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Bonus: One Belt, One Road, Part 2 · Trumponomics

• 0:17
  Speaker 1: Hello, everyone, Welcome to the second of Bloomberg's podcast, where
• 0:21
  Speaker 1: we're talking about our Belton Road series now showing on
• 0:25
  Speaker 1: Bloomberg Television and with me as has Slender Ammon, who
• 0:28
  Speaker 1: hosts episode two. Has okay, I watched this episode. You
• 0:33
  Speaker 1: have been everywhere. I wouldn't see everywhere, but yes, Southeast Asia,
• 0:41
  Speaker 1: South Asia, Central Asia. So yeah, quite interesting. Well, it's
• 0:47
  Speaker 1: been quite a right that the show starts in Mumbai,
• 0:50
  Speaker 1: and I thought it was actually really very interesting about
• 0:53
  Speaker 1: you know, how India is sort of resisting the Chinese
• 0:57
  Speaker 1: Belton Road innovations or initialve if so, tell us just
• 1:01
  Speaker 1: a little bit about what what's happening with with India
• 1:04
  Speaker 1: and how India used this. I think India is pretty uncomfortable,
• 1:08
  Speaker 1: pretty apprehensive. China's putting a lot of money into infrastructure
• 1:12
  Speaker 1: and India's immediate neighbors. We're talking about the likes of Pakistan,
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  Speaker 1: Sri Lanka, Moldives and as you know, David, some of
• 1:19
  Speaker 1: these borders are pretty contentious and we've seen political tensions
• 1:22
  Speaker 1: between Indian Pakistan, for example, that's been going on for years.
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  Speaker 1: So India fields pretty uncomfortable. China is helping to develop
• 1:29
  Speaker 1: these countries which it could have trouble with, you know,
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  Speaker 1: down the road, and there's also the risk of debt.
• 1:36
  Speaker 1: If these countries go into debt, then India could be
• 1:40
  Speaker 1: in trouble as well, right right, right, But you know,
• 1:42
  Speaker 1: some of the shots that we see in the program
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  Speaker 1: are just stunning. But there's one where you're in in
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  Speaker 1: the Mumbai railway station and I just wondered to myself
• 1:52
  Speaker 1: and I saw all these crowd surging around you. You know,
• 1:55
  Speaker 1: what was it like actually doing that stand up? Oh
• 1:57
  Speaker 1: my god, it was crazy. It was actually very facult.
• 2:00
  Speaker 1: It was rush hour. It was so crowded you could
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  Speaker 1: hardly see me. I was. I was really lost in
• 2:06
  Speaker 1: the sea of morning commuters. We actually had to wait
• 2:09
  Speaker 1: for a time when it eased a little so I
• 2:11
  Speaker 1: could be in shot, you know, even know what I mean,
• 2:14
  Speaker 1: even if it's just for for a moment. It was
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  Speaker 1: difficult because security was also tight, so we had to
• 2:19
  Speaker 1: find that perfect moment where you could see me and
• 2:22
  Speaker 1: security wasn't really looking at us. So we got creative
• 2:25
  Speaker 1: and it was one take. We didn't have any other options. Yes,
• 2:29
  Speaker 1: it was one probably had to do it in one take.
• 2:31
  Speaker 1: I could certainly see you because you were wearing one
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  Speaker 1: of your trademark eye popping colored drisk That's just that's
• 2:38
  Speaker 1: a funny one because you know, I thought I was
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  Speaker 1: gonna pop, but you know, if you know Indian and Indians,
• 2:43
  Speaker 1: there were a lot of colors as well, so I
• 2:46
  Speaker 1: didn't really pop that much, but popped enough to be
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  Speaker 1: seen on camp. But tell me, look at you also
• 2:51
  Speaker 1: came out with some extraordinary statistics about India's rail travel
• 2:55
  Speaker 1: and India's rail network. Just give us a little taste
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  Speaker 1: of what were you know what it's it's pretty mind blowing,
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  Speaker 1: right if you take a look at the numbers. I mean,
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  Speaker 1: in his railway one of the largest railway networks in
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  Speaker 1: the world. I didn't know that until I did this series.
• 3:10
  Speaker 1: If you put the tracks back to back, then they
• 3:12
  Speaker 1: will circle the globe one and a half times. And
• 3:16
  Speaker 1: if that is not enough, eight billion passengers a year.
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  Speaker 1: That's the official number. The unofficial could be even more.
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  Speaker 1: You're not even the ones riding on the roof ron, yes,
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  Speaker 1: the roof everywhere. I mean, you know, it's amazing how
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  Speaker 1: many people they can pack in that in that in
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  Speaker 1: the in each what's that cubicle or each box you know.
