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Quest Means Business
Canadian Hostage Killed by Philippines Militants; LGBT Magazine Editor Murdered in Bangladesh; Obama Orders 250 Additional Troops to Syria; Trump: Cruz-Kasich Alliance "Pathetic"; India Revokes Beer Baron's Passport; Bangladesh Bank Thieves Could Strike Again; Automakers Thrive in China Despite Slowdown; Business Booming for Mercedes in China; China is Now Biggest Market for Mercedes; Beyonce's "Lemonade" on sale on iTunes; Beyonce Releases Surprise Album "Lemonade"; New Beyonce Album Sparks Debate on Social Media; Oil, Week Earnings Push Down U.S. Stocks
Aired April 25, 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: Closing bell on Wall Street is ringing. Trading coming to the end of our Monday. The Dow has pared back most of the losses of the
course of the day. Still down just a tad as I think we say that was a confident gavel on Monday. It's the 25th of April.
(BEGIN VIDEO CLIP)
QUEST: Tonight, it's an economy that's going to be turned upside down as Saudi plans for life without oil. If you can't beat him, join forces
against. Ted Cruz and John Kasich say they'll team up against Donald Trump. And when life gives you lemons, Beyonce gives you "Lemonade." Tidal gets a
monster streaming exclusive.
(END VIDEO CLIP)
QUEST: I'm Richard Quest. We start a new week together. And of course, I mean business.
Good evening. We begin tonight with saw Saudi Arabia and the oil kingdom's plans for life in the era of cheap crude and thereafter. Saudi's government
is warning the country's dependence on oil as an addiction that's dangerous. And the solution is a sweeping 15-year plan to transform the
economy.
(BEGIN VIDEO CLIP)
QUEST: Join me at the super screens and you'll see exactly how they are aiming to do this. Now, if you just take the current level of Saudi as it
stands at the moment 87% of government revenue comes from oil. This is the oil barrel. This is the country. It employs the best part of the 80% to 90%
depending on the numbers, of people; citizens in Saudi are employed by the government. The private sector is relatively small.
Now as prices fall, the kingdom is going to run out of money in five years warning the IMF. Economic growth also slowing, there are social problems in
the potential for unrest. So the plan hinges on growing the private sector, trying to introduce more companies and a six fold growth of non-oil
revenue. They want to reduce the number of people employed by the government, possibly from 70% down to under 50% between now and 2030 which
is the Saudi vision 2030 plan.
The government is going to invest in a variety of industries, including tourism, manufacturing, technology and interestingly, mining. And says it
could live without oil in the foreseeable future. It is a bold, ambitious plan that relies on an IPO of Saudi Aramco, the country's oil company which
we'll see in a moment, the size and scale. The Deputy Crown Prince Mohammad Bin Salman developed it and warned the risks of not actually doing it.
MOHAMMAD BIN SALMAN, DEPUTY CROWN PRINCE, SAUDI ARABIA: (As translated) The oil today became like constitution. The holy book, the (sunna) and the oil.
And that is very dangerous. We have addiction to oil in the kingdom of Saudi Arabia. Everyone has it.
(END VIDEO CLIP)
QUEST: Strong words for a country that's planning to use oil itself to wean the country off oil. It's going to put around 5% of Saudi Aramco, the vast
oil up for sale in an IPO to investors. It could and would rank probably as the biggest initial public offering ever.
(BEGIN VIDEO CLIP)
QUEST: Now, the proceeds of Aramco, this 5% will be put into the Sovereign Wealth Fund and it would be used, which obviously take it as the world's
biggest, and it would be used as an investment fund for the future. The IPO values Aramco at $2 trillion.
Let's put that in perspective. That is more than five times more than the world's largest publicly traded oil company which is Exxon Mobile, or
Mobil, which comes in at 363. So the prospect of just 5% of Aramco going in to a sovereign fund to be used for a diversification policy of Saudi Arabia
towards a non-oil economy. CNN's Becky Anderson is in Riyadh. Becky, I've summed up the goal. Tell me, is it realistic?
(END VIDEO CLIP)
BECKY ANDERSON, CNN ANCHOR CONNECT THE WORLD: Well, it is long on vision, slightly shorter on the detail. I have to say, Richard. The 30-year-old son
of the king here, King Salmon, has spent past four years slowly consolidated power and convincing an older generation, his 8-year-old
father included one assumes, that change is not only absolutely necessary for everybody here, but necessary for the country's future identity and
success.
(BEGIN VIDEO CLIP)
[16:05:05]
ANDERSON: He is known locally as Mr. Everything. And that is because he pretty much runs everything. From the massive state oil company Aramco, the
world's biggest in terms of market capital to economic policy to the defense portfolio. Of course, he's defense minister, as well.
(END VIDEO CLIP)
ANDERSON: So he certainly calls the shots. The headline to the vision as you rightly pointed out massive asset sales including 5% of the Aramco most
likely they told us today in a dual listing in the states.
