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Quest Means Business
Bill Gates Supports Government in Apple Dispute; Election Campaign Update; Oil Production Examined; Obama Unveils Plan to Close Guantanamo Bay Prison; Republicans Vow to Block Scotus Nominee; India Works to Restore New Delhi Water Supply; Swedish Teen Rescued From ISIS in Iraq; Gates : Government Must Balance Privacy & Security; Dimian: Egypt Growth Hurt by Tourism Slump; Dimian: Egypt Must Be Firm About Security; Boosting Tourism in UAE's Ras Al Khaimah; Water Crisis Grips New Delhi; New Delhi Struggles to Deal with Water Crisis; Customers Steamed Over Starbucks Rewards; South Africa's Booming Wine Industry; Profitable Moment. Aired 4-5p ET
Aired February 23, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
RICHARD QUEST, HOST: Markets - the closing bell is ringing -- an exact opposite of what we saw yesterday. Today the market went down and never
looked back and the market is off very heavily off more than 1%, with a strong, oh no, a wimpy gavel, bringing trading to a close on today,
Tuesday, February the 23rd.
(BEGIN VIDEO CLIP)
QUEST: Tonight, Bill Gates enters the fray. As the public sides with the FBI over Apple.
Donald Trump may be just hours away from another huge victory in Nevada.
And misery loves company; oil and stocks have a terrible session together. I'm Richard Quest. Of course, I mean business.
(END VIDEO CLIP)
QUEST: Good evening. Tonight, a titan of tech has broken from his peers and says issues of privacy should be left to government, not to Apple and Tim
Cook.
(BEGIN VIDEO CLIP)
QUEST: Big gates told "The Financial Times" he believes the FBI's request to access a terrorist phone is the same as getting a bank record's. In a
later interview, he expanded on that saying he is concerned about government overreach in this case. Speaking to CNN's Fareed Zakaria, Mr.
Gates said the government shouldn't be left blind.
BILL GATES, MICROSOFT CO-FOUNDER: Well, I think at the end of the day, the government will decide about this, and in the meantime, the debate about,
oh, do we have the right safeguards in place what is the role of government in terms of being able to see bad things or enforce its laws -- you know,
that's all been -- although I disagree with specific things that go on, the idea that this has become more of a discussion of hey, we didn't have
safeguards for the FBI a long time ago what do we have now. I doubt we'll go in the direction of saying okay, let's make the government blind because
they messed up in the past. But the overall discussion is worthwhile
(END VIDEO CLIP)
QUEST: Bill Gates on the overall discussion. And public opinion in this case is broadly siding with the U.S. Government at the moment.
(BEGIN VIDEO CLIP)
QUEST: According to a pew survey, when asked what Apple should do in response to the court order, 51% say the company should unlock the phone.
38% say Apple should resist the order. 11% said they don't know.
Support for Apple came not just from young people but older respondents. 43% of those between 18 and 29 were with Apple, so that's 43 with 18-29.
When you look at those aged 65 and older, the perhaps not surprisingly, the figure falls to 27%. So overall it seems millennials and those younger are
far more likely to support the Apple position.
(END VIDEO CLIP)
QUEST: CNN money's business correspondent is Samuel Burke he's in London for us tonight. Samuel the views of Bill Gates, here we have somebody who
is one of the founders of the tech industry. And he's giving a much more nuanced response than arguably some of the young whippersnappers CEOs we've
heard from.
SAMUEL BURKE, CNN MONEY'S BUSINESS CORRESPONDENT: This is the biggest blow that the tech community could have received. That's how one executive in
the tech community described it to me. Because of course you already had Facebook, Google and Twitter coming out on Apple's side. So the only one
left was Microsoft. And although he's not involved in the day to day operation of Microsoft, he is a living legend. So now you have Bill Gates
up against Apple. You have the majority of the American public. You have Donald Trump and other GOP candidates. You also have the New York Attorney
General who's been on your program, Richard, and some very outspoken members of congress. Add that all up, it's not looking very good for Apple,
at least in the court of public opinion and it was already an uphill battle for them to try and prove this very important point they're trying to make.
QUEST: Should we be surprised at this? Because this issue is going. It's a new issue. It is relevant because of the increase in technology. And it is
going to a fundamental relationship that we have with our digital data and government. So we shouldn't be surprised.
BURKE: We shouldn't be surprised. We should be shocked. Because that's what these tech CEOs were telling me when I spoke to them on the phone today,
both in the United States and here in Europe. They couldn't believe it. Because of the analogies that he was using. One tech CEO said to me,
listen, he's talking about a bank or a local telephone company. And this person said with all due respect Mr. Gates, a local telephone company, a
national telephone company in the United States, didn't have customers in China, in Russia, the way that Apple does. They weren't global businesses.
They were facing millions of hacks against their products the way that Apple does.
[16:05:09]
BURKE: So for them to hear him using this analogy really upset them. And he talked about this not as a black and white issue. He said, I'm not taking
the FBI's side, I'm taking the middle ground. And what I heard over and over again today as I worked the phones is the middle ground is the FBI's
side. If they're saying make the product secure but make a back door and that's what Bill Gates is saying, then he's on the FBI's side.
QUEST: Samuel Burke in London, working the story. Thank you, Samuel.
Now, Mozilla is the company behind the web browser Firefox. And it's one of many Silicon Valley firms that have rallied behind Apple in its fight with
the FBI.
