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tv   World Apart with Oxana Boyko  RT  November 2, 2013 10:29pm-11:01pm EDT

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she did love her tour. was to build the world's most sophisticated robot which will unfortunately goes into cuba during the sound anything tunes mission to teach me reason why you should care about humans. this is why you should care what you only call. the. economic up down in the final month that sank night and the rest because i. believe every week.
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hello and welcome to worlds apart of one thing in common between foreign managers and fashionistas is that preoccupation with chance then i'm just we're all about the tax grab the two thousand staff and today having for marching markets especially the bric countries who are collectively at times to challenge the economic supremacy of the developed world our guest today believes that the world's fascination with brakes will be short sleeves and in fact is almost over but it doesn't necessarily mean the end of the rise of the rest well to discuss that i'm now joined by richard sharma who leads the emerging market team at morgan stanley mr sharma's think you very much for your time now if you break out nations took the world by storm and became a best seller almost overnight but i think one of the. why it was such
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a success is because people tend to react to it in a very emotional and almost political way some people in the brics countries too good as in your prediction of the almost immediate demise and some people in the west took it as a promise of that almost immediate recovery but i guess you didn't mean either of that's right i think my point was to sort of speak about the world as i see it and i spoke about some of these brics countries and on an individual basis and as i was traveling to various places from brazil to india i was getting a sense that a sense of complacency is setting in after agreed last decade and that it was bound to lead to a slowdown in reforms and so therefore the good traits of these economies will bound to slow down and not to live up to the hyped up expectations so it really is . a very honest assessment of what i tore would be the goods to all of these videos countries but i think this is where your book gats rather ambiguous and this
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ambiguity was even better articulated in your later article in the foreign policy magazine that you there have provoked actively titled broken brakes why the rest of prizing and i think it contains two major fallacies first. the brakes are now broken i mean their growth is slowing down but they're still growing they're still developing and second is that the rest didn't stop rising simply because the rest is not confined to the brics countries and what is more important is that that's major transformation of global economic and political architecture away from western dominance and towards a more level playing field is still happening and if it had i think it is actually accelerating yes but if you look i was to be issue with what happened last decade and lost a kid it seemed every single emerging market was going to rise to a very rapid peace because between two. thousand and three and two thousand and
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eight that golden era every single developing country was recording a very high growth treat almost without exception and i was taking issue with that that that is unlikely to happen the long term history of economic development is that some countries do when some countries do not do will so now look at what's happening the last couple of years the rate of growth of brazil russia south africa these countries are slowed down dramatically and the forecast i make is that the good street of these countries in particular will not be fostered in the united states and that is a major disappointment because these countries have a per capita income what a will to live which is much lower than that of the united states the fact that these major they've gone and knees in the developing world that unlikely to grow any faster than the leading economy in the world that's the united states is i think a major disappointment but and specially compared to what happened last decade so i was making the argument that what happened last decade is an exception at the every
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single emerging market is going to boom and it's going to happen in a very selective manner yet but the fact that then no one rising or no developing at such a high speed as before doesn't mean that this major transformation. is not happening and the reason why i'm saying that is because obviously it's not just about how much money investors can make all of those countries i think most of those countries and all concerned for that but what they are actually interested in is changing the existing economic practices and it's not a secret that for the last couple of decades developed countries have had in a greater leverage of sort of shaping global trading practices in their favor and part of that own konami growth was conditioned on having those rules in favor of but as you have more countries stepping into default you will also have more power sharing in. now to me some of those perks economic perks that the united states and
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some of the developed economies has to take for granted and sound the parts that enable of that while being they will be taken away from them even though i don't agree with this assessment of dividing the world into two very distinct blocks which is developed and emerging i think that yes the difference between developed countries and emerging countries is obviously per capita income to the per capita income of the developing countries is much lower than in the developed countries but to say that that all the developed countries acted gone certain all the emerging markets act and gone i think that is not the right assessment because there are lots of differences in the developed world between us and europe there are lots of differences similarly in the emerging world there are lots of differences for example. russia brazil south africa they all benefit enormously from rising commodity prices countries like india a key they all want lower commodity prices so you know there are many differences
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and i think that the alliance is also been fully india fees much closer to the united states than it feels to china russia feels obviously closer to china now than it used to feel to the united states but its relations with europe are mixed so i think that these very distinct. of all these countries and seeing that the developed world is acting in concert to make the rules which suit them at the cost of the emerging world i don't agree with this guy because i feel that within the emerging world there are lots of differences and developing countries have their own priorities which mean north meet the priorities of other developing countries that's a very good point against lumping the. countries together and approaching down an individual basis but i think this habit of looking into the world as us versus them or as winners and losers is a very american thing it's a winner takes it all sort of approach and the. and that it is of course that not
