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Quest Means Business
Violence in Nigeria; Security in Abuja; Doing Business in Nigeria; Many Factors Influence Dow's Rise; UK and Swedish Governments Blast Pfizer Attempted Takeover of AstraZeneca; Most European Markets Up; Exclusive Interview: New Target CEO John Mulligan
Aired May 07, 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: Market trading comes to a close, iShares by BlackRock ringing the closing bell. A strong day by the Dow Jones Industrials. When all was said and done, it is Wednesday, it is May the 7th.
Tonight, Nigeria's challenge. It must prove it can protect its own people first before attracting foreign investment.
Also, Sweden's message to the UK -- Pfizer cannot be trusted.
(BEGIN VIDEO CLIP)
ANDERS BORG, SWEDISH FINANCE MINSTER: If we now see a hostile takeover bid for AstraZeneca from Pfizer, we are worried about that.
(END VIDEO CLIP)
QUEST: And also tonight, when it comes to Target, we talk to the chief exec, the new CEO, who's taking aim at hackers.
I'm Richard Quest. I mean business.
Good evening. Tonight, I want to begin with some statistics from Nigeria. Listen to these. When you put it into perspective, the numbers are fairly horrific because we all know there have been 276 schoolgirls abducted by the terror group Boko Haram last month, and those girls remain missing.
Another statistic: eight more girls have been snatched by armed gunmen on Sunday, despite international outrage over the killings.
And at least 150 people have been massacred on Monday near the border with Cameroon, when Islamic militants opened fire in a busy marketplace up in the northeast of the country.
And as Nigeria faces this extraordinary violence, hundreds of the world's top economists and business leaders gather in Abuja today. It's the start of the World Economic Forum, in Africa. Nigeria had hoped to grab the world's attention and promote the economy, which is now set to be the largest in Africa.
CNN's global economic analyst, Rana Foroohar, is in Abuja and joins me now. We will get to the economics in a moment, Rana, but does it feel surreal even having a discussion about economics, investment, policies, when you have three or four of the most heinous, draconian, obscene acts of violence you can imagine?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: On one level, Richard, it absolutely does. But on another level, the growth story in this country is connected directly to whether or not Nigeria can control this kind of violence and bring more security.
As I'm walking around the World Economic Forum today, talking to the many top Western business people and Nigerian business people, and pan- African business people who are here, this topic is coming up again and again.
A number of people have expressed real concern, not just for the individual tragedy of these girls, but for the fact that this really has increased perceptions of political risk in this country dramatically.
Two Western -- top-level Western business people said to me today that it was giving them pause, it was making them think about --
QUEST: Right.
FOROOHAR: -- the growth trajectory of Nigeria, particularly as a country that is trying to bring more people into the middle class.
QUEST: On the other side of this, when you look at the sort of arguments, we're not talking here about crime in the Niger delta or oil being stolen, we're talking about radical Islamist philosophy that, frankly, no matter what the government in Abuja does, they would not be happy.
FOROOHAR: No, absolutely not. It's interesting, too, because this is about girls being taken out of school, being abducted from their homes. And girls' empowerment and women's empowerment has actually been a very important part of the economic story, not just in Africa, but in many developing countries.
Being able to keep girls in education, to empower women, to invest in female entrepreneurs, is a key part of these countries moving up the economic food chain. And the fact that this is happening again is giving people real pause about that.
QUEST: So, to pull it together, Rana, is there a feeling from those you've spoken to that -- I'm not literally, I suppose, when I say this, that Nigeria is ungovernable. That is clearly, patently, obviously false. It is patently governable. But that the situation could, if not carefully controlled, spiral out of control?
FOROOHAR: Yes. In a word, yes. Certainly, it is governable. But there is a governance problem. As a matter of fact, I'm moderating a panel tomorrow on that very topic, and we'll have more to say then.
But I've had several people, including some billionaires, say to me, this is a governance problem. And when you couple what's happened with these girls with other things, like the rising number of car bombs that you've seen, smaller terrorist acts, but also the fact that the central bank head was recently deposed for speaking out about funds being unaccounted for in the treasury.
All this really does increase perceptions of a real lack of strong governance here, and there's a lot of concern --
QUEST: Right.
FOROOHAR: -- for the future, particularly in an election year, in which corruption tends to rise.
QUEST: Now, that's a really interesting point, because they've not exactly done much to help their own cause when you look at the issue of corruption. Whatever one -- whatever awfulness of Boko Haram, the government's failure, really, in many ways, to grasp the corruption nettle, and some would say, make it worse, does not aid the cause.
FOROOHAR: Absolutely not. There's a feeling that things have really declined in terms of accountability, transparency, within the course of this administration. There's little hope going into an election year, as I say, that things are going to get any better.
