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Quest Means Business

Quest Is Live in Bahrain This Week; Greece is Topic A, as P.M. Pushes for Curbs on Global Bond Market Speculation

Aired March 09, 2010 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: The Greeks say blame the speculators and put a stop to them now.

Happy birthday to-the stock market falls of one year ago today.

And where to invest your money? Might this be the place?

I'm Richard Quest, live in Bahrain, where, yes, I mean business.

Good evening. I'm Richard Quest, all this week live to you tonight from Bahrain, and actually from the Bahrain International Circuit, where indeed we'll be talking all sorts of interesting aspects of the Formula One Grand Prix. The first of the 2010 set year, which takes place this weekend.

Now, we will also, tonight be talking to Sheikh Salman, the man in charge of the BIC, the Grand Prix Circuit. And we'll get some idea of the difficulties of organizing an event like this. And most important of all, what is on his mind in the final days.

Also, the chief operating officer of the Bahrain Economic Development Board will be here. Is slow and steady the right way forward, when it comes to attracting inwards investment? Bahrain's ambassador to the United States joins me from Washington in a short while.

We begin our program tonight in Washington, because also in the American capital is the Greek prime Minister. George Papandreou has come with a warning to Washington. American interests will suffer if Greece's debt crisis is not brought under control. And the prime minister is asking the U.S. president to do what he can to help stem the derivatives trading that has wreaked so much havoc in his opinion.

Let's go to Washington first and get some background of the day's events. CNN's Ed Henry is at the White House.

(BEGIN VIDEOTAPE)

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT (On camera): What he is looking for is not direct U.S. aid, in terms of money. Obviously, the U.S. has already dealt with all kinds of bailouts here, very controversial within the United States. A very hot political issue heading into the mid- term elections here so the U.S. is not about to open up its wallet once again for a bailout, especially not to a foreign country, despite long ties between U.S. and Greece. It is just not politically feasible for this administration.

So, what we are told by senior officials is that they are expecting that the Greek prime minister will essentially ask the U.S. President Barack Obama-as well as the Treasury Secretary Timothy Geithner, who will be joining some of the meeting-for public support for some of his domestic austerity measures back in Greece that are meant to try to sort of quell this crisis as Europe, as a whole, tries to grapple with it.

What I find interesting, though, is that this meeting will take place in the Oval Office and it is closed to those of us in the media. So, we will not be getting pictures and video of this meeting. We will not be getting sound from there. And so there is no opportunity for either the American media or the Greek media to go in an actually ask questions, press the U.S. president, press the Greek prime minister, about exactly what is being discussed there. We are likely to just get some sort of a written statement, maybe an official photo from the White House. But very interesting that they are closing this meeting at a time of some real tough issue, obviously.

(END VIDEOTAPE)

QUEST: Now, let's talk more about this-and give you a bit of background-on the derivatives issue. Just a few hours ago the European Commission gave Greece some hope that its calls for a crackdown on derivatives trading might actually bear some fruit. The Commission President Jose Manuel Barroso says he is examining whether to outlaw certain kinds of credit default swaps, the so-called CDS's that have caused damage. In their basic form the contracts offer bond investors a way to insure against losing their money. That is the gist of the idea. However, if the borrowers have leant to defaults some people buy and sell these instruments when they don't hold the underlying instrument, the bond. It is known as a-pardon the phrase-a naked swap. It is a bet that somebody will default, speculation, pure and simple.

And if the cost of insuring against default rises, so goes the cost of borrowing, a riskier bet, they want a better return.

The Greek Prime Minister George Papandreou likens it to taking out insurance on your neighbor's house, but then burning it down to collect the pay out.

Other figures in Europe, including the German Chancellor Angela Merkel, have joined the attack. Some in the financial industry say the politicians are confusing cause and effect, and it actually, in the event, costs will rise if they stop this.

So, the markets that have opened, traded, closed, gone home, but you need to know about tonight. After at week of strong gains in Europe, now the Euro bourses have calmed down some bit. London's FTSE ended just slightly lower, barely-well, look at that, hardly worth-look, we really shouldn't get too excited. The Paris CAC currant, the Xetra DAX in Frankfurt, and the Zurich SMI, all pretty much a tad higher.

One of the most active stocks, EADS, that is the aerospace company in Europe, finished down nearly 3 percent. The reason of that was very simple. It had a loss of over $1billion from 2009, largely on the back of the Airbus A380. It is paying no annual dividend, and it is pulling out of the bidding for U.S. military plane contract worth $35 billion, leaving it all to Boeing. Apparently, it says Boeing was the favored, the terms were too much in favor of Boeing.

