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Quest Means Business
Russia Says No Military Plans for Ukraine; Ukraine Aid Discussions; Sell-Off Continues on Wall Street; European Markets Down; Tough Week for Tech Stocks; Tracking Flight 370; Tracking Aircraft; Pay to Quit
Aired April 11, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Some serious-looking gentlemen to ring the closing bell at the end of a down day on Wall Street. It's bee a down week. The Dow's off roughly 2 percent for the course of the week. Ah! Good grief, knocking seven bells out of the gavel. It's had a few of that over the course of the week. Today it is Friday, it is the 11th of April.
Tonight, Russia must defend its interests. The country's finance minister on Ukraine's unpaid gas bill. You'll hear him on this program.
Narrowing down the search. The Australian prime minister says they're getting closer to the black boxes on Flight 370.
And if you don't like packing, pack it in. Amazon tells its employees we'll give you 5K to quit.
I'm Richard Quest. It may be a Friday, but of course I still mean business.
Good evening. If the tulips and daffodils are out, then it must be the spring meetings of the IMF and World Bank in Washington. And on tonight's show, we have a veritable bouquet of the world's top economic players.
(RINGS BELL)
QUEST: In a moment, you'll hear from the Russian finance minister and his German counterpart, with their views on Ukraine. We'll also hear in this hour from Ukraine's finance minister. And as the bouquet smells ever- beautiful, we'll be talking to the Liberian finance minister on prospects for African growth. A full catalog tonight.
We begin, though, with Russia, which has taken steps to assure Kiev and the rest of the world it has no plans to send troops into Ukraine. Russia's finance minister made the promise to this program at the IMF spring meeting.
On Thursday, President Putin threatened to turn off the gas taps to Ukraine. He calls it an intolerable situation regarding an unpaid bill. And today, President Putin clarified those remarks.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): I want to repeat that we have no intention of halting gas deliveries to Ukraine. But according to the existing contract, signed and valid since 2009, the one nobody ever canceled, Gazprom has the right -- and the government of the Russian Federation suggests -- to switch advance payment method. This means that any consecutive month, Ukraine will only receive gas paid for in the previous month.
(END VIDEO CLIP)
QUEST: As Ukraine considers alternatives to Russian gas, tonight we'll hear from the finance ministers on both sides of the equation. Nina Dos Santos, who's spoken to the Russian and German finance ministers for QUEST MEANS BUSINESS, she is in Washington this evening. Good evening, Nina.
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: Good evening, Richard. Well, to follow on from your floral analogy there at the start of the show, I wish I could say it was coming up roses here at the spring meetings of the IMF. But, as you'd imagine, the issue of Ukraine, of the fallout between Russia and its Western economic partners, has been felt very, very clearly in these meetings.
I got the chance to address the issue of sanctions from both sides of the divide, starting out with the Russian finance minister, Mr. Siluanov. And this is what he had to say when I asked him about a conversation that he'd had yesterday evening with Jack Lew, the US treasury secretary when the United States made it very clear, Richard, that sanctions could be ratcheted up pretty stringently from here.
(BEGIN VIDEO CLIP)
ANTON SILUANOV, RUSSIAN FINANCE MINISTER (through translator): Secretary Lew has mentioned the possibility of the expansion of sanctions if the situation in Ukraine deteriorates. But I would like to assure you that the Russian Federation does not have any further plans to aggravate the crisis and current conflict in Ukraine.
We are interested in the satellization (ph) of Ukraine, and we don't see any reasons or any grounds for further expansion of the sanctions.
DOS SANTOS: Your president, Vladimir Putin, has said that he is now floating the idea of pre-payment for gas. This is coming at a time when Ukraine has no money. The IMF bailout hasn't yet come. What type of pre- payment are we talking about? How much, and how much higher will the gas price be when eventually it's set for the pre-payment?
SILUANOV (through translator): We are not demanding anything new. It's their contractual obligation. We just didn't use it for some time. And right now we see that the current debt of Naftogaz, which is a Ukrainian gas company, before Gazprom amounts to $2.2 billion US.
And we hear some declarations and statements by the Finance Ministry of Ukraine that even if they get the IMF's support, they won't be repaying this debt. We just need to take some actions to defend ourselves, defend our interests, our company's. Gazprom is not reviving the money that is due to Gazprom.
The budget of the Russian Federation is not receiving the taxes of this contract, so we need to understand how long the situation can last. We have no answers right now, and Ukraine is not giving us any. So, tense measures are just taken to protect ourselves, and we are not demanding anything above what is stipulated in the contract.
DOS SANTOS: Can you sit here, as a representative of the Russian government, and confirm to the international community that Russia, with 40 troops -- 40,000 troops on Ukraine's border, according to NATO, will not send those troops into Ukraine to claim other regions? Can you confirm that?
SILUANOV (through translator): There have been statements and declarations, both by the leadership of the country and the military leadership, and yes, I can confirm to you that we have no military plans as far as Ukraine is concerned.
