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Quest Means Business
Preparations for Bahrain Grand Prix; Interview With Bahrain's Finance Minister
Aired March 08, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Good evening to you and welcome to the program, which this week comes to you from Bahrain. And tonight, in particular, comes from the Bahrain International Circuit.
There it is behind you. And over the course of this week, of course, the preparations being made for the Bahrain Grand Prix-the Gulf Air Bahrain Grand Prix-to give it its full title, which takes place this weekend.
In this program tonight you will not only hear from Bahrain's finance minister, but perhaps for a little more excitement I'm gong to take you around their new track.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The idea is after very heavy break and shaking, they are going to dip in here, come around, where does this track go?
QUEST: Oh, God, where does it go?
UNIDENTIFIED MALE: Here, you break hard, and you turn in, it is-it's, you know, it's pushing it.
(END VIDEO CLIP)
QUEST: Now, you maybe well wondering why we are in Bahrain and the importance of our coverage over the next five days. We are here because of iList, our odyssey of global business. It is a chance to bring to your living room, and to your attention, places of the world that you need to know about. CNN is taking you to a new country each month. We started with France in February. This month we are in Bahrain. We'll highlight innovation, in business, industry and culture. We'll provide a showcase for what is interesting and inventive and every month we'll reveal another part of our interconnected world.
So, that is the iList and that is why we are here. And I promise you this, if there is a decision-maker to be heard from over the next five days, you will hear from them on this program.
Let me just show you where we are and why we are here. Over there is the Bahrain International Circuit, that is where the Grand Prix will take place just on Sunday. The Formula One cars are already here. And they will be doing their practice tracks and practice laps, in the days ahead.
Well, we need to get to know a little bit more about Bahrain, before we go to much further, so the name itself, for instance. It comes from an Arabic word meaning "Two Seas". Bahrainis say that it refers to its fresh water springs and-and this is the interesting bit-the sea water around it, as well as the northern and southern waters of the Gulf. But this is what's important. Bahrain consists, actually, of 33 islands. The main one, itself, Bahrain Island, is 48 kilometers long and 16 kilometers wide. It is home to just over 1 million people. And a bit of trivia for you: It is tempting, as you say the name, of this country to go for a good strong guttural, "Bah-rrrain" and that would be wrong. You pronounce it very simply as the experts have told me, just, "Bahrain".
Here at the Grand Prix circuits we have a powerful reminder of the what drives the country and its economy. It is, of course, oil. It accounts for more than a quarter of the GDP. A crucial part of the economy, which according to the IMF, grew by a healthy clip of more than 3 percent in the last year. The oil won't last forever and it is the prospect of a decline in oil revenues that is leading this country firmly to look at diversification.
(BEGIN VIDEO CLIP)
QUEST (voice over): When the Formula One cars race around the track, Bahrain will be in the spotlight. The country's economy has been more like the steady experienced driver, than the boy racers trying to get to the front. While near neighbors, like Dubai, have gone full throttle, Bahrain has opted for staying the course. Dubai's debt troubles played out dramatically on the world stage. And yet, Bahrain's remained relatively unscathed by the global financial crisis. The country avoided recession.
JOHN EDWARDS, BAHRAIN ECONOMIC DEVELOPMENT BOARD: Well, the financial sector in Bahrain did take a hit, particularly in the last quarter of 2008, but it subsequently stabilized and over the last six months it seems to have been expanding. In fact, employment in the finance industry, in Bahrain, increased.
QUEST: That is not to say there aren't problems around the corner. Bahrain, unlike its neighbors to the east and west, is not awash with oil and gas. And the popular view is that what is here is running out. That is not strictly true, says the minister.
ABDUL-HUSSAIN BIN ALI MIRZA, BAHRAIN OIL MINISTER: That cliche has always been there, that the area is running out of oil. Bahrain is running out of oil. Bahrain has not been blessed with the same volume and quantity of natural resources and hydrocarbons, like its neighbors, but it has enough reserves to carry on for a few years to come.
QUEST: After years in the shadows, Bahrain believes it is well positioned to claw back some of the business it has lost as a financial center.
MIRZA: We have now one of the largest aluminum smelters in the world, and we have one of the most famous financial centers in the world. And we are trying to become a tourist attraction. And there are many manufacturing industries which are coming up. So, all these, and the service sector, will be diversification away from relying only on oil.
QUEST: Four hundred banks now operate here. And with an established legal system, and a steady economy, its reputation as a financial center is growing.
(END VIDEOTAPE)
QUEST: Now, of course, it is not just enough to wish to diversify. You have to have a strategy that goes behind it. And the leaders in Bahrain have set out their strategy for the future. It is known as The Vision 20/30 and this is what it is. And you will hear us talk a lot about Vision 20/30 over the next week.
"First of all, they aspire to shift from an economy built on oil wealth to a productive globally competitive economy." Well so much, so far, so good. We have heard that already, but shaped by the government and driven by a pioneering private sector. It is starting to seem like a shifting economy to a private world. To an economy that provides good living standards for Bahrainis through increased productivity and high- wages-and high-paying jobs.
