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Quest Means Business
ISIS Advances Towards Baghdad; ISIS Funding; ISIS Making Gains in Iraq; Protecting Iraq's Oil Sector; Breaking News: Abdullah Elshamy Released; US Markets Up; Argentina Defiant on Debt; World Cup Update; World Cup Index; Timing the World Cup
Aired June 17, 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)
PAULA NEWTON, HOST: Tuesday comes to a close on Wall Street with modest gains, and everyone seems to be in a holding pattern waiting for the Fed's
two-day meeting, ends tomorrow. But also, Iraq. The real indicator here: oil did not move for the day. It's Tuesday, June 17th.
Tonight, the battle for Baqubah. Iraq fights to keep ISIS militants from seizing the city.
Argentina lashes out at what it calls the "hedge fund vultures."
And forget the FTSE and check out the footie. Brazil faces Mexico and we launch our own World Cup Index.
I'm Paula Newton, and this is QUEST MEANS BUSINESS.
Islamist militants are continuing their wave of violence in Iraq and are advancing towards Baghdad. Overnight, they attacked Baqubah, a city 60
kilometers north of the capital. ISIS now has control of dozens of cities in northern and central Iraq and northeast Syria. Now, British prime
minister David Cameron spoke about the situation earlier today.
(BEGIN VIDEO CLIP)
DAVID CAMERON, PRIME MINISTER OF BRITAIN: No one should be in any doubt that what we see in Syria and now in Iraq in terms of ISIS is the most
serious threat to Britain's security that there is today. The number of foreign fighters in that area, the number of foreign fighters including
those from the UK, who could try to return to the UK, this is a real threat to our country.
(END VIDEO CLIP)
NEWTON: Now, Nouri al-Maliki, the prime minister of Iraq, has accused Saudi Arabia of funding radical groups such as ISIS. It's now thought to be one
of the most powerful and wealthiest terrorist groups in the world.
One reason why it's so well off, it raided the central bank of Mosul, taking gold and about $430 million in cash. Now, experts say it also
generates income from smuggling, extortion, and other criminal activities.
It's also turning a profit from major industries in areas under its control, like the oil facilities it seized in Syria, shelling those
facilities, believe it or not, in terms of the government. Now, "The New York Times" says it does the same thing with electricity generating plants
as well.
Now, Josh Rogin, the senior correspondent with "The Daily Beast" told me how ISIS was initially bankrolled.
(BEGIN VIDEO CLIP)
JOSH ROGIN, SENIOR CORRESPONDENT, "THE DAILY BEAST": The reaction was in response to a US policy that Arab Gulf countries saw as neglecting the
Sunnis that were under the atrocities of the Assad regime. They thought that these groups were the only credible way to fight against Assad.
And they've lost control of these groups. So, at this point, the regional sectarian war has spread so much that these governments and private funders
in these countries see these groups as the best way to fight, not only against Assad, but against the larger Shiite conglomeration, that includes
Iran, Hezbollah, that they see as persecuting Sunnis around the region.
(END VIDEO CLIP)
NEWTON: Now, for the latest, we go to our Arwa Damon. She's in the city of Arbil in northern Iraq. Arwa, if we can get your latest update of what you
know to be going on in Baqubah. We've heard varying reports from there today.
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, there have been differing reports as to how intense the battle there is. We know
that earlier in the day, ISIS fighters managed to get their hands on weapons and ammunition at a police station that they stormed.
The tactic we've been seeing them employing throughout pretty much all of this is when they try to take over a city, they'll launch initial quick in-
and-out operations before going in in full force.
Bearing in mind, though, Paula, they are not fighting on their own. At this stage, alongside them, are the various other Sunni insurgent groups that
were quite active here during the US-led occupation. Plus they have the support of the Sunni tribes.
This is not necessarily because they share ISIS's ideology of wanting to establish an Islamic caliphate, but because they do, for the moment at
least, have a unified stance when it comes to the desire to want to bring down Shia prime minister Nouri al-Maliki. But also end Shia domination in
Baghdad.
Of course, as they get closer to the capital, we are seeing the Iraqi security forces standing their ground, bolstered by Shia volunteers and by
the reactivation of various Shia militias, Paula.
NEWTON: Arwa, we've seen some action by the Iraqi government there. Today, they fired some top national security officials. They're blaming Saudi
Arabia. But I'm still left confused as to what they are doing, if anything, on the ground to hold on to a city like Baqubah.
DAMON: Well, it's difficult to tell at this stage, Paula. The Iraqi security forces do have major military bases and then smaller combat
outposts in various areas throughout the country, to include Baqubah. When the US military withdrew, the Iraqi security forces took over the majority
of their facilities.
Whether or not they're launching offensive operations, specifically in Baqubah at this stage to try to confront ISIS head-on, along with all of
its allies, whether they're trying to fortify themselves in defensive position so that they can actually secure the capital.
At this stage, the battle is not all that clear to us. It's very difficult for us to access these areas because of security concerns. Accessing
information is also incredibly difficult. This is not the kind of battleground where you have very defined front lines at this stage.