A year ago, this very night, you and I were probably talking well, we know what we were talking about at this time. We were talking about the fact that the Dow Jones industrials had suffered a sharp fall, a serious fall. With the betterment of hindsight we now know that March 9 was the low point of the recent crisis. Maggie Lake joins me now from New York.

Maggie, we know that it was the low point and we know there has been a rebound since, but much more, what more do we know?

MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: Yes, Richard. Well, first of all, a little birdie just told me that it is your birthday. Happy birthday. And I'm very sad you now share that day with such an unfortunate anniversary, shall we say? But you are right, exactly a year ago, you and I were reporting on what was still, at that point, the great sell off. Of course, we were at a turning point. Obviously we have come a long way since then. But investors still very divided over whether this recovery is real. You know, I went to a trading floor this week, talk to a Wall Street veteran, who was also in the thick of it, to see what he had to say.

(BEGIN VIDEO CLIP)

LAKE (on camera): No sign of a bottom. Everyone just paralyzed by fear at this moment.

QUEST: Stocks desperately looking for some form of momentum, 12 year-lows.

LAKE (voice over): March 9, 2009 U.S. stocks are in freefall. Investors sentiment is plunging. Hersh Cohen the chief investment officer at ClearBridge Advisors remembers it all too well.

HERSH COHEN, CHIEF INVESMENT OFFICER, CLEARBRIDGE ADVISORS: The stock market discounted the end of the world. That really took into account everything bad that could happen.

LAKE: Stocks closed at their worst levels of the financial crisis on March 9. The following day badly beaten Citi Group announced it was turning a profit. Stocks rallied more than 5 percent. And the big bounce was underway. The Dow has rallied more than 60 percent since with 10 Dow stocks up more than 100 percent. Still average investors remain cautious.

(On camera): What about those folks who are sitting at home who some of them cashed out, didn't ride back up.

COHEN: Absolutely.

LAKE: Are so scared about what they just saw happen. It appears that some of them have had their faith in the stock market deeply shaken.

COHEN: I worry about having lost a generation of investors. After the crash of '32, my parents, for example, they wouldn't buy stock until the 1960s probably. They were just-you know they were Depression people.

LAKE (voice over): But Cohen says with interest rates at low levels and cash in savings accounts earning next to nothing, dependable dividend paying stocks still offer the best hope for investment growth.

COHEN: A lot of the great quality stocks recovered, but not nearly as much as the stuff that had fallen the most. So, I think the best opportunities lie in the great companies that are priced at reasonable, they are not giving them away, but they are reasonable. But the dividends are good.

LAKE (On camera): Do you think that, that those lows we saw are firmly behind us? Is there any chance that we are going to go back there?

COHEN: Any chance? Slim, it is hard to believe that the market will go back down to that level. I can't imagine the same kind of collapse occurring. Does that mean we are off and running in the economy? I don't think so, but does that mean we have to go back into the kind of financial collapse we had. I think that is remote.

LAKE (voice over): Comforting words from a Wall Street veteran who has pretty much seen it all.

(Voice over): You believe in stocks as a good investment?

COHEN: I love stocks. I love stocks.

(LAUGHTER)

LAKE: I think that-how can we-we have to end it there, right?

(END VIDEOTAPE)

LAKE: Hersh Cohen is not the only one who loves stocks. Today, we are seeing those markets continue their advance, Richard. We've got the Dow, a bit of a slow start, but the Dow is up about 0.5 percent. Nasdaq, the best performer, up 0.75 percent, S&P up 0.5 percent. But I have to tell you, there is still, for all the way we have come, the ground we have covered, there is still a real sense of caution and what he talked about Richard, the fear of losing a generation of stock investors, very much on the minds of the folks here on Wall Street.

QUEST: Yes. And for good reason, Maggie. Those who got burned -- you know, I was talking to some today -- didn't want to go back into the market. But I have my traffic lights here. We dragged them all the way from London to Bahrain (ph). So Maggie, yes. I know. I know. You'd think we've got better things to do with our time and effort.

Maggie, if we talk to market, because you look at it more than most -- if you talk about investor confidence in the market red, amber, or green from your sort of vantage point overall. What do you think?

LAKE: If you're talking about (inaudible) confidence I think you have to say amber, Richard. There are people who argue the market action should indicate a green, because if you wait until there's all that evidence, you're going to be too late. But there is just no confidence. Hersh (ph) and I talked a lot about that. Fear is still prevalent. So you've got to give it an amber.