The man who is partially responsible for the implementation of this policy, is the finance minister of the country. I sat down with Sheikh Ahmed Bin Mohammed Al Khalifa. Now a former central banker, here, he also has the role of the-of being one of the regulators. And he is chairman of the company that actually, of course, holds the sovereign wealth fund, here. Many hats but one particular task, how to ensure the economy keeps moving in an economy that wasn't badly hit by the recession.
(BEGIN VIDEO CLIP)
SHEIKH AHMED BIN MOHAMMED AL KHALIFA, BAHRAINI FINANCE MINISTER: The most important thing is we look at where we are in terms of an economy. We built an economy that is resilient, that is able to withstand shock. We have gone through this period very well. And I think diversification of our economies helped us tremendously in this.
QUEST: Why do you believe that Bahrain was not as badly affected as other place during this recession?
KHALIFA: I think very important to say that we focused on diversification of our economy. And also in building infrastructure in financial services, over the years, first of all, adhering to this practice. Second, is also building the capacity within the industry to understand what is going on out there.
QUEST: But because it is a financial services center, one is surprised that the toxic assets, or if you like, the regulatory and derivatives that have so infected other places, didn't come here.
KHALIFA: Well, I think we never became immune. We are exposed like the rest of the world, we are a financial center, exposed to investments from around the world. We have over 100 institutions operating from Bahrain, and many countries, many regions. But I think by adhering to this practice we were able to make sure that we minimize the damage to controllable levels. And that is something that we are proud of. And also, looking at the Islamic finance and industry, because they are barred by their own rules, from some of the creative products, they were able to stay away from those industries.
QUEST: Were you surprised that the country managed to weather the storm as it did?
KHALIFA: No, I think, we have this conservative nature and looking at how we grow. I remember many years ago when we went through Al Minach (ph) crisis, in Kuwait, and how we reacted to that. I think, one learns from crisis how to deal with the next challenge that one faces. But making sure that our financial services actually been through different experiences, understands what happens around the world, and is able to implement those challenges, locally.
QUEST: The critics would say that it wasn't so badly affected mainly because you didn't enjoy the boom years, like everybody else did, so therefore you bust wasn't as big?
KHALIFA: Long-term, consistent growth is what we are about. So adhering to best practices, understanding what it takes to develop an economy, its regulation, its people, its training; it is understanding the challenges that one faces. And also looking at these different sectors growing at reasonable degrees over a period of time. I think that is very important for us.
QUEST: What do you expect the growth will be in 2010?
KHALIFA: I expect the growth to be around 4 percent in 2010, which is slightly better than what we experienced in '09. We still had positive growth in '09, which is something that we are very proud of. And I think our economy will continue to grow.
The challenge for us is to start looking at financial services, quarter of GDP may be one-third the growth. What is going to propel our economy for the next couple of years?
(END VIDEOTAPE)
QUEST: Now, we may be in Bahrain, but we have of course, brought the traffic lights, which will be one of our major barometers over the course of the week. Red, amber and green, are rather appropriate, since we seem to be at the race track.
And now, let me show you a little bit of the area where we are. The bell is here as well.
This is the Royal Tower; this is where the management are at the Bahrain International Circuit. It is an extremely impressive building and so much of the local area takes this dessert tenting structure, which of course, really gives the feel of where we are. You will hear much more about all of this in the week ahead.
Let us catch up with the news headlines, now, and Fionnuala Sweeney is at the CNN News Desk.
(NEWS BREAK)
QUEST: It may be chilly and winter where you are, Fionnuala, but I can tell you nice shirt-sleeves weather, not trying to make you too envious. Fionnuala Sweeney, will be with us later with "WORLD ONE".
When we come back, in just a moment, support for Greece is growing. The French president says he is backing Athens. And now, the Greek Prime Minister is on his way to Washington, to hear that, stay with us.
(COMMERCIAL BREAK)
QUEST: And welcome back to CNN QUEST MEANS BUSINESS, our iList coverage, here in Bahrain. It is a new trading week on Wall Street. And of course-well, would it was like last week? But the early indications- Stephanie Elam joins us now from New York, and a good week, last week, if we could repeat some of that, then the bulls are out of the gate; a bit like Formula One.
Where are we going to, Steph?
STEPHANIE ELAM, CNN FINANCIAL CORRESPONDENT: Yeah, it would be just like the Formula One, but that would be a lot to ask of those bulls, Richard. It has really been a pretty quiet day here, as far as Wall Street is concerned, as we start out the week.
The Dow struggling for days, despite surging shares of McDonald's. Now, the fast-food giant posted better-than-expected February sales numbers, thanks to a big boost from overseas. Sales in one area that is particularly important to McDonald's, is that combination of the Asia- Pacific, Middle East and African regions. That region rose 11 percent in the month.
