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Subject to change. Hello, and welcome to World Business Report from the BBC World Service.
I'm Roger Hearing, and on this edition, a threat from Donald Trump to Russia.
Make a deal over Ukraine, or face even fiercer sanctions.
But how much fiercer can they get?
Also, Syria tells the world it's open for investment after the end of the Assad regime.
Some European, some Americans and some and many, many Arab companies are actually lining up to come after the minute the sanctions will be left, they will be in Syria.
Also, the deadline may have passed for the shutdown of all US government offices working on diversity, equity and inclusion.
But for some, the fight goes on.
We work with over 600 companies and I will tell you that 80 % of our companies are staying the course doing this work.
And last year's winner of the Nobel Prize for Economics tells me about the future of the US economy under Donald Trump.
But first, one of President Trump's promises was that he would end the Ukraine war on day one of his administration.
That hasn't happened, but he has urged Vladimir Putin to end what he called the ridiculous conflict or face new taxes, tariffs and sanctions.
In a lengthy social media post, he said if the conflict were to continue, there would be further financial penalties for Russia, which is already the most sanctioned country on the planet.
So what could he do that will put any further pressure on Moscow?
Joining me is Lilith Kevogian, Russia and CIS Europe analyst at IHS Global Insight.
Thanks for being with us.
I mean, Russia is extremely heavily sanctioned at the moment.
Is there room for more?
I think you're right in terms of the direct actions from the U .S., considering that the Russian exports to the U .S.
have really diminished.
There isn't really much in terms of the tariffs or taxes that the U .S.
administration can do.
However, I do believe that if there is a coordinated action together with the EU and other partners to crack down on through secondary sanctions, I think that could have an impact.
So secondary sanctions, what do you mean, are companies that trade with Russia, perhaps at that sort of level?
That applies to countries or companies that operate in countries that haven't necessarily joined the sanctions.
And the countries where certain companies are effectively helping Russia to bypass some of the sanctions when it comes to import of knowledge intensive goods and so forth.
So that has given some breathing space to Russian economy.
And that's an area where effectively sanctions enforcement has failed, not completely, but it's a place where they can work.
So what you're saying is the Trump administration needs to work with outside countries to do that.
I mean, it has to be said that Donald Trump's whole thing seems to be to put out what the US wants and expect everyone else to get along with that.
So they might not be terribly willing to cooperate, I suppose.
Well, look, EU is at the moment considering the 16th sanctions package which will target aluminium, for example, aluminium imports from Russia.
We may see a situation where, for example, the US president will come out and say, well, look, together with our partners, we're working on this.
There could be pressures on certain countries, especially neighboring Russia, as well as those large countries, for example, Turkey or China or India, for that matter, have increased the energy imports from Russia and so forth.
So there could be some pressure on these countries as well.
Well, you mentioned China.
I mean, that's really the obvious point I was coming to next, because as long as China is happy to work with Russia to to deal with Russia, to trade with Russia, that's a very big nut to crack in terms of putting pressure on Moscow, isn't it?
Yes and no. It's really the Chinese government, Chinese authorities deciding whether it's worth it, because Russia is not the significant market for China at all.
For Russia, China is number one.
For China, Russia is not number one, not even top ten.
So yes, it is a source of now relatively discounted energy imports, but China has indicated how important the Western market, particularly US market, is.
So if there is a choice, I would say that China probably will be a lot more considerate rather than just stating that they're standing by Russia.
Lily, one final brief point.
I mean, with all the pressure we're talking about, it's been going on for a very long time.
Is Russia's economy about to buckle under all this?
I think there was false expectation that Russia will just collapse.
In part, it was because many economies were following the politician's statements on severity of sanctions which never really were rolled out in one go.
So that gives some space for Russian economy to operate.
But when you look at underlying numbers, the stubborn inflation, the central bank effectively giving up at really high 21 % rate, it's not really looking good.
I wouldn't say Russian economy will collapse, but it's not going to be an easy ride.
Indeed. Lilith, thanks so much for summing that up for us.
Lilith Givorgian there of IHS Global Insight.
Now, diversity, equality, and inclusion, D .E .I.
for short. The idea is to promote opportunities for women, ethnic minorities, LGBTQ plus people, and other traditionally underrepresented groups.