QUEST: Yes. OK. We'll give it an amber. But the hope of course is for most people that it ends up as a green. But we are certainly clearly not there yet by any stretch...

LAKE: Right.

QUEST: ... of the imagination. All right. Maggie Lake in New York, we thank you for that. We now need to catch up with the news (inaudible) and the news headlines. And Fionnuala Sweeney is at the CNN News Desk.

(NEWSBREAK)

QUEST: We thank you, Fionnuala Sweeney at the CNN News Desk. When we come back, still to talk on this program we'll be talking formula one. They have a phrase, "inertia." Whether it's diesel heads or petrol heads it means the same thing. They like things that go roar. We'll be talking to the chief exec of the Bahrainian (ph) International Circuit about the competition here this weekend.

Quest Means Business -- we're live in Bahrain.

(BREAK)

(PLAYING CLIP)

QUEST: Look at that. So that is what it -- this new bit is really all about.

(PLAYING CLIP)

UNKNOWN MALE: Yeah. That -- coming into that. That camera angle. That, you known, 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.

UNKNOWN MALE: And the idea is after very heavy breaking (inaudible), they're going to dip in here, come around. Where does this track go? Oh, God. Where does it go here? You break hard, and you turn in. It's -- you know, it's -- it's pushing it.

(END CLIP)

QUEST: The man driving that particular vehicle nearly giving me a heart attack in the process. Here's a glimpse of what is in store for next Sunday's drivers. The Bahrain Grand Prix gets underway for 2010 from first race at the formula one season is going to be run. It's actually 6.2 -- 6.29 kilometers of endurance, or 6.3 between you and me and between friends. It's -- it's a bit longer than the previous circuit.

The new layout makes this time the second longest on the 2010 calendar. More tracks means fewer laps. Just 49 laps as opposed to the previous 60 or 70 laps. So the full distance to cover is 308 kilometers, which a formula one car will do at an average speed of 200 kilometers an hour.

Now the -- the man who sort of gave me a very funny turn. I don't think the man -- I don't think man -- this man has ever knowingly driven slowly. Well you saw what he did to me when I was on the track. Shaikh Salman (ph) joins me now. He's the acting Chief Executive of the racing circuit.

You like driving fast around this thing, don't you?

SALMAN: Yes, I do. I enjoy it very much.

QUEST: OK.

SALMAN: Especially with you.

QUEST: Oh, yes. Thank you. The white knuckle ride. Listen, Sir, you -- you're now just a few days away from the actual -- what is the -- the biggest problem, or challenge that you have as you move into this final section?

SALMAN: I don't think it's a challenge. I think we're very confident with -- with what we have, because -- the opportunity we have. Obviously, you know, with the global exposure of formula one. You know, we've got 500 million viewers watching us. And it's very important for us. So, you know, I remember going through Denver, and -- and after the first race 2004. And a girl noticed I was wearing the BIC logo. And she said, you know, "Did you go through the Bahrain race?"

So that hits us how important this race is. So it's not a difficulty. It's the excitement of -- of hosting this great race.

QUEST: This year's is particularly interesting. We've got several new teams haven't we?

SALMAN: Yes.

QUEST: Are they all going to be here?

SALMAN: Well, no. I think -- I think bar one I think, or (inaudible)...

(CROSSTALK)

QUEST: So you've got three -- three new -- three new teams. But more importantly, you've got drivers like Jenson Button, Lewis Hamilton. Moving teams all at once -- moving teams to create new powerhouses. And Michael Schumacher returning to -- to the fray.

SALMAN: Yes. Yes. And that is -- that's exciting for us, because, you know, with all this excitement -- new cars, new teams, all of that -- we build memories. This -- these are -- this is a great race. And -- and we benefit from it so much. You know it costs $150 million to build. We get $600 million worth of -- of economic investment. So it has to be a great race. It has to be exciting racing. And that's what we...

QUEST: And the fundamental criticism of your track -- the new track with its squiggles -- is that it will be slower. It may be technically more challenging, but it will be a slower race. If it's not as exciting, you could have shot yourself in the foot.

SALMAN: No, I don't think so. I think, you know, for -- for us we -- we looked into it. And the -- the slower part is if you're saying one corner -- is that -- well Monaco (ph) has a slow corner. But that's not -- you know, they're not shooting us in the -- in the leg. It's an exciting race. And I think it's going to be fantastic.

