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tv   Documentary  RT  November 3, 2013 5:29pm-6:01pm EST

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there you see your numbers be. a little bit george really. on r t r. hello and welcome to worlds apart one thing in common between fund managers and fashionistas is that preoccupation with chance and 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 attempting to challenge the economic supremacy of the developed world our guest today believes that the world's fascination with brakes will be short sleeved and in fact is almost over but it doesn't necessarily mean the end of the rise of the rats well to discuss that i'm now joined by richard
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sharma who leads the emerging market team at morgan stanley mr sharma thank 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 reasons why it was such a success is because people tend to react to it in a very emotional and almost political way some people in the brics countries to get as 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 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 they could last decade and then it was bound to lead to a slowdown in reforms and so therefore the treats of these are gone. bound to slow
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down and not to live up to the hyped up expectations so it really is. a very honest assessment of what i told would be the goods to these videos countries but i think this is where your book gats a rather ambiguous and this 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 not 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
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accelerating yes but usually i was to be issue with what happened last decade and lost a kid it seemed every single emerging market was going to rise very rapid peace because between two thousand and three and two thousand and 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 in the long term history of economic development is that some countries do with some countries do not do with 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 forecasts i make is that the growth rate of these countries in particular will not be fostered in the united states and that is a major disappointment because these countries have a part capita income what a will to live which is much lower than that of the united states the fact that these major to. gone and me's in the developing world that unlikely to grow any
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foster 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 and the not every single emerging market is going to boom and it's going to happen in a very selective manner yes 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 are not concern 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
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part of that own konami growth was conditioned on having those rules in favor of but as you have more countries stepping into the fold you will also have more power sharing and also with me some of those perks it can all make perks that the united states and some of the developed economies used to take for granted and some of the parts that enable of the well being they will be taken away from them if you like i don't agree with this assessment of dividing the world into two distinct blocks which is developed and emerging i think that yes there is 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 of the developed countries but to say 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
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differences for example. russia brazil south africa they all benefit enormously from rising commodity prices countries like india. they all want lower commodity prices so you know there are many differences and i think that the alliance is also been fully india feels much closer to the united states that it feeds 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 or meet the priorities of other developing countries that's a very good point against lumping the. countries together and approaching down an
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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 problem with it is of course that not 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 well taking died to taking that taxes they can die appear to need to be 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 a neighboring that thinking as well because you 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 mean really issue with as you point out is lumping
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countries together and so therefore i thought this acronym goldbrick makes no sense because this i couldn't get into being a decade ago again it was the creation. years in the united states it got popular as well that he would just putting together for countries that had very little in common these four countries are the large developing economies and that this i couldn't became very popular because the last decade every single emerging market boom so putting any acronym together walked 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
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within the emerging world that are differences so i think there are all these new stars which are emerging out there and we need to also speak recognition of them rather than just keep speaking about bricks now you make a point about not using breaks as an acronym and it can all make sense but brics is now also political leaders getting together for regular summits and discussing not just the 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 point out that 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 what came out of it nothing they won. to
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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 doing would be very large and these other countries would feel marginalised so the problem is that there's not much which can come out of this because china's economic size and political clout is so much bigger the big two the other but for example they want to be joined to here when they join their political clout together and we have seen there plenty of examples of that in the case of russia and china and the u.n. 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 cannot 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
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a personal level and then the using there is personal connections and you know the potential for that economic and political convergence whan the moment there are no i think that's a fair point that which is that if you have two countries which see that interests aligned and they had 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 it 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's 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 also has already become a fairly large economy so the main issue right because the book is the fact that i'm just talking about brics is a very limited view of the emerging would ok but for example one thing in common that break countries. i have is there
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a sort of very keen of that in this of the social unrest and the need to preserve social stability and we've seen that in china we've seen that and russia we've seen that in brazil i think and to some extent we've seen that in india and all those countries use different methods somebody some of them use democratic math and some of them use more authoritarian the math had some of them put more money into social programs trying to placate their populations but given the fact that social and rust is really spreading around the world and in many other places it is really threatening not only economic growth but you know simply can all mixed ability 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 they're resisting resistance to any sort of regime change or revolution on their own territory you know what i think the same sort of fact is today i did work in the
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key there of course 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 there's been so far no one research or 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 way they lead it is dealing with that it is very different in a much more sort of strong handed authority 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.
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please. play. safe if you need to review the economic ups and downs in the final months day the longer the deal sank i and the rest of the life they meet casey will be a prickly cult they played a. key. player . play.
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play. play. oh i. the deepest lake in the world. usually the new more than fifteen cells years old this one dates back twenty five million.