As a matter of fact, we don't know what's going to happen with this investigation into the unaccountable funds in the treasury. I've asked several people about it, I've not gotten any clear answers. There is a sense that the next year is probably a loss.
QUEST: Rana Foroohar, thank you for joining us. We look forward to talking to you tomorrow, and we'll hear about your panel that you're talking at the World Economic Forum.
Abuja has been rocked by some violent attacks recently. In the last month, a car bomb exploded in a crowded bus station. The blast killed more than 70 people. Jonathan Mann now reports on how the Nigerian government is working to keep the delegates, like Rana, safe.
(BEGIN VIDEOTAPE)
JONATHAN MANN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Nigeria has been making an unsettling impression in recent weeks, with the kidnapping of nearly 300 schoolgirls and deadly bomb attacks in the capital, Abuja.
Now, Abuja is welcoming the World Economic Forum on Africa, a gathering of government, business, and economic leaders. Nigeria is hoping to tout its growing economy and business opportunities and present a more appealing face to potential partners.
Authorities say they've put 6,000 police and soldiers into the security effort, closing schools and government offices in Abuja for the duration.
OLAJIDE LALEYE, NIGERIAN ARMY SPOKESMAN: I can assure that Kaduna and Abuja will remain very, very safe while the World Economic Forum is ongoing.
MANN: Some Abuja residents say they've noticed a new attention to security.
ADANU STEPHEN, ABUJA RESIDENT: As an Abuja resident, I feel the decision by the president was very OK, because what they may look at the for the first time is the security of the citizens, and those visitors are coming for the World Economic Forum.
MUSA MUNIR ILLIASU, ABUJA RESIDENT: It should be a permanent approach. Of course, terrorism is everywhere. But you need to get some things right. It's not about just when you have an event that you must try stopping everywhere.
MANN: The challenge is daunting. Even if Abuja remains entirely safe for visiting VIPs, Nigeria will still be coping with the kidnapping and the ongoing investigation of the terror bombings. A few productive and peaceful days doing business won't erase those problems.
Jonathan Mann, CNN.
(END VIDEOTAPE)
QUEST: Nigeria wanted the World Economic Forum on Africa to showcase its economy and attract investments. To get the perspective of what it's like to do business in the country, Seni Adetu joins me now from the Nigerian capital, the chief executive of Guinness Nigeria.
Sir, thank you for joining us. We do start with the fundamental problem of violence in the country and how worried you are that this will force or will put off external investment.
SENI ADETU, CEO, GUINNESS NIGERIA: So, you are breaking, but if I understood you well, you're attempting to know the impact of the security challenges that we have in Nigeria on potential investments into the country, is that correct.
QUEST: Yes it is, sir, that is correct.
ADETU: OK. So, we are absolutely disappointed with events of recent weeks, especially related to the bombings and the kidnapping of the Chibok girls. Clearly, having said that, Nigeria's an attractive market, especially with the reforms that are happening in different sectors of the economy, i.e. in the park sector, in the agricultural sector.
The last thing we ever wanted was to have a situation where foreign investors, who we absolutely need to partner with, as we (inaudible) in those reforms, really beginning to sit on the fence and watch the security challenges of the country and really question whether it's the right time to come into the country. So, on all counts, it's really very disappointing.
QUEST: Is there a feeling that the government is actually getting to grips with this? Are the government -- does business believe the government is doing enough?
ADETU: Well, I was speaking to some colleagues, some of those chief executives I met today, and the concern is really about how the government can match their intent with the capacity to handle it.
So, it's one thing to really have the intent and the desire to really quell this insurgency, but it's another thing -- it's a different conversation as to whether they really have the capacity to deal with that.
And actually, especially the second bombing in Abuja has really put that to question. So, there's a concern that perhaps the government needs help, and reading about the United States promising to come in and support the government, I think it's a really good thing.
QUEST: You are a Nigerian, and you are a chief executive. Hand on heart, sir, could you tell your chief executive, your global CEO, to invest more in Nigeria?
ADETU: So, Guinness Nigeria is a subsidiary of Diageo, and as a company, we are incredibly committed to Nigeria. We have a presence in Nigeria for over 50 years, and we believe that we're very much part of the fabric of Nigeria.
Guinness, the brand, is an iconic brand, and therefore, there hasn't been anything that has happened that has really shaken our confidence as an organization in Nigeria.
We believe that what we have seen from a security standpoint at the moment is actually a passing phase. And therefore, no, we are not calling down our investment in Nigeria. We'll go on as planned. But clearly, we are concerned that it's taken too long to address these security challenges.
QUEST: Right. So, what would you say, as a Nigerian, sir, who loves his country, who is shocked by what you are seeing, and as a chief executive, what would you say to another chief executive who says, "Seni, why should I invest in Nigeria? It's dangerous, it's corrupt, there are issues. Tell me why I should invest in Nigeria."
