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tv   Counting the Cost 2017 Ep 41  Al Jazeera  October 14, 2017 12:32pm-1:00pm AST

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top general before moving to take part in forcing a so-called deescalation zone world leaders are criticizing the u.s. president's decision to decertify the nuclear deal with iran the us president says the iranians are not complying with conditions of the two year agreement britain france and germany there are warning the u.s. against undermining the accord with world powers iran's president says trump is making a pile of delusional allegations former u.n. chief kofi annan is calling on me and maher to ensuring the refugees can safely return home more than half a million are in neighboring bangladesh trying to escape a military crackdown on state and heads a commission appointed by me in my last year to investigate problems their family freed after being held hostage in pakistan for five years is returned to canada joshua boyle and his wife caitlin coleman was seized by the taliban linked to the group while hiking in afghanistan liberia's presidential election is likely to go
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to a runoff next month vision results show the former football star george weah is in the lead at least the third of votes have been counted fifty percent of the vote is needed though for an outright win the news continues after counting the cost so do stay with us. china is holding what appears to be its most significant communist party congress. with president xi jinping. the. country. join me. live coverage. here. i'm adrian finnegan this is counting the cost on al-jazeera your weekly look at the world of business and economics this week
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a scandal made in japan kobe steel japan's third largest steelmaker admits that it faked data on parts used in cars planes and bullet trains general motors boeing and toyota are among the firms checking their products also this week bubble trouble why the international monetary fund and the winner of the nobel prize in economics are signaling danger ahead for the global economy. and the trevi fountain sponsored by luxury fashion brand fendi why without private investment many of italy's most important monuments. planes trains automobiles and fake components japan's kobe steel says that it was faking data about the strength of products delivered to more than two hundred companies for the past decade it's a scandal it's unsettling the transportation industry worldwide general motors boeing toyota honda they all now have to check their supply chains the manufacturer
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of japan's shinkansen bullet trains says that it's already found parts supplied by kobe that failed to meet industry standards the one hundred twelve year old metals manufacturer said that further cases could come to light florence louis reports from tokyo. made in japan and now these brands share one more thing in common their customers of kobe steel the company has admitted employees fabricated data about product quality to meet customer specifications the government says it's following the case closely and although this was an agreement between private entities we think that kobe still is misconduct was something that has shaken the foundation of business transactions the ministry is taking the situation very seriously kobe steel says two hundred customers in japan and worldwide including manufacturers of trains and planes have received falsely certified materials customers are checking whether they used substandard products and whether there are
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safety issues or not and yet more revelations mean the scandal could be wider than initially thought kobe steel at mit's that the fabricated data affected not only copper and aluminum products but also ion powder which is mainly used in making automobile components kobe also admits that it's launched an investigation into a subsidiary company which is reported to have shipped material used for making semiconductors to customers without inspecting them the kobe scandal is the latest to hit corporate japan faulty abbots made by takata problems at the largest safety recall in history of the auto industry in june a japanese company has filed for bankruptcy misandry called one point two million vehicles last week after admitting unqualified stuff carried out factory inspections. the scandals are seen by many as a further blow to japan's reputation for quality manufacturing that reputation has
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allowed japanese companies to charge higher prices compared to cheaper competitors such as china not all analysts think the scandal is a disaster for japanese brands japan tends to have a lot of over spec you know they really if you want to have the last three percent of perfection you have to go to a japanese company because they're the only ones doing that while everybody else you know whether it's korea whether it's germany whether it's india you know operates on a minimum viable standard kobe still said the misconduct involved dozens of employees in as many as four factories and possibly going back ten years the full financial impact is still not known but it could be huge if customers request replacements the company's share price has already taken a beating on the stock market joining us now from singapore marcel tyrian small cells a senior japan economist at capital economics good to have you with us so what now for kobe steel is this likely to be the end of the company i'm not sure if it's
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going to be and therefore been companies that have survived such corpus to get scandals for example. are still around but other companies have indeed gone bankrupt for example to carter the gone bankrupt after such a scandal so so it's certainly a grave threat to the company's future its reputation has been severely dented as it likely that we could perhaps see if not it doesn't go bankrupt if it broken up perhaps. i guess it could rebound if it if it addresses the problems in a comprehensive manner. if it proves that these things will be rectified and that it don't cost severe damage to actual consumers which was the problem. so there's a chance that they will recover from this it is the latest in a number of corporate scandals in japan you alluded to some of them in your first
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answer why is that what is it about japan and cutting corners well i think a lot of these companies did been around for a very long time and defacing heavy competition from from china or from from other countries and i think it's also the corporate culture of income employees and japanese firms the work usually usually for very long time time met at the firm they get seniority wages of it if you don't want to lose their job so basically they have an incentive to cover up if there's any problem and they often work very long hours so sometimes they might just do things to please their managers that that isn't in the best interest of the company in the long run they've also been there's also been a lack of corporate governance in recent years i mean it's been addressed now we've had we're starting to get tougher rules from the top