We might see some tensions growing, but this doesn't reflect our official position. We don't have any plans to send troops to Ukraine.
(END VIDEOTAPE)
DOS SANTOS: So, that is Anton Siluanov, the Russian finance minister. I also asked him would they vote against the IMF program put on the table if it didn't include immediately repaying the money towards Russia. He wasn't particularly forthcoming on that.
That is the Russian side of the argument, but let's talk about the West, and notably, one country that is particularly exposed towards Russia, taking in about 30 percent of its gas needs to power its huge export machine, Germany.
I sat down with Wolfgang Schaeuble, the German finance minister, and he said that they were unyielding, the G7, when it comes to their position vis-a-vis Russia, but they won't be blackmailed either. Take a listen.
(BEGIN VIDEOTAPE)
WOLFGANG SCHAEUBLE, GERMAN FINANCE MINISTER: You may know that the Russian president has written a letter. Ukraine has not paid the bill for energy in the last couple of months. Therefore, Gazprom is asking for money.
We have to find a solution, and of course we have to find a medium- term solution in an overall energy package, including not only Ukraine, the European Union. And maybe there's a chance to have -- to find a medium- term solution in this way.
But this, of course, requests that everybody is respecting the independence of Ukraine and the right of Ukraine to decide itself, and no one else, its way to go and to move, because that is one of the preconditions of international law, and this international law is the basis for a partnership. Otherwise, we can't have partnership.
DOS SANTOS: If you can't have partnership, then what happens? Because Germany and Russia in particular have a very close trading relationship.
SCHAEUBLE: If we wouldn't have -- if we wouldn't have the possibility for partnership, of course, we -- it would be worse for everyone. But nevertheless, as I have just said, no one must have any wrong achievement - - assessment.
The Western community -- Europe and the United States, we stand firm together -- we don't want escalation, but if we would be obliged, we would -- we stand firm. And once again, in the medium-term, I think Russia has even more higher risk.
And therefore, I think it's in the best interest of everyone, including Russia, to come back to respecting international law and the rules and agreed rules on their own.
DOS SANTOS: I'm sorry to have to press you on this issue, Minister, but when you say "we stand firm," what exactly does that mean? We have sanctions on the table. Would we see ratcheted-up sanctions in the European Union in the way we've seen in the United States, that are far more toothful?
SCHAEUBLE: Look, as long as you hope, is to offer two options, and you want cooperation, you must not be too concrete. To stand firm means that whatever would be needed, we would do it together.
DOS SANTOS: How concerned are you about Vladimir Putin's comments about trying to get pre-payment for gas and the threat of the turning off the taps for Ukraine? Which would of course curtail supplies to Europe. Germany relies on Russian gas for 30 percent of the total. You're a major exporter. You can't afford for your factories not to be powered.
SCHAEUBLE: Yes. We are strong enough not to be blackmailed on this issue. Having said this, it's also true Ukraine has not paid its bill. And even in your private life, if you don't pay your electricity bill, the company will cut off.
Therefore, we have to find a solution that the bill will be paid. And then we will do -- we have to negotiate on the price and all these things. That's the next step. But the first step is, of course -- and a common resolution that's already delivered the gas is paid.
(END VIDEOTAPE)
DOS SANTOS: So, obviously, the G20, the G7, and the United States and their Russian counterparts, have all had the chance to talk about the issue of Ukraine here, Richard. What they're trying to achieve here is a sort of two-pronged strategy, on the one hand putting sanctions on Russia to try and crystallize it, saying you're going to suffer economically if you carry on along this path.
And at the same time, ordering a bailout to Ukraine. Mind you, Russia also will have to approve that bailout. It's only got 5 percent of the voting rights on the IMF's board, so it can't scuttle the plans. But you can bit that a thorny issue will be whether or not the first tranche of that money goes towards paying Gazprom so the gas supplies don't get cut to Ukraine and Europe.
QUEST: Well, as the minister said, Nina, it's just you or me. If you don't pay your gas bill, they'll cut you off. Nina Dos Santos, I'm going to cut you off for the moment. We'll be back with you later in the program from the IMF, from the spring meetings. And so --
(RINGS BELL)
QUEST: -- the Dow -- ooh, dear, that was a bit weak.
(RINGS BELL)
QUEST: Trying that again. The Dow Jones Industrials down 143 points, which, Matt, how many percent was that off for the course of the week? That must be off by about 2 percent. There you are, 2 percent over the course of the week, down nearly 1 percent on the day.
It was a down day right the way through from beginning to end, as you can see. Although, there was nearly a bit of a lunchtime rally, but it all sort of petered away. Alison's at the Exchange. Alison?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, Richard, it was earnings results that led the trade today, and you can tell by the sea of red that they failed to impress. JPMorgan Chase didn't do so well, missing on both profit and revenue. Mortgage-lending and trade revenue fell. And although Wells Fargo beat expectations, it also said its income from mortgage banking fell.
