Hello and welcome to World Business Report on the BBC World Service.
Will Bain with you today.
Great as always to have your company.
Coming up, a warning from the United Nations about the state of Myanmar's economy.
We'll hear from a senior official involved with that report in just a moment on the programme.
Also today we'll wrap up a bumpy week in the world of AI, look ahead to what could be a controversial budget in India and why are some of the biggest names in global sport and business looking at investing in a UK cricket league?
The acquisition price is relatively cheaper compared to a football.
So you're looking at that, particularly with the American market, as you say, that kind of private equity venture capital, they work on those kind of assumptions, buy into something that has future growth value and look to exit further down the line for a significant profit.
Yeah, wild rumours in the UK, newspapers about that.
We'll try and work out a little bit later on on World Business Report just why India's richest family and the superstar of former American footballer Tom Brady are among those supposedly interested in buying up a slice of English cricket.
We'll do that before we leave you today on World Business Report.
We're going to start, though, with Myanmar, the East Asian country that's seen rolling political turmoil and violence since a military -led coup in 2021, ousted the elected government of Aung San Suu Kyi.
Well, that was the announcement on that day, speaking on a military -owned TV channel, an army spokesperson promised fresh elections after one year of state of emergency those elections are still yet to happen in the biggest city yangon people reacted with wordless outrage at the time a coordinated campaign
to lean on your car horn and bang pots and pans out of people's windows against the far bruter force of the military which had ripped away any semblance of democracy in the country.
In the hours after the coup, this woman, who didn't want to be named, told the BBC what it was like inside Myanmar.
Some of our friends were detained.
Also, the banks are all closed and people are staying inside.
The internet connectivity is not there anymore.
I'm using it with my Fiverr internet base at home.
So I can go out, use my phone, there is no data at all.
And their military tracks are rolling around, you know, roaming around the whole city.
Over time, perhaps unsurprisingly, businesses started to quit the country too.
A year after the coup energy giants like Total and Chevron said they were quitting gas exploration projects in Myanmar both companies that have been involved there for more than 30 years.
Vicky Bowman. So I can go out use my phone there is no data at all and their military tracks are rolling around you know roaming around the whole city.
Over time perhaps unsurprisingly businesses started to quit the country too.
A year after of the coup.
Energy giants like Total and Chevron said they were quitting gas exploration projects in Myanmar.
Both companies had been involved there for more than 30 years.
Vicky Bowman was the director of the Myanmar Sensor for Responsible Business at the time that we spoke to her from Myanmar about those businesses exiting.
We've seen some companies depart for commercial reasons.
So, for example, metro supermarkets, which had come in to cater to the hotel industry to the wealthy expatriates.
They just couldn't see a case for their business model.
They exited for commercial reasons.
For Total, the pressure from campaigners has continued to grow.
And what their board has probably said to themselves is that given that this has normally been about, I think, 1 % of Total's balance sheet, as it's turning into 99 % of their headache, I imagine that what's happened is that the Total Board has just said, let's give up and sell it.
Chevron's exit is a consequence of the Total decision because it's a sleeping shareholder in the same project.
Vicky Bowman there, who has since left the country, as has Sean Turnnell, former economic advisor to the jailed Myanmar elected leader Aung San Suu Kyi.
He spoke to us in December about the economic impact.
Just a story of survival now.
You know, Myanmar had been in that position where people were beginning to invest in education, people were investing in new goods and services, it was becoming a bit of a hub for even the internet economy, you know, the textile trade was going off, tourism was really growing very strongly, all that on the back
foot. And yeah, you talk to most people now, it's just a story of survival.
The regime is really running nothing but a war economy.
So, yeah, everyone's sort of withdrawn within themselves and basically just trying to survive.
So there's a bit of a potted economic history, if you like, of how we've got to today expertly put together by our team.
So let's come to the president.
All that turmoil that you heard about the fleeing of, among others, big international investors has led perhaps unsurprisingly today to a warning in an official report from the United Nations about the state of the country's economy.
economy and Kani Wignaraja is the United Nations Development Programme Regional Director for Asia and the Pacific, also the UN's Assistant Secretary General.
Kani, welcome to World Business Report.
Thank you for being with us.
