Agency the defacto leader is a pole of the range a crisis that needs to tread carefully to not inflame the situation she controls the government of the country but not the countrys military. Thats all for me from now on the scene here in london counting the cost looks at still making a scandal in japan but by. The man who negotiated the dismantling of apartheid and scrapped south africas Nuclear Program i dont think we needed the bomb but some of my prediction is that they want to use it as a deterrent south africas former president declared talks to al jazeera i just dont. Follow im adrian for the good this is the cost on aljazeera your weekly look at the world of business and economics this week made in Japan Kobe Steel japans Third Largest steelmaker admits that it faked data on parts used in cars planes and bullet trains general boats. Boeing and toyota are among the firms checking their products also this week bubble trouble why the International Monetary fund the winner of the nobel prize in economics is signaling danger ahead for the global economy. And the trevi fountain sponsored by Luxury Fashion brand fendi why without private investment many of italys most important monuments risk. Planes trains automobiles and fake components japans kobe steel says that it was faking data about the strength of products delivered to more than two hundred companies for the past decade its a scandal thats unsettling the Transportation Industry worldwide General Motors boeing toyota honda they all have to check their supply chains the manufacturer of japans shinkansen bullet trains says that its already found parts supplied by kobe that failed to meet industry standards the one hundred twelve year old metals manufacturer said that further cases could come to light Florence Louis reports from tokyo made in japan and now these brands share one more thing in common their customers of. The company has admitted employees fabricated data about product quality to meet custom a specification the government says its following the case closely and although this was an agreement between private entities we think that kobe stills misconduct was something that has shaken the foundation of business transactions the ministry is taking the situation very seriously. Kobe steel says two hundred customers in japan and worldwide including manufacturers of trains and planes have received falsely certified materials customers are checking whether they used substandard products and whether there are safety issues or not and yet more revelations mean the scandal could be wider than initially thought kobe steel at mits that the fabricated data affected not only copper and aluminum products but also ion powder which is mainly used in making automobile components kobe also admits that its launched an investigation into a Subsidiary Company which is reported to have shipped material used for making semiconductors to customers without inspecting them the kobe scandal is the latest to hit corporate japan faulty ags made by takata problems at the largest safety recall in history of the Auto Industry in june the Japanese Company has filed for bankruptcy misandry called one point two million vehicles last week off to admitting unqualified stuff carried out factory inspections. The scandals are seen by many as a further blow to japans reputation for Quality Manufacturing that reputation has allowed Japanese Companies to charge higher prices compact to cheaper compasses such as china not all analysts think the scandal is a disaster for japanese brands japan tends to have a lot of over spec you know they really if you want to have the last three percent of perfection you have to go to a Japanese Company because theyre the only ones doing that while everybody else you know whether its korea whether its germany whether its india you know operates on a minimum viable standard kobe still said the misconduct involved dozens of employees in as many as four factories and possibly going back ten years the full Financial Impact is still not known but it could be huge if customers request replacements the companys share price has already taken a beating on the stock market joining us now from singapore marcel tyria marcels a senior japan economist at Capital Economics good to have you with us so what now for kobe steel is this likely to be the end of the company im not sure if its going to be and therefore been companies that have survived such corpus to get scandals for example. Are still around but other companies have indeed gone bankrupt for example to carter the gone bankrupt after such a scandal so so its certainly a grave threat to the companys future its reputation has been severely dented as it likely that we could perhaps see it if not it doesnt go bankrupt or if it broke it up perhaps. I guess it could rebound if it if it addresses the problems in a comprehensive manner. If it proves that these things will be rectified and that it dont cost Severe Damage to actual consumers which was the problem. So theres a chance that they will recover from this it is the latest in a number of corporate scandals in japan you alluded to some of them in your first answer why is that what is it about japan and cutting corners well i think a lot of these companies theyve been around for a very long time and defacing heavy competition from from china or from from other countries and i think its also the Corporate Culture of income employees and japanese firms the work usually for very long time time at at the firm they get seniority wages of it if you dont want to lose their job so basically they have an incentive to cover up if theres any problem and they often work very long hours so sometimes they might just do things to please their managers that that isnt in the best interest of the company in the long run theyve also been theres also been a lack of Corporate Governance in recent years i mean its been addressed now weve had were starting to get tougher rules from the top a Stock Exchange but of course changing the Corporate Culture takes longer than just imposing some rules