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many countries see the world this way and it is in the united states in particular that the rise of the rast is perceived as a threat as you know chinese and indians and russians and brazilians and the rest of the world taking died jobs taking that taxes they can die a petunia t. opportunities for growth and so on so ultimately you know you are arguing against that but on some level but also on some other level you are sort of unable ing that thinking as well because they are very positive on the united states and you also say that the existing infrastructure that again in my view favor of the developed world for quite some time is not going to change yet you know but what i sort of i movie issue with as you point out is lumping countries together and so therefore i thought this brick makes no sense because this i couldn't came into being a decade ago again it was the creation. year in the united states it got
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popular as well that you would just putting together for countries that had very little in common these four countries are the large developing economies and the this i couldn't became very popular because the last decade every single emerging market boom so any acronym together will act and i think that now what's happening is that you're finding out that these bric countries have lots of differences amongst them and so talking about them as a single entity is just very misleading so i think that if you speak about these countries individually and i'm not trying to say that the united states is superior to all emerging markets my point is that within the developed world that are differences that the united states is doing better than many european countries and within the emerging world that are differences so i think there are all these new stars which are emerging outdated and we need to also speak recognition of them rather than just keep speaking about bricks now you make a point about not. using brakes as an acronym and they can all make sense but
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breaks is now also political leaders getting together for regular assignments and discussing not just economic policies that those summits but also that political stances sometimes coordinating those political stances do you think that this political card to nation has any economic value of actually changing the on deadline day nomics the underlying structural transferred in the global economy i don't think so because look at the evidence so far i mean you pointed to the brics summits you know these summits have been going on now for the last five to six years there was one in march this year and word came out of it not saying they wanted to create a development bank and yet there the differences are so huge for example all the other countries from india brazil russia. china sort of influence would be would be very large and these other countries would feel marginalized so the problem is that
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there's not much which can come out of this because china's economic size and political clout is so much bigger to big to the other but for example they want to join through here when they join their political clout. of examples of that in the case of russia and china and the un security council they can not only counter the united states politically they can also influence that interest economically and this is exactly what i mean by them coming together not necessarily coming up with some concrete can all make proposals development banks and what have you but ultimately you know staying together coordinating that policy stances getting to know each other maybe on a personal level and then the using there is personal connections and you know the potential for that economic and political convergence one moment there i don't think that's a fair point which is that if you have two countries which see that interests
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aligned and they're able to pull together like you mentioned about russia and china and sort of do something at the u.n. that's fair my point is that why should be just these four to five countries what's so special about them for example in latin america today. the mexican economy is doing much better compared to the brazilian economy and similarly like each year there is the example of south korea is a fairly large economy you have the likes of indonesia which are now going to become a trillion dollar economy this. has already become a fairly large garden me so the main issue right because the book is the fact that i'm just talking about brics is a very limited view all of the emerging would ok but for example one thing in common that the break countries have is they are sort of very keen of their own this of the social unrest and the need to preserve social stability and we've seen that in china we've seen that in russia you've seen that in brazil i
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think and to some extent we've seen that in india and all those countries use different methods somebody some of them use you know democratic math and some of them use more authoritarian the math had some of them with more money into social programs trying to placate their populations but given the fact that social and rusty. it's really spreading around the world and in many other places it is really threatening not only economic growth but you know simply cannot make stability and the security of investments do you think that could be perceived as competitive advantage you know that insistence on preserving the social order and that resisted every systems to any sort of regime change or revolution on that own territory you know what i think the same sort of fact is today i did work in the key there of course elated at a different level those factors that it work in egypt so i don't think that you know that is a competitive advantage of just the brics countries and the way they're dealing with all this is also very different i mean again china has been so far no one
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wrist at all we have seen protests in the other countries that you mention like in brazil for example those protests are being dealt with and seen as a wake up call for the government to do something off to the fact that investment and growth and the quality of public services has been so poor in recent years in the key the way they lead it is dealing with that is very different in a much more sort of strong handed authority in manner and so the responses are very different and i don't think that preserving social stability can be a common theme for all these countries because the way they deal with this their responses to all this is very different this is a very interesting thought we will come back to this conversation right after the break. we're.
