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Their company's success helped build a nation.
The company is such a big part of Korea's economy.
But who are the family behind one of the world's tech giants?
Major corporate empire that we now know today.
Inheritance samsung from the bbc world service explores the real-life dramas of the lee family and their company, samsung.
There's a succession style drama underneath of all this.
Inheritance samsung coming soon wherever you get your bbc podcasts.
As the middle east conflict shakes global oil markets, sri lanka is forced into a four-day work week amid a deepening fuel crisis.
I'm here from 4.30 in the morning.
I don't know whether the children have eaten in the morning or not.
They wouldn't have been able to go to school today.
It's World Business Report from the BBC World Service.
I'm Vishala Sripatha.
On the way, fuel shortages ripple across the globe from the Middle East.
We look at how countries are preparing.
Plus the luck of the Irish as we raise a Guinness to St.
Patrick's Day.
We ask why multinationals might be doing the same.
Markets are in a cautiously upbeat mood today.
The FTSE 100, along with major US and European indices, pushed higher on Tuesday as investors look ahead to a big week of central bank decisions.
Central banks were getting ready to talk seriously about cutting interest rates.
But with higher energy prices now because of the conflict in the Middle East, that doesn't feel like a clear path.
Jennifer Snyder is a financial advisor for Brighton Securities in Rochester, New York.
Hi, Jennifer.
Hello.
So what's the likely course of action now, given the bigger picture?
Well definitely, with everything that's going on, near certainty that the Feds will hold rates steady, probably around 35 to 375.
But inflation, because of the oil crisis and the war, it's still a bit above target, about 2.4%.
So they're not in a rush to cut just yet.
And how does that impact businesses?
Because lots of businesses and institutions were hoping rates would be lower by now.
Well, from a business perspective obviously, the oil prices are going to affect everything, the ripple effect of what that does as it relates to inflation.
However, for investors, if we're talking about the markets, it's kind of a balancing act.
So stocks may stay volatile, especially in NASDAQ.
However, that was a winner today. while bonds are finally offering some solid income again.
So the rates being held steady is still attractive to those that want to see some kind of interest on a return.
So the bottom line this is a higher for longer environment, but it's also the most balanced market we've seen in years, with real opportunities in both stocks and bonds.
And Jennifer.
With the indices, we saw markets end in positive territory on Monday as well as Tuesday.
What is that about?
Well, it's because business is going to keep going on.
Dow was up modestly.
S&P was up a quarter percent.
NASDAQ nearly half percent.
And it's just investors digesting the geopolitical risks, these oil swings.
And of course, the start of the ever popular Fed meeting that's happening.
But at the end of the day, these are businesses that want to turn revenue, want to generate the profits.
We want to win.
So, even in light of all the things that are going on, market swings are usually just a reaction of investor sentiment.
OK, Jennifer, we'll be.
Monitoring those indices closely throughout the week.
Jennifer Snyder, financial advisor for Brighton Securities in Rochester, New York.
Well, the US-Israel war with Iran has reminded the world that disruption to the global supply of oil still has the potential to cause major economic upheaval.
The US is the world's largest oil producer and, speaking yesterday, President Trump reiterated his pledge to drill, baby drill.
It's incredible.
We have such great, we're number one in oil by double now.
We drill baby drill.
We're double any other nation and it's going to be soon triple any other nation, and that doesn't include Venezuela.
Well, the US government has granted oil producers permission to drill in Alaska and the Gulf of Mexico, but much of America's oil comes from fracking.
So will frackers be taking advantage of current high oil prices to increase production?
Well, Mike Eastman is CEO of Tall City, an oil and gas company headquartered in Midland Texas, a firm focused on exploratory fracking.
Thank you very much for joining us, Mike.
Thank you.
Nice to be here.
Mike, so what are you planning to do with production given the wider picture?
There's really been no change in our plans.
You know, this price spike has lasted three weeks now.
We don't anticipate it will last much longer, really.
And our company and the people that we know aren't changing their plans based on this momentary disruption in price.
We do plan to drill this year.
We're chasing some new projects, some new reserves.
