Transcripts For ALJAZ Counting The Cost 2020 Ep 9 20240713

Coverage night on aljazeera. Hello im come on santa maria this is counting the cost on aljazeera your weekly look at the world of business and economics this week coronavirus trade war 2 fears the pandemic we examine the impact on china its neighbors and the world including the possibility of it being as bad as the financial crisis a decade ago and our Regional Focus is on cambodia an economy like many that is connected through trade with the worlds 2nd biggest economy now faces the very real prospect of jobs loss plus cant pay 1. 00 pay continue as new president takes a tough stance on the countrys unsustainable debt. It was a bruising year for china a trade war with the United States left its economy expanding at the slowest pace in 30 years and economists estimate 4000000 jobs may have been lost by the way that was 29 tame this year is already being defined by coronavirus its killed thousands infected thousands more and has put the brakes on chinas economy in a very sudden manna here the numbers economists polled by reuters expect chinas growth rate to slump to 4 and a half percent in the 1st quarter from 6 percent in the previous quarter that would be the slowest pace since the financial crisis. With much of the country in lockdown the virus could affect up to 42 percent of chinas economy according to Standard Chartered Companies May struggle to make payments on loans leading to a rise in what is called non performing loans Chinese Airlines have been forced to ground their planes they are expected to lose 12800000000. 00 in revenue globally the Airline Industry is set to lose 29000000000. 00 according to i also of the International Air Transportation Association and the impact of covert 19 as coronavirus is officially known is being felt region they remember china is such an important cog in the way we trade it represents a a 3rd of global trade and again according to Standard Chartered it is these nations which a shaded in dark through the Asia Pacific Region which are going to be the most effective were going to 0 in on cambodia where the economy is strongly dependent on beijing and the government is now warning of job losses wind hey has a report from phnom penh. The skyline in cambodias capital phnom penh has changed dramatically in recent years buildings went up rapidly as the money flowed in mainly from china cambodias largest investor but chinas economy is grinding to a halt making for Uncertain Times for many including the 200000. 00 cambodians employed in the construction sector oh. Im so worried if i lose my job i dont know where i would find another one i also owe money to the bank so if i lose my job for a few days it will be tough for me to pay the loan theres even more uncertainty for those in the Garment Industry which is facing setbacks on 2. 00 fronts the European Union will place tariffs on some footwear and clothing it imports from cambodia because of a deterioration in democracy and workers rights the industry employs almost 800000 people and relies on Chinese Investment and Raw Materials with many suppliers in china closing down because of the spread of coronavirus cambodias government says some of its factories will suspend operations for as long as 3 months as many as 90000 people may lose their jobs temporarily in recent years china has become more influential and more invested in Southeast Asia from tourism to construction to manufacturing but even before the corona Virus Outbreak as the chinese economy was slowing governments in this region were beginning to wonder if they were becoming too reliant on china singapores Prime Minister lee hsien loong says because china is a much bigger factor in the region than it used to be his countrys economy could dip into recession this year as visitor numbers drop by as much as 30 percent thailands economy was already stuttering and may also be nearing recession with growth heading for less than 2 percent and vietnams Manufacturing Sector depends on a well oiled supply chain from china in january exports fell more than 17 percent but some experts believe the threat extends. Well beyond this region all countries in the world depends on china production especially in the United States and europe they import a lot of from from from china and when china have problem they will have inflation there the same thing so that is not for cambodia and for. Asia but for the world the wealthy may be able to ride it out but it is perhaps tougher for those living on the edge of poverty who could easily slip backwards in the event of a regional or Global Economic shock in cambodia there are millions in that category and as corona virus spreads in china and beyond the economic contagion is also worsening when hey Al Jazeera Phnom Penh with us now on skype from hong kong is ruben mondo john hes a professor for asian initiatives at the i. E. Business school at the university of nevada and its great to see you again on counting the cost reuben our reporter in cambodia used the phrase too dependent on china and i wonder if thats what coronavirus is really highlighting at the moment not just for cambodia not just for the region the whole world too dependent on china well us you know from 15 to 20 years ago china already dubbed as the factory of the world so then you have seen now is that the supply chain and the sourcing being interrupted in other words in europe us especially. Clusters of Economic Activity they were beholden to china not to mention asia but the core on a virus distinguishes