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Economies Have Adapted to a World Where Covid Calls the Shots · Trumponomics

• 0:07
  Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
• 0:10
  Speaker 1: global economy to you. World begins unprecedented third attempt on
• 0:16
  Speaker 1: that wise crack on Twitter as the clock struck midnight
• 0:19
  Speaker 1: on New Year's Eve captured the global mood rather well.
• 0:22
  Speaker 1: I thought. We're stepping nervously into January, wondering whether this
• 0:27
  Speaker 1: might be the year things finally get back to normal,
• 0:31
  Speaker 1: trying to ignore the fact that nearly everyone we know
• 0:34
  Speaker 1: either just recovered from COVID or recently had a positive test.
• 0:38
  Speaker 1: Also that many of us in the US and Europe
• 0:40
  Speaker 1: are once again working from home. So the first question
• 0:44
  Speaker 1: on our agenda must be how is the latest wave
• 0:48
  Speaker 1: of omicron infection affecting the global economy so far? And
• 0:53
  Speaker 1: especially what's happening to that great snarl up in global
• 0:56
  Speaker 1: supply chains that so dominated this podcast. In one we
• 1:01
  Speaker 1: have the absolute latest on that in a minute from
• 1:03
  Speaker 1: our supply chains are Brendon Murray. But even if COVID
• 1:07
  Speaker 1: starts to fade from view, we know the pandemic will
• 1:11
  Speaker 1: probably change some parts of the global economy for good,
• 1:15
  Speaker 1: including maybe Mexico, which looks a lot more attractive to
• 1:18
  Speaker 1: global manufacturers now than it did before COVID. Thomas Black
• 1:24
  Speaker 1: has a report from sea quares just south of the
• 1:27
  Speaker 1: US border. Later on, we also have the sad tale
• 1:31
  Speaker 1: of fishermen and divers on the island of Iki off
• 1:34
  Speaker 1: the coast of Nagasaki, whose way of life is already
• 1:38
  Speaker 1: threatened by climate change, but may now also be hard
• 1:41
  Speaker 1: hit by the Japanese government's efforts to cut the country's
• 1:44
  Speaker 1: reliance on fossil fuels. I swim here every day, but
• 1:51
  Speaker 1: the sea is dead now. At the bottom of the sea,
• 1:55
  Speaker 1: it really feels like, definitely set. They are only optimates
• 2:02
  Speaker 1: in there. Not our usual fare perhaps, but a parable
• 2:06
  Speaker 1: of our times. That story coming up later from our
• 2:09
  Speaker 1: japan economy reporter Yoshiaki Nohara, But first let's have that
• 2:13
  Speaker 1: update from our supply chain group Brendan Murray. This omicron
• 2:18
  Speaker 1: spread so dramatically in the last few weeks of twenty one,
• 2:23
  Speaker 1: I guess many of us felt we might be coming
• 2:25
  Speaker 1: back from our Christmas holidays and find the world ground
• 2:28
  Speaker 1: to a halt. Again. It's early days, but what is
• 2:30
  Speaker 1: the early evidence on the impact that the omicron wave
• 2:35
  Speaker 1: is having. Well, the early evidence is showing that the
• 2:39
  Speaker 1: global economy and supply chains in particular, are sort of
• 2:43
  Speaker 1: withstanding the initial outbreaks, whether they be in France or
• 2:48
  Speaker 1: the UK or the US. Uh. You know, a lot
• 2:51
  Speaker 1: of companies have built in resilience plans to deal with
• 2:57
  Speaker 1: workers as they as they call in sick. But still
• 3:00
  Speaker 1: there are a number of of of hotspots where all
• 3:04
  Speaker 1: of these cases are are affecting the ability of companies
• 3:09
  Speaker 1: to to to have enough workers to move goods through
• 3:12
  Speaker 1: the pipeline that they need to move through. So we
• 3:15
  Speaker 1: were seeing some signs that uh, you know, supply chains
• 3:18
  Speaker 1: were starting to repair themselves towards the end of the
• 3:21
  Speaker 1: year after a very disruptive year. But then Omicron you know, came,
• 3:25
  Speaker 1: you know with a vengeance in December and kind of
• 3:28
  Speaker 1: slowed whatever progress we were seeing. So we're entering two
• 3:33
  Speaker 1: with you know, even more question marks about the health
• 3:36
  Speaker 1: of the global trade and whether goods can continue to
• 3:40
  Speaker 1: move as as well as they have or as poorly
• 3:43
  Speaker 1: as they have in a lot of cases for the
• 3:45
  Speaker 1: past two years. And I guess that the latest news
• 3:49
  Speaker 1: has been that that even a very small number of
• 3:52
  Speaker 1: cases in China is causing them to have quite dramatic shutdowns.