• 3:37
  Speaker 1: But when the interesting thing also that came out of
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  Speaker 1: there was that actually there is Chinese investment going into
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  Speaker 1: infrastructure in India. That you mentioned that the aii B
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  Speaker 1: is investing in in the in the in the metro
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  Speaker 1: in Mumbai. The ai B of being, of course, the
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  Speaker 1: Asia Infrastructure Investment Bank, which we started up by China
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  Speaker 1: a couple of years ago. Well, yeah, in fact, India
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  Speaker 1: is one of the founding members. I think they have
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  Speaker 1: twenty one founding members. And AIB has actually committed a
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  Speaker 1: lot of money I think in access of you know,
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  Speaker 1: three billion dollars to invest in India and infrastructure projects.
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  Speaker 1: And I think part of the reason for that is
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  Speaker 1: that India's infrastructure needs are so great. I mean, India
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  Speaker 1: can't put the bill itself, so it needs a lot
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  Speaker 1: of help. So it gets AIB, It gets you know,
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  Speaker 1: funding from the Asian Development the World Bank, so it
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  Speaker 1: gets a lot of help. And I be being the
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  Speaker 1: new kid on the blog in terms of you know, financing,
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  Speaker 1: being able to finance these projects. It's it's come to
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  Speaker 1: India's rescue in a way. There was also an interesting
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  Speaker 1: point made by one of the guests who you interviewed,
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  Speaker 1: um who drew the distinction between investing for commercial reasons,
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  Speaker 1: you know, investing in these infrastructure projects for commercial reasons
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  Speaker 1: and strategic reasons. Just tae that out a bit. What
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  Speaker 1: was that about? Well, I guess you know, like if
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  Speaker 1: you take a look at the Belt and Road initiative,
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  Speaker 1: there are some people who say that China's in it
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  Speaker 1: because as strategic reasons, it wants to be in some
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  Speaker 1: of these countries because it wants to be there for
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  Speaker 1: political and strategic reasons. Um So people are pretty cautious.
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  Speaker 1: It's not just about economics, it's not just about helping
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  Speaker 1: a country get to where it wants to be, get
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  Speaker 1: to the growth it wants to be at, but also
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  Speaker 1: for China's own reasons. I think that that is the
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  Speaker 1: distinction that make I think a lot of people also
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  Speaker 1: talk about the case of Jibouty, where China's invested a
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  Speaker 1: lot of money and infrastructure about it also has its
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  Speaker 1: first military base there. Well, you're right, and you know,
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  Speaker 1: in a way, you know, if not China, then who
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  Speaker 1: if you talk about Jibouti, would the US want to
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  Speaker 1: invest infrastructure there? You know, so as much as you
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  Speaker 1: want to be suspicious of China, you also have to
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  Speaker 1: think who ealth if not China, well, Kazakhstan noting the
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  Speaker 1: doing the investment, but who has in terms of a
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  Speaker 1: completely different story in terms of whether they're going to
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  Speaker 1: welcome uh, you know, in terms of welcoming China's investment
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  Speaker 1: or not. And I have to say those opening shots
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  Speaker 1: of Astana are absolutely extraordinary. I was just amazed by
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  Speaker 1: how modern this city is. What was it like there?
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  Speaker 1: You were surprised, I was really surprised. I mean it
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  Speaker 1: was interesting to see because it's so desperate. You know,
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  Speaker 1: on the one hand, you have the Kazak steps, you know,
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  Speaker 1: vast open mouth and mouth and mouth of grassland where sheep, cows, horses,
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  Speaker 1: grape like in Mongolia. Really yeah, right, and you know
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  Speaker 1: you almost can see, I don't know, you can see
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  Speaker 1: how it was how it was before. And there on
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  Speaker 1: the other hand, you have such amazing modern infrastructure, the skyline.
