Transcripts For ALJAZ Counting The Cost 2019 Ep 50 20240713

A 2nd term in power in 2020 impeachment inquiries a scam join us for the latest developments on al jazeera. Hello im Adrian Finnegan this is counting the cost on aljazeera a weekly look at the world of business and economics this week an i. M. F. Loan tax cuts for big business and a sterile city for the poorest the perfect cocktail the street protests we speak to the Vice President of resource rich acquittal. A cash crunch in kenya east africas largest economy cant pay its bills will it need to ask the i. M. F. For help and the king of streaming is about to face a multibillion dollar onslaught from the likes of apple and disney will find out at netflix can hold on to its number one spot. Weeks of violent street process were brought to a halt in ecuador in mid october after the president walked back on a stare as he measures that in marino withdrew the International Monetary fund backed agreement to increase fuel costs that decision had paralyzed the economy as it hit the poorest and minority indigenous population the most quito had the i. M. F. For a 4200000000. 00 loan as it struggled to cut its budget deficits and debt the government decided to cut fuel subsidies which cost the government 1300000000. 00 a year at the same time as receiving the loan big business is one of concession wiping out past taxes according to the former economy minister Wilma Salgado which raises the question why would you take a loan to help corporations but cut subsidies to the poorest. Im delighted to say that we have the Vice President of ecuador here to help us understand just whats happening in that country right at the moment also someone holds a is also an economist welcome to counting the cost its good to have you with us lets start with the issue of fuel subsidies discussing fuel subsidies the right thing to do but of course i mean anyone who says the opposite is lying in i told all the time in ecuador why fuel subsidies specifically as we have the nec well 1st of all they only benefit the ones who have the most those who are the ones who have cars who consume the most quantity of fuel its just like that we just had a story from the International Development bank ratifying that 75 percent of the people who use who benefits from fuel subsidies are people who dont need them and that have nothing and subsidies when theyre necessary and they go to the people who needs them but in the case of equal and fuel subsidies they just dont it has cost of the country more then over g. D. P. If you put it together for the last what 45 years and it has no economic sense no social sense in of course no environmental sense so something that makes no sense why would you keep it you say that they were that they were needed why why then were there protests when they were abolished so we had the 1st step we took the 1st hit last year we had no protests in this year you have to combine different factors and we have found that out when we manage to handle things because if you see the region not only the region if you see any other countries many other countries mostly in europe. They also have protests and the problem is not how many people are protesting the problem is how they behave thats whats changing in the world if you see the levels of violence the protests are reaching thats something to worry about in the case of ecuador we had 11 days of protests. And at the peak we had only 150000 people protesting its a 17000000 people country right so we had 150000 people protesting in only 7 of the 24 provinces so it wasnt if you count the if you make the numbers wasnt such a huge thing it was mostly concentrated on one very important demographic a nickel which is the indigenous population we have 7 percent of indias population and they were and they were protesting mostly them and it does it didnt come from from the urban sectorial came from the rule rally from the from the fields from the countryside and from the highlands that we are we are we are approaching those issues were bringing solutions we used managed to reduce this year 5 percent rural poverty inequality a big number thats a big resoled but still there is so much too and then you have an additional matter in the region specifically in 4 countries of the region and thats venezuelan migration in 2 years just in ecuador 500000 venezuelans have created a difficult social environment and when i mean difficult i mean there is difficulties with employment there is difficulties with opportunities because its 500000 people that we were counting on and nothing against venezuelans these are good people there are trying to find a future where all migrants look at my face i mean im migration personally fired you know so. But its tough for a country that is also struggling with its with its economy were doing our best to talk about the indigenous population the people who are at the core of the of the protests in ecuador. Why did they feel that theyre not economically safe or that they dont have economic prospects and under under your government other are they cannot make a save you know in general they feel like the rural sector in sector area the rural area in which the main activities have recalled they feel that