Thank you, Will. Just plot through what you've found today, a warning really that a lot of...
Certainly at UNDP that there will be a catch up on human development, on growth.
Then you saw COVID followed very fast by a military coup.
And since 2020, it's been a 9 -10 % GDP contraction.
And now the most recent World Bank estimates says there's going to be another 1 % loss and even more with inflation soaring.
I mean, it's over 25%.
For me, two figures that are quite startling is a litre of petrol is now about $3 .60 and that's three times the cost of what it is in New York.
And look at rice prices.
You can't even say the numbers here because they've sowed in a place like Mongdao.
It's about 900 % increase in rice.
So you've seen a rice bowl turn into, I don't know, rice bread those difficulties when we heard it in the news or many of our listeners will have heard it in the news headlines just before the program started i've seen not just an exodus of big foreign international companies but people human beings
the people who are vital to driving an economy driving an economic recovery as well in terms of a huge uptick in migration away from Myanmar?
That's right, because, you know, with 50 % of people now below the poverty line and another one third really hovering just above and probably now if we look at data, which is very hard to get in today, that one third is probably also teetering on collapse.
So survival is the term.
And we did in 2023, we did a telephone survey among young people.
Now, these were obviously those who had access to a phone line or a cell phone, and over 40 % of them wanted to leave the country.
Now, that's over and above those who have fled across every border that they can get across too.
And these are borders now that are full of illegal activity.
So it's a really tough situation where Myanmar is sadly the leading source of things like opium, heroin, meth, and therefore human trafficking and scam centres.
In the terms of what is realistic, Khani, what needs to happen now externally and internally?
Well, you know, this was, if you think about it, this is not going to resolve itself.
And you're going to need the regional players and the international community to engage with all parties in the conflict.
This is not just about negotiating with one group.
And yet one of the difficult truths is, isn't it, when there are other big things happening in the world, what's happening in Gaza, what's happening in the Congo at the moment, what's happening in Sudan, attention gets dragged away, doesn't it?
How do you refocus international attention, I suppose, which I guess is part of the UN's job?
That's very true. But just think that, you know, you had a healthy Southeast Asian tiger carb economy, let's say.
And today, you have a very hurt, hungry, adult tiger.
Now, a frightened, angry tiger is not something anyone wants.
So the world can't say, well, this is not going to be our business, because it is.
if you look at the way people move, the way drugs move, the way arms and all of that illegal money laundering moves, it is everyone's business.
So I would say you've got to come down hard on shutting down illegal activity, including across borders.
And then like what UNDP is doing, which is to support livelihoods.
We've reached about three, four million people with farming, rebuilding shelters, just getting solar.
You know, this is a country where half of the people, it's 48%, have no access to electricity.
So getting solar energy out there.
But I would say a critical thing is keeping those borders open for commercial trade and aid.
Because if farms do not resuscitate before the spring rains this year, I mean, a couple of months, you're really going to see a famine, and more people are going to be hungry.
They are going to want to move.
So it is in everyone's best interest to really build the capabilities, build back farming and agriculture, and really avoid this awful situation that's going on in Myanmar.
Kaniwig Naraja from the UNDP, the United Nations Development Programme, Regional Director for Asia Pacific, thanks so much for your time here on World Business Report.
You're with World Business Report on the BBC World Service.
Been part of the story of the week, hasn't it, in business and economics terms?
We kicked off on Monday's early edition of the programme talking about the world of AI really being turned upside down.
So we thought we'd round it out on the early edition of the show at the end of the week, trying to work out where we are now and what indeed we learned from it all.
And we're going to do that with Shanti Kellerman, Chief Investment Officer at M &G Wealth here in London.
If you're a regular listener, you know Shanti, always with us on a Friday to pick through what's moving financial markets.
And Dr. Gary Marcus is back with us as well.
Dr. Marcus, you might remember, is an AI researcher, author of Taming Silicon Valley, How We Ensure AI Works For Us.
And he joins us from Vancouver in Canada very early in the morning there, his time.
So very grateful for his time.
Welcome both. Shanti, you and I have done a lot of these Fridays together in the last few months, And I feel like we keep using one phrase, which is, gosh, been a bit of a wild week on the markets this week, hasn't it?
This AI story has been dominant.
