tv Talking Business BBC News May 21, 2022 3:30pm-4:01pm BST
is pretty unusual. looking at temperatures yesterday, reached 42.3 degrees. it is shy of... high temperatures and very warm overnight as well compared to daytime temperatures. hot day and warm nights and as you say you end up with some wildfires as well. flan nights and as you say you end up with some wildfires as well. can we look ahead to _ with some wildfires as well. can we look ahead to what _ with some wildfires as well. can we look ahead to what this _ with some wildfires as well. can we look ahead to what this will - with some wildfires as well. can we look ahead to what this will mean l look ahead to what this will mean for the rest of the summer season? we cannot predict that far in advance based on one event. if we get this sort of temperature at this time of year, injuly and august when temperatures can go into the middle or upper 40s in parts of southern europe including inland spain, certainly be aware that those temperatures are possible to get again. temperatures are possible to get aaain. ~ . , , , temperatures are possible to get auain.~ . , , , again. what is this telling us about our weather _ again. what is this telling us about our weather patterns, _ again. what is this telling us about our weather patterns, there - again. what is this telling us about our weather patterns, there are i again. what is this telling us about our weather patterns, there are a l our weather patterns, there are a number of global circulation patterns that drives our weather.
because this is coming up from the sahara, northern africa, what does this tell us about the jet stream, is it tied to it at all? hot is it tied to it at all? not necessarily. _ is it tied to it at all? not necessarily. in _ is it tied to it at all? not necessarily. in this - is it tied to it at all? not necessarily. in this case | is it tied to it at all? iirrt necessarily. in this case the prime driver of high temperatures across southern space was a flow of air from northern africa, morocco is seeing warm weather as well. the jet stream drives weather across the uk and we often talk about it. the jet stream is in the north of the uk, it is the warmer side of the jet. what drove this was a combination of the weather in north africa and a combination of strong may sunshine and dry ground gives us these high temperatures. and dry ground gives us these high temperatures-_ and dry ground gives us these high temperatures. thank you very much for that. soaring _
temperatures. thank you very much for that. soaring prices _ temperatures. thank you very much for that. soaring prices for - temperatures. thank you very much for that. soaring prices for food - for that. soaring prices for food and energy. — for that. soaring prices for food and energy, rising _ for that. soaring prices for food and energy, rising interest - for that. soaring prices for food | and energy, rising interest rates and energy, rising interest rates and a war in europe mean our living standards are under immense pressure. standards are under immense -ressure. ., standards are under immense pressure-— standards are under immense ressure. ., , , , ,, pressure. the world is business leaders and _ pressure. the world is business leaders and politicians - pressure. the world is business leaders and politicians gather i pressure. the world is business| leaders and politicians gather in the swiss mountains, what can they do to keep the global economy on track? the man behind one of the biggest events on their calendar tells me restoring trust is a top priority. in many parts of the world, wages are rising as companies struggle to find enough staff. but how long will workers continue to win. one of the biggest recruitment firms, the boss speaks to me. wheat to energy and metals, prices are going up. the head of the international monetary fund tells me how governments around the world can keep a lid on inflation without
derailing economic growth. wherever in the world you're joining the firm, warm welcome to the show. are your wages trying to keep up with the rising cost of living? have you seen your supermarket shop cost go you seen your supermarket shop cost 9° up you seen your supermarket shop cost go up every week? rent, mortgage payments? this is because of soaring inflation. it was rising because of the coronavirus pandemic and has been made worse by the war on ukraine. some influential voices are warning a big recession could be on the way. it all means there is massive worldwide problems for the
business and political leaders gathering in the swiss mountains. their stated aim, to improve the state of the world. more than 2500 delegates set to attend, from hollywood movie stars, prime ministers, the chief executives of the world the four biggest companies. being there does not come cheap. —— the world double biggest companies. the starting point for the world economic forum which you need a membership for to get an invite. if it is for a woman, only 25% of participants are female and the organisers want to post it. for some, little more than an exclusive place to talk to rich people that doesn't really manage to solve any problems. doesn't really manage to solve any roblems. , ., ~ doesn't really manage to solve any roblems. , . ~ ., , problems. they talk about things like climate _ problems. they talk about things like climate change, _ problems. they talk about things like climate change, corporate i like climate change, corporate governance, racialand like climate change, corporate governance, racial and gender imbalance, pledge all kinds of