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a stock exchange but of course changing the corporate culture takes longer than just imposing some rules and fulfilling them on paper. this is done enormous damage yet again to japan's reputation you talk about those those changes in the corporate culture do you think that the embarrassment of this latest scandal is going to help to speed up that reform process well i think it will i mean they're talking a stock exchange calculates it has corporate governance governance cold and we've seen some progress about a quarter of our firms now fully meet their requirements and the other three quarters will probably continue to make efforts to meet those requirements also i think of foreign ship shareholders. will put additional pressure on management now about thirty percent of stocks and japan are owned by foreigners in a lot of them are fairly big investors which put pressure on many on management to really reform and change their ways you talked about some of the reasons for this
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this this corporate culture in japan could another be the that it's still paying the price for that the dramatic cost cutting that went on in japan when the economy declined as it did in the one nine hundred ninety s. i think that's quite possible i mean it's obviously. firms that have debt facing rough competition they have an incentive to cut corners and being lax on security standards is one way to do solve so i think it is possible it is the flexion of these terrible times that lots of companies went through are so really good to talk to and counting the cost many thanks indeed for being with us. all right still to come on counting the cost. of oil and what a big. being hidden from prying eyes like and causing problems for russia. and i'm on the hunt for them here in crimea. later in the program.
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now the turn of the century the dot com bubble burst then in two thousand and eight the collapse of a bubble in u.s. house prices triggered the global financial crisis fast forward to twenty seventeen richard thaler the father of behavioral economics is handed the nobel prize in economics just as world stock markets hit new record highs they were as work is all about how humans make irrational money choices you may even remember him from the hollywood movie the big shorts in post prize announcement interviews he said that he's worried about the fact that nothing is spook ing stock markets they just keep calling. well the international monetary fund a spent the last decade trying to pick up the pieces after failing to predict the last financial crisis this week the i.m.f. said that nearly seventy five percent of the world is now experiencing an upswing it's predicting that the world's economy will expand by three point six percent in
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twenty seventeen and by three point seven percent in twenty eighteen that's slightly higher than what it was predicting back in july but the i.m.f. also issued a warning it said record low borrowing costs designed to help the economic recovery pushing up debt levels in the world's largest economies and it singled out china as one of the worst offenders well the i.m.f. and the world bank are hosting a meeting in washington d.c. where finance ministers and central bankers from around the world are gathered you have returned reports. the world bank president says governments around the world need to spend all countries need to invest more in their people it's been a rough few decades for the world bank and the i.m.f. reputation's most recently they failed to see the economic crash of two thousand and eight coming despite the millions of dollars they spent to monitor the world economy for just such crashes and since two thousand and eight as the sort of austerity programs long imposed on developing nations have been forced on developed
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countries like greece awareness and discontent with the i.m.f. is growing finally last year things seem to change the i.m.f. published an analysis that admitted its new liberal policies caused economic damage and this week the fund declared increasing taxes on the wealthy would not impede economic growth and would help address inequality the result is growing political tensions in many places and increased skepticism about the benefits of globalization. but for the leaders of the one hundred thirty three global groups protesting outside the meetings the policies haven't changed over all the rhetoric for example raising taxes on the rich neo liberalism says any monies raised by the government should then be given to private corporations the fight inequality alone says any concern expressed about increasing inequality doesn't match the current policies off the world bank and the i.m.f. such as their pushing of drastic cuts in mongolia to near zero and zambia and
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leading the privatisation of primary schools in liberia and funding investments and projects in honduras on land violently seized from peasants the i.m.f. failed to respond to our request for an interview one of the social indicators that the i.m.f. and world bank often take comfort in is the huge reduction in global extreme poverty over the last few decades surely they argue proof that their brand of new liberal globalization is working however a new report from the center for economic and policy research released this week found that two thirds of the net. in the extreme poverty in the world since nine hundred ninety was in china which rejected that new liberal economic model the rebound the twenty first century was partly due to the fact that the i.m.f. lost almost all of its influence in middle income countries to skeptics both the i.m.f. and the world bank have yet to prove that their stated wish to eradicate poverty is anything more than a public relations strategy to conceal the same old economic approach
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joining us now from london is david coker david is a lecturer of finance at the university of westminster in london good to have you with us again david so you've got the world's brightest and best financial minds meeting this weekend in washington d.c. the world bank and i.m.f. meetings they don't exactly have the greatest record when it comes to predicting trouble ahead today. they don't and particularly we see their forecasts their g.d.p. forecasts are very volatile when there is political instability. the world bank the i.m.f. a reputation severely dented after failing to predict the economic crisis the last economic crisis in two thousand and seven two thousand and eight that they smart enough a wee small governments our institutions smart enough to avoid another catastrophe like that of the systems are very complex i think i think we understand the mechanisms and we've got a good feeling of what has to be done i'm not convinced the political will is there so even though some of the best minds at the i.m.f.