Where are we as we sit here Friday afternoon, European time?
Well, I think you'd never know if you just looked at the number for the week.
So maybe that's the key.
But no, a lot of we did have a lot of a lot of movement this week.
I think the big story is, you know, maybe there's some potential threat for Nvidia.
If people don't need to buy as much as its chips, it's been kind of flat or down this week.
For a lot of those other big companies, if they have to invest less to get to the same place, that's a good story for them.
They're spending less money.
And then we also had earnings this week for a lot of the big tech companies.
So that did push things down as well.
Microsoft's growth was a bit slower, but Apple had pretty positive numbers.
Tesla, not so good numbers, but they talked it up really well and people seemed to like it.
Dr. Marcus, great to have you back on the programme too.
All of us here on the team at World Business Report were picking through some of your great Twitter threads, X threads this week.
And I recommend people to go and have a little look to read through it in more detail.
I guess one of the things that struck me, and I don't know whether it struck you as you wrote it as being one of the things that was interesting this week, were some of the things that didn't surprise you.
so much things that you thought we already knew all along just just explain that a little bit well we we knew all along that these models were going to become more efficient and they did you know it was surprising maybe that that advance came from china i think the other thing that i kept pointing out
is that although this thing is a really big deal economically because it's cheaper to train these models now and that's going to disrupt the business models because there's going to be a price war it's not actually an advance in capability so these models aren't better than the earlier ones.
They're just more cheaply made.
So there's still many problems that large language models have.
They're not reliable.
They hallucinate things and so forth.
And that didn't actually change.
I think a lot of people got confused about that and said, oh, this is a more powerful system.
It's not more powerful, it's just cheaper.
But that has a really big effect because we now have a price war in LLM.
Great to have you back on the program too.
All of us here on the team at World Business Report were picking through some of your great Twitter threads, X threads this week.
And I recommend people to go and have a little look to read through it in more detail.
I guess one of the things that struck me, and I don't know whether it struck you as you wrote it as being one of the things that was interesting this week, were some of the things that didn't surprise you so much, things that you thought we already knew all along.
Just explain that a little bit.
Well, we knew all along that these models were going to become more efficient, and they did.
It was surprising maybe that that advance came from China.
I think the other thing that I kept pointing out is that although this thing is a really big deal economically because it's cheaper to train these models now and that's going to disrupt the business models because there's going to be a price war, it's not actually an advance in capability.
So these models aren't better than the earlier ones, they're just more cheaply made.
So there's still many problems that large language models have.
They're not reliable, they hallucinate things and so forth and that didn't actually change.
I think a lot of people got confused about that and said, oh, this is a more powerful system.
It's not more powerful, it's just cheaper But that has really big effects because we now have a price war and LLMs are basically – large language models are basically becoming free.
And that makes it very unclear how these big AI companies that are investing tens of billions of dollars are actually going to make a profit if there is a price war.
And this obsession, Gary, as well as it's become really, especially from an investment perspective with exactly that, large language models, ones that you sort of talk to, they talk back to you, give you answers, all that kind of stuff.
We were talking to Humayun Sheikh on the program earlier in the week, an original investor in DeepMind, which Google now owns as well.
And he was reiterating that point that too much focus has been on that side of it and not on, you know, AI that does accounting or works in health care or other sort of sides of that, of the AI system ecosystem.
Do you think that that is a learning from this week that will be taken forward, that people will?
It's a learning that could be taken forward.
I don't know if it will.
So there's really been a kind of intellectual monoculture, a kind of absolute focus on large language models to any other approach.
And one thing that's been talked about a lot this week is a war, like a supremacy.
Is China going to be supreme or is the United States?
And I think the answer is if we just use large language models, they're never going to work perfectly.
They're always going to make mistakes.
And everybody knows how to do it.
So there's just this leapfrog back and forth for the lead.
Nobody's going to get a permanent advantage.
One of Anthropik's CEO talked about how we can get a permanent advantage.
That's just not realistic if we use these things.
What we really should be doing is saying, hey, Masa -san seems to be ready to put in another $20 billion.
Masa -san, the boss of SoftBank, by the way, the big Japanese investment fund.
Exactly, which would put it at a valuation of $340 billion according to the reports.