When it comes to Baghdad, however, the Iraqi security forces there are mostly Shia. It is expected that they will stand and fight, should it reach
the city limits.
But also, within the capital in and of itself, you have a patchwork of Sunni and Shia neighborhoods. I think what we're going to see emerging as
this progressing is a map that is very similar to that of 2006 where you really saw Iraq divided along sectarian lines. You saw people moving from
Sunni neighborhoods into Shia neighborhoods where they felt safe.
The tragedy in all of this for the Iraqi population, Paula, is that of course no one wanted to go back to that map of 2006, but again, the
civilians find themselves the victims of these forces over which they have no control at this stage.
NEWTON: Yes, absolutely, Arwa. And some harrowing anecdotal evidence on social media today from people stuck in places like Baqubah and Baghdad.
Arwa, thanks again for the update. We'll continue to stay with you. Appreciate it.
Now, an Iraqi official says extra troops have been deployed to defend oil fields in the south of the country. He says security forces are committed
to keeping oil operations safe, including the foreign oil companies operating in Iraq.
Majid Jafar is the chief executive of Crescent Petroleum, the Middle East's largest privately-owned oil and gas company. He's also a founding member of
the Arab Stabilization Plan. He joins me now, live from London.
I mean, this is a very difficult situation by any measure. But what is at stake if the Iraqi government continues in this vein, being very confused
about how and how efficiently it can actually fight these insurgents?
MAJID JAFAR, CEO, CRESCENT PETROLEUM: Well, I think there's the short-term issue of achieving security and stability for the oil facilities. In
general, the production's mainly in the south, which hasn't been impacted by the fighting, and in certain northern regions, which are largely still
under control, whether of the Kurdistan region forces or the central government.
But what it does raise is a longer-term question of is Iraq going to be able to produce its potential going forward? And world energy markets do
depend on Iraq.
The International Energy Agency's forecasts have been 60 percent of OPEC's productions growth over the rest of the decade to come from Iraq, up to
nearly half for the next two decades of world increase in oil production to come from Iraq. So, it does lead to longer-term questions of Iraq's ability
to meet those targets.
NEWTON: Yes, and it seems like that would have to be off the table right now. If people like you are planning this, so you're not looking at Iraq
already, and saying look, that's off the table. The growth in oil and production has to come from somewhere else.
JAFAR: Well, we're heavily invested across the country in different sectors, and the oil and gas sector in particular in the Kurdistan region
in the north. Our operations haven't been affected -- I touch wood -- at the moment.
But Iraq overall, once it reestablishes, hopefully, security and stability on the oil side needs to pass the necessary legislation to mange the oil
sector and to deal with the revenues. And clearly, the international oil and gas companies do need to see stability. And we've had some of the
majors in the last 48 hours pulling out their expat staff from the country.
NEWTON: OK, I'm just going to hold you right there because we have some breaking news into CNN. CNN is trying to confirm reports that Abdullah
Elshamy has now been released from prison where he was being held in Egypt. It's something his family has been pressing for for quite some time. His
health had been in question, here.
Al Jazeera now reporting that he has been released. As I said, his family had been asking for quite some time that he at least be moved from prison
to a hospital. He had been on a hunger strike, and his family very concerned about his health. We'll continue to get to that story with more
information, but right now, Al Jazeera reporting that one of its journalists has been released in Egypt.
Sorry about that interruption. Of course, as you can imagine in that region, an important bit of news. I want to get to another topic, though,
when it comes to energy in that region, when we talk about Iran. A huge irony right now that Iran may be of use diplomatically in Iraq in trying to
keep a lid on things.
But also something that may be overlooked. If we did not have sanctions on Iran, if Iran was able to bring its production back up, could it be,
potentially, any kind of a replacement for some of that production that isn't happening in Iraq?
JAFAR: Well, clearly Iran is another major resource holder, and so world energy markets are looking at the nuclear negotiations with interest. But
across the Middle East, we've had the problem of, in a way, punching below our weight.
Many countries, because of turmoil, security, and political, such as Libya, such as Yemen, such as Egypt in recent years, not having enough investment
and seeing falling production, while North America, thanks to their shale revolution, has picked up a lot of that slack.
The Middle East, apart from the political turmoil, suffers from very high energy subsidies. Half of the world energy subsidies, $250 billion a year,
goes on energy subsidies in the MENA region. And inadequate incentives to encourage private sector investment in the upstream.
Because incentives that were set 20 years ago when oil was $12 to $15 a barrel are just not working when oil is over $100 a barrel, and oil and gas
companies have other options worldwide.
So the Middle East today with half the world's oil and gas reserves is only producing about a third of its oil, a sixth of its gas, and actually, that
percentage of the market share has even been falling.
NEWTON: Yes, that's a stunning figure, just considering how important those reserves are. Thank you so much for your time today. Appreciate it.
