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tv   Counting the Cost  Al Jazeera  October 7, 2024 7:30pm-8:01pm AST

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as though we reconnect with those who have been witnessing and documenting a genocide, i'm currently living in cairo, egypt trying to move forward. why my company, it's tim stuck in because of the script. this past year has changed my life in so many ways. but i mean the main ways that the priorities in my life has completely been realigned. nothing matters but liberation. join us for special episodes of the stream on our to 0. the hello, i'm adrian said again, and this is counting the cost on elders 0. your we can look at the world of business and they could all makes this rich geopolitical tensions in the middle east of escalating. but how, what, why the complex affect the economies of the parties involved and what are the ramifications globally. a surprise,
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economic stimulus in china beijing is announced. big monetary stimulus measures to try to revive it's slowing economy, but really look as in pop ways, you gold front seat gives the values and we can install it up. is the nation facing? yes, another kind of surprises, or kind of succeed in stabilizing? it's a con, release. tensions ratcheting out bringing the region closer towards an all out. all the geopolitical risk rose off to iran, launched a major ballistic missile attack targeting sites across israel. the escalation comes almost a year off to israel started its war on concept. now whitening boil in the region could carry heavy costs for the parties involved, including economic. i've seen that it's heavy and loss is the long term effects could also have serious modifications for the global economy. we'll discuss banks with, i'll guess shortly, but 1st, let's take a look at what's at stake here. the price of oil is traditionally sensitive to
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every twist and turn and geopolitical tensions. brent crude, the international benchmark oil price, rose as much as 5 percent to move and $75.00 a barrel off to ron subtract gold prices also rose. now iran is a major oil producer supplying around 3 percent of the world output despite west and sanctions that have tripled its economy. it also has influence over the strait of home lose, which handles move on 30 percent of global oil tre, those supplies could be disrupted. trade routes in the red sea of also at risk of to several attacks. my, who the rebels on ships passing through the was a wave, egypt. so is canal vo. uh, through which 12 percent of global tre process could also suffer disruption level on syria of the most vulnerable nations to economic losses. the lebanese government is in desperate need of aid, while the syrian government called a fault, the humanitarian response to the influx of refugees from lebanon. israel's war on
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guns as will respond to the unprecedented humanitarian crisis. in the strip of tax by the is where the army and settlers of ground the economy in the occupied westbank to hold the cost of the war on gaza has heard israel's economy significantly. vital economic sectors under a stand still or rolling has rocketed, well, revenues have slumped credit rating agency bodies downgraded the nation for a 2nd time, bringing it closer to non investment. great neighboring countries including jolting egypt, which depend on tourism. a trade could see a decline of their revenue use use of the disruption of supply chains. unemployment could also rise, that could hurt the economies even saw though. well, joining us not from doha is about to allow his, an economic and political risk analyst, a middle east and north africa director at the global council. i think good time you with us again. let's start with the price of oil, which rose was around 4 percent off to a ron's missile attack on his row,
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but had fallen about 10 percent over the last 3 months with opec warning recently that the price would remain weak. what might happen to the price of oil? if the conflict wipers, especially if it run closes the strait of homo's. well, what we've seen is the return of the duplex covers the premium to the price of all . as you said, it shuts off by about 7 percent following the tit for tat con confrontation. but until that point, markets a door to the shrugged off. what's happening in the middle east now is different. the conflict is whitening and the wrong could decide this next step is to retaliate against iranian israel could retaliate against iranian energy infrastructure, which would take off around $2000000.00. a 1000000 barrels will be raining oil from international oil markets, which would lead prices to go up by, by 80 and even reach a $100.00. that said we've, we've got high inventory. we bought about 5000000 barrels of oil in spare capacity
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between the large oil producers. those can be bought online to offset the loss of iranian production, which would help stabilize the oil prices. but there is no doubt that the risk premium do political risk premium to $1.00 price is, has returned, it has caught oil, traders will soften. the market was bears caught them off guard. and if oil does go to $8100.00 a barrel, what will be the impact on will inflation? because many central banks around the world are just beginning to get a handle on inflation right now. i would undermine the progress that central banks have been achieving the going to rate cutting cycle b. c. b has the united states. federal reserve has an inflation shock. what happened if one was to go up to 80 or 100? the last time it did was in the wake of the russian invasion of ukraine and the sectioning of russian oil. and it's not of the percentage pointed to global inflation. and it, this, this would have the effects um, other parts of economy, oil prices, defense manufacturing,