(BEGIN VIDEO CLIP)
ANDERSON: And this as you pointed out will be the largest IPO in the world if it were to happen next year. And the plan is to throw Aramco's remaining
assets into this enormous, enormous sovereign wealth fund and you pointed out that it was looking at around $2 trillion. Richard, they told us today,
it could be nearly $3 trillion and they want to invest upwards of half of that in foreign assets. That will be a serious global shopping spree.
Richard?
(END VIDEO CLIP)
QUEST: Right. Now that just creates if you like, Becky, a portfolio of properties. Similar to the way Qatar has done it and similar to other
countries. But in terms of fundamentally shifting their own economy to a non-oil, what do they go into? Mining? You can only have so much tourism.
You know better than I do, Becky, that temperature is 40 degrees plus in the heat of the summer.
ANDERSON: Yes. So we're looking at tax increases. We are looking at spending cuts. They've been talking about fostering young talent. They have
been talking about opening the country for business.
Look, Richard. The devil is in the detail. Aramco, for example, is Saudi policy. When it comes to oil, how do you split policy and production? It's
one of the most secretive companies in the world, I'm told. Who wants a slice of a company which is less than transparent as experts suggest?
Saudis are going to feel the pinch, Richard. They're going to say, if we support these changes and we get taxed, because at the moment don't forget
there's a healthy dose of subsidies for everybody here, it's an entitled state to a certain extent, then should we get accountability?
I would suggest, Richard, this is much more about placing the face of the new guard, that being Mohammad Bin Salman in the context of what's going on
here. 70% of people in Saudi are under the age of 30 and his message to us today as we gathered with him was simply this.
(BEGIN VIDEO CLIP)
ANDERSON: I am one of you as far as youngsters are concerned in Saudi. I appeal to you, youngsters in Saudi, to support me of this and, Richard; he
warned that things weren't going to be easy. He said that inflation would go up over the next couple of years. He said that there would be setbacks
along the way. But he is pointing out that he has put together a road map for the next 15 years which would be he says transformative for both the
economy and the society here. It is ambitious but if it works it certainly would be transformative.
(END VIDEO CLIP)
QUEST: Becky Anderson in Riyadh for us this evening, thank you.
Now, the issue and the possibilities of what's likely to happen with the Saudi is the theme of my commentary tonight; my profitable moment on the
CNN Newsletter. If you want to sign up to -- well, if you want to, you are going to, I hope. You want to read the blurb and the news of the day and my
views of Saudi Arabia and this plan of Vision of 2030; it's at cnnmoney.com/quest to subscribe.
Staying with oil for a moment, a push and a fall in oil prices all sent U.S. stocks lower on Monday.
(BEGIN VIDEO CLIP)
QUEST: This was the worst point of the morning, down some 11%. There was a bit of a rally towards the close. The losses paired. Investors on the
sidelines, they're waiting for a Fed meeting. Apple's earnings are delayed until Tuesday after the death of a former executive, Bill Campbell.
(END VIDEO CLIP)
QUEST: Our Air Force One soon will be back across the United States air space as it concludes the U.S. President's foreign trip that largely aimed
at strengthening trade ties.
(BEGIN VIDEO CLIP)
QUEST: On his final stop in Germany, Mr. Obama toured the Hannover Trade Fair with the German Chancellor, Angela Merkel, and promoted "T-Tip." The
proposed trade deal between the United States and the European Union.
A day before he arrived 35,000 people marched in protest of the deal out in the streets of Hannover. The President's trade agenda has also come under
fire in the U.S. especially in the 2016 campaign trail. The U.S. President said he's optimistic it will get done.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Recent surveys in the United States, for example, showed that actually the majority of people still
favor trade. They still recognize on balance that it's a good idea. During presidential elections it's always tough when we're in the heat of
campaigns people naturally are going to worry more about what's lost than what's gained with respect to trade agreements. But I am confident that
we're going to be able to get this done.
[16:10:25]
(END VIDEO CLIP)
QUEST: The President is confident. Ken Rogoff served as Chief Economist to the IMF, he's now a Professor at Harvard. He joins me, good to see you, as
always, sir.
KEN ROGOFF, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: Good to see you, Richard.
QUEST: On this question of trade agreements in a recent article, you're quite -- you sort of are critical of the line of the anti-trade line being
taken by those like Donald Trump and Bernie Sanders and some extent all the republican candidates.
ROGOFF: Well, I want to draw a line between trade as a moral issue and trade as a political issue. Certainly there are people who lose from trade
and we should have a tax system that helps them. We should have unemployment insurance. We should have all kinds of social protections. But
if you think trade is a moral imperative to stop trade, you're forgetting that hundreds of millions of people in India and China, billions, who live
in dire poverty have come out of it with this trade. In China, they're hoping to get 50 million people up, up to $350 a day.
QUEST: But you say the idea that trade fuels inequality is a very parochial perspective and protections who shroud themselves in a moralistic
inequality narrative are deeply hypocritical. But these are the arguments that are finding favor at the ballot box. Look at the roads in Austria.
Last week. Look at "brexit." Look at the republican candidates.
