Hello and welcome to World Business Report from the BBC World Service.
I'm Sam Fenwick. Today we explore the implications of America's new president and how his policies might shape global markets.
We'll hear from Miami's Republican mayor on his thoughts about the US leaving the Paris climate agreement.
In order to fulfill my solemn duty to protect America and its citizens.
The United States will withdraw from the Paris Climate Accord.
In the tech world, we'll bring you reactions to the massive investments in AI.
I think this will be the most important project of this era to create hundreds of thousands of jobs, to create a new industry centred here.
We wouldn't be able to do this without you, Mr.
President. And I'm thrilled that we get to.
And we'll take you to India, where a fierce battle is brewing over a soft drink.
Colas used to be extremely cool as a category for young people.
Today, the exact opposite has happened.
Colas are uncool today.
When a brand is uncool, then you go by price.
That's all coming up here on World Business Report in the next 30 minutes.
So, upon taking office, President Trump issued a series of executive orders, including the announcement of the US withdrawal from the Paris climate agreement, which is widely regarded as the world's most significant initiative.
to combat rising global temperatures.
He also vowed to prioritise investment in fossil fuels over renewable energy sources.
We will drill, baby, drill.
Well, joining us now is Miami's mayor, Francis Suarez.
Francis is a Republican who ran for the GOP presidential nomination in 2023.
Francis, thank you very much for joining us on World Business Report.
Your administration has been proactive, hasn't it, in dealing with issues of climate change since you took office in 2027 when the state was hit by Hurricane Irma.
How do you feel then about Donald Trump's policies towards the environment?
I'm not surprised. I mean, I think he's been very transparent about where he stands and how he feels about the issue.
I think actually him getting the US out of the climate accord, the Paris accord, and saying things like drill, baby drill, is totally in line with the rhetoric that he's issued throughout his campaign.
And frankly, he was elected by a very, very wide margin.
Right. He won every single battle.
administration has been proactive, hasn't it, in dealing with issues of climate change since you took office in 2027 when the state was hit by Hurricane Irma.
How do you feel then about Donald Trump's policies towards the environment?
I'm not surprised. I mean, I think he's been very transparent about where he stands and how he feels about the issue.
I think actually him, you know, getting the US out of the climate accord, the Paris accord and saying things like drill baby drill is totally in line with the rhetoric that he's issued throughout his campaign.
And frankly, he was elected by a very, very wide margin, right?
He won every single battleground state.
He won the popular vote by millions, which had not happened by a Republican president in several decades.
So there's certainly sensitivity on the part of the American public to have inflation under control, which has been something over the last four years that has devastated particularly poor people and working class people in america but can i ask you i asked you how you feel about his policies towards
the climate you're someone who said in the past that climate change is not theoretical that it's real and that it's something that you have to deal with as a as a city as a state every day day in day out i think the climate conversation is one that that continuously, like every single political conversation,
vacillates, right? And I think, in part, the president's reaction to, you know, the discussion, the conversation is one reaction reacting to inflation.
When things change, right?
The inflation wasn't, you know, hasn't been as rampant as it was over the last four years.
And that's partly as a result of our climate policy, of our energy policy, which has been, you know, one that many would argue is not pro -America.
And I think so that's part of it.
Are you disappointed, though, because you are someone that does acknowledge the reality of climate change.
Are you disappointed with it?
I'm not disappointed or surprised because I think he's being consistent.
And I think his his voters, which are my voters, are supporting that policy.
Do you worry about burning more oil and fossil fuels on your state and what might then happen in the coming years as you've had to deal with flooding and hurricanes?
I think the use of fossil fuels which is happening every single day I mean you know with the best majority of vehicles on our roads and a lot of how energy is being produced on a global scale favor of and I think you know even oil producing countries are some of the biggest you know proponents of and investors
in that transition but it has to make economic sense And I think that's where the rubber meets the road.
I'll just throw in another question, if you don't mind.
You talked about the impact of inflation on some of these measures to try and reduce burning fossil fuels.
As a state, you've spent $400 million on projects to mitigate the damage caused by flooding.