So, these bank results really driving the trade today, and they're a big deal, because as one trader put it to me, they connect the dots back to the broader economy. Financial earnings are a lightning rod for overall economic health, but it looks like some banks, they're not doing as well as they were a year ago. Richard?
QUEST: Alison, have a good weekend --
KOSIK: You, too.
QUEST: -- and we'll revisit it all on Monday. Alison Kosik at the New York Stock Exchange. European markets caught in the fallout from what happened on Wall Street. The numbers actually -- because they'd seen probably the worst of yesterday as well. The markets were down, the Xetra DAX off the worst at nearly 1.5 percent.
A terrible week. The rout has been spreading. This is the Dow so far this week. Now, although you have this rally here, but that rally is very firm and very finally defined. That is the Fed minutes rally. But once that's over, the sharp, steep fall becomes ever more prescient and present and, indeed, we end up quite a long way.
Similar for the FTSE, which was also had a very difficult week. That's the way the FTSE traded, down really sharply. Look at that, like the Himalayan mountains.
We need to find out why. Anthony Chan is the managing director and the chief economist at JPMorgan private bank.
ANTHONY CHAN, MANAGING DIRECTOR AND CHIEF ECONOMIST, JPMORGAN CHASE PRIVATE CLIENT: Pleasure to be here.
QUEST: Even though you had results, we won't be talking about those.
(LAUGHTER)
QUEST: We'll be talking about the market. Look what's going on!
CHAN: Well, what's going on Richard, is that the market really raced ahead last year. We had the S&P 500 going up 29.6 percent, 30 percent or more if you include the dividends. And now we're starting to see a little bit of rebalancing, given the surge up there.
QUEST: You see, that's up to a certain point. But why would it fall back and not just trade sideways while concrete goes under that mark?
CHAN: There were a lot of momentum stocks, Richard, that were racing ahead, and now we're starting to see those stocks basically falling out of favor -- temporarily, I think. One of the things you'll keep in mind is that when you look at technology stocks, say the NASDAQ, the price-earnings ratio based on trailing earnings, close to 2 to 1 compared to the S&P 500. If you're worried --
QUEST: What does that mean?
CHAN: That means that those stocks were priced twice as expensive relative to the S&P 500. And yes, those stocks may have greater potential, but in an environment where you're pulling back, you're having a correction, you're going to see those stocks selling off a lot quicker.
QUEST: So, in laymen's terms -- or as much as we ever do in this program -- are we seeing uncertainty, or are we seeing a correction?
CHAN: I think at this point, you have a little bit of both. I think a correction certainly is in the cards. One of the things to keep in mind, that when stocks start to become fairly valued -- that means they're no longer very cheap, and fairly valued means that you can grow those stocks by the amount of corporate profit growth --
(CROSSTALK)
QUEST: Which we're not --
CHAN: -- and dividends.
QUEST: -- which we may not well see in this earnings season. Because if everything I hear is true, 90-odd companies have warned, and only 13 have said they're going to do better. So, this earnings season could be tricky.
CHAN: You're absolutely correct for the first quarter. The earnings are very weak in the first quarter. But Richard, if you look out to the second, third, and fourth quarters, the consensus is that earnings will gradually increase and, in fact, will grow by about 8 percent this year.
We actually believe that earnings will grow about 6 percent. But even at 6 percent, the price-earnings ratio, looking at board earnings, still below the 15-year average. So, stocks historically are not expensive. They're not cheap, but they're not expensive.
QUEST: The rally continues.
CHAN: Eventually, the rally --
(CROSSTALK)
QUEST: Eventually!
CHAN: -- will continue. This year, Richard, the market will be up anywhere from 8 to 10 percent --
(CROSSTALK)
QUEST: Oh, hang on! Hang on! Hang on!
CHAN: -- the S&P 500.
QUEST: Eight to ten percent?
CHAN: Absolutely.
QUEST: Eight to ten percent. It's only -- brave man, it's only April. Good to see you. Have a lovely weekend.
CHAN: Thank you.
QUEST: Now, when we come back after the break, the Australian prime minister says he is very confident that the pings being heard in the Indian Ocean are those from Malaysia 370. Why is he so confident? It's QUEST MEANS BUSINESS right after the break.
(COMMERCIAL BREAK)
QUEST: Malaysia's government investigating the failure of its authorities to track Flight 370 in the crucial hours after it went missing, according to a report on Reuters news agency.
The authorities hope to pinpoint what lead to a week-long search in what may well have been the wrong ocean, since clearly there was evidence that the plane had turned at the top, at 1:19, and had headed out towards peninsula Malaysia and the Strait of Malacca.
Malaysia's acting transportation minister has told Sky News Australia now how mistakes may have been made.
(BEGIN VIDEO CLIP)
HISHAMMUDDIN HUSSEIN, MALAYSIAN ACTING TRANSPORTATION MINISTER: There are cultural differences. There are times when we are lost in translation. And we're learning through this process. And basically -- I'm not saying that we were -- we handled it perfectly.
