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Quest Means Business
U.N. Human Rights Chief Calls for the Immediate Release of Journalists Arrested in Myanmar; Brazil's National Museum Goes Up in Flames; Tropical Storm Gordon Threatening U.S. Southeast; Iraq Parliament Convenes for First Time Since Election; China to Plow Another $60 Billion into Africa; South African President Says He is Happy China is Helping Africa to Develop; China Invests Heavily in Ethiopia; New Generation Begins Applying for First Jobs; Beer Maker Opens New Revenue Stream; Illycaffe Says it is not for Sale Amid Coffee Consolidation. Aired
Aired September 03, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CORRESPONDENT, CNN: We're still working hard around here. It's Monday, September 3rd, pulling out all the stops, Argentina's
President introduces emergency fiscal measures as he prepares to ask the IMF for help. China's President is in South Africa pledging $60 billion in
new aid for Africa, and are you ready for a beer TV network? Anybody? Beer TV? Brewdog thinks you are. I'm Paula Newton in New York and this is
"Quest Means Business."
Tonight, we begin with twin economic crises unfolding on opposite sides of the world. Argentina and Turkey once seen as two of the most promising
emerging markets are now suffering from the same set of problems: Collapsing currencies and soaring inflation have prompted both countries to
seek emergency solutions.
Now, Argentina has just unveiled very harsh new austerity measures ahead of talks with the IMF. It also announced plans to impose taxes on exporters
and eliminate half its current ministries - half - to reduce government spending. Now, Prime Minister Mauricio Marci addressed the nation earlier.
(BEGIN VIDEO CLIP)
MAURICIO MACRI, PRIME MINISTER OF ARGENTINA (Through a translator): This isn't just another crisis. This has to be the last one, and you know,
you'll find me on the side of those that for money, or power mortgage of the future of the country. You won't find me on the side of those that
speculate thinking about the next election. You'll find me on the side of those that lead their lives for you. This isn't easy for me. I want you
to know that these were the worst five months of my life after my kidnapping, but not for one minute did I stop doing what was within my
reach to confront with you, what we're going through because I know it is a great effort, the greatest effort is what each one of you and your families
are doing.
(END VIDEO CLIP)
NEWTON: And he said effort. It's going to be sacrifice. Like Argentina though, Turkey's inflation has skyrocketed in recent months to a 15-year
high now, but its hands appear to be tied by President Erdogan who has rallied against the most obvious medicine, of course those interest rate
hikes.
Still, there is speculation, the Central Bank could actually be headed there towards higher rates this week. We want to begin though with
Argentina. From Washington, I'm joined by Benjamin Gedan. He is senior adviser of the Latin American program and director of the Argentina
project. He was the South American Director at the National Security Council under the Obama administration, and thanks for joining me on what
is another horrible day for Argentina. Everybody has got to feel for them.
I'm telling you, this country is making austerity action look because this is looking like austerity plus, plus, plus, plus. Is this politically
viable? Because I think many people agree this is the financial medicine the country needs?
BENJAMIN GEDAN, SENIOR ADVISER OF THE LATIN AMERICAN PROGRAM: That remains to be seen and frankly, most political observers would say it's not viable,
at least for the long term viability of this particular government. It took office two years ago and right from the beginning, it inherited this
fiscal wreckage for more than a decade of populism and most economist said it needed to fix the fiscal accounts and it needed to do so quickly. Its
answer was, it's impossible that the Argentine public won't permit it and serious austerity would bring an end to the government and when the
Argentine public rejects an economic model, it does so often violently, it does so in the street and governments leave office early.
NEWTON: Yes, and again, it's the people of Argentina that suffers through that. Let's go to through some of those measures though. You're talking a
tax on exports, I mean, this is really regressive and abolishing half the ministries, which obviously, people would say is a good thing.
They want to get to a zero deficit by 2019. I mean, think about that. You know, I'm really interested to learn from you what you think is going
through Macri's mind right now because we've just talked about the fact that it's not likely to be politically tenable what he is doing, so where
is he going with all of this?
GEDAN: I think he has decided rather courageously on the one hand, and on the other hand, I think his hand has been forced by the International
Monetary Fund and the international financial community that he has no other option. I think the irony of the situation is that he may be proved
right from the beginning, which means that his economic model will not survive this level of austerity in which case, the international financial
community will be faced with a much more leftist populist government and will lose even further confidence in Argentina and this cycle will even
worsen.
So, I think ultimately, his political calculation may be proved correct and even as he adheres to the economic advice of the international community,
that may be the end of this new economic reform moment in Argentina.