• 3:57
  Speaker 1: Um in a number of places. UM, we we know,
• 4:01
  Speaker 1: even if we're going to hear later that some businesses
• 4:04
  Speaker 1: are trying to just to change that, but currently they
• 4:07
  Speaker 1: there is a lot of reliance on Chinese production, and
• 4:10
  Speaker 1: you've got complete shutdowns in at least a couple of
• 4:16
  Speaker 1: big cities talk of of barshor in towns like Sheene
• 4:20
  Speaker 1: where their local supply chains are breaking down. If that
• 4:24
  Speaker 1: is the story for for several weeks, if China starts
• 4:27
  Speaker 1: having even the more national lockdown, I mean, that's surely
• 4:31
  Speaker 1: gonna slow down this improvement in the state of supply
• 4:35
  Speaker 1: chains exactly. This is the real wild card this year,
• 4:39
  Speaker 1: especially in coastal towns where where ports are big employers
• 4:45
  Speaker 1: and you know, important for the movement of goods you know,
• 4:48
  Speaker 1: into China and out of China. There are you know,
• 4:51
  Speaker 1: several hundred ships, you know, currently waiting outside of Ningbo,
• 4:56
  Speaker 1: you know, one of the world's busiest ports, and the
• 4:59
  Speaker 1: truck are slow to come and go from this port,
• 5:03
  Speaker 1: and that just backs the whole system up those trying
• 5:06
  Speaker 1: to get in to offload and then to reload and
• 5:09
  Speaker 1: to come back to the States or to Europe. So
• 5:12
  Speaker 1: that is really the big question, is the supply chains
• 5:16
  Speaker 1: are really at the mercy of the virus, and especially China,
• 5:20
  Speaker 1: which you know kind of is the gateway to much
• 5:23
  Speaker 1: of the world's consumer goods and raw materials for that matter.
• 5:27
  Speaker 1: So those shut downs to the zero tolerance policy in
• 5:30
  Speaker 1: China for for COVID cases is really going to be
• 5:34
  Speaker 1: the thing to watch as to whether supply chains can
• 5:39
  Speaker 1: you know, kind of rebound or or stay as as
• 5:42
  Speaker 1: nodded and tangled as they are. We tend to think
• 5:46
  Speaker 1: of the impact of OMCORN as being about hospitalizations and
• 5:50
  Speaker 1: is it you know, that the public health consequences, which
• 5:53
  Speaker 1: obviously could be significant if enough people get COVID, particularly
• 5:57
  Speaker 1: people who are not vaccinated. But what you're speaking to
• 6:01
  Speaker 1: is this the sort of economic impact which comes not
• 6:06
  Speaker 1: so much from people in hospital but just people being
• 6:08
  Speaker 1: at home. And I can say in the UK we're
• 6:11
  Speaker 1: probably in the sort of front line of this at
• 6:14
  Speaker 1: the moment, having been the first developed economy to see
• 6:17
  Speaker 1: a big spike in in infections. The worst case scenarios
• 6:21
  Speaker 1: that the government's working with is that of the workforce
• 6:25
  Speaker 1: might be at home in a few weeks, in the
• 6:27
  Speaker 1: next couple of weeks, which, obviously, if that happens, you've
• 6:29
  Speaker 1: got some pretty important workers who are not on the
• 6:33
  Speaker 1: border controls, or not in the supermarkets, or not in hospitals.
