This BBC podcast is supported by ads outside the UK.
Amiga. Empathy is our best policy.
The New Year is here.
It's the perfect time to refresh those household essentials and score some cashback rewards with Colgate Palmolive.
From toothpaste to dish soap, chances are you've got Colgate Palmolive products on your shopping list and in your house right now.
We're talking brands like Colgate, Soft Soap, Palmolive, Irish Spring, Fabuloso and Toms of And right now, you can get up to a $10 digital Visa prepaid card when you buy up to $30 of Colgate -Palmolive products.
Here's how it works.
Spend $20 on their products, get $5.
Spend $30, get a $10 reward. All you do is shop your favorite brands, snap a pic of your receipt and upload it to CPRewards .com.
So grab what you need, or maybe try something new, and get rewarded just for doing your usual shopping.
And start your year fresh by earning cashback rewards with Colgate Palmolive.
Rewards available while supplies last. Limits apply.
US only 1 1 25 3 3 1 25 For full terms and conditions visit CPRewards .com Hello and welcome to World Business Report from the BBC World Service I'm Sam Fenwick coming up today.
As the official death toll from Myanmar's devastating earthquake surpasses 2000 we explore economic options for the country as it deals with rescue efforts and prepares for the rebuild.
President Trump's so -called Liberation Day is fast approaching but what could it mean for the global economy, and South African businesses are working to mend ties with the US after a rocky few months.
We are looking upon our President to really reach out to President Trump and finalise the non -deal with the spat that has been playing out in public because obviously if the two don't work together.
It will have a knock on the face on business that's all coming up here on world business report over the next 30 minutes.
We begin in Myanmar where relief teams are facing an escalating humanitarian crisis.
The World Health Organization reports that over two dozen hospitals have been either destroyed or damaged and the military junta ruling Myanmar says the death toll now exceeds 2 ,000.
Infrastructure across the country is severely affected with roads, bridges and railways damage, widespread power outages and unreliable communication services further complicating rescue efforts.
Ong Chit Kin works with the Strategy First Education Group, which runs an international college and school in Mandalay.
We saw a lot of buildings just crumbled like paper, and some just fallen to the ground.
and a lot of the three, four -story buildings ground floor and the first floor would be in the ground or just collapsed to the ground.
I would say 100 % of the buildings got crack lines and structural damages but about 10 % just fallen, so a lot of people are still trapped inside.
The extensive damage to infrastructure is severely hindering the delivery of aid to those in need.
here's Marie Manrique, the Acting Head of the International Committee for the Red Cross delegation in Myanmar. Many people in the city of Yangon, this is Myanmar's largest city, have not had electricity or running water since the day of the earthquake.
So that just gives us a good impression of what the situation is on ground zero in Mandalay and Saigon.
Myanmar was once a country on the rise with strong growth and poverty reduction until 2019 but since then it has faced immense challenges including political instability and other natural disasters and the impact of the COVID -19 pandemic.
The 2021 military coup deepened the country's economic struggles triggering widespread conflict and displacement.
Key sectors such as manufacturing and agriculture have been severely disrupted with inflation and shortages, adding to the growing economic pressures.
Earlier I spoke to Dr Sean Trnell, he's a former economic advisor to the State Council, Anchang Chusi.
Dr. Trnell experienced the aftermath of the coup first -hand when he was detained in Yangon in 2021 and spent two years in prison.
I asked him about Myanmar's economy and about what it was like before this earthquake.
So Myanmar's economy was in a dreadful state even before the earthquake, so the country underwent a military coup of course in 2021 and from that moment on economic policy devoted to growth was really replaced by economic policy designed to meet the needs of a war economy.
Essentially there was great resistance to the military junta and in order to survive the junta has really just bent all of Myanmar's economic output to fighting that war, so the economy has been in a really awful state ever since the coup in 2021.
Before that though it was doing okay wasn't it, there was some growth.
It was so economic growth in Myanmar before the coup was up about six to seven percent per annum which wasn't as fast as we wanted but it was the cusp of really transformational change and you know, the big objective was that Myanmar would at last join the other tiger economies in Southeast Asia, but of course after the coup that didn't happen unfortunately and all those gains of the previous decade really has since been erased since the coup.
And your best estimates suggest that GDP is about 50 per cent below what it had been before.
That's right. So my estimates, as well as those of the World Bank, would suggest that me and my economy would be 50 % bigger today had that coup not taken place.
