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Quest Means Business

Sochi Games Security Threat; Pope Francis to Issue Statement at World Economic Forum; Breaking News: UN Excludes Iran from Syria Talks; Fighting Income Inequality; World Economic Forum Executive Chairman Klaus Schwab

Aired January 20, 2014 - 16:00   ET

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

RICHARD QUEST, CNN HOST: Tonight in Sochi, Russian police believed to be looking for a woman terrorist planning an attack. We're live in Russia with the details.

From Davos, the Great Recession is over. Now there's a crisis of inequality.

And Iran. The EU and US lift some sanctions.

I'm Richard Quest at the World Economic Forum where -- ha! -- we mean business.

Good evening from Davos. We'll have our full business agenda in just a moment, but we begin with some breaking news from Sochi. Police in Russia are hunting for a woman who is believed to be planning a terrorist attack on the Winter Olympics in Sochi.

CNN's confirmed that police have handed out these fliers to hotels in the area. They're asking staff to be on the lookout for a particular woman, this woman. She is believed to be from Dagestan and is a widow of a militant from the Caucasus.

Now, the details of this, our correspondent covering the Sochi Olympics, the terrorist threat, and the security problems, our correspondent is Phil Black. He joins me now, live from Volgograd. Phil, what is this remarkable late development?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Well, Richard, the woman that is mentioned in these notices that have been distributed to hotels is a woman named Ruzanna Ibragimova. As you say, 22 years old, from the Russian Republic of Dagestan, that is the heartland of Russia's ongoing Islamist insurgency. The widow of a known member of a militant organization.

The authorities say they have received information which suggests she may have traveled from Dagestan to Sochi between the 11th and the 14th of January. And this information suggests she either was or is working with the leadership of an illegal terrorist organization in order to plan some sort of terrorist act in the Olympic precinct of Sochi itself.

And it lists a series of identifying marks, some of them quite distinctive. It says that she's lame in her right leg, that her left arm cannot bend at the elbow, and she has a very distinctive large scar on her left cheek.

She is the sort of operative, Richard, that would normally be described as a "black widow." That is the widow of a militant who has decided to pick up her husband's cause, perhaps become radicalized or is, perhaps, wants to seek revenge. Richard?

QUEST: Phil, with the Olympics around the corner, President Putin promising every day that security is the number one priority, I'm imagining now that security must becoming intense. Briefly.

BLACK: Well, it's already supposed to be intense. And if this is true, that is what is disturbing about this development, because it would mean that a suspected terrorist has entered Sochi only a relatively short time before the Games are set to begin at a time when the security posture with in the city is supposed to be very strict.

When it is supposed to be enclosed with what they describe as a ring of steel, with all entry and exit points being monitored with the expressed purpose of stopping someone like this from getting into the city to cause harm and disrupt the Games, Richard.

QUEST: Phil Black, who's joining me from Volgograd and will be following the Olympics. Phil, when there's more to report, please come back to us immediately.

Now, the 44th World Economic Forum in Davos is 48 hours away, and of course, the leaders, the top elite of business, politics, academia, will be gathering from around the globe. It's expected that more than 40 heads of state will be here.

In an unusual and unique development, Pope Francis is to issue a statement tomorrow. One of the pope's principle cardinals will be here to read that statement. It's expected to be on the question of inequality and remembering the poor.

In a moment, we'll hear from Klaus Schwab, the founder and chairman of the WEF, but income inequality amongst the top priorities at the World Economic Forum. The Forum themselves identified inequality as the global risk that's most likely to have an impact in 2014, for the third year in a row.

And Oxfam has released its own inequality report. Oxfam says nearly half of the world's wealth -- that's $110 trillion -- I bet your pardon, we're going to go straight to a UN spokesman to hear on other matters. We'll be back in a moment.

MARTIN NESIRKY, SPOKESMAN, UNITED NATIONS: -- and goal of the conference, including the Geneva communique. The secretary-general is deeply disappointed by Iranian public statements today that are not at all consistent with that stated commitment. He continues to urge Iran to join the global consensus behind the Geneva communique.

Given that it has chosen to remain outside that basic understanding, he has decided that the one-day Montreux gathering will proceed without Iran's participation. The secretary-general looks forward to joining the initiating parties, the Russian Federation and the United States, as well as the other states and organizations that will attend this long-awaited and hugely important push for peace.