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  Speaker 1: It's it's just amazing. It's it's so futuristic. So it
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  Speaker 1: was really kind of, um, I don't know, it was
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  Speaker 1: a bit mind boggling. It was desperate and away. I
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  Speaker 1: couldn't I couldn't really put the two together. But it
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  Speaker 1: is a very interesting space a very interesting country and
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  Speaker 1: a country we should all be watching because I think
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  Speaker 1: it is on its way to making its mark, if
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  Speaker 1: not you know, in Central Asia, but the rest of
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  Speaker 1: the world as well. Kazakhstan seems to be really buying
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  Speaker 1: into the whole project. Though you know, some of the
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  Speaker 1: other numbers that came out were pretty boggling. Twenty eight
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  Speaker 1: billion dollars being invested on fifty one projects. How is
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  Speaker 1: it changing Kazakhstan's economy has I think it's changing the
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  Speaker 1: economy in a huge way. If you walk around the city,
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  Speaker 1: if you just walk around the streets, you'd be surprised
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  Speaker 1: to see, you know, branded shops you get, you know,
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  Speaker 1: your max Mara, you have your I didn't quite see Chanelle,
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  Speaker 1: but I saw a lot of the branded goods there,
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  Speaker 1: and I think that is a reflection of how the
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  Speaker 1: country has grown, and I think it has aspirations to
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  Speaker 1: grow even faster. I mean, this is a country pretty
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  Speaker 1: much based on oil and gas. I think that's driving
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  Speaker 1: the economy, but it also wants to be I guess
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  Speaker 1: the middleman, you know, in terms of trade, because a
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  Speaker 1: lot of countries, if you want to move your goods
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  Speaker 1: from east to west, Kazakhstan is possibly is where it's
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  Speaker 1: possibly the middle ground, the meeting point. Yeah. Well, I
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  Speaker 1: mean another thing that came out actually was a conversation
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  Speaker 1: with the deputy Foreign Minister who said that the volume
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  Speaker 1: of container traffic going through Kazakhstan has doubled every year
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  Speaker 1: for the past seven years and that they're looking to
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  Speaker 1: take five billion a year and revenues is just mind boggling. Yeah,
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  Speaker 1: and and it's precisely what we talked about Kazakhstan being
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  Speaker 1: the buckle of the belt and Road, so you can
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  Speaker 1: kind of visualize the role it plays. I mean, that's
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  Speaker 1: that's one side of it. The other side is that
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  Speaker 1: it wants to be I guess, the hub for financial markets,
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  Speaker 1: capital markets. I mean, this is a new ambition. I
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  Speaker 1: think it started maybe about five years ago when UH
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  Speaker 1: President neural Nur Sultan as A Byef by the way,
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  Speaker 1: he's been the only president of the country has had
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  Speaker 1: um you know, he he came up with this planned
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  Speaker 1: this vision to make Kazakhstan play a regional role and
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  Speaker 1: you know that and trade. I think that's what's going
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  Speaker 1: to drive Kazakhstan going forward. It's a pretty interesting, I
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  Speaker 1: guess ambition because you never ever think Kazakhstan was going
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  Speaker 1: to be a financial hub, right, I mean when you
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  Speaker 1: think Kazakhstan, what do you think of definitely not a
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  Speaker 1: financial hub. It wants to be a hub for Islamic finance,
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  Speaker 1: for instance. So it is a role it is really pursuing.
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  Speaker 1: And so that's that brings me back to the question
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  Speaker 1: I had actually about the opening shots when you go
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  Speaker 1: into the into the Kazakhstan part, because you've got these
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  Speaker 1: drones that are flying over. I think that's a new
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  Speaker 1: international financial center, right with that big circular building. Well,
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  Speaker 1: you're right, it's it's huge from whatever what I understand. Well,
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  Speaker 1: I mean to those who are listening to this podcast,
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  Speaker 1: I can absolutely recommend that you take a look at
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  Speaker 1: at this Built and Road episode because of some of
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  Speaker 1: the pictures are just amazing, the dry port for example.
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  Speaker 1: Actually we don't even know whether we were allowed to
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  Speaker 1: have drones, but we did anyways, um, because I think
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  Speaker 1: it's the only way we can show how immense the
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  Speaker 1: place really is. I mean, you don't get a sense
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  Speaker 1: of kazakhstann until you see it from the sky. I
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  Speaker 1: mean that that drone shot. I mean, if you don't
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  Speaker 1: have that drone shot. You can never imagine how huge
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  Speaker 1: and VARs and you know, the potential of the country
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  Speaker 1: just really quite quite quite quite extraordinary. Now, from Kazakhstan,
• 10:43
  Speaker 1: we go to Southeast Asia and the next time I
• 10:46
  Speaker 1: see you, you're in Bangkok standing in the middle of
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  Speaker 1: a of a road. The places that they get you
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  Speaker 1: to stand as quite extraordinary sometimes. But tell me more
• 10:56
  Speaker 1: about Thailand and how this sort fits into the whole
• 11:00
  Speaker 1: built and road strategy. I think the Belton Road is
• 11:03
  Speaker 1: applicable not just to Talent, but the rest of Southeast Asia.
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  Speaker 1: I think, as you can imagine, most of the countries
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  Speaker 1: here in Southeast Asia, emerging economies in need, in desperate
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  Speaker 1: need of infrastructure. I think the countries here need in
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  Speaker 1: access and I don't know, I think, uh, the number,
• 11:23
  Speaker 1: the exact number escapes me, but a few hundred billion dollars.
