
a new thing it isn't hasn't just come about because donald trump entered the white house and launched into a trade war against china and it hasn't just come about because of the collapsing of various trade deals in recent years this is something has been going on for about a decade now so trade flows as a percentage of the world economy are the same now pretty much as they were around the time of the financial crisis and that symptomatic of several factors it's not just about economic nationalism and politicians increasingly looking inwards it's also to do with the lasting overhang effects of the financial crisis it's to do with changes in technology so technology has historically been trading hansing. we had the launch of the container ships after world war 2 which allowed it to facilitate the huge expansion and world trade prior to world war 2 we had the steam ship and we had the telegraph and various other transport and communication
technologies and hands trade and an enhanced businesses ability to do business across borders but what we're seeing now actually is the development of ai and robotics and manufacturing techniques that are making production less about you know the location of production less about labor costs and i'm more of. ause where are the consumer markets can we get the latest products that are customizable to the consumer with shorter lead times and we can do that by reassuring activity because of things like 3 d. printing so that the we are in a world now where there are lots of other things going on it isn't just about the politicians and what they're saying in the headlines are all sorts of other underlying structural reasons so is it a misperception then that the nations that have benefited most from globalization a pulling the drawbridge up well it's easy i mean you said that developed economies have benefits a lot from globalization it's true that we've all seen the prices of foot weren't clothing dropped off
a cliff compared to what they were before the rise of china and other parts of eastern asia in particular that's true but we've got to bear in mind that when this sort of 3rd wave of globalization took off after the fall fall of the berlin wall or less. growth in emerging markets started to rocket and there was a huge there's a period of huge catch up growth between emerging markets and developed market is but at the same time growth in advanced economies as been slowing and become increasingly sluggish. it wants to economies have lost out in terms of offshoring production abroad it's true they get cheaper goods in return but the net effect isn't here huge hasn't been a huge positive for advanced economies and so it's not completely. you know you can you can understand why there is some sort of backlash particularly industries that be most affected such as manufacturing i mean you see this in the united states that those who've gone about how so many millions of manufacturing jobs have left
the united states that is in part a consequence of the globalization process of scene since the $990.00 s. is what's going on no you talked about. a i robotics of the on suring and getting goods as quickly as possible to the consumers that need them it's could you describe that as. perhaps regionalization just with its globalization but on a smaller scale if you like of the winners and losers with that regionalization is probably something we're going to be seeing more of in the coming years you don't need to start sourcing inputs from the other side of the world you can do business more locally but we have seen regional trade pacts and this example. india's just pulled out of is just the latest example of that sort of trend that we're seeing so you've got regionalization is it is more likely in the future because the most maligned form of regionalization that is possible is conceivable is there a risk that this is that is it's less to do with these sort of more benign trends
of technology and itay in consumer trends but actually more to do with a deteriorating relationship particularly between the u.s. and china these 2 countries the world's 2 economic superpowers were. certainly seen in considered as economic partners and to political partners in the 1990 s. there was a sense of optimism that if china could embrace market economics that liberal democracy would soon follow now it's about a strategic rivalry between a western model and a chinese model and insofar as that rivalry will exist will continue to be ever present in the 21st century then we say if a serious risks of decoupling between china and the west it took over their strategic rivals to what extent of a you talked about economic superpowers to what extent have have corporations become economic superpowers in themselves and that they're able to to override if
you like the that the strategic rivalry between countries political entities but are still able to trade a make money to the detriment of people ok consumers benefit but good but work because people who were for these corporations a losing out. so that the corporations bottom line their profit out there yes so the bottom thing to note here is that the rise of the multinational enterprise has been facilitated by a political environment there's been an environment that's allowed those companies to grow and to foster them now just as they have grown immensely and become a very important part of the world economy today it's quite conceivable that the environment turns against such companies and we've already seen that the threats that china can realize against u.s. corporations that operate in china they don't necessarily have to go out of their
way to quite overtly close them down or so on they can do all sorts of more subtle things that are very disruptive to u.s. enterprises in operating in china they can suddenly decide that there are a lot more safety checks that we've got to we've got to put in place on these firms we've got to increase regulation on these firms we've got to make sure that they are. giving more of the tech and rights to their technology over to chinese domestic state owned firms in order they can maintain commercial links domestically within china somehow how do you deal with with taxation in a globalized world i mean big multinationals amazon for instance accused of not paying its dues in particular political jurisdictions problem of tax evasion or tax avoidance. clever accounting should we say it but it lightly by corporations at a global level needs to be tackled at the global level but if you have the big players
of the global level falling out with one another going to be less likely to agree it's not just corporate tax it's climate change is all it's all and. migration crises and we're going to see a lot more of these global problems that we face as a world but it could be the case that our the biggest players will not get on and will not be able. reach agreement that's possibly actually the biggest risk that comes out of all this between the u.s. and china the u.s. and china they're in a trade war the global economic impact isn't huge if that but the long term consequences will be able to reach solutions to serious global problems that could be the biggest consequence of what they are up to at the moment some of this is absolutely fascinating i've really enjoyed our discussion many thanks indeed for being with us and counting the cost there on. the money well macross decision to cut taxes for the wealthy earned him the monica president for the rich his decision to raise taxes on diesel and petrol led to the popular g.l.a.