The Syrian parties, the region, and the international community have an opportunity and a responsibility to end the violence and begin a transition towards a new Syria. That's what I have for you, and I am not taking questions. Thanks very much.

QUEST: That is -- that is an extraordinary development coming to us from the United Nations. The Syrian peace talks, which you will be well aware, are the Syrian talks due to take place in Geneva later this week.

The question had been Iran's participation in those talks, and Iran's -- basically, writing off one of the -- refusing to go into the talks if there was any questions of succession in Syria on the agenda, saying that the future of President Assad was not up for grabs in that.

So now, because Iran was putting preconditions on the talks before going into them, the secretary-general of the United Nations has now declared that they will not be invited to these talks.

Elise Labott is in Washington and joins me now. Once Iran refused to go along with the general consensus and insisted on a sort of precondition, wasn't it somewhat inevitable they would be disinvited?

ELISE LABOTT, CNN WORLD AFFAIRS REPORTER: Well, Richard, the Iranians, in a way, I think the US and the UN feel, kind of played Ban Ki-moon here. Because all along, everyone had said if Iran doesn't adhere to these Geneva principles, meaning that they would support a transitional government and also take efforts to stop the violence on the ground. As you know, they have a lot of influence, that they couldn't come.

And apparently, over the weekend, Ban Ki-moon got some private assurances from the Iranian Foreign Minister Zarif that Iran would, in fact, adhere to the principles. That's when Ban Ki-moon extended the invitation over US objections. And when they wouldn't publicly give those assurances, then obviously, they're not invited to the conference now.

QUEST: OK, so help us understand the significance of Iran not being at this conference. Other parties will be there. They will continue without. Does it make the conference less important, meaningless, a waste of time? Give us a feeling now for what this conference is about now Iran won't take part.

LABOTT: Well, I don't think it's any more meaningless than it was before Iran was or wasn't coming, OK? The whole reason to be having this conference in the first place was to talk about a transitional government.

And the whole plan of the United States and the international community was to change the calculus on the ground so that when Assad came to this conference, he would be so weakened that he would be dying to agree on a transitional government.

The United States, the international community, hasn't provided the opposition with enough support to really change that calculus, and one of the reasons is because of Iranian moves on the ground. They have intelligence operatives, they have fighters on the ground, they're giving a lot of material and weapons support and money to the Syrian government.

And so, now because of all of these reasons, President Assad feels more emboldened than ever to go to this conference. So, it's unclear to see how he is ready to negotiate his exit, including the fact that he said that this isn't what he wants to talk about.

Now, how could it be a peace conference with Iran not there, given they are one of the parties, now, to the fighting? It's really unclear how you really could call this a peace conference without Iran in the room. But it's going to be the elephant in the room, Richard.

QUEST: Now, you see, this is the interesting part, because one wonders who has played who? You talk about the EU and the US maybe playing Ban Ki-moon, but from Assad's -- from President Assad's point of view, the fact that Iran now isn't there, which does, of course, to a large extent, maybe, perhaps, your interpretation, strengthen his position?

LABOTT: I think he goes into this conference with a very strengthened position anyway, because the opposition, if you look at what's been happening with the opposition over the last several weeks and months, they're really a hot mess, and they couldn't even agree until a day or two whether to even come to this conference.

Assad had said all along that he's ready to come to this conference, and now he's not even wanting to talk with the -- he's willing to talk about fighting terrorism, that there are a lot of growing Islamist influence on the ground, a lot of attacks blamed on these jihadi groups. And so he says that he's going to this conference to fight terrorism.

QUEST: Right.

LABOTT: So, he's really not even going to sign up to the principles of this conference. So, the fact that Iran isn't there, I think, doesn't strengthen his hand or weaken it, but I do think he goes into this conference a lot stronger than the opposition does, certainly.

QUEST: Now, I want to just take you slightly to a left turn here, because President Rouhani is due to be here in Davos later in the week. We have seen the Iranian president time and again very much, whether it be tweeting or giving interviews galore, almost promiscuous with his interviews, there's so many of them, we have seen him playing the West for all its worth.

When he comes to an event like Davos, this is where he will show himself a supreme master, if you like, of the public relations art, won't he?

LABOTT: He certainly will. He's going to be on a panel with several other statesmen and also a US congressman, Daniel -- Darrell Issa, and so he is going to be continuing to put forward this narrative that there's a new day in Iran, that Iran has changed.