That's a lot of money.
Surely that's going to play into inflation, isn't it?
So, no, we spent $200 million, I think as a city is what you mean, not as a state, we're talking about the city of Miami, we spent $200 million in what we call Miami for everyone.
That's a resiliency process or project that we believe, based on the studies that we've seen and some of the activities that I've been involved in, in terms of global resiliency policy, saves us seven to eight times in disaster recovery.
So if you spend the money prophylactically, you know, hardening your infrastructure, then you can deal with flooding, You can deal with hurricanes.
You can deal with what they call dry day flooding, which we get depending on the tides on an annual basis.
And so that's that's just smart.
That's smart investing in a world that will save money in the long run.
And so that's not only not going to create inflation, that's actually going to reduce prices because some might say that the more of these weather events that you have, the more you're going to have to spend on that.
And perhaps if you were burning and if you weren't burning fossil fuels, then you might one day have fewer of those events.
Look, I understand what the macro argument is.
I think from our perspective, we want to meet every challenge as we confront it.
And like I said, things change on an annual basis.
You know, this is some long -term policy, but also this is also short -term policy.
And so from our perspective, we want to meet the moment.
And the way we meet the moment is by having an infrastructure that can take on any challenge that Mother Nature can throw away.
We, in the early 90s, we changed our entire building codes because we had a 200 -mile -per -hour event, which is, I don't know what the conversion for kilometers is, but it's a significantly higher number.
So that means that Miami is essentially the most wind -resilient city on the planet.
What we've now seen is weather events that create a volume of water that we have to deal with and manage.
And so we're meeting that moment by investing in our infrastructure so that we don't see some of the catastrophes that we've seen in other parts of the country, where a climate event overwhelms the infrastructure.
And then just one final, thank you, Francis.
Just one final point.
You have encouraged the adoption of solar energy and other green technologies to reduce the city's carbon footprint, the city of Miami.
How difficult will it be to get those projects off the ground now?
Some loans given out by the Biden administration through the Inflation Reduction Act for projects like that have been cancelled.
Look, I think, again, this is an economic question, and I think the economics will dictate what kinds of energy producing resources we invest in.
We obviously love solar.
And, you know, what's interesting about the future is energy demands are not going to go down.
When you think about, you talked in the beginning about AI, right, when you think about electric vehicles, which are growing as a percentage of the total number of vehicles, right, there is going to be greater and greater demand for energy.
And that has to be met in a variety of ways, right?
We have two nuclear plants.
We may need to have four nuclear plants, which produce a tremendous amount of energy to sustain this new future.
So I think we're going into a future where energy is a big issue.
But look, the burning of fossil fuels, the day of tomorrow, I've seen a lot of carbon capture technologies.
They could find a way to capture the carbon from burning of fossil fuels.
And burning of fossil fuels ends up not being a carbon emitter emitting resource.
So technology is a big, big part of the solution.
Francis Suarez, Mayor of Miami.
Thank you very much for joining us today on the program.
Thank you very much.
Well, President Trump has announced the creation of a huge artificial intelligence project called Stargate.
It will see the private sector invest $500 billion in AI infrastructure in the U .S.
over the next four years.
Mr. Trump was speaking at the White House, where he was joined by the heads of major tech firms, OpenAI, Oracle and SoftBank.
He described the investment as a show of confidence in America under his leadership.
This monumental undertaking is a resounding declaration of confidence in America's potential under a new president.
Here's what Sam Altman, the CEO of OpenAI, had to say.
I'm thrilled we get to do this in the United States of America.
I think this will be the most important project of this era.
And as Masa said, for AGI to get built here, to create hundreds of thousands of jobs, to create a new industry centred here.
We wouldn't be able to do this without you, Mr.
President. So how do countries around the world respond to that?
Well, Rush Shaw is with us.
He's the founder of the Tech London Advocates and the Global Tech Advocates.
He represents a network of more than 30 ,000 tech firms across Europe and also the former vice president of Skype and global innovation director at Telefonica.
So, Ross, does the EU have to match this kind of investment and can it?