Denelle Dixon-Thayer, is Mozilla's Chief Legal and Business Officer, and we're very grateful that she joins us from San Francisco.
Look there's no -
DENELLE DIXON-THAYER, MOZILLA CHIEF LEGAL AND BUSINESS OFFICER: Thank you Richard, for having me.
QUEST: I think one thing - I think one thing we can agree on is there's no easy or obvious answer here. Other than however a court rules, Apple will
have to follow the rule of law. Can we agree on that?
DIXON-THAYER: So I actually don't know that there's - I agree that there's no easy answer here but I do think -- and whatever happens in the court is
going to have to be what Apple does. The challenges can go past the court that they're currently in up to the Supreme Court eventually and I think
that might be something that happens here. I think it's distinct from any other cases that we have seen with respect to the government's attempt to
get data because they're actually requiring security vulnerabilities to created in software. Which is very different, very, very different.
QUEST: OK. So we're now getting too much into the weeds of what's being requested and required. At the end of the day, you know, it's surely not
beyond the wit of technology companies for Apple to create this new software that will allow the FBI to do what it needs to do and keep it
safe. Or are we saying Denelle, that the hackers have reached such a state that we can't guarantee the safety of any new software key, whatever we
want to call it?
DIXON-THAYER: So I don't actually think it's only about the hackers here.
(BEGIN VIDEO CLIP)
DIXON-THAYER: The precedent that we can see is about certainly hackers. I think it's very hard to create software and to think that it's going to be
deleted and that no traces exist. There are going to be people that are still alive that created that software. But the implications of this are
far broader. Because it actually gets to what governments can come in to do. So not just the U.S. Government, but many governments could come in and
require the very same thing.
(END VIDEO CLIP)
DIXON-THAYER: Not just from Apple but from other companies. That's the ripple effect that we need to protect against here.
QUEST: So the one question which -- and I'm afraid, you know, since you are the person from the Valley and you're going to get the question. The one
question is, look, what do you then say to the FBI, who says we need this information for law enforcement, for public safety. We know you can get it.
We need it. So what is your answer when they say public safety is at risk?
DIXON-THAYER: Public safety is absolutely crucial. Here, though, if we're just taking this case, there were less intrusive means by which the
government could have gotten access to this data. And because of choices they made in their investigation, those were left unavailable to them. So
it's absolutely important to protect the public but we have to do so by not infringing on individual liberties. And when we look at this, we can
infringe some, there's a balance, that's what our constitution creates. So we need to be very pragmatic in how we approach these things.
QUEST: Right, but even in this case, let's face it, as I think we can agree again, this was a case waiting to happen. And if it wasn't this case it
would just be another case. This is an issue that has to be litigated probably to the highest court in the land. And on that balance point, are
we really now at the point where we're saying physical safety versus digital privacy?
DIXON-THAYER: I think it's actually about physical safety versus digital privacy. I think it's actually about balancing the needs of both. So I
think we have to look at all of what it encompasses here. It's not just about privacy of one's data. It's also just about security of our whole
online environment. Making sure users feel very comfortable transacting online. That's what encryption and this security technology allows.
QUEST: Right, but the final question, are you, and you, I mean the community, us, society, are we prepared to accept that there may be a bomb
or an attack or a terrorist attack because we didn't allow the police, the law enforcement, to get access to a phone?
DIXON-THAYER: I think there are circumstances by which the government has exigent - there are exigent circumstances where the government has the
ability to get access to that. I think that we need to look at it as a balance.
[16:10:01]
DIXON-THAYER: So as I sit here today, I'm not comfortable with what you just said in terms of the idea that some bomb could happen because they
didn't get access to it. But they have to prove that that's what's actually going to happen here. We have to think about this, the way our
constitution lays this out. So it's not -- we just can't believe that the government has the full access and rights to be able to do this in every
circumstance. That would lead us to a very, very challenging environment.
QUEST: Denelle, we're very grateful, thank you ma'am for coming in and really having a good robust discussion on this, it's much appreciated,
thank you.
DIXON-THAYER: Thank you so much for having me.
QUEST: Now, the old adage what happens in Vegas stays in Vegas. Well anything can happen in Vegas tonight.
(BEGIN VIDEO CLIP)
QUEST: Donald Trump's rivals are hoping they can beat the odds in the Nevada caucuses. Quest Means Business.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: (inaudible) Wild West of American politics, the Nevada Republican caucuses are due to begin in a matter of hours and the candidates have been
busy making their final pitches.
(BEGIN VIDEO CLIP)
QUEST: Donald Trump is looking for a third win, clinch Nevada and well, you know, he's not quite unstoppable but he's well on the way. And the latest
CNN poll appears to show that that is a safe bet. Look at the numbers, he's got more support than the next three candidates combined. It's important to
note that Nevada's polls are notoriously unreliable.
(END VIDEO CLIP)
QUEST: This contest comes as Ted Cruz is facing criticism about his campaign tactics. Speaking a short time ago Mr. Trump warned his supporters
be on the lookout for dirty tricks.
(BEGIN VIDEO CLIP)
DONALD TRUMP. U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Well, you know, we're down to crunch time, folks. We got to do it, we got to do it. Like at 5:30
today you know where you're going to be right? And watch out for dishonest stuff. Because I'll tell you what, there's a lot of dishonesty with this.