• 6:37
  Speaker 1: So it's going to be very interesting to see how
• 6:39
  Speaker 1: that plays out. But you do get the sense Brendon
• 6:41
  Speaker 1: that whatever happens, we're going to know quite quickly, because
• 6:44
  Speaker 1: it really is spreading so fast through the economy. If
• 6:47
  Speaker 1: you look past the next couple of months, um, what
• 6:52
  Speaker 1: are the sort of structural elements of the supply chain story,
• 6:56
  Speaker 1: um that might start to fall into place over the
• 6:59
  Speaker 1: next year. You know, people talk, for example about just
• 7:02
  Speaker 1: they're ramping up of production of container ships and that
• 7:05
  Speaker 1: potentially having an impact. How do you see those kind
• 7:08
  Speaker 1: of more medium term forces playing out. Once we get
• 7:12
  Speaker 1: through this wave, we should start to see the benefits
• 7:16
  Speaker 1: of that diversification strategy that began a few years ago.
• 7:20
  Speaker 1: Actually even before the pandemic. During the U. S. China
• 7:23
  Speaker 1: Trade war, it dawned on people that protectionism was was
• 7:27
  Speaker 1: it was, it was a coming trend, and that tariffs
• 7:31
  Speaker 1: could go up at any point, and so you needed
• 7:33
  Speaker 1: to be geographically diverse. That it's not sustainable for them
• 7:38
  Speaker 1: to be sourcing only from you know, a country like China,
• 7:42
  Speaker 1: And they quickly developed different suppliers in Vietnam, Malaysia, places
• 7:48
  Speaker 1: like Mexico, Turkey, Morocco. So later this year, perhaps maybe
• 7:55
  Speaker 1: even next year, we should start to see the ability
• 7:58
  Speaker 1: of companies to to get what they need when they
• 8:02
  Speaker 1: need it, as opposed to as opposed to all these
• 8:05
  Speaker 1: delays that we're seeing now. Some of those some of
• 8:08
  Speaker 1: those structural elements take a lot more time. Building of
• 8:12
  Speaker 1: chip factories and you know, that take you know, tens
• 8:15
  Speaker 1: of billions of dollars and decade or more. Uh, you know,
• 8:19
  Speaker 1: those kinds of things will take longer to come online.
• 8:21
  Speaker 1: But the diversification that the pandemic sort of unleashed, we
• 8:26
  Speaker 1: should start to see some of that. The capacity on
• 8:29
  Speaker 1: the transportation side, new ships, uh, you know, newport capacity,
• 8:34
  Speaker 1: cranes and and other you know, trucking and and these
• 8:38
  Speaker 1: kinds of things, the infrastructure spending, those are those should
• 8:42
  Speaker 1: be medium term things that we we see fairly soon.
• 8:46
  Speaker 1: Three is what a lot of the experts say will
• 8:49
  Speaker 1: be the earliest that will see any new container ships
• 8:52
  Speaker 1: come into operations. So we're looking at, you know, at
• 8:55
  Speaker 1: least six months to twelve months before we we see
• 8:59
  Speaker 1: any real relief on the structural sides. Of things well
• 9:03
  Speaker 1: bred and Murray. Thank you very much, and I'm especially
• 9:05
  Speaker 1: thankful because you've given me a great link into our
• 9:07
  Speaker 1: next item, because, as Brendan was saying that the pandemic
• 9:11
  Speaker 1: is going to leave a mark on global supply chains
• 9:15
  Speaker 1: and also the trade boards, it's not so long ago
• 9:18
  Speaker 1: that we were talking about trade boards. Used to be
• 9:21
  Speaker 1: that that cheap labor was all you really needed to
• 9:23
  Speaker 1: attract global manufacturing firms and become part of their intricate
• 9:28
  Speaker 1: supply chains, but not anymore. The pandemic has made businesses
• 9:33
  Speaker 1: wary of basing key parts of their production process on
• 9:36
  Speaker 1: the other side of the world, especially China, and for
• 9:39
  Speaker 1: those based in the US the last year, they've also
• 9:43
  Speaker 1: found it a lot more challenging to find any workers
• 9:46
  Speaker 1: at all at any price. So all of that, it
• 9:49
  Speaker 1: turns out, has been rather good news for a country
• 9:53
  Speaker 1: teaming with willing workers that also happens to share a
• 9:56
  Speaker 1: two thousand mile border with the US are Dallas based
• 9:59
  Speaker 1: manufact Cacturing reporter Thomas Black went south of the border
• 10:03
  Speaker 1: for a closer look. We have very big plans for Mexico.