ROGOFF: Well, it's clearly a compelling political argument because it's been working but I want to separate it from being a moral argument. If you
look at the world, inequality has gone down more in the last 30 years than maybe any time in history save perhaps for a few failed states. So we need
a system within the rich countries that does transfers, has more, you know, generous tax redistribution. But if you cut off trade, you're hurting these
very, very poor people. The poverty line in china's $350 a year, in the U.S., it's $12,000 a year, it's just not comparable.
QUEST: Do you believe that come what May, I mean, whether it's (TTIP) in the Pacific one or the E.U. one, these deals will get done whatever
happens? And that seems to be the fundamental fear of many of the critics. Look. I was in Seattle during the battle for the WTO in those days. Trade
has never been popular.
ROGOFF: Well, what is true is trade keeps growing with or without the deals and, frankly, a lot of these deals open up Asia to us, to countries in
Latin America far more than they open us up. We frankly have pretty free trade at the moment. Japan sure doesn't and the transpacific deal. That
opens up Japan and it opens up countries like Vietnam. Now I think in the long run the U.S. benefits hugely and let's not forget we're fighting China
for a sphere of influence and if we pull out of this what's going to happen?
QUEST: Your arguments aren't popular at the moment, are they?
ROGOFF: No.
QUEST: You're on the wrong side of this one, according to some.
ROGOFF: Thank you.
QUEST: Good do see you, sir, as always.
As we continue on the program tonight, we're going to be looking at Ted Cruz, John Kasich and an alliance.
(BEGIN VIDEO CLIP)
QUEST: It really is a case of my enemy's enemy is my friend. Or maybe it's my friend's enemy is my friend or maybe it's my friend's enemy is a my
friend's enemy. Whichever way it is, the two of them have come together trying to beat Donald Trump. Is this fair?
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:21:00]
QUEST: Weak, pathetic, desperate. That's how Donald Trump is describing the newest development on the Republican campaign trail.
(BEGIN VIDEO CLIP)
QUEST: Now, this is the development. These two, Ted Cruz and John Kasich, have formed an alliance and they're going to pull their resources in the
hope that blocking Trump from getting as many delegates in the remaining primaries and, therefore, securing the nomination outright pushing for a
contested convention when, obviously, delegates are free to vote for whoever they like after the first vote. Trump says this is all proof that
the system is rigged.
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: You know if you collude in business, if you collude in business or if you collude in the
stock market they put you in jail. But in politics because it's a rigged system, because it's a corrupt enterprise, in politics, you're allowed to
collude so they colluded and actually I was happy because it shows how weak they are. It shows how pathetic they are.
QUEST: Weak, pathetic, desperate. Cruz and Kasich making the most of their limited resources and they're basically agreeing to stay out of each
other's way as the campaign entering the end game. So Ted Cruz will cede New Mexico and Oregon to Kasich. Basically Cruz will not fight here so that
he can become number two. Maybe even number one. While Kasich won't compete in Indiana hoping, obviously, that Cruz wins that one.
If the accusations are -- I mean, however, however technically lawful and proper, correct they are, it's politically inappropriate. But both men
defended their plan.
TED CRUZ, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: After discussions with the Kasich campaign we made a decision about allocating resources. We
decided to allocate our time and energy and resources on the state of Indiana. Governor Kasich decided to allocate his resources elsewhere.
JOHN KASICH, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Resources. I feel it's very fair for me to be able to go to areas where i can spend my resources
most effectively. And the same is true for Senator Cruz. What's the big deal?
(END VIDEO CLIP)
QUEST: What is the big deal? Mark Preston is here. Mark Preston is -- good to see you, sir.
MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: It is quite a big deal.
QUEST: Have you ever seen anything like this before?
PRESTON: Absolutely not. Absolutely not. And who even knows if it's successful at this point in the campaign? It might just be too late now,
Richard.
QUEST: Firstly, is it illegitimate what they're doing? Well it's technically OK, but is it inappropriate?
PRESTON: If you are a follower, a backer of Donald Trump, then it is inappropriate. If you are somebody who doesn't care for Donald Trump and
you don't want him to be the Republican nominee, let alone President of the United States, then you like this idea.
QUEST: But what we are seeing here, first of all, with this sort of shenanigans and secondly with the way in which Ted Cruz is going to round
up delegates who are then free on later votes, I mean, at the end of the day, Trump is getting more delegates, legitimately, and more votes
legitimately.
PRESTON: Well he's getting more votes although Donald Trump's problem has been from the very beginning is that he ran a Presidential km pain here in
the United States based upon media appearances and that can only get you so far.
(BEGIN VIDEO CLIP)
PRESTON: What we're seeing now is Ted Cruz has come in in the back door, Richard. He's come in the back door and he is starting to pick up delegates
that Donald Trump should have secured and has failed to do so.
QUEST: Right, he's doing it playing politics, playing -- not -- I mean I hate to use the word dirty tricks because it's legitimate what he's doing
but it's not - it's sort of basically saying to people, yep, you can vote for Trump on the first ballot, because that's what you're committed to
doing, and thereafter you're free to vote for me.