Well, I think, Sam, that the EU really needs to take a closer look at what's being done and what was announced yesterday.
It is a substantial investment, obviously, in infrastructure and power to support a significant number of data centers which have AI embedded in them.
The UK last week announced its AI action plan with a series of recommendations creating AI growth zones.
So now I think the rest of Europe, I know, is taking this very seriously and really needs to think about how it keeps pushing deeper into AI.
The regulatory landscape in the EU is very different from the U .S.
and the U .K. will probably have a very different one as well.
But they're going to need to look at the level of investment around infrastructure, around energy, and around the use of AI around data centers.
Definitely it's on their radar.
Politicians and countries have been talking about tech sovereignty, haven't they?
Just explain what that means to us and how that might affect the development of AI and innovation.
Yes, I think each nation is looking at how it can have more control over its technology ecosystems.
You know, you've seen significant tech companies in the U .S.
having global impact.
You've seen the Chinese really trying to build more presence on the global stage.
And I think for the U .K.
and Europe, it's around figuring out how do we take more control over our sovereignty as it relates to tech ecosystems and the emerging technologies that are on the horizon.
We've seen the EU pass its Chips Act to invest tens of billions of euros into investing into semiconductors and building high -end fabs to support that, money going into quantum technology and robotics.
And I think the same approach is going to be needed with respect to artificial intelligence in terms of how it competes on the global stage, but having much more autonomy and control over how it deploys and manages its AI resources.
So it sounds like we're entering a tech race.
Oh, there is definitely a tech race.
And I think if you look at the geopolitical landscape, not just semiconductors and chips, but now very much with artificial intelligence, there is collaboration across countries and across ecosystems because no one country is fully self -sustaining, not even the U .S.
But at the same time, people are saying, look, we don't want to get stuck or shut out on the latest technologies.
We learned that lesson during the pandemic when there was a shortage of chips, and so people couldn't buy cars, they couldn't buy appliances because, you know, there just weren't enough chips to be produced.
And now you have nations like India saying they want to be totally self -sufficient in chips by 2025.
That also now relates directly into this thinking about AI and how you see this Stargate project that was announced yesterday playing into that geopolitical landscape.
And then just finally, Trump has appointed David Sachs as an AI crypto czar.
Yes. Do you think that they're going to be looking towards more regulation?
No, I suspect they're going to – well, I think they're going to look at different types of regulation.
I mean, already yesterday, President Trump announced a rollback of some of the AI safety standards that the Biden administration had put into place.
And I think that's an indication of more things that will be coming.
They'll probably introduce some level of regulation, but I think more of it's going to be focused on how does the regulation drive innovation with respect to artificial intelligence.
I don't see the U .S.
going down the road that the EU has taken, which has been a much more significant and much more integrated approach to AI and a one -size -fits -all approach that regardless of industry that you're in, you have to adhere to the same rules in relation to artificial intelligence.
Now we need to see what the UK is going to come up with as well.
And that should come hopefully with the introduction of the industrial strategy this April.
Thank you very much, Ross Shaw there from Global Tech Advocates, representing around 30 ,000 tech firms across Europe.
You're listening to World Business Report from the BBC World Service with me, Sam Fenwick.
Now let's head to Kenya, where cabinet ministers have approved sweeping reforms to streamline state -owned enterprises.
As part of the plan, 42 state -owned corporations will merge into 20, while nine other government bodies will be dissolved.
Now this decision comes amid growing fiscal pressure from the International Monetary Fund and the World Bank, urging Kenya to reform its inefficient state -owned enterprises.
I asked our correspondent, Jewel Karungi, what type of government corporations will be affected.
Some 42 paratetals will be merged into 20 entities.
This will affect organisations such as the Kenya Wildlife Service that is in charge of all the national parks in the country.
Head to Kenya, where cabinet ministers have approved sweeping reforms to streamline state -owned enterprises.
As part of the plan, 42 state -owned corporations will merge into 20, while nine other government bodies will be dissolved.
Now, this decision comes amid growing fiscal pressure from the International Monetary Fund and the World Bank urging Kenya to reform its inefficient state -owned enterprises.