the country has lacked and i recalled policy that helps them they feel that the country has not in our government i mean in the last 2030 years they feel like the country has lacked. Development policy all to help them out and i think most times theyre right but were working on it but still there is so much to you know cation in health specifically in the rural areas again when i go into the communities and i ask him personally i do it myself i go visit 678 communities say when im back in thats how we thats how we manage to control protests. And i asked them why are you protesting they say. They never mention fuel subsidies they say this is because i heard that you are giving subsidies to as well and. Thats not true we would love to leave subsidies to everyone who needs it but we have a close a tight budget we cannot give subsidies to everyone so we have to select people properly but the most important question i asked them is has anyone here in 45 years of fuel subsidies in ecuador has this policy helped anyone here go out of poverty no one raises their hand because this is a failed policy so what we wanted to and what we what we proposed is to take fuel subsidies are 90 percent of our budget deficit right if eliminate that where all said so what what what we propose is to direct at least a 3rd of those of those that money of the subsidies money. To develop them projects and to direct monetary transfers right that was a proposal and when i explained it to them they say why didnt you do it that way didnt you do that and i say because you didnt lead us ok but what why would you forgive corporate taxes which which if if you. Hadnt done you could have covered. Much of your budget deficit in what it is you wouldnt have you would and this is right you tell me would you not have needed an i. M. F. Loan if youd if youd not forgiven corporate taxes we havent for you in corporate what we did is we passed a law one and a half years ago. A law that has been passed in this similar way i mean an article in the lord we pass almost every 4 or 5 years in ecuador and thats also one of the annoyer of the fake news right we had did mostly from Small Businesses and in persons people like not court not corporations we had that in texas and in social welfare because you have to pay social Services Also an amount every month and we have a Development Bank for agriculture for Small Farmers right so people who owed money to those 3. 00 institutions could pay the amount the capital amount and you will get an exam or exoneration on the fines and some of the interest and many people need that to come out of a problem because if you if you lent if you got a loan for 5000. 00 and lets say right. And it became 10000. 00 because you couldnt pay on time right you will if you couldnt pay 5000. 00 you wont be able to pay 10000. 00 so we go back 285000 refinance that so 95 percent of the people who benefit from that decision were small and micro companies the smallest right the ones that we need to support and then 5 percent was large corporations but again it only helped us to collect taxes on time we didnt within. Let them go of their of the obligation to pay taxes what they what we did is we eliminated the penalties and then we collected the money money that serves exactly people who needs government attendance for its own Health Insurance or how do you plan now to bridge that the budget deficit so we have working as you say we have been working with the i. M. F. With the world bank we have a Financial Program in i mean we dont go to the i may have 4 to the world bank because were crazy we believe in we see a possibility there to find loans in better terms instead of borrowing at 10 or 12 percent Interest Rate 5 years 8 years were getting were into a program for 10000000000. 00 at 4 percent Interest Rate 30 years term so of course thats of their option and all they want is that we. We bring order into equality and finance and that we have to do with or without the i. M. F. It will raise a dollar as the economy you cannot have deficits up to 8 percent thats what pressing more than a received 8 percent fiscal deficit right so they were around 3 percent we have done our job without the i. M. F. Because thats what we have to do we know its not popular right no one no one wins an election cutting costs right but thats a problem area for years governments wants to spare to spend more than what they have and in the end what you have is a huge that in no well to bring all other what about the 80 would would it would have been better perhaps to raise v. A. D. To cover some of those costs which is i think ok so its also its also an unpopular decision that has to pass through congress we have passed a law in congress. A law that will allow us to collect taxes there are mostly green taxes and healthy taxes right 500000000. 00 that we need for next year and for the for the whole fiscal plan. But again if you have something that is so wrong because it is completely wrong like fuel subsidies listen this is crazy the same Indigenous Leaders that were leaving the protests in ecuador were just last week at the top 25. 00 in mothery protesting against fossil fuels so who understand what is so if you have something that is so wrong that costs all the 33000000000. 