WEBVTT - Bonus: One Belt, One Road, Part 2

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<v Speaker 1>Hello, everyone, Welcome to the second of Bloomberg's podcast, where

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<v Speaker 1>we're talking about our Belton Road series now showing on

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<v Speaker 1>Bloomberg Television and with me as has Slender Ammon, who

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<v Speaker 1>hosts episode two. Has okay, I watched this episode. You

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<v Speaker 1>have been everywhere. I wouldn't see everywhere, but yes, Southeast Asia,

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<v Speaker 1>South Asia, Central Asia. So yeah, quite interesting. Well, it's

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<v Speaker 1>been quite a right that the show starts in Mumbai,

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<v Speaker 1>and I thought it was actually really very interesting about

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<v Speaker 1>you know, how India is sort of resisting the Chinese

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<v Speaker 1>Belton Road innovations or initialve if so, tell us just

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<v Speaker 1>a little bit about what what's happening with with India

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<v Speaker 1>and how India used this. I think India is pretty uncomfortable,

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<v Speaker 1>pretty apprehensive. China's putting a lot of money into infrastructure

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<v Speaker 1>and India's immediate neighbors. We're talking about the likes of Pakistan,

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<v Speaker 1>Sri Lanka, Moldives and as you know, David, some of

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<v Speaker 1>these borders are pretty contentious and we've seen political tensions

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<v Speaker 1>between Indian Pakistan, for example, that's been going on for years.

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<v Speaker 1>So India fields pretty uncomfortable. China is helping to develop

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<v Speaker 1>these countries which it could have trouble with, you know,

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<v Speaker 1>down the road, and there's also the risk of debt.

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<v Speaker 1>If these countries go into debt, then India could be

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<v Speaker 1>in trouble as well, right right, right, But you know,

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<v Speaker 1>some of the shots that we see in the program

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<v Speaker 1>are just stunning. But there's one where you're in in

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<v Speaker 1>the Mumbai railway station and I just wondered to myself

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<v Speaker 1>and I saw all these crowd surging around you. You know,

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<v Speaker 1>what was it like actually doing that stand up? Oh

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<v Speaker 1>my god, it was crazy. It was actually very facult.

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<v Speaker 1>It was rush hour. It was so crowded you could

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<v Speaker 1>hardly see me. I was. I was really lost in

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<v Speaker 1>the sea of morning commuters. We actually had to wait

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<v Speaker 1>for a time when it eased a little so I

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<v Speaker 1>could be in shot, you know, even know what I mean,

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<v Speaker 1>even if it's just for for a moment. It was

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<v Speaker 1>difficult because security was also tight, so we had to

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<v Speaker 1>find that perfect moment where you could see me and

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<v Speaker 1>security wasn't really looking at us. So we got creative

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<v Speaker 1>and it was one take. We didn't have any other options. Yes,

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<v Speaker 1>it was one probably had to do it in one take.

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<v Speaker 1>I could certainly see you because you were wearing one

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<v Speaker 1>of your trademark eye popping colored drisk That's just that's

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<v Speaker 1>a funny one because you know, I thought I was

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<v Speaker 1>gonna pop, but you know, if you know Indian and Indians,

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<v Speaker 1>there were a lot of colors as well, so I

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<v Speaker 1>didn't really pop that much, but popped enough to be

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<v Speaker 1>seen on camp. But tell me, look at you also

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<v Speaker 1>came out with some extraordinary statistics about India's rail travel

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<v Speaker 1>and India's rail network. Just give us a little taste

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<v Speaker 1>of what were you know what it's it's pretty mind blowing,

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<v Speaker 1>right if you take a look at the numbers. I mean,

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<v Speaker 1>in his railway one of the largest railway networks in

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<v Speaker 1>the world. I didn't know that until I did this series.

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<v Speaker 1>If you put the tracks back to back, then they

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<v Speaker 1>will circle the globe one and a half times. And

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<v Speaker 1>if that is not enough, eight billion passengers a year.

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<v Speaker 1>That's the official number. The unofficial could be even more.

