South Korea presidential election: how will it affect the economy?
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Hello and welcome to World Business Report on the BBC World Service. Will Bain with you again today. Thanks as always for being back with us. On the programme today, we'll hear early indications on who may be the next leader of one of Asia's biggest economies after South Korea's

headed to the polls. And we'll take a look too at the challenges ahead for whoever takes power, particularly when it comes, of course, to those trade issues with President Trump and the United States. Speaking of tariffs, the US's top trade negotiator is going to be in Europe on Wednesday to try to ease some of those trade tensions with its biggest trading partner. So what are the European Union's expectations for those talks?

We really, really, really want to avoid the worst case scenarios with the US because this is the strongest trade and economic relationship in the world worth 1.6 trillion euro annually. We should be doing everything we possibly can to save it, to strengthen it, not weaken it. Yeah, we'll hear about more about those talks a little bit later on on World Business Report.

Let's start, though, in South Korea, where polls have now closed in its presidential election, with exit polls projecting that the country's next president will be Lee Jae-myung. It comes after millions of South Koreans turned out in a snap election triggered by the former president, Jung Suk-yool, who was impeached, you might remember, last year over his failed bid to impose martial law. It led to huge protests like these. Oh!

Chaotic scenes outside the South Korean parliament at that time. Former trade minister in South Korea, Johan Ku, told the BBC that the economy was a key part of this election campaign.

These six months of prolonged political turmoil, domestic consumption and business sentiment is really one of the lowest right now. And then also we are facing this trade headwind with President Trump. So I think this is a moment that the new administration really needs to take on these big challenges as a top priority.

Well, World Business Report's David Kan has been right across this. You might remember when we chatted with David about this in the past as well. You'll know that David's got a long background working for our Korean service here at the BBC as well. David, great to have you back on the programme. What's the latest then? What do we know so far? So, as you mentioned, the exit polls have come out and it's quite decisive. With Lee Jae-myung, that's the Democratic Party candidate with a clear lead at 51.7%.

And Kim Moon-soo of the People's Power Party, that's the conservative party that the impeached President Yoon was from, is at 39.3%. Now, it's important to note that there is no official announcement and it's an exit poll.

But Korean exit poll have been generally quite accurate. It got the number right to the decimal point in the last election. So with such a big gap, Lee is projected to be the winner by most media. In fact, a spokesperson of the Conservative Party has all but conceded, saying they will humbly accept the results and that they are disappointed and rather shocked that the gap is so big. On the other hand, the Democratic Party said...

The exit poll results are the people's thunderous rebuke towards the administration, that is, the People's Power Administration, and Lee Ji-hyun, the spokesperson of the Federation of Korean Trade Unions, shared the same sentiment.

I believe this election was the people's judgment on former President Yoon Suk-kyul's attempt at insurrection through declaration of martial law last year. We, the Federation of Korean Trade Unions, continue to fight to bring this judgment as well. The union has resolved to support Lee Jae-myung of the Democratic Party and have been campaigning for his win. And because we ran alongside him, this victory isn't just him and his parties, but the unions as well. We

We already made a policy agreement with Lee Jae-myung, and it included guaranteeing universal labour rights without blind spots, delayed mandatory retirement, improved social safety net, four-and-a-half-day working week, and the eradication of long working hours. We hope Chairman Lee, I mean President Lee, will take an active role in creating a society that respects labour.

Trade unions, they're clearly happy about where, as David says, those exit polls, as they are still at the moment, suggest the vote may be going in South Korea. David, we heard from a former trade minister there as well. Clearly, the backdrop to a lot of this has been what you've been on the programme talking about before, hasn't it? The attempt and the chaos that we played a bit of yesterday.

to impose martial law. But what else was kind of at play? What else were people hoping for from this election? So according to almost every survey in the country, the economy, economy, economy, economy was the biggest concern of the voters. And both candidates emphasized economic growth as priority as the priority policy.

What was interesting this year was that both parties emphasised, or both candidates, emphasised economic growth. Usually the Democratic Party, as you might expect from a more left-leaning party, usually emphasises welfare and wealth sharing. But this time they both said the same thing of growth.

This isn't that surprising considering South Korea is actually looking at a very low growth, like a lot of other countries in the region, with the Korean Central Bank forecasting only 0.8% this year. And this growth was also something many business owners had in mind. And a business owner that I spoke to, Dongjun Kang, who manufactures custom acrylic merchandise, felt the same thing.