But that's all based on our analysis.
We base on $60 oil, so we do it at a much lower price.
And so when you say you don't expect this spike to last much longer than a few weeks, do you expect the oil price to return to levels that we saw before this war started?
I don't think anyone really knows that, but that's our expectation that it will be back down in the 60s or 70s pretty quickly.
And we certainly are not going to make any plans based on $95 oil.
So broadly would you say that shale producers try to avoid reacting to geopolitical spikes like this?
I think yes.
Ever since, I guess, around COVID times 2020, there's been a lot of financial discipline.
And I think all the companies are maintaining that.
They've been handsomely rewarded the public companies for returning cash to shareholders or buying back stock and not chasing growth at all costs and being reasonable in their plans.
And I think that's going to continue.
So do these sort of conflict-driven price swings pose an issue for companies like yours in terms of planning, would you say?
It doesn't.
I'm saying it doesn't really affect our planning.
We proceed on.
We're working a project.
And I can tell you in the last month, it hasn't changed a thing about it, really.
And in terms of the main factors that influence your decision to drill more clearly.
The president is a big fan of oil.
What sort of tends to be the main factors when it comes to those decision making moments?
Well, we look at our company looks for new reserves.
And so we're going on an exploration basis into new areas.
And so we're analyzing the technology that we have and then running that versus what we anticipate the price to be.
And we always pick a price that we think is safe.
So it's a little bit under the current price and try to make sure our projects are economic.
Make money at those prices.
And so that's how we approach it.
And so when we see a price up from whatever it went from 65 to 95, it doesn't change us at all.
We're still down and running our economics based on 60.
And we know that over the life of these projects, we won't get that right.
Some days it'll be lower than that.
And sometimes it'll be higher, but we have to have a conservative basis to go in and make these large investments that we're making.
These wells that are being drilled out here are still $10 million a piece or so.
And so they're very expensive and It takes a lot of capital to pull it off.
And so we have to be conservative in our economic analysis.
And is it hard to raise investment for those sort of projects?
It's not easy, but we got it done.
And we've got a lot of great partners in our partnership here.
A lot of family offices, individuals and so forth, and a few companies.
And so we're excited about it.
But yeah, I wouldn't say it's easy, but we got it done in a few months.
OK, Mike, thanks for joining us.
Mike Easton, CEO of Torse City, an oil and gas company headquartered in Midland, Texas.
Well, the surge in oil prices and the wider disruption to global trade caused by the conflict in Iran is being felt far beyond the Middle East.
Now in Sri Lanka, the government has announced an emergency shift to a four-day work week to conserve dwindling fuel reserves amid growing fears over petrol shortages.
And on the streets the impact is already visible, with long queues forming as tuk-tuk drivers wait for hours just to fill their tanks.
I'm here from 4.30 in the morning.
I don't know whether the children have eaten in the morning or not.
They wouldn't have been able to go to school today.
What's the solution?
The amount of fuel isn't enough, but at least with this there is some control.
So that is a good thing.
That was tuk-tuk drivers in Sri Lanka there, waiting for hours just to fill their tanks.
Well, the Sri Lankan government has now declared that every Wednesday will now be a public holiday, in order to cut fuel consumption on the island.
I've been speaking with Ahilan Kalrigama, who is an economist at the University of Jaffna.
Sri Lanka is facing fuel shortages.
We just introduced a QR code, in other words, rationing petrol and diesel for all vehicles.
And soon after, the government has announced that every Wednesday will be a public holiday for state employees, for schools and universities.
And they've also recommended that the private sector also follow suit.
This is really to reduce the level of fuel consumption in Sri Lanka so that we can conserve whatever fuel that we have in the country, even as we know that the transport of fuel has been greatly disrupted and it could last for many weeks to come.
And are you seeing the effects already when you walk around?
Over the last two weeks, there have been longer fuel queues, initially as soon as the war started.
And then it was starting to settle down a bit.
But now with the rationing of fuel and creating a system, we are based on a QR code interface.
Each vehicle will be given so many liters of fuel.