If you take a look at Nasdaq, it is making some modest gains. Tech heavy index really showing that it is come back from a lot of pain. It closed on Friday at new highs for the year, outperforming the other major U.S. averages. Tomorrow, actually, marks the one year since the market closed at its lows for the recession. Since then the Dow is up 61 percent. The S&P 500 up 68 percent. And Nasdaq up, 83, percent, Richard. So, definitely there has been a lot of growth in that one rough year.
QUEST: And the sell offs from AIG, just keep coming. It is Monday, so the "for sale" and "sold" sign must be on the door.
ELAM: They have got it polished up and they are using it frequently, that's for sure. Because AIG is selling its American Life Insurance Company unit, or ALICO, as it is known to MetLife for more than $15 billion in cash and stocks. Now, AIG has really been aggressively selling off its assets, because they have got to repay some massive debt back to the U.S. government.
You remember that bailout? This is all part of that. They need to get that number down. Last week it sold and Asian insurance unit for more than $35 billion. Those two deals combined are worth more to AIG than the 20 assets-assets sales the company has announced since its September 2008 bailout. AIG says about $9 billion from the CEO will go to repaying the government.
The company will still owe, a hefty $65 billion. But it is says it is making progress. And the market does like to see progress being made, so AIG Sales are on the upside by 4 percent. And investors also like the deal from MetLife, so this stock transaction gives AIG, and essentially, the federal government about a 20 percent stake in MetLife. The company said the deal will add about 50 cents a share, to its earnings in 2011.
So, taking a look, people, overall think this deal is a good idea and a lot of people here, Richard, would like to see the government paid back.
QUEST: Stephanie, your market is just basically unchanged. So, we are going to leave you right there.
ELAM: I'm boring today. I know.
QUEST: The European markets weren't terribly exciting.
(LAUGHTER)
QUEST: All right. I've got European markets to talk about. See you tomorrow, Stephanie.
ELAM: Right.
QUEST: Look, European markets virtually unchanged again, in many ways. Although the London market has it an 18-month high, but as you can see, the numbers are not terribly exciting. So, we won't dwell, or tarry, too long those.
Instead, let us turn our attention to Greece. And the European Union, is drawing up various prospects and designs for how they can help out Greece, but at the same time not call it a bailout, whether it is Germany or France, or the Commission itself.
The Greek prime minister having visited European capitals is now in Washington, where he will meet the U.S. Treasury Secretary Tim Geithner. He'll also have talks with President Obama. However, it is not, of course, likely that he'll be seeking any assistance from the U.S., other than, perhaps to find out whether Wall Street did any shenanigans in helping previous governments to hide their debts.
Let's turn to the latest position for Greece. Jim Boulden, who is looking after matters for us on that, joins me now.
And Jim, the one thing I've seen so far is credit default swaps seemed to have narrowed, which suggests that the Greece, if you like, situation, is abating.
JIM BOULDEN, CNN INT'L. CORRESPONDENT: Yes, that has been a very positive move in the last couple of days, Greek stocks doing well, because of all this talk, especially all the news from Mr. Sarkozy over the weekend saying that the European Union is thinking of putting together a fund. Though they wouldn't give us the details.
But what is interesting, Richard, is that Mr. Papandreou is joined on his trip to Washington by George Papaconstantinou, that is the Greek finance minister. He is also meeting with officials from the International Monetary Fund, in Washington. And a few hours ago I interviewed the finance minister by phone and asked him if Greece is making the rounds to ask the EU or the U.S. for any aid.
(BEGIN VIDEOTAPE)
GEORGE PAPACONSTANTINEOU, GREEK FINANCE MINISTER: Well, we are saying something very simple. We are doing what needs to be done in terms of taking those measures to control our deficit with, which proves very clearly the determination to do just that. And what we are asking for, and we are receiving from our European allies, is political support and the commitment that if push came to shove they would be there to help us.
BOULDEN: Now there will be more strikes on Thursday, in Greece, are you feeling the pressure from these strikes? And I'm sure the U.S. government will be asking you about whether there may be any climb down, by the Greek government, because of the number of people we have seen taking to the streets?
PAPACONSTANTINEOU: I think it is very clear that we have a parliamentary majority. We proved that within the few days of announcing the measure we passed them through parliament. They are now law and are already being applied. Obviously, there will be demonstrations. The right to strike and to demonstrate is clearly enshrined in the constitution. However, we are confident that we have the backing of the majority of the Greek population to push what are some very difficult measures. But they are absolutely necessary measures to be able to tackle the deficit.
BOULDEN: Your prime minister has been talking about markets speculators and he would like to see the G20 clamp down on market speculators. Do you expect to be discussing that tomorrow with the Secretary of Treasury Tim Geithner?
PAPACONSTANTINEOU: Yes, we will be discussing this, both with President Obama and with Secretary Geithner. There is a joint European approach on these issues, an initiative with Chancellor Merkel, with President Sarkozy, with the chairman of Euro group, Mr. Juncker, with Prime Minister Papandreou. It is clear that beyond looking at what each country do-by itself, to sort out its finances-there speculative forces at work. There is the operation of shorting, on CDS (ph) and these are issues that, both at the European level and the global level, through the G20, we need to look very carefully at.