NEWTON: Yes, and he is saying to Argentineans, look, this just may be the way it is and these are the stark choices you are facing. What's the best
case scenario that we can get if you see this because I know that sometimes, they are looking for some kind of tepid growth in 2019 if they
could put all of this behind them.
GEDAN: Frankly, if he can recapture the confidence of international community, there is a very short term upside. Argentina doesn't really
need to borrow anymore right now. The International Monetary Fund backed by the White House has invested $50 billion in Argentina and its desperate
straits now have led the International Monetary Fund even expedite the disbursement of those loans.
It frankly has most of the money it needs to finance itself for the next year or two, so what he needs is the run on the currency to end. It needs
foreign investment to return at some modest pace and it needs the recession that it is entering to be modest and frankly ...
[16:05:16]
GEDAN: ... what investors also want to see is that this government or a likely successor government will adhere to a similar responsible fiscal
model. It's possible, but again, the politics are almost impossible in Argentina right now.
NEWTON: Yes, you said it right there. A successor government would have to keep this going. Quickly before I let you go, do you think this could
turn into a political crisis sooner than next year?
GEDAN: Unfortunately, I think it could. Argentina's opposition is not historically known as being particularly responsible. I think the unions
are nearly impossible to work with, much of the leftists tyrannous movement in Argentina wants to see this government gone immediately and will use
violent protests to achieve that. I think there has emerged in recent years, a more modest centrist, tyrannous movement that I think is willing
to stand with the government relatively in this period, but again, I think the Argentine labor unions and the Argentine opposition wants to see this
government out and are not going to be good partners in austerity.
NEWTON: Yes, we'll see what their next move is. Thanks so much, really appreciate it.
GEDAN: My pleasure.
NEWTON: Now, a lot of these issues that we just talked about that were driving the crisis in Argentina are also dragging down the Turkish economy.
Now, CNN's John Defterios told me how economics and politics are classing in Ankara.
(BEGIN VIDEO TAPE)
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: Despite rampant and runaway inflation and a cash shortage of about $100 billion are doing everything to
avoid the International Monetary Fund. President Erdogan almost sees it as caving into the interest rate lobby if he did so. We cannot overlook the
fact that the US is the largest shareholder of the International Monetary Fund and in the context, President Erdogan clashing with President Trump on
a number of issues as NATO allies, you can see why President Erdogan doesn't want to take action.
Now, it was interesting with the inflation report with consumer inflation running nearly 18% and producer inflation running at 32%, the Central Bank
came out and said, "We'll do everything. Use all of the economic tools to stabilize prices," but this rings hollow in financial markets because of
the power consolidated by President Erdogan and the elections in June.
He appointed his son-in-law, Berat Albayrak as the Minister both Finance and Treasury. He is going to take his cues from of course, his father-in-
law and is very unlikely they'll lean towards the International Monetary Fund. Now, back at home, Erdogan is blaming Donald Trump for this currency
crisis that we see today. The lira down better than 40%, but at the same time, these are years of economic policy by President Erdogan over
borrowing, pushing major infrastructure projects, driving up that current account deficit.
So, it's fair to say Donald Trump pushed over the edge, but he clearly didn't lead him off the cliff beforehand because this has been building up
for years and President Erdogan remains steadfast against the International Monetary Fund all the way through it.
NEWTON: Yes, and I guess politically that works for him. I am interested to know from you, John, I mean, they are saying that they are going to do
everything they can. Obviously, that means no interest rate hikes or does that mean that perhaps they will look at a modest interest rate hike?
DEFTERIOS: Well, there's a game going on here, Paula. The repo rate is hovering at 16.5% that was moved up in June because of the initial sell off
of the lira here. The bank policy meeting that is going to take place in September 13th, we are going to watch that very carefully. Many in the
market believe they need to jack up interest rates by 10% to send the right signal to the market. I cannot see President Erdogan allowing that to
happen and with that executive Presidency and the powers he accumulated back in June, he has the right to oust the Central Bank on his own and hire
a new chief.
And this is the push and pull that we see right now in the financial markets and why we are watching his son-in-law very carefully, he is trying
to put in all the measures, but he has limitations because he knows his father-in-law is against those policies.
NEWTON: Yes, and this is on the fact that there is that family relationship that's raised a lot of eyes. Before I let you go, John, you
know, we're covering very much what's going on in Argentina as well. Completely opposite in Argentina. Argentina is pounding on the IMF's door
and raising interest rates to astronomical levels. Is there any sense in Turkey of what the tipping point would be here for Turkey for them to do
something more extreme.
