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tv   Counting the Cost 2018 Ep 33  Al Jazeera  August 20, 2018 7:32pm-8:00pm +03

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gitta tensions have gone young as nuclear weapons program. began the police have been rounding up protesters in the capital kampala after using a live gun fire to disperse demonstrators that officer supporters have been protesting against president yoweri museveni people are angry at the arrest and alleged torture of several opposition politicians including well known musician robert k. advani who goes by the stage name of the wind those are your current headlines do stay with us though next up is counting the cost we'll see a little bit later with much more news see that a five. alarm
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housing sleeker this is counting the cost on al-jazeera your weekly look at the world of business and economics financial tremors in turkey shake investor sentiment we'll take a look at whether it could be spreading across the emerging markets. also this week south africa's rand takes a beating why a perfect storm of factors including land reform is hitting africa's most developed economy. plus why google is tracking your every move even when you tell it to stop . but the collapse of the turkish lira was a big worry for investors around the globe this week the currency crisis came to a head after a feud with the world's biggest economy the spat with the united states
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a long time nato ally isn't over yet on wednesday turkey said it is putting retaliatory tariffs on imports of certain u.s. products economists say turkey's central bank needs to raise interest rates significantly to strengthen its currency but that's something turkey's president russia tired earlier one doesn't want to do in the meantime qatar a strong ally of turkey has pledged fifteen billion dollars in direct investment in the country simca salo has more from istanbul qatar and meres visit to turkey wasn't the renda working visit it was right in the midst of the crisis of political tensions between united states and turkey and it was also the time when the turkish lira was losing value so it was important that he pleasure to billion worth of foreign direct investment package for now we don't know that it is of this investment package but it was a sign for both turkish domestic markets and international markets that
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a huge fund qatar has confidence in the turkish markets of course qatar has some more investments in turkey at least worth twenty billion dollars of investments in from media to entertainment construction infrastructure all into turkey and qatar has a strong economic corporation and. almost two years ago kuo n.b.a. qatar national bank acquired one of the biggest banks of turkey finance bank and the bank actually is planning to expand in the next couple of years more and it is one it is the biggest third loan lender in turkey so qatar already is a very important investor in turkey even planning to expand more. let's take a step back and talk about the turkey effect emerging market currencies from india to argentina to indonesia hit major lows why is this a turkey's economy is relatively small it only accounts for about one percent of
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global gross domestic product to find the answer we have to go back nearly a decade ago after the end of the global financial crisis record low interest rates in the developed world meant it was cheaper for developing nations to borrow in dollars or euros about forty trillion dollars was added to the debts of emerging markets since then that's according to the institute of international finance but we are now entering an era in which central banks like the u.s. federal reserve on keeping rates low anymore and that's lending support to the dollar so as the dollar rises it is now costing those developing countries a lot more to repay their debts. well joining us now from london is timothy ash a senior emerging markets sovereign strategist with london based blue bay asset management thanks very much for being with us so things look to have stabilized for now and the financial boost from qatar is
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a big help but one of what effect will this have is turkey out of the woods yet the central bank which had been very inactive in the period since july twenty fourth when they fell to raise rates which were really was a spur for the the big pressure on the layer we've seen in recent weeks sentiment really began to fight i mean it showed the begin to tighten liquidity both onshore and offshore we have the good news about the qatari support which is positive they could have come out of monday with an announcement of capital controls they probably thought about in the thought this is not really a very good idea this is not going to helpers it's not going to help turkey to business and that's that's a positive they they still face big challenges the economy is still overheating there's a big pressure from inflation. policy credibility is pretty low still and they have the problems still with the relationship of the u.s. that really does need resolving and this seems to be part of a worldwide trend with emerging markets argentina is having problems indonesia south africa the list goes on what do you think's going on there well you know i
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guess we came into the year with with the expectation of a fed policy tightening we saw some policy errors in argentina obviously then in turkey and you know a combination of individual countries stories that have been quite challenging plus for tightening and then obviously a difficult geopolitical backdrop with with trump on trade offs the problems with china you know that's made people somewhat nervous around. the positives i think is you know in currencies have adjusted you know the times when when emerging market run run fixed exchange rates it is pretty much over in terms of big liquid markets occurrences of adjusted that will help them you know if global growth slows. and trade flows as well generally policymakers have been pretty authors in terms of policy responses i mean turkey would be the exception but generally policy makers of height rates and so far as held in pretty well and remember a large part of the m.