QUEST: OK. There's one other aspect that we have to consider in this. Which I -- you know, I'm not a great formula one expert. But well in fact you could write on a postage stamp what I know about formula one. But I do know that there's some changes of the rules this time, aren't there?

SALMAN: Yes.

QUEST: particularly the refueling. They're not allowed to refuel during the race. What affect will that have?

SALMAN: Well we don't -- you know, that -- that to us is -- is...

QUEST: No, but for the driver's point of view. I mean, (inaudible) filter. It's also with the tires, isn't it?

SALMAN: Well absolutely. And they have to benefit from the tires. You know, for us we know it's a long track. How -- how will the car cope with the weight, and -- and, you know, full fuel -- it's a full tank of gas. The tires will go earlier or later. And this has -- this all makes the exciting point. And that's -- that's the great thing about starting up the season.

And for us it's a great honor. We're very privileged to -- to have this 16th anniversary of F-1 starting the championship. And that proves that we are doing something right.

QUEST: You're doing something right. It seems to be one of the more popular grand prix's (ph) in the calendar. How long will you keep it going here, do you think?

SALMAN: Well I think it depends on us. How do we capitalize on it?

QUEST: How do you improve it next time?

SALMAN: Absolutely. We have a -- a $1 trillion market in the GCC. The business platform has to come alive. We as a country have to bring the grand prix closer to the business -- the business sector. The private sector -- I mean, we started in -- in 04. We've seen it grow. And that -- that's the -- that's the challenge. And it's also exciting for us, because we -- we enjoy doing it.

QUEST: We'll talk more about with our next guest -- the $1 trillion GCC. Shaikh Salman, many thanks. Good luck.

SALMAN: Happy birthday.

QUEST: Oh. Oh, thank you very much. How clever. Very kind of you. But listen, I heard one year -- how -- you must just tell me the story of the electricity bill.

SALMAN: The week before the Grand Prix, we got an electricity bill and we were a bit shocked, because it was, it was a bit of a shocker for us, because we said, you know and the guy was doing his job, you know, not saying anything against him.

QUEST: They threatened to switch your electricity off.

KHALIFA: NO, no, no, they didn't, they didn't, but they just sent the bill and it was a first shocker for us. One week before the Grand Prix, it's not the message you want to hear, but you know.

QUEST: Have you paid the bill?

KHALIFA: Absolutely.

QUEST: Have you paid it this time?

KHALIFA: Every time.

QUEST: Many thanks in deed. Thank you very much.

All right, when we come back we're talking about a $100,000,000,000,000.00 area of the GCC, but is the wealth equal within that trillion?

QUEST: Welcome back, rich man, poor man, the haves and have nots, they've always been with us. Here in the Middle East, in the Gulf region, you might be surprised to learn that the gap is especially wide. Qatar citizens, for instance, amongst the richest, if not the richest in the world in nearby Yemen, it's a very different story. And when we talk about the wealth gap, we're not just talking about the difference, say between migrants and locals.

John Defterios is with me. Good evening to you John.

JOHN DEFTERIOS, ANCHOR, MARKETPLACE MIDDLE EAST: Thanks, Richard, thanks for having me back.

QUEST: So, the wealth gap; we always think of these parts of the world as being just simply, wealthy.

DEFTERIOS: You know in fact it's one of the most important issues if you look at social cohesion and even a security issue, because what you see in Yemen right now. I say, oil and gas is the great divider, if you want to put it that way, when it comes to per capita income. You talked about Qatar, but let's look at some of the other top per capita earners and we have them in a group here; of the wealthy and the poorest, but Qatar as you noting here, not just one of the highest, but in 2009 it was the highest, followed by Kuwait, the U.A.E., and Bahrain. There's a bulge right there, ranging from 38,000 down to 35,000 and surprisingly you see Saudi Arabia 23,000. You would think the largest oil exporter in the world would have one of the highest per capita incomes; they're trying an economic development program to spread that out, but it just hasn't happened just yet, because there's corners of the area where this, actually quite severe poverty in Saudi Arabia.

Now let's look at the poorest, you talked about Yemen at the top of the list, at nearly $2500 and then you have Iraq, Morocco, Syria, and Jordan. Now four of those don't have oil, do not have oil wealthy, Iraq does, but some of them have gone through economic reforms, it just happened just yet, in terms of the economic development feeding in. now in the last five years, you seen some of the Gulf money from here transfer into North Africa, that's just been in the last five years and not enough to close that gap.