DEFTERIOS: Well, it's interesting to put those two into context, Paula. You have Turkey and Argentina, very different economic policies, but
actually, similar results when it comes to their currencies. The peso got about 50% and the lira down - better than 40%. As you suggested here,
President Macri almost running to Washington. His team putting forward a new fiscal program here to rebuild investor confidence and then on Tuesday,
holding meetings with Christine Lagarde of the IMF and her team in the US capital.
At the same time here, moving interest rates up in a panic to 60% sent the absolute wrong signal here. In fact, it's very obvious as he didn't clear
it with the International Monetary Fund that he wanted to move up this credit line to $50 billion, which is a record for a credit line within the
IMF.
So, I don't see Turkey bowing to that sort of pressure, moving to raise interest rates at that level. It reminds me in the late 1990s ...
[16:10:15]
DEFTERIOS: ... and the Asian crisis when Dr. Mahathir Mohamad of Malaysia said, "I will not follow the path of the International Monetary Fund," and
five years later, he was actually proven right. I don't think that's the case for President Erdogan today because the over borrowing over the last
decade.
(END VIDEO TAPE)
NEWTON: Okay, as we were telling you, US markets are closed for Labor Day. There was no rest though for Europe and Asia. It was a mixed picture
throughout Europe. Weak manufacturing numbers for a lot of the sentiment, but as you can see there, London was in focus up nearly a percentage point,
and that was as the British pound was sinking.
Now, there have been a lot of fresh and new, and quite frankly controversial disagreements over the direction of Brexit. Theresa May's
former Brexit Minister says he is ready to vote against her proposed deal when the time comes speaking on the BBC, David Davis claimed the so-called
Chequers deal will be worse than staying in the EU.
(BEGIN VIDEO CLIP)
DAVID DAVIS, BRITISH CONSERVATIVE PARTY POLITICIAN: I am against it. It would be rather odd for me to resign over something and then vote for it
when it came back. And mind you, as the Chequers proposal, it's not a deal, we shouldn't call it a Chequers deal, it's the Chequers proposal is
actually almost worst than being in. I mean, we will be under the rule of the European Union with respect to all of their manufactured goods and agri
foods, that's a really serious concession. What about taking back control? Does it work? That actually leaves us the position where they dictate our
future, rules without us having to settle.
(END VIDEO CLIP)
NEWTON: Now, meantime, this leaves Theresa May firing back at her former Foreign Minister after his scathing newspaper article took aim at her
Brexit plan as Mrs. May tries to sell that deal to a skeptical Brussels. Boris Johnson says it's already dead on arrival and as he put it, Britain
is going quote, "into battle with the white flag fluttering over our leading tank." Nic Robertson joins me now live from London.
I mean, Nic, you couldn't be more blunt than that. She's actually now having to fight this on two fronts from two key and pivotal Cabinet
ministers, former, I should say. Where do you go here politically? We had been discussing earlier that this is kind of what the financial market had
expected, but maybe not expected, the political turmoil. Was Theresa May, maybe not blasting this next session of Parliament.
NIC ROBERTSON, INTERNATIONAL DIPLOMATIC EDITOR, CNN: Yes, she's thought about blasting people's expectations, and I think based on that, the
expectation is that she will continue to last longer in part because although Boris Johnson is critical no one really wants to be leader at this
time because they know it's a poisoned chalice. She is not just fighting these hard-lined Brexiteers, but there are people within her party and
pieces within her party who voted for remain or pro-remain, so they are anything but wanting to get Britain out on any kind of hard deal.
They are also saying that the Chequers deal doesn't work for them. She's also hearing criticism from the EU's chief negotiator, Michel Barnier who
is saying that the Chequers plan doesn't work for him either because it threatens the sanctity of the European project, that it could have grave
consequences and Britain cannot cherry pick things from the single market because that would only encourage other countries to do that.
So, it's just handled in many ways, but I can tell you exactly how she is fighting this politically and number ten came out today, her office came
out today, very strong with it, and certainly what Boris Johnson had to say is there is no new ideas there, but we need serious leadership with a
serious plan and number 10's position is, they have a plan, and their position as far as Michel Barnier and the European Union is she, Theresa
May has put forward this Chequers plan. They've heard what the EU has to say, now it's up to the EU to move.
I think there was something in her language in her own column over the weekend in her own piece over the weekend in the "Sunday Telegraph" that
indicated she wouldn't be pushed into compromise for anything that wasn't in Britain's national interest, which means perhaps there is compromise to
come.
So that, I think how she is going to fight it, push back on her political enemies back home if you will, and push back on the EU to get into
renegotiations.