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<v Speaker 1>You're not even the ones riding on the roof ron, yes,

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<v Speaker 1>the roof everywhere. I mean, you know, it's amazing how

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<v Speaker 1>many people they can pack in that in that in

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<v Speaker 1>the in each what's that cubicle or each box you know.

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<v Speaker 1>But when the interesting thing also that came out of

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<v Speaker 1>there was that actually there is Chinese investment going into

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<v Speaker 1>infrastructure in India. That you mentioned that the aii B

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<v Speaker 1>is investing in in the in the in the metro

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<v Speaker 1>in Mumbai. The ai B of being, of course, the

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<v Speaker 1>Asia Infrastructure Investment Bank, which we started up by China

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<v Speaker 1>a couple of years ago. Well, yeah, in fact, India

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<v Speaker 1>is one of the founding members. I think they have

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<v Speaker 1>twenty one founding members. And AIB has actually committed a

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<v Speaker 1>lot of money I think in access of you know,

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<v Speaker 1>three billion dollars to invest in India and infrastructure projects.

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<v Speaker 1>And I think part of the reason for that is

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<v Speaker 1>that India's infrastructure needs are so great. I mean, India

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<v Speaker 1>can't put the bill itself, so it needs a lot

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<v Speaker 1>of help. So it gets AIB, It gets you know,

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<v Speaker 1>funding from the Asian Development the World Bank, so it

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<v Speaker 1>gets a lot of help. And I be being the

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<v Speaker 1>new kid on the blog in terms of you know, financing,

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<v Speaker 1>being able to finance these projects. It's it's come to

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<v Speaker 1>India's rescue in a way. There was also an interesting

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<v Speaker 1>point made by one of the guests who you interviewed,

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<v Speaker 1>um who drew the distinction between investing for commercial reasons,

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<v Speaker 1>you know, investing in these infrastructure projects for commercial reasons

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<v Speaker 1>and strategic reasons. Just tae that out a bit. What

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<v Speaker 1>was that about? Well, I guess you know, like if

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<v Speaker 1>you take a look at the Belt and Road initiative,

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<v Speaker 1>there are some people who say that China's in it

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<v Speaker 1>because as strategic reasons, it wants to be in some

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<v Speaker 1>of these countries because it wants to be there for

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<v Speaker 1>political and strategic reasons. Um So people are pretty cautious.

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<v Speaker 1>It's not just about economics, it's not just about helping

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<v Speaker 1>a country get to where it wants to be, get

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<v Speaker 1>to the growth it wants to be at, but also

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<v Speaker 1>for China's own reasons. I think that that is the

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<v Speaker 1>distinction that make I think a lot of people also

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<v Speaker 1>talk about the case of Jibouty, where China's invested a

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<v Speaker 1>lot of money and infrastructure about it also has its

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<v Speaker 1>first military base there. Well, you're right, and you know,

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<v Speaker 1>in a way, you know, if not China, then who

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<v Speaker 1>if you talk about Jibouti, would the US want to

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<v Speaker 1>invest infrastructure there? You know, so as much as you

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<v Speaker 1>want to be suspicious of China, you also have to

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<v Speaker 1>think who ealth if not China, well, Kazakhstan noting the

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<v Speaker 1>doing the investment, but who has in terms of a

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<v Speaker 1>completely different story in terms of whether they're going to

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<v Speaker 1>welcome uh, you know, in terms of welcoming China's investment

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<v Speaker 1>or not. And I have to say those opening shots

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<v Speaker 1>of Astana are absolutely extraordinary. I was just amazed by

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<v Speaker 1>how modern this city is. What was it like there?

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<v Speaker 1>You were surprised, I was really surprised. I mean it

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<v Speaker 1>was interesting to see because it's so desperate. You know,

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<v Speaker 1>on the one hand, you have the Kazak steps, you know,

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<v Speaker 1>vast open mouth and mouth and mouth of grassland where sheep, cows, horses,

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<v Speaker 1>grape like in Mongolia. Really yeah, right, and you know

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<v Speaker 1>you almost can see, I don't know, you can see

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<v Speaker 1>how it was how it was before. And there on

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<v Speaker 1>the other hand, you have such amazing modern infrastructure, the skyline.