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asset classes really oil and commodities metals are not a struggling at the moment that is a challenge but doing ok how big a problem is debts in all of this then clearly the positive about effects adjustments in emerging markets that helps the real economy the big foreign exchange moves then puts a spotlight on countries with a lot of external debt foreign debt that the encouraging factor is so far we haven't seen any major emerging market go down a debt restructuring default scenario been a lot of pressure on turkey but they've survived so far willingness to pays pretty high they have options as you know as noted earlier in some of the qatari support so countries of arriving through it so far. but you know it really does depend on you know if we see a further deterioration in u.s. china trade relations global growth begins to suffer global poverty on the back of trade you know trade tightening and then oil and commodities take
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a step lower i think that would change the whole outlook for emerging markets more fundamentally and when you look when you look at turkey particularly those that trades a great deal with a country that have large investments in it how exposed are they to turkey's problems do you think. well in terms of contagion you know turkey is a big trading partner of many countries that if you look at it you know it's it's it's quite interesting but no one has spoken about a reorientation east given the challenges in terms of the u.s. relationship and the qatari support is useful but in the end two thirds of turkey's trade investment in financing is from the west so whatever the army say about this we are in taishan. it's really important to normalize the relationship with the west cause ultimately you know what happens in turkey will be determined about his ability to encourage you know international banks mostly western and international institutional investors portfolio vestas that to keep their money in turkey and you
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know. again it's really important i think that that relationship with the u.s. is normalized as soon as possible all right timothy ash thanks very much for being with us my pleasure farai still to come on counting the cost of three hundred year old spanish ship is found off the coast of colombia but who gets all its sunken treasure is the big question. for first an associated press investigation this week revealed that google is tracking your mobile phone even when the location setting is turned off companies like google make billions of dollars from selling information about our every move to advertisers data like our exact location and google did not deny it was tracking users movements it said it provides clear descriptions of its tools to consumers argentina already had the highest interest rates in the world and it's decided to hike them even higher on
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monday it raised interest rates by five percent to a record forty five percent the central bank is trying to combat a currency selloff concerns over a local corruption scandal and this week's term or in emerging markets set off the latest drop the lack of women in key senior corporate roles of the u.k.'s largest public companies was highlighted this week a report released wednesday showed just seven foot c. one hundred c.e.o.'s are women the report pointed out the c.e.o.'s of the largest london listed companies are as likely to be named dave as they are to be female. south africa's president cyril ramaphosa is staking his reputation on trying to revive the economy ahead of next year's national elections but last week's plan to overhaul how land is owned in the country has alarmed some investors although apartheid ended almost twenty five years ago south african society remains one of the most unequal in the world and has made matters like land rights
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a burning issue for me to miller has more from stellenbosch. slivers of light shines through the simply furnished home of. she's been living on this land illegally for three weeks there are dozens more roughly built homes dotted across this hill in still and bosh near cape town an area known for its affluent vineyards and estates. it's because of our government that we are here we have us for lent before but they have not helped us we have to make a lot of norris and fight to get this land here the court has ordered that no more can be built and those that are on occupied be destroyed but as night falls people scurry to bring in more building material. is the believe this is our land that was taken from our ancestors even though the current owner bought this land the previous owner stole this land and so now it needs to be returned to us while we
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are taking the land. according to government statistics of africa's white minority population owns more than seventy percent of privately owned farming land under political and public pressure to reform land ownership the ruling african national congress says it will support moves to change the constitution to allow the seizure of land as long as it does not harm the agricultural sector or the economy but it's unclear how this will be done and who will qualify for the land while acknowledging the need for urgent land reform presidents forum up or supposed to be struggling with a balancing act this week while addressing investors he said the government would not allow land grabs and an alkie wanting to calm the fears of the business community but deciding between what land those people need and what investors want may not make everyone happy the government says it plans to seize one hundred and thirty nine farms across south africa before the constitution is changed if
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successful amendments to the constitution could be avoided there are fears seizing land without compensation. scale off investors violate property rights and hurt food production critics say talk around land exposed the ocean is a ploy for votes ahead of next year's elections rather than a sincere attempt to reform land ownership and that expectations should be managed meanwhile people here could face eviction as the landowner returns to alter in the coming weeks to have them removed well joining me now from london is john asheboro a senior merging markets economist at capital economics thanks very much for being with us so this selloff in emerging markets couldn't have come at a worse time could it for south africa with all the other problems that it's dealing with it certainly is a difficult time for the africa and coming after a period when there was such optimism they had the change in president obviously in february and there was a hope that this word would put