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the defects of food and fertilizer prices. so it would have 2nd and 3rd order effects on the global economy just as it's starting to mount a recovery. as we've reported several times in the last few weeks on counting, the cost of israel's economy has been put quite badly by its war on guns and would be hooked for the still by a wider contract. what about of the economies in the region 11 and syria? jordan, egypt, what would be the impact of a, of a wider conflict on them? could the economies withstand it? especially level 11 on and syria are the 2 sides of the same point. their, their economy service are connected there, intertwined. they share a very porous border of both countries or reeling from, from long time economic crises. syria is, goes back, goes back to a 10 year old civil war it's, it's got a feeling states living on that level of the banking system. one of the collapse not only effective 11 east currency, but also the searing process. you have a,
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a refugee crisis about 37 percent develop in east population today made the whole syrian refugees. and then you have 11 on today and internal displacement crisis that involves a 1000000 lebanese moving some southern regions to flee the viking, which is going to be further strength, decreasing social infrastructure of the lebanese state. and you have between those 2 countries. now a, a, a panel economy or informal, the com, you're on the list of the economy. yeah, for example, like striving narcotics, trade between the correction and federally patronage networks that time the 2 countries together, which has led to for example, levels of exports of fruits and vegetables being banned to major markets in the goals because of things like capital going in are call take being found inside these goods. so it has been devastating for both the economies and both economies are mirror images of each other. and what about the economies of george an agent that jordan is heavily dependent on for an age. it hasn't been effected directly by
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the christ. of course you have a tourism, a big being had to go off. but egypt as a egypt, as it is a bigger story in egypt, is a calling reading from a the worst economic crisis in, in decades. it has just the certainly no, no, not nearly all the words is accepted for an aid from the u. s. stimulus package from the i ipad, big investments from southeast and the u. e. a investment this just about starting to come in, but you get to not out of the woods. it's fundamentals haven't changed and the, the, the war has affected egypt in material ways. so got here on your loss of about 20 percent. the revenue from the source canal, which is an important source of heart currency for egypt and its tourism sector, which was just recovering from the shocks of corporate and rushing grain is, is being affected. and what about the impact of the instability of both up to back and what about the impact of, of a wider conflict on, on global trade routes? for instance, let's say this is come out as well. the global yes,
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i think big global trade routes and the districts have recalibrated costs are significantly higher. the red sea continues to be out the balance for most shipping . these are have not relented in their attacks on red sea shipping. uh, that has had the pleasure to be fixed as by now have been a baby taken to global inflation. so i think that that, that will only continue, especially if you combine that with fire oil prices that will have 2nd or 3rd, inflation effects on the global economy. global market seem to have taken things pretty much in the stride as you were saying earlier there, but quite sanguine for the moment. there's been no big rush to safe havens. how long would that lost or how quickly could things change? if a wider conflict would be good. well, i think the, the, the impact is going to be coming from from oil prices. right. so it affects kind of goes in effect sectors across the world,
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manufacturing. and that's going to really hit the recovery and it strikes. it's going to for central banks to keep interest rate is higher and that's what we have to really focus on. if the interest rates remain the buyer and the price of the bump for consumers goes up in the, the central banks will have to have those pause in the rate of cutting cycle. and that's going to affect the recovery in a big way. it's going to be also politically centimeters, action year for, for the us israel and the run light to deliver that october surprise for the us selections. if it is going to make it very hard for the hairs campaign to wind voters, when that when the price of the pump is, is going up. when you know energy production is really becoming a, like the rock commit to go issue in the us in a box of gloves throughout the states that are producing energy. indeed, i could state so increasing the oil prices because i'm in the small conflicts. how wide ranging effects on the global economy offered the good to talk to accounting the cost. many thanks for being with us. thank you to try those younger workers of
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finding it hard to get a job. businesses are struggling to pay off debts. the wealth of the chinese people has been depleted by slumping home prices. investor confidence is depressed. and paging trade relations with the west aust strained chinese leaders worried about the sponsoring economy. pulling up all the stops with central bank unveiled a series of economic stimulus measures last week, it was seen as the boldest attempt to revive economic growth. but is it going to work? we'll discuss that with a guest in a moment. but 1st, let me pull some sharif ripple's show no smoking, the 7210 most video fits foundation, the caea, the mazda them comes as it stuff, markets have sold for over the week of the china central bank, announce some of the boldest measures and is aimed at surviving the world's 2nd largest economy, including the cops and interest rates, just oil change of the human fall point. i take the opportunity to announce the
