Former president of Brazil sentenced to 27 years in prison

0:04Hello and welcome to Business Matters. I'm Roger Hearing. On the programme today, Jair Bolsonaro, Morrow, the former Brazilian president, is jailed for 27 years for attempting a coup. Washington is not happy, but what will it do about it? Also, hundreds of Korean workers flying home after their arrest by American immigration officials in Georgia. What's going to be the effect now on plans for new battery factories in the US? London counts the cost to business from a strike on the capital's underground trains. and why are AI bots now writing the speeches of business leaders and politicians? You will find somebody who leaves school at 16 or 18 who's a smart sort of tradesman will be able to write a better speech than an Oxford PPE graduate.

0:50And I'll be joined throughout the programme by two guests on opposite sides of the world, Na Pham, journalist and filmmaker, normally based in Taipei, although she's joining us today from Hanoi. So, Na, a very good morning to you. Good morning, Roger. I'm indeed in Hanoi. I've just been attending the celebration of Vietnam's National Day, very big, big event. Indeed. Well, we'll talk about that in a moment. But let me first bring in and welcome Stephanie Hare, a researcher on technology and ethics, who's actually joining us where I am, in London. So, I don't know, good middle of the night to you, Stephanie.

1:25Welcome to the programme. Good evening. You're both very welcome to the programme. OK, well, let's kick off then with Nha. You were talking there about the celebrations going on. Just tell us what is going on in Hanoi right now. Well, apart from the National Day, not much really, because that celebration actually took months and months and months to prepare. Vietnamese were all geared up for that. It's the 80th anniversary of the National Day, very big celebration indeed. I heard that they spent billions of dollars to organise it, and there was a procession of like 10 days, lots and lots of activities across the country, and people for a moment forgot about the tariffs, but now they're back to normal and have to deal with that.

2:08Well, indeed. And, of course, the other thing we should mention there is it is 50 years, I think I'm right, since the end of the Vietnam War and the reunification of the country. So a lot of reasons for kind of marking a national day. All right, Stephanie, what's been catching your eye in the way of news right now? Well, we've been living a news story here in London with the strikes that have affected so much of public transport. And I think bikes are the winner. Yes, I have to say, well, we'll talk about this a little bit later in the program because I can talk about the tube strike anyway. But I have to say it's been a bit dangerous.

2:43A lot of people using these bikes that you can get from the side of the road. And I think many of them have never cycled in their lives before. And heaven help pedestrians is all I can say. Anyway, we're going to move on to a story that's been breaking in the last hour or so, which is the news that Brazil's former president, Jair Bolsonaro, has been sentenced to more than 27 years in prison after the Supreme Court in Brazil found him guilty of attempting a coup when he lost the 2022 election. Now, four out of five judges voted to convict Mr Bolsonaro. His friend, President Trump, called this verdict surprising.

3:21Well, I watched that trial. I know him pretty well. a foreign leader. I thought he was a good president of Brazil, and it's very surprising that that could happen. That's very much like they tried to do with me, but they didn't get away with it at all. But I can only say this. I knew him as president of Brazil. He was a good man, and I don't see that happening. Donald Trump. Well, Donald Trump's Secretary of State, Marco Rubio, said in Washington that the country would respond accordingly to what he called this witch hunt. Now, Brazil is already dealing with 50 % tariffs on its goods imported into the US, so how much worse could it get?

4:02Well, I'm joined now by Gustavo Ribeiro, who is the founder and editor-in-chief of the Brazilian Report in Brasilia. Gustavo, thank you for being with us here on Business Matters. Is there concern in Brazil about the result this will have? Because obviously it won't go down well in Washington. Thanks for having me. And yes, there's a lot of concern in Brasilia because the Brazilian government believes that something will come from Washington. Now, the$1 billion question is what? The more probable alternative that the Brazilian government is preparing for is if Trump extends sanctions against more Supreme Court justices.

4:47So the justice that has overseen this case against Bolsonaro, he has been targeted with the Magnitsky Act, which is pretty much a sort of financial death sentence. You can no longer hold assets in dollars. You can no longer have any business whatsoever with U.S. companies or persons. For instance, this justice can no longer have a MasterCard or a visa. And so the Brazilian government believes that the other justices who voted to convict Bolsonaro may face similar punishment. But there's also the concern that, for instance, military deals could be in jeopardy. And Brazil has the U.S. as its main military partner.