So the coup was a dreadful setback to the country's economy and left me and my really ill equipped when, you know, things like this earthquake come along.
Well that was my next question.
How does it now cope with the rescue effort and the cost of that and then at some point, the rebuild.
So Myanmar is just not in a good place to cope with something like a natural disaster like an earthquake.
It has very little in the way of infrastructure, and of course the people have been suffering economically for the last four years.
They've got very little in the way of reserves, very little in the way of resources to recover from something like this, plus of course the country has been thrown into war, so all sorts of infrastructure have been destroyed, all sorts of transport networks are now blocked and so even before the earthquake the country was in a dreadful state but now since the earthquake and even more damage to critical infrastructure the country is really in a bad place.
How easy or how difficult will it be for those perhaps employed through agriculture, one of the biggest industries in Myanmar to get back on their feet.
Agriculture is tough in Myanmar, as it is of course in many countries, but in Myanmar, because of the lack of economic development, most people live in what is not much more than subsistence agriculture.
The upside of that is that they can usually survive a lot of things.
They're amongst the most resilient people in Myanmar, in a country in which people, you know, have learnt to be resilient.
But it does mean that, you know, that their living standards are not much beyond mere survival anyways, so you know recovery from from that is always going to be difficult.
There's just not much fat around in Myanmar, not much reserves for when disasters happen.
You've got deep ties with the country, how does it feel for you when you see the pictures on the TV?
I feel awful about the situation in Myanmar, I've got many friends and colleagues still there, some unfortunately still in prison and I was of course especially worried about them, because the jails are very old, built for the most part of concrete and you know, if walls fall down on you in places like that it's pretty much all over.
So I've been terribly worried about friends and colleagues there.
But likewise, you know, you just grow fond of the place.
Me and Mark, I think for anyone who's been there, or know Burmese people.
It's very easy to fall in love with the place.
Burmese people are incredibly resilient, incredibly courageous and generous, and your heart just bleeds for them.
So, yeah really difficult situation for them, but really difficult situation I think for all the people in the rest of the world who really love them and love the place.
What reforms then do you think are needed long term to bring about a bit more economic stability?
Long time the changes are really political.
So economics really just comes out of the politics of Myanmar. So what it desperately needs is a stable government, an accountable government with a real focus on economic development, and it hasn't had that for the last four years.
As I mentioned earlier, this military regime is really just focused on their survival.
they're fighting a war, they're losing this war and really the only economic policy they've got at the moment is how to extract as much foreign exchange as possible to buy the armaments they need to fight the democratic opposition.
So yes, they really need a government that is totally different than the current one but one that is accountable to the people of Myanmar and one that's really focused on their welfare and on economic development and growth.
So, when you look back at your time in Myanmar, do you think you would have done things differently?
I think in retrospect we should have done the reforms a little bit faster and a little bit harder, because in a sense what we needed to do was really change the political economy of the country.
It would have been tough because, of course, we have to remember Myanmar has been ruled for most of the last 60 years by a succession of military regimes so the task was always going to be hard, but I think yeah probably a little bit more pace, a little bit more profound reforms. We might have just changed things in that time period so yeah that that's probably the area where I wish we'd done a little bit different.
Do you think that that would have then avoided the coup in 2021?
I'm not sure, because against all of that of course, I also have to juggle the idea that many of the crony businesses, including the military ones, were getting increasingly angry and frustrated at the reforms. To some extent, the reforms were part of the background music to the coup itself.
So maybe it wouldn't have forced all of it, but I just had this sneaking suspicion that if we'd you know just gone that little bit harder and maybe had changed the circumstances such that you know various powerful entities connected to the military have sort of withered away a bit more we might have got through.
For the immediate help then that is needed to help these people who are in you know terrible despair do we have to turn to international aid now?
International aid is very important, but equally important, or just as important, alongside it, is that the aid goes to the people who can make a difference and not to the military.
Because if you look at the long history of Burma, in Myanmar, we see a long history of the weaponisation of aid by the military juntas.
So it's really important to keep the money out of their hands because they will use it to oppress, basically, they've got no track record and they're demonstrating again, right now, no track record in helping the Burmese people through crises like this, in fact the opposite.
So it is important to deliver aid but it's important that aid goes to the right people.
I suppose the challenge at the moment is that aid budgets are being cut by countries like the United States, countries like the UK?
