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And this is Andrew Peach with World Business Report.
Good to have you with us today.
How AI is helping to run the government of Albania.
I'll be talking to the Albanian Prime Minister in a moment.
We'll be asking if funding for the Eurovision Song Contest is under threat as nations threaten to pull out over the war in Gaza.
And we'll be in Minnesota to ask why US prices haven't gone up quite as much as people expected.
Every individual product that you change the price on, you need to first of all figure out what that price is going to be and make sure it's competitive.
You have to send that to all your partners, make sure all the channels are updated and then follow up.
First, Albania has appointed a new government minister to help fight corruption.
Her name is Diella, but Diella isn't a real person.
She's a virtual minister powered by AI, charged with overseeing government procurement.
Alice Taylor is a journalist for Politico in Tirana.
She's been telling me Diella is already a familiar face.
When you log on to eAlbania, which is a platform for accessing government services digitally.
Forms you might need to fill out.
So we're familiar with her to an extent.
The prime minister in July, I think it was.
He said you know, perhaps we're ready for an AI minister, an AI ministry and maybe even one day, an AI prime minister, but I don't think we were really expecting that this AI minister would appear so soon.
I think this minister name that she's been given is perhaps a little bit of PR work, but I think the idea of using AI for this kind of process is solid.
I think it can work.
I think we will see other governments starting to use AI
AI for things like this, to automate processes, to be more transparent, to be more accountable.
But I do think the concept of calling her a minister, giving her a name she's got a nice little traditional outfit.
I think this is a PR element as well.
Who is Diela accountable to?
In fact it was just announced.
Now the prime minister has been formally given his mandate by the president.
And within his mandate, from the president the decree, so to speak, is a line that he is responsible for this virtual ministry and the minister Diela.
So technically, he is responsible for her.
Let's go live now to Albania's Prime Minister, Edi Rama, live on World Business Report.
Thank you for being with us.
So, Diele is the new member of your team.
Thank you.
Yes, Diele is an AI minister that will take care of the AI processes of governance.
How is Diela going to help tackle corruption?
Because, in the end, she's just responding to whatever the humans who program her tell her, isn't she?
Diela is already helping as a virtual assistant in our very advanced platform where we offer online for all our citizens in Albania and all around the world, 95 of our services.
And Dijela 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 acquis communautaire, meaning 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, it took a lot of years.
For Croatia.
That was the last to become member of the European Union and was really a very, very impressive example in the process of negotiations.
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 Diela.
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, will not only 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 has a fully functioning set of institutions.
And by using technology and artificial intelligence, countries like Albania that started from very, very much behind can make incredible leapfrogs to practically have in their hands things that even very big developed countries have their own difficulties to have because of the much more solid structures of traditional way of working within the institutions.
They are a bit like very big boats that need a lot of time to turn the tide.
While Albania can now transform itself and is transforming itself, from the boat that the world saw when we went out in the open after having escaped communism, 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?
But I don't think it hurts.
I think beyond the beyond the impact that of course it has publicly, it has also another impact.
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.
And this is, in fact, the biggest advantage I'm expecting from this minister that will be there to collect from the others the things that the others should deliver.
So it's quite an exercise when it comes to the psychological effect it has.
Well, you may have other prime ministers looking at your work and Dialla's work with some envy and thinking whether they could do the same kind of thing.
Really grateful that you were able to join us.
Thanks for being with us.
Thank you.
That's Eddie Rama, who is the prime minister of Albania.
Now to the business of Eurovision, the song contest between nations.
It's been around since the 1950s. and got a TV audience of 166 million this year.
Next May it should be in Austria who won, but will it happen?
The Irish broadcaster RTE says it won't take part if Israel is included, because it would be unconscionable to do so in the light of what's happening in Gaza.
Broadcasters in the Netherlands and Slovenia... have said they'll also withdraw.
And Spain's culture minister has said something similar.
That's significant because Spain is one of Eurovision's big financial backers.
William Lee Adams is a BBC journalist and the author of a book about Eurovision called Wild Dances.
Here with me in the World Business Report studio.
William, especially for listeners who are not fully familiar with the Eurovision Song Contest, just give us a sense of how it works and why it really does face some kind of threat now.
Sure.
Eurovision is often called the world's most watched non-sporting event.
It's massive.
Countries that participate choose a singer, they sing an original song, and this program is the most, or one of the most watched programs in almost every country that airs it.