00 a year that has cost it in the last 45 years or 100000000000. 00 you have to fix whats wrong 1st and so we have to we want to start with whats whats wrong mr Vice President its been an honor to speak to you and counting the cost many thanks indeed for being with the north thank you for the interior pleasure to hear. That kenya is in the midst of a cash crunch the International Monetary fund the lender of last resort may light up a loan to make sure that east africas biggest economy doesnt succumb to an economic shock so whats gone wrong or president Uhuru Kenyatta has promised to create 1000000. 00 jobs a year and to do that hes been increasing spending on Health Care Manufacturing agriculture and housing. Now the country has increased its debt to 62 percent of Gross Domestic Product in order to do that which means that its spending a 3rd of its revenue on servicing debt and worse still the loans arent cheap it went to the markets to raise some 7000000000. 00 euros that means theres less money to pay contractors forcing the government to increase the debt limit to 87000000000. 00 ahead of elections in 2 years there seems to be little political will to downsize the Civil Service which eats another 3rd of the countrys tax revenue it appears the government was oblivious to the fact that it breached its legal dept ceiling of 50 percent of g. D. P. In 2015 and 16 the infringement only came to light after a new team took over at the treasury after the previous finance minister was charged with graph related offenses and it couldnt come at a worse time bridges and roads have been destroyed by flooding lives of livestock have been lost and this expected to be more flooding the Economic Cost of that is yet to be determined. Lets get more on the situation with lisa strobel shes a senior economist Subsaharan Africa economics and country risk at i. H. S. Market good to have you with us lisa this cash crunch has meant that companies have been paid jobs have been lost what sort of damage is this doing to the economy perhaps have to look at the latest Business Sentiment readings that have indicated that. Employment levels have gone up slightly in the month of november however the latest Business Sentiment readings have also indicated that firms reported to be more cautious about Economic Activity in the next year with that said and also the consideration that Global Market economics fundamentals are expected to be less favorable next year we expect to see a slowdown for kenyas economy currently i just market forecasts a group of 5. 7 percent which is a slowdown from 6. 3 percent last year and 5. 8 percent this year. Perhaps on a more bright a note we do expect to see. Private borrowing to increase in the near term thats thanks to the latest Interest Rate cut by the central bank of not 15 percent. As well as the removal of the in 2016 introduced Interest Rate cap that should somewhat offset the current cash flow problems we have to also keep in mind that besides the job losses weve seen the cash crunch has also cost sticky not performing loans in the Banking Sector so with the removal of the Interest Rate cap we do expect to see some improvement on this front that will ultimately hopefully support a good demond in the new town the president s plan to solve this is laudable but could a have been achieved without resorting to Something Like 7000000000 euros of expensive loans from capital markets. Yes indeed we have seen kenya tapping into the International Markets around 3 times of the last 5 years. Unfortunately given the downbeat performance of revenues this little room to really include a non external financing to kenya us major a large projects involving infrastructure and Economic Development we have seen there the tax to g. D. P. Ratio last year has been in decline by not want one Percentage Points nontax revenue has shown a even weaker performance. So the outlook does not look too good for revenues in the coming year is one way of perhaps dealing with the Current Situation and something what we have seen. In the east africa region is that governments in order to address their Fiscal Consolidation is to reproach or see their investment spending away from larch greenfield projects more into refinancing the already existing Infrastructure Network but typically those investments that have a higher return on investment theres been a lot of debate about about the Infrastructure Projects particularly the ones that the china is is ultimately building in that kenya is paying for i mean thats been a significant factor in this this cash crunch. Yes indeed it has if we look alone into the distribution of loans from china to africa over the term 2010 to 2017 we see that kenya is the 1st largest recipient following angola and its european of chinese loans. Export import back are shina is the largest Lending Institution on the continent and key partner for kenya financing its major project the. Standard garc railway that has commenced operations in 2700. 00 taking passengers in last year also cargo and fried the overall loan stood at a 1600000000. 