NEWTON: Yes, she's got to fight on so many fronts now and it's the fight from within that's really taking its toll, funny enough. You know, Nic,
I'm going to draw in here your so many decades of experience, the hard border in Northern Ireland, something that Theresa May and the Chequers
plan said would never happen, and yet, with all of your decades of experience, you've been on that border so many times. Do you see it
working? Have you seen a plan either from Brussels or from London that says, "Yes, we can make this work. This makes sense."
ROBERTSON: You're absolutely right. Look, there's nothing that's been put forward yet that is amenable to all sides. You have Theresa May propped up
politically ...
[16:15:15]
ROBERTSON: ... by essentially hard-lined Brexiteers in Northern Ireland who don't want to see the compromise that the EU hard-lined Brexiteers feel
is being pushed on them, the so-called back stopper option on Northern Ireland.
Boris Johnson in that column we're talking about here, with tanks and white flags and people being knocked out and Britain being in the trunk of the
car, spent half that column putting forward a bunch of statistics on Northern Ireland that were probably for many people cherry pick statistics
that didn't offer a new way forward, but does show that Northern Ireland remains the main sticking point.
Theresa May went to Northern Ireland in the past couple of months that tell those politicians there, "Look, there is no magic solution, magic fix for
this." So this is where the real fight is going to come down. Many issues but Northern Ireland, no technical solution and no political way around it
yet, and that I think is where we are going to have a lot more debate, Paula.
NEWTON: Yes, and to continue the military analogy, just a few months to the D-day, hard to believe. Nic Robertson, thanks so much as always.
Now, just ahead, Chinese billionaire and Chief Executive of one of China's largest tech firms was arrested in the US on the weekend. We'll have more
details on that.
The Chief Executive of Chinese e-commerce giant, JD.com is back in China after being arrested while on a business trip in the United States.
Richard Liu was accused of sexual misconduct, an allegation, which the company says is false.
CNN's Clare Sebastian is following the story from London for us. Clare, a lot that we don't know here and obviously, he was released and allowed to
go to his home country. So what are both authorities saying and the company saying about this right now?
CLARE SEBASTIAN, CORRESPONDENT, CNN: Yes, Paula, we still don't know the exact circumstances of the arrest. They haven't talked about the location
or the exact nature of the alleged crime, but JD.com continues to vigorously defend their CEO and I'll read you a statement that we got from
the company, a new one today. They said, "We learned that Mr. Liu was taken by Minneapolis police for investigation on August 31st, 2018. Mr.
Liu was soon released. They didn't receive any accusation and nor did he pay any bail. Right now, he has returned to China and resumed his normal
work."
[16:20:13]
SEBASTIAN: But the bottom line is that he is resuming his normal work under the cloud of an ongoing investigation because the Minneapolis Police
Department say they are actively investigating this. No charges have been filed yet and they say they are not going to release the report on the
arrest until Wednesday at the earliest.
At the moment, a lot is still not known about this, but what we know is that he didn't pay any bail. This is not bailed. He is a free man. There
were no travel restrictions and that's why he has been able to return to China.
NEWTON: Yes, no travel restrictions is key and as you point out, it comes at an intense time for the company. They need a CEO in place and they need
them concentrated.
SEBASTIAN: Right, and then like with many tech companies, the CEO is synonymous with the company itself having his mug shots splashed across
social media is certainly not the kind of publicity they are looking for, but you are right, JD.com is investing heavily there in a period of intense
investment. We know that that's crucial when you are trying to build an e- commerce company at scale. They are investing in fulfillment, in marketing.
They just partnered with Google to try and expand their footprint outside of China. So this is a really intense time for the company, and certainly
not a time when they want their CEO to be portrayed in this manner, but as I said, the company say the charges are false and they continue to defend
him.
NEWTON: Okay, and we do have some other corporate news when it comes to CEOs. A lot of people had been waiting to see who the successor would be
to Sir Martin Sorrell at WPP and we have a name now.
SEBASTIAN: Yes, we have a name, Mark Read. He is an insider. He is in fact one of the executives that's been running the company on an interim
basis since Martin Sorrell stepped down in April. So this is a new phase now for the company. He has now been announced.
A couple of interesting things about him. Obviously, he is an insider. So this is something that will perhaps provide stability for this company. He
also has a digital background. He was running their digital agency called, Wunderman in New York and that is something that he is going to need bring
to this role because obviously, we know that in advertising, things are moving in that direction.
WPP has been really struggling since companies are cutting back on ad budgets and moving into online advertising, so this will be a crucial area
of experience for him. Paula, the company, reports its half-year results tomorrow, so perhaps more on how fast he'd continue to turn around the
business then.