big surprise years small suppliers in terms of china or europe and us were conceived of china as a big supplier for asia and special become bored is a small fry or is a small try for china so there are those less necessary because theyre the volume in terms of not about. Watch as you know this. So once you have. A particular industry. Industries thats going to be the effect 1st how long this. Lasts. And secondly which industries because Manufacturing Industries and the more they tend to be heavier industries the start would be longer once you have shot up machinery to restart it will take a longer time not only in terms of manpower. Ok and so lets put lets put some values on it then as far as the chinese economy goes. Only growing at around 6 percent forecast to maybe go down to 4 and a half percent i always point out that those are rates which other countries would probably be quite happy with certainly 6 percent most countries would be thrilled with how long can china survive at 6 percent or 4 and a half percent given as you pointed out a couple of decades ago it was 15 to 20 percent is that you know you have to remember 2 things one thing you said theres always a National Narrative of china meaning they want to grow at this rate it must somehow be near that rate. So john as a problem greg youre going to be an integrity of statistics who the premier of china i mean. You really has to figure out the growth rate you would rather go to how much out well it is produced by the transportation railroads. And that stuff so yes to report this that the states that is given so thats thats the 1st problem so the integrity of the statistics and then secondly is really how how far the damage will be ok some people say that from 6 point one they had in 2019 that these may be like 5. 5 or even lower defense but you know it should be close to 6 i think over all it will be. One to 2 percent of g. D. P. At the moment the calculation is about 200000000000. 00 per month you are so its how much country can remove from her so if if this ends in april then i think they can reach 5 to 5. 50 through the whole year ok but if this goes further i think theyll be in danger of going so lets talk about measures that can and in fact are being taken hong kong 15000000000. 00 stimulus i think it was which the headline was i think 1200. 00 to reach that is in per head i mean is that helpful in the short term does that does that put a sticking plaster over for a little bit. Its of course and youre saying would be a bit of a help but. Its really a course method because really what the hell the we need kind of comes from this kind of source so our uncle is using its service giving its grammar meant rest of the rest of the 1000 200. 00 us dollars so its actually doesnt count much after all many of the. Rest of us dont live in hong kong of course so theyre outside it. So the appellation of that is maybe 20 percent of that is. Really going to be the right targets you know made the point already written sorry to interrupt you youve made the point already about how long this crisis goes on will define the ultimate effect 2nd ominously for everyone not just china. 10 years ago more than 10 years ago the whole world was in a financial mess Global Financial crisis there are some suggestions that the impact of this could be in the realms of that eventually do you agree with that if the crisis were to go on for an extended period of time that we could be looking at a financial crisis era problem no i think the one of the crisis of 2000 and. 3 for the in a funny america for you mark the financial crisis around the world i think the effect of this one is going to be harder for us because the resource of the problem is is here. Is so the source of the problem for regatta imported problem but. We are in the hot seat so therefore the effect of this will be harder harder on os. So not just hong kong also. Just being a progressive a progressive our dependence on china. China using its economic power so. The effect will be more damaging for us extraordinary times on the ribbon monday joining us from hong kong thank you so much we do appreciate it my pleasure. Tell me if you feel weve been here before argentinas economy expected to contract for the 3rd Consecutive Year inflation running at more than 50 percent and the country in talks with the i. M. F. To avoid a default on its debt yet we have seen this movie before since the late ninetys fiftys in fact the i. M. F. Provided loans and bailouts to argentina more than 20 times this time though its funny admitted what everyone else is saying that argentinas debt is unsustainable it has debts of more than 320000000000 dollars 44000000000 dollars of which is owed to the i. M. F. And more than 10000000000. 00 which formed part of the record 56000000000 dollars bailout back in 28 tain came from private investors the i. M. F. Now saying theyll have to take a haircut in other words losses on their holdings remember the more debt you have the more interest you pay the less money you have to spend on Crucial Services there seems to be however a determination in buenos aires that they wont accept any new austerity measures in fact the new president definitely is has instead frozen prices and high salaries tourism board has a report now from buenos aires. Was hoping his engine would be readjusted this year. I didnt tina has one of the highest inflation rates in the world and he was disappointed when he found out that despite being paid on 240. 