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and the world bank write excellent papers that talk about the solutions we just don't have the political will to implement it they're calling for a larger to our higher taxes i should say the other way upper upper wealth and so we've got the one percent and more importantly the one tenth of one percent who saw in the wake of the financial crisis saw their wealth soar and yet we also know at the same time people in the lower ninety nine percent saw their wealth stagnate and in far too many cases decline so i think we've got to align our political leadership with the i.m.f. and the world bank start to open up and we do have to take some choices which many of the elites may find unpalatable taxes do have to go up we have to engage in a period of progressive policies that will help open up education for more people if we can start to do this if we start to get control of the political environment and in particular the instability that's bubbling underneath the surface i think when the financial next financial crisis comes it's only
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a matter of time we'll be in a much stronger position if it were to hit tomorrow i would suspect we'd see open revolution in some of the western democracies some of them are very very unstable at this point it's bubbling beneath the surface so our leaders have to take the difficult decisions to do what's necessary to calm people down to give people the perspective or the view or i should say that there is opportunity for everyone in spite of the changes we're going through not only politically but technologically which is also something they're considering. this week these massive changes that are coming due to technological innovation in the world bank one of the things that is warning about is the risk that automation poses to all of us who who work for a living when they're looking sort of twenty years thirty years down the line if they were are they right to be doing that and what about something which is so far in the future given all the problems the that exists in the world today right now. well there are a lot of problems no but we have to face it we have to face the fact that this fourth wave as we call it the digital revolution it's not coming it's here and
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a lot of people have overlooked banking for instance my era we're starting to see bots take over a lot of traditional jobs we feel that a lot of banking jobs are going to maybe as many as thirty percent of banking jobs will be wiped out that's the tip of the iceberg when we start to see these upper skilled jobs wiped out just decimated what will it do to lower skilled jobs people that princeton's and i don't mean to sound horrible but people that deal with customers we can program a bot that can do many of the queries and a lot of companies in fact are playing with that they're experimenting with these things if you take a look at what ten cent in china is up to ten cent in china pioneered these ai bots and they've got a user base of some seven hundred million people who are quite happily using bots to plan holidays to schedule a dinner reservations to book a car to plan anniversary trips things like that a lot of these jobs that are done by people right now they're going to be wiped out
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so the the revolution's upon us again it's up to our leaders to listen to what the world bank and even to take a look at what's going on in banking and other areas and start to address these the underlying start to address the changes and try to figure out what we're going to do with people unfortunately i do feel a lot of our leadership is sleepwalking they're letting the changes roll and again we're going to see massive spikes in unemployment not this time in the agricultural sector or the manufacturing sector which what we're what which were impacted by the earlier waves of automation now it's going to be it's squarely in this digital sector of the economy it's going to be squarely in the middle class services and upper middle class services and it is something to worry about and it will give rise if there's another financial crisis and if these job cuts come it will give rise to political instability we probably haven't seen since the thirty's. david i think it's really good to talk to you if you give it given the rather pessimistic nature of what we've been discussing but many thanks indeed for being with us great
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to have you on counting the cost thanks for your time adrian take care. german engineering giant siemens a russian state owned enterprise in the case of the crimean turbines these are the main elements of a legal dispute which will be going to court in russia next week and it's all about e.u. sanctions rory chalons reports. what we're looking for in this disputed land is high tech equipment proof in finely machine steel of the lengths russia's leaders will go to to supply the crimean peninsula with electricity and the trouble that's bringing to the kremlin. territory cannot do without. power lines but ukraine refuses to provide it russia's mainland doesn't have enough of it and you sanctions shots crimea iraq and western energy technology so russia's opted for deception when their thought about building a power station on the mainland and the growth for electricity to the.