ADETU: Hello, you -- do me a favor, can you repeat that question, because the mic was breaking a bit. Can you just say that again, please?
QUEST: Of course, sir. Why should I invest in Nigeria?
(SILENCE)
QUEST: We appear to have lost the line there. I think we may be having a few problems there, so we'll try and get back that. It's a shame, because that was an interesting possibility there. If we can come back to it before the end of the program, we most certainly will.
Alison Kosik's at the New York Stock Exchange, joins me now. Alison, it was a very -- we had quite a few factors that influenced the trading day today.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, several -- it was a little bit Ukraine, a little bit of Janet Yellen, Richard, a little bit Ali Baba. We saw the Dow up on the fact that worries are easing about Ukraine.
We saw tech shares sell off, one analyst saying that could be because portfolio managers are selling their tech stocks in order to make room for Ali Baba, that's the Chinese e-commerce company that filed for an IPO last night.
And then, throw in Fed Chair Janet Yellen testifying before a joint economic committee. She said, sure, the US economy is on track for solid growth this quarter, but she's concerned about the housing sector, and she's still concerned about the job market, saying it's far from satisfactory. Nevertheless, we saw the Dow up triple digits. Richard?
QUEST: We did. Alison, we'll leave it there tonight, if we may, because I do want to go back to the Nigerian capital. Seni Adetu is joining me, the chief exec of Guinness. You can hear me, sir? I can see that you can hear me now.
So, my last question to you, as a Nigerian who loves his country, who's also a chief executive, what do you say to other CEOs who ask, "Seni, why should I invest in Nigeria?" Tell me why.
ADETU: OK. So, like I said before, clearly Nigeria is an attractive market, and all the economy fundamentals and the metrics that you measure will support that. The recent re-basing of the GDP, from my perspective, was long overdue, but it's a test to the economy size of Nigeria.
QUEST: Right.
ADETU: There is enormous economic opportunity in Nigeria. It is true that there are some headwinds, some challenges in the way. We're talking about infrastructure, cost of capital, the raw material availability, skilled manpower, and so on and so forth.
But the bottom line is that given the size of the economy, and the size of the population, the fact that we're now beginning to actually expand or diversify our economic base to go beyond the oil sector, I think it's all the indicators that would show that Nigeria for the long haul is a real investment destination.
QUEST: Thank you very much for joining us, sir. I appreciate it. Many thanks, indeed.
Now, when we come back, we're going to stay within the corporate world. There's an extraordinary hostile takeover and strong criticism of Pfizer's attempted takeover of AstraZeneca. Now, Sweden's finance minister has denounced the deal. We'll hear from him next.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: The governments of the United Kingdom and Sweden today blasted Pfizer's attempted takeover of AstraZeneca. Speaking from experience, Sweden's finance minister warned Pfizer's promises must be taken with "a sackful of salt," in his words. And we'll hear from him in just a moment.
In the UK, the prime minister, David Cameron, demanded stronger commitments from Pfizer on jobs and investment. The opposition accuses Cameron's government of cheerleading for the deal.
(BEGIN VIDEO CLIP)
ED MILBAND LEADER, UK LABOUR PARTY: If he does not take action now, and the bid goes through without a proper assessment, everyone will know he was cheerleading for this bid, not championing British science and British industry.
DAVID CAMERON, PRIME MINISTER OF BRITAIN: Let me be absolutely clear: I'm not satisfied. I want more. But the way to get more is to engage, not to stand up and play party politics.
(END VIDEO CLIP)
QUEST: So, that's the political row in the UK. Well, there was a very firm warning from Sweden, where the finance minister, Anders Borg, warned Pfizer cannot be trusted. Mr. Borg says the company did not keep its promises when it took over the Swedish drugmaker Pharmacia.
And Minister Borg has a stake in Pfizer's bid as well. AstraZeneca has nearly 6,000 workers in Sweden. So far, no guarantee from Pfizer that those jobs will stay.
(BEGIN VIDEOTAPE)
BORG: Our experience was quite bad, and we basically did not see any of the commitments made by Pfizer coming through. And obviously, we're worried about Swedish jobs here. We have invested heavily in life science and provided local facilities for our research-based companies.
And I think we need some commitment here for jobs in R&D. And we know that AstraZeneca can provide a good pipeline of research.
QUEST: Do you believe that European governments have the necessary powers to prevent takeovers, bearing in mind these days, with anti- competitive restrictions, the provisions are quite limited? Do they need - - do you need more powers?
BORG: Well, the starting point should also be the tax discussion, because the US, the UK, Sweden, and other countries have discussed the tax system quite heavily over the last few years. And now we see this company, Pfizer, taking advantage of what one could call a loophole in the tax system to basically take over a company with US taxpayers' money. And that is one problem.
But I do think this kind of merger can provoke a discussion where we also need to think about whether we need more regulations and new directives in this area.