It's a huge European campfire.
People gather around and for sponsors, that's a huge opportunity.
Okay.
It's really good as well.
I've been to three of them.
I've been to Sweden and Germany and Turkey in the past.
It's a great sort of party to be a part of.
And yet it always comes up against these political controversies of one sort or another.
Now we've got broadcasters and governments in some of the countries who take part in it saying well, maybe we won't take part in it anymore because of the participation of Israel.
Yeah.
Indeed, and it's been a hugely controversial topic for the past two years, and it could have a financial impact if countries start withdrawing.
So the important background is that Eurovision is a co-production between the roughly 40 countries that participate.
They all contribute funds to this giant pot and that pot of money is used to put on the show.
Now the EBU, the European Broadcasting Union, which backs the contest.
They don't reveal how much each country pays.
But through freedom of information request, we do have a sense.
So, for instance Ireland, at the most recent edition they had to pay 118000 to participate and broadcast the show.
And smaller Slovenia, it had to pay around $100,000.
You brought up Spain earlier.
Spain is one of the big backers, a wealthier nation, bigger population.
They're charged around $390,000.
So when you add all this up, if more countries withdraw their money, it becomes much more difficult to put on a glitter-slicked competition.
So you may be able to still have it, but it wouldn't be anything like the kind of event and TV spectacle.
Absolutely.
I think the real risk is if you have a mass exodus, say 15 or 16 countries leave, then suddenly you say do we need to have semifinals?
There's a show on the Tuesday and the Thursday broadcast in prime time.
But if 10 countries are competing for 10 spots, what's the drama there?
Why would you watch?
And does it tend to be beneficial financially to the host city?
Does it actually just cost loads of money?
Absolutely.
A well-run Eurovision can bring in so much revenue.
Tens of thousands of people visit, sometimes for up to two weeks.
That's a lot of hotel stays.
That's a lot of food.
Liverpool, for instance, cited huge economic benefits when it hosted in 2023.
William, thank you very much.
Now, for some news about us, this is actually the last day of World Business Report at this time.
From Monday at 1430 GMT.
You'll hear Business Daily at this time, followed by our new podcast, World Business Express, which will bring you the stories that matter and the people affected by the fast-changing global economy.
And you can still hear World Business Report at 22.30 GMT.
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This is World Business Report with Andrew Peach here on the BBC World Service.
Live now to Randeep Somel, Fund Manager at M&G Investments.
Randeep, let's talk about Armani, because Giorgio Armani's will leaves pretty specific instructions about his business interests.
It does indeed.
The fashion mogul passed away last week and he has said the company, now Giorgio Armani, owned by a foundation, can only be sold to either LVMH, Luxottica or L'Oreal and, failing a sale, that the company should be publicly listed.
Do we know why he had this view that only some people were allowed to buy it?
I think he wants to ensure that the brand continues to be managed in the right way.
And all of these three brands have quite dynamic and long-term CEOs and I think he believes that the culture of those organisations are best suited to continue on the Giorgio Armani brand.
Do we know if any of them want it?
It's very early days.
It's only become public today.
So I think we'll find out over the course of the coming months.
Of course, none of them will want to go public yet to specifically say that they want to negotiate a good price as well.
Now, shares in Warner Brothers Discovery are surging.
Why?
They have been bid for by Paramount Skydance.
So I think in the current environment, both companies have a fair amount of debt.
Competition is rising.
Costs to produce are increasing.
And also the competition from the likes of Amazon and Netflix has increased.
So I think that the merger is there to try and get more content together, to get your distribution together and also to try and lower cost.
Another reason that they're surging at the moment is that the Skydance itself is run by David Ellison.
His father is Larry Ellison, the CEO of Oracle.
Who we were just talking about earlier in the week.
Exactly.
And he has guaranteed to backstop the deal, and he's now the richest man in the world.
Tell me what's happening in the banking sector in Spain.
Yes, it's ongoing now for 16 months, but BBVA has bid for Sabadell again to create a national champion and to find some cost of synergies.
The bank Sabadell has actually asked their shareholders – this is a hostile takeover – to turn down the offer.
They believe that BBVA should be paying more.
And in fact the largest older owner of Sabadell, who is a Mexican billionaire, a gentleman by the name of Guzman has said, while he's not opposed to the merger, he thinks BBVA should be paying a little bit more.
