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Hello and welcome to World Business Report from the BBC World Service.
I'm Rahul Tandon.
Thank you so much for joining us today.
How Albania wants AI to help run its government.
We'll hear from the Prime Minister and we'll hear from a Korean who's arrived back home after being arrested by immigration agents in the US state of Georgia.
They shackled my ankles, and then there was another chain around my waist that was connected to the handcuffs.
It was so tight I couldn't touch my face with my hands.
But let's start the programme by looking at what's been a pivotal week for Nepal and its economy.
That's the sound of protesters on the streets of Kathmandu, the capital, most of them young, in what has become known as the Gen Z protest.
Those demonstrations led to the resignation of the Prime Minister KP, Sharma Ali, and the country now has announced that it has a new interim Prime Minister, Shashila Karki, who will be its first female leader.
So what are the economic challenges that she now faces?
Sudeep Bhai Subedi is the founder of the YouTube news channel In-Depth Story.
At the moment, the biggest challenge is a lot of destruction has been made.
A lot of public property has been destroyed, have been destroyed.
So I think the bigger challenges at the moment will be again to get the faith of everyone, to get the trust of every people here.
We saw the burning of two big foreign investment-backed companies here.
And that is definitely not good for the masses that we are sending to the world today.
Another challenge that she faces is jobs.
For many young Nepalese it's a difficult task.
Ashutosh is 19.
He was one of the protesters.
It's pretty hard conditions.
So people leave the country because of this.
They obviously will try to find an easy way, and that's to go out, and and we can't also blame them, because they only don't go for themselves, they go for their family and they take a decision, which is a very hard decision to take, but they're taking it.
So yeah, i would say it's not very easy to find results.
Let us speak to somebody who knows the Nepali economy very well.
Dr. Rohini Pandey is an economist based at Yale.
I think it's extremely important that a woman has managed to become the prime minister in a system where, even though there is affirmative action in the electoral system, it's usually been supported by political parties.
Rohini, there are a number of challenges that are going to face Nepal's new prime minister.
Let's start with some of them.
We've spoken to people in Nepal.
There's been a huge amount of damage.
There were a number of companies that were burnt as well.
So putting back Some sort of semblance of normality is going to be difficult, isn't it?
Or it's going to take time.
Yes, it's going to take time.
The one thing to remember though essentially, if you look at the number of times there have been coalitions of different political parties formed at the central level and changes therefore, in the position of the leader of the country, that has been remarkably frequent.
So, while it's going to take time to come to a resolution of these issues, it's not that we're saying nothing, that this was a period of a lot of stability.
In that way, I think it was different from say, looking at a neighboring country Bangladesh, which had had a single leader and a single party in power for a long time.
Those images though, that people saw, particularly earlier in the week, they were not images that are going to help bring in money into Nepal.
It looked very unstable.
How will that affect its economy?
So right now, the two main sources of revenue for the economy is is remittances and tourism.
This is coming at the start of the fall tourism season, but it's also important to remember that tourism has been a very kind of difficult to manage sector.
There was the earthquake around 10 years ago.
Then there was COVID.
That shut down the country for a couple of years.
And one thing to notice there is Nepal is also a country with a lot of hydropower potential, but also is vulnerable when it comes to climate change.
So I think that this would possibly be a point in time for the country to start thinking about.
What does a pathway to sustainable development that's not the typical way manufacturing construction pathway, but is one that perhaps builds more on its natural resources, but not just tourism, would look like.
And that is important, isn't it?
Because one of the big challenges facing Nepal is that so many of its youngsters are going abroad almost 2000 a day because there is a shortage of jobs, isn't there?
Well, I mean, there is migration from many low income countries.
I don't think it's just a shortage of jobs.
It's also educational opportunities.
We'll see migration out.
I don't think we should think of migration out in itself as a bad thing.
But I think you do need to think about how you're going to manage remittances flows and where you're going to invest them.
Where would you think that that huge amount of money that is such a significant chunk of its economy that comes back into Nepal should be spent?
Some of this is relating to reforming the financial sector.
So these are remittances that are coming into households, and households have to choose whether to save or invest.
This is not money coming directly. into the coffers of the government.
So I think the first most important thing would be for the government to create a sense of sufficient trust in the financial system that people are willing to invest or willing to put their savings in banks.
And that would then give the economy liquidity to move resources to high return sectors.
That takes time though, doesn't it, to build up that level of confidence, particularly in an economy and this is what a lot of the protests were about where there have been such high levels of corruption.
If you think about...
The corruption.