We have just got to be careful. They have paper ballots, they have the whole deal going. Paper ballots, right. So just watch out. If you see
anything, let us know about it.
(END VIDEO CLIP)
QUEST: There are 30 delegates available and up for grabs in Nevada, and here's where the race stands now ahead of the caucuses.
(BEGIN VIDEO CLIP)
QUEST: Donald Trump is well out in front, he's got 68 delegates pledged. Ted Cruz a distant second, 11, Marco Rubio, has 9.
A win in Nevada would give Trump tremendous momentum going into the main event next week as you can see. Now, that main event is super Tuesday. It's
on March the 1st with more than 660 delegates at stake across 12 states. The candidates need 1,237 delegates to win in the GOP primary.
(END VIDEO CLIP)
QUEST: The war of words is getting nasty as you might expect as well. Sara Murray has this report.
(BEGIN VIDEO CLIP)
SARA MURRAY, CNN CORRESPONDENT: Donald Trump is hoping to lock in another win in Nevada.
TRUMP: Forget the word caucus, just go out and vote, OK?
MURRAY: While Marco Rubio appears set on amassing endorsements.
UNIDENTIFIED MALE: I'm supporting Rubio.
UNIDENTIFIED MALE: He's conservative and he's electable.
MURRAY: And arguing it's time for Republicans to rally behind him as the alternative to Trump. Before it's too late.
MARCO RUBIO, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: If we nominate someone, then half of the Republican party hates, we're going to be
fighting against each other all the way to November, we will never win that way.
MURRAY: But right now Trump's blows are trained firmly on Ted Cruz.
TRUMP: This guy is sick. There's something wrong with this guy.
MURRAY: Just hours before voters cast ballots in the unpredictable caucus state of Nevada.
[16:15:02]
TRUMP: You know, it is Las Vegas, it's a little tricky, a little tricky.
MURRAY: Cruz was trying to nix the narrative that his campaign plays dirty.
TRUMP: This guy Cruz lies more than any human being I have ever dealt with. Unbelievable.
RUBIO: Every single day something comes out of the Cruz campaign that's deceptive and untrue.
MURRAY: Yesterday Cruz fired his communications director.
TED CRUZ, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: This morning I asked for Rick Tyler's resignation.
MURRAY: That's after the staffer distributed a video that appeared inaccurately to show Marco Rubio dismissing the bible.
RUBIO: Perhaps that was the most offensive one because they basically made it up.
MURRAY: As Cruz struggled to regroup, John Kasich had his own awkward campaign moment saying women left their kitchens to support his 1970s
statehouse bid.
JOHN KASICH, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: We just got an army of people who, and many women who left their kitchens to go out and go door to
door and to put yard signs up for me.
MURRAY: His offhand comment quickly called out by a voter.
UNIDENTIFIED FEMALE: I'll come to support you but I won't be coming out of the kitchen.
KASICH: I got you, I got you.
(END VIDEO CLIP)
QUEST: Republicans don't have the night to themselves. Hillary Clinton and Bernie Sanders will face South Carolina voters in the CNN Democratic Town
Hall.
(BEGIN VIDEO CLIP)
QUEST: The Democrats have already been through Nevada. Mr. Sanders is looking to regain momentum after a loss in the silver state. And he's busy
hammering Hillary Clinton for her paid speeches to Wall Street firms. To put this into context now, Maria Cardona is a democratic strategist and CNN
political commentator. Maria, look, broad brush strokes here, broad brush.
MARIA CARDONA, CNN POLITICAL COMMENTATOR: Sure.
(END VIDEO CLIP)
QUEST: I mean, to an outsider, does it -- does Bernie Sanders still have a realistic hope of pulling this off? I mean, you know, man to woman, woman
to man, is it likely to happen?
CARDONA: Well, I'll say this Richard, after the first four primary caucus states which we're now just completing, the first being Iowa, second New
Hampshire, then South Carolina, and Nevada, depending on which party you're in.
(BEGIN VIDEO CLIP)
CARDONA: South Carolina is for us on this Saturday for the Democrats. And Nevada caucuses are today for the Republicans. You will only have -- each
side will only have accrued 4% of the delegates needed in order to cinch the nomination. So that tells you really that this is just the beginning --
really of the begin of this whole process. So it is incredibly early to predict what is going to happen.
QUEST: Well, hang on - hang on, I mean, you know this much better than I do.
(END VIDEO CLIP)
CARDONA: Yes.
QUEST: But if you look at the delegate count, and the super delegate count, she's half - she's a quarter of the way there.
CARDONA: Absolutely. That is exactly right.
(BEGIN VIDEO CLIP)
CARDONA: So what I was going to say is she also has now what I think is more important than the lead on the super delegate count, which I'll get to
in a moment, she has a lead in the pledged delegate count which are the delegates that are pledged as you continue to win more percentages within
the caucuses and in the states that are holding the primaries and these contests.
So that I think is the more important number because it is now going to be difficult just from a mathematical standpoint and given the fact Senator
Clinton is ahead in most of the states that are coming up, it will be difficult for Sanders to catch up.
(END VIDEO CLIP)
QUEST: OK, now, let's leave the numbers to one side. Is Hillary Clinton, she says she knows she has work to do with women, she's got work to do with
the youth, I mean -- she's constantly telling us that she has work to do. But is there any evidence that she's becoming more likable as a candidate?