00 u. S. Dollars in commercial and concessional terms to be paid back in 15 years the kenyan authorities have expressed that the current numbers of passengers and flight transport will be not sufficient enough to generate the quiet revenue that is required for the repayment of the loan ultimately concerns were a race that some alternative the only way to achieve to get these revenues done for the repayment is by increasing tax but that again has been a post by the opposition. Could sort of address you could the debt have been restructured zaps with with loans from the. World bank and the african Development Bank yes and ultimately its necessary for kenya to to do a Restructuring Plan in order to address the current cashflow crisis we have seen since 1990 s. Restructuring operations taking place 3 times. That have helped the economy to manage its step float alongside the governments need. On the domestic market to refinance expenditure. The i. M. F. Has expressed last year concern that that costs are reaching unsustainable levels hence has raised their debt distress rate risk from a low 2. 00 to moderate lisa really good to talk to you and comes with a cost many thanks indeed for being with us my pleasure. Now called cutting peak t. V. Of the rise of socalled over the top services or streaming to you and me are we witnessing the end of television as we know it its estimated that 63 percent of people watch their favorite shows online and more content Companies Like disney h. B. O. Peacock are launching their own services now take a look at this the Industry Leader netflix or 13200000 people watch Adrian Finnegan<\/a> this is counting the cost on aljazeera a weekly look at the world of business and economics this week an i. M. F. Loan tax cuts for big business and a sterile city for the poorest the perfect cocktail the street protests we speak to the Vice President<\/a> of resource rich acquittal. A cash crunch in kenya east africas largest economy cant pay its bills will it need to ask the i. M. F. For help and the king of streaming is about to face a multibillion dollar onslaught from the likes of apple and disney will find out at netflix can hold on to its number one spot. Weeks of violent street process were brought to a halt in ecuador in mid october after the president walked back on a stare as he measures that in marino withdrew the International Monetary<\/a> fund backed agreement to increase fuel costs that decision had paralyzed the economy as it hit the poorest and minority indigenous population the most quito had the i. M. F. For a 4200000000. 00 loan as it struggled to cut its budget deficits and debt the government decided to cut fuel subsidies which cost the government 1300000000. 00 a year at the same time as receiving the loan big business is one of concession wiping out past taxes according to the former economy minister Wilma Salgado<\/a> which raises the question why would you take a loan to help corporations but cut subsidies to the poorest. Im delighted to say that we have the Vice President<\/a> of ecuador here to help us understand just whats happening in that country right at the moment also someone holds a is also an economist welcome to counting the cost its good to have you with us lets start with the issue of fuel subsidies discussing fuel subsidies the right thing to do but of course i mean anyone who says the opposite is lying in i told all the time in ecuador why fuel subsidies specifically as we have the nec well 1st of all they only benefit the ones who have the most those who are the ones who have cars who consume the most quantity of fuel its just like that we just had a story from the International Development<\/a> bank ratifying that 75 percent of the people who use who benefits from fuel subsidies are people who dont need them and that have nothing and subsidies when theyre necessary and they go to the people who needs them but in the case of equal and fuel subsidies they just dont it has cost of the country more then over g. D. P. If you put it together for the last what 45 years and it has no economic sense no social sense in of course no environmental sense so something that makes no sense why would you keep it you say that they were that they were needed why why then were there protests when they were abolished so we had the 1st step we took the 1st hit last year we had no protests in this year you have to combine different factors and we have found that out when we manage to handle things because if you see the region not only the region if you see any other countries many other countries mostly in europe. They also have protests and the problem is not how many people are protesting the problem is how they behave thats whats changing in the world if you see the levels of violence the protests are reaching thats something to worry about in the case of ecuador we had 11 days of protests. And at the peak we had only 150000 people protesting its a 17000000 people country right so we had 150000 people protesting in only 7 of the 24 provinces so it wasnt if you count the if you make the numbers wasnt such a huge thing it was mostly concentrated on one very important demographic a nickel which is the indigenous population we have 7 percent of indias population and they were and they were protesting mostly them and it does it didnt come from from the urban sectorial came from the rule rally from