Aid cuts are terrible, terribly timed for Myanmar's situation, alas, and in many ways it's more than just simply the money cuts, it's the loss of expertise.
You know, if we look at what's happened in USA, we see that a lot of people with great expertise in Myanmar, who knew the people, knew the players, knew how to get things plan, a lot of those people have gone.
So even if the money comes back, we've still got a real deficit in terms of expertise in helping out.
So I think that's a particular problem at the moment.
And poor old Myanmar, once again, the timing of events in the country was just not conducive to the lives of the people there.
That was Dr Shawn Ternell, former economic adviser to Myanmar before the military coup in 2021.
Every day our world gets a little more connected, but a little further apart.
But then, there are moments that remind us to be more human.
Thank you for calling Amika insurance.
Hey, I was just in an accident.
Don't worry, we'll get you taken care of.
At Amika we understand that looking out for each other isn't new or groundbreaking.
It's human. Amika, empathy is our best policy.
The new year's here.
It's the perfect time to refresh those household essentials and score some cashback rewards with Colgate Palmolive.
From toothpaste to dish soap, chances are you've got Colgate Palmolive products on your shopping list and in your house right now.
We're talking brands like Colgate, Softsoap, Palmolive, Irish Spring, Fabuloso, and Tom's of Maine.
And right now you can get up to a $10 digital visa prepaid card when you buy up to $30 of Colgate Palmolive.
products. Here's how it works.
Spend $20 on their products.
Get $5. Spend $30. Get a $10 reward. All you do is shop your favorite brands, snap a pic of your receipt, and upload it to CPRewards .com.
It's so easy! That's CPRewards .com.
So grab what you need, or maybe try something new.
And get rewarded just for doing your usual shopping.
And start your year fresh by earning cashback rewards with Colgate -Palmolive.
Rewards available while supplies last. Limits apply, US only, 1 -125 -3 -3125.
For full terms and conditions visit CPrewards .com.
You're listening to World Business Report from the BBC World Service with me, Sam Fennick.
Now, we're going to turn our attention to South Africa, where efforts are underway to rebuild its relationships with the United States.
The strained ties stem from the Trump administration's criticisms of South Africa's land reform policies.
Now, with trade concerns on the horizon, Pretoria is preparing a bilateral trade deal as a contingency plan, should it lose duty -free access under the African Growth and Opportunity Act.
So, how might that improve relations?
Well, I asked Mtho Koulou, President of the South African Chamber of Commerce and Industry.
Besides the tariff announcement, there hasn't been any firm decision that has been made businesses.
South Africans still continue to trade with the US and similarly US with us.
American companies based in South Africa are still in business and still investing so there hasn't been a shift obviously, now the issue is what is likely to happen.
So it's a rather anticipation and preparation for the worst if it does go negative as it is in the political space.
So you're trying to rebuild relationships with the United States.
How do you anticipate doing that?
So from the business community, I think what we need to do, we just need to remind both countries about the wholesome relationship that we've enjoyed over the years.
So what we have done is that we work with the American Chamber of Commerce for instance, and we also have businesses in South Africa organized under the umbrella of South African Chamber of Commerce in the US who are, our rebuilding is ready to engage our counterparts in business and just to put the facts across that there isn't actually any threats to property South Africa, and there isn't any desire to reduce the quality of service that we provide to them, or is there a desire to sabotage and negatively affect their investments in South Africa.
Obviously, we are looking upon our president to really reach out to President Trump and finalize the non -deal with the space that has been playing out in public, because obviously, if the two capitals don't work together, it will have a knock -on effect on business.
But as an instant, we have a good relationship with our counterparts in the business community of America, and Americans operating in South Africa.
If you were to lose access to AGOA, how significant would that be to the economy, and to the businesses which you represent?
Yeah, well it would be big because that's one of the, amongst other normal trade deals that we have, and other P2P relationships, AGOA is one of the hallmarks of the relationships between the economies of Africa and the economy of the US.
So in the US, we know that by the 11 per cent contributed to our trade account globally.
So it would be a big number, not all 11%, benefit from Agora duty free support.
However, I do send a very big message that there is strong problems between South Africa and Agora.
So it is a symbolic relationship we have. And there's a lot of numbers that depend on Agora and Agora is also a strategy for Americans.
Remember that just over half of Agora's trade comes from South Africa.
So with South Africa's exit from it will also weaken the US relations with the African continent, about these growth opportunities.
What sectors are likely to be most affected if you lose the duty -free access?