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<v Speaker 1>It's it's just amazing. It's it's so futuristic. So it

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<v Speaker 1>was really kind of, um, I don't know, it was

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<v Speaker 1>a bit mind boggling. It was desperate and away. I

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<v Speaker 1>couldn't I couldn't really put the two together. But it

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<v Speaker 1>is a very interesting space a very interesting country and

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<v Speaker 1>a country we should all be watching because I think

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<v Speaker 1>it is on its way to making its mark, if

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<v Speaker 1>not you know, in Central Asia, but the rest of

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<v Speaker 1>the world as well. Kazakhstan seems to be really buying

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<v Speaker 1>into the whole project. Though you know, some of the

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<v Speaker 1>other numbers that came out were pretty boggling. Twenty eight

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<v Speaker 1>billion dollars being invested on fifty one projects. How is

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<v Speaker 1>it changing Kazakhstan's economy has I think it's changing the

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<v Speaker 1>economy in a huge way. If you walk around the city,

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<v Speaker 1>if you just walk around the streets, you'd be surprised

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<v Speaker 1>to see, you know, branded shops you get, you know,

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<v Speaker 1>your max Mara, you have your I didn't quite see Chanelle,

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<v Speaker 1>but I saw a lot of the branded goods there,

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<v Speaker 1>and I think that is a reflection of how the

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<v Speaker 1>country has grown, and I think it has aspirations to

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<v Speaker 1>grow even faster. I mean, this is a country pretty

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<v Speaker 1>much based on oil and gas. I think that's driving

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<v Speaker 1>the economy, but it also wants to be I guess

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<v Speaker 1>the middleman, you know, in terms of trade, because a

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<v Speaker 1>lot of countries, if you want to move your goods

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<v Speaker 1>from east to west, Kazakhstan is possibly is where it's

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<v Speaker 1>possibly the middle ground, the meeting point. Yeah. Well, I

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<v Speaker 1>mean another thing that came out actually was a conversation

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<v Speaker 1>with the deputy Foreign Minister who said that the volume

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<v Speaker 1>of container traffic going through Kazakhstan has doubled every year

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<v Speaker 1>for the past seven years and that they're looking to

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<v Speaker 1>take five billion a year and revenues is just mind boggling. Yeah,

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<v Speaker 1>and and it's precisely what we talked about Kazakhstan being

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<v Speaker 1>the buckle of the belt and Road, so you can

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<v Speaker 1>kind of visualize the role it plays. I mean, that's

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<v Speaker 1>that's one side of it. The other side is that

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<v Speaker 1>it wants to be I guess, the hub for financial markets,

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<v Speaker 1>capital markets. I mean, this is a new ambition. I

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<v Speaker 1>think it started maybe about five years ago when UH

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<v Speaker 1>President neural Nur Sultan as A Byef by the way,

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<v Speaker 1>he's been the only president of the country has had

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<v Speaker 1>um you know, he he came up with this planned

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<v Speaker 1>this vision to make Kazakhstan play a regional role and

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<v Speaker 1>you know that and trade. I think that's what's going

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<v Speaker 1>to drive Kazakhstan going forward. It's a pretty interesting, I

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<v Speaker 1>guess ambition because you never ever think Kazakhstan was going

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<v Speaker 1>to be a financial hub, right, I mean when you

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<v Speaker 1>think Kazakhstan, what do you think of definitely not a

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<v Speaker 1>financial hub. It wants to be a hub for Islamic finance,

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<v Speaker 1>for instance. So it is a role it is really pursuing.

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<v Speaker 1>And so that's that brings me back to the question

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<v Speaker 1>I had actually about the opening shots when you go

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<v Speaker 1>into the into the Kazakhstan part, because you've got these

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<v Speaker 1>drones that are flying over. I think that's a new

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<v Speaker 1>international financial center, right with that big circular building. Well,

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<v Speaker 1>you're right, it's it's huge from whatever what I understand. Well,

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<v Speaker 1>I mean to those who are listening to this podcast,

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<v Speaker 1>I can absolutely recommend that you take a look at

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<v Speaker 1>at this Built and Road episode because of some of

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<v Speaker 1>the pictures are just amazing, the dry port for example.