To go -- because as you are well aware, you don't just need the base, you need the middle ground and you need to attract an element of the other
side.
CARDONA: That's right. And I think the answer to that is yes. And it's interesting because she's gone through this evolution in the last two
Presidential contests that she's gone through.
(BEGIN VIDEO CLIP)
CARDONA: This happened to her in 2008 as well where she famously said that she found her voice after New Hampshire when it looks like she was misting
up or tearing up after a voter asked her a question. After that, she became -- the perception is that she became much more personable and somebody that
could relate better to voters.
This time around, it is also happening. But what is interesting I think is that you know you say that she's got a lot of work to do with women where
in fact in New Hampshire she did lose women.
(END VIDEO CLIP)
CARDONA: In Nevada, women came back home to her as we like to say. So I think what her focus is going to be Richard, is to not take any vote for
granted and to continue to talk to voters about what they care about. About you know not talking so much about here's what I've done and here's what I
will do for you but here is what we can do together. Here is what we can do by fighting for opportunities to give you the way to achieve things and you
can live up to your god given potential and I think that's a relevant message for every voter.
[16:20:17]
QUEST: And as we continue with the caucuses, the primaries, the events, right the way through, Maria we're looking forward to having you to help us
understand the machinations of it all. Thank you.
CARDONA: Look forward to it, Richard, thank you.
(BEGIN VIDEO CLIP)
QUEST: Now, the Democrats candidates are going to be taking the stage just a few hours from now. It's 1:00 o'clock in the morning in London and 2 in
central Europe when you can see it but don't worry there are highlights throughout the day on Wednesday and it's all on CNN.
(END VIDEO CLIP)
QUEST: The markets. Yesterday when you and I were together, the Dow had risen very sharply.
(BEGIN VIDEO CLIP)
QUEST: Today in almost a mirror opposite, you see it's down at the beginning and it never looked back. After the break.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: The volatility continues on Wall Street after we saw a triple digit gain on Monday. The Dow suffered a triple digit loss, almost replicating
the opposite direction.
(BEGIN VIDEO CLIP)
QUEST: The Dow was off over 1.14%. And oil largely behind what we saw in the fall with West Texas and Brent down more than 4% on Tuesday after the
rally on Monday. The oil prices are driving the equities, equities are driving the oil market and we see to be in some sort of feedback loop on a
daily basis.
Iran's oil minister says Saudi's plan to freeze production is a joke. CNN money correspondent Paul La Monica is with us now.
(END VIDEO CLIP)
QUEST: Paul, this relationship between oil and oil and equities. I was reading Ben Bernanke's - Ben Bernanke has written a blog about this, a very
learned document, which I didn't understand all of it but I got the gist of it that basically says that they do feed on each other.
PAUL LA MONICA, CNN MONEY CORRESPONDENT: Yes, that's right, Richard. I mean the correlation between oil and stock has never been this high, and I
think the reason why oil and stock are moving in tandem is just that everyone is worried that the price of oil is plunging, not just because of
the well-known supply concerns, the world is drowning in oil, OPEC isn't going to cut production and Shell gas companies in the U.S. aren't not
pulling back either. It's always about global demand.
(BEGIN VIDEO CLIP)
LA MONICA: There are worries about China. There are worries once again about other emerging markets. And that is the big fear.
(END VIDEO CLIP)
QUEST: The inability though of oil to gain stability and I'm thinking now about, you know, 4% down one day, 6% up the other day. On relatively minor
developments. An odd comment here calling a joke. Another comment there saying a freeze. This is what's -- is this the new normal, this volatility,
in all markets?
LA MONICA: I think it is. And it seems like it's just getting worse every day. I mean, we live in this high paced social media world where one tweet
begets all this speculation and people overanalyzing words from various OPEC officials. Right now, any suggestion that OPEC is going to cut oil
production has lifted oil prices. And now it appears that there is no way that OPEC is going to do that, we see oil prices coming back down to a
possibly more normal level. When does this stop? It's really a huge question. And I don't think anyone knows the answer to and that's a big
problem.
[16:25:10]
QUEST: And there's lots of talk now that the idea of a recession in the United States -- I mean, you've been writing about this on CNN Money. The
idea a recession or the idea that somehow we're facing another financial apocalypse is starting to drift off.
LA MONICA: Yes, I think that is the case. I mean you look at what happened today on Wall Street.
(BEGIN VIDEO CLIP)
LA MONICA: That actually is the first time in you know about a week where we've had a sell-off of this magnitude. We've had a bit of a winning streak
lately and I think that is largely due to lessened fears about a recession. People are starting to act a little bit more rationally and realize yes,
oil prices have tumbled but that still is good for American consumers. This doesn't necessarily spell another 2008.
(END VIDEO CLIP)
QUEST: The "Quest Mean Business" guru is Paul La Monica, from CNN Money who joined us to make sense of it all, thank you Paul.
LA MONICA: Thank you.
QUEST: If you want to learn more about this strange tango between oil and stocks, then CNN Money (inaudible) there's a new article on this topic,
it's just gone online, go to cnnmoney.com/oil where you'll see the coverage on the volatile price of oil.
British's offshore oil industry says it's on the verge of collapse. Oil and Gas U.K believes more than more 40% of oil fields in the North Sea will
lose money this year if prices remain around $30 a barrel.