Now, we want to bring you up on today's developments in the markets. Alison Kosik has been waiting patiently at the New York Stock Exchange. We do have
the markets, it seems to me, in a bit of a holding pattern. I was relieved, surprised, shall we say, that oil didn't really move that much. And the
markets certainly -- modest gain. It wasn't bad.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Right. So, as far as oil goes, we did see it steady today, compared to what last week -- what the past couple
of days have looked like. As far as the markets go, yes, we did see stocks in the green, and believe it or not, it was inflation and relief that there
is some that drove the trade today.
We found out that consumer prices moved higher in May more than expected, but the market is actually seeing this inflation as good news because, one
trader telling me, inflation is a sign of health, that the economy needs a modicum of inflation.
So that perceived good news offset some downbeat news on housing. We found that construction of new homes slid 6.5 percent. Permits for future
building activity fell as well. Didn't shake investors, though.
This is all ahead of this two-day Fed policy meeting wrapping up tomorrow, so we did see that kind of sideways choppy trading throughout the session.
Paula?
NEWTON: Yes, totally expected, with Janet Yellen making her comments tomorrow afternoon --
KOSIK: Yes.
NEWTON: -- and I'll be with you again tomorrow --
KOSIK: OK.
NEWTON: -- to check out what she says. Thanks, Alison, appreciate the update.
Now, has Argentina's leader put her country on the path to default? We'll look at the battle between Washington and Buenos Aires. That's next.
(COMMERCIAL BREAK)
NEWTON: S&P has cut Argentina's credit rating two places and warns further downgrades are definitely possible. It came after Argentina's president
said she would not give into so-called "extortion." She's defying a ruling by the US courts ordering Argentina to pay its full debt.
Now, the MERVAL index of Argentinian stocks fell sharply on Monday after that ruling, not a surprise. It made up some of its losses on Tuesday. In a
television address, President Kirchner said Argentina would not default.
(BEGIN VIDEO CLIP)
CRISTINA FERNANDEZ DE KIRCHNER, PRESIDENT OF ARGENTINA (through translator): I want to address the millions of Argentinians who are
listening, but also the 92 percent of creditors who believed in Argentina. I want to tell them that Argentina will meet its obligations. Argentina
will not default on its structured debt.
All the government, all the country, all the directors in the areas of environment and policies, need to be open to negotiating. What no president
can do in a sovereign country is to subject its country, its people, to extortion.
(END VIDEO CLIP)
NEWTON: Let's repeat those words carefully: she said it would not default. Now, this case dates back to Argentina's $100 billion default in 2001. The
country offered creditors new terms, which some refused.
Now, the holdouts sued. They argued Argentina can afford to pay everyone. US courts agreed, ordering Argentina to pay the plaintiffs $1.3 billion.
And on Monday, the Supreme Court refused to hear an appeal against that order. It will be default all over again if it fails to pay by the end of
the month, just two weeks away.
Now, Richard Samp is with the Washington Legal Foundation, a law center that advocates for free enterprise. He says Argentina has nowhere left to
go. Richard joins me now from Washington.
I have to tell you, Richard, the lady in Buenos Aires begs to differ. She's saying that, look, she will negotiate her own terms to this repayment, that
her government will not submit to this kind of extortion. Really, if she refuses to pay, she refuses to pay. Are we really going to be in a
situation where people start seizing Argentinian assets?
RICHARD SAMP, CHIEF COUNSEL, WASHINGTON LEGAL FOUNDATION: No, and that's not what the court said. The courts said Argentina had two options: either
it can treat all of its creditors equally, which means that if it is going to pay those creditors who agreed to a 70 percent haircut, it also has to
pay the holdouts.
The other option is it can pay nobody. What he court said it may not do is violate the terms of its bond covenant, which says that you must treat all
bondholders equally. President Kirchner says that she is going to defy the courts, apparently, and she is going to try to continue to pay the -- what
are called the exchange bondholders without paying the holdouts.
She's not really going to be able to do that with any ease, because number one, she will be held in contempt of the American courts. Number two, no
international bank can afford to cooperate with her, because if they do, they will also be held in contempt of court and will be subject to massive
fines.
So, I'm not sure if it's really going to be plausible for President Kirchner to declare herself an international outlaw and to defy American
courts.
NEWTON: And yet, the United States has shown some sympathy for this position, and I mean the US government. They declared, in fact, that they
didn't want this case to go forward because it would certainly put Argentina at risk and its economy in grave danger.
Is there not an argument there to be made that she's saying, look, they will be paid, just on a different schedule as mandated from the courts?
SAMP: I don't believe she said that the holdouts would be paid. They get referred to by her on a constant basis as "vultures," "extortionists" and
the like, so that I suspect that if she had her way, she would pay nothing to those holdouts.
NEWTON: In terms of paying nothing to those holdouts, though, what is going to happen going forward? I'm hearing a lot of repeats of what one side
said and the other side said, but how will this end in the next few weeks?
SAMP: I don't know. There's, perhaps, more than a few weeks involved. The next interest payments due to exchange bondholders is on June 30th. My
understanding is that no default can be declared unless they are at least 30 days late. So, that brings us to the end of July. So, that does give
cooler heads an opportunity to try to negotiate some sort of settlement.