(END VIDEO CLIP)
QUEST: On Friday, there were mixed signals about the status of the search. The Australian prime minister Tony Abbott said real progress is being made.
(BEGIN VIDEO CLIP)
TONY ABBOTT, PRIME MINISTER OF AUSTRALIA: We have very much narrowed down the search area, and we are very confident that the signals that we are detecting are from the black box on MH370.
(END VIDEO CLIP)
QUEST: Now, the Australian search chief, Angus Houston, said the fifth ping detected on Thursday by sonar buoys dropped from the plane most likely not related to the aircraft.
The International Air Transport Association, IATA, has now formed its own task force to improve airlines' ability to track planes in real time. IATA's DG, Tony Tyler, told me what must be done to prevent this kind of tragedy in the future.
(BEGIN VIDEOTAPE)
TONY TYLER, DIRECTOR-GENERAL AND CEO, IATA: What really needs is happen is for us to make sure as an industry that we never lose another aircraft like this, that an aircraft cannot simply disappear.
Now, there are various technological solutions to this. There are various possible ways of doing it. And what we at IATA are doing is convening a task force of industry experts from all the necessary disciplines who will sit down together and work out the best way of doing it, the most effective way, the most cost-effective way.
And then we will make sure that our friends from ICAO are involved and ultimately it will be ICAO who, of course, say what rules need to be made and followed to put these things into effect.
QUEST: Do you feel any urgency in this in the sense that the ICAO process, as anyone who as ever witnessed it, it can be long, drawn-out, and we could all have retired and be pushing up daisies by the time it actually comes to fruition?
TYLER: It is urgent. Let's put it in perspective. Commercial aviation celebrates a hundred year anniversary this year, and this is the first time that this has happened. So, one doesn't expect this to be a common occurrence by any means.
But all the same, it's so important. And I think as you rightly say, the amount of work and trouble and expense and effort that has to go into finding an aircraft when it's disappeared, which could all be avoided if only we knew where it was, it is important. It's important we get on with it.
As to how long it will take, I think the industry is able to -- should be able to come to a decision pretty quickly about the best way of doing it. And I think providing the industry can lead in that way, the ICAO process can be quite fast, and they'll be able to respond very quickly, I think. Everybody wants it to get done. It shouldn't be a contentious issue.
So, I'm optimistic that we can move reasonably quickly on this. And as quickly as reasonable people would think is necessary.
QUEST: Related to that is the constant streaming of, for want of a better phrase, limited black data recorder information. It's sort of tangential to a sense of streaming where the aircraft is. But if we'd had data from the black box in real time, many of the issues of finding just the black box itself would not arise. Would you be in favor of limited data streaming?
TYLER: I'm very much in favor of looking into that issue and coming up with a sensible answer to the question. I think we've got to be -- it's a much -- we've got to be practical about it. It's a much more complicated issue than simply locating aircraft.
When you think we have over 100,000 flights a day and if you're talking about streaming data from every single of those flights, there are issues about cost, there are issues about storage capacity, there's a whole lot of issues that come up.
Again, I think the experts need to sit down and work that one out. I can certainly see the attractions of what you're saying, but let's make sure we do it in a practical way.
(END VIDEOTAPE)
QUEST: Tony Tyler of IATA. I have a question for you: how much money would you want to leave your job? Amazon is offering its employees money to leave the company. It's not cutting jobs. In fact, it wants them to stay. We'll sort it all out in a moment.
(COMMERCIAL BREAK)
QUEST: To you and me, they are warehouses. To Amazon, they are fulfillment centers where tens of thousands -- hundreds of thousands of employees work putting boxes and sending out the various goods.
Now, Amazon is making its employees an offer it hopes they will refuse, dangling the cash before them. The company is offering its fulfillment employees up to $5,000 once a year if they want to leave.
It's a letter to the shareholders, the Amazon boss, Jeff Bezos, says the goal of the program, in his words, it's called "pay to quit," and the goal is to encourage folks to take a moment and think about what they really want. In the long run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company.
Amazon's obviously experimented with the program before rolling it out to 40,000 fulfillment workers -- that sounds rather vulgar -- at the beginning of the year. The company says fewer than 10 percent of the employees who got the offer accepted it.
Would you accept it? Why would Amazon even be doing this? What's the purpose? Let's talk about it. The psychologist Jeff Gardere --
JEFF GARDERE, PSYCHOLOGIST: Great to see you, Richard.
QUEST: Good to see you, sir.
GARDERE: Thank you, sir.
QUEST: It's an interesting one. What's the psychological value in the offer?
GARDERE: Simply what they're doing, Richard, is weeding out the employees who really don't want to be there or who are weaker-willed. If you put that temptation out there, those people who feel that maybe they need to look elsewhere, they will take the money and run.