QUEST: How much of that transfer is taking place to trade versus aide and realistically you got the Qatari's, who are extremely comfortably off and the Saudi's as you say, for statistical reasons, not quite the same, but how much transfer can realistically take place?

DEFTERIOS: Well, it's interesting, of the four poorest countries' there, they all receive U.S. aide. The culture of aide going from the Gulf States, going into North Africa are say, are going into Jordan, for example, has not been in the culture just yet. And I spoke to the Central Bank governor of Bahrain here and said, you know, what is it, what's the best path forward? Aide is one component, but they want to see the reforms pushed forward. First let's listen to what he said. It's a very sensitive issue, let's get his response:

(BEGIN VIDEOTAPE)

RASHEED AL MARAJ, GOVERNOR, CENTRAL BANK OF BAHRAIN: I think we have to balance between domestic components and aide in general. This is a big controversial issue, spending money sometime does not lead you to the same results that you want.

DEFTERIOS: Are we starting to think of the Arab region and the Arab market as one, where you see much more cross border investment to deal with that wealth gap?

MARAJ: I think the big challenge for us, over many, many years has always been increased trade between Arab countries.

(END VIDEOTAPE)

DEFTERIOS: Rasheed Al Maraj there. Going back to your point, Richard, whether it's trade; they actually have a free trade agreement here, The Greater Arab Free Trade Agreement, signed in 2005, but in reality they don't use it a great deal. Very little, you know trade internally within the Arab world and that's why you still have that gap.

QUEST: All right, let's bring this right down to brass tacks; it is extremely difficult to feel too much sympathy in an environment where there are so many so wealthy that could transfer wealth to some who are so poor, some would say.

DEFTERIOS: No in fact and this is one of the reasons we talked about yesterday, the single currency. They need to get single currency, they need to get a single market, but it is a security issue as well. You have Yemen with a civil war taking place on the border of Saudi Arabia and that's why it is important, it is important to kind of take care your own in a sense. It's also good to spread the wealth in a sense, these other countries, you have Egypt and Jordan, very dependent on $25,000,000,000.00 a year from the Gulf states.

QUEST: What have we got tomorrow?

DEFTERIOS: Oh it's very interesting, youth unemployment. Another big issue in the region, nobody wants to talk about it, but it is interesting.

QUEST: Don't mention unemployment.

All right, when we come back, in just a moment, not so much unemployment, we're going to consider the issue of doing business in the region. What sort of business do they actually want, would anyone do?

We're live in Bahrain, in a moment.





QUEST: -- painful for those involved. But, of course, that's the necessity for those involved within the market. Here in Bahrain, stocks ended the day a fraction down, just a tad, settling at just about 1,500 points.

Let's take a look, though, at the economy of Bahrain. It is one of the most diversified in the Gulf region at the moment. It has been a fundamental policy of the government here to diversify away from an oil economy. Its well developed communications and transportation facilities, petroleum production and processing, accounts for 60 percent of experts. Its second biggest export is Aluminum, or Aluminium, depending on your point of view.

A good deal of international banking is conducting here. It is the headquarters of many multi-national firms doing business in the region.

According to Zawya.com (ph) -- I think I've got that wrong -- Bahrain's financial service industry is blooming, with employment in the sector up by 1.5 percent.

Kamal Ahmed is the chief operating officer at the Bahrain Economic Development board.

Good evening, sir.

KAMAL AHMED, BAHRAIN ECONOMIC DEVELOPMENT BOARD: Good evening.

QUEST: Many thanks for joining us.

AHMED: My pleasure.

QUEST: Let us put this into context. The fundamental question, which sort of business do you want here?

AHMED: I think it's important if we're talking about business to talk about what kind development we want to have in Bahrain. For us, we want to make sure that development and growth benefit the people of Bahrain. That has been said several times by his majesty. We need to ensure GDP growth is reflected and delivering style of standard of living of all people.

So this is why all that we're trying to attract to Bahrain is high value industrial services that will create medium and skilled jobs for our people.

QUEST: But Bahrain did a very good job of attracting those sort of things in the past and then promptly lost them. You lost out to other competitors.

AHMED: I'm not sure we have lost them. But, at the end of the day, it is not a zero sum game. I think all the countries in the region are growing, and we are enjoying a growth rate of seven percent the past five years. And more companies are coming to Bahrain.

QUEST: Well, let me take issue here, if I may. You say it's not a zero sum game. I've never quite believed that myself. I think, actually, there probably is an element of zero sum game, because a job that goes here doesn't go there, and a job that goes there doesn't come here.