NEWTON: Yes, and as you were saying, that's a big juggernaut. WPP has been struggling with everyone else in terms of how to carve out that
business. You and I have talked before that we have places like Amazon and Google that have built digital empires out of literally nothing. From what
you can see in his background, anything in Mark Read's background beyond the fact that the does have this digital experience, because some people
are saying that WPP actually needs a complete shakeout in terms of the way it does - the way it competes in this industry?
SEBASTIAN: Yes, I mean, you know, the digital is the area that stands out. He was the CEO of the WPP Digital before, he was the CEO of Wunderman, so
certainly that is the area where he seems to have most strength.
But he's been at the company two decades, so he's definitely got experience in all areas, Paula. And I think a lot of people have been looking to see
if he is going to simplify it, if he is going to try and cut costs because the company has seen its costs rising as it continues to try and attract
new business and try and invest in new areas, in new economy. It's called Martin Sorrell himself, he blamed things like private equity firms coming
in and slashing advertising budgets.
But we know that it is also the likes of Google and Facebook that have really become the powerhouses in digital advertising, and it's increasingly
difficult for companies the likes of WPP, these legacy advertising conglomerate to compete.
NEWTON: Absolutely. Clare Sebastian there with our analysis. Appreciate it.
Now if you want to keep on top of the day's business headlines in just 90 seconds, then try our "Daily Briefing" podcast. It's updated twice a day
before and after the bell rings on Wall Street and you can just ask Alexa on your Google Home Device for your CNNMoney/briefing every week day.
And in the meantime, a new app is promising to give parents more control over their kids' smart phone use. It's too bad, you can't just take the
phone away because that's what I would like. Zift calls it some kind of a screen time parenting ally, we'll call it. It tells parents what their
kids are searching for online and that includes alerts if they are searching for things like drugs, weapons, suicide, pornography, the list is
long, of course. The co-founder told me all about it.
(BEGIN VIDEO CLIP)
MICHAEL BURNS, COFOUNDER, ZIFT: The key that I want to underline is that the primary function that I set out to address in co-founding this company
was the screen time. We have children on five to ten hours a day, I am worried about their health, their mental development and that is a primary
purpose.
But equally interesting is making sure that you understand what's happening in their world because if they are somewhere for five to ten hours a day,
and we're all busy, we need to understand what's happening in their world. But you don't want to be a spy. I don't want to capture every piece of
information.
NEWTON: And yet, it seems a bit tempting because it seems as if this app does kind of allow you to spy on your children. And I mean, spy in
intrusive ways that perhaps they are entitled to their own privacy as well.
[16:25:10]
BURNS: I would agree with you. They are entitled to their privacy, which again is why we try to through at lengths to not capture information, to
not show text, to not read all of their information. The way this actually works is that a piece of artificial intelligence sits on the child's
device. It scans websites and will just give you an alert to a category.
So you're not actually looking at everything they see. You're not reading every text they read. What you are getting is an alert if they've spent
time on sites that describe how to kill yourself painlessly or drugs or guns or violence or porn.
So you get on all categories, and remember, it's up to you, the parent to decide your parenting style. So, depending on the parent, you can set it
at different levels and your child can gain trust and we're dealing with kids from age seven to 16. Now, they are very different problems. So my
advice is, you start young when they get their first phone and that's why we're trying to time this release with back to school. We make a lot of
promises ...
NEWTON: Oh, yes, it's been a huge controversy. Some schools thinking of just banning the phone outright, and that's been also an issue as well. I
want to talk to you a little bit about the business side of this thing. I would think there would be low barriers to entry for competition for you at
this point and you know there are a lot of apps that kind of do this that parents already use.
BURNS: Well, the reason that I approached this was I couldn't find the right solution for me, so I have four children. I am raising one child
with autism so he has some very specific needs. There was always a tantrum or a fight. Some of the things that I have tried are cumbersome, some
things required a lot of work and we set out to number one, do something that could be free and number two, something that doesn't require the
parent to learn to do something or put a lot of energy into it.
NEWTON: So you think that will be your competitive edge there. It's free and plus it's easy to use.
BURNS: It's very easy to use. In fact, there is a family feed that would remind you of Facebook newsfeed, and it's like just staying in tune with
what your child is doing. You're not putting parental controls in place, you're not setting a hundred parameters and having to touch their phone
every day.
(END VIDEO CLIP)
NEWTON: There are scary things to be found on that phone. Who says you don't want to spy on your kids? That wouldn't spy on your kids. Moving
on, Chinese money is flowing to Africa and African debt is flowing to China. We will be live in Nairobi as the Chinese President agrees to a new
financial package for the entire continent.