Those who want to be there, then the money doesn't really matter. They have a 97 percent stick rate with this. And so what Bezos is doing is saying, listen, if you want to leave, I'll give you the money. But if you want to stay, your benefits will be much greater.
QUEST: But why not just simply say to employees, if you want to go, go? What's the -- I mean, this is such a naive question I can't even believe I'm asking it, but I need the psychological advantage to it -- what's the advantage of the money?
GARDERE: The advantage of the money is that basically saying if you want to be here, then the money doesn't matter. But if you are on the fence, then the money will tip you over and you'll go and it'll cost us less money to get you out of here versus someone --
QUEST: Right.
GARDERE: -- who really wants to work.
QUEST: Now, in this strategy, the amount of money is crucial.
GARDERE: That's right.
QUEST: And it goes of $1,000 a year from the first year to the second year to the third year --
GARDERE: That's right.
QUEST: -- to the fourth year. So, coming in at -- somebody who's been there for five years, $5,000, if they'd been there five years, they must like it or they must be doing it for a reason.
GARDERE: Well, those people who are there for five years, chances are, they're not going to take the money. It's the ones who come in earlier in the game who don't have much of an investment in the company emotionally who will take the money.
QUEST: Right. And of course, many of their centers are in areas of high unemployment or in developing areas. So, there's a -- as a psychologist, do you think this scheme, for want of a better word --
(LAUGHTER)
QUEST: -- is brilliant, or is it a disgrace?
GARDERE: I think it's absolutely excellent. It's a pay-to-quit program, which is really a great play on words, because they don't want you to quit. And they tell you, please don't take the money. It's almost like a temptation. If you really want to be in a relationship with us, then no matter what the temptation we put out there, then you're not going to take it.
QUEST: Brilliant. How good of you to come in tonight, sir.
GARDERE: It is my pleasure. You know what? We need to try this with marriages. We'll pay you to leave, but if you really want to stay, then the rewards are greater. I may try it myself.
(QUEST RINGS BELL)
QUEST: The man's barking mad.
(LAUGHTER)
QUEST: Coming up after the break, Africa --
(LAUGHTER)
QUEST: -- rising. This may be a very good idea, actually. We'll experiment in the future. Africa and the officials at the IMF conference, sustaining growth is a top concern. We talk to the finance minister from one of the world's fastest-growing economies next.
(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.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Oscar Pistorius says he didn't know his girlfriend was behind his bathroom door when he shot at it. Pistorius was being questioned again by the prosecutor at his murder trial. He said Reeva Steenkamp never yelled out.
The Australian prime minister Tony Abbott says he's confident that searches are zeroing in on the missing black box of Flight 370. He told reporters in China that searchers believe audio pings picked up earlier this week came from the plane's flight recorders.
Russia's finance minister has told this program he has no military plans in Ukraine. The assurance comes despite the United States' estimates of 40,000 troops from Russia massing at its border. Speaking at a meeting of the IMF, Russia's finance minister responded to the threat of more sanctions by Treasury Secretary Jack Lew.
ANTON SILUANOV, RUSSIA FINANCE MINISTER (through translator): Secretary Lew has mentioned the possibility of the expansion of sanctions if the situation in Ukraine deteriorates. But I would like to assure you that the Russian Federation does not have any further plans to aggravate the crisis and current conflict in Ukraine. We are interested in the settlization (sic) of Ukraine and we don't see any reasons or any grounds for further expansion of the sanctions.
QUEST (voice-over): German Chancellor Angela Merkel visited Greece on Friday and praised the nation's reform efforts. This week the debt-laden country tapped bond markets for the first time since its bailout. The IMF says Greece still needs considerable support in the years to come.
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QUEST: Officials at the IMF conference in Washington say sustaining growth in Africa is a top priority following a decade of economic expansion. The IMF managing director -- deputy managing director, Min Zhu, told participants at the Africa Rising conference, he said, "Africa will continue to rise in the next decade and the next 100 years. Now it's our job to ensure that 'Africa's Rising' is a sustainable story."
Our correspondent, Nina dos Santos is with us again in Washington at the IMF.
NINA DOS SANTOS, CNN CORRESPONDENT: Yes, Richard, what better example of a country that is rising in Africa than Liberia. We're talking about a nation with an 8.7 percent growth rate and around about 4 million people that share that growth rate.
But of course getting everybody to benefit from the nascent economic story in these African countries is something that has been high up on the agenda here, with the topic of inequality debate as this meeting of the IMF and also across the street, World Bank.
I'm joined now by the finance minister of Liberia, Amara Konneh on QUEST MEANS BUSINESS.
Great to have you on the show, Minister.
AMARA MOHAMED KONNEH, LIBERIAN FINANCE MINISTER: Thank you.
DOS SANTOS: As we were saying before, inequality is a real issue. Now 8.7 percent, 8.9 percent growth sounds great for 4 million people. But if you've got 68 percent of them unemployed, which is not only in Liberia, not everybody's benefiting.