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spirits and buddhist gone she lives you know. the pure clear water in the lake is helping scientists unravel the mysteries of the universe. i try to see by cow in its entirety. it's not that i have discovered something new here rather that i absorb everything that this place offers. a spiritual bike. on a. welcome back to worlds apart where we are discussing economic breakdowns and breakthroughs fifth richer sharman be had of the emerging market team at morgan stanley mr sharma before we went to the break we were discussing social protest social unrest spreading around a while then i wonder given the preponderance of those moods around the world free
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of sin mass protests in brazil risen the arab countries can't get enough of it sam some countries in europe turn care 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 decade was so placid. there was so few brought this and so many emerging markets were doing so well and booming that before gart the fact that in the 1980's in one nine hundred ninety there were lots of across many developing countries including eastern europe even in places such as brazil. and. this
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taking 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 last 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 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
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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 the 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 bad so yes the arab would like egypt ignore the poor discipline quite bloody but in other parts of the world. it's seen as a wake up call even india will produce in two thousand and eleven it was seen as a wake up i'm not of that negative about these for this whole being growth as much now i want to ask you a specific question on turkey imagine it before and then your book you're very positive on turkey saying that it is probably the first example of
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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 industries 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 with the flow of arms back and 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 their military spending significantly so you have all those major issues stemming
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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 the its religion from its economy still can be applied to these day that's a point where he spoke about in the book was how he had done from being a complete basket case of a cue to go away and read hyperinflation and video. so achieved so much economic success and. i think that was great but the problem there is of course stead o. do one deleted they his attitude has changed which is that after being ready for kissed on economic reforms and being very sensitive to the concerns of the other box of the population he now has become much more targeted and less dollars rid of
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any criticism and more bad annoyed so many leaders stays in power 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 message from the people that is they do do i need 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 that's been they've developed and developing countries speech was introduced back in the fifty's and the sixty's and back 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 lower g.d.p. 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
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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 das which is that small for me is seen that countries tend to do with photo 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. it was between the emerging markets and the developed world on change so we've seen cycles and some countries have been able to graduate to becoming developed countries but those are selective but broadly many developing economies find it very difficult to overcome their policies and institutions and become developed countries now you
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make references to g.d.p. per capita fairly often in the book and in fact it's one of here and that tricks 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 software is that can also contribute to how well the country develops how fast it grows and. what kind of yields 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
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per capita income exactly along the lines that you're seeing bad if 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 foster to lift more people out of poverty mean that johnny can actually do it doesn't mean that china candidate. those same he'll turn even better yields. than the united states it doesn't mean that no i mean i didn't mean that but what i focus on is that if those chines 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 south africa is disappointing expectations so i take into account what expectations were different per capita income level when trying to figure out which way the breakout stars and which will not be the breakout stars now and the other
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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 laugh your economies hit the rock bottom and only of them they can and will be able to purge itself of the structural deficiencies yet when you have this recent crisis the united states the united kingdom many other countries in the region want out of the way all of you know bailing out protecting the regulator and. it not only reeks of double standard it it actually i would argue damages the chances of global economy of 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 and they went to a massive crisis in ninety seven ninety eight and then but that set the stage for
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a big boom to begin ofter that because they carried out some significant reforms new leaders came into place those new leaders had new energy levels and so i think there was a cleansing process there is in the developed world i think that you are correct that by sort of cushioning the blow and by going off to stimulus off the stimulus of the stimulus and more to using the bean they are not 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 i agree with your point that the that a better approach has been to carry out reforms and the reforms that typically get it out only when economies have
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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 needs 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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exactly what happened that day i don't know but a woman i killed. years later is when i got arrested for. a crime i did not do. we have numerous cases where police officers lie about polygraph results. innocent people to consent to the police officers don't beat people anymore i mean it just doesn't happen really. in the course of interrogation why because there's been this is like men know because the psychological techniques are more effective in obtaining confessions than physical abuse and they were off taking they could get what they wanted they could say what they wanted and there was no evidence of what they did or what they said. if you nothing and you got no opportunity. to start
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to construct your. olympian bit. don't want to be gangstas you don't want to be drug dealers they don't want to blow you know the time that the kid came be we can see. you just meet the boat as i was and i hope i was in the hood and with some very good thirty round clip. but i said. i don't want to die i just really do not want to die young young. we're not psyched to have active camps at guantanamo where patients are worse than the months after in the past or strike never turned world's attention to the place
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that some. of our. raises alarm on america's drone campaign which has taken hundreds of innocent lives despite u.s. claims that very few civilians come under fire. when a drone hate i was with my grandmother everything became. a pakistani girl who survived a u.s. drone attack travels to washington to tell congress how her home was destroyed and her grandmother killed. the e.u. isn't satisfied with washington's explanation of n.s.a. surveillance allegations germany wants edward snowden himself to shed some light on reports of chancellors a phone being tapped. dry.


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