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<v Speaker 1>Actually we don't even know whether we were allowed to

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<v Speaker 1>have drones, but we did anyways, um, because I think

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<v Speaker 1>it's the only way we can show how immense the

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<v Speaker 1>place really is. I mean, you don't get a sense

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<v Speaker 1>of kazakhstann until you see it from the sky. I

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<v Speaker 1>mean that that drone shot. I mean, if you don't

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<v Speaker 1>have that drone shot. You can never imagine how huge

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<v Speaker 1>and VARs and you know, the potential of the country

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<v Speaker 1>just really quite quite quite quite extraordinary. Now, from Kazakhstan,

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<v Speaker 1>we go to Southeast Asia and the next time I

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<v Speaker 1>see you, you're in Bangkok standing in the middle of

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<v Speaker 1>a of a road. The places that they get you

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<v Speaker 1>to stand as quite extraordinary sometimes. But tell me more

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<v Speaker 1>about Thailand and how this sort fits into the whole

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<v Speaker 1>built and road strategy. I think the Belton Road is

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<v Speaker 1>applicable not just to Talent, but the rest of Southeast Asia.

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<v Speaker 1>I think, as you can imagine, most of the countries

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<v Speaker 1>here in Southeast Asia, emerging economies in need, in desperate

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<v Speaker 1>need of infrastructure. I think the countries here need in

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<v Speaker 1>access and I don't know, I think, uh, the number,

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<v Speaker 1>the exact number escapes me, but a few hundred billion dollars.

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<v Speaker 1>So that's the magnitude of what is needed in terms

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<v Speaker 1>of infrastructure in Southeast Asia. And Thialand is just one

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<v Speaker 1>of them. I think as it pursues growth, it also

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<v Speaker 1>needs to address its infrastructure needs, which are kind of

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<v Speaker 1>bursting at the team's old. It needs to move more goods,

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<v Speaker 1>it needs to move more people across the country. So

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<v Speaker 1>you know, this is where bodies like organizations like a

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<v Speaker 1>I be coming to effect again, I mean coming to play.

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<v Speaker 1>They provide some kind of funding so that infrastructure can

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<v Speaker 1>be built. I think that the Philippine Finance Secretary made

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<v Speaker 1>a good point because he says that in the Philippines,

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<v Speaker 1>for example, we're not building airports and hoping people will

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<v Speaker 1>come to them. We're building airports because we are absolutely

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<v Speaker 1>bursting at the scenes. And I suppose he's making the

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<v Speaker 1>distinction against say the airport that was built in Sri Lanka,

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<v Speaker 1>which I believe Harvard gets any airplanes coming to it,

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<v Speaker 1>and the port there as well, which has very few

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<v Speaker 1>ships visiting every week. So as you say the Southeast

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<v Speaker 1>Asian situation is we need infrastructure because our capacity is

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<v Speaker 1>so tight. Well, you're right, Um, even take at the Philippines.

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<v Speaker 1>Just take a look at the airport. I mean it's

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<v Speaker 1>it's really old. It's not meeting demands. And he made

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<v Speaker 1>that point precisely. Each country really has to look at

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<v Speaker 1>it at its own interests, and right now it's trying

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<v Speaker 1>to meet the needs of the people a rising middle class. Uh,

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<v Speaker 1>And that story is Southeast Asia really the rise of

0:12:58.920 --> 0:13:02.520
<v Speaker 1>the middle class in everybody now is more mobile. People

0:13:02.559 --> 0:13:07.600
<v Speaker 1>want to move, so infrastructure like roads, railways, airports really

0:13:08.240 --> 0:13:11.080
<v Speaker 1>need to be upgraded. It has been slow for the