AHMED: I think it's important to say that we are not blessed with the same level of natural resources like the other countries in the region. And for us it's clear that we have to rely on our assets, our important assets, our human resources, our people to diversify our economy. It's an economic imperative for us to fully diversify our economy.

What we are doing is creating -- what we are trying to do is creating sustainable economic growth. And we are creating matching opportunities for our people, for our people on the one side, and for our business on the other side. We need to make sure that our government is efficient, creating the right business environment.

QUEST: Right. But on this point, one of the things that I have been impressed with is that you do have Bahrainis at all elements in the food chain, if you like, from the check-out to the CEO's office. That is something that you're going to have to continually train the people here to adopt all the skills.

AHMED: Yes, exactly. And we are proud that Bahrainis, they know they to -- they have to work hard in order to live a decent life. And this is what we are doing, investing our resources in making sure our people have the necessary skill and knowledge not to compete in the regional environment, but at the global environment. We make suer that they have access to better opportunities and better jobs, in order for them to flourish.

QUEST: Many thanks, indeed for joining us. Thank you very much.

AHMED: Thank you so much.

QUEST: We look forward to seeing you again. Many thanks, indeed.

AHMED: Thank you.

QUEST: Many thanks. Now, when we come back in just a moment, think about this position as such: firstly, you have Iran to your north. Secondly, you have the Fifth Fleet from the United States to your south. So where does this leave Bahrain? We'll talk to Bahrain's ambassador to Washington in just a moment.

(COMMERCIAL BREAK)

QUEST: Welcome back. The one factor here, again and again -- and you've heard it twice tonight on this program, from Sheikh Salmon (ph) and from Ahmed, is that this is a country that has not been blessed with an abundance of natural resources. It's one of the least oil dependent economies in the region. While recent growth, the impact of the global financial crisis was, indeed, relatively muted.

In 2006, Bahrain approved a free trade agreement with the United States. It was the first such between the United States and a Persian Gulf state. In just a moment, we will be talking to the ambassador from Bahrain, who will be joining me from Washington. Before we do, we have -- we will be talking to Jenny Harrison. Jenny Harrison is at the CNN World Weather Center and she joins me now to put in perspective.

Jenny, I can honestly tell you one of the delights about being here is I can feel -- I was going to say the season change. It doesn't really have a season, as such. But I can certainly feel that summer is starting to get up with a bit of a vengeance.

JENNY HARRISON, CNN INTERNATIONAL METEOROLOGIST: It is. In fact, temperatures up a bit above average, Rich, where you are. It's 22 degrees right now there, in Bahrain. Of course, by day, it will get even warmer.

This is the prediction for the next couple days. One or two little bits and pieces of clouds well to the north, but really, apart from that, we've got high pressure. We've got sunny skies. Of course, that means no sign of any rain, certainly not in Bahrain for the next few days.

Look at these high temperatures. You can see 29, 30, 31, in fact, getting warmer as we head towards the weekend.

Now we know, of course, the sort of climate we have in Bahrain. It is dry, desert like. Have a look at this particular website, some beautiful images of the natural creatures that you find here.

Now, of course, as I said, it's a desert environment. This is the Dow (ph). He's actually a spiny tailed lizard. This one is about two feet long, as you can see. When you scroll down this website, which is a fascinating one -- it's the HawaIslands.com (ph) -- then, of course, you come to the Reem Gazelle (ph). And aren't gazelle gorgeous, depending on any country in the world they may be. But, of course, again, you can see that their coloring is all to blend in with the desert.

Then we can continue to scroll down, some beautiful sites along the coast. Then we come to the dolphins. Now, you can see many, many schools of dolphins off the coast. You've got the Humpbacks, the Common, and the Bottlenose dolphins. If you're lucky enough to be there, you can actually go out and actually take a trip and even swim the dolphins in some cases. Check out that website, HawaIslands.com.

Now let me just show you the temperatures, because I said it's going to be pretty warm; 34 in Baghdad, the same in Kuwait, as we go into Wednesday. Those temperatures about 10 degrees above average. In Damascus, it's a little bit warm for this type of year.

But get this, we could be seeing some snow in London in the overnight hours, into the early morning Wednesday. Of course, they've seen plenty of it in northern Spain, southern France, causing widespread travel problems in that region. That low, as you can see, pushing eastwards. There were two of them. Moving away from there now. But more winds and rains and, of course, snow, and that cold air, which is coming around the low.