He can point to implementation of this nuclear deal today. The IAEA, in fact, and the United States say that Iran has already started to stop its enrichment to a 20 percent purity and convert its stockpile of enriched uranium and allow UN inspectors in. They're going to be doubling over the next couple of weeks.

So, the narrative certainly on the part of the Iranians, and the fact that they are not going to be at this conference, I think, in fact, only strengthens them --

QUEST: Right.

LABOTT: -- because they're the ones that are really needed right now. So, I think President Rouhani goes to this conference really the darling of the agenda.

QUEST: We thank you for that. Elise Labott joining us from Washington. When we come back later in the program, just after this very short break, we'll have more, of course, on the Iranian situation, this decision by the United Nations not to include Iran in the Syria talks in Geneva.

We will also, of course, talk about our agenda tonight on inequality. We have the executive director for Oxfam International, who will be joining me in a moment, and we'll talk about the haves and the have-nots, and why here in Davos, one can hope in any shape or form, that an elite might be able to do anything about it. It's QUEST MEANS BUSINESS, we're live in Davos.

(COMMERCIAL BREAK)

QUEST: Welcome back to the World Economic Forum. We're in Davos tonight on QUEST MEANS BUSINESS. The issue, of course, at the top of the hour is the decision by the United Nations to disinvite or not invite, if they were or ever invited, Iran to the Syria talks taking place in Geneva this week. That announcement made in the last ten minutes.

Nick Paton Walsh joins me now from Beirut. We've heard from Elise Labott and the Washington view. How will this be viewed in the region, Nick?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, this has been, I think, probably the strangest 24 hours imaginable to simply try and get these talks to even happen, Richard. There was a sense of slight triumphalism at the Syrian opposition finally being pressured by the US to attending. We saw that towards the end of the weekend.

Then Ban Ki-moon's strange, I think, some said, a lot of the spokespersons said it wouldn't have been that much surprise to US officials, invitation to Iran. That caused the opposition -- Syrian opposition's deadline, which expired just over an hour ago now.

We're now hearing from them, though, that because Ban Ki-moon has rescinded that invitation to the Iranian, expressing his disappointment at their not accepting the talks should focus on a transitional government that doesn't involve President Bashar al-Assad, that the Syrian opposition said it's likely to attend Geneva II.

So, that's all really back on. But where do you actually lead, now, the future for those talks? The Syrian opposition that struggled to even get a mandate or a majority together to even agree to attend. A UN which has possibly jeopardized the whole process by this unexpected invitation to Iran.

And then the big problem here, too. These talks, most sides now of this dispute throwing into the spotlight the issue being a transitional government to replace Bashar al-Assad. Damascus themselves haven't explicitly agreed to that, but they're still invited to attend the talks anyway.

So, sooner or later, that key issue, replacing Bashar al-Assad, is going to raise its head during the talks. That's likely to cause and be pretty short-lived, but I think some are saying at least these, the first talks of their kind, are better than the consistent fighting that's been all we've seen for nearly three years inside Syria, Richard.

QUEST: Nick Paton Walsh joining us from Beirut. Nick, we thank for that, and we'll be talking to you more in the hours ahead as more reaction comes in from the various parties. Nick, thank you for joining us this evening.

So, to our agenda tonight in Davos and the issue of income inequality. It's one of the top priorities at the World Economic Forum. The Forum itself identified inequality as the global risk most likely to have an impact in 2014. It's the third year in a row this has been the case.

And Oxfam released an inequality report saying nearly half to he world's wealth, $110 trillion, is in the hands of just one percent of the world's population. The Oxfam report explains the danger. It says, "Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown."

Winnie Byanima is the executive director of Oxfam International and joins me now. Director, thank you for being with us tonight.

WINNIE BYANIMA, EXECUTIVE DIRECTOR, OXFAM INTERNATIONAL: Delighted to be here.

QUEST: The issue -- the number that everybody's been quoting all day, 85 of the richest people in the world own some ridiculous amount of the world economy.

BYANIMA: Yes. If you put all the wealth in the world on a weighing scale, 85 people, richest people, own half of that wealth. And the rest own the other half. And what Oxfam is saying is that this is dangerous. It's not only dangerous because of income inequality per se, but we also find through our report that the very, very wealthy people also capture power.