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a difficult period behind the country that doesn't seem to have happened and why do you think that is there's a realization i think now that many of the problems faced by the africa are serious structural issues it's going to take more than just a new president to address them even if president opposed is making some positive steps in some directions particularly in personnel changes at state enterprises it isn't possible in only a few months to turn things around and so that has led to i think a bit more understanding of the situation facing the africa and then of course this recent fall in the rand has been due to something entirely unrelated to the africa situation in turkey because well even if the africa is improving it's still vulnerable to problems elsewhere in the world. and what implications does this land reform plan have for south africa's economy how is it being viewed there is is there a fear that it could. we could end up with the chaos that zimbabwe went through several years ago. i think is a bubble is probably more than
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a worst case scenario i think things getting that far it is very very unlikely what's going on right now there is significant. a significant amount of indecision and of lack of clarity it simply isn't known right now exactly what the government's plan will be there been leaks suggestions of different bits of land being taken or not and so right now people honestly don't know what's going to happen and that's led to a great deal of of worry in the markets are a view and i think the view of many analysts is that at the end of the day the n c isn't going to go crazy they aren't going to do the sort of thing that happened in zimbabwe they know what the result of that would be and so we'll probably see some kind of compromise and a slow illegal istic process they're talking with changing the constitution they'll be debates in parliament they'll be new laws where excess that goes isn't exactly clear but probably a series of small steps and it is also worth keeping in mind that agriculture is only but two percent of the economy of the africa so while this makes huge headlines and it's very emotive greatly for
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a lot of people this isn't going to be what changes the direction of the african economy what's much more important in that countries it's happening in mining what's happening in manufacturing what's happening in the retail sector generally and where does south africa fit. globally in terms of what's happening across emerging markets in the world right now will those it's been a very bad week a very difficult week you could say for emerging markets generally and so that has been one of the most affected by that and some of that is because the africa has some domestic fragility as it has problems with its its current account deficit and so on but part of it is stuff ruka because it's an accessible market an easily tradable currency it's always more affected by. by factors going on in the global economy than other less integrated economies so if you look at another african countries like kenya like nigeria they just don't have the sort of financial connections to the rest of the world that allow them to be harmed by crises that
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are happening in europe or in asia so the africa is in some ways a victim of its success because it's a more integrated more globalized economy it therefore feels the harm of that when you see investors as they have been doing this past week pull out of emerging markets become scared by what's happening in turkey and elsewhere so it is in this case the victim of bad luck this isn't really a problem of their own creation but because of the way their country works they've been much more hard hit by that than have also are and how our foreign investors in south africa or potential foreign investors are likely to view this whole issue of land reform and the lack of clarity around it right now with a lack of clarity is certainly bad for investment people don't really know what's going to happen i don't know as well what the end of this process will be so the constitution refers to the confiscation of property and currently we're only discussing a cultural land that's where the debate happened but if the laws changed at the same laws be used or applied to the mines or to other industrial assets it's really not clear so i think when we do actually get a draft of
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a constitutional change then they'll be some clarity and we expect that that draft change will be relatively incremental and that will cause people to calm down of course if the change is more than but people think then we'll see another big drop in confidence and more worries but right now i think many investors that are at least as worried about the economy generally i mean we had the economy contract in q one and the numbers we have suggest that things were pretty much flat at best in q two so this is an economy that might be in a technical recession that's having significant issues and concerns about corruption there are a lot of things to worry about even before we get the land issue so it's only adding to that which is which is worrying people there is also this sovereign wealth fund proposal that the government. talking about and given the problems there you've just highlighted there what are the prospects for that well there isn't there isn't to be frank much sovereign wealth to put into any kind of fund they put together so it would be a limited effect but at the moment there are several different funds and different
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ways that the government sort of marshals its assets and consolidating them into one even if it would be very big by the scale of qatar a country that that is still a probably administered a good step but i really don't it will be a big enough or sort of strategic enough to have a significant effect on the economy even though it's an economy that does need investments there for goods doesn't have the kind of revenue the kind of stored up wealth to create one of these huge funds in the way that you see in in the middle eastern countries or in places like singapore good to speak with you john nash born there have been allegations of fraud on a kenyan infrastructure project there was welcomed with fanfare just a year ago the railway which was funded by china connects the capital nairobi with the port city of mombasa catherine sawyer has details this is the latest corruption case involving the construction of a really line in kenya the biggest and most expensive infrastructure project in the country at the moment the heads of the national land commission the state really