But it's up to the shareholders now to decide.
And, as we end this week, just worth marking the fact that stocks in Japan, South Korea and Taiwan are ending the week at record highs.
They are.
And they're pretty much following the lead from the US.
We've seen some huge and quite fantastic deals when it comes to AI.
None less so when we go back to Oracle's and AI's 300 billion deal signed earlier this week, which means a lot more data centres, a lot more chips, a lot more computing power.
And where are all of those chips made?
South Korea and Taiwan.
Now, do stay with me, Randy.
We heard on yesterday's World Business Report that prices are going up in US shops, but perhaps not by as much as had been feared when Donald Trump's import tariffs were first introduced.
So what's going on?
My colleague Justin Ho has been finding out.
Wolf Tooth Components is a manufacturer in Minnesota that makes bike parts.
About 1700 different parts, ranging from little clamps, levers and spacers to gears, pedals and seat posts.
Co-owner Brendan Moore says almost all of them are made out of aluminum.
We do have some molded parts, we have some rubber parts, but aluminum is the primary because it's both lightweight and strong.
And these days, it's also more expensive because of the president's 50% import tax on the metal.
But Wolf Tooth Components hasn't raised any of its prices so far this year.
Moore says that's partly because he doesn't want to upset his customers, but it's also because raising prices is a ton of work.
Getting all the different dealers which in the US we probably sell through 3000 or 5000 dealers and getting everybody to change their pricing is a huge task.
Moore says that's partly because the company sells so many kinds of parts.
Every individual product that you change the price on, You need to first of all figure out what that price is going to be and make sure it's competitive.
You have to send that to all your partners so they get it out to all the channels.
Make sure all the channels are updated and then follow up.
Moore has to follow up because he says some of the retailers that sell his products tend to drag their feet with price hikes.
After all, it doesn't hurt to be the last dealer selling stuff at the old lower price.
So Moore says his company ends up spending months prodding them.
And then we hear back, but these guys haven't changed their price.
And we're like, yeah, yeah, we're talking to them too.
It's coming.
And so it's just a whack-a-mole situation where you're just contacting each customer.
For other companies, raising prices can require a lot of manual labor.
Think about all those little sticky price tickets on something.
Think about having to get those off.
That's Rob Donahue.
He's the CEO of the clothing supplier David Donahue Menswear.
He also decided to avoid price hikes this year, even though he's paying higher tariffs on the clothing he imports from Vietnam.
Donahue says he didn't want to have to pay warehouse employees to sit there with X-Acto knives peeling off price stickers.
And besides, he didn't know what price he'd put on the new stickers, since the president's tariffs have been all over the place.
Was it going to be, in our case from Vietnam, 20%?
Or was it going to be 46% where they started?
We didn't know.
Donahue says he plans to raise prices next year on his spring items.
He says he hopes tariff policy will be more stable by then.
And waiting for the new season will be a lot more straightforward for both his company and the stores it sells to.
For the retailer, they can say, OK, great.
You know what?
Everything that we receive through fall of 25 is at the old price.
Spring of 26 and going forward is at the new price.
Relationships between businesses can be another obstacle to hiking prices.
Think of it like dating, right?
When you're dating someone and you have some bad news to share with them, you want to hold off until that relationship develops a little further.
That's Sophie Blake.
She runs a jewelry company that sells rings necklaces, earrings and other items that are made in India.
A couple months ago, she struck a deal to sell jewelry through a big online wholesaler.
But just days later, President Trump hiked his tariffs on India to 50%.
Blake says she really doesn't want to go back to the wholesaler and try to renegotiate.
This relationship that I was building with this partner, this has been a relationship that's So.
Blake's prices will stay the same.
She says her profits are taking a hit, but her strategy at the moment is to just make sure the launch goes well.
Let me build this relationship, solidify it, and then we can go back to the negotiating table with our partner and discuss pricing again.
Blake says if she can prove to the wholesaler that her products sell, she'll have more leverage when she eventually has to raise her prices.
Justin Ho reporting.
Randy Sommel from M&G Investments is still here.
In terms of the U.S. economy, we're looking pretty nailed on for a rate cut next week.
It's beginning to look that way.
The US Federal Reserve has two equal targets.
One is to maintain price stability, but the other one is to maintain full employment.
Now inflation isn't really that low yet.