aggressive change. then very little happens. if this meeting never happened, the world would stay pretty much as it is. the real function is as a way for the billionaire class two virtue signal. can vanish but it is really an elaborate charade that is about maintaining the status quo over the banner of improving the world. lsluiith banner of improving the world. with war raauin banner of improving the world. with war raging and _ banner of improving the world. with war raging and the forward being felt over the world, president zelensky is going to be amongst those speaking. he thinks davos can help. translation: this year the conference will be especially important for our country, post—war reconstruction will be discussed, we
are doing our best to fully gather the support of the world. participation in the davos forum is one of the best opportunities for that. some important people do seem to see value in davos, coming at a time of huge challenges for the global economy. what does the man who founded the gathering in the early 1972 think it can do to make the world a better place? always a pleasure having you join me, clauss. i am wondering if there are one or two problems in particular that keep you awake at night? four two problems in particular that keep you awake at night?— you awake at night? four or even five main challenges _ you awake at night? four or even five main challenges keep - you awake at night? four or even five main challenges keep me - you awake at night? four or even five main challenges keep me up| you awake at night? four or even l five main challenges keep me up at night. first, the war we see in ukraine, the aggression of russia on ukraine, the aggression of russia on ukraine and all its implications.
history as a turning point, the title. also at the tail end of the covid pandemic, the biggest global health disasterfor the covid pandemic, the biggest global health disaster for the last 100 years. the global economy, great concerns because the global economy, we may speak later about it, is certainly out of balance. if i add a fourth issue, we have the global warming. this is also an issue where we cannot wait. i add a fifth one, the impact of all the new and disruptive technologies like artificial intelligence. so all
those challenges and factors you have mentioned, in reality, clauss, how did you meeting your hosting in davos fix them? we do not fix them. since the world are so complex, we are not in a situation where we have simple answers to very complex questions. so what we do in davos is to create awareness about complexity of issues. but also about the urgency to take action, to provide new insights. ﬁgs urgency to take action, to provide new insights-_ urgency to take action, to provide new insihts. �* , . ,, ., new insights. as the war in ukraine, onauoin new insights. as the war in ukraine, ongoing coronavirus _ new insights. as the war in ukraine, ongoing coronavirus pandemic, - new insights. as the war in ukraine, ongoing coronavirus pandemic, is i new insights. as the war in ukraine, | ongoing coronavirus pandemic, is all that stopping the leaders of the global economy from making progress on other important areas such as climate change, international tax reform, border security, all of those prominent in davos in recent years, because they are fighting all these other fires? you years, because they are fighting all these other fires?— these other fires? you are right, erin. i
these other fires? you are right, erin- i have _ these other fires? you are right, erin. i have said _ these other fires? you are right, erin. i have said this _ these other fires? you are right, erin. i have said this since - these other fires? you are right, erin. i have said this since a - these other fires? you are right, | erin. i have said this since a long time, the world does not sufficiently doing its job time, the world does not sufficiently doing itsjob is. particularly now global decision—making is very much characterised by short—term thinking, crisis management. we fix specific issues, for example we raise interest rates by some points, but what is missing is to think long term and to have really an idea how we exit from the situation we have manoeuvred ourselves in, which means the high inflation, too many. what is actually the exit strategy? the same as the war in ukraine, what exit strategy is we have available? yes, you critics will say davos is nothing but a talking shop. so what