the from the fields from the countryside and from the highlands that we are we are we are approaching those issues were bringing solutions we used managed to reduce this year 5 percent rural poverty inequality a big number thats a big resoled but still there is so much too and then you have an additional matter in the region specifically in 4 countries of the region and thats venezuelan migration in 2 years just in ecuador 500000 venezuelans have created a difficult social environment and when i mean difficult i mean there is difficulties with employment there is difficulties with opportunities because its 500000 people that we were counting on and nothing against venezuelans these are good people there are trying to find a future where all migrants look at my face i mean im migration personally fired you know so. But its tough for a country that is also struggling with its with its economy were doing our best to talk about the indigenous population the people who are at the core of the of the protests in ecuador. Why did they feel that theyre not economically safe or that they dont have economic prospects and under under your government other are they cannot make a save you know in general they feel like the rural sector in sector area the rural area in which the main activities have recalled they feel that the country has lacked and i recalled policy that helps them they feel that the country has not in our government i mean in the last 2030 years they feel like the country has lacked. Development policy all to help them out and i think most times theyre right but were working on it but still there is so much to you know cation in health specifically in the rural areas again when i go into the communities and i ask him personally i do it myself i go visit 678 communities say when im back in thats how we thats how we manage to control protests. And i asked them why are you protesting they say. They never mention fuel subsidies they say this is because i heard that you are giving subsidies to as well and. Thats not true we would love to leave subsidies to everyone who needs it but we have a close a tight budget we cannot give subsidies to everyone so we have to select people properly but the most important question i asked them is has anyone here in 45 years of fuel subsidies in ecuador has this policy helped anyone here go out of poverty no one raises their hand because this is a failed policy so what we wanted to and what we what we proposed is to take fuel subsidies are 90 percent of our budget deficit right if eliminate that where all said so what what what we propose is to direct at least a 3rd of those of those that money of the subsidies money. To develop them projects and to direct monetary transfers right that was a proposal and when i explained it to them they say why didnt you do it that way didnt you do that and i say because you didnt lead us ok but what why would you forgive corporate taxes which which if if you. Hadnt done you could have covered. Much of your budget deficit in what it is you wouldnt have you would and this is right you tell me would you not have needed an i. M. F. Loan if youd if youd not forgiven corporate taxes we havent for you in corporate what we did is we passed a law one and a half years ago. A law that has been passed in this similar way i mean an article in the lord we pass almost every 4 or 5 years in ecuador and thats also one of the annoyer of the fake news right we had did mostly from Small Businesses<\/a> and in persons people like not court not corporations we had that in texas and in social welfare because you have to pay social Services Also<\/a> an amount every month and we have a Development Bank<\/a> for agriculture for Small Farmers<\/a> right so people who owed money to those 3. 00 institutions could pay the amount the capital amount and you will get an exam or exoneration on the fines and some of the interest and many people need that to come out of a problem because if you if you lent if you got a loan for 5000. 00 and lets say right. And it became 10000. 00 because you couldnt pay on time right you will if you couldnt pay 5000. 00 you wont be able to pay 10000. 00 so we go back 285000 refinance that so 95 percent of the people who benefit from that decision were small and micro companies the smallest right the ones that we need to support and then 5 percent was large corporations but again it only helped us to collect taxes on time we didnt within. Let them go of their of the obligation to pay taxes what they what we did is we eliminated the penalties and then we collected the money money that serves exactly people who needs government attendance for its own Health Insurance<\/a> or how do you plan now to bridge that the budget deficit so we have working as you say we have been working with the i. M. F. With the world bank we have a Financial Program<\/a> in i mean we dont go to the i may have 4 to the world bank because were crazy we believe in we see a possibility there to find loans in better terms instead of borrowing at 10 or 12 percent Interest Rate<\/a> 5 years 8 years were getting were into a program for 10000000000. 