These are the current temperatures right now in Europe. There's plenty more snow, as you can see, to accumulate, in particular across the Alps and across into the Balkans. So when it comes to travel delays, you could see a few passing snows in London, turning to rain later in the day. Those aren't the longest delays, by any means.

Munich, we've got the clouds. We've got the low cloud and the fog. And then we've got the snow. Same story in Milan.

But did you know something a little bit special is going on today. If I can get my graphic to come up, I can tell you all about it. Look at this, the backdrop of Bahrain, well, it's all about Mr. Quest.

"I've talked about his suits and ties, his charm and wit and many guiles. He travels the world on trains and planes, his love of which never wanes. It's all about his quest --

I've talked about his suits and ties, his charm and wit and many guiles. He travels the world on trains and planes -- his love of which never wanes.

It's all about his quest for the best that he scowls and he growls at all his guests. Today is no different, but for one thing -- it is his birthday! So let us all sing. Happy birthday, old chap! Forget your bonds and stocks, and treat yourself. Go and get some Botox. Happy birthday!

I thought I would revise the tradition.

RICHARD QUEST: We thank you for that, Jenny Harrison. And no, Jenny, I am not revealing to you at this point in the proceedings exactly how old I am. You'll have to wait until the top of the hour.

We will be back in just a moment. This is Quest Means Business -- live from Bahrain. Thanks, Jenny.

(BREAK)

QUEST: Welcome back. Quest Means Business -- Live in Bahrain. Let's go from Bahrain right away to the United States.

Joined now by the Bahrainian Ambassador to the United States, Houda Ezra Ebrahim Nonoo. Good afternoon to you, Ambassador. Afternoon, your time.

Ambassador -- the Bahrain enjoys free trade with the US, and is indeed an ally in many regards. But at the same time, because of its positioning and because of the issues here, does it sometimes create a difficult position for you and for the government in Washington?

HOUDA EZRA EBRAHIM NONOO: Did I state that Bahrain has a great relationship? Our friendship goes back over 120 years. We signed the FTA in 2006, and the FTA has done a lot for Bahrain. It has the imports from Bahrain -- the imports have risen, as well as the exports, going out.

It actually has helped our stand with the government.

QUEST: With that in mind, Ambassador, I'm wondering, what do you see? Because you're recently appointed. And your new into Washington. What do you see as being the challenge for you in describing that relationship between Bahrain and to the US government?

NONOO: The main challenge is actually not for the government. It's with the people. Bahrain's such a small country, and not everyone has heard of Bahrain. So my main challenge is actually promoting Bahrain, and getting Bahrain on the United States map.

That's been my biggest challenge. I've actually been traveling around the United States, talking to different people and just telling them all about Bahrain -- where we're situated, what's our advantages are, and taking it from there. That's the main challenge I've had. Not with the US government.

QUEST: Right.

Now do you find that eyebrows get raised slightly? Firstly, when the Bahrain sends a woman as an ambassador to Washington? And secondly, somebody of the Jewish faith? Perhaps somebody might not have necessarily thought that would be the case from an Islamic country in the Gulf.

NONOO: Eyebrows are raised all the time.

When I first arrived here, it could be that I was female and I was also Jewish, I could just state at the same time. They couldn't fathom how you could be an Arab and a Jew. It was very difficult.

On our national day last year, I was standing in line. The first in line. My husband next to me. They'd come say hi to me, bypass me completely and go to my husband.

It's just didn't make sense that we had a female ambassador.

I'm actually the third female ambassador from Bahrain. The first was to France in the year 2000. We currently have one in China. And I'm the first to the United States, but the third from Bahrain.

A lot of people have questions on how can a Muslim country send a Jewish ambassador? And my answer usually is, "I'm Bahraini." And that's what is important.

We have tolerance of religion in Bahrain.

QUEST: The religious question may be relatively straightforward in a sense, but it can't necessarily, Ambassador, be divorced from the Middle East peace issues, and of course, the lack of diplomatic relations between so many countries in the GCC. Bahrain, included -- and Israel.

NONOO: It can be divorced in the sense that it's my religion. It's my personal religion.

I happen to be Bahraini and I happen to be Jewish. Same as you get anywhere else. British Jews, American Jews.

What I say to people is, my religion is Judaism, but my nationality is Bahraini. When they ask me questions, I say, "Just ask me." I'll say to them, "Bahrain in its little ways is trying to promote peace. Arab peace."

We're a small country, but we are going somewhere.

QUEST: Right.