QUEST: Right. But are you talking about the uber uber billionaires or are you talking about the millionaires and little billionaires who are, if you like, the wealthy upper, upper middle class elite?

BYANIMA: I'm not talking about the hard-working doctor or the hard-working lawyer who earns a modest amount of money. We're talking about he super super rich. We're talking about 85 individuals --

QUEST: Name them.

BYANIMA: -- who own --

QUEST: Name them.

BYANIMA: -- half the world's --

QUEST: Name them!

BYANIMA: -- wealth.

QUEST: Name some of them.

BYANIMA: Well, I don't want to be naming names, but just to give you the data and the consequences of this, when a few people control or a few companies control wealth, they also take control and capture power and capture democracy.

QUEST: But that's inevitable.

BYANIMA: And make the rules in their own favor.

QUEST: But that's inevitable, and how are you going to change it at a place like Davos?

BYANIMA: Well, we are calling for action, both from business leaders and from governments. First, we are bringing their attention to the fact that if we don't break out of this, power and wealth, privilege and opportunity, are going to keep passing on from one generation to another to a few people.

QUEST: Director --

BYANIMA: So, to break out of this, there are a few things we're calling for.

QUEST: Come on. Give me them in hard terms, one, two, three, four.

BYANIMA: One: to support progressive taxation. Two: to stop tax dodging. To close tax havens. To put money that is saved into the health and education of all people, to create decent jobs and pay decent wages.

QUEST: Now, I suspect here at Davos, perhaps unusually, you will find a willing, receptive audience, because the sort of people who come here tend to be the liberal elite that believe in this sort of thing. But you have to convince everybody else, don't you?

BYANIMA: Absolutely, and we have arguments that are appealing both to the stinking rich and to those who are attracted to moral arguments.

For those who are thinking about economies and growth, they need to know that this kind of inequality does not encourage growth. It stalls growth. It causes a security -- it causes --

QUEST: Right.

BYANIMA: -- social instability. And all this undermines the profit-seekers motives.

QUEST: Director, one thing I can say with absolute certainty, the issue you're talking about is very much the issue on everyone's minds and will be at Davos this year.

BYANIMA: Thank you very much for having me.

QUEST: Thank you very much for coming in with us this evening and talking about this. One of the big issues, inequality. When we come back after the break, another man who's been talking about that is the executive chairman of the World Economic Forum, Klaus Schwab. He's my guest after the break. QUEST MEANS BUSINESS in Davos.

(COMMERCIAL BREAK)

QUEST: Welcome back to Davos. Earlier, I spoke to Klaus Schwab. He's the founder and executive chairman of the World Economic Forum. Bearing in mind that now we are no longer in a period of crisis, perhaps those attendees at Davos might be feeling rather pleased with themselves.

(BEGIN VIDEOTAPE)

KLAUS SCHWAB, EXECUTIVE CHAIRMAIN, WORLD ECONOMIC FORUM: I hope not complacent. I feel we still have much too many unknowns. We have to see how the tapering works out, we have to see what we do on banking stress tests, we have to see the third arrow of Abenomics, we have to go through the -- what I call the midlife crisis of emerging markets. I think there will be many worries still at the horizon, which we want to discuss here.

QUEST: Right, but the difficulty is to balance these immediate issues -- tapering, unemployment -- with longer-term goals, like you call reshaping the global economy.

SCHWAB: Exactly. But --

QUEST: The temptation is to go for the easy bit.

SCHWAB: No. I think people are aware that the time has come to reboot, and not only to look at the present crisis situation at the short term. I think what we are missing in our world is a longterm vision. That's also creating all the mistrust in politicians and so on in global governments.

QUEST: How can you have longterm vision when CEOs are obsessed with quarterly reports and politicians are obsessed with the next election?

SCHWAB: That's exactly the problem. And we have to change it. We have to make sure that he global leaders who are coming here, politicians and business leaders, take on again a longer-term view. Because otherwise, we will have one crisis after the other one, and we will go into a generational crisis of tremendous dimension.

QUEST: Inequality is meant to be the big issue to be discussed here. The global risks report says it, Oxfam says it this morning, the wealth gap, the income gap, the -- we can call it whatever gap you like. But inequality, how, sir, can you get the people here to focus on that?

SCHWAB: We can create awareness for it. We will do it in many ways. We will even see a message of support related to this issue. We have to address the practical issue, which means particularly the creation of jobs. That's a key challenge which we have.