00 at 4 percent Interest Rate<\/a> 30 years term so of course thats of their option and all they want is that we. We bring order into equality and finance and that we have to do with or without the i. M. F. It will raise a dollar as the economy you cannot have deficits up to 8 percent thats what pressing more than a received 8 percent fiscal deficit right so they were around 3 percent we have done our job without the i. M. F. Because thats what we have to do we know its not popular right no one no one wins an election cutting costs right but thats a problem area for years governments wants to spare to spend more than what they have and in the end what you have is a huge that in no well to bring all other what about the 80 would would it would have been better perhaps to raise v. A. D. To cover some of those costs which is i think ok so its also its also an unpopular decision that has to pass through congress we have passed a law in congress. A law that will allow us to collect taxes there are mostly green taxes and healthy taxes right 500000000. 00 that we need for next year and for the for the whole fiscal plan. But again if you have something that is so wrong because it is completely wrong like fuel subsidies listen this is crazy the same Indigenous Leaders<\/a> that were leaving the protests in ecuador were just last week at the top 25. 00 in mothery protesting against fossil fuels so who understand what is so if you have something that is so wrong that costs all the 33000000000. 00 a year that has cost it in the last 45 years or 100000000000. 00 you have to fix whats wrong 1st and so we have to we want to start with whats whats wrong mr Vice President<\/a> its been an honor to speak to you and counting the cost many thanks indeed for being with the north thank you for the interior pleasure to hear. That kenya is in the midst of a cash crunch the International Monetary<\/a> fund the lender of last resort may light up a loan to make sure that east africas biggest economy doesnt succumb to an economic shock so whats gone wrong or president Uhuru Kenyatta<\/a> has promised to create 1000000. 00 jobs a year and to do that hes been increasing spending on Health Care Manufacturing<\/a> agriculture and housing. Now the country has increased its debt to 62 percent of Gross Domestic Product<\/a> in order to do that which means that its spending a 3rd of its revenue on servicing debt and worse still the loans arent cheap it went to the markets to raise some 7000000000. 00 euros that means theres less money to pay contractors forcing the government to increase the debt limit to 87000000000. 00 ahead of elections in 2 years there seems to be little political will to downsize the Civil Service<\/a> which eats another 3rd of the countrys tax revenue it appears the government was oblivious to the fact that it breached its legal dept ceiling of 50 percent of g. D. P. In 2015 and 16 the infringement only came to light after a new team took over at the treasury after the previous finance minister was charged with graph related offenses and it couldnt come at a worse time bridges and roads have been destroyed by flooding lives of livestock have been lost and this expected to be more flooding the Economic Cost<\/a> of that is yet to be determined. Lets get more on the situation with lisa strobel shes a senior economist Subsaharan Africa<\/a> economics and country risk at i. H. S. Market good to have you with us lisa this cash crunch has meant that companies have been paid jobs have been lost what sort of damage is this doing to the economy perhaps have to look at the latest Business Sentiment<\/a> readings that have indicated that. Employment levels have gone up slightly in the month of november however the latest Business Sentiment<\/a> readings have also indicated that firms reported to be more cautious about Economic Activity<\/a> in the next year with that said and also the consideration that Global Market<\/a> economics fundamentals are expected to be less favorable next year we expect to see a slowdown for kenyas economy currently i just market forecasts a group of 5. 7 percent which is a slowdown from 6. 3 percent last year and 5. 8 percent this year. Perhaps on a more bright a note we do expect to see. Private borrowing to increase in the near term thats thanks to the latest Interest Rate<\/a> cut by the central bank of not 15 percent. As well as the removal of the in 2016 introduced Interest Rate<\/a> cap that should somewhat offset the current cash flow problems we have to also keep in mind that besides the job losses weve seen the cash crunch has also cost sticky not performing loans in the Banking Sector<\/a> so with the removal of the Interest Rate<\/a> cap we do expect to see some improvement on this front that will ultimately hopefully support a good demond in the new town the president s plan to solve this is laudable but could a have been achieved without resorting to Something Like<\/a> 7000000000 euros of expensive loans from capital markets. Yes indeed we have seen kenya tapping into the International Markets<\/a> around 3 times of the last 5 years. Unfortunately given the downbeat performance of revenues this little room to really include a non external financing to kenya us major a large projects involving infrastructure and Economic Development<\/a> we have seen there the tax to g. D. P. Ratio