with the successful outcome before this year's meeting?— this year's meeting? successful outcome would _ this year's meeting? successful outcome would be _ this year's meeting? successful outcome would be a _ this year's meeting? successful outcome would be a greater- this year's meeting? successful- outcome would be a greater awareness of the interrelations of the challenges we face. and i would also hope that we draw more attention to ukraine, the suffering of the people, the refugees problem and so on. we have a very strong ukrainian presence in davos. i hope such people become aware of the danger of large parts of populations suffering. i hope that people in davos become aware and make progress also related to global warming. goad
also related to globalwarming. good luck with everything, _ also related to global warming. good luck with everything, professor klaus schwab. while some of the richest people discussed the big problems affecting many of us in davos, what is the effect on living standards around the world? jobs are arguably the most important thing in determining those living standards. jonas prising, from manpower group, what are the biggest challenges in the employment market at the moment? you are seeing a continued very strong labour market across the
world where we have bounced back from the difficulties during the pandemic and in most parts of the world we are now back to the employment levels we saw before the pandemic. the supply of labour... why? very strong surge for the in products and services. some of the effect your scene with very high wage inflation compared to what we have been used to for the last 20 or 30 years at least, that will take time to normalise but we think a lot of this is related to the pandemic effects that we
experience. the pandemic effects that we exnerience-_ the pandemic effects that we exerience. , ., ., , experience. does it mean wages will keep coming — experience. does it mean wages will keep coming up. _ experience. does it mean wages will keep coming pp. part _ experience. does it mean wages will keep coming up, part of _ experience. does it mean wages will keep coming up, part of the - experience. does it mean wages will keep coming up, part of the cycle i keep coming up, part of the cycle causing rising prices? the inflation is significantly _ causing rising prices? the inflation is significantly driven _ causing rising prices? the inflation is significantly driven by _ causing rising prices? the inflation is significantly driven by the - is significantly driven by the pandemic of that, it is an anomaly seeing labour markets tighten this quickly for so many people in a uniform way across the world. we still believe that we will see a wage inflation which is a biting and we believe we have seen the peak of wage inflation in the united states and we think we are close to seeing the peak of wage inflation in europe as well. ., , , ., . , the peak of wage inflation in europe aswell. ., _ , ., . , ., as well. one of the by-products of globalisation, _ as well. one of the by-products of globalisation, in _ as well. one of the by-products of globalisation, in some _ as well. one of the by-products of globalisation, in some ways, - as well. one of the by-products of globalisation, in some ways, is . as well. one of the by-products of| globalisation, in some ways, is this increase in pay inequality, those earning the most earning more, the vast majorityjust earning the most earning more, the vast majority just stagnating. earning the most earning more, the vast majorityjust stagnating. that is causing a genuine cost of living crisis for hundreds of millions of people. it feels like a problem only
getting worse. cannot ever be addressed or has the horse already bolted? a lot of the globalization, if you step back from globalization and said, has it been beneficial for the world and for the population at large? and the answer to that is unequivocally yes. but along with the yes comes the caveat that we've seen significant polarization of the workforce between the haves and the have nots, principally driven by access to skills to take advantage of globalization and more usage of technology, which is why we think it's so important for policymakers and organizations to be laser focused on reskilling and upskilling their workforce to enable them to participate in the wealth gains that have occurred. so they also can feel that they have prospects of improving the lives of themselves and their families and their children. yes, at the moment we've got this
jobs buoyancy, but we're also in the middle of a a cost of living crisis — if people start spending less and there's less demand for products and services, couldn't that lead to job losses? we have seen that economists have downgraded the growth prospects for europe, brought them down also for the united states, as well as for china. so overall, the global economy, economic growth is coming down. but what's important to note, of course, it's coming down from very lofty projections for 2022 and 2023. so the fact that it's coming down doesn't mean that we're tipping inflation is driving, amongst other reasons, a cooling of the economy. but i think it's important to say while economic growth is cooling and slowing, it is still projected to be at a healthy level, still sustaining good employment across the world in all geographies.