(BEGIN VIDEO CLIP)
QUEST: The oil -- obviously the oil is expensive to extract with deep long- standing capital expenditure. Some traders are taking a practical approach to the turbulence as CNN Money's Europe Editor, Nina dos Santos discovered.
NINA DOS SANTOS, CNN MONEY EUROPE EDITOR: It's morning in the city of London and traders are preparing for yet another volatile day on the oil
markets. Abbishek Deshpande helps to run the oil operations of one of France's biggest banks and he's had quite a year.
ABBISHEK DESHPANDE, OIL MARKET ANALYSIS: We've been far more busy in the last 3 to 6 months. Particularly given the movements in oil prices.
DOS SANTOS: The last 18 months haven't been for the fainthearted. Ever since OPEC's dramatic decision to boost oil production in 2014, the market
has been plagued with volatility, huge price swings and a lot of uncertainty.
DESHPANDE: We did see this coming and that's why we were bearish quite early on last year itself with the prices on the oil side.
DOS SANTOS: Oil companies have seen their profits tumble and thousands have lost their jobs in the process. But for Abbishek, crude's crash isn't
necessarily bad news.
DESPANDE: Volatilities sometimes can be good. It's a cycle. And on both upside or downside, you do end up having business.
DOS SANTOS: Oil traders have had to adapt if they want to earn their keep. And today more than ever it's a question of finding the right opportunity.
DESPANDE: You have to be pragmatic. You have to give them far more interesting products that can help them lock in some of the profits and
reduce their losses.
DOS SANTOS: After a turbulent few months for the oil industry, Abbishek and his colleagues believe that the worst is now over.
DESPANDE: We do see that the turning point is nearby, particularly for the oil prices, and then really a recovery but that recovery may not
necessarily be a sharp recovery.
DOS SANTOS: So whichever way the oil barrel goes there is money to be made in these markets. Even if it keeps the traders on their toes.
Nina Dos Santos, CNN Money, London.
(END VIDEO CLIP)
QUEST: Just like Wall Street, stocks across Europe when they traded, they ended in the red.
(BEGIN VIDEO CLIP)
QUEST: If you take a look and see how the market moved. The worst losses were in Zurich there the Zurich SMI down nearly 2%.
Business confidence fell in a third straight monthly drop it's another sign that China's slowdown is hitting other economies.
(END VIDEO CLIP)
QUEST: In London, Standard Chartered reported a first annual loss since 1989. The bank is focusing more of its attentions and capital on emerging
markets.
Now, Mars is recalling chocolate bars in some 55 countries.
(BEGIN VIDEO CLIP)
QUEST: The company says the chocolate may include an ingredient not found on the package. Plastic. In a statement, Mars said it issued the voluntary
recall after a customer complaint. It says it believes this is an isolated incident. The recall includes Mars, Snickers, Milky Way, Celebration packs
produced in the Netherlands, all of which leaves me with a rather conundrum, do I open it and eat it or not? Take the risk or put it to one's
side.
(END VIDEO CLIP)
QUEST: Answer by the end of the program.
Shares in Fitbit fell 21% by the close of trading.
(BEGIN VIDEO CLIP)
QUEST: Reported earnings after the bell on Monday, they beat expectations, they warned about falling sales in the year ahead. Investors are worried
the markets may be wearables for exhausted. Still under the leader, is at the top.
(END VIDEO CLIP)
QUEST: Months after the Metrojet crash Egypt's Finance Minister explains how it's trying to boost growth as the tourism industry grapples with a
major slump.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
[16:30:00]
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment.
Egyptian Finance Minister tell us the country safe for foreign tourist.
And Starbucks customers are getting jittery and it's not the caffeine. It all about a big new change in its loyalty plan. I'll have a profitable
moment on that as well. For all of this and that and the other this is CNN, and on this network the news always comes first.
Barack Obama has unveiled plans to close the highly controversial Guantanamo detention center in Cuba. 91 suspected terrorists are still
being held there. Many Americans don't want the detainees transferred to U.S. soil. So Obama says closing Guantanamo is important to uphold U.S.
Cuban rights values.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: keeping this facility open is contrary to our values. In undermined standing in the world. It is
viewed as a stain on our broader record of upholding the highest standards of rule of law.
(END VIDEO CLIP)
QUEST: Republicans in the United States Senate say they have no intention of approving a new Supreme Court Justice while President Obama is in
office. Mr. Obama's nominee to replace Antonin Scalia must be approved by the Senate, which is controlled by the opposition Republicans. The Senate
leader Mitch McConnell said, "Well the president had every right to nominate a replacement, Republicans have no intention of letting them
through."
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: He has every right to nominate someone. Even if doing so will inevitably plunger nation into
another bitter and avoidable struggle. That certainly is his right. Even if he never expect that nominee to be actually confirmed, but rather to
wield it as an election cudgel.
But he also has a right to do that, but he also has the right to make a different choice. He could let the people decide and make this an actual
legacy building moment, rather than just another campaign road show.
(END VIDEO CLIP)
QUEST: India's government has regained control over the canal that supplies water New Delhi. Authorities say it could be several days before
the city has access to clean water once again. The canal was damaged by protesters from the Jat Community who want more official recognition from
the government.