That just doesn't make sense to me because I don't see how to earn out that valuation.
You're talking about a company, OpenAI, that has never made any profit whatsoever, now actively in a price war with new competitors like China giving away stuff for free and open source.
Like, I just don't understand how the math works there.
As a final thought, Gary, you've been one of those consistently raising from the beginning, really, about concerns and trying to get governments really sort of wake up and take some of this more seriously and get involved in some of the policing, I guess, and managing of this.
Was there one tiny silver lining this week that actually, if nothing else, it was proved that however big the wallet, few companies, a handful of companies can't control this?
It's going to be impossible going forward for a very small number of people to control this.
I think that's right.
There's another lesson here, too, which is we do actually need regulation around AI.
So DeepSeek suddenly went to the top of the Apple charts and it's taking everybody's data.
The license, in fact, gives them the right.
And that data is going directly back to China, presumably, or at least there's a conduit by which it might.
That's a sign that we don't have our regulatory act together if that much money can be – the technical term is exfiltrated from the U .S.
over to China. That's not great.
And that's one of many signs that we don't really have our regulatory act together.
Yeah, we saw the Italian government today saying they were going to block the app for exactly that reason.
But it doesn't answer the kind of regulatory questions that Gary is raising, does it?
A fascinating conversation.
Sure, we're one we'll return to in the future with you both.
Dr. Gary Marcus and Shanti Kellerman, thanks so much for your time.
You're with World Business Report on the BBC World Service.
And come Monday, I'm sure we'll be talking about this, India's budget could be a controversial one.
The BBC's Arunday Mukherjee from our team in Mumbai has been looking at the key areas and where some of those controversies might lie.
A symbol of strength and ingenuity.
A long line of people wait to enter this year's auto show being held in India's capital, Delhi A crowd of enthusiasts jostle as they walk along new, gleaming cars on display soaking in the sights of the vehicles expected to hit the Indian market But the number of people doesn't necessarily mean number
of sales a reality car makers have been struggling with Sales growth slowing to a four -year low and even smaller affordable cars saw a drop in sales by over 14%.
A long line of people wait to enter this year's auto show being held in India's capital, Delhi.
A crowd of enthusiasts jostle as they walk along new, gleaming cars on display, soaking in the sights of the vehicles expected to hit the Indian market.
But the number of people doesn't necessarily mean number of sales, a reality car makers have been struggling with.
Sales growth slowing to a four -year low, and even smaller affordable cars saw a drop in sales by over 14%.
Ladies and gentlemen, a big round of applause for E Vitara.
Maruti Suzuki, India's largest selling car maker, is also feeling the pinch.
I am very, very much positive today.
Partho Banerjee, the sales and marketing head of the company, is optimistic but also realistic about industry challenges.
The bottom of the pyramid, the people who are there, their affordability part of it, vis -a -vis the increase in the car price has been a challenge.
How we can try to bridge the gap of the affordability is something collectively we all have to work together.
Walking through supermarkets and looking at revised price tags of essential items is a reminder that from vegetables to fast -moving consumer goods, costs have significantly gone up.
And because incomes have not increased at the same pace, people are much more cautious about spending.
Consumption makes up 60 % of the Indian GDP, so the lack of spending has a direct impact on the country's growth.
Now this is definitely a sizable slowdown compared to...
Which is why economist with QuantEco Research, Yuvika Singhal, says putting money in the hands of Indians is essential.
Urban consumption does require a handholding, which can come to some extent from some kind of a tax incentive coming in from the budget.
Personal income tax can see some reject to give the middle -income class earners some kind of reprieve to give a boost to their disposable income, which ultimately translates into higher consumption.
Along with weak consumer demand, factories across sectors saw muted manufacturing activity, the combination driving down India's economy to a seven -quarter low.
India's growth fell from 8 .1 % between July and September in 2023 to below 5 .5 % for the same period in 2024.
Private investment too has been sluggish, and while one still sees construction sites for big infrastructure projects as we drive through Indian roads, the government has pulled back on its spending.
Capital expenditure, or CAPEX, has been a key driver of economic growth of late, and Yuvika feels that has to continue.
The government needs to continue to press the pedal as far as its own government CAPEX story is concerned.