and fulfilling them on paper. This is done enormous damage yet again to japans reputation you talk about those those changes in the Corporate Culture do you think that the embarrassment of this latest scandal is going to help to speed up that reform process well i think it will i mean theyre talking a Stock Exchange calculates it has Corporate Governance governance cold and weve seen some progress about a quarter of our firms now fully meet there were acquirements and the other three quarters will probably continue to make efforts to meet those requirements also i think of foreign ship shareholders will put additional pressure on management now about thirty percent of stocks and japan are owned by foreigners in a lot of them are fairly big investors which put pressure on many on management to really reform and change their ways you talked about some of the reasons for this this this Corporate Culture in japan could another be the that its still paying the price for that the dramatic cost cutting that went on in japan when the economy declined as it did in the one nine hundred ninety s. I think thats quite possible i mean its obviously. Firms that have debt facing rough competition they have an incentive to cut corners and being lax on Security Standards is one way to do solve so i think it is possible it is the reflection of these terrible times that lots of Companies Went through are so really good to talk to and counting the cost many thanks indeed for being with us. All right still to come on counting the cost. Of oil and what a big. Being hidden from. Causing problems for russia. On the hunt for them here in crimea. Later in the program. Now the turn of the century the dot com bubble burst then in two thousand and eight the collapse of a bubble in u. S. House prices triggered the Global Financial crisis fast forward to twenty seventeen Richard Thaler the father of behavioral economics is handed the nobel prize in economics just as world stock markets hit new record highs they were as work is all about how humans make irrational money choices you may even remember him from the hollywood movie the big shorts in post prize announcement interviews he said that hes worried about the fact that nothing is spook ing stock markets they just keep calling. Well the International Monetary fund a spent the last decade trying to pick up the pieces after failing to predict the last financial crisis this week the i. M. F. Said that nearly seventy five percent of the world is now experiencing an upswing its predicting that the worlds economy will expand by three point six percent in twenty seventeen and by three point seven percent in twenty eighteen thats slightly higher than what it was predicting back in july but the i. M. F. Also issued a warning it said record low borrowing costs designed to help the economic recovery pushing up debt levels in the Worlds Largest economies and it singled out china as one of the worst offenders well the i. M. F. And the world bank are hosting a meeting in washington d. C. Where finance ministers and central bankers from around the world are gathered to have returned reports. The World Bank President says governments around the world need to spend all countries need to invest more in their people its been a rough few decades for the world bank and the i. M. F. Reputations most recently they failed to see the economic crash of two thousand and eight coming despite the millions of dollars they spent to monitor the World Economy for just such crashes and since two thousand and eight as the sort of austerity programs long imposed on developing nations have been forced on developed countries like greece awareness and discontent with the i. M. F. Is growing and finally last year things seem to change the i. M. F. Published an analysis that admitted its new liberal policies caused economic damage and this week the fund declared increasing taxes on the wealthy would not impede Economic Growth and would help address inequality the result is growing political tensions in many places and increased skepticism about the benefits of globalization. But for the leaders of the one hundred thirty three global groups protesting outside the meetings the policies havent changed over all the rhetoric for example raising taxes on the rich neo liberalism says any monies raised by the government should then be given to private corporations the fight inequality alone says any concern expressed about increasing inequality doesnt match the current policies off the world bank and the i. M. F. Such as their pushing of drastic cuts in mongolia to near zero and zambia and leading the privatisation of primary schools in liberia and Funding Investments and projects in honduras on land violently seized from peasants the i. M. F. Failed to respond to our request for an interview one of the social indicators that the i. M. F. And world bank often take comfort in is the huge reduction in Global Extreme poverty over the last few decades surely they argue proof that their brand of new liberal globalization is working however a new report from the center for economic and policy Research Released this week found that two thirds of the net. In the extreme poverty in the world since nine hundred ninety was in china which rejected that new liberal economic model the rebound the twenty First Century was partly due to the fact that the i. M. F. Lost almost all of its influence in middle Income Countries the skeptics both the i. M. F. And the world bank have yet to prove that their stated wish to eradicate poverty is anything more than a Public Relations strategy to conceal the same old economic approach joining us now from london is david coker david is a lecturer of finance at the university of westminster in london good to have you with us again david so youve got the worlds brightest and best financial minds meeting this weekend in washington d. C. The world bank and i. M. F. Meetings they dont exactly have the greatest record when it comes to predicting trouble ahead today no sir they dont and particularly we see their forecasts their