As someone who runs a business, I want the next administration to try and get the money moving. Yeah, I understand that policy that helps everyone is good, and I know it sounds selfish, but as a business owner, we need profit. Lots of challenges then, lots to work on, David, not just at home, but obviously in the sphere of trade as well.

Yes, one of the biggest tasks is going to be, as you might expect, dealing with President Donald Trump and tariffs. Korea hasn't been able to properly negotiate with the United States regarding tariff policies as it didn't have a clear leader. But whoever wins are going to have to hit the ground running and come up with an agreement. And mind you, South Korea is in an interesting geopolitical position stuck between China and America and also North Korea to the north.

So they're going to have to make both China and America happy while trying to limit North Korea's alliance with Russia. Yeah, it might look like it looks like we know where the result is going, but the work really very much at the beginning stage, isn't it? Shoral Tandon and the team on the later edition of World Business Report and on Business Matters later on again tonight. We'll mop up all of that should those results be confirmed. David, thanks as always for your time. David Kan there.

From our team here at World Business Report, we're speaking of trade and President Trump. The United States has set Wednesday as a deadline for trade partners to put forward what they're calling their best offer on trade terms to try and avoid future tariffs. Many of the so-called reciprocal tariffs on countries around the world announced on the 2nd of April are in a 90-day hold as President Trump faces legal issues tomorrow.

at home that we've talked about on the programme, around his approach to imposing those tariffs. On Wednesday, though, his chief trade negotiator, Jameson Greer, is set to meet with one of the US's biggest trade partners, the European Union, and their trade commissioner, Maros Sefcovic. That's going to be on the sidelines of an OECD meeting in the French capital, Paris, while Olaf Gill is a spokesman at the EU Trade Commissioners' Department. He told us what we might be able to expect.

In the call two Sundays ago between European Commission President Ursula von der Leyen and US President Trump, both sides agreed to accelerate the pace of negotiations, both at technical and political level, to try and find some good negotiated outcomes that would enable us to avoid tariffs and, you know, really generate some win-win deals for both sides. So that's what's currently happening. EU technical negotiators are in Washington as we speak.

working hard to try and make progress on various fronts. And tomorrow, Wednesday, the EU Trade Commissioner Mara Šefčević will meet his American counterpart, the United States Trade Representative, Jemisin Greer, in Paris, where they hope to, you know, get into it and hopefully make some forward strides at their level as well. Yeah, a lot's changed since that call, hasn't it, between the Commission?

President and the teams around those potentially ratcheted up tariffs from the United States. We've had court orders in the US. We've had movements on steel. Does that completely sort of reset the negotiating table again, all of that? Well,

Not especially. The thing is that from our side, not a whole pile actually has changed. So the EU has been saying very clearly and very loudly to our American friends that we want to avoid tariffs and we want to sit down and negotiate to make deals for a number of months. We're very pleased that the US has finally, you know, come to the table in a meaningful sense.

So we are now hoping that the commitment they've made is a sincere one and that we can make a quick headway. There's some urgency, though, isn't there? I mean, we talked to colleagues across Europe in the steel industry. 50% would be devastating. It would be job losses in the thousands. It would be collapses of industry, potentially. So there is an urgency to this.

Absolutely. And we've been making the point that there is urgency to this for many months. So as I say, we're happy that the Americans are now matching our sense of urgency. And yes, of course, such across the board tariffs are massively harmful, not just here in the EU, but also in the US, because these supply chains that kind of go across the Atlantic so neatly and from which we benefit to a large extent are

are threatened. So we really hope that the Americans will roll back on this latest tariff threat, as they have done on others, but that remains to be seen. Does those court cases that I was mentioning, particularly the International Trade Court ruling that kind of struck down a load of the, what they call reciprocal tariffs, does that change the negotiating position for you? The fact that some of this stuff might never be able to come into force in the first place, does that strengthen Europe's hand?

Not particularly. Our approach, as you Brits like to say, is keep calm and carry on. Our approach in this hasn't substantially changed. We have made very clear what we are and aren't willing to do in terms of negotiations. But I suppose, should it? I mean, there'll be those in kind of European companies, European head offices who'll be saying, well, we're in a much stronger negotiating position now. We should be pushing back much harder, rolling back more of this stuff.