BOULDEN: Now, you will be meeting with the International Monetary Fund, but again, this is not about a bailout or assistance. The prime minister will not be meeting with the IMF? Is that correct?
PAPACONSTANTINEOU: That is correct. I will be meeting at the-I will be going to the IMF to discuss the technical assistance that we have requested from them, I repeat, some technical assistance, regarding budget reform, tax reform that is underway. There is absolutely no discussion about any financial assistance.
BOULDEN: And finally, there is a lot of talk about a European monetary fund, that would mirror the IMF, that might actually be discussed and even set up this year. Would that come in time to help Greece? Would Greece be looking at an EMF, as it were, for any kind of assistance?
PAPACONSTANTINEOU: I think we are all learning from the trouble that Greece is in at the moment. It is two things. One, each country must do what it must do on its own. But to (AUDIO GAP) to European mechanisms, there to help those countries that are in trouble, even though they are doing what they must be doing. And I think in that context it is very important that the discussion about various mechanisms, that it is finally taking place and there are a number-and we will be discussing this in ECOFIN (ph), in the European Council next week, and other forums. So, this is a good direction.
(END VIDEOTAPE)
BOULDEN: And Richard, we'll be in Athens on Thursday to report on those strikes and see if the government does have any changes to its plans, Richard.
QUEST: Jim, we may be (AUDIO GAP) when you are in Athens. Jim Boulden, joining us from London.
Now, on the other side of EU, in geographic terms, Portugal is doing a Greece, and it is trying to make sure it doesn't end up in the same state. We are, of course, talking about cutting deficits. The Portuguese government says it wants to get its budget deficit down to 2.8 percent of GDP by 2013. This year it is estimated that that deficit number will be more than 8 percent.
The latest government plan involves cutting welfare benefits, shrinking the number of people employed in the public sector. It is also planning to sell state-owned assets and increase taxes for higher earners.
When come back in just a moment, the euro has been the single currency for Europe and some say a single pain in the neck. So why would countries in this part of the world want to have a single currency for the Gulf? John Defterios will be with me to talk single-minded, single currencies, in just a moment. This is QUEST MEANS BUSINESS, we're live in Bahrain. Good evening.
(COMMERCIAL BREAK)
QUEST: Welcome back. QUEST MEANS BUSINESS, live in Bahrain this evening.
We talked a lot in recent weeks, you and I, about the euro and the single currency; the perils of tethering yourself to other economies that might not be performing quite so well. Here in this part of the world they have a similar plan for the GCC countries to also have a single currency. Well, they have a plan, but it hasn't really come to fruition yet. I asked the finance minister when he expected a single currency actually to come into force?
(BEGIN VIDEO CLIP)
SHEIKH AHMED BIN MOHAMMED AL KHALIFA, BAHRAINI FINANCE MINISTER: I'm not going to put a date from the Kingdom, of Haiful (ph), for the single currency, but I expect that we are working towards it. And I know that our central bank is putting as much effort as everyone else to make sure that it happens as soon as possible.
QUEST: And could we agree, without a date, within our lifetime?
KHALIFA: Definitely.
(LAUGHTER)
(END VIDEO CLIP)
QUEST: So, that is the "within our lifetime". John Defterios joins me-a
JOHN DEFTERIOS, CNN ANCHOR, "MIDDLE EAST MARKETPLACE": That's a long timeframe.
QUEST: Good evening to you. Welcome to Bahrain.
DEFTERIOS: Thank you. Welcome to you.
QUEST: Yes, this is my first time. You have been here many times.
Let's talk single currency. Why do they want to do it when they have seen so many problems elsewhere?
DEFTERIOS: Well, in fact the euro was the inspiration, Richard. This is an initiative that goes back to 2001. So right after the euro was launched they thought it would be a good idea to bring these countries closer together; a number of political hurdles along the way.
But first, let's take a step back and say which countries are involved. The six countries were in the GCC, the Gulf Cooperation Council, Saudi Arabia, Kuwait, Qatar, and Bahrain, the ones in green there, are the ones that are going to join in. They have committed to the process.
Two that have not committed to this process, you see them in red. The giant state of Oman, which Sultan Qaboos is the leader there, didn't like the pace of globalization. Thought it was too fast for his country. And then you see the UAE. Now, another political issue here, the UAE wanted to have the central bank based in their country. When that decision was made late in 2009, they decided to opt out, because the central bank is going to be in Riyadh.
One other thing to look at here, now we have four countries involved; you have Kuwait, that has moved to a basket of currencies, right now. That is different than the other three, who are linked to the dollar. So, a gigantic hurdle to get through.
QUEST: There are usually two reasons to do a single currency, political and economic. Now, the economic reason may be good, bad, or indifferent, but the political reason is probably going to be the one that scuttles this.