So there's been some trepidation in terms of lowering interest rates, but unemployment now is beginning to rise and the jobs market is getting weaker, which should give the Federal Reserve some ammunition to start cutting rates.
And let's just talk about the UK economy for a second or two.
Government, which has been in office for just over a year, has made a huge thing about growth being what it wants to achieve, and data today suggesting it's achieved literally none.
Yes, unfortunately, the July figure for economic growth is exactly zero.
We've seen production actually come off and be negative now for July.
Construction is at zero and we've just got a little bit of services balancing the overall out to nothing.
So unfortunately, with the Chancellor's upcoming budget in November, this doesn't look good for our fiscal situation.
Right.
So she might need to raise some taxes or find some money from somewhere.
And in terms of getting growth going, what would she do?
Well, I mean, a couple of things.
I mean, raising national insurance clearly hasn't helped.
It's increased employer costs, which means hiring has been pretty poor, if not actually net negative.
Whether she has the ability to try and reverse that we shall see.
I mean, the other one is just getting the planning rules moving.
The government has talked about a new runway at Heathrow, building more houses, but we haven't actually seen any shovels on the ground yet.
It's just moving that process along.
Thank you very much indeed, Randy.
Now on World Business Report, Puerto Rican star Bad Bunny.
Puerto Rico's tourism industry has received a big boost during its hurricane season, thanks to the wrapper and a month-long residency in San Juan.
According to the Puerto Rico Tourist Board, it's generated hundreds of millions of dollars in revenue for the island.
Let's talk now to Suzanne Ramirez de Arellano, who's a writer in San Juan and former news director for Univision Puerto Rico.
Thank you so much for being with us.
Just give us a sense of what it's felt like to have this going on over the past few weeks.
It's been incredible.
I mean, I think that what Bad Bunny has done is he's united a potent nationalism and culture with actual material change.
The numbers read at 200 million, but I'm sure that at the end of this, we will see that it's more.
I mean he's generated not only monies for big stadiums like El Coliseo, where the residency is taking place, but in mom and pop stores.
I mean, everybody's benefited.
Everybody has a Bad Bunny logo on their businesses.
You've got at least 400000 people that have attended the residency, two-thirds of them from overseas.
So I mean, in terms of the money, What is shown to us Puerto Ricans who, as I think your listeners will know, Puerto Rico is a US colony and it's been in what I call extractive colonial purgatory forever.
What Bad Bunny has done is shown that our culture is our biggest resource today.
And that we can, through this, bump the economy.
I mean, he has bumped up the GDP by 0.15%.
But more than the money, it's what it's done to Puerto Ricans themselves, to show that we can do it and show us how we can do it.
So I was going to say we'll perhaps come back to the hard cash in a second or two, but the positive feeling of a local hero.
I understand he's known in Puerto Rico as the saint, is that right?
Yes, he's known as San Benito.
I mean, there's bodega candles with his face, incense with his name everywhere.
And he is truly beloved on this island.
Now, there are parts, there are people... who criticize his lyrics or who criticize his politics.
But I would say overall nobody, whether they like him or not, whether they like his music or not, can deny what he's done for Puerto Rico.
I mean he's done more for Puerto Rico than most governors have done for this island, definitely more than the United States has ever done.
Our local politicians, especially right-wing politicians who want statehood, Always say Puerto Rico without the US is nothing.
This has proved that that is not true.
And how do all the local businesses who, as you say, have benefited so much from all of this, from the positivity, but also from people visiting, spending their money?
How do they keep that going?
How do they take this momentum and keep it rolling?
That is a very good question.
And it's a question that, you know, is being asked here.
I believe, this is my opinion, that Bad Bunny's residency will be duplicated by other artists.
Let's say, for example, there's you know whispers going around that Raul Alejandro was another Boricua superstar.
I guess you would know him by being the ex-boyfriend of the Spanish singer Rosalía Boricua will also take up Bad Bunny's mantle.
What this has shown, and I want to indicate that Bad Bunny's production company is entirely Puerto Rican.
So I think he's opened up a door to what can be done here and how we can benefit from what is our main resource, which is our culture.
Thank you, Suzanne, so much for being with us.
That's Suzanne Ramirez de Arellano, live from Puerto Rico on World Business Report.
There's much more about some of the stories we've talked about today and during the week on the programme online.
BBC.com slash news is our web address.
From me, Andrew Peach and the whole team on World Business Report.
Thank you for listening to the programme on the BBC World Service.
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