QUEST: Would you be in favor of giving European companies -- European governments, forgive me, greater powers to prevent takeovers?
BORG: Well, to start with, this is a special case in one extent because it's a hostile takeover. So, the shareholders of AstraZeneca is resiting this. They have not said that they are entering into discussions with Pfizer over the bid. So, they also worried about the profitability and the economic soundness of this merger.
But yes, I think this is the kind of merger that might provoke a discussion on whether we need to also enter these kinds of discussions into the competitiveness discussions of Europe.
QUEST: We see another issue with this, of course, at the moment with France. General Electric trying to take over Alstom. The French government, or at least part of it, the French government against the GE bid, in favor of a Siemens bid. Is it up to the French president to comment on an American offer for a French company that should be decided by the shareholders?
BORG: No, I think we should trust the shareholders. But what worries me is that the shareholder, then, must also show that they are up to the role and can also take society concerns into consideration.
We -- in Sweden, we are quite happy to have US companies buying Swedish companies and being active in our economy, and I would presume that that's also true for France. France needs to become more open, more competitive, and more business-minded.
But then we also need to see responsible shareholders. And therefore, if we now see a hostile takeover bid for AstraZeneca from Pfizer, we are worried about that.
(END VIDEOTAPE)
QUEST: Worries form ministers both in the UK and in Sweden. There's a slight uptick to most European markets on Wednesday. President Putin's call for a delay in the secession vote in Ukraine, Fiat missed its earnings, and the shares were down almost 12 percent.
But if you look at it the way everything else moved during the course of the session, the Dow Jones Industrials -- sorry, Dow Jones -- the London FTSE was off just a tad. All the other markets, the Xetra DAX, the Paris CAC 40, and the Zurich SMI, were up sharply as well.
When we come back after the break, 40 million Target shoppers had their credit card information stolen. The chief exec's gone, and we'll talk and hear to the man who replaced him.
(COMMERCIAL BREAK)
QUEST: The chief executive of Target says shoppers can start swiping their credit cards with confidence today. The American retailer's reeling from that massive customer data breach and the ensuing public relations nightmare. CNN's Poppy Harlow met the interim chief exec, John Mulligan. It was an exclusive interview.
(BEGIN VIDEOTAPE)
POPPY HARLOW, CNN CORRESPONDENT: Has Target gotten down to the bottom of exactly what happened, what caused the data breach?
JOHN MULLIGAN, INTERIM CEO, TARGET: We have immediately upon finding out about the breach, we engaged a company to come in and conduct an end- to-end review. That end-to-end review is ongoing, they're near the end of that.
And they're looking at all aspects: what happened related to the breach, what happened -- what we could have done to prevent it, looking at all of our technology, our controls, our systems, the team -- a very broad view, and we've begun to make significant changes.
We made changes immediately upon finding the breach. We've had several remediation steps we announced last week. We brought in a new CIO --
HARLOW: Right.
MULLIGAN: -- chief information officer, importantly. And we're accelerating our chip and PIN technology. So, we're making progress, and we expect to continue to make progress and we expect to continue to make progress in resolving those issues.
HARLOW: I think the question comes up for so many Americans, like me, who are Target shoppers, how do I know I'm completely safe? If they don't know exactly what caused this, how do I know the threat has been completely eliminated, that I am safe to use my credit or debit card at Target? Are people 100 percent protected?
MULLIGAN: Sure, our guests can shop with confidence today at Target. Obviously, we removed the malware, we've closed the point of access where the individual came in. We've increased our malware detection. We've increased malware prevention.
We put in a tool called whitelisting, which only allows the software we want to run on our point-of-sale systems to run on our point-of-sale systems. We've hardened our perimeter by increasing two-factor authentication. So, we've taken significant steps to improve the security, and our guests can shop with confidence at Target today.
HARLOW: I think many people might be scratching their heads when they hear you say we haven't gotten to the bottom of what happened, we're still working on it, but customers are 100 percent safe shopping at Target with their credit and debit cards. How do you know that?
MULLIGAN: Well, as I said, guests can shop with confidence, and last week, we talked about all the significant remediation steps we've taken, starting with bringing in a new chief information officer.
But beyond that, as I said, we've increased significantly our anti- virus protection, putting in place tools like whitelisting so only the software that we want to run on our point-of-sale systems can run on our point-of-sale systems. So, we've made significant progress in remediation, and our guests can shop with confidence today.
HARLOW: This is a question for every single retailer right now, and so much of retail has become mobile and uses credit and debit card numbers, and I'm wondering, at this point in time, do you think that any major retailer can be hack-proof?
MULLIGAN: I can't speak to that. What I can tell you is that the cyber security is a threat broadly, not just for retail, but for American business. And as we've looked at our response, there are things that -- actions that we've taken internally that I mentioned.