5:31Yeah. And I mean, we already know there are 50 percent tariffs on almost all Brazilian goods. I mean, I suppose potentially those tariffs could go up even higher. Well, yes, but I mean, 50 % is already a de facto embargo for many industries. Now, it's important to say that the list of exceptions extends to, give or take, 700 products, some products that are really important for U.S. consumers, such as orange juice. But for instance, coffee is not exempt, so maybe that list of exceptions will shrink further. And, I mean, 50 % is already almost an embargo. So at one point, it doesn't make a difference of how high these tariffs go, right?

6:18Well, I suppose that's right. But on the other hand, I also suppose that given it does effectively amount to an embargo, that's not going to make this verdict popular in Brazil, surely, because people say, well, the process against Bolsonaro is making it impossible for certain businesses to do business. So do people in Brazil think, well, we shouldn't be doing it? Or do they think, well, we'll carry on. We don't care what America thinks. So this Trump election has created a sort of rally around the flag effect here in Brazil. And also because the Bolsonaro family has pretty willingly tied itself to the tariffs.

6:58They have said time and again that Trump is only doing this because we convinced Trump to do that. So many people in Brazil are blaming Bolsonaro for the tariffs, not the Supreme Court. A recent poll showed that about 39 percent of Brazilians are against the conviction of Bolsonaro, but 50 percent are for it. So that's very interesting. I think I also noticed that President Lula's favorable ratings have gone up quite a lot as well. He's sort of surrounding himself in a kind of nationalist flag, maybe. Yes, exactly. I mean, the approval ratings, according to a poll that was published today, went from 29 to 33 percent.

7:41And the thing is, it's hard to know how much of that is this rally around the flag effect and how much is the fact that inflation is going down. And that affects a lot voters mood in Brazil because we have a poor country, a low income country. And I mean, the cost of the basic food basket really affects voter moods. So, I mean, it's hard to to separate, to quantify how much of this is Trump and how much of this is just inflation. Yeah, and I suppose what you're saying is in the end, it's kind of rally around the flag and say to Washington, do your worst. We're not going to succumb to your pressure.

8:25Is that essentially what the feeling is? That is almost verbating what the Brazilian government has said no further than this week. So the Brazilian government is willing to stand its ground and to do whatever it can to protect the Supreme Court. However, there is a growing feeling of uneasiness around investors because many Brazilian companies, and especially the big banks in Brazil, have operations in the US. So they are really worried about how that can affect their bottom line and their operations. Yeah, well, it's an interesting moment. We'll see how it proceeds. We don't, of course, know what, if anything more, the US government is going to do.

9:11But Gustavo, thank you for being with us. Gustavo Ribeiro, they're live on the line from Brasilia. Stephanie, it is an interesting time, I suppose, in global politics and economics because it seems to do anything that offends the man in Washington can bring all sorts of terrible things on your head at the moment, doesn't it? Yes, I mean, I think we can't really discuss what's just happened in Brazil with this verdict without reflecting on what has happened in the United States with regards to the storming of the capital on the 6th of January in 2021 and attempts to overturn an election and, you know, threaten elected officials' lives.

9:52And obviously you get sort of challenges to power in two countries and very different outcomes about holding those people to account and what that means. Yeah, there's an interesting parallel that you're drawing there. Now, Fahm, what's your take on this? I mean, do you see this? Is it being seen that Washington is perhaps, you know, I suppose, supporting its ally? I mean, in a quite an honourable way, really. Or is it a bit of a bully in the north taking on a slightly smaller economy in the south? Well, I think it's both really, you know, both supporting its allies and also a bit of a bullying effort.

10:30But, you know, I'm Asian and coming from where I live, you know, things like that are not actually surprising. In South Korea, in Taiwan, in Vietnam, in China, we all see presidents and former top officials being prosecuted and even jailed. So it's also something to do with the culture of top politicians across the world. And, yeah, I mean, we in Asia are actually watching it with kind of curiosity, but not surprised. No, you're right. That is interesting because you're drawing that point that a number of leaders, I mean, a former leader of Korea, of course, South Korea, is in trouble with the law.