• 10:10
  Speaker 1: In Mexico is very very important market for ours. That's
• 10:15
  Speaker 1: Isaac Larion, the founder and CEO of mg A Entertainment,
• 10:20
  Speaker 1: Los Angeles based toymaker. You've probably seen or even bought
• 10:24
  Speaker 1: some of the toys made by m g A, from
• 10:27
  Speaker 1: dolls like Brats to the iconic Little Tykes cozy coupe.
• 10:31
  Speaker 1: That's the bubble shaped plastic car that toddlers can climb
• 10:35
  Speaker 1: in empower with their own feet. So what do toys
• 10:39
  Speaker 1: have to do with Mexico. Well, mg A now makes
• 10:42
  Speaker 1: that Little Tykes toy car. And see that what is
• 10:45
  Speaker 1: a dust swept border city just across the Rio Grand
• 10:48
  Speaker 1: from El Paso, Texas. The company's set up the factory
• 10:53
  Speaker 1: only a few miles from the US border and in
• 10:56
  Speaker 1: just nine months, beginning operations in November. And those big
• 11:01
  Speaker 1: plans for Mexico that Larry and just spoke about, they're
• 11:04
  Speaker 1: part of a strategy to shorten mg a's supply chain.
• 11:09
  Speaker 1: Last year was a wake up call for m A.
• 11:12
  Speaker 1: The company makes most of its toys in China and
• 11:15
  Speaker 1: also has a large US plant in Hudson, Ohio, but
• 11:20
  Speaker 1: both proved problematic. While the Chinese factories performed, mg A
• 11:25
  Speaker 1: ended up with seven hundred and fifty shipping containers filled
• 11:29
  Speaker 1: with millions of dollars of toys stuck outside the port
• 11:33
  Speaker 1: of Los Angeles and completely missing the holiday shopping season.
• 11:38
  Speaker 1: Adding insult to injury, the expense for sending those containers
• 11:41
  Speaker 1: from China to the U S had skyrocketed from three thousand,
• 11:45
  Speaker 1: two hundred dollars a container to an astonishing sixteen thousand dollars.
• 11:52
  Speaker 1: But back in the US, the company couldn't crank up
• 11:55
  Speaker 1: production at its Ohio plant because it couldn't find enough workers.
• 11:59
  Speaker 1: To hire American workers if they are even available. I
• 12:06
  Speaker 1: don't want to work in factories or forms. So we
• 12:11
  Speaker 1: are moving across the borders into Mexico. We just opened
• 12:16
  Speaker 1: up our first factory in Uarez, Mexico, and we did
• 12:20
  Speaker 1: it in the record time. M g A isn't alone
• 12:24
  Speaker 1: in increasing production in Mexico, and it's a trend that
• 12:28
  Speaker 1: is only getting started. According to Jason Tolliver from real
• 12:32
  Speaker 1: estate firm Cushman and Wakefield, the whole idea about sourcing
• 12:37
  Speaker 1: was in the global connectivity, was to drive down production costs.