There's actions we've taken that we think are important for the retail industry. We think information sharing across the retail industry. We think chip and PIN is an incredible step forward to provide additional security for our guests. And last week, we announced that we're going to partner with MasterCard to accelerate that in our stores.
HARLOW: CEO Gregg Steinhafel stepping down, resigning this week after 35 years with the company, came as a surprise to many. Was his resignation tied to this massive data breach?
MULLIGAN: Those are -- that's conversations between Gregg and the board. And what I can tell you is we reached a place last week where we -- Gregg was very focused on getting us past the data breach, we announced significant changes related to that last week.
Ad the board and Gregg had discussions, and they determined that now was the right time for new leadership at Target going forward. And that's what we're focused on, is moving the company forward.
(END VIDEOTAPE)
QUEST: Exclusive interview with Poppy Harlow on the question of Target. When we come back, the effects of the crisis in Ukraine are starting to be felt in the boardrooms of some major companies. The breweries and the banks getting hit.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in a moment. This is CNN and on this network the news always comes first. Boko Haram terrorists have killed more than 150 people in a Nigerian border town near Cameroon according to local officials. The government continues to search for more than 200 schoolgirls that have been abducted by the group.
Russia's president Vladimir Putin has unexpectedly voiced support for Ukraine's plans for presidential elections on May the 25th and says eastern separatists planning referendums this Sunday should postpone those votes. Mr. Putin also said Russian troops positioned along Ukraine's border have been pulled back though nature (ph) says it sees no evidence of it.
In Thailand, the country's Constitutional Court has removed the caretaker Prime Minister Yingluck Shinawatra from office. It ruled that she had abused her position by reassigning a senior security official and a political opponent in 2011. The deputy prime minister takes over.
The polls have closed in South Africa in the country's first elections since the death of Nelson Mandela. The party once led by Madiba, the African National Congress, the ANC's expected to hold on to power although the President Jacob Zuma may see his share of the vote fall after reports of rising corruption. They'll know the results later this week.
Paris Saint-Germain have won the French Football League title for the second year in a row. Monaco's failure to secure victory earlier on Wednesday evening when the title was wrapped up before PSG kicked off their home game against Rennes.
The turmoil in Ukraine is now spreading to some of the balance sheets of Europe's leading companies. They're already feeling the pain. You know the battle is straightforward - Russia on the one side, Ukraine on the other and the E.U. and the United States in the middle. Well now of course we have a variety of major corporations who in some shape or form are staring to say that the battle is hurting them either because they have big assets in Ukraine, or more likely, they are close friends and partners in Russia.
Let's start off with Societe Generale , the bureaus and the banks. Start with the banks. Societe Generale has written down the value of its Russian activities by $730 million as a result of this claiming it's obviously the Russian aspect that's giving them problems. Same again when it comes to Carlsberg. With huge investments in Russia and a huge business in Russia, Carlsberg has cut its forecast for the year. The bureau has claimed a drop in demand from Russia and the weakness of the ruble. As for Siemans which makes $2 billion a year, again, in Russia. It's escaped unscathed for now. Joe Kaeser, the company's chief exec, had a controversial meeting with Vladimir Putin in March. Kaeser now says the situation's taken a serious turn for the worse since then.
(BEGIN VIDEOCLIP)
JOE KAESER, CEO, SIEMANS: I'm very, very concerned about the development and the time it takes to get the matter under control. I mean, it has gotten - it has gotten a serious turn since I was speaking to the president of Russia last time, and it's very concerning. It will hurt everybody -- the society, the people and therefore it also hurts the economy and the global dialogue about getting jobs and better stand. So I'm concerned. I do hope that the efforts of Chancellor Merkel especially and also the European and global community, will help - will help to basically get some peace into Ukraine.
(END VIDEOCLIP)
QUEST: One of those people and those ministers helping to lead the debate and the negotiations, the European response is Anders Borg of Sweden. We heard from him earlier on the question of European takeovers. Now, Minister Borg on the question of how far European companies will be hit and hurt before this crisis is over.
(BEGIN VIDEOCLIP)
ANDERS BORG, SWEDISH PRIME MINISTER: This obviously it quite a big setback for investments in Russia. I mean, if we cannot trust Russia to follow international law and to be a stable partner in national relations, well then they are not a stable business environment either.
QUEST: But companies now are saying that the - that what's happening between the E.U. and Russia and the United States over Ukraine is now starting to affect their profitability, it's starting to affect their business. This was inevitable and surely, Minister, this is the sort of thing that could fracture the solidarity of Europe.
BORG: Well, I think one should not be too optimistic about Russian growth numbers. If they are pursuing this populist and nationalistic policy, I think there's a great risk of even worsening investment climate in Russia. And that will obviously have a negative impact on the growth numbers. But indirect effect will also hit Europe, but I mean primarily this will hurt Russia. So I think the most efficient sanctions are actually the business community's reaction to the Russian aggressive policy in Ukraine.