(END VIDEO CLIP)
[16:20:05]
PRESTON: Some would say that he is a good card player. Right? He knows that if you're going to lose this hand, you're really playing ahead to the next
hand when the pocket's a little bit deeper.
(BEGIN VIDEO CLIP)
PRESTON: But, you know, this is a situation that Donald Trump right now has a head wind with him. You know, at this point. He's somebody who has come
out of here in New York who won very big. He's going in to tomorrow night when there's going to be five contests here along the eastern seaboard, and
he's going to do well and that is what's scaring Ted Cruz and John Kasich.
(END VIDEO CLIP)
QUEST: If, if Donald Trump -- it's 1,272 is the number of delegates you need I think --
PRESTON: 1,237.
QUEST: 1,237 I do beg your pardon. 1,237. Thank you. 1,237. If he falls short by 100 or 200 --
PRESTON, Right, or 2.
QUEST: But I'm trying to get to the point is that if he just, just falls short --
PRESTON: Right.
QUEST: and then doesn't get the nomination, he has a very good claim for saying this is democracy of a sham.
PRESTON: No doubt about that and I think for the next couple of months we'll hear him saying that this is democracy at a sham. But rules were laid
out and if he falls short then he's got to play the game through and try to win the nomination on the floor. However, that might not play out in the
world, in the public world that says he deserves it and it's certainly not going play out with the supporters.
QUEST: I bet you have got no idea what happens next.
PRESTON: I have absolutely no idea.
QUEST: In this one --
PRESTON: No Idea, but I would say this. I mean, you know, in the realm of Donald Trump, this is a reality show game right now where he has a shot of
winning it and a shot of losing it. Who better to be at the head of it than Donald Trump?
QUEST: Great to see you. Thank you for always helping us understand what's happening.
Now Steve Hilton joins me to help us understand the machinations. He says the Republican Party is in need of a major overhaul. Good to see you sir.
STEVE HILTON, CEO CROWDPAC: How are you doing Richard.
QUEST: Thank you for coming in and joining us. You are David Cameron's former director of strategy. You helped overhaul the Conservative Party and
take it back to victory in the U.S. Now you're CEO of Crowdpac, you join me in the C-suite. Steve, you in a recent article on the Republican Party,
your point was fundamentally it's not the way you're telling the message that's the problem.
HILTON: That's exactly right. I think for too long they've thought if they get a better website or they just find out a way to reach more Hispanic
voters or something like that, that will solve the problems. It's actually much more about a fundamental rethink to show how your principles can deal
with the problems that real people experience today. And I think that actually Trump and Cruz in many ways are on to something. Because when they
talk about the rigged system, when Cruz talks about the Washington cartel running things, that's a truth about the modern world that many things in
our lives have become too big and bureaucratic and removed from the human scale.
(BEGIN VIDEO CLIP)
HILTON: The trouble is what they haven't done is turn that into an agenda for real changes that will improve people's lives.
QUEST: But what does that mean?
(END VIDEO CLIP)
QUEST: Because they would say that that's exactly what they're doing. The Republican Party would say that their policies may be anti-gay or not as
gay friendly or not as immigrant friendly or whatever, or more inequality related. But they would say that their constituency, this's what they're
looking for.
HILTON: But that's not how you win elections. How you win elections is by making a big argument about what's wrong with the country and how you're
going to change this.
QUEST: They say they've done that.
HILTON: They've done the first part of it which is making the big argument. I think that's what they're tapping into, this sense of anger and
frustration with big business, with big government, with this bureaucratic way of running things. What they haven't done is show anybody how they
would actually turn that into a change that would affect their life on a daily basis.
QUEST: You know, the Tory Party thought of as a mean and nasty party didn't they? It was always about what they were against rather than what they were
for. When you were having those discussions before government, how brutal did you have to be with the Tory grandees?
HILTON: I think that there was a group of us who were involved in the modernization of the party that had seen the way things had gone wrong and
actually didn't need much - the people, the leadership didn't need much convincing because we could all see and we all felt this very strong sense
that actually conservative principles applied to the modern era would be not only right but popular.
QUEST: "Brexit." I just got back from the U.K. a couple of days ago and I'll be back there covering in it a couple of weeks. Is this a big idea? Is
this the sort of thing you're talking about? It seems to me from listening to both sides there's very much big ideas at stake here. The big idea of
what the two sides, what the future of the U.K. to look like in Europe.
HILTON: I think it is a big argument and a bit idea. Look I've just written this book called "More Human" which is about what's wrong with the world
where things have become too removed from the human scale.
(BEGIN VIDEO CLIP)
[16:25:05]
HILTON: Now, the E,U, is very much in the heart of the argument because people in the U.K. think too many decisions made too far away and that they
can't really control them.
QUEST: That's what they were to say in Washington, of course.
HILTON: Exactly right. It's a very similar discussion. Now, on the other side, you've got people that say well that's fine. we accept that there's a
bit of loss of control there. But what we get in exchange for that are economic benefits like trade and clout around the world.
QUEST: Are you going to tell me you have - you have singularly not revealed so far how you're going to vote on June 23rd?