Obviously, it's not in the interest of holdouts to have a default on all the bond payments. They would just as soon be paid. So, I'm sure they are
willing to go the negotiating table. And the question is whether Argentina is willing to negotiate.
NEWTON: It doesn't seem like so so far, but we will continue to follow this important economic story in South America. Richard Samp, thanks so much for
your time.
Now, still to come on QUEST MEANS BUSINESS, all the latest from the World Cup in Brazil.
(COMMERCIAL BREAK)
NEWTON: All right, time for the latest from the World Cup action. Mexico and Brazil are scoreless in the second half. Alex Thomas is live for us
from Rio. I cannot imagine how tense it is where you are right now.
ALEX THOMAS, CNN SPORTS CORRESPONDENT: Around 25 minutes remaining in Brazil's second match of this second World Cup that they're hosting on home
soil. After losing in the final to Uruguay way back in 1950, Brazil and their fans desperately want to lift the famous World Cup trophy here in
their own back yard.
But they're being held to a nil-nil draw currently by Mexico, who didn't do very well in qualifying, but always seemed to raise their game when they're
playing Brazil. Brazil have had more possession, more shots, but Mexico have got better in the second half.
Brazil desperate to find a goal, two wins from their first two games would comfortably see them through to the next round. But really, if they get a
draw here, they're going to be sweating it right through to their final game of the group against Cameroon.
Let's show you some of the action from the earlier game on this day six of the FIFA World Cup here in Brazil. It featured Belgium, who are many
people's dark horses to lift the World Cup, because they got such a great array of players.
But facing Algeria, it was the African team that scored first when Sofiane Feghouli was fouled in the penalty area and got up to score from the spot
kick. Manchester United's Marouane Fellaini equalizing for Belgium, but not until 20 minutes from the end.
And having got back on level terms, the Belgians then managed to get a winning goal ten minutes later. Eden Hazard of Chelsea setting up Dries
Mertens for a very impressive winner, 2-1 the final score in Belgium's favor, Paula.
NEWTON: Alex, Spain has a crucial match coming up against Chile. That ought to be an absolutely raucous affair there tomorrow.
THOMAS: It will be. And it's in the Maracana Stadium here behind me on Wednesday night, 24 hours from now. I've been in earlier watching Spain
train, Vicente del Bosque, their coach, under huge pressure even though he was the man that guided them to glory four years ago in South Africa when
they won the World Cup for the first time in their history.
Either side of that, they've won the European Championship two years running, they're indisputably one of the best teams in the world and red-
hot favorites here, but were thrashed by the Netherlands 5-1 in their opening game.
So they need to improve against Chile, who they've never lost to in 10 encounters. Spain have won eight and drawn twice. So, Spain are favorites
to win, and they'll need to to get their World Cup back on track and avoid doing what happened to Italy four years ago to go out in the group stages
while being defending world champions.
NEWTON: Yes. And the Italians would say, you had to bring that up, didn't you, Alex? You just had to bring it up.
(LAUGHTER)
NEWTON: Thanks, Alex. We'll continue to check in with you. Appreciate it.
All right. Now, the World Cup is a clash of the football haves and have- nots. Now, the Lloyds of London insurance market has valued every team at this tournament. Germany, Spain, and England, of course, are at the top.
Germany's team is valued at more than $1 billion.
Honduras and Iran are at the bottom, and we thought we'd see how these values rise and fall over the course of the World Cup. Now, forget the FTSE
100. This is the Footie 32 Index. Now, the only currency we care about is goals. So, if we have a look over here --
(BEGIN VIDEO CLIP)
(CROWD CHEERS)
(END VIDEO CLIP)
NEWTON: When you're scoring -- have a look at this -- we've got Costa Rica here at the top. Now, if you can see at the top here, 60 -- almost 65
percent, and why? Well, we all know about that upset that happened with Uruguay.
I want you to observe the middle here. England, losing its first match, at minus one. Now, why do we have these zeros here? We have a zero for
Russia, and we have a zero for South Korea. They have not played yet.
Now, by the end of the tournament, we will see which countries are punching above their weight and who is being left behind. Now, this is all how it
stacks up right now, as we were telling you. It's Costa Rica, who are the biggest gainers, and as I was telling you before, that 3-to-1 upset against
Uruguay really brought their stock value up, way more than 60 percent.
At the bottom, yes, it's Honduras over there. And as you can see from that, there are some blue chip teams way down there, as you can see. Portugal,
Japan, Croatia, they got a ways to go.
Now, we'll keep you updated as this tournament continues, and I for one have been looking at the fact that, look, you've got people like England,
Belgium, Brazil, Italy, really should be punching much higher than that, and we'll see how this goes. As I said, it's all about goals.
Now, if you've bee watching the World Cup, you might have noticed the electronic boards the officials are using. Well, they're like enormous
watches, and they're made by the Swiss company Hublot. I asked Hublot's chairman if the company was taking a risk with the new look.