Kurdish forces say they have rescued a 16-year-old Swedish girl from ISIS in Iraq. According to the Kurdish authorities she was, in their words,
misled by an ISIS member to travel to Syria and then crossed into Iraq. The authorities say she will be returned home to be reunited with her
family.
Bill Gates has weighed in on the controversy between Apple and the FBI. The Microsoft cofounder broke from the views of his peers in the tech
industry. And said issues of privacy should be left to the government, not Apple and Tim Cook.
He told the Financial Times the FBI's request to access a terrorist phone is the same as getting at bank records.
Egypt's Finance Minister says his country is safe and is working to lure tourists back to destinations like Sharm El Sheikh. He admits that last
year's Metrojet's crash has hurt the country's reputation. CNN's Emerging Markets Editor is John Defterios, who met the minister in Abu Dhabi.
(BEGIN VIDEOTAPE)
HANY KADRY DIMIAN, EGYPTIAN FINANCE MINISTER: We're in agreement that this is a shock. We're doing a lot of effort to overcome it as quickly as
possible. So we don't lose more seasons. We're making sure to send the right signals to the international community that our country is safe.
There is a negative impact no doubt, but we hope that it will make it as short-lived as possible.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: You have the bar set rather high going back to the autumn, 5 to 5.5 percent growth. You've
recalculated lower. Is this primarily because of tourism receipts going down?
DIMIAN: That is one factor indeed. But like we have negative factors such as the tourism that you just mentioned. We have other positive factors
such as the continuation of the megaprojects that we're having. The continuation of closing our energy deficit. The continuation of closing
our infrastructure gap. All these spending's also have a multiple of positive, multiple of impact on other feeding industries. So our
expectations that were still in a relatively high growth rates of around 4.25, but these do actually meet or match our earlier hopes to go north of
5 percent.
DEFTERIOS: We look at the benchmark of Egyptian pound against the dollar, with the Fed in the cycle of having raised interest rates does it put
additional pressure on your currency and trying to manage the turbulence in emerging markets with capital flight leaving the emerging-market arena?
[16:35:02] DIMIAN: Look when you have quite a fluid circumstances you have to have a dynamic policy reaction to it. I don't see any problem with
what's happening. And we can reverse course when things go in a different direction.
DEFTERIOS: It's seems that President el-Sisi is making sure and almost cracking down like never before when it comes to security. How does this
impact for direct investment going forward? Is this something investors want? Or does it raise alarm bells that it hasn't stabilized today in
Egypt?
HANY KADRY DIMIAN: What do you expect? If you are in a region that is quite turbulent and your borders are not safe because of what's ongoing
left and right. So you have to be very firm and without hesitation that you want to protect the borders. You want to protect the people. You want
to protect the infrastructure, protect the economy. You want to protect the country. So that's not a question of any hesitation.
DEFTERIOS: This is not an overreaction from what you see today?
DIMIAN: No.
DEFTERIOS: Why so many questions coming from the outside? Why the crackdown at this sort of level, sir?
DIMIAN: You have terrorism surrounding you. And you have terrorism that is effecting you from inside. What would you do in your own country?
DEFTERIOS: This is welcomed in the country. You think it's necessary? Is what you're saying, as Finance Minister the state should take this
position?
DIMIAN: I think that the entire international community has got alerted that what Egypt has been doing, again in its fight against terrorism, is
quite right. And you have many signals. That even in the Security Council that Egypt now is heading the committee on security.
(END VIDEOTAPE)
QUEST: Egypt's Finance Minister.
Well in the face of the oil slump that's taken a toll on so many Middle Eastern countries. My next guest is charged with trying to perhaps plug
the gap. Boosting tourism in Ras Al Khaimah, the northern most Emirate of the UAE. Ras is located 45 minutes from Dubai International Airport. It's
got mountains. It's deserts. It's got green plains. And the history as rich and has settlers continuously for several thousand years. But of
course it has lived in the shadow when it comes to tourism of Dubai. And arguably now Abu Dhabi as well. Haitham Mattar is the Chief Executive of
Ras Al Khaimah Tourism Development Authority. He joins me now from London.
Sir, there's no question for all the Emirates of the UAE, the collapse in oil price does mean there has to be a greater attention on new industries.
On finding or making money other ways. Would you agree?
HAITHAM MATTAR, CEO, RAS AL KHAIMAH TOURISM DEVELOPMENT AUTHORITY: I think the Minister of Energy, UAE's Minister of Energy, has really made a strong
emphasis on the fact that the slump of oil prices will not impact the UAE's vibrant economy. The decline in oil prices has been a trend throughout the
years and we've seen --
QUEST: No, no, no. There is no way. With respect sir, with respect, there is no way that a 50 percent reduction in the price of the main
commodity is not going to have an effect on the economy of the UAE. The ruler of Dubai pretty much admitted that.
MATTAR: I think you know that there's also a positive impact on the reduction of oil prices. Especially for oil importing countries, such as
let's take Germany and India for instance, which are Ras Al Khaimah key source markets. Last year we seen a fantastic world from Germany and a
phenomenal growth from India at over 80 percent. Now the Ras Al Khaimah tourism is showing phenomenal growth trends and visitor numbers. We've
grown by six percent, which is higher than the global average. Now obviously the positive spin on this where the reduction of oil prices has
an impact on a lower cost of road and air transfers. And now what that means is savings and also it means additional or higher disposable income
for consumers, which you know, guess what, they're going to spend it somewhere else. Where are they going to spend it? Holidays.