Of course there's corruption in many different forms, but you know, some of it is perceived at least as coming from siphoning of funds from large investment projects in sectors like hydropower, building dams, even building roads, and siphoning of our contractors.
So again, you know to think about both as you build up the confidence of citizens in the financial sector.
To the extent that the government is investing resources, either it's getting through multilaterals and aid agencies, or that it's simply choosing to invest in its own.
How does it put it?
In sectors that are high growth in a very vulnerable country, climate-wise?
And I think the latter has not been emphasized enough right now.
Dr Rohini Pandey, the expert and economist on the Nepal economy.
The country's president has announced that the elections for the new House of Representatives will be on March, the 5th next year.
Let's bring in Chris Lowe, chief economist for FHN Financial in New York.
Chris, I know you've looked at many countries in many parts of the world.
When there is instability, like we have seen yesterday in Nepal, it is difficult for a while for those countries to attract investment, isn't it?
It's very difficult.
And the key element is re-establishing some kind of stability, Rahul.
And I do think it's quite encouraging in this case that the government has called new elections.
The that there appears to be a willingness for the military to step down once civil control is returned.
Those are encouraging signs, but we'll have to wait and see what happens when the election actually takes place.
Yeah.
And those problems don't just affect low income countries like Nepal.
The credit rating agency Fitch has downgraded France's sovereign credit score on Friday.
And, of course, France has its own political instability at the moment, with the prime minister resigning this week.
Yeah, it's really interesting the way the rating agencies have looked at political instability in the G7 countries.
The U.S., of course, has been downgraded fairly recently as well.
And there do seem to be two key elements every time.
One, they look at the budget, which in the case of France is not looking good.
And then they look for that political instability which gives you the will to actually tackle the budget.
Chris, you are the master of understatement when you're saying the French budget doesn't look good.
It keeps bringing down successive governments.
More from Chris coming up.
Eight days ago, US immigration authorities conducted one of the biggest raids of any that have taken place over the last few months.
More than 300 South Koreans were detained at a Basque tree construction site in Georgia.
After spending time in detention on Friday, they arrived back home safe.
The BBC's Saren Ha has been speaking to one of the workers, who's a software engineer for one of the companies caught up in the raids.
He asked that we didn't use his name to protect his identity.
I was planning to stay for about a month, but was arrested on the sixth day after I arrived.
I was detained for seven days and then landed in Korea today.
How we got arrested?
Well, we just came out for a brief break and I could see a lot of people, lots of DA officials with guns.
As Koreans, we just thought they were here to arrest drug criminals.
But then they suddenly started arresting us.
They started classifying people by their visa types, carrying out identity checks and body searches.
So did you have a chance to properly explain your situation?
Of course we tried.
There were helicopters and drones, armoured vehicles, people with guns.
Some Koreans were trying to say they weren't criminals, but some law enforcement officials were pointing guns at their chests.
And you know those red lasers that come out of those guns?
It was so shocking that some people were shivering in fear.
And after talks between the US and South Korea, it's been agreed that you and your colleagues will be able to return to the US without any issue.
Will you go back?
I have a family, and this is what I do.
I'm an engineer.
I've worked hard all my life developing this equipment and these new technologies.
I've been doing this for 30 years.
I've put my life into this work.
If I can't do this, what am I going to do?
How will my family live?
A South Korean worker who was detained at the Georgia Ice Center, now with his family in Korea.
Speaking to my colleague, Saren Ha.
Chris Lowe still with us.
This has been an important case, hasn't it, Chris?
Because Donald Trump wants foreign investment to come in to the US.
But cases like this could put some companies off.
Oh, this is a huge case and it's so important to the economy for two reasons.
One, as you mentioned, billions in commitments for foreign investment coming as part of the tariff negotiations.
And yes –
Companies are going to be very reluctant to spend that money if their workers are harassed while they're trying to build those plants.
The other, I think, critical element is –
We have a labor shortage in the U.S.
The job market is very tight.
And without immigration, there's not enough domestic population growth to meet that need.
I am hopeful that perhaps this case, which really is very high profile, will jostle Congress enough that they start looking at immigration reform, a pathway for people to work here who are not citizens.
Let us see what happens in that case.
Chris talking there about tariffs, let's look at some further implications of them now, because India is still in talks with the EU about a possible peace deal.
Maro Sefcovic, the European Union Trade Commissioner, had this to say in India today.
We are now maximizing our efforts to finalize negotiations by the end of the year, as it was agreed by the President of the European Commission, Ursula von der Leyen, and Prime Minister Modi when we've been here, as I mentioned earlier this year.
And we are striving to put in place an economically meaningful win-win package that brings real added value to businesses and consumers both in Europe and here in India.