11:15It does seem to be something that happens a lot. But then you could also say the same has been true of France in recent years. So there's a lot of precedent for this. But let's talk about something else that matters a lot to people in all these places, I suppose, at least places where people have money, because they can use credit cards. Now, credit cards have an interesting and somewhat tangled history. They've been around, in fact, since the 1950s. Some of you might even remember this advert from the 1980s. You've got a few minutes. Welcomed around the world and just around the corner. Hello, American Express.

11:49Oh, Mr. Lewis, to your front store. Thank you. The American Express card. Don't leave home without it. Oh, I remember that advert. But it does seem that many people are leaving home without their credit cards now because debit cards, where the money is deducted immediately from your account, are increasingly a bit of a substitute, especially, it seems, among younger Americans, where credit cards, in fact, may be on their way out. I heard about all this from Michael Waters, a freelance journalist who writes for The Atlantic magazine. In 2004, debit cards represented about 33 % of all card transaction volume.

12:26And last year in 2024, so 20 years later, they were 47%. And essentially what is happening is that for a host of different reasons, more Americans are spending more money with their debit cards than with their credit cards. I suppose the obvious point is that with a debit card, it comes out of your account straight away. There's no hidden burden of debt that's building up. I mean, that must be the attraction. And the thing is that people kind of use these two cards dynamically, right? You know, you make different kinds of purchases with a debit card than with a credit card. You do have people who, you know, like an emergency or something, kind of have no choice but to put it on a credit card if they don't have that kind of money in their bank account.

13:04You see debit cards used a lot for, you know, like smaller transactions like groceries, etc. So, you know, people have a dynamic relationship to it. But in general, I mean, part of the appeal is that with debit, you are spending money that you actually have, which when there is money in your account can be sort of a smart financial choice. And then there are moments when some sort of like emergency crops up. And that's when people start to dip into credit more often. And you say there's a kind of generational effect in all this. It's interesting who is actually moving away from credit cards. So you see in a lot of different surveys that young people in particular are expressing skepticism of credit cards.

13:43And I think that's for a lot of different reasons. It's also just a generation that has grown up around so much debt, whether that's from student loans or from credit cards, and just have this sort of skepticism of spending too much on credit cards. And that's not to say that young people are not using credit cards often as well. there is a lot of appeal in credit card points and getting different kinds of like cash back for spending on credit. But especially for this generation that grew up in the shadow of the Great Recession, there is a lot of skepticism of over-investing in that kind of debt.

14:19And this is going to be a problem for the credit card industry, isn't it? If the youngest generation, the one that's coming up, doesn't really want to use them as much because it's a It's a big money spinner for some of the big banks. Yeah, I mean, and it remains to be seen, right, how long this holds. I do think that part of what has kept credit cards so omnipresent, especially in the U.S., is the use of credit card points, right? This idea that in exchange for spending on certain items, you get back airline points, you get cash back of different kinds. And there really is like a strong relationship between the kinds of rewards that you get for spending on cards and people's willingness to use those cards.

14:59And I actually think that one reason why we see debit gaining a little bit more popularity in recent years is that a lot of debit cards now have cashback features, right? And I suppose part of the encouragement or part of the willingness, as you say, to use debit cards is you're spending money you have. And then, I mean, it goes beyond that. I suppose people who aren't in a bank, don't have any bank, are using cash. And that is exactly the money you have and nothing else. So it's maybe part of the same thing, the unbanked. I also think part of the explanation for why debit cards are gaining in popularity now is that we're seeing this just like technological shift away from cash, like across more cohorts.

15:38Right. So there are a lot of stores that no longer accept cash. I think that is probably contributing a little bit to people who maybe spent things with cash are now just switching over to debit. We've seen how well Klarna, the big Swedish buy now, pay later company, is doing, just launched on the New York Stock Exchange. Is that another pattern that kind of shows you that the people like still have this appetite for credit, but perhaps in different areas? Yeah, I think when you look at young people in particular, there is a lot of, I would say, experimentation with buy now, pay later. And so that is a way of making a big purchase with money that you maybe don't have up front that, you know, there's some segment of young people who maybe would have once put that on a credit card and are now opting for a buy now, pay later.