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  Speaker 1: So that's the magnitude of what is needed in terms
• 11:31
  Speaker 1: of infrastructure in Southeast Asia. And Thialand is just one
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  Speaker 1: of them. I think as it pursues growth, it also
• 11:37
  Speaker 1: needs to address its infrastructure needs, which are kind of
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  Speaker 1: bursting at the team's old. It needs to move more goods,
• 11:44
  Speaker 1: it needs to move more people across the country. So
• 11:48
  Speaker 1: you know, this is where bodies like organizations like a
• 11:53
  Speaker 1: I be coming to effect again, I mean coming to play.
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  Speaker 1: They provide some kind of funding so that infrastructure can
• 11:59
  Speaker 1: be built. I think that the Philippine Finance Secretary made
• 12:02
  Speaker 1: a good point because he says that in the Philippines,
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  Speaker 1: for example, we're not building airports and hoping people will
• 12:09
  Speaker 1: come to them. We're building airports because we are absolutely
• 12:14
  Speaker 1: bursting at the scenes. And I suppose he's making the
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  Speaker 1: distinction against say the airport that was built in Sri Lanka,
• 12:20
  Speaker 1: which I believe Harvard gets any airplanes coming to it,
• 12:24
  Speaker 1: and the port there as well, which has very few
• 12:27
  Speaker 1: ships visiting every week. So as you say the Southeast
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  Speaker 1: Asian situation is we need infrastructure because our capacity is
• 12:34
  Speaker 1: so tight. Well, you're right, Um, even take at the Philippines.
• 12:38
  Speaker 1: Just take a look at the airport. I mean it's
• 12:41
  Speaker 1: it's really old. It's not meeting demands. And he made
• 12:46
  Speaker 1: that point precisely. Each country really has to look at
• 12:49
  Speaker 1: it at its own interests, and right now it's trying
• 12:52
  Speaker 1: to meet the needs of the people a rising middle class. Uh,
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  Speaker 1: And that story is Southeast Asia really the rise of
• 12:58
  Speaker 1: the middle class in everybody now is more mobile. People
• 13:02
  Speaker 1: want to move, so infrastructure like roads, railways, airports really
• 13:08
  Speaker 1: need to be upgraded. It has been slow for the
• 13:11
  Speaker 1: Philippines in particular. I think infrastructure projects have been slow
• 13:15
  Speaker 1: to get off the ground, uh, and they've run into
• 13:18
  Speaker 1: all sorts of issues, and that is quite a reflection
• 13:22
  Speaker 1: on what's happening in emerging markets. Indonesia is another country
• 13:25
  Speaker 1: in need of infrastructure but having a lot of trouble
• 13:28
  Speaker 1: getting these infrastructure projects off the ground. Yeah. Well, I
• 13:32
  Speaker 1: suppose we have to, like say, it's not completely smooth sailing.
• 13:34
  Speaker 1: We've also it just had the new Prime Minister in
• 13:37
  Speaker 1: Malaysia pushing back on some Chinese infrastructure projects. That has
• 13:42
  Speaker 1: to do with debt as well. I think where Malaysia's concern. Uh.
• 13:47
  Speaker 1: They're looking at a huge debt which was not expected,
• 13:52
  Speaker 1: which was passed on from the previous government. UH. Martin Mohammad,
• 13:57
  Speaker 1: the Prime Minister, has had to review all these projects
• 14:00
  Speaker 1: with China because it's costing the country a lot of money.
• 14:03
  Speaker 1: And by reviewing, I think he's kind of delaying most
• 14:07
  Speaker 1: of these projects. He can't take on both these projects
• 14:10
  Speaker 1: right now because they just don't have the capacity financially,
• 14:14
  Speaker 1: so that will have to wait. But in terms of
• 14:17
  Speaker 1: infrastructure needs, I mean even Malaysia has to build these
• 14:21
  Speaker 1: infrastructure if it wants to remain one of the tigers
• 14:25
  Speaker 1: in Southeast Asia. Well, the other I suppose you have
• 14:27
  Speaker 1: other point is that China looks on this as a
• 14:29
  Speaker 1: decades long project. It's not something it's going to be happening,
• 14:33
  Speaker 1: and they're in lies, and therein lies the risk. I
• 14:35
  Speaker 1: think infrastructure projects are so long and people are reluctant
• 14:38
  Speaker 1: to because there are changes in governments there it's you know,
• 14:42
  Speaker 1: when it comes to imaging markets, you see changes every
• 14:44
  Speaker 1: other year, sometimes in terms of for you know, who's
• 14:47
  Speaker 1: in power, and policies change, and there in lies the
• 14:51
  Speaker 1: risk has Thanks very much for speaking to us. That
• 14:55
  Speaker 1: brings us to the end of our second podcast on
• 14:59
  Speaker 1: the Built and Road series of Limburger is running at
• 15:02
  Speaker 1: the moment, but next time we're going to be talking
• 15:05
  Speaker 1: about episode three, which takes us all the way to Africa.
• 15:09
  Speaker 1: Thanks for listening, guys. M