last year has been in decline by not want one Percentage Points<\/a> nontax revenue has shown a even weaker performance. So the outlook does not look too good for revenues in the coming year is one way of perhaps dealing with the Current Situation<\/a> and something what we have seen. In the east africa region is that governments in order to address their Fiscal Consolidation<\/a> is to reproach or see their investment spending away from larch greenfield projects more into refinancing the already existing Infrastructure Network<\/a> but typically those investments that have a higher return on investment theres been a lot of debate about about the Infrastructure Projects<\/a> particularly the ones that the china is is ultimately building in that kenya is paying for i mean thats been a significant factor in this this cash crunch. Yes indeed it has if we look alone into the distribution of loans from china to africa over the term 2010 to 2017 we see that kenya is the 1st largest recipient following angola and its european of chinese loans. Export import back are shina is the largest Lending Institution<\/a> on the continent and key partner for kenya financing its major project the. Standard garc railway that has commenced operations in 2700. 00 taking passengers in last year also cargo and fried the overall loan stood at a 1600000000. 00 u. S. Dollars in commercial and concessional terms to be paid back in 15 years the kenyan authorities have expressed that the current numbers of passengers and flight transport will be not sufficient enough to generate the quiet revenue that is required for the repayment of the loan ultimately concerns were a race that some alternative the only way to achieve to get these revenues done for the repayment is by increasing tax but that again has been a post by the opposition. Could sort of address you could the debt have been restructured zaps with with loans from the. World bank and the african Development Bank<\/a> yes and ultimately its necessary for kenya to to do a Restructuring Plan<\/a> in order to address the current cashflow crisis we have seen since 1990 s. Restructuring operations taking place 3 times. That have helped the economy to manage its step float alongside the governments need. On the domestic market to refinance expenditure. The i. M. F. Has expressed last year concern that that costs are reaching unsustainable levels hence has raised their debt distress rate risk from a low 2. 00 to moderate lisa really good to talk to you and comes with a cost many thanks indeed for being with us my pleasure. Now called cutting peak t. V. Of the rise of socalled over the top services or streaming to you and me are we witnessing the end of television as we know it its estimated that 63 percent of people watch their favorite shows online and more content Companies Like<\/a> disney h. B. O. Peacock are launching their own services now take a look at this the Industry Leader<\/a> netflix or 13200000 people watch Martin Scorseses<\/a> epic gangster movie the irishman in the us over the 1st 5 days after its release its spending billions on content and has more than 100000000. 00 subscribers worldwide but apple is spending 6000000000. 00 on content including spending a reported 3 100000000. 00 on the morning show starring Jennifer Aniston<\/a> amazon claims that it signed up millions of people after paying 90000000. 00 pounds for 3 years worth of English Premier League<\/a> games joining us now from london daniel got danielle is a Research Manager<\/a> at research and analytics film company amp analysis good to have you with us daniel ultimately whats going to determine the success of these streaming services does it all come down the budget i think budget is very important and weve seen that from the likes netflix and amazon whove been investing heavily over the last few years in original content as well as license content so with the original content being one of the cornerstones to the new streaming platforms in allowing you to engage with consumers and bring them on to platforms and so that is definitely part of it but then being able to develop a wide array of content for customers is also important but is there room for all of them in the marketplace i mean consumers surely can only afford maybe one perhaps 2 streaming services and its its the outliers the people who are the 1st Companies Like<\/a> netflix and amazon who are in the lead on pay they have they definitely have a strong market position at the moment and. These new companies coming in like disney and a lot of the studios do have a lot of content to lean on and ultimately i think in their current form this Many Services<\/a> might be difficult to sustain in the market what we may see is some of them adapt and change apple is a good example of this where they could become more of an aggregator of content producing a few of these original content to bring people on platform but then also bring other services there so you can get it through want one platform now the elephant in the room is that these are all American Companies<\/a> whereas the International Competition<\/a> coming from an International Competition<\/a> stand any chance whether this is one of the challenges a lot of the larger