• 12:41
  Speaker 1: A couple of things that made that more expensive. First,
• 12:43
  Speaker 1: just to supply the Chaine disruption. So whether it's a
• 12:46
  Speaker 1: pandemic or whether it's everything related to sustainability and and
• 12:50
  Speaker 1: and natural disasters or anythinks of the cost transportation costs
• 12:55
  Speaker 1: a kind of or less reliable. But labors also got up.
• 12:59
  Speaker 1: And how companies looking at these problems of higher labor
• 13:02
  Speaker 1: costs in China and the risks of sending their goods
• 13:05
  Speaker 1: across the Pacific Ocean to the US. We see production
• 13:09
  Speaker 1: companies saying, Okay, I've got three options. I can move
• 13:13
  Speaker 1: to other areas in Southeast Asia, Vietnam, Me and mar
• 13:17
  Speaker 1: perhaps India, but I don't have as reliable energy, I
• 13:20
  Speaker 1: don't have as good of infrastructure that I don't have
• 13:23
  Speaker 1: that it's harder to transport. I can move further inland
• 13:27
  Speaker 1: into western China, or labor costs are a little bit
• 13:31
  Speaker 1: lower and I can take advantage of, you know, the
• 13:34
  Speaker 1: infrastructure that they have, but I still have all my
• 13:36
  Speaker 1: exit one basket. Or I can become more regional shortness
• 13:40
  Speaker 1: supply chain, come back to the America's manufacturer in Mexico
• 13:44
  Speaker 1: at lower wage rate, and then push into the US.
• 13:48
  Speaker 1: And that's really what's drawing people back. Mexico didn't become
• 13:52
  Speaker 1: a magnet for foreign factories by accident. The country started
• 13:56
  Speaker 1: pushing for manufacturing investment back in the late nineties six
• 14:00
  Speaker 1: teas with a program designed to entice factories to Mexico's
• 14:04
  Speaker 1: northern border, where the unemployment rate sword and poverty was crushing.
• 14:09
  Speaker 1: There are now almost six thousand, five hundred of the
• 14:13
  Speaker 1: so called Miki Ladora factories throughout Mexico that employed more
• 14:17
  Speaker 1: than three million workers. Since the pandemic, even more plants
• 14:22
  Speaker 1: are popping up, particularly in what Is. Excavators and bulldozers
• 14:28
  Speaker 1: swarmed the city, carving out foundations for industrial plants from
• 14:32
  Speaker 1: the sandy soil of the vast Chihuahuan desert. This one
• 14:36
  Speaker 1: right here, this is a new built to suit for
• 14:39
  Speaker 1: Warner Ladder. To your left, it's about four or fifty
• 14:42
  Speaker 1: thousands for feet and they already half presents here, but
• 14:46
  Speaker 1: they're bringing in lines from the USA UM and then
• 14:51
  Speaker 1: here to your ride. This is our newest development that
• 14:55
  Speaker 1: we're developing for buildings a total about seven hundred thousands
• 14:59
  Speaker 1: were feet. That's Jesse Melendus. He's the director of real
• 15:03
  Speaker 1: estate and new business development for Intermax, a Mexican company
• 15:06
  Speaker 1: that was a pioneer for providing industrial space for foreign
• 15:10
  Speaker 1: companies along the border. He's driving through what is showing
• 15:15
  Speaker 1: off the construction boom that has taken hold here. Industrial
• 15:19
  Speaker 1: real estate is tight in this city of space has
• 15:24
  Speaker 1: been leased, and price per score foot has jumped more
• 15:27
  Speaker 1: than twenty percent from a year earlier. But a lot
• 15:32
  Speaker 1: will depend on how the economy performs in the US
• 15:35
  Speaker 1: or Mexico sells about eight percent of its exports. We're
• 15:40
  Speaker 1: seeing more US companies that are Indesia coming to Mexico
• 15:48
  Speaker 1: and not the US, So instead of saying re shoring US,
• 15:53
  Speaker 1: it's more like reshoring North America. One of the Mexican
• 15:57
  Speaker 1: factory workers helping to make this possible is Fraying Gonzalez.