DEFTERIOS: It could do. Right now there are a couple of political issues right there. But you raised the economic one. Number one, they want to free up the trade that is not taking place across borders. The investment that goes across borders right now. And then the other idea here is to see the broader area, or region, to build up here. You also have, you know, a trillion dollars of trade right now. They think over the next 10 years an economy of a trillion dollars, if you get the single currency in there, it could double that.
QUEST: Traffic lights, brought them all the way from London. We are gong to use them. Red, amber or green-
DEFTERIOS: Oh, yes.
QUEST: -for the single currency?
DEFTERIOS: It is a little bit more challenging. Right now I'm going to leave it at a red, because they haven't committed 2015. They missed the 2010 deadline. They have the Arab Monetary Council at the end of the month. If they get some clearance here, I'm going to move that to a yellow, but not until the end of the month.
QUEST: Leave it on a red. John, see you over the course of the week.
DEFTERIOS: I'll see you.
QUEST: As we continue our coverage, here in Bahrain, we will be looking at the Formula One track behind me. Well, we won't just be looking at it, we'll take you on a spin. QUEST MEANS BUSINESS, we are live in Bahrain.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This corner is going to be-by the time you see it you are committed. We are doing almost, I don't know, 160, 180, and breaking hard into this corner. Very tight situation.
QUEST: Oh, no!
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: The Bahrain International Circuit that will, this forthcoming weekend, host the first of this year's Formula One Grand Prixs. Bahrain has pole position and that is the stadium that you're looking at -- a track that has been revamped. We're going to show you that in a moment.
I'm Richard Quest.
Good evening.
QUEST MEANS BUSINESS.
This is CNN.
As part of our high list coverage, coming to you all this week live from Bahrain.
And the country will be in pole position when the Grand Prix takes place this Sunday. There will be a twist to the tale -- and I mean quite literally a twist. The circuit, which has been a fixture on The Grand Prix calendar for the past six years, has been changed. New twists and turns have been added. It has been lengthened. The critics say it may be slower. Some people say it will be more exciting.
What does it actually mean when you're on the track?
I went to find out with the acting chief executive, a man who drives rather fast.
(BEGIN VIDEOTAPE)
QUEST: The starting line at the Bahrain International Circuit.
Sheikh Salman, what is different this year, because there have been some changes to the track?
SHEIKH SALMAN BIN ISA AL KHALIFA, ACTING CEO, BAHRAIN INTERNATIONAL CIRCUIT: Absolutely. We have a new track. It's a 6.299 circuit, 23 corners. And it's going to be fantastic.
QUEST: Is it a more difficult track?
Al KHALIFA: Yes.
QUEST: Are you going to show me?
Al KHALIFA: I'd love to.
QUEST: Do you drive fast?
Al KHALIFA: Well, let's get in.
QUEST: I've just had lunch.
Where do the changes begin?
Al KHALIFA: Well, after turn four, we -- we turn here and usually we would go straight down into the exits. But now, we turn away and we go into this new (INAUDIBLE). It is a fascinating track.
QUEST: Right.
Al KHALIFA: This part is fast. And -- and they're going to -- you know, they're going to -- all the way down, it's a blind corner, you know, it's going to add so much excitement. The next part is the more technical side. In a Formula One car, they will be driven by (INAUDIBLE) here.
QUEST: Adding technical challenges will make the race more exciting for drivers and spectators. For instance, as the cars hurtle toward the chicane (ph).
Al KHALIFA: This corner is going to be -- by the time you see it, your commitment, you are doing almost, I don't know, 160, 180 and braking hard into this corner. Very tight (INAUDIBLE).
QUEST: Oh, no.
Look at that.
So that is what it -- this new bit is really all about?
Al KHALIFA: Yes. That -- coming into that. That camera angle, that, you know, part is just going to be spectacular, you know, with the palm trees, with the desert. You know, we are in the Arab world. We are in the desert. The idea is after a very heavy breaking chicane (ph) they're going to dip in here, come around.
Where does this track go?
QUEST: Oh, God, where does it go?
Al KHALIFA: Here. You brake hard and you turn in. It's -- you know, it's -- it's pushing it.
QUEST: And with all these changes, the track is a kilometer longer, at 6.3 kilometers. It has 22 turns instead of 15. Sheikh Salman believes this Grand Prix still has a uniquely Middle Eastern feel.
Al KHALIFA: It's actually finding the differentiating factors, you know. How -- how do we make this Grand Prix (INAUDIBLE)?
How do we make it our own?
We wanted a track that, if we saw it for a second, we would say, that's ours and that had our culture, that had our customs. The wind towers on top of the grandstands. That's purely on -- the -- the tent-like structures.
QUEST: Back at the finish line, less than a week to go, what do you want?
Al KHALIFA: Well, I want the people to come to the Bahrain Grand Prix -- you know, we were the first to start the Grand Prix in the Middle East. It is a Bahraini Grand Prix. What you see here is all our values, all our traditions, all our customs coming together for this one weekend. And I want people to come back and say that they'd love to come back because they enjoyed themselves at the Bahrain Grand Prix.
QUEST: I'll come back, provided you don't drive. I'm walking.