but from what we can tell when we speak with employers, their outlook is still optimistic. they're still looking to increase their workforces. well, on that note, jonas prising the big boss of manpower. a real pleasure, my friend, having you with us. thanks for your time. and i'd love to talk to you again soon. so we've heard about the widespread challenges facing the global economy, rising prices, stretched supply chains and worker shortages. so how do governments and central banks steer the global economy through these very choppy waters? well, i caught up with the head of the imf, the international monetary fund, whose role it is is to try and bring prosperity to the world. kristalina georgieva, always a pleasure having you join me. thank you for your time. kristalina, can we start with this? because just before the war in ukraine started, you warned the world economy was facing, and i quote, "a tough obstacle course this year because of the ongoing impact of coronavirus,
the the pressures of rising prices and growing government debt levels." but since then, kristalina, we've got another major covid lockdown in china. look, i'm just wondering if the war in ukraine is an obstacle too far for the global economy. it is definitely a major factor for setback of the recovery. just to give you a sense as to how significant it is, we did downgrade our projections for growth for this year because of omicron from 4.9 to 4.4%. and now with the war hitting ukraine very severely, russia quite significantly, but also sending waves throughout the world, the downgrade is bigger. we went down to 3.6% for this year. and what is most significant is that
in this round of downgrades, we actually are bringing our growth projections down for 143 countries. this is 86% of the world. and if you ask yourself, who are the 14% that are lucky, they tend to be an oil exporting countries, food producing countries and countries that have no leftover from dealing with covid. but even for these countries, you would hear concern about uncertainty. we have rarely seen uncertainty so profound. your forecast is down to 3.6% for the global economy. do you think you're going to have to cut that number again? look, not out of the question. it depends very much on how the downside risks
are going to materialise. and let's go through the risks in front of us. one, the duration of the war and the scale of the sanctions. this is highly uncertain. if it goes longer, if there are additional sanctions, if there are more spillovers from the war, it would be really bad for the world. two, we are very concerned about the importance for central banks to decisively counter inflation. they have to do it, but as they do it, what would be the impact on growth? what would be the impact on investment sentiment? three, we know that we are faced with a food crisis and whether it would materialise to a point that it creates in weak economies social unrest with consequences for how they wrestle with the problems they face. four, we have a mountain of debt. remember, 2020 was the highest
increase in debt levels for a good reason, to put the floor under the world economy that was rattled by the pandemic. just to finish on a more positive note, we have to remember that our projections for this year are still for positive growth. all of those risks you highlight has many worried of a recession. in fact, the senior chairman of goldman sachs, lloyd blankfein, is amongst the big names to voice those concerns. i've got to ask you. could we see a global recession? look, the cloud of uncertainty so thick that it would be irresponsible to make a definitive projection. what i can say is that inevitably there will be countries falling into recession. when they're in this most exposed category, haven't yet returned to pre—pandemic levels, highly
dependent on trade with russia, or russia and ukraine, and highly dependent on energy imports. so we say to to our members, be very careful how much you spend and what for you spend. there are two priorities. one, the very poor people, segments of society that are now struggling with high food and energy prices for people. for whom this is like 40, 50%, and now even more of their consumer basket. this is a major problem. i was looking at data for some developing countries where food is 40% and food prices have doubled. so there has to be support provided in a very targeted manner, preferably by providing
subsidies directly to people. in other words, use social protection programmes, don't use subsidising across the board because then the rich people benefit from your very scarce public resource. and very importantly, to support the businesses that are most damaged by the war. we know the work of the imf is all about prosperity, you know, making people's lives better. but, boy, kristalina, it feels like living standards are only going to to fall this year in much of the world. i mean, what are the consequences of that? i mean, we've already seen civil unrest in sri lanka. could could we could we see more of that elsewhere? oh, definitely, yes. remember 2019, the year before the pandemic, it was the year
of unrest from chile to paris — across the world we had seen it. what was the big driver? it was a sense of inequality growing and a sense of exclusion and also decisions being taken that may be good decisions, but they are not supported by people. people are not brought on board. and i think if we are to learn any lessons from 2019, it is to be much more humble about policy decisions and engage in multiple ways with people, because policies must be for people, not the paper we write them on. one thing that the war has highlighted is globalfood security, prices at record highs. how does the world make up the shortfall lost from ukraine and russia as well,
to make sure everyone has enough to eat? there is plenty of food, but it is not distributed in a way that reaches everyone. so we advocate strong before three avenues of action. number one, trade needs to be retained open that we should not have a situation in which countries hold on food more than they need and create all kinds of barriers for food to move from one place to another. two, we ought to focus more on agricultural productivity, not only because of the war, but because of climate change. part of the food problem is because of weather—related decrease in agricultural productivity. so more resilient agriculture. it may not be a solver of the problem today, but it will be a solver of the problem tomorrow.