QUEST: We see in the United States the refusal to grant further benefits to the longterm unemployed. We see Europe with its still high-level of structural unemployment. You, sir, you and I have talked before. Are you any easier about the lost generation? Is enough being done about it?

SCHWAB: No. Because what we are seeing is mainly structural employment. And this issue will become even much wider, because we have such a technological revolution going on at this moment. This will destroy employment, and we have to make sure that the destroyed employment is replaced by better jobs, and that's not happening at the moment.

QUEST: But the difficulty here is you've got half the people who are banging on about it and trying to get somebody to do something about it. The other half have the power to do something about it and are not doing something about it. And your challenge --

SCHWAB: I'm not in agreement, because look at our international business council, which comprises a hundred top business leaders in the world. All what they are doing here is to look for practical ways to create jobs.

(END VIDEOTAPE)

QUEST: Now, a good robust discussion with Klaus Schwab at the World Economic Forum. Our coverage of events here in Davos continues on a special section of our website.

Anne-Marie Slaughter has written an excellent analysis piece for CNN. She's the president and chief exec of public policy institute the New America Foundation and lays out a case why modern capitalism does not need to be a zero-sum game, warning that our current system has never been more predatory. Have a read of what she has to say and your views as well, it's at cnn.com/davos.

Now, when we come back, we have much more from the World Economic Forum. We'll hear about the man called Champagne, what he could tell us about tackling elitism in football. And I'm pleased to say here in Davos, we've got a small scattering of snow, so before long, the trees will be looking gorgeous.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. This is CNN, and on this network, the news always comes first. Iran has been excluded from this week's Syrian Peace Conference in Geneva. A spokesman for the U.N. secretary general Ban Ki-Moon said talks would start without Iran's participation. Syria's main opposition group had threatened to pull out all together if Iranians were involved.

The United States and the European Union has suspended certain economic on Iran after Tehran started curbing its most sensitive nuclear operations. It's part of a nuclear deal struck with six world powers in November. The move makes way for more talks and even more easing of sanctions.

CNN has learned that the U.S. military plans to have at least two warships and other aircraft on standby at the Sochi Winter Olympics in case security help is needed. One official said that they would be close in case of an incident like a terrorist attack where evacuations for Sochi would be required. An American missionary held in North Korea now for more than a year has spoken on camera. Escorted by two security guards, Kenneth Bae spoke to a small group of journalists in Pyongyang on Monday. Mr. Bae appeals to North Korean authorities to pardon him and send him home.

Protestors in Kiev have put up new street barricades after violence in the Ukraine capital over the weekend. Thousands of demonstrators rallied in defiance of new anti-protest laws. E.U. officials are blaming the government for the violence.

As we reported at the beginning of this program, Russian security services are hunting for a woman who could be planning to bring terror to this year's Winter Olympics. They fear the 22-year-old may have already made it past a fierce ring of security surrounding Sochi. These are fast becoming the most expensive Games in history, and as our senior international correspondent Nic Robertson now tells us. The games have also been marred by allegations of rampant corruption.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, SENIOR INTERNATIONAL CORRESPONDENT: It looks like any other new road, even feels like a normal road. But with the rail line just over there, it cost a staggering $180 million a kilometer to build. That's $290 million a mile and it links the Olympic events by the coast with the ski venues in the mountain. According to one Russian opposition politician, the total cost -- $8.7 billion, "cheaper" quipped one Russian magazine to have coated the road in a thin layer of caviar. The Olympics so far are widely estimated to have cost over $50 billion.

BORIS NEMTSOV, FARMER DEPUTY PRIME MINISTER: This is the most expensive Olympic Games in the history of mankind. This is the most corrupted Olympic Games in the history of mankind. My estimation is that they steal about $25/$30 billion U.S. dollars.

ROBERTSON: Nemtsov turned a detailed report. The corruption, he says, the result of cronyism. He also compares, cost overruns at previous games - roughly two times original estimates.

NEMTSOV: If you look at the London Olympic Games, the picture looks very similar - twice higher. Even Chinese - twice. An average increasing of money is about twice, for Putin it is more than four.

VLADIMIR PUTIN, PRESIDENT OF RUSSIA: We are allocating a round sum of $12 billion for this.