There have been some queues, but that's likely to subside.
So you can see it on the streets with these queues.
But there's also a lot of anxiety among the people because Sri Lanka has gone through a repeated crisis the COVID-19 crisis.
Then Sri Lanka went through a major economic crisis from which we haven't recovered yet.
And just last November, one of the worst cyclones hit Sri Lanka, and now the fuel crisis.
So our labor has already been disrupted.
But in another sense it's also true that Sri Lanka, if you look at our labor laws, people are expected to work anywhere between 40 to 48 hours week.
And this might be one way in which the regularity of work might be reduced.
And it might be something that perhaps even stays into the future.
It's coming up to the Easter holiday season.
Sri Lanka is the fourth fastest growing tourism market in the world.
Businesses are probably quite worried about how that might affect them.
What are they doing to prepare?
If you look at Sri Lanka's economy, our biggest import cost is fuel.
Now that has gone up.
And two big foreign exchange earners.
One is tourism and the other is tourism foreign remittances, and mainly of people working in the Middle East.
Over a million people out of our 22 million population work in the Middle East.
So we're also going to be short of foreign exchange and the tourism sector.
It's already been affected with all the cancellation of flights.
And even our other exports, like tea and garments, might get affected because of the higher insurance costs.
So it's affecting us on all fronts.
So it is a very worrying situation.
And just going back to this public holiday, does it actually work?
Has there been examples of this in the past?
You know when you're effectively shutting down part of the economy to save fuel.
Is there evidence that this will meaningfully reduce consumption?
I think so.
During the economic crisis four years ago, we introduced this QR code and rationing of fuel, which did work.
And now there's also a reason that they're making it every Wednesday, so that if you take the government services,
If you make it a Friday, then it becomes a very long weekend.
And then there is a backlog.
But by just breaking in the middle of the week people would hopefully stay home take care of their other chores.
And in the process, the country saves fuel.
But hopefully there won't be as much a disruption as well.
That was Ahalan Kalrigama speaking to me earlier from Sri Lanka.
Their company's success helped build a nation.
The company is such a big part of Korea's economy.
But who are the family behind one of the world's tech giants?
The major corporate empire that we now know today.
Samsung.
Inheritance Samsung from the BBC World Service explores the real life dramas of the Lee family and their company Samsung.
There's a succession style drama underneath of all this. inheritance Samsung.
Coming soon, wherever you get your BBC podcasts.
You're with World Business Report from the BBC World Service.
Now to our listeners from the Emerald Isle, a very happy St Patrick's Day to you.
However, it's not just a day to honour Ireland's patron saint.
It's also the time of year when Irish politicians traditionally descend on Washington to strengthen ties and promote Ireland in the US.
Now cast your mind back to this time last year.
There were real worries in Dublin that Donald Trump's tax agenda could see US multinationals paying far less corporation tax in Ireland on their European profits.
But despite those fears, the money hasn't stopped flowing.
Brad Setzer is an economist at the Council on Foreign Relations in Washington.
Well yeah, I mean about half of Ireland's reported GDP is the activities of US multinationals, which do contribute something to Ireland's economy, but not anywhere near the amount that registers in the formal data.
The Irish produce a measure of the size of the real Irish economy, which is about half the size of the formal gross domestic product.
So do you think ordinary Irish people wouldn't necessarily relate to those figures that we see in economic data?
The figures put Ireland amongst the richest countries in the entire world.
I think most people in Ireland would recognise that Ireland's done well, but Ireland isn't one of the world's richest countries right now.
So if those profits could move overnight, would that put Ireland's economy in a bit of jeopardy?
It would radically reduce the tax revenues that the government of Ireland is now getting.
Last year, the government reported $35 billion in corporate tax revenue.
That's an enormous sum.
Over 15 billion euros of that is coming from just three American companies.
So if Ireland lost that tax windfall, there would be some adjustment to the budget.
Now, a lot of that is going into a sovereign wealth fund, into a rainy day fund.
So there wouldn't be necessarily an immediate impact.
But these are gigantic numbers and there's no way it wouldn't force Ireland to either raise some other taxes or otherwise reconsider its finances.