(BEGIN VIDEOTAPE)
JEAN-CLAUDE BIVER, CHAIRMAN, HUBLOT: It was not a risk, it was a big opportunity. We have been discussing about this design for at least four
years. So, it was a long process. And the referees, the commission of the referees, they really welcomed it because they said, this gives us a better
attention.
NEWTON: Why the World Cup? We know it's a huge venue in terms of advertising and promotion and the spotlight is also would cost a lot of
money just to be able to deal with that sponsorship.
BIVER: Yes. If you want to have -- to reach 40 billion people, then you have to pay for 40 billion. So, is it expensive? I believe not. It's all
in the relation to the enormous coverage. It's the biggest event in the world.
Luxury today, we need also awareness, which football will give us. But we need also to talk to the next generation, which football gives us, and we
need to talk to today's customer. So, in football, we are reaching all this. And in that sense, it's very, very important.
NEWTON: In a world where a wristwatch is not a necessity anymore, you felt that the World Cup would be a way to speak to future generations about why
you need a wristwatch?
BIVER: You are right. Nobody needs a watch. When nobody needs a watch, you might be in trouble when you produce watches.
(LAUGHTER)
BIVER: So you have to find a reason why people would wear watch. And one of the reasons you can get is emotions, dreams, statures. And if you are
related to success through business, or success through sport, you can transfer this type of emotion of success.
If you take a brand like Ferrari, building cars, how did they build their reputation? Through sport. Because they were winning in competition. So,
the winning process brought Ferrari to the degree of exclusivity it has today. And we try, somehow, to be the Ferrari of the wrist.
NEWTON: Football, though, specifically, that is more, you would think, a mass marketing ploy other than a luxury watch brand. You just mentioned
Ferrari, but there are, in terms of luxury brands, they tend to go for other sports.
BIVER: Yes, they go for other sports, you are right. We go -- but we have decided that whatever we would do, we would try to be first, different,
unique. First, different, unique. If we go into golf, are we first, different, unique? No. If we go to tennis, first, different, unique? No.
But if we go into the NBA, we are with the Miami Heat, for instance, or the Lakers, we were the first luxury brand that went with basketball. First
luxury watch. So, going into basketball, we were first, different, unique.
And the interesting thing, since we entered football, we entered football in 2005, which is already ten years ago and nine years ago, we were -- and
then, in the first ideas, nobody wanted to follow. All the other watch brands were saying hey, let's see.
Now, they all want to enter football because now they have realized that we have done so well, but we have blocked football. This panel is blocked in
2022. Nobody in the world can have this panel until 2022. And in 2022, we will go on for another 12 years.
(END VIDEOTAPE)
NEWTON: Next on QUEST MEANS BUSINESS, a check of the news headlines and we'll hear from Jordan's finance minister about the crisis in Iraq and it's
affecting the Middle East.
(COMMERCIAL BREAK)
NEWTON: Welcome back, I'm Paula Newton. The news this hour. In Iraq Islamic militants have advanced within 80 kilometers of the capital
Baghdad. They clashed with Iraqi government forces in the city of Baqubah and looted the police station. Officials in the city say they managed to
repel that attack. U.S. officials say American forces are questioning a key suspect in the attack on the U.S. Consulate in Benghazi in 2012. The
spokesperson for the National Security Council says the Libyan militia leader Ahmed Abu Khattala was captured at the weekend. He will be brought
to the United States to face charges. The U.S. ambassador to Libya and three other Americans were killed in the attack in September 2012.
The Al Jazeera journalist Abdullah al-Shami has been released from custody in Egypt. Al-Shami has been on a hunger strike in protest of his detention
without charge for the last ten months. His case attracted international calls for his release. Three other Al Jazeera journalists remain in jail,
accused of aiding a banned organization and reporting false news. A verdict in their case is expected on Monday. The Spanish senate has approved a bill
to formalize the abdication of King Juan Carlos. It has already been passed by parliament. The king is expected to sign the bill Wednesday at the World
Palace. His son Philippe will take the throne Thursday. As ISIS militants battle for key cities across Iraq, the crisis threatens to destabilize the entire region. Jordan's finance minister warns the
violence could halt crucial energy projects and disrupt oil imports. He told CNN's John Defterios that the international community must step up to
contain the fighting.
(BEGIN VIDEOCLIP)
UMAYYA TOUKAN, JORDANIAN FINANCE MINISTER: Really I think the extraordinary burden of the Syrian crisis as well as any potential regional crisis
including the Iraq situation should be really met also by the international community (ph). I don't think it's in the interest of the international
community to have our positive and moderating ground (ph) compromised. So there should be much more international assistance because of the Syrian
crisis as well as any potential crisis.
JOHN DEFTERIOS, CNN'S EMERGING MARKETS EDITOR AND ANCHOR OF "GLOBAL EXCHANGE" SHOW: What are we looking at -- there's a destabilization of
Jordan potentially as Iraq flares up? That's your biggest concern - the connection between a lack of funding and destabilization of the Jordanian
people?
TOUKAN: Well, it's a potential threat really because it's very uncertain on how it will develop. But I think the best way to meet those challenges is
to have your internal structure on solid grounds.