And I think on that point, in absolute fairness, it is worth pointing out. So it's in this country, Ambassador, as you know only too well, women play roles at very high levels of government. And indeed, vote within the limited democratic process. And crucially have equal rights, in many respects.

NONOO: That is very true. Women have always had their rights in Bahrain. Women have always worked. Back from the '60s, '70s and even in the '30s.

The first schools for girls in Bahrain was in 1928. The government schools.

So women have always had their rights. We've been doing whatever we wanted to do. We have female ministers, female undersecretaries, ambassadors. In the private sector, we have them as bank managers. So women can (INAUDIBLE) in Bahrain.

QUEST: Ambassador, many thanks indeed for joining us tonight, live from Washington. The Bahraini ambassador joining us now.

We were just talking about the Jewish religion there, which "grande elegante," takes us into this particular interesting fact.

One of the most important and well-known -- well, I say important -- everybody goes there to visit it. In the center of Bahrain, just outside the capital -- in the perhaps sites where maybe life began -- the Garden of Eden, perhaps -- based in this very country. Well, that much is up for dispute. But certainly, they have something called, "The Tree of Life."

Want to have a look?

(MUSIC)

The midday sun beats down on the Bahraini desert.

Nothing grows out here. Nothing, it seems, except this. It's called, "The Tree of Life." And for more than 200 years, it's stood here -- which is a miracle, when you think there is no natural water for miles around.

The tree's believed to be part of the mesquite family. But how and why it ever grew here, when there's no water underground, is one of life's unknowns.

The tree is a local tourist attraction. Unfortunately, the tourists aren't respectful of this grand old dame.

I don't know who Amar is, or why he felt the need to write on the tree. But lots of people do.

2008 was a bad year for graffiti. Sean (ph) joined in and so did a few others. Even building this protective rail hasn't protected the Tree of life. Just look at the amount of graffiti. And tell me, why do some people leave their phone numbers on the tree? That's another of life's little mysteries.

You can always rely on the true love of life to show the way forward. Originality? Nah! "H + H equals love." "I love you."

But lots of people seem to express love around the Tree of Life. Whether it's Nelson and Charley and Luke and Diane or Susan and Brenda -- everybody seems to want to get in on the act.

To my untutored eye, the tree of life sometimes looks pretty dead -- all bark and brittle. But go to the end, to the newest bit, and you realize this centuries' old tree still has plenty of life left.

(END VIDEO TAPE)

QUEST: Now, before we finish this evening, we need to tell you a little bit -- show you a little bit more about what's been happening here. The Grand Prix takes place this weekend. Let me show you some of the little souvenirs, the little bits and bobs that they have around the Grand Prix area.

Walking into the main building, this is the Presidential Tower -- the -- the Royal Tower, I beg your pardon. I'll get thrown out if I carry on like that.

Here you see the brand new Grand Prix winners (AUDIO GAP).

In 2004, when things (AUDIO GAP) Mike Schumacher -- that is...

That is why this particular Grand Prix is so significant, because not only did he win the first one here, he's back here again for the revival -- the return of Schumacher, right through (AUDIO GAP).

Of the few Grand Prixs where so many people have won twice or three times. The Gulf Bahrain Grand Prix 2004 and 2009.

This year's takes place, of course, on Sunday.

And just over here -- come behind the aspidistra and these are the shovels (AUDIO GAP) and building the place.

We'll have a Profitable Moment in just a moment.

Grand Prix winners

(COMMERCIAL BREAK)

QUEST: Welcome back to Bahrain, where tonight's Profitable Moment.

And, indeed, one year ago tonight, we were peering into the second, or, indeed, the third leg of the financial abyss. Markets had fallen so sharply and we had no knowledge or no way of knowing whether this was merely the start of a major further fall -- was this going to be the 1930s all over again?

History has shown us that things bounce back rather quickly. The markets have risen. The pendulum has swung back. Things are looking a lot better than they had before.

Anyone who's been through a rally knows that it could all change very quickly. But tonight, we do not worry about those sort of things. Tonight, of course, I choose to think that the glass is half full. The 60 percent rise in the Dow has been...

(SINGING)

QUEST: They say blow out a candle and make a wish.

What should the wish be?

The wish is that as the market recovers, we all have a profitable time.

Because that is QUEST MEANS BUSINESS for this Tuesday night, live from Bahrain.

A cheer from my colleagues. These are the people who actually get us on air every single night. Come on, give us a cheer.

Whatever you're up to in the hours ahead, I hope it's profitable.

We'll be back tomorrow.

END