We're in the mode of looking for deals that benefit both sides of the Atlantic. And what happens on the other side of the Atlantic as regards, let's say, the background noise, of course, we keep an eye on it. And of course, it factors into our thinking, but it doesn't substantially change the trajectory of our negotiation. I mean, legal decisions are more than background noise, aren't they? Whether a law is legal or not, whether it's allowed to happen or not, it fundamentally shifts things.

Well, that remains to be seen. We're prepared for all outcomes here in the EU and we're negotiating hard to try and make good deals. At what point does the patience run out and actually you start turning elsewhere? Interesting that the announcement today has been in the Financial Times and others, hasn't it, of the progress you're making on trade deals with India, one of the other world's largest economies. At what point does Europe just go, you know what?

we're getting nowhere with this. Actually, we're better off forging deals with everybody else around the world and let the Americans do what the Americans want to do. Well, look, you're certainly correct that there's a massive degree of interest around the globe right now to sign trade agreements and strengthen existing trade agreements with the

EU precisely because we're a reliable partner that follows the rules and does what we say we're going to do. We don't create the kind of turbulence that other partners right now are creating. So you're quite right. We are making excellent headway for a really meaningful trade agreement with India. But in recent weeks, we've also launched formal negotiations for a deal with the United Arab Emirates.

We're making great progress in talks with various other partners around the world. Plus, we hope soon to be able to present to the EU member states our proposals for a final agreement with the Mercosur region of South America and for updating our deal with Mexico. So we're really in a position of strength in that sense. But as regards your first question, you know, we really, really, really want to avoid the worst case scenarios with the US because

As I've said many times, this is the strongest trade and economic relationship in the world, worth 1.6 trillion euro annually. We should be doing everything we possibly can and not sparing any effort to save it, to strengthen it, not weaken it. It still sounds like the gap between the two sides is vast. Well, isn't that what negotiations are for? Sounds like a lot of work though. Yes, but we're ready to work. We're here to work and we're here to work on behalf of European citizens and companies who expect us to do that work for them.

Well, that's Olaf Gill there, a spokesperson for the EU's Trade Commissioner. Well, here in the UK, the governor of the Bank of England, Andrew Bailey, has been speaking to lawmakers in the Houses of Parliament in front of what they called the Treasury Select Committee this morning and said President Trump's tariff strategy had blown up the usual way of doing things. Over a long time, we built up a pattern of world trade agreements, which led to a lowering of tariffs.

It was initially based around, post-war it was based around the GATT, which became the World Trade Organization. And I'm afraid that system has now really been blown up to a considerable degree, let's be honest, by all of this. And that has very serious consequences for the world economy.

The head of the UK's central bank, Andrew Bailey, there speaking to lawmakers in London a little earlier on Tuesday. Well, the world economy, perhaps unsurprisingly, is slowing. That's according to official figures from the OECD. It says President Trump's trade tariffs are a big reason as to the why. It's a pretty stark warning from the Organisation for Economic Co-operation.

and development. That, by the way, is where US and EU trade negotiators are going to be meeting on Wednesday at its HQ in Paris. So significant that this announcement comes today. The OECD said it downgraded its global growth forecast and said protectionism is

is already hitting investment, confidence and jobs with the United States one of the hardest hit. The OECD also expects the US economy to grow by just 1.6% this year, down from 2.8% in 2024. And the body also warned that inflation may persist for longer as well. That's how those price changes

rises that we see all around the world and that even a reversal of tariffs wouldn't necessarily bring any immediate relief from that. Well, the OECD's chief economist Alvaro Pereira has been speaking to the BBC. He was asked what the main message from their report was.

We have a message for every country that we have witnessed in the past few decades, a historic decline in poverty rates around the world and a big increase in living standards in every single country, thanks to more trade, less trade barriers and technological development. We think right now the top priority should be for countries to get together, continue dialogue and in particular to reach trade agreements.

so that we bring more jobs, more prosperity and a better future for our people. Alvaro Pereira there of the OECD speaking to the BBC from Paris. Well, Fiona Sincotta with us, who's a senior market analyst at Citi Index here in London. Fiona, great to have you back on the program. Welcome back.

Thank you. I guess it's sort of no great surprise, body that monitors this stuff finds that massive trade war having an impact on growth. What about the scales then? Anything cause your eyebrows to raise a little bit from the numbers?