(END VIDEO CLIP)
HILTON: Well, first of all, I won't be there. I live now -- I live in - I live in California. And the thing that I'm - it's very generous of you to
give me the --
QUEST: I know you appreciate the offer.
HILTON: I really do but the trouble is I think that there's something slightly impolite about intervening in that debate from the other side of
the Atlantic so I think I'll wait until I'm there.
QUEST: Good to see you as always.
HILTON: And you.
QUEST: Thank you very much.
As if political woes in the U.K. and the U.S. weren't bad enough, well, they're worse in Brazil. Now Brazil's Vice President has denied that
there's a coo in the works against Dilma Rousseff. The country is mired in tour moil as the Senate could vote to impeach Rousseff. It's all happening
more than 100 days from the Olympic Games in Rio de Janeiro.
Shasta Darlington spoke exclusively to Michel Temer. Shasta joins me. What did he say that surprised you?
SHASTA DARLINGTON, CNN CORRESPONDENT: Well, Richard, we did expect him to come out defending himself and Brazil against the accusations from the
President that he was behind this coup d'etat, that it wasn't really an impeachment. He did that. I think what was interesting is that he admitted
that he once he becomes President, if senate votes to go forward with that impeachment trial, that he, too, recognizes that he could face an
impeachment.
(BEGIN VIDEO CLIP)
DARLINGTON: And that we've seen coming out in polls, a lot of Brazilians saying they don't want to see just Rousseff removed from the office they
also would like to see the vice president removed and new elections held. And he said he recognizes that this is a very divided country right now
with a deep recession, the political chaos, zika virus et cetera, but that he's going to try and build a unified government and country. Take a listen
to this.
MICHEL TEMER, BRAZILIAN VICE PRESIDENT: (As translated) my goal would be to work with the country's political forces and form a good cabinet to advise
me, to guarantee governability, to help the economy recover and put the country back on track for a smooth election in 2018.
(END VIDEO CLIP)
DARLINGTON: Now, as you know, Richard that's a pretty tall order, it's not going to be easy to rein in all of these different forces. The President
and her supporters have vowed to keep up the fight and we expect protests and even strikes so it's not going to be an easy task, Richard.
(BEGIN VIDEO CLIP)
QUEST: OK. Shasta, I mean, the vice president is considered to be a technocrat. He's been there since 2011, he's the leader of one of the other
parties. Is he thought of being - and he does -- if he does become President or interim President replacement President, whatever the phrase
being used is, is he thought to be up to the job?
(END VIDEO CLIP)
DARLINGTON: You know, when you look at markets and investors, whenever it looks like the impeachment is moving forward, we'll see a change of
government, the markets react positively and I think that's what the vice president tries to get across and a lot of advisers. They say, listen. Half
of the battle here is confidence. If we can boost investor confidence then we can really start to turn around the economy. You turn around the
economy, Brazilians will be less angry and we can all start moving forward. And that's what he's betting on and in fact he's already talking to former
central banker (inaudible), that could be one of the big names for finance minister, he's really moving forward Richard.
QUEST: OK. Now, what is the likelihood -- because this is really what people care about in the rest of the world; what is the likelihood that all
this happens bang slap wallop in the middle of the Olympics and that it is not Dilma Rousseff that announces the opening of the Olympics?
DARLINGTON: Richard, I think it's a very, very likely that it will not be Dilma Rousseff who opens the Olympics. This is going to move quickly.
(BEGIN VIDEO CLIP)
DARLINGTON: At this point, it looks like senate could vote as early as the 12th of May or maybe the end of May to go ahead with the impeachment. They
only need a simple majority and as soon as that vote comes in, she's got to step down for 180 days to defend herself.
So at this point, looking very likely that she will not be the President when the torch is lit or lit in Maracana Stadium to set off those games,
Richard.
(END VIDEO CLIP)
QUEST: You have a busy summer ahead of you and it won't be watching the sport. Shasta Darlington who is in Brasilia for us tonight.
My word, whatever next. Well the thieves didn't need a tunnel or a truck. They just needed some computer code. And with that, they took $101 million
from the Bangladeshi Central Bank. How is this possible? Security researchers warn that these could strike again. A Central Bank!
(COMMERCIAL BREAK)
RICHARD QUEST, CNN ANCHOR: Hello. I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment. When Beyonce give Tidal a much needed boost
with her brand new album. And I'll be speaking to John McAffee after a warning of a new cyber-attack. How can anybody steal nearly $100 million
from a central bank? They did it with Bangladesh. All that after the news because this is CNN. And on this network, the news always comes first.
Canadian hostage killed in the Philippines by Islamist militants. John Ridstel had been held since February after being abducted from a Filipino
tourist resort along with three others. The Canadian Prime Minister, Justin Trudeau, confirmed what he's calling Ridstel's cold-blooded murder.
(BEGIN VIDEO CLIP)
JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: Canada condemns without reservation the brutality of the hostage takers in this unnecessary death.