and three, there has to be increase in agriculture, agricultural production, in places where this is possible. it is not going to be enough to fully compensate for the loss, but it can compensate for some of the loss. and i have heard some positive announcements, for example, from canada in this regard. don't hold, you say. i mean, much of the world was relying on india, world's number two wheat producer, to help make up the shortfall. india has now put export restrictions in place. would you say india is wrong? i would really beg them to reconsider. that is such a difficult moment for the world. they can play a positive role. i understand they need to feed their people. they have 1.4 billion of them. but let's all act in a collaborative manner, because only if we do it, we have a chance to to
overcome this crisis. a few weeks ago, ukraine's president, of course, president zelensky, told a joint meeting of you at the imf and the world bank that his country needs $7 billion a month just to keep going. is he going to get that money? i'm very confident that he would get what is necessary to fill the financing gap, which we have estimated together with ukrainian authorities to be 5 billion a month. for at least the two, three months that are in front of us. there is a recognition that the ukrainian economy is the most devastated from the war, shrinking by 40% probably this year. and that the world needs to stand by ukraine and help ukraine manage. and of course, all of this moneyjust doesn't come out of out of nowhere. and given that you have, kristalina, major concerns about government
debt, which you've mentioned following the pandemic, is there enough will from richer countries to give ukraine the help it needs? can they even afford it? i do believe that in the short term, ukraine does need significant financing, preferably grants, because as you noted, the loan burden is significant. it may be necessary at some at some point this loan burden to be reviewed and revisited. but ukraine is going to get on its feet and start also raising revenues, and i'm confident in that. well, on that note, kristalina georgieva, my friend, the big boss of the imf, thank you. always appreciate your time. and i'll talk to you soon. thank you. well, that's all for this week. don't forget, you can keep up to date with the latest on the war in ukraine and how it's impacting our global economy on the bbc news website or smartphone app. you can also follow me on twitter.
tweet me, i'll tweet you back. you can get me at bbcaaron. thanks for watching. i'll see you soon. bye— bye. good afternoon. there's a lot of dry and very usable weather out and about today. however, we do have rather a lot of cloud, particularly across the western side of england and wales and across northern ireland and western scotland we've got this weather front that's bringing some patchy rain in as well. so east of the grampians best for the sunshine, a little bit warmer generally across england, wales compared with yesterday because we've got more sunshine which will last well into this evening. but you can see that split with the cloud and the weather fronts continuing to pester northern and western areas. a mild night here, perhaps a little bit chilly at six to seven in some of the valleys of england and wales. and so a bright, sunny start. and that's where we'll see the lion's share of sunday's sunshine. but we will have rather more cloud again across wales and northwestern england, possibly more than today. and again, those weather fronts are flirting with northern ireland and much of scotland actually
this is bbc news, the headlines at 4: celebrations for australia's labor party as it wins the country's general election. it means this man, anthony albanese, is set to form the next government though it's not yet clear whether it will be a majority or minority administration. it says a lot about our great country that the son of a single mum who is a disability pensioner, who grew up in public housing down the road can stand before you tonight as australia's prime minister. i've always believed in australians and theirjudgment and i've always been prepared to accept their verdicts. we'll have the latest on what this means for australia — and for the world.