Those negotiations are continuing and they come as President Trump has placed 50 tariffs on India to try and stop it buying Russian oil.
Economic relations are tense.
Sergio Gore is President Trump's nominee to be the next ambassador to India.
We're actively negotiating with the Indians right now.
In fact, the president has invited their commerce and their trade ministers to come visit us next week, and they'll be meeting with Ambassador Greer here in Washington.
Part of that will include a hopeful deal.
We're not that far apart right now on a deal.
In fact, they're negotiating the nitty-gritty of a deal.
Let's hear from Nisha Biswal.
She was Assistant Secretary of State for South Asia in the US State Department under President Obama.
Now at the Asia Group, I started by asking her about those talks between India and the EU.
I think India is in a different position.
Once India kind of came to the conclusion that it needed to put in place some trade agreements, I think it has been willing to be more And I believe that has opened the space for the agreements with the UK and the EU to be a bit more ambitious than what India had proposed in years past.
Well, let's look at that situation with the US.
Donald Trump has put these 50% tariffs on India.
He's also asked the EU to put 100% tariffs on India because it's buying Russian oil.
Will India stop buying Russian oil, do you think?
I don't know if India will stop buying Russian oil, but I think that India certainly can manage the trajectory of how much Russian oil it is buying.
And also, we saw this in years past with respect to India's reliance on Iranian oil.
And over time, the Iran purchases basically went down to almost zero.
So I'm not saying that it will necessarily go as quickly in the same direction, because obviously the India Iran relationship is different from the India Russia relationship, but It does mean that it doesn't need to be as big of a factor in the US-India relationship.
If India can diminish both by volume and by share of its total energy, how much of that reliance is on Russia?
Do you think India has reasons though, to be a little bit more optimistic in terms of its economic relationship with the US?
Because the nominated ambassador to India, who we heard from earlier, spoke a lot more positively this week.
I think is an important signal in multiple directions.
One.
I think the Indians will know that they are dealing with someone who is able to communicate directly to the president and communicate directly on behalf of the president.
Oftentimes things get lost in a lot of translation across bureaucracies.
And here having that political appointee in place, I think will drive a higher level of engagement.
And secondly, the fact that that nominee has conveyed that he believes that the US-India relationship is important here, is strong and has a lot of potential.
And he's re-articulated commitment to Quad.
He has underscored that he thinks that there are not that many differences left on the trade.
All of that, I think, will make it easier for India to be able to also come forward and to be able to put aside some of the anger and frustration that has been rampant in India over the last couple of months.
Nisha Biswal there.
The great thing about news, Chris, is it changes very quickly.
So it looked optimistic with the comments of Sergio Gordo, the next ambassador to India.
But in the last few minutes, Scott Besson has told G7 partners that if they're committed to ending war in Ukraine, they should join the United States imposing tariffs on countries purchasing oil from Russia.
He's talking about China and, of course, India.
India.
This looks difficult to resolve between the US and India when it comes to tariffs and both of their economies.
Yes, I quite agree with that.
But Besant has a point, and that is Europe now is footing most of the bill for Ukraine's fight against Russia.
Ironically, India is footing about half of the bill for Russia's fight.
India is not reliant on Russian oil.
They're saving a few dollars a barrel on Russian oil.
That's why they're buying it.
They used to buy a very small percentage of their oil from Russia.
Now it's almost half.
I think he has a point.
Well, can I give you the point that the Indians make, Chris?
India would say, fine.
But then why is India getting 50 tariffs and China's lower, when China imports more Russian oil than India does?
Well, because if the US puts 50 tariffs on China, they'll cut off rare earth, magnets and metals which are essential to US industry.
Unfortunately, India doesn't have that kind of leverage.
Yeah, that is a good point that you make there.
In business, they say you can have better, cheaper, or faster, but you only get to pick two.
What if you could have all three at the same time?
That's exactly what Cohere, Thomson Reuters and Specialized Bikes have, since they upgraded to the next generation of the cloud Oracle Cloud Infrastructure.
OCI is the blazing fast platform for your infrastructure, database application development and AI needs, where you can run any workload in a high availability, consistently high performance environment and spend less than you would with other clouds.
How is it faster?
OCI's block storage gives you more operations per second.
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Better in test after test.
OCI customers report lower latency and higher bandwidth versus other clouds.
This is the cloud built for AI and all your biggest workloads.
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You are with World Business Report with me, Rahul Tandon, and we are continuing to talk to Chris Lowe about what is happening in the US.
And the NASDAQ keeps going up.
Does that surprise even you, Chris?
It really does.