ROBERTSON: Back in 2007, President Putin vastly outbid South Korea and Austria, pledging to spend $12 billion to host the Winter Games in Sochi. Keeping the budget was always going to be a tough challenge. Sochi is a sub-tropical summertime seaside resort -- the Florida of Russia. And the ski slopes are up in the mountains. Everything almost had to be built from scratch. That it is so over budget is no surprise here.

DMITRI TRENIN, CARNEGIE ENDOWMENT: Nothing new really. So this is the way that things are done in this country. This is the way the country operates.

PUTIN: Since the collapse of Communism, Trenin has analyzed a new Russia and Putin's rise in it. The Olympics, he says, expose systemic flaws.

TRENIN: There's a nexus in this country between the people and the government and the companies that are friendly to the government, and this nexus provides the companies with the money that comes from state coiffures.

ROBERTSON: Nemtsov goes further, names names. The high-cost road and railway, a contract given to a former KGB friend of Putin's, whom, he says, now runs the nation's railroads.

NEMTSOV: Unfortunately, there been no transparent and as competition for orders, nothing. Putin distributed orders between his friends.

ROBERTSON: Attempts to reach Putin for comment have been unsuccessful. But here is what the president of the Olympic Organizing Committee had to say.

DIMITRY CHERNYSHENKO, PRESIDENT, OLYMPIC ORGANIZING COMMITTEE: This budget also is very transparent, it's in the governmental program number 90 - 991. So you can visit the website and learn the figures yourself.

ROBERTSON: 1.5 trillion rubles, $47 billion, the total spent according to the government website. A portion of that the government says coming from private investors. But allegations of wastage don't stop at corruption. Mismanagement too. The ski jump went massively over budget as well as delayed. When Putin learned the details during a visit last year, he promptly fired the official responsible who equally swiftly left the country, escaping prosecution. Government officials admit Putin has been in charge every step of the way. But the money, overblown in media estimates they say, was well spent.

Few here think they'll ever see what they consider to be the wasted billions ever again, and many worry that once the Olympics are done, most of these wintertime venues in this seaside resort will barely get used. Nic Robertson, CNN Sochi, Russia.

(END VIDEO CLIP)

QUEST: Now returning to our top story this evening. The decision by the United Nations secretary general Ban Ki-Moon to disinvite the Iranians from the Syrian Peace Conference known as Geneva II to be held in the - in Geneva - later this week. A spokesman for the Syrian National Coalition, Louay Safi, is on the line now for Syria's main opposition party - the National Coalition - and joins me now. So, as a result of this decision by the secretary general, can you confirm you will now attend these peace talks?

LOUAY SAFI. SPOKESPERSON, SYRIAN NATIONAL COALITION: Yes, yes I will confirm that. The secretary general did the right thing by extending the invitation. It was - it was -- wrong in the first place, but it's always good to go back and correct, you know, anything like that.

QUEST: Essentially, though, to a large extent, you put a certain amount - a great deal - of pressure, some would say. You almost blackmailed the situation by saying if the Iranians came, you wouldn't come. So, the secretary general, between a rock and a hard place in this case.

SAFI: Well, I mean, he knew that before he sent the invitation and he - you know - he sent it in the wrong time -- just 24 hours before the conference. So, I'm quite amazed that he had, you know, he went away with this. So that's why I think that he assented, and we can now go back again and start the conference.

QUEST: So, why are you not insisting that the Syrian regime - the Syrian government - also accepts all the principles of Geneva I? Why were you only accepting it in once sense and not to the Syrian regime?

SAFI: Well because Iran is not - is not, you now, recognizing the Geneva communique that formed the foundation for the negotiations. I mean, would you invite meeting someone who kept waiting to disagree with the whole purpose of the meeting? Why would you (inaudible) come? I mean, I wonder.

QUEST: So, when you all meet in Geneva later this week, realistically we've heard now - I mean, the whole question of a transitional arrangement on the agenda. The whole refusal of Assad to consider such an agenda or to consider such an outcome. The absence now of the Iranians, who whether you like it or not, are power brokers in the proceedings to some extent. So what can realistically come of this week's Geneva II?

SAFI: We have little hope that the effort (inaudible) would come with goodwill in negotiations - already his foreign secretary has sent a letter that put doubts on accepting Geneva communique. But, frankly, we would like the world to know that this government, is not interested in political solution. And they will continue to kill the (inaudible) clause against humanity and the whole world has to do something about it.

