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tv   Counting the Cost 2019 Ep 46  Al Jazeera  November 19, 2019 8:33am-9:01am +03

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who helped pioneer competing in the arabic language and the egyptian islamic scholar honored for his contribution to add culture both building successful lives abroad but never forgetting that every. arabs abroad the translator and the innovates announces. hello i'm adrian figure this is counting the cost of al-jazeera a weekly look at the world of business and economics this week are we 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 news. this man is worth more than a $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
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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 out of 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 resolved a low progress is being made and various nations appear to be giving up on working
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together on trade from bragg's 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
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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
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it the facilitator 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 hance 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 it the location of production less about labor costs 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
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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 pay as a period of huge catch up growth between emerging markets and developed market is but at the same time the growth in advanced economies as been slowing and become increasingly sluggish. vast 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
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you can understand why there is some sort of backlash particular 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 would it's globalization but in a smaller scale if you like of the winners and losers with that regionalization is probably something that 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 is just pulled out of is just the latest example of that sort of trend that we're
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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
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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 but but workers people who were for these corporations a losing out. so that the corporation's bottom line the profit on the 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 we've already seen the it's the threats
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that china can realise against us 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 us 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 so how do you deal with with taxation in a globalised world i mean big multinationals amazon for instance accused of not paying its dues in particular political jurisdictions the problem of tax evasion
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or tax avoidance how clever accounting should we say it but it politely 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 are the biggest players will not get on and will not be able. the 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
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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 site 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
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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 gray along 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 of sheer frustration the other protests were very successful in a way because they managed to court to changes course faction decided to try to balance due book. should your full fiscal orthodoxy as a result of the violence of the protests it actually frew that offer a look see out of the window and decided to invested to spend about 20 of
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12000000000 euros on measures to help the duro update to middle classes plenty of measures were taken which have had to actually. improve the come of the working people especially to me dollars. made me. nervous and at the same time is or 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
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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 duty 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 with 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 that penalize people who are living outside and centers so in one way it's people living in the countryside who generally of big problems because that's where there are no jobs wages are incredibly low. that's where it started in the province's and
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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 why a lot of the measures which have been taken by mccaw but distin to boost the end. of the lower middle paid. workers in france and in that respect some of the measures were. really had 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 us so sure of benefits programs such as unemployment benefit has been a reform of general. schema you that for example 'd now you need to work 6 months for the previous 2 years in order to claim a number on benefit and before it was 4 months in 28 months it's still
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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 the 10 percent poor received $280.00 euros an average would get $841.00 euros they compare fans to redistribute 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 ok you took about there's a lot redistribution 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 you can say it does it is more difficult because the problem is not just about wages access to education access do. 2
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to 2 jobs due to poor us in france are 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 . wharton in provincial towns which fed left out in the graphical divide to you can find work easily in some of them 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 the french public hospital system is . short of staff and therefore there's a lot of pressure on them and they want an interest 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 that's maybe wise devoted to the fact
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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 india is cindy jack it's always good to talk to you many thanks indeed for being with us on comes in the cost of a thank you christine legarde took the reins of the european central bank in the past few weeks look god 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 previous answer left her and the proposals for a banking union on the 1st she has not many options as matter that i had already
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used most monetary tools purely box is empty it has been used quite aggressively and. equality problems. can be forced to marry nobody will go against you. provide as much agree. 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. 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 set 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 because my dad to be the mandate of the c.v.
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is limited because an independent central bank is only justifiable in democratic terms when it appears 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 of the druggie christine legarde has a difficult job ahead of her to form a consensus that is also an after steely 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
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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 had the proposal in many aspects relating to completion of 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
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the e.c.b. zig-zag to boards newest potential members think the new president needs to look into this it's nice or does fear 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 weak 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 europe. 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
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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 some are back but there are only a few in circulation that's why some zimbabweans feel nothing will change but 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 there'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
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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 as 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 rick can live in years ago. very precious. bird. the danger of that happening again is real we have to her political recollections. are bright enough strong enough for them to show remorse to avoid anything which is responsible the government says there will be no
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reckless printing and the thing you know it's will ease cash shortages but people are skeptical this bag ran out of cash in less than 4 hours leaving many customers frustrated and again uncertain about the country's economic future. right to go anywhere. 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 there 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
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with us the news on al-jazeera is next. the british iraqi journalist who's visualizing complex statistics in a simple art form i think your office are some really exciting opportunities to break apart from those systems and to collect data in a way that better represents a different community challenging mainstream misconceptions the quite crating 100 illustrations it doesn't alienate people like people who are like i'm not smart enough to understand this truth is that anyway. in china cancer drugs can be pretty beautifully expensive some desperate patients travel to india to buy cheap generic versions but what cost when a strollers dollars smuggling to survive are now does iraq.
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hello again on this in doha with the top stories here it out is there the u.s. has abandoned its decades old physician on israeli settlements in the occupied west bank saying it will no longer consider them illegal this latest program israel move puts the u.s. adults with most of the international community and the un security council reports from washington. for 41 years the u.s. has called israeli settlements built in the occupied west bank illegal under international law that u.s. policy changed on monday calling the establish of civilian settlements inconsistent with their nash.


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