What are you doing to change that?
KONNEH: Nina, this is a very, very interesting question. And we are very concerned about that. But starting from the very low days in terms of our economic recovery, we recognized that we needed to put the emphasis on resuscitating the traditional sectors of growth, which has now attracted following investment into the country.
We also needed to focus on governance. But we are concerned that the population is still not benefiting from, you know, the impressive growth record that we see.
But this is not just a Liberia phenomenon. This is a phenomenon for the 12 fastest-growing economies in Africa. It's a continental issue. It's a global issue. And that is why we are here this spring meeting, to you know, talk to the IMF and the World Bank to see if we can find other creative ways in addition to the foreign investments that are in the country to address this global issue.
DOS SANTOS: And obviously the World Bank's big slogan is to end poverty. That has been really brought to the fore this year with Tim Kent's (ph) comments on the issue of inequality, Christine Lagarde over here in the IMF making the same thing.
But it'll take years to put on the programs that you're planning in place. It also takes more than one government's commitment.
What is your long-term strategy for Liberia?
KONNEH: The key is commitment. Our long-term strategy is long-term vision that we hope, you know, through an scrupulous implementation will set the country on the path to sustain economic growth. It's part of Liberia Rising 2030 (ph).
DOS SANTOS: And that's privatizations presumably?
KONNEH: Privatization is part of the economic transformation pillar of that long-term strategy. But the key Is going to be as a post-conflict, you know, nation to focus on peace, security and the rule of law. That's the key determinant of economic growth. And then economic transformation, rebuild your infrastructure, energy, roads, ports, and ICT, you know, for an emerging market.
And then of course you know, continue to invest in human development, schools and health care and then improve governance, you know, capacity, brain drain has been an issue for all post-conflict countries.
DOS SANTOS: Well, Rwanda has just marked the 20th anniversary of the Rwandan genocide. Liberia's marked the 10th anniversary of its civil unrest.
How does a country like yours rehabilitate people to teach them the skills that would cause international companies to invest and hire in those countries? Because that's effectively what you need to do, invest in education, invest in ending inequality.
KONNEH: You know, you've said it right. We admire Rwanda and we are in solidarity with them because we feel their pain. It's the same thing, you know, maybe not at the same scale what happened to Liberia.
What happened in these situations is that we tend to lose focus on the soft, you know, destruction, you know, of the country, the impact of these conflicts on the soft infrastructure, the human beings. And all of us go through that. It will require, you know, a robust action, strong political will to increase, you know, funding to education, to ask for more international support for it. It will require building institutions for skills building like technical, educational institutions. We are doing that in Liberia. It will also cause for, you know, strong partnership between the government and the private sector.
DOS SANTOS: OK. Amara Konneh, we're going to have to leave it there. Thank you so much for that, Amara Konneh --
(CROSSTALK)
KONNEH: Thank you, Nina, thank you.
DOS SANTOS: -- Liberian finance minister.
And Richard, Liberia's obviously not part of the G20. But the other dialogue that's been going on here at the IMF is trying to get bigger role in participation for the G20, the managing director of the IMF, Christine Lagarde, has repeatedly expressed her frustration with Congress in the United States thwarting this process. But eventually that will also help to give these institutions the access to financing that they need and the seat at the table to end (INAUDIBLE).
QUEST: The G20, which of course, has actually been around for quite a while at the IMF in terms of -- in terms of it.
OK, Nina, many thanks indeed.
When we come back, the Heartbleed bug is more virulent than we thought. New vulnerabilities have been discovered inside the Web's connective tissue. We'll tell you how to vaccinate yourself. (INAUDIBLE).
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(COMMERCIAL BREAK)
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QUEST: Five days since we found out about the Heartbleed bug and we are still coming to terms with its full implications. It's a fateful weakness in the encryption program which is used all over the Web. And it has the potential to afflict many parts of the electronic body, which is the Internet. And we're only just finding out how far it could spread.
Look at exactly where it is, Nurse, the screens, please. The superscreens. First of all, the Heartbleed, a flaw widely (INAUDIBLE) in the program. It's called open SSR, which is used to create secure connections. It's been there for two years. And we're only just noticing. It could affect, for instance, beginning with the social networking, the Facebook, the Twitter, the Instagram, the Yahoo! and the -- all, they are now all currently developing patches to patch the problem.
Then you've got mobile phones, Google Android, a whole host of them are using it. They're known as Jelly Bean is vulnerable. It's used in around 35 percent of Androids. That is also having to be fixed.
Online shopping needs to be fixed on all the major online retailers are having to develop patches.
When it comes to email, not surprisingly Gmail says it was affected but it's now fixed. The other having to get to grips and putting it right. All in all, you've really got to go to the big companies involved. They say switches and firewalls are affected and now they need to actually put it right.
The patient is being attacked from all sides and it's not clear -- well, I -- does the patient survive?