QUEST: Louay Safi, spokesman for Syria's main opposition group, the National Coalition. Thank you, sir, for joining us and talking to us at such short notice. We appreciate it. When we come back in just a moment, "Quest Means Business" in Davos, our agenda continues. You may think that there's plenty of money sloshing around the world. Our next guest will tell me quite clearly there's a gap when it comes to building the infrastructure the world needs.

(COMMERCIAL BREAK)

QUEST: There's some snow. It's small, it's not very significant. But at least it is snowing here in Davos at the World Economic Forum gets ready to get underway. Hope we will get a bit more before the week is out.

(Inaudible) markets and news that came out in the financial work. Deutsche Bank posted a $1.3 billion loss in the fourth quarter. It was larger than expected. There'd been a decline in bond trading and that dragged down revenue. Deutsche is warning a tough year ahead. The shares were off more than 5 percent in the Frankfurt market. The mood distinctly chilly on Europe's trading floors. The latest growth numbers from China lukewarm by Chinese standards, and there was that unpleasant surprise from Deutsche. All in all, the FTSE closed just up a tad, the DAX was down a bit more, the CAC and the Zurich - they eked out gains. Standard & Poors Rating Services estimates the gap between investment needed and public funds around the world could be as much as $500 billion every single year. The infrastructure gap - I asked Doug Peterson, the president and CEO of McGraw Hill why infrastructure was really so important.

(BEGIN VIDEO CLIP)

DOUG PETERSON, PRESIDENT AND CEO, MCGRAW HILL FINANCIAL: It matters because infrastructure is one of the most important drivers of jobs and of growth. It's also something that we leave behind for new generations to take a benefit from that infrastructure related to their well-being and continuing to have the cycle of jobs and growth.

QUEST: So, who is expected to make up this shortfall? Government or cash- strapped the private sector -- invariably wants guarantees and guaranteed profits, and there's nobody else in between.

PETERSON: Banks today make up about $300 billion of the $500-billion gap that we participate - that we expect. And of that $200 billion left, we're expecting and believe it'll be pension funds, insurance companies and other institutional investors that need to fill that gap. In fact, we've seen many institutional investors start increasing their allocation to infrastructure in the last couple of years. But they need to do that because there are going to be transparency and incentives.

QUEST: Well on wider issues, we are here in Davos and I obviously understand that you can't talk individual companies or individual countries, but there is a feeling generally that things are getting better.

PETERSON: I would agree. While I'm Davos - I'll be arriving there tomorrow - I will be spending time with countries, I will be involved in an infrastructure imperative panel, I will be spending time in the financial services sector as well as global aging. And all of these are topics which have been - have been - reviewed carefully by Davos over many years. But I do think that there is renewed interest, especially as we see more stability in the banking and financial sector to look at what will be the balance sheet. How can we ensure that we have long-term perspective and more cooperation between the public sector and the private sector for these important infrastructure topics.

QUEST: On our program this evening we've been talking at great length about the issue of inequality. From the CEO side, from the corporate side, what more do you think corporations can do to show they are aware of this inequality gap?

PETERSON: From a CEO side in the corporations, first of all, we have to recognize that there's a growing gap. There are many different ways we can do - through advocacy, through our own community activities - to ensure that we can have our approach to communities to help with the gap. Going back to the infrastructure topic, infrastructure itself, as I said before, is a way that you can lay a foundation that has years and years of benefits to new generations. And let me even broaden infrastructure more than just roads and energy and water. Think about also education and the importance of having investment in education as well to have new generations have the skills that are required for an information economy and an intelligent economy.

(END VIDEO CLIP)

QUEST: The CEO of McGraw Hill talking to me earlier. When we come back after the break, Klaus Schwab joins us to put the story and the facts about women and Davos. How many are here? And why aren't there more? After the break.

(COMMERCIAL BREAK)

QUEST: Welcome back to Davos. It's not only increment equality we're looking at here at the World Economic Forum, but also gender equality. Just one in seven delegates at this year's forum is female, and fewer still, are chief execs, presidents and managing directors. So, we've been putting these questions to Klaus Schwab, the executive chairman. And the question being simple - about where there's not enough women represented at Davos?