16:28And when it comes to Klarna specifically, I mean, you also see that they are trying to break into the debit card market, too. And so they see that, right, there is this interest among young people in debit cards specifically. And Klarna recently launched their own debit card in the US as a part of sort of their expansion. Michael Waters there talking about debit cards and credit cards. Now, OK, I'm going to ask both of you. You don't have to answer. Nah, do you have a debit card? Do you have a credit card? I'm intrigued. I have a debit card and I have a few credit cards. But, you know, in Taiwan or, you know, in Japan, cash is still king.

17:06And we don't actually use credit cards very much, not debit cards. So cash is still the currency that we use. That's really interesting because you'd imagine somewhere like Taiwan, very tech, they would have it. Because my son has just come back from mainland China. He says almost nobody uses cash there at all. No, mainland China is actually different. they do promote digital payment. The same happens in Vietnam. So people use QR code and, you know, pay directly from their banks. But Japan and Taiwan are different. I don't know why, but I mean, they do prefer cash. And also IC card, which is like prepaid cards, the smart cards that they use in the metro and, you know, in convenience stores.

17:50Yeah, it's very peculiar. But I personally like cash. You know, something about Chris's bank notes that really remind me of my childhood where we received red envelopes on holidays. Oh, lucky you, yes. I love it, yeah. Well, I suppose if you received a red envelope and there was a card inside it, if you were a child, you might think, well, what's that about? It wouldn't be as exciting as I'm having, as you say, bank notes. No, not exciting at all. Yeah, that's the thing. Okay, Stephanie, fair dues, I'll ask you, do you have a debit card, do you have a bank, do you have a credit card? I have a debit card because here in London, As you know, in the UK, digital payments, contact payments are in many ways preferred more than cash.

18:33But I also go to Berlin a lot for research. And there, it's the complete opposite. And they want everything in cash. So I've got cash in euros. Isn't that strange? Certain economies, you know, as you say, Germany, Taiwan, Japan, they don't like that electronic form of payment. It's strange, isn't it? Well, is it, though? I mean, I've wondered about that and thought, is this a tax avoidance issue? Oh, right. Because you can track everything digitally. I mean, there's a big argument for cash also as resilience. Yeah. And is that maybe why the Chinese are so keen on it? Because they can keep a complete eye on what everyone's spending, I suppose, if they get hold of the data.

19:13Yes. It is interesting. So, Stephanie, you don't have credit cards? Is that right? No. And is that a personal choice? You just don't want to go there, don't want to do that stuff? I think – I mean I should have a credit card because you're supposed to always have one for emergencies and also you have to get them to build up your credit score if you want to do things like buy property, et cetera, which I've always sort of hated as a model that, oh, you have to use this debt-inducing model. I guess you're supposed to just be very clever with them and put everything in your credit card and pay it off at the end of the month.

19:46So you just have to have this discipline. But I hate that because, again, it's all about who has my data. what's it for? And you're stuck, basically, you're locked into a monopoly of certain big companies or banks. So, there you go. It is interesting, what you said about credit score because, I don't know again if this happens where you are now, but it is, if you don't have a credit card, often, it's actually quite, if you've not borrowed money, you don't have a credit score. It's a kind of, it seems to be not rewarding prudence in some ways if you can't get something because you haven't got a record of having borrowed money before.

20:21It's almost as though the entire financial system is rigged. Yes, imagine. I mean, who would have thought? Gosh. Yep. And so it's an interesting thing in terms of the trend because what Michael was saying there is that young people don't seem to like credit cards in the same way. They are wary of debt. Again, now, would you say that where you are, that there is any kind of generational issue on that? Because, you know, people do, particularly when they're young, I suppose, and aren't earning that much, could build up a lot of debt. Sure, yes. But I think young people these days also prefer credit cards and types of cards.

20:58And first, you know, it looks more sophisticated, more tech savvy. But also, yeah, they don't want to get into debt. And also, even though lots of debts actually occurred with their own families, like, you know, parents give away money and give them some credit, then they pay back later. So it's not to do with the banking system, really, but with the spending habit that is more developed, should I say, these days with young people. Yeah. Do you notice, Stephanie, that kind of difference between generations in that sort of way, that younger people are more debt averse, I suppose, is what we're saying?

