tv Business Briefing BBC News February 20, 2019 5:30am-5:46am GMT
this is the business briefing. i'm maryam moshiri. as south africa's government presents it's budget, will it help cure the country's economic woes or could it lead to another credit rating downgrade. and pain for the poppy business. how the australian farms that supply half of the world's legal opium are coming under pressure. in the markets, asian stocks moved forward into positive territory this wednesday as investors felt more and more confident that chinese and us trade negotiators would be able to thrash out a deal. us stocks benefitted from upbeat news from retail giant walmart. and on the markets —
in a few hours from now, south africa's finance minister tito mboweni will announce the country's budget for 2019. many will be hoping the budget reverses the nation's economic fortunes, which in recent years has seen it overtaken by nigeria, as africa's largest economy. however many challenges still remain: the country's state utility firm, eskom, is currently $31 billion in debt and remains a major headache for the government. eskom is currently struggling to supply africa's most—industrialized nation with enough power and says it may run out of funds by april. the eskom situation is being closely monitored by ratings agency moody's. many analysts are predicting they mayjoin fitch and s&p,
by downgrading south africa to ‘junk status‘ if the situation is not resolved soon. junk status means the cost of borrowing will be more expensive. however debt is not the only issue for south africa. the country is also trying to tackle a high jobless rate. last month the unemployment rate hit 27.1%, meaning 6 million potential workers were without a job. and the country's currency the rand has fallen 18% against the us dollar over the past year. this week alone it's down 6%, as international investors remain concerned over the issues at eskom. razia khan, head of economics, africa at standard chartered bank joins me now. they have few economic problems right now? at great deal resting on this urgent. usually we would be looking at revenue, spending, if revenue would be a bit data than
last forecast, would spend even be less 7 last forecast, would spend even be less? but the real issue that you highlighted is what the government intends to do about eskom. it has a lot of debt. it is the state—owned utility, it generates about 95% of the power used in south africa, it is not a choice for anyone to let it go but what options are there for working out that dead in a way that preserves south africa's own creditworthiness? and what options are there out there? a number of things has been discussed. one that eskom should shift its debt to the government itself or that the government itself or that the government paid is —— pays its service costs or government paid is —— pays its service costs or even government paid is —— pays its service costs or even it puts in place a new capital, it has an equity injection. each of those options have their pros and cons but what is clear from the rating agency sta nce what is clear from the rating agency stance is they want to see this level of support in return for something that is going to
fundamentally improve the creditworthiness of the state owned electricity company itself which means don'tjust give them money, look for something in return. raise revenue, raised tariffs, maybe cut costs. given all of this backdrop, what is life like in south africa in terms of the economy? we are optimistic actually. let's not forget south africa has seen some very important institutional reforms in the last year. what we have seen in the last year. what we have seen in the terms of markets recently is the nervousness about the accumulated levels of debt but fundamentally we do believe that the south african economy is turning around. growth has been very weak. probably around. growth has been very weak. pro ba bly less around. growth has been very weak. probably less than 1% over the course of 2018 and one way of looking at that is, well, with consumption coming back, with private investment looking a lot better, growth can only improve.
thank you very much indeed. you will be joining thank you very much indeed. you will bejoining me to review thank you very much indeed. you will be joining me to review some thank you very much indeed. you will bejoining me to review some papers later on, won't you? so stay with us. us president donald trump has reiterated the suggestion that he may not increase tariffs on chinese products on march the first, as previously threatened. the reversal comes as the two countries continue trade talks in washington this week, after last week's discussions in china ended without a deal. michelle fleury has the latest from new york. trade talks between the two largest economies are going well and that is the assessment from donald trump who says he is open to pushing back the deadline to complete negotiations. much one is not a magical date. the us has already impose tariffs of one $250 billion of chinese goods and china has retaliated by imposing duties on $110 billion worth of us products. in december, both countries agree to halt nick harris
for 90 days to allow for talks. however, the us has said it will increase tariffs rates on some chinese goods from 10% to 25% if the two sides did not reach a deal by march the first. separately, there was a report from bloomberg suggesting that as part of any deal, the us is now seeking to secure a pledge from china that it will not devalue its currency, why? most likely to prevent it from countering the impact of american tariffs. officials from the us and china are back at the negotiating table for a fresh round of talks. this time, in washington, dc. now let's brief you on some other business stories. japan's exports fell 8.4% in january from the same time last year — that's the biggest fall in more than two years. economists see the drop as a sign of slowing external demand. that helped widen the trade deficit of the world's third biggest economy.