QUEST: But how do you intend to try and keep European governments together when European companies start putting pressure on their governments because it's hurting profitability?
BORG: Well, in the discussions we had on the fringes of the equity (ph) meeting, it was quite clear that everybody was agreeing that we need to show a united and also a tough stance on these issues. If we allow Russia or other countries to push forward and to break international law and to undermine governments in other countries, that is a major setback. Not only for - in - political sense, it will also have a negative economic impact. So I think it's necessary that we stand firm on these issues in the long-term. It's better for Russia, it's better for Europe to cooperate and have more trade. But if they are pursuing a policy, an aggressive policy Ukraine, there must be some red lines here.
(END VIDEOCLIP)
QUEST: That's Anders Borg. A storm is brewing in Los Angeles' leafy Beverly Hills. Hollywood stars are taking aim at this famous hotel because of its owners -- in a moment.
(COMMERCIAL BREAK)
QUEST: This week's "Business Traveller" takes us to Los Angeles and to the Beverly Hills Hotel. This iconic, famous, every cliche under the book - well in the book - has been a haven for Hollywood's elite for more than 100 years, until now. Some of America's biggest stars are staging a boycott. They're demanding a change in ownership. What could be happening under the palm trees and the bungalows of the Beverly Hills. It requires Kyung Lah to explain.
(BEGIN VIDEOCLIP)
KYUNG LAH, NATIONAL CORRESPONDENT FOR CNN BASED IN LOS ANGELES: He is a Sultan worth more than $20 billion, the absolute ruler of Brunei, a small southeast Asian country, but one of the richest nations per capita in the world. He's courted by America's most powerful leaders.
SULTAN OF BRUNEI: This visit give me a good opportunity to renew the long-standing and warm friendship.
LAH: That friendship is being strained as Brunei installs a new Islamic Sharia law that punishes adultery, abortions and same-sex relationships with flogging and stoning.
Female: Nobody is going to set foot in that damn hotel until he is out of it!
LAH: He is the Sultan, and Hollywood protesters like Jay Leno want the Sultan's money out of the storied Beverly Hills Hotel. The hotel chain, called the Dorchester Collection is partially owned by a Brunei investment agency. Hurt the investment, hurt the Sultan. Richard Branson tweeted, "No Virgin employee will stay at Dorchester Hotels until the Sultan abides by basic human rights."
JAY LENO, COMEDIAN: It's people being stoned to death. Hello? It's all economic, you know. How big an economic impact it will have? Let's find out and see. It's just a matter of doing the right thing. The hotel says a boycott is the wrong thing - hurting not Brunei but the locals.
CHRISTOPHER COWDRAY, CEO, DORCHESTER COLLECTION: It's going to hurt our employees and they have - this has nothing to do with them, none whatsoever.
LAH: But the boycott and the celebrity power is bringing attention to the Sultan's new law, a law that surprises Jillian Lauren who says she knows the Sultan like few others. She details in her book "Some Girls, My Life in a Harem" that at 18 she was a mistress of the Sultan's brother for a year and a half in Brunei. One night, Lauren says in her book, she was gifted to the Sultan who she says broke his own Sharia laws.
JILLIAN LAUREN, AUTHOR: I am a witness to the fact that, you know, the Sultan was drinking, was committing adultery, was, you know, not exactly living on the straight and narrow.
LAH: For them to then pass this harsh law -
LAUREN: Right.
LAH: -- how do you view this?
LAUREN: It's maybe indicative of the way that a lot of people in power behave which is it's one rule for them and another rule for the rest of the people who don't have so much money and don't have so much power. And that's why I felt compelled to tell my story.
LAH: Kyung Lah, CNN Beverly Hills, California.
(END VIDEOCLIP)
QUEST: Now, if you're traveling the globe or simply staying at home, the "Business Traveler" weather. Jenny Harrison is at the World Weather Forecast. The spring seems to have sprung in many places in Europe, I'm told.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Yes. Definitely so, Richard although a little bit -
QUEST: Oh!
HARRISON: -- colder again going across northern - I know. Just when you think - just when you think it -
(CROSS TALK)
QUEST: The sweat at the back?