This was an act of cold-blooded murder and responsibility rests squarely with the terrorist group who took him hostage. The government of Canada is
committed to working with the government of Philippines and international partners to pursue those responsible for this heinous act. And bring them
to justice.
(END VIDEO CLIP)
QUEST: Two people have been killed in the latest machete attack in the capital of Bangladesh. That's were a string of similar attacks have taken
place in recent weeks and being claimed by Islamist militants. One of Monday's victims a U.S. embassy worker also the editor of the country's
first transgender magazine. The police say he and another man killed in the embassy worker's home by assailants who were posing as couriers.
President Barack Obama is ordering 250 new American Special Forces to Syria. He says the troops will join efforts already under way to train
local forces in fighting ISIS. Speaking on the final day of the tour at the Middle East and Europe, Mr. Obama said he was hoping to build momentum
in the battle against the terror group.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: We continue to make progress. Pushing ISIL back from territory that it controlled. And just as I've approved
additional support of Iraqi forces against ISIL, I've decided to increase U.S. support for local forces for fighting ISIL in Syria.
[16:35:00] A small number of American Special Operations Forces are already on the ground in Syria and their expertise has been critical as local
forces have driven ISIL out of key areas. So given the success I have approved the deployment of up to 250 additional U.S. personnel in Syria,
including Special Forces to keep up this momentum.
(END VIDEO CLIP)
QUEST: Donald Trump's calling the new alliance between Ted Cruz and John Kasich weak and pathetic and shows how they are. Kasich and Cruz said
they'll stop campaigning in certain states hoping to stop Mr. Trump from getting enough delegates to automatically clinch the Republican nomination
outright.
The Indian beer baron's Vijay Mallya's passport revoked by the government. It's hoping that this will pressure the tycoon to settle more than a
billion dollars in outstanding debts. Mallya is often referred to as the Richard Branson of India, he took over the chairmanship of his father's
massive Kingfisher Beer Company in 1983. He also owns a Formula One team. The government says he owes money from loans made to his now defunct
airline Kingfisher. Ravi Agrawal a reports from New Delhi.
(BEGIN VIDEOTAPE)
RAVI AGRAWAL, CNN NEW DELHI BUREAU CHIEF: Richard, you know this better than anyone else. There's nothing more seductive than air travel and
perhaps that's the downfall of Kingfisher's Vijay Mallya. He's known her as the king of good times, because he's flamboyant and fun loving. And he
was one of India's most successful businessmen. But going from selling beer to selling airline tickets was perhaps a step too far. He launched
King Fisher Airlines in 2005 at a difficult time. Competition in India was intense, oil was expensive. Now Mallya wanted nothing but the best. He
even claimed he picked the air stewards himself. At the time in India you needed to run a domestic airline for five years before you get an
international license. Mallya didn't want to wait. So he bought Deccan Airlines a low cost carrier and merged the two companies. In large part
because he wanted its international license. Now, Deccan was leaking money. It was a low cost carrier. Kingfisher was a premium. In the end
it just didn't work out. And now here we are today. Kingfisher went belly up. Hundreds of people lost their jobs. Mallya owes $1.3 billion to
Indian banks and now he's the UK and has had the Indian passport revoked. Mallya's lawyers say that Mallya did not flee to the UK, he's just there
because he travels a lot. They also say that he's not a willful defaulter, but either way it's quite a fall from the heady heights of 2005. Richard?
(END VIDEOTAPE)
QUEST: That was the Bangladeshi government dealing with the aftermaths of the machete attacks I told you about in the news. It's also trying to
track down the robbers who stole $100 million from the Bangladeshi Central Bank. You heard me right, $100 million from a central bank. Security
researchers are warning that thieves could strike again. The attackers targeted the so-called Swift Payment Network. It's used by thousands of
banks around the world.
And they used the Swift Network to steal money from the central banks' accounts at the New York Fed. Swift says its network and core services are
safe. How is this possible? It boggles the mind. John McAffey, it boggles my mind. Central banks are among the most secret organizations in
the world. Have absolute integrity of policy and procedures. And somebody manages to make off with $100 million. John McAfee, what do we do about
it?
JOHN MCAFEE, FOUNDER, MCAFEE SOFTWARE COMPANY: Not much we can do about it taking the smartphones into the office. This is the problem. Our
smartphones are universal spy devices. They're designed to pass information about us. We download applications. Half of which root
android phones, this means once the phone is rooted, you have control over everything within that phone. If you take it into the office, if you take
it into a bank, it is so trivial from that phone to access the internet within the bank. So it doesn't matter whether it's Swift, the central
bank, the U.S. Fed. Nothing is safe as long as we do not do something about these spy devices that we carry around with us, Richard.
QUEST: Well, we're clearly not all give up the mobile phones at the moment. But come on, John. I mean, I have a certain incredulity in the
voice because I would have thought that the central bank might have had a bit better security than two tin cans and a piece of string in the Swift
system to prevent somebody from making off with 100 million.