You know, the U.S. economy has been pummeled by those tariffs we were talking about earlier.
GDP growth in the first half was about 1.25%.
The economy is looking a bit healthier now.
According to the Atlanta Fed, GDP in the third quarter is tracking closer to 3%.
And even consumption has picked up a little bit still.
It is remarkable to see a record.
And I think the reason we're looking at record stock prices, particularly in the NASDAQ, is the emergence of AI as such a dominant factor in the global economy.
Right. is one of the factors as well.
The next week we know that the Federal Reserve, that's the US central bank, will meet.
They'll tell us what they're doing with interest rates and everybody's expecting a cut.
It's just what is the size of that cut going to be?
Yeah, absolutely.
Look, they were in the middle of trying to normalize interest rates from a very high rate, had already cut four times last year when the tariffs put them on pause.
Now we've seen much of the tariff inflation.
Economic models suggest there probably shouldn't be as much going forward.
And, at the same time, that weakness we talked about in the economy, as well as significant weakness in the job market.
They will cut, I think next week.
They will cut again in December.
And I expect they'll continue to cut next year.
The president will be happy with that, won't he?
Well, he – no, because it's too late.
As far as he's concerned, they should have done this in April.
Let us see how he reacts next week to whatever happens.
Of course, coverage here across our business programs.
Albania has appointed a new government minister to help fight corruption.
Her name is Dayala, but Dayala isn't a real person.
She's a virtual minister powered by artificial intelligence.
But how will she help tackle corruption if she's programmed by humans?
That's a question that World Business Report's Andrew Peach put to Albania's Prime Minister, Edyama.
Dayala is already helping as a virtual minister assistant in our very advanced platform online for all our citizens in Albania and all around the world.
95 of our services.
And Diela has helped more than a million applications and has issued herself 36000 documents with a digital seal.
On the other hand, Diela is working for something very fundamental for us, which is the transfer of the European Union body of law to our legislation.
For this process, countries before used armies of translators, armies of pre-drafters and drafters.
And as a matter of fact, for Croatia, that was the last to become a member of the European Union.
It took seven years.
But what you've described is a couple of functions that people will be familiar with.
An AI bot fronting any large organisation or government is pretty common, really, really useful.
And of course, you can use AI for a bureaucratic process of the one you went on to describe.
But how does it make your government operations 100 free of corruption, which is what you've claimed?
This is what we are working.
And that's why I explained that this is what we expect from DLR.
We are working together with a very, very brilliant team, which is not only Albanian but also international, to practically come out with the first, a full AI model in public procurement which, as a matter of fact, not only will wipe out every kind of potential influence on the process of public biddings, but will also make these processes much more fast, much more efficient and totally accountable, because they will be transparent.
Part of this is about your bid to join the European Union, to get Albania a clean bill of health so that your accession to the European Union can happen.
It's not to join the European Union per se, but it's to become a country that that has a fully functioning set of institutions And, by using technology and artificial intelligence, countries like Albania that can now transform itself and is transforming itself to a very speedboat that can really show the way.
Sure.
A lot of people listening might be thinking it's hard to disagree with a lot of what you're saying.
But in the end, this is just a big publicity stunt, isn't it?
I don't think it hurts.
I think, beyond the impact that of course it has publicly, it forces and it exercises a great hell of pressure on the other members of cabinet, on the other agencies within the country, to run and think differently.
Albania's Prime Minister, speaking to my colleague, even Andrew Peach, a little bit earlier, Chris Lowe, still with us, guiding us through some of these stories.
We were talking about the NASDAQ before, weren't we?
And how AI was driving it to new record highs constantly.
Is there a danger that the AI bubble could burst, Chris?
Yeah, you know, I think probably the most important thing whenever we see a technology that becomes so central to the market is that you will have winners and losers.
You will have winners.
Some companies still standing in the end, but others are going to fall by the wayside.
And, of course, at the moment, it's very difficult to handicap that race.
But look at the fact that the big AI companies are releasing as many as two or three different versions a year.
And each new version that comes out basically makes everyone else obsolete until their next version comes as well.
It's a very fast-changing environment.
Briefly, if you don't mind, do you use AI much?
I use it, but nothing as ambitious as rewriting the entire legal system of my country.
I'm mostly looking for factoids to put in my notes.
There we go.
Chris Lowe.
I'm assured it is Chris Slower, not some AI version of him.
Thank you so much for joining us.
Please do join us in a couple of hours' time, because we're going to have a very special edition of Business Matters, a programme that's been with us for many years.
It's our very last one.
So we're going to be looking back at how economies have changed during the course of one of our favourite programmes.
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