• 16:02
  Speaker 1: The forty nine year old earns one thousand, eight hundred
• 16:05
  Speaker 1: paces a week, or about ninety dollars plus benefits. Had
• 16:09
  Speaker 1: a plant recently built by the unit of China's Kiss
• 16:13
  Speaker 1: and Technology that makes suggestible beds. Like many workers in
• 16:17
  Speaker 1: what is, Gonzales migrated north from southern Mexico, where jobs
• 16:22
  Speaker 1: are scarce and pay is even lower. I've been here
• 16:28
  Speaker 1: in Ware's for two years. Over there in Vera Cruz,
• 16:32
  Speaker 1: there's no work for Mexico. This could be the start
• 16:36
  Speaker 1: of a prolonged period of foreign investment from companies seeking
• 16:40
  Speaker 1: to shortened supply lines, reduce risk and keep costs in check.
• 16:45
  Speaker 1: Plant manager Menicio Garcia is convinced that this is Mexico's
• 16:49
  Speaker 1: manufacturing moment. Do you think there's going to be more
• 16:53
  Speaker 1: manufacturing coming that was done in China coming to and
• 17:01
  Speaker 1: see what our quid is Mexico. I'm Thomas Black. Now,
• 17:24
  Speaker 1: whatever impact the pandemic might ultimately have on our world,
• 17:28
  Speaker 1: it's not going to come close to the global consequences
• 17:30
  Speaker 1: of climate change. Will surely see more extreme weather events
• 17:34
  Speaker 1: in the coming twelve months and government actions to reduce
• 17:38
  Speaker 1: our reliance on fossil fuels that could affect us all.
• 17:41
  Speaker 1: And the message from the scientists is this stuff is complicated.
• 17:45
  Speaker 1: The forces we've unleashed are going to interact in unpredictable ways,
• 17:50
  Speaker 1: even if we do all the right things from now
• 17:52
  Speaker 1: on a big if we have a story now that
• 17:55
  Speaker 1: teaches that lesson in a particularly powerful way. From a
• 18:00
  Speaker 1: corner of Japan you've probably never heard of. Here's Yoshiaki Nohara.
• 18:18
  Speaker 1: It's before dawn at the Japanese fish market. I'm on
• 18:23
  Speaker 1: a remote island called iky off the Nagasaki coastline. In
• 18:29
  Speaker 1: a matter of seconds. Bias snap up. Japanese butterfish, yellowtail,
• 18:35
  Speaker 1: and red snapper all needs to replaced in cases of ice.
• 18:42
  Speaker 1: I'm overwhelmed by the vigor and speed of the auction,
• 18:47
  Speaker 1: But every fisherman I speak to says this is nothing
• 18:52
  Speaker 1: compared to their heyday years ago. They all signed the
• 18:58
  Speaker 1: same corporate behind their decline higher water temperatures due to
• 19:05
  Speaker 1: global warming. They've all been coping with the effects of
• 19:10
  Speaker 1: rising temperatures for years, long before Ikey became the fastest
• 19:16
  Speaker 1: city in Japan to declare a climate emergency in two
• 19:20
  Speaker 1: thousand nineteen. You have knows the fisher we used to
• 19:28
  Speaker 1: find around here have been moving up north. We are
• 19:32
  Speaker 1: getting fewer and fewer of them. They don't stay here
• 19:36
  Speaker 1: for long anymore. Water temperatures have risen by about one
• 19:41
  Speaker 1: degree celsius compared with the old days. That was Terataka Okubo,
• 19:51
  Speaker 1: head of the Katsmoto Fishery Cooperative. He's seventy five and
• 19:57
  Speaker 1: has seen the wax and wane of the local issery.
• 20:01
  Speaker 1: Most boys he grew up with skipped to high school
• 20:05
  Speaker 1: to become fishermen, but now many leave the island in
• 20:10
  Speaker 1: search of college and jobs. The city has now about
• 20:14
  Speaker 1: twenty people, just half of its population. In climate change
• 20:24
  Speaker 1: isn't just twomorrow's problem here in Ikey. All generations living
• 20:30
  Speaker 1: on the island see a needful action, but hard The
• 20:34
  Speaker 1: reality is that in isolation, their efforts to transform the
• 20:39
  Speaker 1: island's energy supplies to renewables won't stop temperatures from rising.