Al KHALIFA: Come back.
QUEST: Sheikh Salman will join us tomorrow on the program to talk about the practical problems and issues in organizing the Grand Prix.
But now the chairman of the International Circuit, Zayed Alzayani, joins me now.
Good evening to you, Sir.
ZAYED RASHID ALZAYANI, BAHRAIN INTERNATIONAL CIRCUIT CHAIRMAN: Good evening.
QUEST: Many questions for joining us.
ALZAYANI: Thank you and welcome to Bahrain International Circuit. We're really privilege to have you here.
QUEST: We'll, we're delighted to be here. Everything is getting ready. To some extent, your work is now done.
But I'm wondering how important to the country is the Grand Prix?
ALZAYANI: Well, first of all, our work is not done until Sunday afternoon, when everything is done and everybody starts to leave. And really, we typically take Monday, maybe Tuesday, often, then the work starts for next year's Grand Prix.
QUEST: Right.
ALZAYANI: But obviously, we also carry out other events during the year, so it's not only the Grand Prix, but it is really the biggest event of the year.
As for the country, really, this is the -- the main focus of setting up this track on one of the main focuses to set up this track is to attract people to Bahrain, to expose Bahrain to the world.
QUEST: You see, I've heard numbers suggesting several hundred million dollars -- $500 million, $600 million -- as being the economic impact for this one event.
Would you agree with those numbers?
ALZAYANI: Yes. And I think -- I think here that would be quite right. This is based on an economic impact study we carry out every year after the race. It's done by an independent firm.
QUEST: So when we look at the amount of -- of stuff that is here, many of us think it's here just for one day of the year, for one event. The cars arrive, they race on the track and they all disappear and you are left with an empty building.
ALZAYANI: Well, that's not true. As I said, you know, we try to use the track throughout the year for motoring events and also non-motoring events -- private functions, business functions. A lot of the stuff does go away with Formula One because by scale, it's the largest event we carry and it's the largest motoring event in the world.
QUEST: In terms of putting the country on the map -- not that it needs to be put on the map, but if you did put it on the map, this is one of the most important events for the year for the country.
ALZAYANI: Definitely, no doubt. I think being in a league of 17 countries or 19, depending from years to year, has really put us on the world scene. And this is probably one of the -- the main successes we achieved with the Bahrain International Circuit.
QUEST: You've got Michael Schumacher here this year. So again, much more attention on this first Grand Prix.
ALZAYANI: Yes. I mean we were fortunate.
QUEST: More teams, as well.
ALZAYANI: More teams. Yes, absolutely. New rules, as well. A new layout on the track. We believe it will be more challenging. It's a big longer, but more twisty. It allows us for more overtaking opportunities. And this is one of the reasons we wanted to have the first race, actually, is -- is to get the -- the international impact right away.
QUEST: I -- look, I know you've got plenty of lights out there for the marshals.
ALZAYANI: Yes.
QUEST: But forgive me, I had to bring me own traffic light.
ALZAYANI: Yes.
QUEST: So, Bahrain and the importance of the -- the Grand Prix to the economy -- red, amber or green?
ALZAYANI: Green.
QUEST: All right. I gave you that one.
(LAUGHTER)
QUEST: Chairman, many thanks, indeed for joining us.
ALZAYANI: Thank you very much.
QUEST: And all of our best for this weekend...
ALZAYANI: Thank you very much.
QUEST: -- and -- oh, oh (INAUDIBLE)...
ALZAYANI: We'd like you to join us for our race.
QUEST: Ah.
ALZAYANI: So this is your ticket in there for the race.
QUEST: Oh, oh, oh.
ALZAYANI: You must stay until Sunday and see what happens after the race finishes. And I'll also leave a small memory of Bahrain with you. This is our flag.
QUEST: A nice one.
ALZAYANI: We carry this proudly.
QUEST: Excellent.
ALZAYANI: And hopefully you -- you'll be coming back to Bahrain again and again.
QUEST: I guess I know where I'll be this weekend. Bad luck to all of you. No, no, there's only one ticket in here and that's mine.
Many thanks, indeed.
ALZAYANI: Thank you very much.
(END VIDEO TAPE)
QUEST: When we come back in just a moment, a ticket of a different kind. It's a statue. It looks golden. His name is Oscar.
But who got him and how much money was made?
We'll have that story in just a moment.
QUEST MEANS BUSINESS.
We're live in Bahrain.
(COMMERCIAL BREAK)
QUEST: (INAUDIBLE) and the bosses and, indeed, the gentleman we've just been talking to, the chairman, all have their offices.
It lights up rather grandly, doesn't it?
Reds and -- well, that's what you'd expect from a Grand Prix.
Depending, if you drive around town, actually, you see it says four days to go. I think it means four days to the Grand Prix weekend. Of course, the Grand Prix itself is on Sunday.
Now, last night was Hollywood's biggest night of the year.
The winner is -- the Oscar goes to -- "The Hurt Locker." The Iraq War drama took six statues, including best picture. And Kathryn Bigelow was named best director.