[16:30:00]
(COMMERCIAL BREAK)
[16:30:00] PAULA NEWTON, HOST, QUEST MEANS BUSINESS: Hello, I'm Paula Newton, and there's more QUEST MEANS BUSINESS in a moment when we'll look
at President Xi's touch to Africa, $60 billion, no strings attached.
And some advice for newcomers in the workplace. How not to fumble at first job, before that though, this is Cnn, and on this network, the news always
come first. The United Nations Human Rights chief is calling for the immediate release of two "Reuters" journalists convicted Monday of
possessing state secrets.
A judge sentenced them to seven years in prison. The journalists say they were framed while investigating the killings of Rohingya Muslims. Brazil's
national museum has been devastated by a massive fire. Centuries of history and millions of artifacts have all been destroyed.
Reports say the museum had no fire sprinklers. President Michel Temer described the loss of the museum's collection as an insurmountable loss for
his country. A tropical storm is tearing across south Florida right now and it's threatening to intensify into a hurricane.
Tropical Storm Gordon formed on Monday near the Florida Keys and quickly moved to the mainland. It is now moving northwest into the Gulf of Mexico.
In Iraq, parliament has convened for the first time on Monday after May's hotly contested election, but Monday's parliamentary section ended without
any progress between the two main electoral blocs as both sides claim enough seats to take power.
Parliament is due to reconvene again on Tuesday. China says it will pour another $60 billion into Africa, $60 billion, sounds very large when it's
actually the same amount that China pledged in 2015. Now, the money will come in the form of aid, investment and loans.
The country has been accused of saddling Africa with unsustainable debt, if African leaders like the president of South Africa says he's happy that the
money will just keep coming.
(BEGIN VIDEO CLIP)
CYRIL RAMAPHOSA, PRESIDENT OF SOUTH AFRICA: Now, for us, it is also important to have China as a partner in all this. Because China is playing
a very constructive role on the African continent in helping the African continent to develop, but not develop only as a country that wants to take
resources, but as a partner.
China is an equal partner to all the countries that are part of this focal committee, and it's a partner in development. It's a partner in economic
growth. It's a partner in advancing the interest of all the countries in Africa as well as China itself.
(END VIDEO CLIP)
NEWTON: And we want to go to Cnn's Farai Sevenzo who is watching all of this from Nairobi. Farai, thanks so much. You know, some people have
called this debt trap diplomacy, and how does it differ from the decades of aid and investments, so-called kite(ph) aid that Africa unfortunately has
been used to.
FARAI SEVENZO, CNN CORRESPONDENT: Well, it's a very pressing and a good question to ask. But China has come to Africa with a completely different
mindset. And the difference really, to answer your question is that these governments are getting interest free loans, they're queuing around the
block for this money.
In areas of Africa that were completely underdeveloped just 18 years ago since China began the forum of China-Africa relations cooperation. It's
mushroomed into a massive infrastructure, new roads have been built and all manner of things.
And of course, the issue for many critics of what China is doing in Africa is as you say debt. I mean, let me just read you some mind-boggling
figures here. It says 20 -- China owns 23 -- I beg your pardon, 21.3 percent of Kenya's external debt.
And we go on to many other figures of billions that run into billions. Angola is the biggest receiver of Chinese loans, numbering close to 17
billion or so, according to a piece of paper I have in front of me.
So it's different because the African see it as China extending that kind of -- benevolent kind of money only and no qualms about sorting elections
or what human rights -- China is in the business of giving these countries the money they need to develop themselves.
[16:35:00] And that's how the government sees it. But of course, it's different in every sphere of life in African politics and in African
society. The politicians are there in their numbers in Beijing to receive President Xi Jinping's massive generosity, and of course it's not just
generosity, it is as you say --
NEWTON: Right --
SEVENZO: Loans --
NEWTON: Right --
SEVENZO: Leading to debt.
NEWTON: Yes, you call it generosity, obviously it's out of self interest. Some people would say that there are actually mortgaging a lot of their
natural resources to China in the process. But you know, you talked about the fact that there were no strings attached in terms of human rights.
What about corruption because that is also a problem in Africa as so many African citizens are aware.
SEVENZO: Paula, that is the whole thing I'm trying to explain, is that it's not just generosity, critics of this whole thing say what about human
rights? What about the idea of corruption? Where does this money that China throws at these leaders? How is it accountable?
I mean of course, if you got money from the IMF, they would come in there with their accountants and make sure that every cent and every dollar was
accounted for. And the fear is China is giving a blind eye to the usual malpractices of African governments.