(BEGIN VIDEO CLIP)

KLAUS SCHWAB, FOUNDER, WORLD ECONOMIC FORUM: It's ridiculous, because if you look at the participation here, you have most of the famous women in the world you have participating. Political leaders - I don't have to mention the name - we even start the whole meeting with two very prominent women - the president of Korea and of Liberia. So, we reflect to a certain extent wish to have gender parity. We move into this direction.

QUEST: There is not one panel on the issue of same-sex relationships - gay rights or anything similar - whether it be in the workplace, in the political sphere or in the human rights. Why is that so?

SCHWAB: I can't give you a reason. We have 240 sessions and it's (really/rarely) natural that even with 240 different sessions, you can deal with - not with all specific issues which we have in the world, and what is very important, we deal with the world in its whole complexity but we try still to have a certain focus. And the focus this year is social inclusion, it's addressing still-remaining issues of (inaudible) which (inaudible) overcome.

QUEST: Well, if you're talking about social inclusion and you take, for example, the issue of gay rights in Nigeria with the new law which the president didn't sign or the issue concerning the law in Russia which President Putin has come under such criticism. Surely you have at least half an hour in your agenda to discuss that here at Davos.

SCHWAB: But surely there are certain sessions and certain discussion subjects which are discussed in the general dialogues of the participants. But I'm completely convinced practically all (inaudible) related to (such) one, this issue will come up again and again.

QUEST: We've been asking people for tweeting questions for you.

SCHWAB: Yes.

QUEST: All right. (Wendy Graham Morgan) says, "Why are we living in a world of such poverty and the same few countries continue to have so much wealth?"

SCHWAB: I think we forget what progress has been made in the last 30 years. Millions have been added into wealth generation. Let's don't only have a pessimistic view.

QUEST: "Are large companies and governments failing in global governance?"

SCHWAB: No. What is failing is the cooperation among those governments and among the stakeholders of our global world.

QUEST: (Sara Vetro) - "Can you see the possibility of a shift in gender and racial inequality in the near future?"

SCHWAB: Quite some progress has been made over the last ten years, we should not forget.

QUEST: A question from (Steven Straus) - "Should it be a condition of being a WEF strategic partner that the company not have committed any serious crimes?"

SCHWAB: He worked for the Forum before, so he should know that we really are very restrictive concerning such companies.

QUEST: Finally, and I think this goes to the heart of everything we've talked about. It comes from (Ugo Newali) - "Obviously we need more substance than rhetoric, so how do you make sure the forum doesn't turn into a tea party?"

SCHWAB: It isn't a tea party. Otherwise, people wouldn't feel worthwhile to come here.

(END VIDEO CLIP)

QUEST: Klaus Schwab robustly answering your question and throughout the course of the week we'll make sure you get chance for questions to the people that we interview on the program. Now, I've taken the coat off because the attentive amongst you might notice I'm looking slightly better dressed tonight. Right on my lapel here there is a new little pin. What is the significance of this little pin? Well, Klaus Schwab told me earlier why I needed to wear it.

(BEGIN VIDEO CLIP)

SCHWAB: So, Richard, you have participated almost ten times. And every Forum member for more than ten times gets a pin.

QUEST: Ooh, that's great.

SCHWAB: Special - oh, I deal with the pin.

QUEST: The pin.

SCHWAB: So you don't feel lonely amongst the Forum community here.

QUEST: I say. The Forum pin. Thank you very much.

SCHWAB: Thank you.

(END VIDEO CLIP)

QUEST: So, that is what you get, or rather this is what you get when you've been coming to the World Economic Forum for at least ten years. I'm not at all sure what privileges it gives me or whether it lets me into any of those rather exclusive lounges that we keep seeing and hearing all about. It probably just gets me a free cappuccino. We'll be back with a "Profitable Moment" after the break. This is "Quest Means Business" in Davos.

(COMMERCIAL BREAK)

QUEST: Tonight's less than "Profitable Moment." You heard the (Oxman) director on this program remind us that the richest 85 people in the world own half of all the world's production and wealth. What an indictment that is for the question of inequality. And that's why here at the World Economic Forum this week, inequality is very much on the agenda. The question they need to ask themselves - what can they do? They won't come up with any plans or policies or programs. What they can do is put it on the agenda and make it clear that such inequality is obscene and cannot be tolerated in a modern society. And that is "Quest Means Business" for tonight.

I'm Richard Quest in Davos. Whatever you're up to in the hours ahead, (RINGS BELL) hope it's profitable. I'll see you tomorrow.

END