streaming platforms facing local content is definitely on the up and is what Consumers Want<\/a> so they could be room that local local content being produced by local producers and theres definitely an opportunity there whether thats working with the streaming services or breaking in on their own i think that there could be an opportunity deficit lots of local platforms can break the sports market do you think its going to go all out for instance for the english premiership rights or even u. S. Sports for that matter. So initially amazon as i said you know they take an aggregate a platform approach they did that toes in the water in some of the sports in the u. K. You know youve mentioned the premier league theyve also just gain the rights for the Champions League<\/a> in germany but amazon i think at the moment are trying to bring people within their prime ecosystem so they will spend money in ecommerce platform so at the moment i think for amazon its about using content whether that sports or drama t. V. Content to bring people within that platform so i dont think we will see them go all out to collect all of the premier League Rights<\/a> but i think there were cherry pick as and when right become available and whats next for netflix you think netflix is focusing very much on original content and were going to see that investment grow over the next few years with the likes of as i say disney n. B. C. Starting their own platforms they were pulling that content from netflix so this really puts the emphasis on them growing their original content and building that catalog to support all of the customers that they currently have and what im going to ask you again something you were talking about a little earlier on a consumers going to be willing to pay for all of these platforms. So what weve seen i think in a lot of different markets is slightly different trends so in western europe were seeing consumers stock a lot of these streaming services on top of that 8580 platforms in the u. S. Were seeing more replacement at the moment we havent i think reached that point but as you say with lots of these new platforms coming in are we going to start falling over that edge of having too many of these platforms and will consumers have a base pack of 2 or 3 platforms and then dip into others i think its all going to change a lot over the next few years and thats what we will say to these platforms that the the success or otherwise of the sound the death knell for traditional broadcasters for free to air services. I mean they could be opportunities on both side with the free to air broadcasters that their specialty in and where their expertise lies in that local content and that could be an opportunity there more and more consumers are moving online not just younger consumers as well so older consumers so these are the things that i think need to be considered by the local broadcasters as to adapt it to to the new world to me its been great talking to your county the cause many thanks indeed for being with us thank you. Thats our show for this week if youd like to comment on anything that weve seen particularly our interview with the Vice President<\/a> of ecuador you can tweet me a figure on twitter use the hash tag a j c to see if you can or you could drop us a line counting the cost of aljazeera dot bet is our email address as always theres plenty more few online at 0 dot com slash c. T. C. That takes you straight to our page and there youll find individual sports links even entire episode for you to catch up. But thats it for this edition of counting the cost im Adrian Finnegan<\/a> from the whole team here in doha thanks for being with us the news on aljazeera is next. In 2008 just near undocumented a groundbreaking skiing. Preparing some of indias poorest children for entry into its toughest universities d. We return to see how the students and the scheme a helping change the face of india. Super 30. A city defined by military occupation theres never been an arab state here with the capital of jerusalem everyone is welcome but this depot structure that maintains the can only project thats what we refuse it was one of the sound of the settlement with this and the story of jerusalem through the eyes of its own people segregation occupation discrimination injustice this is apartheid in the 21st century jerusalem a rock and a hard place on al jazeera. This is aljazeera. Youre watching the news hour live from our headquarters in doha im terry you know up again coming up in the next 60 minutes a day is a solemn. Day. Democrats were proud Donald Trumps<\/a> impeachment towards a full vote by the house of representatives. Its a witch hunt its a sham its a hoax nothing was done wrong. Also ahead the u. K. Is the reelected Prime Minister<\/a> vows to heal his countrys divisions protesters both say theyll fight him every step of the way. While in algeria people come out to deny","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia903109.us.archive.org\/26\/items\/ALJAZ_20191213_223200_Counting_the_Cost_2019_Ep__50\/ALJAZ_20191213_223200_Counting_the_Cost_2019_Ep__50.thumbs\/ALJAZ_20191213_223200_Counting_the_Cost_2019_Ep__50_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240716T12:35:10+00:00"}