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following policies. first, reduce the reserve requirement ratio and the policy interest rate drive the market benchmark, interest rate downward 2nd, we will lower the interest rate on existing mortgages and unify the minimum down payment ratio for mortgages. yeah, 3rd, great new monetary policy tools to support the stable development of the stock market. right, to the new meshes that in particular, the, as revive and the sector that slows china as a company from the co would 19 pandemic. the property sector has been aiming for years after the government crackdown on excessive borrowing for projects. the pro long slums affected other parts of the economy from construction to sales of home appliances. and the say, the mortgage rate cops, roubles, consumers, sentiment, and proof of the property market share following up with you on how the calculus has to signals. the 1st is to boost president's consumption and the 2nd is to stabilize the declining real estate market. effectively reassures families with
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existing house loans which is beneficial for helping the real estate market stabilize quickly and avoid impact and residents consumption. the major chinese city, shanghai runs out and shinji and have eased the home buying restrictions that concerns remain well high levels of debt among households and businesses which could limit the effectiveness of dimensions. the head of the national day holiday was told the stepped up efforts to encourage consumers spending from exhibitions of displaying clean energy. v goes to promotions for furniture i'm smart home with customers can receive a subsidy of up to 20 percent when trading an old home way. additionally, in line with the consumption search during the holiday, we have introduced a new batch of environment defend the smart home devices featuring high cost performance. chinese stocks had the best one the valley since 2008 on september 30th. but showing us factory activity strong for the 5th straight month in
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september and the subs the sector also slowed sharply. the stimulus package has boosted the motor. all of consumers and businesses being may need additional bone moves. if it's to me, it's 5 percent growth target for 2024. i'm a consumption eve entre 0 for accounting, the cost. and joining us now from shanghai as shown. ryan, he's the founder of managing director of china, a market research group that's leading strategic market intelligence from focused on china, an offer of the book, the split. sure. good to have you with us. so the government wants to restore confidence in the economy and encourage investment on spending. is this package of measures enough to do that? or is it just a stopping point? do you see more to come? it's great to be here. if you know my background, i've been in china for 27 years and for the 1st 25,
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i was one of the biggest people on china. but for the last 2 years i become one of the biggest bidders. and so it's great that the chinese government is launch what i consider to be of many stimulus to help rebuild confidence, help get the stock equity markets booming. again, try to see if we can get some things happening in the real estate market. and that's all great, i still think the stock market can go up another 1020 percent over the next one to 3 weeks. but here's the question. i'm not sure that this many stimulus is enough to really fix some of the structural problems that are inherent in the chinese economy . today. we have to remember that 30 percent of the economy used to be based off of real estate. we're now looking for new drivers abroad, which egypt paying and the c p. c. whole new productive forces. things like manufacturing and he's manufacturing and batteries. the problem though, is this trying to get stronger and any bees you're seeing the western world getting very nervous. you know, the bottom regime is 5 to 100 percent tariffs on chinese. i need these the vassals
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justin to go from canada and also swap the 100 percent. and you also see 18 to 30 percent on tariffs in europe. so the problem is the stimulus is great to regain investor confidence. but at some point, it's very hard for chinese economy to actually grow because the drivers that are supposed to take the place and substitute real estate are being contained by the western imperial powers. okay, so it's just a sticking plaster for the moment, but what were the risks of inaction for china? was it risk and perhaps becoming like japan and staring down the barrel of of decade of stagflation. you know, we've already dealt with basically 4 last years in china. we are facing the last decade i can obviously, you know, income levels are really low. that's why you have an 18 point. 8 percent unemployment rate in august for chinese. you. so we're facing serious issues. the
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chinese government had to launch a mini stimulus. but here's the problem, it's run out of money. a lot of local governments have become overly indebted because of very expensive 0 corporate policies that they have to adhere to during the cobra era. there's very little tax revenue. so actually what's happened is a lot of local governments are going around you profitable companies and say, please donate money to local tax authorities because we need to raise money. they're also going along to a lot of wealthy people and saying, you know what, 1020 years ago, you were corrupt. you did something illegal, will let you go if you pay a fine. but it's very clear that the government had to launch a stimulus in order to regain confidence. but we're also just kicking some of the problems down the road. we need to deal with structural forms. we need to get use unemployment though. we need to fix labor market laws, so it's easier to hire and fire employees. and most importantly, is we have to make sure that we have stable income. because even if you have