jaw or yellow jacket protests which morphed into a revolt against inequality. just how unequal then is french society well earlier this year but not on oh briefly overtook bill gates to become the 2nd richest man in the world the sente billionaire plans to take over a jeweler tiffany for more than $14000000000.00 according to bloomberg the personal fortunes of french billionaires have grown twice as fast as their american and chinese counterparts in 2019 for the size of hundreds of millions being raised in just a matter of days to rebuild or not to dam cathedral after the fire just underlined distorted priorities in france but research from the o.e.c.d. and french statistics office show that france is actually less unequal than other european nations and the richest 10 percent paid 70 percent of all income tax in the country and 2017 but the poorest may feel like they're paying more as the cost
of the seventy's have risen but it's a year since the protests began they've largely petered out has anything actually changed though in france joining us now from london jack russell jack is a senior research fellow at the london based think tank the global policy institute good to have you with us jack so what happened to the protests or did they just peter out out of sheer frustration other protests were very successful in a way because they managed to court to change its course faction decided to try to balance the books. should you have full fiscal orthodoxy and as a result of the violence of the protests it actually frew that offer to see out of the window decided to invested to spend about 20 of 12000000000 euros on measures to help the duro update to middle classes plenty of measures were
taken which have had to actually. improve the gum of the working people especially to me dollars. mid middle or lower nerves and at the same time these are so made concession on income tax which has allowed the middle classes to see their income raise their income rise and we've seen that in the in defeat as recent economic figures that the french economy has grown by 0.3 percent on average of one point free 1.4 percent a year higher than most large european countries as a result of an increase in a purchasing power which led to strong consumption consumption which has been driving motor of the french economy this year and we carry on doing so because in next year's budget there's more income tax cuts planned so what will these
protests ultimately all about we know have they they began as a protest over riley a rise in fuel duties were they about inequality the heavy burden of taxation on the poorest or and it just expanded to the extent that it was a protest about many causes but just one protest movement yes there are many causes to the protest there's a feeling initially it started to spark was the increase in the fuel tax which was a penalize people who are living outside and centers so in one way it's people living in the countryside who generally oh so i have big problems because there's where there are no jobs wages are incredibly low. that's where it started in the province's and then spread all over the place one of the driving factors was actually the take home pay in france very people work even people who work
there were quite a lot of working poor and that's what other of the measures which have been taken by my core but distin to boost the and. of the lower middle paid. workers in france and in that respect some of the measures were. really add to improve the take home pay of workers because michael as a features of feel it is that working most pay is done some cuts in the social of benefits programs such as unemployment benefit has been a reform of the. scheme you like for example 'd now you need to work 6 months for the previous 2 years in order to claim a number benefit and before it was 4 months in 28 months it's still a different system is still very generous and there's a lot of restriction in france and that's why france as one of the lowest poverty
rates in france even to 10 percent poor received $280.00 euros an average would get 8 $141.00 euros taken their fans through a distribution so france as the gini index and the poverty rate which is equivalent to the scandinavian countries and largely better than those of germany and the u.k. and even more so spain and italy if you took about the the re disappearance of wealth and the generosity of the state you wouldn't recognise that the o.e.c.d. statement then when it says that the social elevator that lifts the poor out of poverty in france is broken. yes it gets it does it is more difficult because the problem is not just about wages and access to education access due. to due to 2 jobs due to poor us in france or to be found. in the suburbs but the people in the service stuck in the suburbs of paris but these
people do not take part in them and stray ssion demonstration to work more is more important in provincial towns which fed left out in the graphical divide to you can find work easily in something and actually in france now there's a shortage of workers in many professions that today a speech or a workers are going to demonstrate it because of french public hospital system is. short of staff and therefore there's a lot of pressure on them and they want an increase in wages to make the job more attractive so there are problems in france maybe less than others but in france people tend to quickly. demonstrate and this may be wise devoted to the fact that people are ready to be violent and demonstrate that maybe that's why france still what could be described as one of the best or distribution and so sure social welfare system in the o.e.c.d.