Yeah, so I mean, like you said, it's not surprising that growth is expected to slow. I mean, we've sort of been hearing this narrative and assessing this narrative now for a couple of months. I think what was interesting was the extent to which U.S. growth is expected to, or the downgrading growth, should I say, that's expected for the U.S. That was down from 2.8%.

which was quite significant to its 1.6% and 1.5% that are expected. Yet interestingly, and this is where we're seeing the problem, is that because inflation is expected to remain sticky across the year, the Federal Reserve are going to struggle to

to cut interest rates to support the economy. So normally when you get slowing growth, you would expect to get slowing inflation and the Federal Reserve, for example, to step in to cut rates to support the growth. And they may struggle to do that, which makes it a little bit more concerning than perhaps in other situations. Yeah, you're right. Interesting, in particular, the impact on North America, wasn't it? And those sort of allies as well, Mexico and Canada too, on a day where we saw

Inflation for the Eurozone, so all the countries that use the Euro economy, ticking underneath the European central bank's 2% target, came down to 1.9% today. As people might have been hearing in the news, Fiona, more cyber attacks on big companies, seeing lots of those here in the UK, but today, European ones as well, Cartier among those being targeted.

Yes, there have been big names that have been targeted. As you mentioned, Cartier, Dior, we've also seen North Face and then Victoria's Secrets just a few days ago. I mean, these attacks seem to be coming, they appear to be coming really quite a sharp reality for the industry. Obviously, this is an industry which already has, I think, a lot of headwinds that it's facing with deterioration.

deteriorating consumer confidence, consumers reining in their spending, supply issues, and now also to be having to up their security spend. These are companies that have a lot of customer information and so they're quite easy targets in that respect. Yeah, quite. And it seems to be, as you say, a well-trodden path that one. We'll keep watching on the programme. Fiona, thanks as always for your time. Fiona Sincotter of City Index there. You're with World Business Report on the BBC World Service.

Now, the UK government has threatened to sue former Chelsea football club owner Roman Abramovich to make sure the money from the club sale goes to Ukraine. The £2.5 billion, close to $3 billion then, in proceeds have been frozen in the UK bank account since the sale, with Mr Abramovich sanctioned after Russia's full-scale invasion of Ukraine back in February 2022. The UK government wants the money to be for Ukrainian humanitarian aid. Mr Abramovich has said he wants it to go to Ukraine.

all victims of the war in Ukraine. Oliver Bulloch is a journalist and the author of Butler of the World and Moneyland. He spoke to the BBC's Johnny Diamond and explained what's happened with Mr Abramovich since the beginning of Russia's war in Ukraine.

Roman Abramovich has always been perhaps the canniest of all the Russian oligarchs. He's very good at inserting himself into political processes in a way that very much serves his purposes. Clearly, at the beginning of the war, he insisted

considered that being a peacemaker would be beneficial to his interests, presumably both personally and politically, as someone who had always managed successfully to straddle the Western and Russian worlds. He has disappeared from view rather in the last year or so, though he did pop up in the Kremlin last month, just before the unsuccessful peace talks in Turkey. So he's clearly still operating a little bit behind the scenes.

And what of the money he has left behind? There's two and a half billion pounds. A fair number of people will be thinking, don't quite know why we can't just seize it. Yeah, the terms of the sale of Chelsea were organised very quickly, shortly after the full scale invasion of Ukraine in February 2022, to try and allow Chelsea to continue operating as a football club to prevent any damage to the club or to the Premier League.

And under the terms of the sale, the money, the proceeds of the sale would be put in a British bank account and would be used exclusively for humanitarian purposes in Ukraine.

That has not come to pass. The money is still sitting in the bank account. And it's not that surprising that the government's getting very frustrated about this. This was three years ago, after all, and the money is still sitting there in a bank account and not benefiting anyone. The £2.5 billion at stake here...

is a pretty vast sum, but it is chump change compared to the estimated £250 billion of Russian state money that has been frozen in European bank accounts, much of it in Belgium for the past few years, and about which there is now a clamour to try and seize that and again to disperse it within Ukraine.