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a stimulus, we're stocks go up. people aren't going to go out and spend if they're not sure if thoughts are going to continue to go up. they need to make sure that they know a 2025 or 2026. their income levels are going to be the same. it's not hotter than a 2024, but it's always the stable in common income levels. i don't think you're gonna have the consumer confidence to go out and spend a lot of right now. we're a golden week and found a big holiday week. hotel prices, an air ticket. prices are down 20 percent year on year because the confidence is spent just isn't there. a very briefly showing. is this some of this package at least enough to lift the moribund property sector, which of course so many problems. of course the chinese economy i think is enough to live equities. and that's why you see institutional investors from around the world from david tapper to fidelity. to capital group are rushing into china, but i'm not convinced it's enough to uplift the more bound real estate sectors. you
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call it because people still even mortgage rates are lower even down paul, down payment levels are lower. people are not going to buy homes. if they think the price we're going to continue to draw, i hope we've reached bottom, but i don't think it's we've reached bottom any time soon in real estate show and really got to talk to your own content the cost manufacturing day for being with us . thank you for having me. the official dates have published an argentine assessable the hoff it's 46000000 people living in poverty. that's a why is a pull the 5000000 this year alone? these on the 1st official figures published since heavier millay became president last december, daniel schwab. but in the capital point us out as looks now at how this figures translate into reality for millions of argentines pulled a t is nothing new knowledge and tina, which is look for one economic crisis to another, over the past 60 years or so. the what the stick is published by the state statistics office index show is to 53 percent of the population now lives below the
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poverty line console for basic food items. that for the increase of more than 5000000 this year, 2 thirds of them are on the 14 years old, told me it has to be a lot because of the kids. the kids are different issue. and i may not have much. but the little that i have, i tried to sometimes give them a piece of chicken good by large boxes of milk to at least give them some milk, even though i have so little wages have not kept pace with an installation of more than 230 percent of the worst in the world. this means people are working the same hours for less well prices rise most daily. and this on top of government costs to subsidies for fuel health, transport and welfare programs weekly. so we have 2 of them. uh, i also turned all
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a 100 and since this government took office, our work has dropped off. we work twice as much for less. at my age, i'm not getting hired anywhere else except maybe dragging a cart and a few more. so i keep pushing forward to cover, you know, that they throw sales h o in one of the cyrus a magazine to help those and precarious living conditions. you know, as you know, i guess helps the neighbors. i sell the magazines, i've called to my job, but he, like millions of others, is living on the edge. barely able to feed is a children. so to have told you almost how you plan and where he is planning, how to resist, what's happening. this is a place of resistance. what are the trenches we were trying to ensure everything doesn't pull a pump. 9 heavy emily took office in december, but promising to drastically come public spending to tame outs from teen is rapids inflation. the government claims to poverty on previous administrations. the rescue, he said, would take time. the markets, the i m f,
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a millions of electron cdn still supports him for the latest polls show his popularity is waning. this was was one of the richest countries in the world. certainly one of the wealthiest and left in america. but now major crisis full of mind that blooms, there's no stability, and in patient population, tons to ever more extensively those who promised instant solutions for the delay hasn't delivered one of those know yet with each day the policies more i'll continue is one to when. if he'll deliver, what does the seemingly endless round of economic crises is set to continue? that which one the route to 0 for counting the cost in $1.00 us iris. it is the countries 6th currency in 25 years. the gold fact, zinc was launched 6 months ago in an attempt to tackle a long running currency crisis and inflation. but some bob with gold was de valued
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by more than 40 percent against the dollar last week. the move by the central bank to slash the local exchange rate of its currency signals, persistent trouble in the nation's economy. is it replaced as in bob we and all of which have crushed several times since being introduced? reintroduced 5 years ago. previous attempts to stabilize the currency on the mind by the central and printing money to finance government borrowing is above we and dollars stuff with one of the world's worst pressures to dates in 2009. the government was printing 10 trillion dollar notes of hyper inflation was wondering if 5000000000 percent of nations presidents has about to implement measures to stop the currency sliding. joining us now from colorado, it is a bump way, is prospectors and bought a who's a development economist of senior research for the labor of economic development research institute for. and bob we prospect got to talk to you again. so why has the central bank devalued? does x, y has the public?