SAMUEL BURKE, BUSINESS CORRESPONDENT: The patient can survive if it has the right medicine. You used a word when you were setting that up, very crucial here, potential. Here we are, all sounding the alarm.
QUEST: Can't even think about it.
BURKE: Didn't think about it. We're sounding the alarm, but we haven't seen any concrete examples of it yet.
QUEST: This is a storm in a teacup and people are making a lot of fuss about nothing.
BURKE: The truth is, though, that we found out it could. It has the potential to be much more widespread than we had first thought. We first thought about websites -- Facebook and Google, the ones you mentioned . But today we found out it could potentially be in physical devices, digital devices that are connected to the Internet, like servers, switchers, even your printer and any of the information that passes through them could be affected.
QUEST: You're being alarmist.
BURKE: I'm being smart. The truth is so many corporations use equipment from Cisco and Juniper Networks, and both of those companies said today that some of their products are affected.
QUEST: There's no evidence that anybody has actually hacked in and taken things, or am I wrong?
BURKE: You are absolutely right. But this is not really hacking. Someone who developed this code left the door wide open, Richard. And no one would leave their front door wide open in a bad neighborhood at nighttime. Anybody can come in and maybe tamper with these machines. That's the real difficulty here, is that now this is known --
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QUEST: So what do you do?
What do you do about it?
BURKE: Well, you have to change your passwords. And I think one of the worst parts of this is we -- you can barely remember your password as it is, correct? You have to change your passwords this week and probably again in a couple of weeks once all the other companies catch up.
The other thing that's very difficult is some of these devices cannot be changed, Richard. The code is already in them and some of them don't have firmware in them. So that means they cannot be changed. Your only option then: this to get rid of them, to throw them away because they're worthless if you cannot update them.
QUEST: But can that be recycled? We'll answer that another day.
Thank you, Samuel.
A tropical cyclone is lashing Queensland in Australia. Now Ivan Cabrera is with us at the World Weather Center.
Ivan, is a -- Queensland's quite heavily populated in parts. So I guess it's quite serious.
IVAN CABRERA, AMS METEOROLOGIST: Yes, I think so. And in fact, at last check, the census in this part of Queensland, the euro peninsula here, upwards of 200,000 people. So certainly not a megacity, but enough people, enough dense population there, which certainly you would want to get out of the way. And really, you would want to get out of the way of this thing because it was at one point a category 5.
It made landfall just a few hours ago. It was a category 3. So it was essentially weakening as it made landfall. But it was so strong that it didn't have time to just completely fall apart. it wasn't going to do that here.
So there's the landfall occurring at 11:00 GMT. That's 9:00 pm local time. I hate when these things landfall and I hate it even more when they landfall at night because you can't see, especially people that don't heed the evacuations. Then they're blind out there, 230 kph. That was the sustained winds. We're done with those winds at this point here.
But what we're not done with, look at these rains that are going to continue over the next few days, Cairns' getting in on very heavy rainfall. So if you're watching this from Cairns or further south, I think that's the area that is going to be prone for flying, because the rain is going to be coming down very hard, already picking up 125 millimeters. I think we could double that easily in the next 24-48 hours; 159 kph wind gusts. So far that's the highest. That would be a category 2 equivalent storm in the Atlantic. And that was a confirmed but wind gust.
There goes a storm, interesting here that it hugs the coastline here. If it was going west, it would dissipate. But it's not going to do that. And because it's hugging the coastline, two things, this is where people live here in this part of the world and part of Australia. So we are going to get heavy rain across the region and also the system is going to make it just enough offshore or it's going to hang onto its intensity, essentially. Not going to blow up, I don't think. But it is going to bring us some very gusty winds, although I don't think at this point they are going to be the dangerous.
This will be. Look at this, 200, 200-plus millimeters of rainfall from Cairns further down the south, Townsville getting in at 155 millimeters here. So now the transitioning from a wind event to a flooding event. And we're already seeing damage across the region. We'll get new pictures for you in the next few hours.
In the United States, if you're traveling here, if you're coming into New York, you're fine. But thereafter, we have a big event coming up for Sunday, with a big storm setting up. This is the time of year, Richard, we get into tornado season, a slow start because we've missed one of the ingredients, the warm tropical air hasn't been there. It's been very cold. But now we're getting in on that. And so Sunday, we're going to have this area of the country here from Texas extending up into Missouri with the potential of severe weather in the form of strong thunderstorms and the rotating kind -- we call those tornadoes. And that is going to be a big deal coming into Sunday afternoon, Richard.
QUEST: Ivan, thank you.
Now in Ukraine, everyone pays more when the price of gas goes up.
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UNIDENTIFIED FEMALE (voice-over): Igor (ph), a regular at this Kiev restaurant, tells me it's difficult because the price of everything is going up.
QUEST (voice-over): As the numbers on the gas bills continue to climb, we see how the rises are hurting Ukrainians. (INAUDIBLE).