This is, I think, the most extraordinary thing -- the only woman to win that honor in the 82 years they've been holding the Oscars.
(BEGIN VIDEO CLIP)
KATHYRN BIGELOW, DIRECTOR: One more dedication, to men and women all over the world who -- sorry to reiterate, but wear a uniform, but even not just the military, HAZMAT, emergency, firemen. You know, they're there for us and we're there for them.
(END VIDEO CLIP)
QUEST: All right, so that is the -- the way it all took place. But I have an -- just ignore the -- the gap of tape holding it together. It clearly didn't travel as well as maybe others did.
Listen, never mind who won the Oscar for the -- for the best picture, best this, that and the other.
Let's talk to Tatiana Siegel, who joins me now from Los Angeles.
Tatiana, good afternoon -- good evening to you.
In the -- in the race to make money, is there a discrepancy between the Oscars?
TATIANA SIEGEL, FILM REPORTER, "VARIETY": No. I mean I think once you win an Oscar, you are put into a higher pay scale and you get more perks on your next job. So it's definitely a win-win for anyone who wins, especially somebody like Kathryn Bigelow. She's definitely going to be one of the bigger recipients for taking home the little gold man.
QUEST: And if we look at the money that is being made against the various films, the actual box office revenues, they would see some very interesting figures. He who made most money didn't necessarily get the statue.
SIEGEL: That is absolutely true. And there likely won't be any more money coming in for "The Hurt Locker." The ship has already sailed on that film because it's out of theaters in the United States. It's already on DVD and home video. So you will see probably almost no financial bump from winning the Oscar for that film, like you did past winners, like "Slum Dog Millionaire."
But it was not a -- a big commercial hit at the box office. It was definitely more a film that the critics embraced and now the Academy. So not -- not in the league of "Avatar" at the box office, for sure.
QUEST: Yes, well, I don't think any movie, perhaps, this -- or in recent years or next year will be in that league. But I wonder, if we -- if I take my business hat off -- because, obviously, if I want to make money, I'll go in with "Avatar".
But is there a perversion in the fact that they go for one movie that's not necessarily the biggest blockbuster and in other years, they seem to go exactly the opposite direction?
SIEGEL: I mean there's definitely a herd mentality that seem to start to percolate early in the Oscar season where you start to hear buzz, like this movie is going to go all the way. It happened last year with "Slum Dog Millionaire." And it -- you know, some years it's a movie that's doing great at the box office. And some years it's a movie that, you know, for whatever reason, the public at large hasn't really embraced, but the -- the Academy does seem to go in -- in one direction and -- but, you know, with the best actress winner last night, Sandra Bullock, she was in "The Blind Side," which was a movie that did great at the box office and, you know, was a -- was a real big moneymaker.
QUEST: Tatiana, many thanks, indeed.
Interesting stuff and a fascinating look at how the money and the Oscars go in two different directions this year.
Many thanks.
Tatiana Siegel joining us from Los Angeles.
SIEGEL: Thank you, Richard.
QUEST: Now, you may well wonder about the weather here in Bahrain. Well, you know it's going to be hot in the summer. What you may not know is once that breeze gets up, well, it really does get up. And not only does it get up, it gets right up your trouser leg.
Jenny Harrison is at the CNN World Weather Center -- and, Jenny, fascinating stuff.
JENNY HARRISON, CNN METEOROLOGIST: Yes, no, it is, actually, a very fascinating place you find yourself in this week, Mr. Quest. I'm going to give us all a bit of a tour, I think. I'm going to start out with a look on Google Earth and I'm going to take you right the way across to Bahrain itself. And, of course, Richard has been telling you some of the statistics already.
So there it is. From north to south, 48 kilometers; east to west, it is 16. And, of course, Bahrain made up of 33 islands. Of course, the main one is the large one that we all know about. And home, of course, as Richard was telling you, to just over a million people, most of which are actually up toward the north.
I want to point out to you this location. That is the International Bahrain Circuit, where Richard is certainly today. And the further south you're going to head, of course, what you can really see is just desert. It really is very much a desert climate. And then there's barely anybody at all living south. And then you come to this new development. This is Durrat Al Bahrain. And this is actually 15 interconnected islands. And it's going to be a luxury resort. In fact, development began back in 2004. It's still continuing, but it looks to be very impressive, indeed.
So what does all that mean when it comes to the actual climate?
Well, very high humidity. Now, in actual fact, June, July, August, September, we're looking at extreme levels of humidity. So if you're visiting then, it could be very tough, indeed.
Very low rainfall. At the most, about 85 millimeters of rain. And that generally comes to an end in March, from November through to March. And very mild winters. Very pleasant, indeed. The humidity, then, is barely there and, of course, temperatures are not too bad.
Now, Richard said it's going to be hot. And it is. And, in fact, right now, where he is, it is about 22 degrees Celsius. Over the next few days, temperatures, as you can see, in the high 20s, low 30s, which actually is a little bit warmer than average so early in the year.