I asked our correspondent, Jewel Karangi, what type of government corporations will be affected.
Some 42 paratoles will be merged into 20 entities.
This will affect organisations such as the Kenya Wildlife Service that is in charge of all the national parks in the country.
We have organisations such as the Kenya Airports Authority.
There are some that will be removed altogether.
Some nine organisations would be dissolved.
We have organisations that will be merged and pushed to the private sector.
The government says that they would better perform if they were handed privately.
And this includes organisations that represent the tourism sector, organisations such as the National Social Security Fund that is in charge of all pensions.
So there are a lot of organisations that will be affected by this entire move.
And the ones that will be dissolved is the aim that some of those will be bought up by private companies, because you can't just suddenly get rid of what they're doing, presumably.
What's interesting is that for this nine that will be dissolved, they're not saying what the plan is.
And one of the corporations that was mentioned that will be dissolved is the Lamo Port South Sudan Ethiopia Transport Development Authority.
And this one was basically in charge of building a road that connects Kenya to South Sudan and Ethiopia.
it is a very key infrastructure item so doing with it all together does not give indication as to what happens to this particular project.
And what's behind this?
Why has this decision been made?
A number of reasons have been cited as to why the decision needs to happen now.
One of them is that the government has been under a lot of financial burden to raise money.
Now if you recall last year the government had proposed to introduce a new law that would have brought about new taxes.
But a lot of young people went to the streets to protest against this bill, and the bill was dropped altogether.
So that means that the government was not able to raise the money that it needed to run business in this financial year.
Another reason that they have cited is that they want to reduce waste.
Now, a lot of these state corporations are heavily indebted, and most of them have been defaulting on some of these debt obligations.
And if you're merging organizations and dissolving some organizations, presumably that also comes packed of Donald Trump's plan to drill baby drill.
But for Kenya, it could have a positive effect on the economy, couldn't it?
Can you explain why?
Yes. So today we heard from the central bank governor who said that Trump's announcement would be actually a positive thing for Kenya and his reasoning was that if companies in the US are encouraged to drill oil then this would lower the fuel prices in the country and in turn lower inflation in the US.
With reduced inflation in the US then that means the global inflation would go low.
He was seeing it as a ripple effect right from how lower fuel prices would affect the US economy and in turn affect the global economy, Kenya included.
To just give some context, Kenya discovered oil over 10 years ago but has never started commercial production yet.
So the country is heavily dependent on oil and any changes in fuel prices has a direct impact on the cost of basic goods and services in the country.
So the assumption or the feeling is that if the price of oil is able to go down and today we have already seen that the price of crude oil has already dropped, then the expectation is that this would lower the inflation globally and also translate into lower inflation in specific countries.
That's the BBC's business reporter, Joel Kiri Ongi, speaking to me a little bit earlier on.
Now, in a significant move aimed at boosting economic growth, the UK government has replaced the chair of its antitrust watchdog.
The boss of the Competition and Markets Authority has been forced out of his job and he will be replaced by a former Amazon executive.
Let's talk to Russ Mould about this.
he's investment director at AJ Bell.
Ross, is this an unusual step for the UK government?
It is relatively unusual, yes, and the UK in many ways has been seen as being very tight and very fierce on competition rules and antitrust.
Mr Bokkarink, who's been let go from the competition like its authority, intervened in Microsoft's purchase of Activision Blizzard in video gaming and slowed that up for a long time, slowed up Vodafone's planned merger with three here in the UK, and that was now being seen as by the new Labour government
as a potential obstacle for growth and they're looking to try and free things up.
So if I was looking to buy an overseas company, looking to buy a UK rival, I think I'd be quite excited right now.
Now's the time to do it.
The business secretary, Jonathan Reynolds, said that we want to see regulators, including the CMA, supercharging the economy with pro -business decisions that will drive prosperity and growth and put money in people's pockets.
Now the CEMA is responsible for ensuring fair competition and protecting consumer interests.
So did those two, that statement from Jonathan Reynolds and what the CMA is responsible for, are they slightly at odds?