g. D. P. Forecasts are very volatile when there is political instability. So the world bank the i. M. F. A reputation severely dented after failing to predict the economic crisis the last economic crisis in two thousand and seven two thousand and eight that they smart enough a wee small governments our institutions smart enough to avoid another catastrophe like that at the systems are very complex i think i think we understand the mechanisms and weve got a good feeling of what has to be done im not convinced the political will is there so even though some of the best minds at the i. M. F. And the world bank write excellent papers that talk about the solutions we just dont have the political will to implement it theyre calling for a larger or higher taxes i should say the other way upper upper wealth and so weve got the one percent and more importantly the one tenth of one percent who saw in the wake of the financial crisis saw their wealth soar and yet we also know at the same time people in the lower ninety nine percent saw their wealth stagnate and in far too many cases decline so i think weve got to align our Political Leadership with the i. M. F. And the world bank start to open up and we do have to take some choices which many of the elites may find unpalatable taxes do have to go up we have to engage in a period of progressive policies that will help open up education for more people if we can start to do this if we start to get control of the political environment and in particular the instability thats bubbling underneath the surface i think when the financial next financial crisis comes its only a matter of time well be in a much stronger position if it were to hit tomorrow i would suspect wed see open revolution in some of the western democracies some of them are very very unstable at this point its bubbling beneath the surface so our leaders have to take the difficult decisions to do whats necessary to calm people down to give people the perspective or the view or i should say that there is opportunity for everyone in spite of the changes were going through not only politically but technologically which is also something theyre considering. This week these massive changes that are coming due to technological innovation in the world bank one of the things that is warning about is the risk that automation poses to all of us who who work for a living when theyre looking sort of twenty years thirty years down the line if they were are they right to be doing that and what about something which is so far in the future given all the problems the exists in the world today right now. Well there are a lot of problems no but we have to face it we have to face the fact that this fourth wave as we call it the digital revolution its not coming its here and a lot of people have overlooked banking for instance my era were starting to see bots take over a lot of traditional jobs we feel that a lot of banking jobs are going to maybe as many as thirty percent of banking jobs will be wiped out thats the tip of the iceberg when we start to see these upper skilled jobs wiped out just decimated what will it do to lower skilled jobs people that princetons and i dont mean to sound horrible but people that deal with customers we can program a bot that can do many of the queries and a lot of companies in fact are playing with that theyre experimenting with these things if you take a look at what ten cent in china is up to ten cent in china pioneered these ai bots and theyve got a user base of some seven hundred Million People who are quite happily using bots to plan holidays to schedule a dinner reservations to book a car to plan anniversary trips things like that a lot of these jobs that are done by people right now theyre going to be wiped out so the the revolutions upon us again its up to our leaders to listen to what the world bank and even to take a look at whats going on in banking and other areas and start to address these the underlying problems start to address the changes and try to figure out what were going to do with people unfortunately i do feel a lot of our leadership is sleepwalking theyre letting the changes roll and again were going to see massive spikes in unemployment not this time in the Agricultural Sector or the Manufacturing Sector which what were what which were impacted by the earlier waves of automation now its going to be its squarely in this digital sector of the economy its going to be squarely in the middle Class Services and upper middle Class Services and it is something to worry about and it will give rise if theres another financial crisis and if these job cuts come it will give rise to political instability we probably havent seen since the thirtys. David i think its really good to talk to you if it gets given the rather pessimistic nature of what weve been discussing but many thanks indeed for being with us great to have you on counting the cost thanks for your time adrian take care. German engineering giant siemens a russian state owned enterprise in the case of the crimean turbines these are the Main Elements of a legal dispute which will be going to court in russia next week and its all about e. U. Sanctions rory chalons reports. What were looking for in this disputed land is high tech equipment proof in finally machine steel of the lengths russias leaders will go to to supply the Crimean Peninsula with electricity and the trouble thats bringing to the kremlin where territory cannot do without. Power lines but ukraine refuses to provide it russias mainland doesnt have enough of it and you sanctions shots crimea iraq and western Energy Technology so russias opted for deception when their thought about building a power station on the mainland and the growth for electricity to the. It was a fake because the well it was just bought the wreck of those door buy ins from us. To say well well install them here but not on the occupied territory of the crimea but crimea is where siemens acknowledges the four turbines now are the Reuters News Organization filmed these two large objects in july for the