Now, let me take the broader view again and look at the weather conditions we've got. Of course, some rain is heading to the north in the Middle East. Nothing, as you saw, in the forecast for Bahrain. Temperatures also pretty much in line with what we see this time of year.
And not so really, now, across into Europe. These are the temperatures with the wind factored in. The winds coming from the nation and the east. It feels like minus 10 in Munich; minus four in Paris right now. And a very unsettled week across the south. We've got two storm systems heading in. Rain and snow on the cars. All of that, as well, heading into the northern regions of the Middle East -- but, Richard, it's warm, it's sunny, it's nice where you are.
And I just wanted to check, you didn't actually get behind the wheel of that car, did you, around here?
Because I've seen your driving.
QUEST: No, but you wish you had. Look what you're wearing. You're a...
HARRISON: Oh.
QUEST: -- you're a secret petrol head.
HARRISON: I do like (INAUDIBLE).
QUEST: She's a motor head...
HARRISON: I do like that (INAUDIBLE).
QUEST: -- wearing that leather jacket.
HARRISON: Yes. I...
QUEST: Yes, I'll bet you do, fast and furious.
HARRISON: Yes.
QUEST: All right. Jenny Harrison in the World Weather Center.
Who knew?
Who knew?
When we come back in just a moment, a vehicle of a different kind -- slightly more sedate. A London taxi in the desert. I'll have a story about that. It's a World At Work.
Good evening to you.
(COMMERCIAL BREAK)
QUEST: Welcome back, QUEST MEANS BUSINESS, this evening coming to you live from Bahrain and the, of course, Grand Prix track over in the distance -- the live lights, the cars have arrived. The secrecy is intense. And over the next few days, we'll be trying to gauge exactly who's doing what. We'll talk more about the actual Grand Prix in tomorrow night's program.
One of the interesting things you see here in Bahrain is the role that women play. We'll have talking about that, as well, later in the week.
But for our first World At Work in the kingdom, we decided it was time to get into a cab -- not only get into a cab, get into a London cab with a woman at the wheel.
(BEGIN VIDEOTAPE)
QUEST (voice-over): Take a long look. A London cab, the Middle East and a woman behind the wheel.
LATIFA AL QARI, TAXI DRIVER: The first time I took the taxi, the first time, I scared. I scared because I drive in the car and I scared if I get customers and I don't know the way he want to take, I scared. But I say I will do it. I will do it and I will take him. I will see I'm the best lady to run the cab. And I take him.
QUEST: During those first journeys, it wasn't only the passengers Latifa worried about. Male taxi drivers in Bahrain thought this wasn't a job for a woman.
AL QARI: (INAUDIBLE) they don't want the lady driver to be taxi driver. They don't want. But we talk with them, all right?
And I tell them, as the lady, she need to work every way she can work. She can work in the shops. She can work everywhere. Because we can do it.
QUEST: Right.
AL QARI: Give her a chance to do it.
QUEST (on camera): Are they giving you a chance now?
AL QARI: They give us very, very good chance.
QUEST (voice-over): Seven months on, Latifa is driving like she's been a cabbie for years.
AL QARI: This is -- we have this one university. This is the university for Bahrain.
QUEST: Like the kingdom of Bahrain itself, the way Latifa is going about her business shows a combination of modern life and traditional values.
(on camera): Do you always drive in the abaya and with the scarf?
AL QARI: Yes. All -- all the time we wear an abaya and the scarf because -- because I, first time, we are Muslim; second time, we are -- when we were by this one, they respect you.
QUEST (voice-over): Latifa was in her mid-40s and semi-retired when she decided to drive a cab.
AL QARI: I said, oh, this is a good idea.
QUEST: Today, she can't imagine doing anything else, as she motors through her World At Work.
AL QARI: I love it. Really, I love to drive the taxi. I love the people. I love the people. I don't know. I love the people. I love my country. I like to be my country just to come up, up, up, up, up.
(END VIDEO TAPE)
QUEST: When we come back, a Profitable Moment from Bahrain.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
Well, it's the Grand Prix this weekend, so it had to be with a Ferrari right at the front. Look about this. Let's talk about Bahrain. Just think about the economy of this country. It was the first with Gulf oil, or at least the first to make serious money out of it.
It was the first with financial services, at least the first to make a real splash. And now, of course, as things change and the oil money perhaps starts to run out, so Bahrain is the first to try and diversify the economy from an oil to a non-oil economy in the future.
It's one of the first to have a Grand Prix that will take place over there this weekend. Others may join in, others like Abu Dhabi may believe that they have the right to hold it. But no, it's countries like Bahrain that were amongst the first.
And over the course of this week, we're going to bring these people and these stories right to your doorstep. Later in the week, you'll hear from crown prince. You'll also hear from the oil minister. And, of course, you'll hear from the people in the country.
Because that is QUEST MEANS BUSINESS for this Monday night.
I'm Richard Quest in Bahrain.
Whatever you're up to in the hours ahead, I hope it's profitable.
I'll see you tomorrow from Bahrain.
END