HARRISON: Yes, exactly. Just when you think it's shaped to maybe even get those shorts on, Richard, but not so in some parts of Europe. The north and the east, some rather cold air has been pushing across the last couple of days. More of it to come as well, but it's as well of course a very unsettled picture. There's quite a band of rain working its way eastwards, but there is some nice sunshine hidden amongst all this as well. Most of the sunshine - the warmer weather - is now across the southwest of Europe and also despite that low heading on into Turkey, some rather warm weather there too in the last couple of days. But the system across the north is spreading some widespread rain, heavy at times. Winds not too bad, it's just kind of wet really. I know that's what happens if you get rain, but by which I mean we're not expecting many particularly large thunderstorms There's this large area across central Europe where there's some warnings in place. It's just a possible chance that we could have some heavy rain within there, maybe some large hail. And evel (ph) as we have to say of course there is that risk of tornadoes, but hopefully it is a fairly small chance. But when it comes to high temperatures and the warm weather, well you can be assured of that across the southwest, Portugal and Spain. Look at these temperatures - 34 in Seville - the average is 26, 34 in Cordoba - the average there is 26. So you get the general idea.
There is that very warm weather, so this is the temperature trend for the next 48 hours, showing you the above-average temperatures there, also across the southeastern portion of Europe, but there to the north and the east is this rather a lot of blues and purples indicating some below- average temperatures. So it'll stay warm across the southwest for both Seville and Madrid over the next few days, getting in the low 30s, so a good ten degrees above average. And here, into the mid-30s again for Seville. So enjoy that. The rain meanwhile, well there's plenty of it coming across the north - even one or two snow flurries and that cold air really just in the mountains up into northern areas of Norway. And where the rain is coming through, it will feel a little bit cooler, but not cold, just a little bit cooler. Seventeen (inaudible) London, the same in Paris and there 21 Celsius in Rome.
Now, somewhere else it's been very hot indeed is the West in the United States. So if you're heading out to this particular area, well just be prepared for some serious heat. Thirty-seven is the actual temperature Tuesday in Wichita, Kansas, the average is 23. The temperatures in the low to mid 30s Celsius. There's a severe drought across most of the West and some very strong winds. All of these combinations meaning there's a very higher - high - fire risk as we continue Wednesday on into Thursday, but particularly Wednesday across this particular region including Amarillo, a very extreme case. We could have winds gusting higher than 60 kilometers an hour.
Now at the same time, we're going to see these storms developing across the Central Plains. They could become quite severe as well. But as they move eastwards, one of the concerns will be for lightning but without any rain with it. So on this very, very dry ground, that could spark more fires. There's been plenty of them certainly in Oklahoma and you can see the warnings here again through Wednesday for some of that severe weather. It will continue to work its way eastward over the next couple of days. And I just very quickly want to show you before and after, Richard. This is a burn scar. This is what the big fire in Valparaiso in Chile did a few weeks ago. So this is why these fires are taken so seriously. Of course danger to life but also it takes a long time for the ground to actually recover after a big forest fire. So we're dealing with lots of those now in the West of the United States.
QUEST: You have your work cut out for you in the days ahead, Ms. Harrison.
HARRISON: I do. I like to be busy, you know how that goes. Better to be busy than not.
QUEST: I'm sure there's a saying there from the (inaudible). Thank you very much. Jenny Harrison -
HARRISON: (LAUGHTER)
QUEST: Now, when we come back, Uganda's finance minister says that the controversial ant-gay law is not affecting investment in her country. We'll hear the justification after the break.
(COMMERCIAL BREAK)
QUEST: As the World Economic Forum in Africa begins, global investors are scrutinizing the continent's records on gay rights. An anti-gray (ph) in Uganda sparked outrage among some business leaders earlier in the year. Sir Richard Branson came on this program to say he would reconsider doing business in the country. Uganda's finance minister denies that this law and its effect is having any real impact on investment. Jim Boulden sat down with Uganda's finance minister and asked if potential investors even questioned her about the ant-gay law.
(BEGIN VIDEOCLIP)
MARIA KIWANUKA, UGANDAN FINANCE MINISTER: For the record, there's been a lot of noise, a lot of dust and a lot of misunderstanding because of different interest groups, you know, all playing to the gallery. So we've decided that the foreign affairs minister will be the one to communicate Uganda's position. For me as a minister of finance and economic development, I just look forward to continue working with all our development partners to see how to improve the standards of living of all people living in Uganda.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: But you've worked at the World Bank, and as you know, the World Bank has held back a loan for Uganda because of this issue. Where do we stand on that right now and do you expect that loan to come through soon?
KIWANUKA: What I've been told by the World Bank is that it was going through the normal evaluation process. They've had some concerns which they have researched and I'm sure they've finished whatever they were doing.
BOULDEN: Uganda of course is still considered one of the poorest countries, isn't it? And so what do you see as your main job right now to sell - will the infrastructure bring the jobs and that will sort it? Or do you need to get education up, do you need to bring the Diaspora back? What do you see?
KIWANUKA: OK, first of all, yes, we do have a lot of way - a long way to go - to become -- not such a long way as before - become a middle income status country. The way to plan to do it right now is to - for the government to - do the infrastructure - the big, bulky goods that require a lot of money up front -- and the private sector won't fund because it means a lot of - their benefit will be defused. So the government rather use its own money or borrow for that purpose.