It's been one of the growth areas in employment in the U .S., in business and in government.
But not anymore. President Trump has ended D .E .I.
programs. He's told the federal D .E .I.
employees, in fact, they're going to be put on paid leave.
And he's trying to dissuade private companies that receive government contracts from hiring employees from marginalized backgrounds.
What the order calls illegal DEI discrimination and preferences.
Meta and Amazon, which both hold US government contracts, already say they are scaling back some initiatives in this area.
So how is this affecting those who've been involved in DEI?
Well, Subha Barry is the president of the Washington -based talent services firm Ceramount, which helps companies to develop diverse workplaces.
I got her reaction to the moves from the president.
Well, you know, we've always lived in interesting times.
It's just become a little more interesting now.
I started doing this work over 25 years ago.
So this journey has had its ups and downs and ebbs and flows.
But at Saramount, we empower the world's most inclusive and high -performing workplaces.
So we focus on talent.
But the problem is going to come with this, Suba, because if the U .S.
government, the federal government, which is a huge up -to -now investor in DEI programs and such, doesn't have those anymore, and big companies like Meta and Amazon seem to be moving away as well, that's not going to be good for the DEI industry, is it?
well it is in an industry if you really think about this nomenclature of dei i believe it's been misunderstood and very often misused from our perspective it's about talent do you not want the best talent that is available in the marketplace to come and work whether it's the government or whether it's
your companies but donald trump has said very specifically he wants a meritocracy.
But what he says is it's not people chosen on the basis of their gender, their sexuality, their race, that kind of thing, which up to now has been a push for DEI to try and make the workplace more diverse.
So one is pushing against the other.
We've always thought about it as something that you focus on, because that is what the marketplace is saying.
So let's take Gen Z, for example.
This is the newest generation coming into the workforce.
Do you know they are 49 percent multiracial in the U .S.
They are 30 percent LGBTQ.
They are 20 percent neurodiverse.
So you tell me if you don't want diversity, you don't have to.
But that is what is happening to the population.
They say the U .S. is going to be minority majority by 2040.
The Gen Z is already here today now.
So what if your best scientist, best engineer, best surgeon, Best banker is from one of those demographics I talked about.
Would you hire them or would you not?
Well, what he's saying, as I understand, is absolutely you hire the best people, but you don't give preference to people because of their gender or their race or their sexuality.
That's kind of where he's going with this.
But DEI is surely about giving special representation to people who are underrepresented, regardless of their talent, in a way, so that you can make sure the workplace is more diverse.
Actually, to the contrary, DEI is about asking you if your customers, if your population from which you draw from is changing, but the representation in your company isn't changing, should you not be asking why and then ensure that things that may be insidiously in the system, you find ways to overcome.
So you look at your marketplace, you look at your customers, you look at the communities that you live in and work, and you say to yourself, I'd like for them to come and shop with me.
If I'm a pharmaceutical company and if your population from which you draw from is changing, but the representation in your company isn't changing, should you not be asking why?
And then ensure that things that may be insidiously in the system, you find ways to overcome.
So you look at your marketplace, you look at your customers, you look at the communities that you live in and work, and you say to yourself, I'd like for them to come and shop with me.
If I'm a pharmaceutical company and I produce, you know, manufacture a drug that disproportionately hits one particular population, I'm not going to say, well, I'm not going to target them because that's a diverse population.
I'm going to say I want to heal whoever is sick.
I want the best talent.
So I ask you to turn it on its head.
I want you to think about DEI as being able to get your fair share of who is represented in and around you.
And there is data to prove that diverse teams actually produce better outcomes.
So what do you think will now happen because Donald Trump has very clearly set his face against DEI.
Companies like Meta and Amazon seem to be moving away from it.
He's trying to push parts of the US government well away from it.
What's going to happen to DEI, do you think?
We work with over 600 companies and I will tell you that 80 % of our companies are staying the course doing this work.
10 % are actually doubling down.
And yes, 10 % are backing off.
But sadly, media covers the 10 % that make that noise.
You do not cover the 90 % that stay doing this work.
But that 10 % maybe includes Meta and Amazon, which are pretty big within that.