QUEST: Right, but you have the job of attracting them to yourselves, and do you envisage a sort of a two stop shop, where go to Dubai and also did
visit yourselves. Because it's very difficult, isn't it. To compete against the sort of wealth and attractions of something like Dubai or Abu
Dhabi up the road. Or maybe you go for a one-stop and you get two for the price of one.
MATTAR: Well, look I think the Ras Al Khaimah is one of the seven Emirates obviously in the UAE, and Dubai has been a fantastic strong brand in the
UAE where tourism all started. Has been with Emirates Airline's launching back in 1985 and growing what it is today. The support that we have from
Emirates Airlines.
[16:40:00] Also the Dubai's airport is a great hub and it's only 45 minutes away from Ras Al Khaimah. So 90 percent of our passengers today arrive
through Dubai's airport. So yes, we do have add-on holidays for people who come from the U.K. and across the world to stay in Dubai. Now the
advantage here, Richard, is Dubai has been ranked as the fourth best shopping destination in the world. And that is a great advantage for us.
Because what Ras Al Khaimah is position for clearly is not shopping. We are very much geared toward attracting tourism that is looking for
heritage. Connecting with culture, nature and obviously we have a beautiful terrain. You mentioned earlier the mountains, we have the
highest mountains in the UAE, beautiful desert and obviously great beach resorts.
QUEST: We need to leave it there. Thank you, sir, for joining us.
Two week without water in a capital city any country trying to prove to the world and it's ready to be the next global powerhouse. Friction over
India's caste system is revealing a vulnerable infrastructure. QUEST MEANS BUSINESS, good evening.
(COMMERCIAL BREAK)
QUEST: Well it is February, and this is what it looks like outside in New York today. It overcast, it's more than that. It's actually been raining
very sharply as our cameras at the top of the building show you.
Engineers in India are working furiously to restore New Delhi's water supply. Protesters damaged a critical canal in a neighboring state and it
could take up to two weeks before parts of the city have clean running water again. As a result people are scrambling to fill buckets and bottles
from trucks roaming the city. Sumnima Udas road along in witnessed the crises at first-hand.
(BEGIN VIDEOTAPE)
SUMNIMA UDAS, CNN CORRESPONDENT: (voice-over) A truckload of water is the hottest commodity in Delhi right now. People jostle for every drop.
UDAS: Residents in this neighborhood have received no water for the past two days. So this is what they've had to resort to. Tankers like these,
hundreds of them, have been going from neighborhood to neighborhood.
UDAS: (voice-over) Government officials say 10 million people have been affected by the water crises, which they're calling unprecedented.
UNIDENTIFIED FEMALE: I believe a person cannot survive.
UDAS: (voice-over) She shows me how she's coping.
UDAS: Wow, you've filled up every single bucket in the house.
UNIDENTIFIED FEMALE: Because I was not having a drop of water.
UDAS: (voice-over) The lives of many in this city of 25 million disrupted, because a week long protest in a neighboring state of Haryana. Agitators
damaged a major water canal which accounts for 60 percent of the city's water supply.
UDAS: This is one of the main highways connecting Delhi to the state of Haryana, and as you can see they've completely blocked off the entire area.
They're using these kind of pipes, tree trunks, and trucks. Trucks have been lined up one after the other so there's absolutely no access on this
road for the past few days.
UDAS: (voice-over) "Long live Jat unity," they chant. The Jat's are a dominant caste in Haryana. Traditionally well off.
UDAS: It's like a camping site.
UDAS: (voice-over) But they're demanding a place or reservations in India's education and government jobs quota system, which is designed to
help lower castes that have been disadvantage for centuries.
"The system is so unfair. Even if we study really hard and get much better grades than the lower caste. They're the ones getting accepted to the best
universities just because they're lower caste. We wanted to be equal for all," he says.
The government has set up a committee to address their demands. But these protesters say they don't believe it. They want it on paper. Until then
they will continue to camp out. It's a pattern of resentment growing across India as jobs and admissions in universities become more
competitive.
Within minutes they ask us to leave. Many here are still very angry. This caste based quota system just one of India's many fault lines that can
erupt any time. Sumnima Udas, CNN, New Delhi.
(END VIDEOTAPE)
QUEST: And we'll have more QUEST MEANS BUSINESS in just a moment.
(COMMERCIAL BREAK)
QUEST: Customers say Starbucks' new reward program is distinctly under rewarding. The coffee chain is to award perks based on dollar spent, not
visits to stores. When the new system launches you're going to get two stars for every dollar you spend. Three hundred stars gets you a gold
status. The gold gets you just at the moment -- current program give you gold status after just 30 visits. All in all you'll need to spend
considerably more dollars both to get gold status and to actually get a freebie, $63 or more before getting your free drink. Darlene Lopez is one
of those Starbucks customers who says she's steamed up about the change, and she's not steam because of the hot coffee. Darlene, thank you, what is
your tipple that you like to buy from Starbucks? What do you buy?
DARLENE LOPEZ, STARBUCKS COFFEE DRINKER: Oh, thank you, well thank you for having me. So usually I like to treat myself with the Caramel Macchiato.