At a time when your urban consumption is slowing, the private sector is bound to be very cagey to unleash a full -fledged CAPEX recovery cycle.
But despite the headwinds, this nation of 1 .4 billion people is still bustling with economic opportunities.
The buzz on the streets, backed by the World Bank and the International Monetary Fund, who say, comparatively, India will still remain one of the fastest -growing big economies in the world.
But this year's budget could hold the key to whether India manages to maintain that economic trajectory.
Yeah, excellent primer as always from Arunaday Mukherjee there in Mumbai.
We're trying to get Arunaday on the programme on Monday to break all of those decisions down for us.
Let's round out today, though, talking cricket here on the programme on World Business Report.
Because whether you like it, love it, know the rules, a big fan or have never heard of it or seen it played before, it's becoming increasingly big money.
A hundred bull shortest format here in the UK called the hundred competition is now open to international investment And it's getting some, or apparently so, buzz from some of the biggest names in sport, celebrities like Tom Brady and India's richest family, the Ambani's.
Dr. Dan Plumney of Sheffield Hallam University in the UK told us more.
This was absolutely a drive by the ECB in England to do something that would, you know, ultimately rival some of those leagues around the world.
And they saw this new franchise based shorter ball format as a way to do that.
And so far they and the traditional teams of clubs have kind of been the funding arm for it, right.
This move is the first time they've opened it up to private investment and it's the first time really we've seen it in big fashion happen in the world of cricket.
An interesting experiment, I suppose, in that regard, full stop for the sport.
It was always likely and you're absolutely right if you roll the clock back the ECB set this up they had all the rights to the franchises themselves the eight hosts of franchises being counties essentially that are connected into the county championship system the ECB had the rights to those they're
still going to retain a stake in those franchises still and they still own the overall rights to the competition so they're giving the clubs an option with what they do with the other stake and then and then the ECB are going to sell their of that but they'll still have overarching rights and i guess
we were always likely to end up at this point it would need some form of expansion moving forward that was pretty clear absolutely right if you roll the clock back the ecb set this up they had all the rights to the franchises themselves that the eight hosts of franchises being counties essentially that are connected
into the county championship system the ecb had the rights to those they're still going to retain a stake in those franchises still and they still own the overall rights to the competition so they're giving the clubs an option with what they do with the other stake and then and then the ECB are going
to sell their part of that but they'll still have overarching rights and I guess we were always likely to end up at this point it would need some form of expansion moving forward that was pretty clear and the ECB are going to use some of that money generated to go back into the recreational game and to
support the county structure as well so on paper looks a pretty good deal but of course the devil will always be in the detail and how it plays out in practice yeah absolutely and really interesting isn't it because certainly with cricket purists here in the uk it had some controversy because of that model
to start with that some of the traditional teams that made up the kind of club competition in the uk felt like they were being frozen out of this new format but certainly if we're to believe the uk newspapers today i mean english cricket's governing body can't be any more excited can they India's richest
family Tom Brady the likes of that who already owns a football club or part owns a football club here in the UK as well shows that there actually is an appetite for this competition that many thought was coming to a crossroads yeah there is absolutely the appetite if any of those rumors are true and it's
interesting the makeup as you say isn't it you know you we expected the IPL players to be involved you can see the natural synergies there and of course the co -owners of the delhi capitals finalized a take over of county club hampshire last year as well so they look on course to secure potentially the southern
brave as part of that agreement so you could see that happening that was kind of where we thought it might go but yeah the other interesting ones as you say you know this kind of multi -sport multi -club type ownership model which the the tom brady example would look towards with Birmingham City at football
club owners, Knighthead Capital in contention, maybe for the Birmingham Phoenix.
We've seen noises that Todd Bowley at Chelsea or the Glazers at Manchester United have been looking at the London spirit.
So that angle as well is really interesting.
And we've seen that in other sports as well, of course, around the world.
But it does show that, yeah, there is an appetite there for this type of investment and that the investors coming in, actually, also see probably growth for future expansion of the competition as well.
Well, that growth is really interesting as well.
Cricket bonkers will love it.
Some of them will literally not know the rules to this game, but it does show you, doesn't it?
American private equity money.
They're seeing this as sort of an untapped market in a way that perhaps.