jack it's always good to talk to you many thanks indeed for being with us and comes in the cost of a thank you christine legarde took the reins of the european central bank in the past few weeks legato has inherited a divided governing council plagued by leaks and public dissent and that's raised concerns that the e.c.b. hasn't the resolve to take tough action just as the biggest economy germany narrowly avoided recession and was a serious tone it came reports now from frankfurt. barely a few weeks into her new role and christine legarde already has a pretty full to do list but behind the warm welcomes of her new colleagues why some unwelcome problems on monetary policy the increasingly fractious governing council her predecessor left and the proposals for a banking union on the 1st she has not many options as matter that are he had already used most monetary tools purely through box is empty it has been used
quite aggressively and. equality problems which. can be forced to marry nobody will go against you. will provide as much agree to. what's clear is like out is prepared to be troublesome if required particularly when she believes the wealthier member states might be doing more libbie the country is in particular those with the budget space have not really made the necessary effort and i'm thinking obviously of countries that are in persistent budget surplus right now like the netherlands germany and a certain number of others in the world others did it and yet there are some influential voices particularly in germany which are urging her not to overstep her new positions parameters or placement out there it'd be the mandate of the c.v. is limited because an independent central bank is only justifiable in democratic terms when it hears only
a limited mandate that's clear this belongs to the principles of a democratic constitution one thing the new president has been clear about is her desire for consensus among the e.c.b. upper echelons as things stand votes on interest rates are only held at the discretion of the president but there are reportedly as many as 4 central bankers want that to change and for all interest rate decisions to be put to the vote analysts say that is a legacy. he of the druggie christine lagarde has a difficult job ahead of her to form a consensus that is also enough to steer the economy i mean mario draghi didn't do this for 4 is enough for his own entertainment he knew that he needed to take very bold decisions and there was probably going to take too long if you needed to bring the entire governing council behind him mario draghi was renowned for being prepared to do whatever it takes to defend the euro and the euro zone what he could
not do was persuade enough member states to do all they could to make the european banking union complete. germany had long resisted the idea of its citizens insuring the deposits of banks in riskier parts of the euro zone but now it is offering conditional backing for a pan european deposit protection scheme. but not everyone thinks it goes far enough i welcome mark at the proposal and many aspects are leading to completion a banking union course on some aspect including on the street so i for then should treat our story exposure so. our position are different than ours and we consider that this is a man made sure that there would be would have a negative impact that weakness in the european banking sector is something one of the e.c.b. zig-zag to boards newest potential members think the new president needs to look into is its needs all deaths here the situation is not such that we will see
a serious banking crisis tomorrow i would not go that far but we need to think further ahead and banks need to urgently get out of the week situation they are in and become competitive again which of course is even more difficult during an economic downswing and that is christine legarde problem in a nutshell she says she wants to achieve consensus but she knows also that difficult decisions lie ahead dominic kane al-jazeera of the european central bank . zimbabwean dollar notes have been reissued for the 1st time in a decade the currency was scrapped because of hyperinflation the government now says the new notes will help ease cash shortages but with most banks imposing withdrawal limits many zimbabweans are skeptical that the move will help. reports from harare. queues outside banks in zimbabwe disappeared when there was hardly any cash available most transactions were made electronically now for the 1st time in
a decade notes are back but they're only a few in circulation that's why some zimbabweans feel nothing will change the government is now operating in panic mode and this desperate decision of bringing. us is not just about wins most banks are limiting individuals was drawls to just 20 us dollars a week inflation is in the triple digits many here say that's not enough for them to cope with constant fuel shortages and the price of basic commodities going up every week people are getting the money that they want only getting $100.00 which is not enough only to. about $2.00 to $2.00 bottles of the world. so it's not much in 2009 dumped its currency will lead to hyper inflation widespread unemployment soaring food prices and shortages a basic goods the u.s. dollar and other foreign currencies were made legal tender but that didn't turn the
economy around 4 years ago the government introduced the bonds notes and coins and while we were told the value was based on the u.s. dollar but few people believe that then on the black market they kept losing value now some people fear these new notes and coins will again cause inflation. this year history could repeat itself if the government prints these new notes recklessly to live in years ago. very precious. bird. the danger of that happening again is real we have to her recollections and because of that. bright enough strong enough for them to say we must avoid anything which is that irresponsible the government says there will be no recourse printing and the thing you know it's well east cash shortages but people are skeptical this bag ran out of cash in less than 4 hours leaving many
customers frustrated and the game uncertain about the country's economic future. ready to go one way i was i was like what i. had. and that's our show for this week if you'd like to comment on anything you've seen you can tweet me. on twitter please use the hash tag a j c t c when you do or you can drop us a line to the cost of al-jazeera dot that is our address as always has plenty more for you on live at al-jazeera dot com slash c.t.c. that takes you straight to our page and there you'll find individual reports links even entire episodes for you to catch up on. but that's it for this edition of counting the cost for the good for the whole team here at doha thanks for being with us the news on al-jazeera is next.
i was taken to military are. in forced labor sit down. and was to make sure that we're no longer entitled to basic rights more citizenship rights once their villages were burned were funneled into what is now become complex where the marines are basically in prison exiled coming soon on al-jazeera. from lagos to jerusalem i am on the go moses plainchant. form a milestone in history muslim background. 3 short films that show how people take a stand against eviction sameness struggling communities the 1st time they arrested i was 11 years old a.j. selects amount to 0.
0. 00000. 000-000-0000 extension 000 this is al-jazeera. color from doha everyone on come on santa maria this is the news hour from al-jazeera. i have the right to speak i have freedom of speech just as other people do donald trump is accused of attempting to intimidate the former u.s. ambassador to ukraine as she testified at the impeachment inquiry. how is it that foreign corrupt interests can manipulate our government and that testimony mary out of a.