And people -- we've been speaking to here, I feel, but even the projects that they've built, even here in Nairobi, the great massive railway that
takes people from Nairobi to Mombasa, they say, well, it hasn't done -- it's not fit for purpose, it's supposed to be taking goods --
NEWTON: Right --
SEVENZO: From Mombasa to the city. But really, it's just for tourists.
NEWTON: Right --
SEVENZO: So there are many questions soon to be answered, but in the moment of course, the African leaders are not being up, Mr. Xi Jinping's --
NEWTON: All right, thanks so much, we're going to have to leave it there, Farai from Nairobi, appreciate it. And now Ethiopia as we were just
talking is one African country that has already seen a lot of Chinese investment. The new African Union headquarters in the capital Addis Ababa
is the symbol of strength of its ties.
It was donated by Beijing in 2012 at a cost of $200 million. Now Ethiopia has also taken $12.1 billion from Chinese creditors since 2000 to build
things like those transport systems that Farai was just talking about. Cnn's digital contributor Jenni Marsh has just returned from a trip to
Ethiopia where she looked at these investments. Earlier, she spoke to Kristie Lu Stout.
(BEGIN VIDEO CLIP)
JENNI MARSH, CNN'S DIGITAL PRODUCER: There's been a long-standing misconception that the Chinese come to Africa to do business, but they
don't hire locals. And there was a big report last year which was the first time we really had a date to set on this.
And the report by McKenzie(ph) sounded actually -- and Chinese companies in Africa normally, 89 percent of employees are local. So the main factory
that I visited in Ethiopia is called Huajian. This is a really big Chinese shoe-manufacturer, Namek(ph) shoes that people like (INAUDIBLE).
And inside, there were just thousands and thousands of workers, and the vast majorities of these were local Ethiopians. And that some people here
have been back to China for training, so it did seem like there were some good opportunities there.
KRISTIE LU STOUT, CNN: Wow, interesting, and such is jobs. I mean, China is part of its road initiative, it's also building infrastructure across
Africa. How much of that built did you see and what does it look like?
MARSH: I mean, you can't escape it, particularly in Ethiopia, this is -- it's a very young city, badly in need of infrastructure. There are so many
roads, even roads which go past the Prime Minister's office which are just simple death traps.
So the Chinese has really helped others to mature, it's given them roads, and the Chinese have built the first kind of metro system in Africa to
allow trains which still runs through the city. The infrastructure really is helping the country to industrialize and to modernize.
LU STOUT: Right, but a lot of the infrastructure has been built on debt. So are African nations like Ethiopia, are they saddled with debt? Did it --
loans from China?
MARSH: Yes, I mean, it's a really interesting point. Since 2000, Africa has taken $130 billion in debt from China, and that's mostly been used for
infrastructure. But I think it's really important to note that while China has lend a lot to African countries, there are many other creditors too.
(END VIDEO CLIP)
NEWTON: And you'll want to get more information on this. Jenni has written a series of pieces for our website including employed by China, you
can read them all at Cnn.com, and next month, look out for a special edition of QMB live from Nairobi.
Coming up next, we all remember our first jobs, though I know many of you involved reporting on Cowes(ph) caught in high tide. Mind it, I wonder
what advice people would have from this, especially this next guest, she's trying -- going to tell us how to make an impression in your first job.
[16:40:00] (COMMERCIAL BREAK)
NEWTON: OK, employers watch out or maybe celebrate, I don't know. Generation Zee is heading your way. The first of the 60 million people
born after the year 2000 who are starting to hit the workforce now.
According to a Monster.com survey, 76 percent of this generation see themselves in the driver seat in their own careers compared to those
millennials and Gen X'ers and boomers, they were also much more willing to move for work and more likely to believe a job should have a greater
purpose than money. Yes, that thing is going to pull.
And so young people often find navigating their first job a challenge. Meredith Whipple Callahan looked at some of the common mistakes people make
and how to avoid them. In her book "Indispensable: How to Succeed at Your First Job and Beyond". She joins me now.
You know, I have that anecdote about my first job as a TV -- local TV reporter, Cowes'(ph) stock and high tide(ph). And the moral for me on that
was be willing to do anything, right? And while you're willing to do anything, you know, you brought up that word, humility --
MEREDITH WHIPPLE CALLAHAN, AUTHOR: Yes --
NEWTON: Show a little humility.
CALLAHAN: Yes, so when you're starting your first job, I think it's important to keep those really high expectations of what you want, at the
same time adopting just a deep sense of humility of understanding that you don't know anything.
There's lots that you don't know about the company, there's a lot that you don't know about the industry, there are things that you just don't know
about how work is done. And so actually entering the workforce with a sense of humility and asking lots of truth questions to learn quickly
rather than assuming that anything that you know applies is the place to start.