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QUEST: Billions of dollars of IMF money's being designated to help Ukraine get back on its feet. There have been talks and preconditions and now Ukraine says it's close to achieving the first round of aid. Its finance minister told Nina dos Santos the country has done everything that was asked of it.
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OLEKSANDR SHLAPAK, UKRAINE FINANCE MINISTER (through translator): We are pleased that the G7 discussed Ukraine and we count on rapid financial assistance to Ukraine. And more importantly, we expect harsh measures against Russia, the aggressor.
DOS SANTOS: The bailout hasn't come yet.
What has the IMF asked for and when do you think it'll come?
SHLAPAK (through translator): We have an ambitious program in cooperation with the IMF, which will amount to $17 billion. We have fulfilled all preconditions. There are 13 of them. And we expect that at the end of April, the IMF board will make a positive decision on cooperation with Ukraine.
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QUEST: Now one of the most interesting and fascinating parts of the whole Ukraine situation is the situation as relates to the price of gas.
On the one hand, you have the IMF's requirement that Ukraine raise its gas prices for consumers. In other words, doesn't subsidize gas as it has for so long. The fund estimates Ukraine spent 7.5 percent of its GDP on gas subsidies in 2012.
Arguably, that work is being done for them because Russia has massively increased the price of gas in its own right. Here's the problem. The Russian increase in gas prices doesn't reduce the subsidies. Whichever way you look at it, Ukrainians are paying more for gas.
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KELLY MORGAN, CNN CORRESPONDENT (voice-over): Tending to tomato plants at one of Ukraine's largest vegetable producers. But this sprawling company is facing even bigger cuts. Gas, which is needed to heat the greenhouses at Kombinat Teblychny already accounts for 60 percent of all costs.
With Russia now demanding 81 percent more for the price of its gas, head agronomist, Stanislav Yuhnenko, says growth will be stunted.
"These rising gas prices will not enable us to make any profits. We won't be able to expand our company," he says. "Instead, we will need to downsize and people will lose their jobs."
Higher gas prices also mean higher transport costs. Both costs inevitably pass down the food chain onto consumers, he say, they can ill afford it.
Igor, a regular at this Kiev restaurant, tells me it's difficult because the price of everything is going up.
The owner of Two Geese says she will hold off on increasing prices for as long as possible.
"We are prepared to take a loss," she says, "so we can keep our customers."
Customers who feel helpless as their government tries to convince Russia to return to the subsidized price regime Ukraine enjoyed before President Viktor Yanukovych was ousted.
"We'll pay what they tell us," Yulia tells me. "We have no choice. I don't have my own gas station at home."
For the most modest homes, high gas prices are simply unaffordable. Adam Berkut is a single father of two, widowed when his wife died after giving birth to their youngest son four years ago.
"One hundred, 130, 98." He tells me the costs of his most recent gas bills in Grivna (ph), an average of about $10. It's a lot for a man who is disabled and lives on a pension of just $200 a month.
"Children need heating," he tells me. "So if I have to pay higher prices, I will find a way."
His eldest boy, 8-year-old Ian Adam (ph), reads a poem about being optimistic at the start of each day.
"Smile at the sun. Smile at the heavens. Smile at the flowers." Increasingly difficult when you're paying the cost of a political crisis -- Kelly Morgan, CNN, Kiev.
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QUEST: And a final look at how the market did trade, down 143 points, loss on the -- over three-quarters, 16,000 looks a little bit iffy. And when you think of how the week has gone, you really do put this into perspective. We started at 16,445, give or take. We had a bit of a nice move back up again having had a slip down the slope with the Fed's minutes. But way off down. And the issue is @RichardQuest, of course, whether what we are seeing is just a correction that's underway because of high prices or maybe something a little bit more. It's just a little bit of indigestion, a little bit of intervolatility.
When we come back after the break, it's our Friday ""Profitable Moment."
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QUEST: Tonight's very "Profitable Moment," so Amazon has decided it's going to invite its employees once a year that they can leave and Amazon will pay them to go, $1,000 if you've been there one year; $2,000, two years and so on, up to a payment of $5,000 after several years' employment if you want to leave.
The strategy behind it is simple, the psychologists say, Jeff Bezos says we only want people working here who actually want to be here. And it may be a little bit of encouragement or basically bribe is required, then so be it.
It is a fascinating strategy because in me heart of hearts I feel there's something wrong with it. But I can't put me finger on what. It makes perfect sense. You literally say to your disaffected staff, there's the door. Go and use it and we'll pay you to use it on the way out.
But what does it tell us about the employment situation? What does it tell us about the workplace? I'm not sure because ultimately people work in places they either need the money for or because they enjoy it. And in the best environment, you do both.
I guess the real test is not so much paying them a bit of this or a bit of that but as Winston Churchill once said, "Madam, we're not arguing about the principle. We're just arguing about the price."
And that's QUEST MEANS BUSINESS for tonight. Yay! I'm Richard Quest in New York. What are they trying to tell me? Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.
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