They may be big, but there are plenty of others that are staying the course.
And I'm going to say to you, the reason to do that is because they are cognizant of wanting the best talent in their organisations.
And they know that the best talent doesn't just come in one gender, one race or one ethnicity.
That was Suba Barry there of Saramount.
You can tell us what you think about all that.
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We'd like to hear from you about it.
You're with World Business Report from the BBC World.
This is Ashley Kennedy from the Ben & Ashley I Almost Famous podcast.
You probably know somebody who's on ozempic or semaglutide right now.
These are really popular medications that people are using to lose weight if it seems like all other options aren't working for them.
Go to tryfh .com to find out if weight loss in that port has now been cancelled.
Well, the customs chief said the port would now be controlled by the Syrian state.
It had been a major Russian trade and military base.
So is Syria the place to put your money now?
Well, I've been speaking to Dr.
Osama al -Qadhi. He's a Syrian Canadian economist.
He's chairman of the Syria Economy Working Group.
I put it to him that the Assad -era sanctions would have to be lifted first.
Right now, it's a little hard because of that sanctions, but we're working hard along with all Arab countries, including Saudi Arabia and Turkey in the region, and other countries, even the European friends, trying to convince the Trump administration to remove that sanctions totally, or at least give
it like on hold for one or two years.
So we allow more investors, including the American and British investors and the Arabs and Syrian investors to come over to fix the oil industry.
Even if they need to help the central bank of Syria, at least they can help them big time.
Dr. al -Qaeda, I take on board that if the sanctions regime is softened, then it may become possible.
And you've laid out some of the areas money could go into.
But you'd have to ask yourself as an investor why, because you would think potentially this is still a very unstable situation.
If you put money into a country like Syria, it might be destroyed in a bombing raid when the next war comes along.
The risk exposure is getting better and better compared to any other revolution.
After 14 years of crisis, I think we are doing an excellent job of stabilizing the economy and the country itself.
So I think it takes maybe little time before all investors will feel more comfortable that their investment will be in a safe hand, will be in a safe place.
We need the current American administration and the European to remove them from that terrorist list first.
And then we don't need an election to have, like, temporary of technocrat government in the meanwhile.
It's like interim government where the country for, like, three or four years, just to put it till we have a new constitution, that's easy in any country.
It's not really need, like, big election.
So that will make even countries more comfortable that we are going as we speak to, like, liberal economy and freedom and democracy.
Well, I hear what you're saying about values.
It's going to take time, I'm sure.
Yes, I hear what you're saying about values, Dr.
Al -Qadi. But the fact is this is a country that's hollowed out, really.
It's been fighting.
The country for, like, three or four years, just to put it, till we have a new constitution, that's easy in any country.
It's not really need, like, big elections.
So that will make even countries more comfortable that we are going, as we speak, to, like, liberal economy and freedom and democracy.
Well, I hear what you're saying about values.
It is going to take time, I'm sure.
Yes, I hear what you're saying about values, Dr Al -Khadi.
But the fact is, this is a country that's hollowed out, really.
It's been fighting for so long, there's almost nothing left.
If you want to put money into a place, You want to know that there are factories that you can invest, that there are things that produce, there are farms that work, this kind of thing.
There's very little of that in Syria.
Yeah, I think there is many smart contracts where you can get investors, like BOT contracts, for example, with a lot of companies and big corporations are willing to come to Syria to invest with BOT.
Just explain what BOT means.
It's a buy -up rate and transfer.
So the company will come and establish everything for 10, 15 years.
They run everything.
After 10 or 15 years, depends on the contract, it will be then the ownership of the government itself.
And during that 10, 15 years, government will get some small percentage or whatever percentage of revenue.
And at the same time, the government will make sure one condition that we have at least 70 to 80 percent of the employees are Syrian.
So you create more jobs.
Some European, some Americans, and some and many, many Arab companies are actually lining up to come after the minute the sanctions will be left.
They will be in Syria.
Saudi Arabia just last week had a meeting of 17 countries, including Britain and the United States and a European representative there.
So they are willing to invest.
They need that sanctions to be removed immediately because they are willing to go and invest there.
Syria is a virgin country.
Six decades of Ba 'ath parties and Assad regime running that country.
maybe, maybe we invested less than 5 % of that country.