0:13:11.080 --> 0:13:15.160
<v Speaker 1>Philippines in particular. I think infrastructure projects have been slow

0:13:15.200 --> 0:13:18.280
<v Speaker 1>to get off the ground, uh, and they've run into

0:13:18.360 --> 0:13:22.360
<v Speaker 1>all sorts of issues, and that is quite a reflection

0:13:22.360 --> 0:13:25.600
<v Speaker 1>on what's happening in emerging markets. Indonesia is another country

0:13:25.640 --> 0:13:28.120
<v Speaker 1>in need of infrastructure but having a lot of trouble

0:13:28.160 --> 0:13:32.080
<v Speaker 1>getting these infrastructure projects off the ground. Yeah. Well, I

0:13:32.120 --> 0:13:34.600
<v Speaker 1>suppose we have to, like say, it's not completely smooth sailing.

0:13:34.640 --> 0:13:37.600
<v Speaker 1>We've also it just had the new Prime Minister in

0:13:37.600 --> 0:13:42.400
<v Speaker 1>Malaysia pushing back on some Chinese infrastructure projects. That has

0:13:42.440 --> 0:13:47.640
<v Speaker 1>to do with debt as well. I think where Malaysia's concern. Uh.

0:13:47.760 --> 0:13:52.080
<v Speaker 1>They're looking at a huge debt which was not expected,

0:13:52.160 --> 0:13:57.280
<v Speaker 1>which was passed on from the previous government. UH. Martin Mohammad,

0:13:57.320 --> 0:14:00.359
<v Speaker 1>the Prime Minister, has had to review all these projects

0:14:00.440 --> 0:14:03.760
<v Speaker 1>with China because it's costing the country a lot of money.

0:14:03.960 --> 0:14:07.319
<v Speaker 1>And by reviewing, I think he's kind of delaying most

0:14:07.320 --> 0:14:10.440
<v Speaker 1>of these projects. He can't take on both these projects

0:14:10.520 --> 0:14:14.280
<v Speaker 1>right now because they just don't have the capacity financially,

0:14:14.440 --> 0:14:16.760
<v Speaker 1>so that will have to wait. But in terms of

0:14:17.000 --> 0:14:21.720
<v Speaker 1>infrastructure needs, I mean even Malaysia has to build these

0:14:21.760 --> 0:14:25.360
<v Speaker 1>infrastructure if it wants to remain one of the tigers

0:14:25.400 --> 0:14:27.440
<v Speaker 1>in Southeast Asia. Well, the other I suppose you have

0:14:27.720 --> 0:14:29.720
<v Speaker 1>other point is that China looks on this as a

0:14:29.760 --> 0:14:32.520
<v Speaker 1>decades long project. It's not something it's going to be happening,

0:14:33.040 --> 0:14:35.480
<v Speaker 1>and they're in lies, and therein lies the risk. I

0:14:35.560 --> 0:14:38.880
<v Speaker 1>think infrastructure projects are so long and people are reluctant

0:14:38.920 --> 0:14:42.040
<v Speaker 1>to because there are changes in governments there it's you know,

0:14:42.320 --> 0:14:44.640
<v Speaker 1>when it comes to imaging markets, you see changes every

0:14:44.680 --> 0:14:47.480
<v Speaker 1>other year, sometimes in terms of for you know, who's

0:14:47.520 --> 0:14:51.240
<v Speaker 1>in power, and policies change, and there in lies the

0:14:51.440 --> 0:14:55.000
<v Speaker 1>risk has Thanks very much for speaking to us. That

0:14:55.880 --> 0:14:58.840
<v Speaker 1>brings us to the end of our second podcast on

0:14:59.000 --> 0:15:02.200
<v Speaker 1>the Built and Road series of Limburger is running at

0:15:02.240 --> 0:15:04.920
<v Speaker 1>the moment, but next time we're going to be talking

0:15:05.000 --> 0:15:08.840
<v Speaker 1>about episode three, which takes us all the way to Africa.

0:15:09.560 --> 0:15:11.120
<v Speaker 1>Thanks for listening, guys. M