walmart has posted strong christmas sales growth as the world's biggest retailer lured customers from shrinking chains and ramped up its online grocery business. in the us, the company's comparable sales rose 4.2%, one of the company's biggest quarterly gains in a decade. ford has said it will close a factory in brazil after more than 50 years as it stops selling heavy commercial trucks in south america. the us carmaker said it saw "no viable path to profitability" for the sao bernardo do campo plant, which employs about 2,800 people. the closure is the latest move in a bigger global restructuring. it's a secretive industry that impacts the lives of millions of people every day but few of us ever consider where painkilling drugs come from. the australian island of tasmania is responsible for growing around half of the world's legal opium supply — but as hywel griffith has been finding out, it is an industry feeling pain of its own. it's one of australia's best kept secrets, the drug supply that blossoms and blooms in the tasmanian hills. for this farmer, blossoms and blooms in the tasmanian hills. forthis farmer, growing opium poppies has helped double the
income of his business, giving him money to invest in sheep and crops. it is an intensive process. injust a few months, the seed pods from these flowers are processed into painkilling opiates drugs used around the world. a lot of people are shocked and don't realise that global reach of what we do. you point out it is in pain relief, you know, when you break your arm. when you see people in hospital drugged up you see people in hospital drugged up and you like to —— use a —— you would like to express, hey, thanks for supporting me, mate. it has grown to nearly 900 at its peak of yea rs grown to nearly 900 at its peak of years ago, farmers. injust grown to nearly 900 at its peak of years ago, farmers. in just a few decades, this has become a multi— million—dollar business that has proved profitable for this little island but like any global trade, it island but like any global trade, it is vulnerable to changes in that market on the other side of the world. america's opioid crisis has
made international headlines. in the us alone, painkilling drugs are linked to 140 overdose deaths every day. since 2014, prescription rates of there have cut and cut back year—on—year. causing demand for the drug to drop. after poppies, we clea n drug to drop. after poppies, we clean the paddock up... steve bollen had been growing poppies in his field for over 30 years but this year, he decided not to sow. he is among hundreds of farmers in tasmania to opt out. we had a 25% price drop last year. everyone is hoping for an increase in price because of the risk involved. we have been riding the ups and downs but as commodities have been going, if we do have a certain amount of ups, wejust if we do have a certain amount of ups, we just give if we do have a certain amount of ups, wejust give up, i guess. there are still plenty of farmers here looking to find profit in poppies, hoping that pay in the industry has
been feeling, will pass. that's it for the business briefing this hour — but before we go, here are the markets. in terms of asian markets, it has been a pretty good day. investors are hoping for some sort of resolution to the china— us trade spatin resolution to the china— us trade spat in the talks in washington which are of course ongoing. high level once upcoming. the dowjones was around its opening mark. coming up was around its opening mark. coming up next is the news briefing. we'll take you through ther stories making headlines in the global news media. stay with us on bbc news. the nuffield trust says young people in the uk are more likely to die from asthma or have a poor quality of life from long—term conditions compared their counterparts in other
high incomes countries. it found that nearly one in five young people are said to have a long—standing condition. but trends in smoking and alcohol consumption amongst young people have been improving in recent years, and the uk has some of the lowest rates of road traffic accidents. john owen reports. young people in the uk are making healthier lifestyle choices than ever before but compare to other high income countries such as germany, the us and australia, britain is still underperforming on several crucial measures. eskom study that compared the uk to other wealthy countries and found that britain has one of the highest rates of death from asthma amongst 10—24 —year—olds and also has worryingly high levels of obesity. a trend which is thought to be getting worse. the important finding for us was where we do less well are in the long—term conditions that people start to get in their teens and
early 20s, they are going to live with them all their lives. they are things that asthma, diabetes, lifetime conditions that will affect their outcomes when they are older. but it's not all bad news. trends in smoking in alcohol —— consumption have improved in recent years and we have improved in recent years and we have some of the lowest depths in traffic accidents when it compares to other countries. nonetheless, according to this report at least, the health and weight —— health and well—being of young people in the uk is pretty bleak. they want the best —— they want children to have the best start in life and they want people to live longer and healthier lives. coming up at 6:00 on breakfast, naga munchetty and dan walker will have all the day's news, business and sport. this is the briefing from bbc news. the latest headlines:
the british government's revoking the citizenship of a teenager who ran away to join the islamic state group in syria. in france, thousands of people have taken to the streets protesting a recent rise in anti—semitic attacks. now, it's time to look at the stories that are making the headlines in the news media across the world. and we start with a story that's been playing big here in the uk, the fate of shamima begum. the guardian reports that the teenager, who fled to syria to join the islamic state group, is to be stripped of her citizenship. a lawyer for her family says they're considering legal action. staying in britain, and there's another headache for labour leaderjeremy corbyn. the times leads on news that another of his backbench mps has quit the party. joan ryan says mr corbyn is presiding over a culture of anti—semitism. the financial times focuses on the plight facing britain's car industry after honda confirmed it was closing its plant in swindon. the japanese firm says up to 7,000 jobs are at risk.
no avoiding brexit, i'm afraid, especially on a day when theresa may returns to brussels for talks. bloomberg says the prime minister is making a last—ditch attempt to rescue her deal. finally, we take a look at french newspaper le figaro. on its front cover is a picture of fashion designer karl lagerfeld who's died following a short illness. the paper describes him as the ‘last emperor'. with me is razia khan from standard chartered. let's start with the guardian story, and basically we are talking about shamima begum. her citizenship is to be revoked by the uk government. there is a feeling among some that this is not fair, others that it is the right move. it has certainly been the subject of a great deal of debate, some making the point that citizenship isn't necessarily something that can be taken away, what are the grounds for
this, it raises all sorts of issues around belonging, being of dual heritage, how meaningful is citizenship? is it more meaningful for some than others? others would of course take the view, look at what she got herself involved in. surely the government has to take a tough stance on that. the interesting thing is to make someone the interesting thing is to make someone stateless is not illegal. however, i think the home secretary had advice that her mother have a bangladeshi passport and therefore to have access to bangladeshi nationality. there is still some degree of controversy around exactly what conditions have two apply at for a full citizenship to be considered as being a dual citizen, for example. that somehow impact one's writes in a way that might not have been thought about before? why the specifics of the case have really focused on the situation of these young woman. nonetheless it raises a whole host of water issues. you have