That was Dr. Assami al -Khadi.
So let's hear about what's been happening in Wall Street and, indeed, the share markets generally.
Deanna Gutter, his behavioural finance financial advisor at Brighton Securities, joins us now.
Deanna, thanks for being with us.
I suppose investors have got used to, well, the first few hours, at least, of the Trump administration.
Certainly, the S &P 500 rather likes it.
I mean, Oracle, for example, had a bit of a rise because Donald Trump was saying about AI.
Yeah, and thanks for having me, Roger.
Always nice talking with you.
Well, I mean, let's also talk about another area of the tech, I suppose, in a way, or certainly the new economy, Netflix.
Now, they've had a bit of a lift, and that's because they got more subscribers than before.
In the old days, Netflix was, oh, we haven't got enough subscribers.
It's really gone up, hasn't it?
9 % today, closing at.
And, you know, they're focusing on growing their ad -supported business, and they have entered live sports.
They did a boxing match in November, which was the most streamed sporting event ever.
It had a lot of signups, right?
Drove the most signups for Netflix.
And then on Christmas Day, the NFL football games.
And then we got to forget sports.
They had Beyonce for a halftime performance.
And then what do these sporting events do?
They're perfect for attracting advertisers, wanting to reach the large audience, and hence their goal for focusing on growth with the ad -supported businesses.
Great move. Certainly seems to be doing well for them, doesn't it?
That's really interesting to see how that's playing.
Thanks so much for being with us, Deanna.
Deanna Gutter, their behavioural financial advisor at Brighton Securities.
Now, there's little doubt the new US president is going to take the US economy in some directions it hasn't been for a while, including pushing for oil and gas extraction, clamping down on undocumented migrants who provide, of course, much of the farming labour force in the US, and indeed pushing back
against imports by raising tariffs.
And as the world's largest economy, it's going to affect all of us.
So, what is going to happen?
Well, joining me now is Simon Johnson, joint winner of the 2024 Nobel Economics Prize.
He's also a professor at the MIT Sloan School of Management.
Thanks so much for joining us, Simon.
It's an interesting moment.
I mean, you, I know, have written about what you think might be coming down the line in terms of the U .S.
economy. But what do you think will actually change?
We hear a lot of talk.
What do you think will actually change in the US economy?
Not as much as we think.
I think Mr. Trump likes drama, he likes analysis.
He negotiates in a very, well, you've noticed this, a very loud way.
I think, though, the US economy is strong.
And unless he throws something completely weird into the mix, like a massive trade war, I think we'll carry on pretty much as we've been going.
So that's interesting.
So just really kind of better deals almost.
As you say, he negotiates in quite a loud rhetorical fashion, gets a good deal, and some of the things he's promised, well, he doesn't need to do them because he's found a way through.
Well, yes, I think so in part.
And if you look back at what he did when he renegotiated NAFTA, which became something called the U .S.-Mexico -Canada Agreement, he now wants to renegotiate that one.
But look at the first time he did it.
There was a lot of shouting, and he said he was going to rip it up and so on and so forth.
Actually, they sort of changed the rules of origin.
They did things that the Mexicans, the Canadians were totally fine with.
And it was very amicable in the end.
So he certainly can get there.
Gets a good deal. And some of the things he's promised, well, he doesn't need to do them because he's found a way through.
Well, yes, I think so, in part.
And if you look back at what he did when he renegotiated NAFTA, which became something called the U .S.-Mexico -Canada agreement, he now wants to renegotiate that one.
But look at the first time he did it.
There was a lot of shouting and he said he was going to rip it up and so on and so forth.
Actually, they sort of changed the rules of origin.
They did things that the Mexicans, the Canadians were totally fine with.
And it was very amicable in the end.
So he certainly can get there.
But, you know, he wants to show and he wants there to be a certain amount of, you know, frothing at the mouth and so on on all sides.
And it makes for good TV and presumably radio.
Yeah, but I mean, what about the sort of the concrete?
Like, I mean, he said that undocumented migrants are going to be sent home.