So OECD reforms were meant to stop profit shifting.
However, Ireland's tax revenues have surged.
So has there been an issue or something that hasn't been achieved there with the OECD when it comes to tax reform?
Well, I think the OECD process was meant to eliminate what were called zero-tax jurisdictions the Caribbean, the Caymans
And the OECD process did do that.
But what happened was that a lot of companies that had previously been resident in the Caribbean for tax purposes migrated to Ireland.
And so the net result has been an enormous windfall for Ireland.
I would say the process, the OECD reform process has been incomplete.
There's still a lot of capacity to shift profits, particularly out of the United States, because of the way the US tax code is structured.
And so in terms of how diversified Ireland's economy is, what would you say about that?
Well, Ireland's economy is becoming less and less diversified.
Ireland is the tax hub of a few American multinational tech companies Apple and Microsoft and the American pharmaceutical industry, which has a real presence in Ireland.
Many important patent-protected drugs are manufactured in Ireland, and that provides the basis for moving profits on US sales out of the United States, where they'd be taxed at 21, and to Ireland, where they're taxed at more like 12.
In some sense it's a diversification of Ireland's economy relative to 50 years ago, when it was very agricultural.
But it has meant that Ireland's economy today is very concentrated and its tax base is very concentrated around the activities of the American tech sector and the American pharmaceutical sector.
So what would happen if one of those multinationals would pull out?
Well, if one pulled out the tax windfall from the other two is still so big that Ireland could manage.
If all three of the biggest US taxpayers pulled out, then Ireland would be facing a bit of a fiscal crisis.
So these profits are often like generated from US consumers, as you sort of alluded to there.
Is that fair?
Should that money be going back to the US taxpayer instead?
Fair is a loaded word.
This is legal.
And what I do think is that the US should change its tax law so that it is not possible, at a minimum, to have intellectual property that's developed in the US, shift that intellectual property to Ireland, do production in Ireland all for sale back to the US, where we pay some of the highest costs in the world for drugs and have the profit on that chain of activity register as an Irish profit.
And is it sustainable, this model?
It's been going on for some time, which would suggest it might be.
My forecast is that it's not sustainable.
But it's not sustainable because the US needs the tax revenue.
And at some point, the US will look at this as a necessary reform for its own fiscal sustainability.
So the US and the EU have long been aware of profit shifting.
Why haven't they taken stronger action then?
It's just been hard to close the very specific loopholes that allow American companies to move their intellectual property abroad and to book profits abroad.
It's doable, but it would be – it's hard to go against the lobbying power of big tech and big pharma.
That was Brad Zetzer speaking to me a bit earlier on.
Well, we're going to head over to Venezuela now.
Back in January, the United States carried out a military operation that removed Venezuela's president, Nicolas Maduro, from the country, a moment that sparked cautious hopes of change for many Venezuelans.
But although Maduro himself is gone, much of his government remains in place, leaving the country in a tense and uncertain transition.
Well, the BBC's Ione Wells has been in Venezuela speaking with young people about what they hope this moment might mean for their country's future.
I'm at the Central University of Venezuela in Caracas to hear from some students about what they hope for from the future.
I am a medicine student and 30 years old.
A transition should happen in a peaceful, calm way.
It won't happen overnight.
Today, there's a meeting here of a new political movement in Venezuela called We Save Venezuela.
It's a group of young people of different political persuasions getting together to discuss what the future of Venezuela might look like, possible opposition candidates and how a transition might work.
I feel intervention in any country isn't the best thing, but it was the firm hand.
Venezuela needed to move forward and be a free country with democracy, where everyone can raise their voice without fear of being arrested.
It's absurd that we as a country with the largest oil reserves in the world have these deficits.
Yesterday, I was without power for six hours there in Maracay.
The energy issue ends up paralyzing the economy and the progress of the country.
The real hope of Venezuelans is that we can live in freedom and that our rights will be respected.
There are still regular government rallies for Nicolás Maduro, with supporters demanding his release.