• 20:46
  Speaker 1: Neither way they provide enough jobs to stop the exodus
• 20:50
  Speaker 1: from the island. Generating windpower could also end up being
• 20:56
  Speaker 1: more destructive for Ikey's fishing industry. Three small boats returned
• 21:05
  Speaker 1: after the sun rises and all the best fish have
• 21:09
  Speaker 1: been sold at market. Fishermen casually offload that catches on
• 21:15
  Speaker 1: the concrete. They don't care whether the fish are dead
• 21:20
  Speaker 1: or alive. They cought not because they're variable, but because
• 21:26
  Speaker 1: they eat so much seaweed. They're disrupting the food chain
• 21:30
  Speaker 1: in the local waters. One fish code is zumi. A
• 21:34
  Speaker 1: striped brushy fish is particularly bad and arrived in drops
• 21:40
  Speaker 1: from more tropical waters. The seaweed is all gone. That's
• 21:48
  Speaker 1: a roted me to the fact that something is critically wrong.
• 21:52
  Speaker 1: Fish used to leave their eggs on the seaweed. All
• 21:56
  Speaker 1: of that is over. There are no sporting grounds here anymore.
• 22:08
  Speaker 1: I approached Shinozaki, who wears a straw hat and he's
• 22:14
  Speaker 1: chatting with his friends. Shinozuki is a fifty three year
• 22:18
  Speaker 1: old local diver. His catch of auchens and abaloni has
• 22:23
  Speaker 1: dwindled as the seaweed has disappeared. His days of harvesting
• 22:30
  Speaker 1: seventy abaloni in one day a long gone. In the
• 22:35
  Speaker 1: sixth month ending in September two thousan one, he didn't
• 22:40
  Speaker 1: manage to find even ten abaloni. Shinozaki tells me how
• 22:45
  Speaker 1: he can barely sustain his lifestyle anymore. Last winter, he
• 22:51
  Speaker 1: took a construction job in the Tokyo suburbs just to
• 22:55
  Speaker 1: make and smat The water is complete, really different. Now.
• 23:01
  Speaker 1: I can't tell if I'll be able to continue what
• 23:04
  Speaker 1: I'm doing for much longer, and I can't tell my
• 23:07
  Speaker 1: children to follow in my footsteps. My Shinozaki and others
• 23:15
  Speaker 1: let me hop on one of their boats and off
• 23:18
  Speaker 1: we go. The water is emerald green. I see rocks
• 23:24
  Speaker 1: at the bottom, clearly the scenes of pure beauty for tourists,
• 23:30
  Speaker 1: I'm sure, but not for people like Shinzuki, who remember
• 23:35
  Speaker 1: the water that used to be home to dark for
• 23:39
  Speaker 1: a sub seaweed. The city of Ikey has been developing
• 23:43
  Speaker 1: land based wind and solar power projects to prevent temperatures
• 23:48
  Speaker 1: from rising higher. It's now aiming for offshore wind farms
• 23:53
  Speaker 1: to make its power generation one renewable by two fifty,
• 23:59
  Speaker 1: up from the current thirteen percent. That's in line with
• 24:05
  Speaker 1: the Japan's target to go carbon neutral by two fifty.