So, currently primarily it will be our automotive industry in our agricultural products and the clothing and apparel opportunities so it really hovers around that because minerals and the lines are not necessarily subject to the duty -free work so we can still trade in minerals because those are governed by a different arrangement but Accor itself provides lots of opportunities for our agricultural products, our vehicles that we assemble in South Africa for the US market and obviously other consumer goods such as apparel and clothing.
Do you fear for the worst?
We think that businesses that are invested in South Africa some of the biggest names coming out of the US we fear for the worst but we believe that the business voice and the business interest will be able to reach out to Washington and avoid a situation where political decisions are targeting businesses.
I mean, in recent years, there was a multi -billion dollar investment that was announced by Microsoft. Google has done the same.
So these big plans, we believe, that are close enough to Washington to be able to say to them, the business community, the business environment in South Africa is still viable to not punish businesses through the stroke of a political pen.
But obviously, very quickly, our president will have to make sure that he reaches out Washington and we deal with any negative.
But Donald Trump and his administration have said some pretty strong things about the South African government haven't they?
Yeah, certainly. They've said a lot of strong things and I must say to you, a lot of them really based on misinformation because some of the things that were mentioned for instance in the executive order which were supposedly the position of South Africa is absolutely not true.
I mean, there isn't a genocide in South Africa, There isn't a targeted racial murder There isn't a wholesale expropriation of property and the rule of law is still safe and the constitution remains supreme.
So it's unfortunate that they've taken such strong decisions in executive order based on things that have very little evidence in society that can back it up.
So in South Africa those things do not happen.
There may be instances of crime which are prosecuted accordingly as the law dictates, States, but what the president has said about South Africa is totally not true and that's what we need to turn around, we need to remove this misinformation and demonstrate that there isn't this wholesale expropriation and mass killing of a particular racial group, and more importantly that we are not interested in having an economy that is not inclusive." Mtho Kulo, who is the president of the South African Chamber of Commerce and Industry.
Well this Wednesday, the US president is set to implement secondary tariffs, adding to the levies already imposed on aluminium, steel cars and fentanyl exports to America.
It's been dubbed liberation day by President Trump but some are questioning whether it could instead bring additional strain to the US economy.
Let's talk to Simon Yvnet.
He's the co -chair of the World Economic Trade and Investment Council and also Professor of Geopolitics at IMD Business School in Switzerland.
Simon, thanks for being with us.
What is the potential impact of these secondary tariffs on the US economy first?
There will be two effects.
The first is your classic increasing the price of imported goods, which plays a big part in many Americans' spending patterns.
And so the cost of living will rise.
And the second thing is because so many Americans are freaked out by the prospect of these tariffs as well as by the other political drama going on in the United States, that they're scaling back their expectations for spending in the rest of the year, as are many firms with investments.
And so this will, of course, depress the economy, the combination of falling national output, and rising prices is called stagflation.
That's really what we're looking at in as the prospect in the United States, if these measures go forward, the argument against that, and the argument being used by Mr. Trump is that that will be temporary, and that actually growth will come following that because if you use an example of a car, for example, people are more likely to buy US made cars than ones that are imported in.
So the counter argument to that is that the same President Trump has threatened to keep raising tariffs over time.
So it's not like we're going to have a one off adjustment to tariffs, or one off change in the cost of living.
He intends to ratchet this up over time.
So unsurprisingly, American consumers and firms have taken fright at this prospect.
And that's led to exactly the stagflationary risk that I identified earlier.
What about those who trade with the US?
How could it be? How could it impact them?
So for the countries which get hit with large tariffs, which is quite likely to be China, possibly the European Union, these are countries which are going to see their exports disadvantaged in the US market.
They'll lose market share to other foreign countries as well, other foreign exporters, as well as to US firms. And that export loss will then ricochet through their economy.
Their ability to absorb that loss will depend on how quickly they can export more to a third markets.
And that's, I think, the key factor which is missing in much of these discussions.
It's not a matter of whether a country is exposed to the United States high levels of exports, if their exports are growing faster to other destinations, then they can quickly regrow the lost US market sales.
And that's essentially the mitigating factor that we're seeing in the data.
And you've done some research which suggests that 70 of the US trading partners could fully make up those losses within about a year, and a following 115 could make that up within five years.
Yes, that's right. I mean, broadly speaking, well over half of America's trading partners would not be affected for, or adversely affected for many years.