00 a month he would not benefit from the need his government incentives because of a lack of my. Whenever i see my wife owns a minimum pension and she got a small increase but somehow im considered to be rich with this out of make and can barely survive if i were rich i wouldnt be in this clinic id be some they were they treat me decently i had to come to the hospital. His source is not the only pensioner whos struggling the stace argentina is coping with recession inflation growing poverty millions of dollars in debt. For many here it brings back memories of 2001 economic collapse when argentina was isolated from the International Markets after it failed to pay debt to. The administration of president of the Financial Base and the i. M. F. Seemed to agree on one issue that debt payments are unsustainable argentinas new government says that it needs to restructure debt with the i. M. F. And private phone coders in order to focus on growth to get out of the current economic crisis negotiations are well underway but its not clear yet whether this country will be able to prevent the forthcoming sovereign debt once again since taking Office President for members has increased taxes and strengthened currency controls in an attempt to prevent the loss of much needed u. S. Dollars i think but this one discovers a med im not sure if its going to achieve it but i think what theyre thinking that even though theyre not saying it the ending at some sort of competent change rate that helps and keep the external accounts and balance. Debt restructuring was howard stern at least from the financial point of he refused the interest burden for the next year or 2 and with this tried to spread the message. Argentina has had a long history with the i. M. F. And foreign creditors and there are many especially my governing coalition who say payments should be suspended and of the government of former president. Argentina took on iran 100000000000. 00 in foreign debt. That would be the that people will say the debt should be investigated likely to a decided to go to the i. M. F. Billions of dollars to mark creep because donald trump gave his full support knowing the argentina couldnt pay it they did it so much would be reelected that did not happen the i. M. F. Violated its own regulations and now they want to tell us what we should do. For amanda says hes priority is to help societys most vulnerable as he struggles with point creditors but hes policies are not reaching everyone in the same way many fear another default could make the situation even worse with us now from london Richard Siegel he is an emerging markets senior credit and list at Manulife Asset Management and its great to have you with us here i mean it seems that the i. M. F. Has now publicly said what everyone else was that this just cant go on with argentina if this cant go on what can whats the next step the situation argentina has been very stressed for a number of years it predated the latest dilemma between bondholders and the government the i. M. F. Is acknowledging what weve understood for a long time meaning that the public debt is unsustainable and it needs to be written down quite substantially but the i. M. F. Itself is also a major creditor argentina owes it about 43000000000. 00 so in a sense a 3 way negotiation has to happen between the government the i. M. F. And bondholders and this is likely to commence in earnest in the 1st part of next month and what chance of any success there because the current argentinean leadership doesnt really seem to be in a mood to be negotiating certainly doesnt want to go down the austerity track. It will have to compromise eventually all parties will have to compromise the i. M. F. Is perhaps in the toughest position of all because it was full speed behind the last administration bondholders acknowledge they were too generous in lending to argentina during the last one astray ssion but the i. M. F. Announced a 50000000000 packaging june 2018 so some might say that is part of the problem as well as part of the solution but the i. M. F. Has in its benefit a new Senior Leadership so it is able to turn the page it is a question of seeing how the numbers work and managing the negotiation process im glad you made that point about the i. M. F. In one sense actually being part of the problem because it does always interest me that i. M. F. Loans is seen as a necessity you know a bailout is needed to avoid defaults but they still loans they still need to be paid back and they can just end up exacerbating the problem sometimes. It doesnt this happened during argentinas last step crisis meaning that the i. M. F. Was such a large creditor x. And european governments were also very large creditors to greece those debts couldnt be written off the i. M. F. Cant by statute write off debts owed by middle and upper Income Countries which means that everyone else has to pay a much larger burden but it has to work this way because the i. M. F. Is the lender of last resort and if this system breaks down then that will cause a lot of moral hazard and a lot less certainty for countries that do get into crisis situations lets talk about the private buy and bondholders you mentioned them before what is the likelihood of them taking a head count as it were you know in in the province of buenos aires they did manage to avoid a default. And the the bond holders that by fidels the hell bent if they got paid in full the situation with the provinces in wealthier municipalities such as the city of necessaries is much different of course theyre also financially strained as well because weaker growth