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live. live. live. live league live live
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. he turned his lover into an amazon. or the other been my dream to sort. but he couldn't hold on to the research if he knew i was growing a teacher and now she runs her own amazon factory through down a trail of tomato there's no alcohol smoking and even coffee is forbidden they worship the sun. will he ever be able to win. man vs woman on r.t. . welcome back to worlds apart where we are discussing economic breakdowns and breakthroughs fifth richer sharma be had of the emerging market team at morgan stanley mr sharma before we went to the break we
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were discussing social protest social unrest spreading around a while then i wonder given the preponderance of those moods around the world free of sin mass protests in brazil risen played the arab countries get enough of it it's them some countries in europe and turkey are also quite volatile so many of these protests are driven by economic grievances i guess but the only exception of turkey i wonder if the global consensus on the risks posed by social instability has changed in recent years in any way because arguably we have never had so many protests around the world on such a large scale and again the security of your investment would depend on the stability of the governing system right yes that's true but i also feel that because the last big kid was so placid where there was so few brought there said so many emerging markets were doing so well and booming that peaceful gort the fact
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that in the 1980's in ninety nine b. there were lots of protests across many developing countries including eastern europe you couldn't places such as brazil. we have more sticking place in many countries it wasn't so volatile and the outcome wasn't so bloody because you cannot compare what happened in poland for example to what is happening in egypt right now because it was china you know like china had its massive protests back in one thousand nine hundred nine so i agree that yes you know there's been a sort of sudden spike in the number of protests in the last few months and quarters but i think we forget that in one thousand nine hundred nineteen ninety they also were a lot of protests and lost decade was misleading the t.v. peaceful a lot of emerging markets were booming so we figured that thought disorder normally wheels life in many developing countries and also as we see now in some of the developed countries but i think we have to make a distinction between process speech as he said i normal way of life and volatile
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and bloody regime changes that reaches what we also saw in many of the arab countries and when you consider for example what is happening in europe money you have those major strikes and major protests to an economic proposal that is put on the table i would think that is really endangering not only economic growth but the actual taken on a cricket it could be but you know for example if you see in places such as brazil is the deciding fact being seen in a positive way that this is a wake up call so yes sure there was some initial police brutality but it's been handled rather peacefully so in some places it is in fact seen as a wake up call because the good street in these countries had fallen so sharply and the quality of public services had become so by so yes the arab would like egypt ignore the poor disappeared quite bloody but in other parts of the world it's seen as a wake up call even in india when to approach this in two thousand and eleven it was seen as
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a wake up i'm not that negative about these fortis hosting growth as much now i want to ask you a specific question on turkey and mentioned it before and your book here a very positive are in turkey. saying that it is probably the first example of a country proving that you know you can have a successful muslim economy you can have a successful muslim democracy when the leaders really try to separate politics and religion from economy and putting a lot of. thought a lot of effort into. growing domestic market is enabling that industry and i think that was a very popular argument that is until turkey got embroiled in in syria and the fallout from it has been so far quite significant because they had they lost all their investments in syria and turkey was the single largest investor in syria they created a major source of instability on their southern border of the flow of arms back and
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forth with the flow of militants they also had to increase their social spending significantly because of the presence of the refugees they had to increase that military spending significantly so you have all those major issues stemming from what altimetry was a political and partially religious decision and it is now putting at risk all that hard won six hours that they had over the past few years so do you think your argument about turkey being that prodigious example of a muslim democracy that was able to separate that it's religion from its economy still can be applied to these day that's a serious point when i spoke about in the book was how he had done from being a complete basket case a decade ago with hyperinflation and video. so achieved so much economic success and i think that was great but the problem there is of course. to do it has changed
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which is going to be ready on economic reforms and being really sensitive to the concerns of the other box of the globalization he now has become much more to to talk. did he and less dollar and of any criticism and more bad annoyed so many leaders stays in bali for too long that's a risk that the explicit and as you say that's putting it risks like some of the incredible gains that he has made i still think that they'll be able to come through this but i think what the clear message from the people that is their job one needs to come up with a succession plan so that new fresh blood can come through and think about how to take the country forward we've been talking about the distinction between they developed and developing countries speech was introduced back in the fifty's and the sixty's and that at that time the difference big gap in terms of technology in terms of economy in terms of the living standards between those countries was there a much pronounced it is no longer the case china may have a lower g.d.p.