That usually happens after about 12 stars. So with this new program it's going to take a lot more stars, a lot more time just to get a little treat
that, you know, I would normally when you get without that reward program.
QUEST: But Darlene, you could buy more from Starbucks, which is what they're hoping. Because it is people like you and me that are just buying
a coffee and they want us to buy more.
LOPEZ: Right. So instead of valuing, like the fact that my visits are the ice coffee, or maybe the bagel that I get. It's kind of being valued for
your dollar, and that's not really what I about when I think about Starbucks. Even though it is pricey anyway. I was willing to make a
sacrifice for those reward stars, and that doesn't seem like that's going to come across any more.
QUEST: So long and short of it is, would you take your business elsewhere? Because Howard Schultz and the whole Starbucks thing, the goal here is to
get more money out of you and me. They don't want us here if we're just buying a bit of old coffee.
LOPEZ: You know, that's a really good question. I think it comes down to I probably wouldn't shop there is much. The incentive was the point that I
would get for maybe a coffee, but if I can get it somewhere cheaper I guess I will just maybe once in a while treat myself if I have an extra five
dollars lying around. But the incentive to be gold or to have the star there isn't there anymore. It's going to be too expensive.
QUEST: Darlene I wish you well in your cup of coffee and Grande Latte, chocky, whatever it is you might me tippling in your morning. Thank you
for joining us.
LOPEZ: Thanks do much.
QUEST: From a cup of coffee in the morning, to a stronger drink in the evening. South Africans consume much more than beer and wine. Now the
countries wine business is seeing growth in the international market.
[16:50:08] CNN's Money Africa Correspondent, Eleni Giokos reports.
(BEGIN VIDEOTAPE)
NTSIKI BIYELA, WINEMAKER, STELLEKAYA: When you talk about something that you smell and then it's so -- I'm going to use the word very seductive.
ELENI GIOKOS, CNN MONEY AFRICA CORRESPONDENT: (voice-over) Ntsiki Biyela, is South Africa's first black female winemaker.
BIYELA: It draws you in.
GIOKOS: (voice-over) This is Ntsiki's 12th harvest. But she didn't always enjoy drinking wine. She had to be converted when she first started out.
GIOKOS: Did you drink wine at the time then?
BIYELA: No, what was wine?
GIOKOS: (voice-over) This is true for the rest of South Africa. In the world's seventh largest wine producer, beer still wins.
RICO BASSON: MANAGING DIRECTOR, VINPRO: South Africa has got an extremely low consumption of wine, only six liters per capita. We consume 60 liters
of beer. Still a beer drinking nation.
GIOKOS: (voice-over) Representing four percent of global output, more than half of South Africa's wine is destined for the export market.
BIYELA: It's has yet to be a success.
GIOKOS: (voice-over) So winemakers like Ntsiki are turning international and chasing new connections.
GIOKOS: From Stellenbosch to Texas, tell me about this. This is fascinating and unlikely route, but it exists.
BIYELA: Oh, yes, actually I wind up do better in Texas. I know when people think Texas, they think cowboys and you know.
GIOKOS: (voice-over) In the past decade China has been the hottest market. But duty-free access to the United States in a trade agreement
means South African winemakers can cash in on higher margins by finding their way to the U.S. most develop pallets.
DAVE LELLO, OWNER, SKELLEKAYA: We have a good marketing California, Texas, New York. Last year we grew about 60 percent in Texas, and we probably
make about 50 percent more gross margin going overseas than we do locally.
BIYELA: We pulled out of China and we realized that the forecast in America -- America is huge. Currently we're in three states, but like we
see that it's our biggest market.
GIOKOS: (voice-over) Skellekaya are moving out of the Chinese market due to competition and squeezed margins, but overall South Africa is seen
exponential growth with exports to China increasing by 40 percent.
BASSON: I do think that the growth into Africa, into China, and into the U.S. Pacific is great.
GIOKOS: (voice-over) As the industry adapts to the shift in demand and softer global growth, these winemakers face another challenge this year.
Skellekaya produced the earliest harvest to date driven by the widespread drought. And so the unlikely connection to the United States will be
tested. And international markets driving margins will be more important than ever. Eleni Giokos, CNN Money, Stellenbosch.
(END VIDEOTAPE)
QUEST: They'll have a profitable moment on coffee, not wine after the break.
[16:55:00] (COMMERCIAL BREAK)
QUEST: Starbucks' Executive Howard Schultz, he's finally got me. For years I have been beating his loyalty schemes one star per visit rule. How
do I do it? Well I get the cashier to ring up every item individually. Once for the latte, pay. One for the muffin, pay. One for the banana,
pay. I then put them together and I get three stars instead of one for the visit. While if Starbucks is going to have such a silly rule, then all is
fair in love and loyalty. Now the company with its value based program, as with the airlines, it seems we're going to lose out.
No longer will 12 stars gets me a freebie. In future two stars for every dollar. And I will need 125 stars. That means spending a whopping $62.50.
I'll have to buy 20 tall skim extra lattes, as opposed to my current 12 for that free drink. That's an extremely large amount of caffeine. And
surprisingly this changes enraging customers and even more upsetting than that my nice little nifty wheeze, which I enjoy doing every single time has
been killed off.
And that's Quest Means Business for tonight, I'm Richard Quest in New York, whatever you're up to in the hours ahead I hope it's profitable. I'll see
you tomorrow.
END