crimean puerto theodosia despite Russian Media reports two years ago about the turbine secret destination siemens accepted moscows reassurances that they were for southern russia but now the scandals forced the german industrial giant to act its pursuing criminal charges it wants its missing technology back and it says it scaling down Russian Operations they told us siemens will hold Power Generation equipment deliveries from existing contracts to state control customers in russia for the time being the e. U. Has also responded with new sanctions asset freezes and travel bans. When we visited theodosia the turbines if thats what they were had disappeared perhaps theyre already here one of the two new power plants being built in crimea but russian technicians are expected to face significant problems getting them to work because siemens is refusing Technical Assistance this whole siemens gas turbine saga illustrates in a nutshell that binds that russia has got itself into and trying to wriggle past the e. U. Restrictive measures moscow is just more of them and with Washington Signing in new american sanctions the ability of russia to secure the investments in technology it needs to stop the country sliding backwards well that only gets harder now for Power Generation problem of a different kind blacked out and on the brink of bankruptcy most of puerto rico still has no power nearly a month after her a can maria devastated the u. S. Territory its just one factor crippling Economic Activity and adding to the humanitarian crisis unfolding that the island is virtually bankrupt it owes seventy billion dollars in debt and that makes recovery from the Natural Disaster of this scale incredibly difficult Puerto Ricans with solar panels are among the few with a stable Electricity Supply this week though ill must the c. E. O. Of electric car maker tesla offered to revamp puerto ricos power grid using Solar Technology is offer was welcomed by puerto ricos government its fear that hundreds of thousands of people may leave if electricity is not restored soon. Budget Airline Ryanair says that it will challenge a lot of air berlin deal love turns as agreed to by more than half of the failed german carrier for two hundred forty eight Million Dollars and rival ryanair is not happy its accused of breaking e. U. Competition laws and says the deal will result in higher prices for consumers ryanair may face some court time itself though as belgium says its going to sue the airline authorities there accuse it of not providing enough information to non English Speakers after it canceled thousands of flights last month and finally this week some of the biggest names in italian fashion are helping to restore ancient roman monuments to their former glory the governments turning to private businesses to help to pay for the huge cost of renovating sites like the coliseum now after four years new areas of the building a been open to the public a knave parker has been to take a look. Its a steep climb to the top of the coliseum commissioned by the emperor of a speccy and in the years seventy two for the past forty years the fourth and fifth levels have been locked away from view until now welcome to the ancient cheap seats that probably wouldnt offer the best view of the regular bloodbath down below but they do offer a sensational view of the city. The opening of the upper levels is the result of a four year Epic Restoration project the outsides also strengthened and spray clean to remove generations of grime the cost a colossal thirty Million Dollars and the still more work to do the sheer scale of romes archaeological heritage poses a huge financial burden for the city and for the country the vast costs involved frequently exceed state budgets. Ticket sales help but revenues dont go far enough thats where high end italian fashion comes to the rescue the coliseums renovation was largely paid for by the billionaire owner of todds Luxury Footwear company. In follows a three Million Dollars renovation of one of romes main Tourist Attractions the trevi fountain paid for by Clothes Company fendi. On the spanish steps restored last year with more than a Million Dollars from jewelry designer ball gary when we had to celebrate there were one hundred thirty new very three we wanted to create something really special for this any of your three and thats why we thought to pay tribute to the sea today where our founder and also created so much richness in our creativity the financial help sloan she welcomed its of these cash strapped government but there were some concerns about bigger tally and Companies Using their renovations as a branding exercise. Theres a real risk of commercializing ancient monuments but the brands we chose last year were chosen carefully we havent seen any signs of companies abusing their patronage. Italians are intensely proud of their rich Cultural Heritage but preserving it comes at a huge cost that for now only italys big businesses are able to cover. And that is our show for this week if you want to comment on anything that youve seen tweet me. On twitter please use the hash tag when you do or you can drop us a line counting the cost of aljazeera dot that is our address as always theres plenty more few online at aljazeera dot com slash c. T. C. That takes you straight to our page and there youll find individual reports links even episodes for you to catch up on but that is it for this edition of counting the cost. Of the whole tape here thanks for being with us the news on al jazeera is next. In the final part of a six part series filmed of a by. The people of who can still fight for their land. The village chief is in prison. And forced underground the filmmaker has become part of the soccer. Crackdown including. Chinas democracy experiment at this time on aljazeera in recent years the sawhill of north africa as witness the socalled war on terror. Is this official narrative. Battle. A battle for the earths natural resources. Shadow war. At this time. This is al jazeera. And
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