And some of the biggest trading partners like China could restore their previously lost US export sales in less than three years.
Mr Trump has also talked about, over the weekend, about potential tariffs on those that might by Russian oil.
And this came after President Putin questioned the validity of President Zelensky.
Can you just explain the impact of that?
So these are, these are what are called secondary tariffs, which seek to discourage other countries from buying from Russia, buying oil from Russia with the goal presumably of trying pressure the Russians into accepting whatever ceasefire terms President Trump thinks are acceptable.
I think the key thing is whether or not those other countries are going to look at this threat and think that it's serious, will it ever happen, and whether or not they essentially trade much with the US either, because if a third country doesn't trade much with the US and then they keep buying Russia, well, there's not much for the Americans to sanction, is there?
Is there a possibility that across all of these sanctions on Liberation Day on Wednesday that actually economies might be looking at it and wondering whether they will actually happen because he, Mr. Trump seems to have introduced tariffs and then remove them quite quickly if we were looking at Mexico and Canada as an example?
So that concern has some foundation, but I think very smart forward looking governments are probably scenario planning, they're sort of would be the wise tack to take.
Okay Simon Yvnet co -chair of the World Economic Forum Trade and Investment Council.
Thank you very much for coming on and explaining that for us.
So as we've been saying a wave of tariffs on countless goods affecting numerous countries slated for Wednesday of this week.
It is kind of almost impossible to keep track but thankfully we have Jane Sydenham with us here.
She's Investment Director at Rathbone's Investment Manager and you're going break down for us the real world impact of these tariffs and how the impact that they're having on markets today so I'm just looking across at the S &P 500 it's down one percent the Nasdaq is down two percent but gold is up how are our investors feeling overall today yeah I mean it's been interesting that actually markets haven't been as negative as you might have thought given the uncertainty but that I think is is because we simply don't know what Trump is going to do on Wednesday.
But certainly, today, we're seeing weakness in automakers in Europe because those would be really be in the firing line.
They already are in the firing line, really.
But, you know, we're also seeing more defensive stocks, more domestic defensive stocks doing quite well like utilities and food and sort of basic goods.
So, the market's kind of really hunkering down a little bit today and saying, okay, you know, we'll kind of support those stocks that will do well in a recession, and stocks that are really beneficiaries of international trade are not doing so well.
As you rightly say, the gold price is strong, and that has been a real feature this year with the gold price up significantly since the start of the year and for all of last year.
You know, the oil price is up because there's worries about sanctions on Venezuelan oil.
And then interestingly, we've seen some very strong performance in the price of copper over the last few months and that's because US manufacturers are stockpiling copper in case there are tariffs introduced on the import of those metals at the border so you know it's not just the stock market it's not just currency markets we're seeing all these other effects on commodities as well.
And the cost of shipping has gone up I think because as you said people are stockpiling in the US I was looking at prices and wine shipping being shipped over before the tariffs come in.
Yes. I mean, you know, we've seen an incredible jump in the price of shipping goods in the last couple of months.
And as you rightly say, I think a lot of it relates to this stockpiling activity ahead of the introduction of any tariffs.
So that's really having an effect on the supply of these large container ships and whether or not these goods can be transported in time to avoid any tariffs.
Jane, it's going to be an interesting week.
Thank you for joining us here on World Business Report for Monday.
Thank you to all of the guests.
The producer today was Hannah Beaulieu.
Don't forget, you can always get our podcast by searching for World Business Report wherever you get your BBC podcasts.
The new year's here.
It's the perfect time to refresh those household essentials and score some cash back rewards with Colgate Palmolive.
From toothpaste to dish soap, chances are you've got Colgate Palmolive products on your shopping list and in your house right now.
We're talking brands like Colgate, Softsoap, Palmolive, Irish Spring, Fabuloso and Tom's of Maine.
And right now you can get up to a $10 digital visa prepaid card when you buy to $30 of Colgate Palmolive products.
Here's how it works.
Spend $20 on their products, get $5.
Spend $30, get a $10 reward. All you do is shop your favorite brands, snap a pic of your receipt, and upload it to cprewards .com.
It's so easy. That's cprewards .com.
So grab what you need, or maybe try something new, and get rewarded just for doing your usual shopping.
And start your year fresh by earning cash back rewards with Colgate Palmolive.
Rewards available while supplies last. Limits apply.
US only. one $125 through $331 .25.
For full terms and conditions, visit cprewards .com.