DEFTERIOS: What is the direct impact of Iraq? For example, I know oil supplies have not been coming in for the last few months, you have a near
$2 billion pipeline project to go from Basra to Aqaba. These things just go on hold?
TOUKAN: Exactly. They have to go on hold if the crisis develops to a more serious situation, and as I said, Jordan has met in the past those
challenges by major reforms - fiscal reforms as well as economic reforms, political reforms.
DEFTERIOS: We have a quite a dangerous situation, Minister, in a sense that you have Syrian refugees competing now against Jordanians for jobs, so
they're undercutting salaries and competing in the case where we have youth unemployment of about 25 percent in the country. That's a dangerous mix, is
it not? It strains relations with those refugees and the Jordanian people.
TOUKAN: Well I think in general unemployment, especially among the youth and women, I think is very destabilizing actually. And so this problem of
unemployment in the region actually has to be dealt with.
DEFTERIOS: But the capital outlays by either the United States or the European Union candidly aren't there. Do you feel let down in that way with
the cash contributions?
TOUKAN: Well, we feel - yes - we are not getting enough to continue to play our moderating role in the region. And really, meeting the needs of all
those refugees is not only a humanitarian issue, it only - it also neutralizes, I think, any extremist tendencies.
(END VIDEOCLIP)
NEWTON: Now stay tuned for more on the crisis in Iraq and its impact on the region. CNN's Christiane Amanpour will host "Hillary Clinton's Hard
Choices," a town hall meeting from the Newseum in Washington. That's in about 20 minutes from now at 10 p.m. London time, 11 p.m. in Central
Europe. It's the currency some governments and regulators want to suppress, but Bitcoin just keeps bouncing back. After the break, we'll speak to some of
those are still keeping (inaudible).
(COMMERCIAL)
NEWTON: Now, the whole point of the virtual currency Bitcoin is that it's free of centralized control. Now that's under threat from a powerful group
of so-called Bitcoin miners. It's a loose alliance of market players calling itself GHash. It briefly took control of 51 percent of the
computing power that drives the Bitcoin market. Now, the Bitcoin price has dipped about 6 percent this week, and over the last year, there's been
plenty of volatility. Even so, plenty of businesses still support it, and as Nina dos Santos tells us in week's "Future Finance."
(BEGIN VIDEOCLIP)
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: You join us in the east end of London here at the Old Shoreditch Station Cafe. And we're here in
this part because it accepts digital currency. More and more people are choosing to spend and trade this way. There are many cryptic currencies on
offer. And here they accept the most popular - the Bitcoins. That means that you can pay for everything from your cakes to your coffee with
Bitcoins. There's even a Bitcoin ATM.
Male 1: I met a chap who was a Bitcoin guru, and he kind of gave me a pitch on Bitcoin. And I was -- I'm quite a sci-fi enthusiast, and I just - well,
immediately I was captivated by the idea of it. And I saw it as very much the way forward, like, I mean, a virtual currency or digital currency is
definitely the way that the world, you know, the future of finance is heading.
DOS SANTOS: And what certainly changed things for you is that machine behind your head which is a Bitcoin ATM. Joel, you are the man who decided
to bring that into this cafe.
JOEL RAZIEL, OWNER OF U.K.'S FIRST BITCOIN ATM: That's correct, yes. I had the idea several months ago. I mean, I saw one of them at a convention. I
was so amazed by the machine, I thought someone might bring one to the U.K. The reason I really like Bitcoin is I think that our financial system is
very limited. We can send music, we can send messages, we can send any type of information. The only thing we can't send is money without having to go
through banks.
DOS SANTOS: So now, how exactly does it work? Because I have to put a lot of money into that machine to get just one Bitcoin. I'm looking at that
price - it's right about 310 pounds and 90 at the moment.
RAZIEL: We can trade in thousands of a Bitcoin, which means that it's perfectly acceptable to pay the coffees by paying 0.001 of the bits.
Male 1: You can put five pound note into the Bitcoin ATM and it will give you a value of Bitcoin that exchanges to that value --
RAZIEL: For enough to buy a coffee.
Male 1: -- enough to buy a coffee.
DOS SANTOS: Let's be honest, this is just the anti-establishment movement, isn't it?
RAZIEL: It may have started that way but I think it's grown to something a lot greater than that. It's about freedom. It's not about trying to go
against something, it's just about trying to make the world a place - a financial place - we'd like to operate in.
Male 1: People don't tend to carry like they used to. They have their ATM card, and that's it. The future beyond that? It's not even have to worry
about your ATM card. You just have your phone and the phone covers all of your bases. It's your diary, it's your communication device, it's your
wallet.
DOS SANTOS: So, show me how it works.
RAZIEL: It's a very simple process. The first thing we'll do is press the start button. The second step is to scan the QR code on your phone. This
links to your Bitcoin wallet which is online, so I'll just scan it here. And the third step is just to insert your money into the note acceptor.
DOS SANTOS: And so that gives you how much? Sixteen mini Bitcoins.