I mean, they may end up in Mexico or I suppose in Canada.
um but that in itself you know they're a part of the workforce that actually underlies a lot of the u .s economy oh absolutely i mean if you really if you really could round up every undocumented migrant in the southern home which you can't and you shouldn't uh even try that would be a massive shock
to the u .s economy and and you know the meatpacking industry would shut down as well as a number of other sectors so that that is not going to happen they'll they'll be arresting people who are already in custody for crimes perhaps violent crimes perhaps all crimes and they will be attempting to deport
them of course deporting people is much easier when the countries are willing to take them back but I mean we're talking about something that will be headlines and and it will be noticed but it's not going to dramatically change the supply of labor I think in the U .S.
economy. But there will be Americans saying look you promised tax cuts are there going to be tax cuts do you think?
The republicans have got a lot of heavy lifting to do just to maintain the tax cuts that Mr.
Trump did in his first administration those had a sunset clause for technical reasons, technical and political reasons.
And they've got to renew them.
And that is going to be difficult because their constituency, their caucus on Capitol Hill is very worried about, well, some element is very worried about deficits and debt.
They've only got a small majority to play with.
So they've got to convince people these tax cuts really do pay for themselves, which, spoiler alert, they don't.
Okay, so we ticked off a few things there.
But let me pick you up on something.
And back in 2023, you wrote a book called Power and Progress, talking really, I mean, perhaps alluding to what you might call the new progressive era, the Gilded Age almost, reflecting what happened at the end of the 90th, beginning of the 20th century.
Do you see that, which is driven essentially by technology, that's what you saw as advancing perhaps wealth for everyone, is that still on course?
No, but it hasn't been on course for a while, and that was sort of the theme of the book also, which is you can get a lot of progress through technological change, but just like in the Gilded Age, you've got to make sure the billionaires then and now don't get completely out of control.
And so what we're seeing with the role of Elon Musk, what we're seeing with these high -profile appearances at the inauguration, what we're seeing with the Stargate deal today is that the billionaire class is...
An idea? Well, the trickle -down idea is usually associated with tax cuts, which without adjustment work.
But the idea that billionaires build factories and jobs, it can be true.
And look, Henry Ford was an important positive figure right after the Gilded Age.
But unfortunately, the tech companies of today, and this is absolutely true if you look at Mr.
Musk's vision, are all about replacing people with robots, self -driving cars, right?
Self -driving car means you don't need a taxi driver.
You don't need anybody to deliver goods around the city.
That's all going to be done by a robot.
Now, that's a big negative effect on a lot of people.
If enough new jobs are created, and that's what we work on at MIT, trying to get that process accelerated, then you might be able to keep pace with Mr.
Musk and Sam Altman, who runs OpenAI and others.
But unfortunately, the vision that really grips Silicon Valley right now is replace humans with machines.
And if that's your main thrust, if that's where government policy is going, and that's where all this energy in the private sector goes and all the money goes, you've got a big problem coming in terms of employment.
But Simon, that I suppose is the point where what Donald Trump promised the people who voted for him, who were the forgotten people, that was one of the lines, who weren't feeling that they could even afford their groceries.
That's just going to get worse, isn't it?
Oh, yes, absolutely.
Look, there's a profound contradiction between two groups of people around Mr.
Trump. One is the billionaire class and the other is, I think, a good name for them is the forgotten people.
And the forgotten people felt that they were going to get some policies from Mr.
Trump that would really turn things to their advantage.
And he's told them that this is what tariffs will do and so on and so forth.
I mean, honestly, he's not going to be able to deliver on that.
It doesn't work. That's not how the economy works.
Those policies will, you know, perhaps look a little decorative, but they're not going to change the reality.
The reality is going to be driven by the billionaire class.
The billionaire class is going to be replacing the forgotten people, displacing them, driving them further down the labour market, down to subsistence level or below in terms of jobs.
That's what they've been doing for some time now, some decades, even, you could say.
But under Mr Trump, it's going to be completely out of control.
Gosh, all right. Simon, thank you for being with us.
Simon Johnson, the joint winner of the 2024 Nobel Economics Prize, also professor at the MIT Sloan School of Management, giving us there his sense of what will happen with Donald Trump's economic policies, how they will change America.
And I guess how they'll change the world.
That's it from World Business Report for me and the rest of the team.
Bye bye.