• 24:10
  Speaker 1: The nation is aiming to boost renewable energy like wind, solar,
• 24:16
  Speaker 1: and hydrogen to cut its reliance on fastil viewers. Ikey
• 24:22
  Speaker 1: and other rural towns have abandoned space and natural resources
• 24:27
  Speaker 1: to power that transition. Ikey's mayor, Hirokazu Shirokawa fully supports
• 24:36
  Speaker 1: the government's willingness to take on climate change. God the
• 24:42
  Speaker 1: people may say, what's the point of this small island
• 24:45
  Speaker 1: declaring a climate emergency, But that's helped us to raise
• 24:48
  Speaker 1: awareness about this issue. We've got to take action otherwise
• 24:52
  Speaker 1: nothing is going to change. Still, such a dramatic transformation
• 24:58
  Speaker 1: will have a cost for local fishermen, Shirakawa says, they
• 25:03
  Speaker 1: won't be able to carry on in the same way
• 25:07
  Speaker 1: radio waves in sound from wind turbine blades will impact
• 25:10
  Speaker 1: our fishing. I think we need the power company to
• 25:13
  Speaker 1: guarantee some kind of compensation for our fishermen. Okubo, the
• 25:21
  Speaker 1: head of the local fishery cooperative, so the offshore wind
• 25:25
  Speaker 1: farm will impact of fishing grounds, even though he's not
• 25:29
  Speaker 1: sure what the impact will be, but sticking with the
• 25:33
  Speaker 1: status quo will only guarantee ongoing decline for fishermen. Understand,
• 25:42
  Speaker 1: it's untried the territory for us. We don't know what's
• 25:46
  Speaker 1: going to happen until we go with it. It's hell
• 25:50
  Speaker 1: for us if we do it, and it's hell for
• 25:54
  Speaker 1: us if we don't. If we just sit tight, things
• 26:00
  Speaker 1: will keep going downhill and the proparation degline isn't going
• 26:05
  Speaker 1: to stop. Okubo's predicament speaks to the price that rural
• 26:12
  Speaker 1: communities will have to pay, even if we manage to
• 26:15
  Speaker 1: meet global emissions targets. Both in Japan and abroad, Locals
• 26:22
  Speaker 1: like Hisaa Takeo are fearful of what's the transition to
• 26:26
  Speaker 1: renew Boenecy will mean for Ikey and its fishing industry.
• 26:33
  Speaker 1: I'm against it. Abalone and other sea creatures are very sensitive,
• 26:39
  Speaker 1: and things like wind turbines go in the water, they
• 26:43
  Speaker 1: will disappear. So are you not. Takeo is one of
• 26:50
  Speaker 1: the area's famous female diverse who've been catching abalone and
• 26:55
  Speaker 1: other sea creatures for generations. Turbines only the latest threats
• 27:02
  Speaker 1: to marine life She's witnessed in more than fifty years
• 27:06
  Speaker 1: of diving. Tidal currents have moved, typhoons have become worse,
• 27:12
  Speaker 1: and without the buff of the seaweed, waves have become stronger.
• 27:18
  Speaker 1: Warmer waters have meant she can stay in the water longer,
• 27:23
  Speaker 1: but there's less to catch. I swim her every day,
• 27:30
  Speaker 1: but the sea is dead now. At the bottom of
• 27:33
  Speaker 1: the sea, it really feels like death. Want on it?
• 27:40
  Speaker 1: She in Aptimus And for Bloomberg News, I'm Yo shaky Nohara. Sorry,
• 28:08
  Speaker 1: not a happy ending this week for Stephanomics. We'll try
• 28:10
  Speaker 1: to do better next time. But for good and bad
• 28:13
  Speaker 1: news about the global economy. Do follow at Economics on
• 28:16
  Speaker 1: Twitter and rate this podcast, especially if you like it.
• 28:20
  Speaker 1: This episode was produced by the Magnis Hendrickson and Yoshi's
• 28:23
  Speaker 1: story from Japan was edited by Paul Jackson. Special thanks
• 28:27
  Speaker 1: also to Chester Dawson, Yoshito Kubo, to Yoshi in Ajima,
• 28:32
  Speaker 1: Takaki Iwabu Go or mitsu Yuko Takeo and Lucy Meekin.
• 28:38
  Speaker 1: Mike Sasso is executive producer of Stephanomics, and the head
• 28:41
  Speaker 1: of Bloomberg Podcast is Francesco Levy.