But away from the main crowd, some young people told me they were public sector workers who were compelled to attend or risk penalties at work.
I hope that the world knows everything they see on government media is false.
It's all a lie.
This 22-year-old worker Elena, whose voice and name we've changed, says last month, public employees received a 150 bonus for attending pro-Maduro marches, on top of a 120 monthly salary.
Friends who didn't go, didn't get it.
The economy remains the same.
The government remains the same.
The fear of expressing yourself still exists because the figures that represent the most terror in government remain imposed.
I asked how she felt about the idea of living in a democracy.
Elena doesn't want to emigrate, like the millions of Venezuelans who have fled the economic crisis, but others told me they no longer see a future for themselves here.
One of them is Ana, whose name we've also changed, a 25-year-old teacher from Maracaibo hoping to move to Spain.
I don't know what it is like to be able to go on the street and don't feel like you could get killed at any point in time just because you posted the wrong thing in social media.
I want to earn money and feel like I can live somewhere that actually has electricity.
She grew up watching her mother cry when the family did not have enough money for the week and people looting shops in her hometown Maracaibo, when power cuts lasted a week.
She's lived through too many cycles of things getting better, then worse again to believe things will be different just because Maduro is gone.
It can be very lonely.
Most of my friends had to flee the country to pursue something better.
Not all young people are convinced by the US's intervention.
But one thing I clearly heard that unites many young Venezuelans who have never lived through a change of political party is they want less polarisation and corruption with crucially, the freedom to speak without fear.
Ione Wells reporting there.
Now, if you're not in the United States, you may never have heard of March Madness.
But over there, it's huge.
It's the annual high-stakes knockout tournament that decides the champions of college basketball.
But it's not just about the sport anymore.
March Madness has become one of the biggest moments in the year for sport betting, drawing in billions of dollars in wages.
John Cohen has been tracking that boom.
He's the author of the book Losing Big, America's Reckless Bet on Sports Gambling.
College sports are sort of a big thing in the U.S., especially college football.
And then for one month of the year, all of America decides that it cares about college basketball.
And March Madness is the championship tournament for these qualifying college basketball teams that have made it this far in the season.
And they are sort of selected, some automatically and some by a committee, to participate.
And it's a huge event moment in the sports calendar because there are so many teams participating, so many school alumni and so on, all of whom have a little stake in the action.
And because tens of millions of Americans fill out a bracket trying to predict who's going to win this tournament.
So it really is sort of like the Super Bowl, but it's sort of lots of little Super Bowls spread out over the course of about a month, culminating in the crowning of the national champion sometime next month.
Now, you've been tracing that boom and you warn about the risks involved.
Tell us a bit about that.
Yeah, the risks involved specifically relate to the rise of gambling in the United States, which has opened the floodgates for legalization in 2018 and has spread from a 5 billion industry to 170 billion industry just in the matter of eight years.
And the risks, specifically being much of like what we see in the UK and in Europe, are that the people who are gambling are disproportionately younger men, many of whom are gambling on these sort of technologically supercharged apps that don't provide safeguards.
And something like March Madness is an opportunity for fun, is an opportunity to use gambling to sort of make sports a little bit more exciting, a little bit more engaging.
But it can also be risky as a moment when people can sort of get over their skis and gamble a little bit more than they afford, more than they intend, develop a habit that's going to be with them for a long time.
And like you say, it's big business, it draws in billions of dollars.
In terms of this year's March Madness, who's tipped to win?
Oh, I'm like everybody else in America.
I'm just trying to figure out who I should be betting on.
Duke is sort of the blue blood, as they're called, sort of the gold standard in the college basketball universe.
They got a tough path.
They have a tough draw.
Personally, if I was a betting man, I like the University of Arizona.
I think they have a pretty good shot this year.
All in on Arizona then.
Let's be careful about all in, but yeah, I'm going big on Arizona.
Big for me is $20, but yes, I'm going big.
John Cohen speaking to me earlier, and the March Madness tournament has got underway while we've been on air.
Howard University from Washington, D.C. are playing UMBC.
That's it for this episode of World Business Report.
Thanks for listening.