[16:40:08] MCAFEE: You would think that but there's nothing different between Swift or the Fed or the Pentagon. Here's the problem, Richard. As
long as we do not take these smartphones seriously and understand that by downloading these applications from who knows where we are infecting our
phones and, therefore, those phones have the ability to infect the internet. This is the issue. You cannot protect against it unless you
plain the employees and have absolute procedures. $80 million is what they walked off with. And every single member of Swift -- and Swift is the
international wire transfer agency. Every single member is open to the same right now.
QUEST: So am I right to be pessimistic hearing what you are saying about the future of our ability to handle cyber security?
MCAFEE: Well, I've been yelling about this from the streets for a year now and I have done it three times on your program. Once with the FBI. So,
absolutely, we've got to start taking this more seriously. We have a major flaw in our security. And that flaw is our smartphones. I'm sorry to keep
saying it over and over and over. But it will be clear that when they discover the source of the break, it will be a smartphone. It always is.
And these smartphones are now being routed by applications. Meaning, taking supervisor privileges and controlling every aspect of the telephone.
You can do it remotely. Downloading an app will do it. I keep saying it over and over we have to do something and do it now.
QUEST: All right. Next time you and I talk about this, I'm going to come and visit you and give me a demonstration how it's done and how we prevent
it. Good the see you, John. Thank you for joining us.
MCAFEE: All right. Thank you.
QUEST: John McAfee joining us.
Economic growth in China is at its weakest in the best part of seven years, and yet, Mercedes Benz is booming in Beijing. We're going to be going
inside it's Chinese plant after the break.
(COMMERCIAL BREAK)
QUEST: it's the annual auto show, it's in Beijing and its proof as a country of economic growth slowing down. The appetite for luxury cars, you
might be surprised, it's still booming. CNN's Beijing Correspondent is Matt Rivers and he reports to us that high-end automakers are catering
their products specifically for the consumer in China. And as a result, they're seeing profits soar.
(BEGIN VIDEOTAPE)
MATT RIVERS, CNN BEIJING CORRESPONDENT (voice-over): Relentless assembly lines never stop at the Mercedes Benz plant in Southern Beijing. They
produce four different models here, cars driving profits.
[16:45:00] HUBERTUS TROSKA, DAIMLER BOARD MEMBER, GREATER CHINA: Over the past years, we have put a lot of effort in R&D and designing and bringing
the right products to China and this is paying off.
RIVERS (voice-over): Hubertus Troska is the Daimler board member that oversees greater China and right now he's a happy man. Sales were up 24%
in the first quarter of 2016. And more Mercedes are now sold in China than any other market in the world.
RIVERS (on camera): And because of that, Mercedes Benz has a lot of incentive to try and cater towards the local market. So the Chinese
version of the GLC is typically used here more as a family car. Think kids and grandma in the backseat. So they designed the area as such, more
comfortable seats, bigger headrests. Apparently what the best customers want they get.
RIVERS (voice-over): Cecilia By is one of the customers, they're young. Average age 36 as a group. They've got more money to spend than the
parent's generation and want to spend the wealth on luxury. She says in the past ten years the amount of cars like these on the road has increased
immensely. She says that's because China become more modernized and luxurious. But Mercedes Benz record profits come at a time when the
broader economy here isn't doing all that great. Lower GDP growth, slowing experts, lots of debt. Not exactly strong indicators of hearty consumer
spending but Hubertus Troska says the brand is ready.
TROSKA: In our factories we look month by month at the projections and keep pace with the overall demand for the product lines, the overall
markets.
RIVERS (voice-over): There is some thought that the broader slowdown hasn't yet hit consumers. That waning growth takes a bit of time to affect
people's spending habits. But Troska says even if that is the case, China's growth still far outpaces traditional markets like Europe. Simply
put, it's a huge market and people still have money to spend. Plus, a tax break on auto sales set to last until December doesn't hurt. So expect the
investment here to continue and the factory floor to keep humming. Matt Rivers, CNN, Beijing.
(END VIDEOTAPE)
QUEST: The story of cars. Now, I'm selling lemonade here on QUEST MEANS BUSINESS. Where else would you expect us to have lemonade? We're doing it
the old-fashioned way with real lemons and have a bit of a juice. Beyonce, on the other hand, she's selling lemonade the modern way. I'll explain
what my lemonade stand and Beyonce has to do with it all after you've enjoyed "MAKE, CREATE, INNOVATE."
(COMMERCIAL BREAK)
QUEST: It is where every novice entrepreneur began. Hmm! Selling lemonade. On a warm day. There's nothing better. Nothing more refreshing
than a few real lemons and a bit of lemonade stand. You will find them all across America. Now, hmm, rather good.
[16:50:00] If you're a Beyonce fan you got a similar thrill this weekend. The singer surprised the world with a new album. It was called "Lemonade."
(BEGIN VIDEO CLIP)
BEYONCE, SINGER (singing): I'm telling these tears going to fall away fall away may the last one burn into flames.