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and other business people have pleaded not guilty to one thousand charges including fraud corruption and abuse of office they're accused of authorizing payments for compensation of land used in the construction of a section of the really about three million dollars paid to people or for land that did not exist or that was already owned by there was cooperation this year the government has intensified its crackdown on corruption in a way kenyans have not seen in the long time no matter how powerful you think you are no matter how much you think you know people in high position no matter how much money you have. large will not save you corruption has been a major concern. candles have been an artist in several public offices government officials politicians and powerful business people have been implicated some have been brought to court i report by the auditor general's office shows that a bad of the country's budget is lost to corruption and mismanagement every part of
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where i'm optimistic is that for the first time it's not just the job of the director of public prosecutions or the and the corruption commission it's a multi agency so we're going at this with everything that we have. and in the spirit of the crackdown demolitions of buildings of drug reserves and retired inland say to have been acquired forge allegedly is ongoing so this is one of the buildings what millions of dollars that have been brought down by the government in the last few weeks if it's right next to an important stream the next one to go is also authentic that the owners have already started bringing down the path for demolition. this is president who king at his last time in office and he's promised more jobs through the manufacturing industry he vassal health care affordable housing and food security for that to happen he needs to deal
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decisively with corruption i think he understands that this is the only chance that he has. to basically break away from the past which is basically the law but i have friends in high places that make a phone call and this is going to go away many kenyans say they're happy with what they see there however also calling for a speedy trials convictions and the assets of those found guilty to be confiscated . and finally colombia's government is blocking treasure hunters from salvaging what they're calling the holy grail of shipwrecks when the spanish san jose galleon sank more than three hundred years ago it was thought to be filled. we have gold and precious stones cargo but we worth billions today as man where apollo reports it is unclear who will get the treasure once it's brought ashore. stories of ship wrecks and sunken treasure have long captivated the imagination. but perhaps no wreck has fascinated underwater archaeologists and treasure hunters
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quite like the sun who say. attacked by britain's royal navy in seventeen zero eight during a battle off the coast of gaza hanna colombia all but seven members of her crew went down with the ship. unfortunately the san jose was too heavy to maneuver itself against the attack and was sunk by the british where. three years ago former colombian president juan manuel santos announced his government had found the fabled galleon. with the aid of unmanned submersibles three d. mapping technology state of the art robotics and an international team of experts the son jose was found. the catch is a company called sea search armada claimed they had found the ship more than thirty five years ago and had been locked in a fierce legal battle with the colombian government over their share of the treasure a treasure that today is valued up to twenty billion dollars i. think it
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had everything the cargo manifest lists gold silver precious stones pearls all of the wealth from taxes collected over six years from colombia panama and through this is. literally wrote the book on the son who say he says there were several parties who have a legitimate claim to ownership over the treasure is the spain because it was a spanish ships peru because most of the congo was peruvian. because part of the congo was panamanian and colombia because the ship was founded on waters it's believe there are more than one thousand sunken spanish galleons off the coast of colombia alone according to you know there's an estimated three million shipwrecks all around the world still waiting to be discovered apart from the treasure the cultural value of many of these vessels is a measurable. until you and he feel an expert in maritime law says the case of the son who say could set a precedent for future disputes over sunken treasure. could all of the countries
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involved could set up an example of i started that would serve the world in similar situations. with so much at stake over the ownership of the treasure recovery efforts have been put on hold indefinitely leaving some here to wonder how much longer they'll have to wait before the treasure of the san jose surface is again. and that is our show for this week remember you can get in touch with us by tweeting me at as in secret do use the hash tag a j c t c when you do or droppers an e-mail counting the cost that dot net is our address there's more if you online that. dot com slash c.t.c. that will take you straight to our page which has individual reports and links and tie episodes for you to catch up on. so that is it for this edition of counting the cost on as i'm speaking from the whole team here thanks for joining us the news on ideas into is next.
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in the morning. this is the opportunity to understand a very different way were there before something happens and we don't leave. every
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weekly news cycle brings a series of breaking story but it wasn't a trumpton out on the boy told through the eyes of the world's journalists images matter a lot of international politics joining the listening post as we turn the cameras on the media and focus on how they report on the stories that matter the most the big third is someone from the country who guides you who leads you to this story you the bottom line tells us who wrote the post on al-jazeera. full of struggles but i'm a nobody not a person coming. up and everybody over there believe they are so full of pleasure. i leave it up more in an intimate look at life in cuba today getting a little more detail on a carry id for the gun to be a fixer i think this is my cuba on al-jazeera.

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