means lower tax revenues but their debt levels are much lower by contrast argentina had very open access to the International Bond markets and most of this was in dollars whereas their revenues are mostly and a local currency so when the local currency devalued its ability to repay in dollars which was much lower bondholders for the most part recognize they were overgenerous and therefore large haircuts have been discounted since last august. Quite famously arjen time government bonds fell by a nearly unprecedented 30 Percentage Points in 3 days the differences of opinion between bond holders and the government led by economy minister has been are not that substantial also argentinas waits in the emerging market indexes is only one percent so the mount of relative pain that bond holders will have to accept is fairly low so i wouldnt overdramatize the likely difference of opinion and what about the pain for the people in argentina you know weve been talking here about about i. M. F. About governments about bondholders as i was like to bring it back to the everyday people and what they are going through this is the big problem actually and this was the reason that the election shock occurred or i what i think many analysts missed the poverty rate was quite high and 2017 it was 27 percent but because the economic gradualism policies failed to turn the economy around by the end of last year reached 40 percent and this has to be the 1st priority of the government when it stabilizes the Financial System of the economy to address that and not worry so much about any other particular matter indicators and that regard i think the argentine government has the right emphasis whether it can turn the economy around or not is another question which is single talking argentina with us on counting the costs this week thank you so much you do appreciate it ok finally counting the cost means more than financial implications it is the cost to people their lives and their livelihoods. Case in point of bangladesh where residents in the capital of been living with some of the worst air quality in the world officials are now warning a Serious Health affects but the thing is its not just the air thats polluted the main river which used to be dark source of Drinking Water is now toxic to his parents myth reporting from dhaka. That taking a bath in a poisonous soup of decades of untreated waste water from tanneries battery and pharmaceutical factories and other industries on which bangladeshis economy relies. Were fully aware of how polluted it is but were both men and when were around here this is where we have to wash now the government is finally making some progress against the worst polluters with a High Court Order forcing the closure of 231. 00 illegal tanneries but the pollution continues licensed tanneries as opposed to pump their waste to this new Treatment Plant but its not yet fully equipped to operate at capacity. So every day thousands of liters go straight into the river. Because the court has ordered us to make sure that the Treatment Plant is performing up to mid level so were going to take over operations from the chinese who are running it not in the government shares the same attitude and mindset to tackle the pollution problems 64. 00 freshwater fish species in bangladesh are under threat because of pollution 9 a critically endangered according to government figures. Used to provide Drinking Water now its toxic and black and cracking down on polluting industries is part of the governments ambitious plan to clean up the rivers. Here a market built on illegally reclaimed land is being ripped down all this area up to the road will be dug out again and the river returned to its original with. The money. There are a lot of influential people involved in land grabbing even members of parliament and big industrialists who own many of these industries are polluters but at the same time Public Awareness is growing in regard to the environment and pollution and a strong desire to save these rivers. For years the government has turned a blind eye to the garment related industries which contribute 20 percent of the countrys g. D. P. Activists hope this court ruling will set a precedent for other rivers 38 of which they say a dying due to bridle pollution and land grabbing. Bernard smith aljazeera daca and that is it for this week you can get in touch with us though by tweet me at come all i need to use the hash tag a. J. C. To see if you dont just drop us an email counting the cost of aljazeera dot net is the address and theres plenty more for you at this address as well al jazeera dot com slash c. T. Say thats our page which has individual reports links into entire episodes for you to catch up. But that is it for this edition of counting the cost im kemal santamaria from the whole team thanks for joining us the news on aljazeera is next. Started as a modest man. Carry a soldier whod never imagined he might one day become president of egypt. He had an ambitious wife. And son he became an algae and was imprisoned for the killing of protesters. The story of the rise and fall of Hosni Mubarak the family short one. Chilling listening post as we turn the cameras on the media india has more than 424 Hour Television news channel. And focus on how they report on the stories that matter. The states misleads the public the media reflects the. Climate change. Shows a dark believe they have anything to apologize theyre listening post on aljazeera. This is aljazeera. 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