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it was a fake because the well it was just going to recall those door buy ins from. there say well we'll install them here but not on the occupied territory of the crimea but crimea is where siemens acknowledges the four turbines now are the reuters news organization filmed these two large objects in july for the crimean port of feodosia despite russian media reports two years ago about the turbine secret destination siemens accepted moscow's reassurances that they were for southern russia but now the scandals forced the german industrial giant to act its pursuing criminal charges it wants its missing technology back and it says it scaling down russian operations they told us siemens will hold power generation equipment deliveries from existing contracts to state control customers in russia for the time being the e.u. has also responded with new sanctions asset freezes and travel bans. when we
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visited theodosia the turbines if that's what they were had disappeared perhaps they're already here one of the two new power plants being built in crimea but russian technicians are expected to face significant problems getting them to work because siemens is refusing technical assistance this whole siemens gas turbine saga illustrates in a nutshell that binds that russia has got itself into trying to wriggle past the e.u. restrictive measures moscow is just more of them and with washington signing in new american sanctions the ability of russia to secure the investments in technology it needs to stop the country sliding backwards well that only gets harder for power generation problem of a different kind blacked out and on the brink of bankruptcy most of puerto rico still has no power nearly a month after her a can rear devastated the u.s.
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territory it's just one factor crippling economic activity and adding to the humanitarian crisis unfolding that the island is virtually bankrupt it owes seventy billion dollars in debt and that makes recovery from a natural disaster of this scale incredibly difficult puerto ricans with solar panels are among the few with a stable electricity supply this week though ill must the c.e.o. of electric car maker tesla offered to revamp puerto rico's power grid using solar technology is offer was welcomed by puerto rico's government it's feared that hundreds of thousands of people may leave develop tricity is not restored soon. budget airline ryanair says that it will challenge a lot of air berlin deal love turns as agreed to buy more than half of the failed german carrier for two hundred forty eight million dollars and rival ryanair is not happy it's accused of breaking e.u. competition laws and says the deal will result in higher prices for consumers
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ryanair may face some court time itself though as belgium says it's going to sue the airline authorities there accuse it of not providing enough information to non english speakers after it canceled thousands of flights last month and finally this week some of the biggest names in italian fashion are helping to restore ancient roman monuments to their former glory the governments turning to private businesses to help to pay for the huge cost of renovating sites like the coliseum now after four years new areas of the building of been opened to the public a knave parker has been to take a look. it's a steep climb to the top of the coliseum commissioned by the emperor of a speccy and in the years seventy two for the past forty years the fourth and fifth levels have been locked away from view until now welcome to the ancient cheap seats that probably wouldn't offer the best view of the regular bloodbath down
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below but they do offer a sensational view of the city. the opening of the upper levels is the result of a four year epic restoration project the outsides also be strengthened and spray clean to remove generations of grime the cost a colossal thirty million dollars and there's still more work to do the sheer scale of rome's archaeological heritage poses a huge financial burden for the city and for the country the vast costs involved frequently exceed state budgets. ticket sales help but revenues don't go far enough that's where high end italian fashion comes to the rescue the coliseums renovation was largely paid for by the billionaire owner of todd's luxury footwear company. in follows a three million dollars renovation of one of rome's main tourist attractions the trevi fountain paid for by clothes company fendi. on the spanish steps restored
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last year with more than a million dollars from jewelry designer ball gary when we had to celebrate there were one hundred thirty new very three we wanted to create something really special for disney very serene and that's why we thought to pay tribute to the sea today where our founder and also created so much richness in our creativity the financial helps launch the welcome but it's of these cash strapped government but there are some concerns about bigger tally and companies using their renovations as a branding exercise. there's a real risk of commercializing ancient monuments but the brands we chose last year were chosen carefully we haven't seen any signs of companies abusing their patronage. italians are intensely proud of their rich cultural heritage but preserving it comes at a huge cost that for now only italy's big businesses are able to cover.
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and that is our show for this week if you want to comment on anything that you've seen tweet me and a finnigan on twitter please use the hash tag j.c.t. see what you do or you can drop us a line counting the cost of al-jazeera dot net is address as always there's plenty more few online 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 is it for this edition of counting the cost. of the whole tape here thanks for being with us the news on al-jazeera is next.
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in a world where journalism as an industry is changing. fortunate to be able to continue to expand to continue to have that passen that drive and present the story in a way that is important to our viewers. everyone has a story worth hearing. we cover often ignored we don't weigh our coverage towards one particular region or continent that's why i joined al-jazeera. we are witnessing around the word this hungry money which is only looking at how to make all about privatized sation of nature should our environment be for sale but we're trying to do this just likable to stabilize the country by giving them a financial incentive to do that pricing the planet at this time on al-jazeera. in
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the final part of a six part series filmed of a five years. the people of new can still fight for their land. the village chief is in prison. and forced underground the filmmaker has become part of the saga. crackdown the concluding part of one kind of china's democracy experiment at this time of his iraq. this is al-jazeera.


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