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is it, bobby failed to embrace it. what i think you'll 50 percent if the value did to, to allow for market forces of demand and supply to have a good to say in terms of exchange rate to 10 munition. as you also know, the part of the market today, it was a also a depreciating for the premium, was actually widening. so the central bank it through the month of what is the committee if decide that you adopt it more lead by the exchange rate. so that is actually an assisted that the devaluation is that we had seen and that the bothers in my view is that say it's also being driven by the huge mismatch in terms of the demand for the usb and the available supply. so i think that that is pushing pressure, obviously on the exchange rate. if people have not yet only embraced visits and probably got a given the time to use that be a bit in the past with respect to conic. i listed it as well as i position,
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so in terms of the trust and confidence in the zig and there's do a huge gape and deficit that the central bank and say the fiscal authorities, if awake on a, in terms of feeling up for us. but what do you say that the central got bank wants to take a more liberal approach? true to the exchange rate? does that mean that the say will be allowed to float freely on currency markets or are they still going to control the exchange right? what? yeah, would be towards allowing it more leave it free floats, it to some extent and maybe not the other, but then for the plot, the central banks still maintain that good 5 percent is that in that requirement? so this to some controls, we did that for an exchange management system, but the, well, what we are getting is that they want to allow market forces, they've demanded stoplight. so it could, it's a fee in terms of fair the, the pricing was bad for them exchange and he's above $6.00 currencies in 25 years.
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why has the central bank been unable to get a handle on the countries economic, a monetary policy, to what extent is the government it's the biggest threat pants were to its own currency and its own economy? yes, yes. i think i've got biggest challenges in my native, largely from level fiscal discipline. so in other words, we have failed to control public spending with deed fucked in a boy level. so we, we, we, we have a lot of different seats for the longest of times. in the, we have actually used the central bank for about possibly 2 to 5 minutes. those visits. so that has created it in place, not a push as we need the economy. so i'll say ultimately our biggest challenge, at least with the disco, liquid fiscal discipline, but or for level money to discipline. so model stoplight, what's made is be a bit of a unprofitable and, but only look at the numbers in between end of april of this year in april,
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june this year. and the zip mind me is actually increased by 50 percent, which is i unplugged and it will give in the state will quite corner me a which has been exhaust submitted by it by the drought close above just cutting the base and get it out, which is fixed it costs for production, and the, the, the amount of fish items picked up. and also this fucking of, you know, how much the price is, is also put in a little chris up, oh, now kind of the column. so this it is, but it's very challenging yet. and also because of the drought we are experiencing or holding pop outages is always good to talk to your prospect manufacturing data being with us to get on counting the cost. take some of the things that's i'll show for this week if you'd like to comment on anything that you've said, and i'm at a, sitting on the, on the x try to remember to use the hash tag h a c t c. or you can drop us a line counts in the cost of elders here don't met is our email address. there's plenty of of you online, out a 0 dot com slash ctc. that takes you straight to
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a page. and then you'll find individual reports, links, and tot addition skews of catch up. but that's it for this edition of counting the costs. i'm a very instead of going from the whole team here though, have thanks for being with us. for news on al jazeera is next is really for us, is seek to sign into the truth. in garza, i'm the occupied westbank by indiscriminately killing jermel is now just here with journalists, a paid the price. this is not just an attack on journalism. it's an attack on the world's right to know. the truth must be protected and heard. and the stories of real people must be told. journalism is not a crime. first thing, it's and the
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limits to how far the dream contains sta in your own adventure. now. counter air waves, the
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safe them even come in as an international inside corruption, excellence award. denominator hero. now the the hello, i'm elizabeth put on them and this is i'll just hear a lie from jo. ha, with special ed coverage of the one year anniversary of the october 7th attacks the .

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