21:35I think that particularly this generation of young people that grew up in the shadow of the financial crisis and with job insecurity, etc., I think they've had to be so careful. They don't have the being able to take it for grantedness that somebody who's Generation X, such as myself, had that I think those attitudes towards money are really formed in your youth and security. so I completely sympathize and understand there's a whole thing of going back to cash and even putting budgets for certain things in envelopes so you have your rent in one envelope and your groceries in one because it's so easy and the research shows this if you're paying in cash you really feel it whereas if you're paying in card it's very easy to just keep paying and going over your budget that's the secret isn't it that's why they have these things because it doesn't feel like you're spending money at all I think we've uncovered a few things there anyway stay with us Much more coming up here on Business Matters in just a moment.

22:31We're going to talk about that issue about Korea and those guys who were arrested in the US, apparently for not having the right visa when they were working on a battery plant. But we're also going to talk about those tube strikes, which Stephanie, I know, has suffered from, as have I. And we're going to talk about speech writing. Who's doing it? Is it all being done now by robots? Stay with us. This is Business Matters.

23:03Welcome back to Business Matters with me, Roger Hearing, and my guests today, Nar Pham and Stephanie Hare. Now, just before we go forward, a repeat of an announcement that's a little sad. In January, the BBC announced that Business Matters will be closing here on the World Service. And we're now in the final week of the programme. The whole team of producers, presenters and editors wanted to say thank you for being with us. Whether you've tuned in regularly over the last 12 years or just now and then, it's meant a lot to have you listening. Next week at this time, you will hear our colleagues from the newsroom, bringing you trusted global news and analysis seven days a week.

23:37Also, I wanted to tell you about our new show, World Business Express, which you can hear Monday to Friday at 14.50 GMT here on the BBC World Service, bringing you the stories that matter and the essentials on the fast-changing global economy. But now, well, let's talk about part of that economy. What's going on between North Korea and the US? Because last week, a raid by US ICE, Immigration Control Enforcement, ICE, on a Hyundai and LG battery plant in Georgia resulted in the arrest of over 400 Korean workers. The officials claimed were working illegally. The raid caused something of a diplomatic row between Seoul and Washington, and it means the plant is now facing a minimum start-up delay of two to three months.

24:22That's according to the Hyundai CEO, Jose Munoz. The plant, part of a$7.6 billion factory complex intended to make battery-powered models, was due to come online later this year. Now, the fallout of the raid has been widespread. Workers at other LG plants, including those co-owned by GM in the US, were asked to return home. And South Korean companies will be very hesitant about investing in the US, according to President Lee Jae-myung. From the perspective of companies, setting up local factories in the US inevitably raises concerns like, will we face all sorts of disadvantages or difficulties in the future?

25:04Is this really something we should do? Such concerns could significantly affect future direct investment in the United States. Korea's president. Well, the plane carrying the detained workers from the Georgia plant left a little bit earlier for South Korea. Although there are talks about a new sort of visa for Korean employees going to the US, the plans to expand battery making in the US through joint Korean-US ventures seems to be in some trouble. I asked Tim Shorrock, a Washington-based journalist who's been writing about the Korean economy and US-Korea trade, if this was putting that relationship under strain.

25:43Well, absolutely. I thought it was extraordinary to see the South Korean president openly criticize the U.S. president of calling this an unjust infringement on their rights and also to say him saying that this could deter Korean companies from investing, which, of course, it will, because, you know, this was a very cruel treatment to make to a country that's been invited to invest or asked to invest up to$350 billion in the US economy as a way to build up, make America great again. And so it means depriving Korea of lots of capital investment and its own industrial process and shipping that to the United States.

26:26And I think that itself is problematic for many Koreans in Korea. Yeah, and Tim, I mean, some people would say, well, OK, but these people, they were in there working at a Hyundai, joint Hyundai and LG plant, shouldn't those companies have made sure that all the people there had a right to work there? I mean, you know, just follow the law. Well, absolutely. I mean, there is some blame to be put on the big companies. I mean, none of the people arrested or detained were from either Hyundai or LG. It was all of their subcontractors. And of course, you know, if South Korea is going to ship their industrial facilities and the way they operate in Korea to the United States, of course, it's going to come along with subcontractors, which is, you know, a big part of the occurring economy anyway.