BOULDEN: Now you're heading to Nigeria for the World Economic Forum. I do want to ask you this because there's a parallel between Nigeria and Uganda in one way - one of the problems in Nigeria is the problems in the north and everyone's talking about the missing girls at the moment from the school.
KIWANUKA: Yes.
BOULDEN: Well Uganda had an issue obviously - a very serious issue - with rebels in the north. Do you think there's any advice, any lessons that Uganda can give to Nigeria or is it just too different?
KIWANUKA: Well I won't say lessons Uganda can give because not really part of my main - our main forte, if you like. But I can observe that outcome (ph) -- it did not negotiate with abductors, there was a hunt that went on and on and was not always in the public - you know - view and that finally the girls came home.
BOULDEN: Yes.
KIWANUKA: So all I can add is our thoughts and prayers are with the girls of Ahucheboke (ph) the same way we prayed for our girls in Aboke and hope that hope that it will resolve very, very soon because human life is a terrible thing to waste.
(END VIDEOCLIP)
QUEST: After decades of international loans, high debt and little development, Africa's investment potential is starting to come alive. That is indeed what it is all about at the World Economic Forum. We know there are still some major issues to resolve, not least the struggle for gay rights as we've already heard. And the impact on Boko Haram - the very real pressing and drastic situation now affecting Nigeria's northwest - are becoming apparent by the day. Zain Asher who joins me now has been looking into this for us. The World Economic Forum meets in Africa to promote African business, and yet Nigeria's got these problems with Boko Haram which we'll talk in a moment -
ZAIN ASHER, CORRESPONDENT -- Yes.
QUEST: -- and Uganda his the problem of gay rights.
ASHER: Yes, absolutely. But I think it's interesting - it's going to be interesting - to look at just how the world's - how the international community can really sort of have impact on this to make sure that they pull back in terms of anti-gay right laws. So, for example, we know that the World Bank is holding that loan, we know that countries like Sweden and Denmark are holding back in terms of foreign aid. But my -
QUEST: Besides, the minister doesn't seem terribly concerned about it.
ASHER: Right.
QUEST: The minister there says, well a) it's the foreign minister who should be talking about this not me and b) it's all previous and politicus ad dominiticum (ph).
ASHER: Right. So here's my question - is foreign aid for a country like Uganda ever going to be more important than pleasing their electorate? -- A lot of whom have the same anti-gay views that some of the - some parts of the - government do? But also, another issue is that you know there's been the shift away from foreign aid towards relying more on foreign investment. And if you're trying to get transnational companies not to invest in countries like Uganda because of their anti-gay laws, then the way you do that is through the consumers. The responsibility lies on the consumers.
QUEST: Right. But in this case, you're talking about CEOs who on this program have refused to say one way or the other whether they would support or are against the law. So I ask you, from your experience in the continent - and you grew up there in Nigeria, -- let's turn to Boko Haram in this situation. What is it we are missing here in this story?
ASHER: I think it's really the economic impact. So, Boko Haram, you know, aside from the terrorist angle of it, it costs the Nigerian government roughly $600 million a year. That's one thing. Also the area in the northeast of Nigeria Benue State (ph) has been largely evacuated. There are cities there that's a ghost town. So you have to think about what's the economic impact for small business in that region as well? But also - and tourism as well in Nigeria.
QUEST: But we're a business program so we understand the importance here as you know of the World Economic Forum in Africa talking about business. But where do you draw the line at hypocrisy , Big Business - to be my "Profitable Moment," by the way --
ASHER: (LAUGHTER).
QUEST: -- where do you draw the line of hypocrisy where you finally have to say do something.
ASHER: Right, so I think that in Nigeria you have a lot of Western companies trying to promote education in Africa - 'education Nigeria' - but at the same time you have girls in northeastern Nigeria who can't go to school. And with education, that is - that represents the future - the economic future of any country. So I think that with Boko Haram at least you have to focus on education because that is the economic future of the country. But Western companies can't be hypocritical with that, Richard.
QUEST: Putting it in perspective. Thank you very much indeed. (Inaudible). We will have a "Profitable Moment" (RINGS BELL) after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." No one who's been to African can fail to be enthused and admire and wonder at the possibilities of investment - energy and business opportunities that exist in this country, even though on the continent there are difficulties. It is quite extraordinary and in fact I'll be in South Africa next week where the program will be coming from. But on the other side, whether it's issues of corruption and transparency, the appalling questions that have rised from the Boko Haram incident, or indeed the downright abusive civil and human rights coming from the anti-gay legislation in countries like Uganda and Nigeria, the truth is that African countries cannot have it both ways. You cannot seek international investment and then go and kick those very companies and those people which will be buying your products. It simply reeks hypocrisy. And that is "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow. END