RAZIEL: That's correct. Each mini Bitcoin is a thousandth (ph) of a Bitcoin. It will send me 16 of them to my account, and it should be with me
in about ten seconds.
DOS SANTOS: So, on average, how many of your customers is the percentage actually coming to your cafe and buy things in Bitcoins?
Male 1: A very small percentage, I would say. Probably 1 to 2 percent of our current customers.
RAZIEL: People say that Bitcoin is this new-age, revolutionary intangible currency. I think what a lot of people don't understand, or maybe haven't
noticed, that the banking system has done this to us over the space of several years. We now have online banking, we now have chip and PIN, we pay
with wire transfers over the internet. And in fact, very people are using cash these days. Bitcoin is just a smarter step into empowering ourselves
to control this digital money.
(END VIDEOCLIP)
NEWTON: Now it's time to go to Jenny Harrison who's at the CNN International Weather Center right now. And, Jenny, I was looking at some
video which you're going to show us right now. This scared the heck out of me. I mean, for anybody who's been stuck in anything that even remotely
appears to be a tornado, and like, you just think - what would I do if I saw this?
JENNY HARRISON, CNN INTERNATIONAL METEOROLOGIST: Yes, I know. The whole situation, this whole season of course, Paula is a worrying one for just
about everybody in these areas where of course we do see these severe weather storms come through. Now this is actually the radar going back from
Monday. This is in particular is one of the storm cells which wreaked havoc in one particular area.
Let me just show you the video that in fact you're talking about, because up in Nebraska, there were actually two tornados that were filmed --
spotted and then filmed at the same time. Hopefully we can show you that video. Two tornados - and now, it does happen, but it's not that common,
but it happens. And of course it's even less common that we actually happen to be in the right place for storm chasers actually to record this. But
these tornados, they were fairly slow-moving, but they were on the ground for over an hour as they literally ripped their way through these
neighborhoods. And you can see in some of these images there the actual debris that was picked up of course at the same time. Two people were
killed, and 16 have been very seriously injured. And this now showing you some of the devastation from those tornados coming through.
So, typical for this time of year, typical for this sort of strength of storms as well that then produce these tornados - not as typical to see two
across the ground at the same time. Come back to me and I'm going to show you some obviously of the weather information to go along with this
particular - these particular storms. Now, in particular first of all, let me just show you this little town. This is the town of Pilger, and it's
literally less than one square kilometer in size.
And this was ripped apart by those tornados. And just when you think how tiny it is, and they somehow ended up in the bulls-eye of those devastating
systems. Now, of course there were a lot of reports of bad weather on Monday, it will continue through this Tuesday on into Wednesday - three days in total.
On Monday alone there were over 30, but there 31 reported tornados, not one in Pilger. The National Weather Service had been out there. They say
certainly signs of an EF3, maybe even an EF4 in some areas. But over 180 wind reports, 130 hail reports, and this threat will continue, as I say,
almost into Tuesday. This is the last few hours and on into Wednesday as well. Very hot, moist air across the eastern half of the country. This is
where the severe storms will continue to break out as we continue through the next couple of days.
And right now, this huge swathe you can see here - 53 million people are actually in the path of what could be some very severe thunderstorms. This
is the forecast for the next 48 hours. You can see the storms to the north, but also we're going to see more of those popup showers and thunderstorms
really through pretty much central and eastern southern regions of the country. Wednesday a very warm day, particularly in D.C. with a high of 36.
So, yes, another very unpleasant couple of days unfortunately to come, Paula.
NEWTON: Yes, and it is a bit scary for everyone and everyone has been encouraged to really pay attention over the next few days as this continues
to go on. Jenny, thanks for that update. We appreciate it. Now after the break, how doing good deeds and doing good business go hand-in-hand.
(COMMERCIAL)
NEWTON: Now, businesses must be a force for good in the world - that's the principle behind the philanthropic side of Virgin Group Virgin Unite. Now,
the CEO, Jean Oelwang, says it exists to tackle global issues and to promote entrepreneurs by harnessing the Virgin brand.
Now, the foundation encourages companies in the Virgin Group to reinvent the way they work and go beyond business as usual. It's also active on
issues such as healthy childbirth and reforming drug laws. Now, Jean joins me now from our CNN Center in Atlanta. Thank you so much for being here
with us today. You know, we have to deal with the cynical side of this first. Many people say this is a company that's responsible to its
shareholders, let the charities deal with that charity work, by all means, the company can contribute. But why put it under the Virgin name/the Virgin
brand?
JEAN OELWANG, CEO, VIRGIN UNITE: Yes, I think that right now in the world actually they don't have to be separate. Doing well doesn't have to be
separate from doing good. I think both a business has to do well in today's day and age. It was fascinating (ph - Edelman just did a study and they
found that 87 percent of the people who responded that they expected businesses to put as much emphasis on taking care of people and the
environment as they did on profit. So I think now is a time that really business as a force for good is probably more important than ever before in
the world.
NEWTON: And which areas are priorities here in terms of Virgin going forward I in this vein?