(END VIDEO CLIP)
QUEST: It's how Beyonce's going about selling "Lemonade" that's caught our interest. She hasn't put up a store at 5 cents glass. The album was
released exclusively on the husband's Jay-Z's streaming service Tidal on Saturday night. Now by Monday morning, the actual album or the video album
selling on iTunes. It highlights this complex battle between streaming and downloading music in the music industry. Which is all very different from
the rather simple lemonade stand. Come on. Explain, Sian-Pierre, is the Founder and Editor-in-Chief of Swagger. When's this thing about, the
streaming? He starts off with Tidal, but pretty much overnight it's available everywhere else.
SIAN-PIERRE REGIS, FOUNDER AND EDITOR-IN-CHIEF, SWAGGER: Yes.
QUEST: Except on the streaming. How significant is that?
REGIS: It's a big move for her. I mean, they want to keep the money within Tidal. As you know Beyonce owns some 3 percent of Tidal. It is the
only artist-owned streaming site. So the plan, I believe, is keep the money inside. Right? We'll accept it to iTunes to buy as an album but
since so many people --
QUEST: That's a hypocrisy. If you believe that it should only be on Tidal, for streaming, then you only sell it on Tidal for purchase.
REGIS: Well, see, Tidal is subscription service. Right?
QUEST: Right.
REGIS: So they want to keep people coming back to Tidal monthly to listen to the album as a stream. Why go to iTunes and spent $17.99? What, say,
two months or so of Tidal to buy the album?
QUEST: You own it. You own it.
REGIS: Sure, but who needs to own music these days? We want to listen to it. Plus, Tidal has so many other artists on its label. That's what
they're trying to lure people in on. Whether it works, who knows? Kanye West released his album on Tidal for streaming only recently, but then he
said he would never end up on an Apple. Where is it now? It's on Apple. It's on Spotify. It's elsewhere.
QUEST: Beyonce cannot move it to the others. She owns 3 percent, as you said, of Tidal. But her husband's got the rest of it. It would be the
ultimate in betrayal.
REGIS: well maybe, but Kanye also owns 3 percent and they decided, obviously, for money reasons that it doesn't make sense to keep on Tidal.
We'll see if Beyonce is that much bigger than Kanye. But they can keep people coming back to Tidal to stream the album only and not put it
anywhere else.
QUEST: All right sir. Here you go. Where on earth is this ludicrous title "Lemonade" come from?
REGIS: Well, the idea is really what women, there are multiple narratives here. There's the black narrative, the black female narrative. And black
women, people believe lemons and end up in this country or born into the institutionalization here. So they make lemonade with what they have.
Women scorned as well, people saying that Beyonce was cheated on by Jay-Z. Her mother was cheated on by her father. What does a scorned woman do but
make lemonade?
QUEST: So it's very much -- I mean from the Black Panthers and the Super Bowl. It's not by accident obviously, it's not by accident. You're saying
there's a -- not only have you got this whole streaming business and sales, it is a deep psychological issue in relation to the lemonade.
REGIS: Yes. There is a few things at play here. Right? There is Beyonce as a business woman. Let's keep it on Tidal and let's keep the money in
the household. There's also Beyonce as an artist with a narrative. Right? Black Lives Matter movement is so huge in the country and arguably globally
that she wants to speak to that. Much as Nina Simone did to the black movement in the civil rights era. She realizes her place and her platform
as an artist and she wants to use that platform for good. That's why she included Trayvon Martin's mom and Eric Garner and Michael Brown, all slain
black men in her video. This was purely black feminist and it was a moment for people who aren't black or feminist.
QUEST: Will it work?
REGIS: Absolutely. She is the number one artist in the world bar maybe Adele, but to be an artist and not just a musician is really special in
this moment. Cheers, to Tidal.
QUEST: Very good lemonade. And would you mind five cents please.
REGIS: No. I don't have it. I gave it to Tidal.
QUEST: Thank you. If all of this talk of lemonade making you more confused than thirsty, what exactly did Beyonce mean about this? You can
read about her album on CNN.com. It's a full explanation of the video and the lyrics. "Lemonade" is explained at CNN.com/entertainment.
[16:55:00] A fall in oil prices push U.S. stock lower on Monday, look at the numbers. Investors on the sidelines. They're waiting for the outcome
of this week's Fed meetings. I would happily juggle, but I can't so instead a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Saudi Arabia today launched Saudi Arabia vision 2030. The policy and plan that is designed to shift the
economy to be more diversified from the 80 odd percent that's oil revenue base for the government at the moment. It has numerous different strands
to it, green cards, for residency to allow people to invest, it will have greater private sector involvement. Shifting the economy towards more
private companies. At the core of it is to shift to create a 5 percent of Saudi Aramco and create a sovereign fund that will invest.
But will it work? The problem is all the oil economies from Nigeria to Qatar to the UAE are all trying to diversify at the same time. And you
must remember, it's fine to say that you want to tourism industry even based on religious tourism as Saudi would have, but the temperature there
is blisteringly hot in the summer. There are numerous restrictions that some people would find most unpalatable. And in an economy where women
can't even drive cars, how realistic is it to say you want meaningful participation of females in the work force? Saudi vision 2030 is a useful
step forward to show the way, but it's the execution of that policy that will be crucial. 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