Do you see the sort of advantages and risks to trying to seize that money? I mean, the advantages are clear. Ukraine needs the money. You know, they need money to support their economy. They need the money to pay for weaponry, to pay for their soldiers and so on. The risks, I mean, if you think the potential harm that might be caused by a legal proceeding against Roman Abramovich is something, just think about trying to go after a sovereign entity. Mm-hmm.

You know, this raises all kinds of curious precedents that might have knock-on effects down the line. You know, when it comes to trying to persuade other big sovereigns, whether that's Saudi Arabia or China or whoever, to invest in our economies, they're going to be considerably less confident to do so if they think that there is a risk that that money could just be taken away if we fall out with them for, you know, political reasons. And also, while the money exists in a frozen state, it is a political bargaining chip.

It is something that perhaps can bring Russia to the negotiating table. You know, I personally would love to see this money confiscated and used to help the Ukrainians. But I can totally understand why there are a lot of politicians who are very reluctant about the kind of precedents and consequences of doing that. Because, you know, something like that hasn't been done for a very long time. And it would be once it was done, it would open a whole new series of possibilities, which might be quite hard to close again.

Oliver Bullock speaking to Johnny Diamond there. Interesting story, isn't it? More on our website, bbc.com forward slash news, should you wish to read a bit more of the background to all of that.

Now, for many people around the world, working in extreme weather isn't so much a choice as just something they have to deal with. But increasingly, there's concern globally that countries and companies aren't taking the risk to workers having to work outdoors seriously enough, particularly when it comes to extreme heat. Japan, for example, brought in one of the world's toughest laws to protect workers from extreme heat this week with employers saying,

now facing fines of up to $3,500 if they don't act. The crackdown follows a record summer that saw dozens of deaths and more than 1,000 serious injuries linked to heat stroke. Well, Professor Andreas Floris is founder and director of FameLab, a research unit that studies how heat affects the human body, particularly in workplaces. He's based in Greece normally, but joins us from Bangkok, Thailand. Professor Floris, welcome to World Business Report. Thanks for being with us.

Thank you for having me. It's great to be here. Before looking at this kind of more broadly around the world, because it's clearly not a Japan-only issue, what did you make of the law that was announced by the Japanese earlier this week? Oh, that's a great update. And it's great to see Japan joining the handful of countries around the world that are forward-seeking and, you know, seeing the danger, seeing also the problem in their bottom line and finding solutions for it.

presumably this is an enormous issue right what who are we talking about farmers construction workers are there groups in your research who are most at risk from some of these issues absolutely in in europe the five would say biggest industries that are impacted are of course as you mentioned agricultural construction but it's also tourism keep in mind tourism in south europe is is a huge uh you know help to the gdp of south european countries and it's

vastly impacted. And then you have also transportation. Also keep in mind the gig economy and delivery people, you know, in transportation. And of course, manufacturing is also impacted because there are

that are not either well regulated indoors, but also in some cases, you know, it's the machinery itself inside factories that produce a lot of heat. So it's not only the environment, but it's the heat produced by the machinery itself. And what is it then that you think is the issue here? Is it that governments and regulators are,

Well, I think it's the latter. You need to find people who are forward-looking because indeed – and I do see the point that this is a front-heavy issue.

So it's an investment. The employer needs to invest a little bit on it. But all studies that have been done on the topic show that the return on investment, there is a return on investment. So it's 1.02, which means like, let's say an employer invests a million pounds to change their either, you know, equipment or provide different like change their methods, the way they do things.

They will get back for every million a year. They would get not only everything back, but on top of that, they will make profit of £20,000. So you do get so much improvement in productivity and loss in healthcare costs for your workers and in absenteeism that it is indeed worth the investment. So there's some education involved here as well.

Sorry. There's some education involved here as well then, actually. Oh, absolutely. Education. Yeah, absolute education, awareness for the employers and for the workers sometimes because also you find workers who are, you know, they don't take this as a serious issue. But all the studies we've done actually points to the opposite direction that it impacts both their health and their productivity. Yeah.

Difficult, though, of course, isn't it, to speak up sometimes as well? So having those two things going together, as you say, the sort of pressure from an overall body to help them too when you're just a worker working for someone clearly important in all of this as well. Fascinating area. Thanks so much for talking us through it all. Professor Andres Floris there, the director of the Fame Lab, speaking to us from Bangkok, Thailand, and bringing us just about to the close of this edition of World Business Report. Thanks so much for listening.