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per capita but technologically it is quiet at the finance nation do you think this distinction that's been developed and developing countries still. holds any water really yes i think because you know the point capita income levels are still very different so that's that's why we distinguish between developed and developing countries but here is the key point which is that sustaining economic success is a very difficult daas which is that small for me is seen that countries tend to do with a while and then they don't. begin to hurt them and they stumble so i think that's the key point that sustaining economic success is very difficult and so therefore don't bank on the stars of the last decade to continue to be the stars in the subsequent decade i mean the fact of the matter to means is that for the last fifty years the difference in but capita income all the way to live was between the emerging markets and the developed world on change so we've seen cycles and some
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countries have been able to graduate to becoming developed countries but those a selective but broadly many developing economies find it very difficult to overcome. policies and institutions and become developed countries now you make references to g.d.p. per capita fairly often in the book and in fact it's one of your mattrick for determining which country is going to be a the next breakout country but i wonder if using absolute figures is really telling the whole story here because obviously the chinese g.d.p. is much lower than the american but the living standards and expectations of those living standards are also quite different so what would be considered as humiliating living standards in the united states would be. perceived as a pretty good deal in some of these countries so when you try to put it under the same cap in this case an american i don't think you take into account all those additional sacked years that can also contribute to how well the country develops
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how fast it grows and. what kind of eels it delivers to its investors no i didn't do a count mind dinosaur argument is that you can't be in countries with very different per capita income exactly along the lines that you're seeing that is china's per capita income is still a fraction of that of the united states you can't compare the growth rates of the two countries because china needs to grow faster to lift more people out of poverty mean that you can actually do it doesn't mean that china candidate. those same deal to even better yields. than the united states doesn't mean that no i mean i didn't mean that but what i focus on is that if those jeans are things getting better at the margin in china today or not this is the united states and versus other developing countries i think that's the key metric and the point is the fact of the countries but i think things are getting better at the margin are these new breakout stars and i think that the good streets of many economies such as brazil
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south africa is disappointing loss' expectations so i take into account what expectations were different per capita income level when trying to figure out. which we've started which will not be the brigs stars now and the other economic mantra that is often propagated by western economists especially when they're asked for advice from emerging countries on how to deal with various crisis is that you shouldn't try to curb the blow you should live here our economy's hit the rock bottom and only them they can and we will be able to purge itself of the structural deficiencies yet when you have this recent crisis is the united states the united kingdom many other countries in the region the one out of the way all of you know bailing out protecting the regulating and. it not only reeks of double standard it it actually i would argue damages the chances of global economy of
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priming itself would you agree with that that's a fair point because i think that if you look at the case of east asia or even russia the way into a massive crisis in ninety seven ninety eight and then but that set the stage for the big boom to begin off to that because they carried out some significant reforms new leaders came in to police those new leaders new energy levels and so i think there was a cleansing process there is in the developed world i think if you correct that by sort of cushioning the blow and by going off to stimulus off the stimulus of the stimulus and i want to easing the pain there nor being able to carry out the more fundamental reforms needed for growth having said that if you look at the case of the united states the private sector in the us is growing at about three percent but it's really the government sector which is contracting because. they're cutting back on their bloated size which is what's holding down to less than two percent so
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i agree with your point that the that a better approach has been to carry out reforms and the reforms at the peak at it out only when economies have a hard landing and they have nor their choice but to reform there is any question the blow to sort of north take the hard decisions and postpone the hard decisions which leads to lord longer term problems well it doesn't look like we have too many points to disagree upon but this is all the time we have for it thank you very much for being here on worlds apart and please join us again same place same time here and while the part.
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from some of the poorest nations on earth so this is a very serious and very urgent problem that needs immediate international action. on foot territorial waters they fish they load the fish on to the ships and leave for europe. to day illegal fishing is taking the bread out of our mouths. more news today. again flared up. these are the images the world has been seeing from the streets of canada. giant corporations are today.
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tara tag the partner of the n.s.a. leaks reporter accused of espionage and terrorism in britain for trying to carry documents from edward snowden with him through an airport. digital discontented big money n.s.a. facility set to open in utah is drawing the anger of privacy activists the new data center will reportedly be able to store a vast amounts of personal data. in iraq over its record high death toll over the last five years cause of baghdad to ask the u.s. for additional aid to fight insurgent violence. and peace on the precipice pakistan summons the us ambassador refusing washington of scuttling attempts to get islamist militants to go to the negotiating table after a u.s. drone strike killed the leader of the country's taliban insurgency.


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