OELWANG: Yes, I think when we step back and look at the issues in the world right now - if you look at this kind of perfect storm over the poverty
crisis where still more than half our population globally lives on less than $2.50 a day, 1.6 billion people don't have electricity, and if you
look at that coupled with the environmental crisis that we're seeing live today on TV, as well as every single major ecosystem is in decline.
And then if you look at that coupled with conflict in the world, I guess we feel passionately that it isn't about one company or about one sector
driving change and responding to these issues, it's about really a different approach between government, business and the not-for-profit
sector. And what we're really passionate about is how can business be a force for good, and how can we connect unbelievable entrepreneurial spirit
with ideas that are going to make a difference and bring the right people around the table from a convening perspective to make change happen.
NEWTON: Jean, maybe you can be your own best salesman for this foundation. You had a very successful business career. You decided to go to this end of
it. What excites you going forward about belonging to this kind of foundation when some would say, you know, the real responsibility should be
to elevating shareholder value, not to this kind of a foundation?
OELWANG: Well, I think part of elevating to shareholder values is making sure that we really put purpose at the core of all of our businesses and
they drive change and as - it's the business model now, there's no debate about it anymore, it's been very good for the bottom line. If you look at
the wonderful work that Unilever is doing under Paul Polman or M-Pesa (ph) in Kenya. And from a Virgin perspective, I think there couldn't be a more
exciting place. We're doing lots of exciting work with this next generation of entrepreneurs coming on board to help create jobs, we're working with
our 80-plus businesses across 15 industries to look at how we can put people and planet at the very core of who they are and then looking at
these really exciting collaborations where we bring unlikely marriages together to create things -
NEWTON: Right.
OELWANG: -- like the Carbon War Room or the B Team.
NEWTON: Right. Thank you - thank you so much for your insights on this foundation effort. Appreciate it.
OELWANG: Thank you, Paula.
NEWTON: Now, from promoting entrepreneurship to celebrating the smartest ideas, the European Patent Office is recognizing inventors who have
contributed to social and economic progress. Nick Glass has more.
(BEGIN VIDEOCLIP)
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT: The much-coveted award in the shape of a sale. Inventors seldom gather like this for a party. You won't
necessarily know their names, but they've all made a difference of some kind in the way we live. These Danes invented an affordable way of turning
deadly water into something drinkable. This Hungarian invented Rubik's Cube and lent his name to it. This American gave us 3D printing.
MANDY HABERMAN, JUDGE, EUROPEAN INVENTOR AWARD: Now I've actually seen 3D printing in use, in production, and, you know, I practically wet myself
because it's so exciting.
TONY TANGENA, JUDGE, EUROPEAN INVENTOR AWARD: One of the things that surprised me was something like a smog-eating concrete. Who would've
thought about that?
BENOIT BATTISTELLI: PRESIDENT, EUROPEAN PATENT OFFICE: ZEUS inventors and ZEUS entrepreneurs, they're the real heroes of our time. And in my view
they are not celebrated enough.
GLASS: Fifteen nominees in all were up for awards, half of them in the biggest growth field, medical technology. First the board went to a
professor at London's Imperial College. Chris Toumazou has invented a microchip that can quickly and cheaply analyze our DNA to see whether we
are predisposed to certain diseases.
CHRIS TOUMAZOU, EUROPEAN INVENTOR AWARD - "RESEARCH": I think medical technology is the next big wave. I mean, we're seeing it not just in
healthcare, but in the consumer industry as well.
GLASS: A Belgian microbiologist and a French chemist were honored for developing an urgently-needed new drug for TB - tuberculosis, and
surprisingly, their company isn't in it for the profit. In a sense have you invented something that you have effectively given away philanthropically?
KOEN ANDRIES, EUROPEAN INVENTOR AWARD ' "INDUSTRY": Yes, it's - you could say that, yes. I call this philanthropy from within.
GLASS: The lifetime achievement award went movingly to the oldest man in the room - Artur Fischer from Germany. At 94, slow on his feet, but still
nimble of mind. More 1,000 patents so far to his name including the famous Fischer wall plug for screws. Another popular winner, Chuck Hull from
California - the inventor of 3D printing. At 75, still happily working, his wife as he put it likes to - well - shop.
CHUCK HULL, EUROPEAN INVENTOR AWARD - "NON-EUROPEAN": I would tell people about 3D printing, and they wouldn't understand if I tried to explain it,
and their eyes would glaze over. But nowadays, you know, strangers explain it to me, so it's much better.
HABERMAN: Out of the 50 nominees, not all of them would have changed the world yet, but come back in 20, 30 years' time and ask the same question,
because I would say that a good two-thirds of them probably will have changed the world. Yes. I truly believe that.
Female: Congratulations to all our winners and finalists.
GLASS: Nick Glass, CNN "The European Inventor Awards" in Berlin.
(END VIDEOCLIP)
NEWTON: And that's "Quest Means Business" for tonight. I'm Paula Newton in New York. Now, a CNN town hall with "Hillary Clinton's Hard Choices,"
hosted by our own Christiane Amanpour - that's up next.
END