It's about striking the right balance.
I have no problem with lower controls by government over prices, routes, barriers to entry and competition, but customers must be protected, quality of service must be protected and that means keeping an eye on antitrust and market share.
So they're not diametrically opposed.
There has to be a balanced truck.
What you don't want is an area where companies become too powerful a bit like the 1975 film Rollerball, where major companies even pick who plays for sports teams.
Ross Moll, thank you very much.
We're going to head to India now, one of the world's largest consumer markets.
It's witnessing an unprecedented rivalry in its cola market.
For decades, multinational giants Coca -Cola and PepsiCo have vied for the attention of the Indian consumer, but now they face a formidable challenger in Asia's richest man, Mikesh Ambani.
His company, Reliance Retail, has launched its own cola brand with an extensive retail network and aggressive pricing policy.
Reliance has intensified the cola wars in the country as the BBC's Davina Gupta has been investigating.
It's a sunny winter afternoon in Gurugram near Delhi and I'm at a birthday party of a three -year -old.
As people gather around to wish the birthday boy, no celebration here is complete without a staple on the drinks table, soft drinks, from classic colas to fizzy fruit flavours.
I love the face and also the fact that cola is so easily available in the market.
I can easily serve it to all my guests and it's also the choice of most of the people who come and attend these parties.
And this is just a glimpse of an estimated $5 billion soft drink market here in India.
For decades, this market has been dominated by two global brands, Coca -Cola and Pepsi.
Fast forward and the cola wars in India have taken an unexpected turn.
In 2022, Mukesh Ambani, Asia's richest man, decided to enter the field.
His company Reliance acquired CamperCola, a nostalgic brand from the 1970s, for 22 crores or 3 million US dollars.
Cola war meant only Coca -Cola versus Pepsi and vice versa, but it looks like there is a third player in the industry which is CamperCola.
Kartik Srinivasan, a brand consultant who has worked on marketing campaigns for global brands in India.
Reliance has a fairly huge stake in the food and beverages industry.
They have a huge presence in terms of the retail formats.
So it makes sense that they have their own in -house cola brand instead of trying to sell Coca -Cola and Pepsi alone.
Reliance's strategy to disrupt the cola market is twofold.
First, they are undercutting competitors with predatory pricing.
At a Reliance retail store in Delhi, I saw this firsthand.
it's afternoon where customers are coming in to make purchases and there's a section of cola drinks here so i can see that all the big brands you have pepsi you have coca -cola and also camper how is this product doing let's ask sanjay kumar who is manager of this reliance retail store coca -cola sells
more in our store and then comes pepsi for now people are only buying Campo Cola if there is an offer.
When they are buying more cola bottles for a get -together or a party, then they prefer Campo Cola.
Campo Cola is 50 % cheaper than the other two brands.
The second strategy for Reliance to catch up is hyper -localization.
The company has partnered with bottling plants like that of Godavad Consumer Products in the western Indian state of Maharashtra.
Seloni Godavad is the chief operating officer here.
The transportation costs is a very big cost for these companies.
So they have to make multiple plants.
So they look for bottleiers like ours, you can have a benefit of at least two to three percent on an overall basis.
For now, as per reports, Campacola plans to reach 10 million mom and pop stores in the next five years.
And most of them are in rural India.
So how is this new player going down with Coca -Cola and Pepsi?
Shiv Shivakumar was the CEO of Pepsi in India.
Colas used to be extremely cool as a category for young people in the 1990s and 2000s.
Today, the exact opposite has happened.
Colas are uncool today.
When a brand is uncool, then you go by price.
And that's where Kampa coming in has simply flattened the price table of the market.
So where does it leave us?
For global businesses, it's a case study in local adaptation and resilience.
For India's growing population of 1 .4 billion people, it means more choices, competitive pricing and even more aggressive advertising vying for their attention.
That was Davina Gupta reporting for us, bringing us to the end of World Business Report for today.
The producer today was Matt Lines.
I'm Sam Fenwick and I'll be back at the same time tomorrow.
Thanks very much for listening.