NEWTON: One thing I was interested in what you said which I think many people kind of apply to their own careers no matter where they are is drive
your own career development from the start. How do you do that?
CALLAHAN: Well, you start by having a sense of where you want to go. You know, start by actually articulating your goals and sharing them with the
people around you. And then after that, it's really a matter of driving to get the feedback that you need.
So running down the feedback, not just on a six or 12-month cycle that is given to you by your company, but after you do anything that's new,
anything that's pushing your boundaries, anything that you're really learning from, asking the people around you, not just your manager but
everyone else for feedback on how you did.
NEWTON: You know, I give this generation a lot of credit for just being incredibly smart and adaptive. But what -- you know, that whole issue of
both humility comes into play because they seem to do everything by their own terms, on their own terms. What would say distinguishes this
generation in the workplace from others?
CALLAHAN: I think it's a sense of passion and a sense of identity, really knowing what they want and having a sense of wanting to align work to that
broader purpose and passion in their life. That can be challenging because obviously the step between your first job in particular and your overall
sense of what you want in life probably won't be great.
It's something that you iterate on and get closer and closer to overtime. So I think that's where the humility comes back in, it's having a sense
that maybe this job won't be perfect, but you're willing to learn a lot from it. And you learn more as you move into your next job.
[16:45:00] And then overtime, you'll come to really converge the things that you want in your life and the things that you end up getting in your
work.
NEWTON: And in terms of top tips really for this generation as they go in, what would you say to them?
CALLAHAN: I say the first thing to do as you walk in the door is really think about how you show up and look prepared, you should show up on time,
you should --
NEWTON: Seem logical --
CALLAHAN: Seem logical, you should bring what you need for the job, and moreover as people are giving you direction or guidance, take notes,
actually show that you care about what they're saying and that you're going to do everything that you can to do a good job.
NEWTON: There's this issue of be proactive about getting feedback. It's a tough thing to do because some people don't really want to engage on being
criticized about anything, and yet, is it worst for this generation and for others?
CALLAHAN: They notice that, it's worst for this generation than for others. I think humans in general have a deep sense of -- kind of
defensiveness when they get feedback. But getting over that defensiveness and understanding that everyone's feedback, everyone's perspective is
useful, it's something that we can all do regardless of generation.
NEWTON: These people should start practicing with their parents, no be so defensive, that'd be good practice. And again, getting to advice for the
managers who employ these very bright people, you know, I don't have a lot of time now, but quickly, what would say is the piece of advice -- you
know, people who want to keep these young stars on their staff.
CALLAHAN: I think it's understanding what they want and understanding where they're coming from, while at the same time delivering them the
advice and wisdom that you have.
I'm still trying to really converge a sense of what they're looking for, what they're interested in, the things that they find developmental and
also the things that you know that you need from a manager perspective and from a business perspective.
NEWTON: Yes, and I always take pity on them, first job is so tough, isn't it? Meredith, thanks so much, really appreciate you coming in. Now, after
the break, treat for fans of Craft Beer, a beer hotel with a beer museum and beer spots, not kidding.
(COMMERCIAL BREAK)
NEWTON: Investors are still digesting Coca-Cola's $5 billion buy of Costa Coffee. It's the latest in a string of major coffee acquisitions and what
has been a deal-making frenzy. One family-owned company says it's not for sale on QUEST MEANS BUSINESS.
The chairman of Illycaffe told me what's driving this coffee consolidation.
(BEGIN VIDEO CLIP)
ANDREA ILLY, CHAIRMAN, ILLYCAFFE: I would say it's the exact opposite as a mature market (INAUDIBLE).
[16:50:00] It's a market under heavy radicalization, there are new technologies, new routes to market, new products category like cold rule,
like ready to drink.
So it's very dynamic. What is mature is so-called traditional coffee. The coffee our parents were used to drink. Roasted brown or beans -- this,
yes, is a mature market as a consequence mainly unfortunate systems. Espresso portion system in Europe and filter coffee portion and system in
the United States which are basically cannibalizing their traditional coffee consumption.
And this is the way the industry consolidation was started because they trip all the traditional coffee companies were not able to grow any longer.
So a consolidator had a good idea to merging -- acquiring them in order to create a critical mass by M&A.
NEWTON: A critical mass, and by that you mean mass market as well. And if I hear your tone correct and that you don't think that that's a good
development in this market.
ILLY: Oh, I think on its -- and particularly natural about that. Yes, there are less actors in the industry, the industry is becoming more
competitive, so it would be necessary concerns more, difficult to stay in the market. But on the other opposite side, like it happened also with
beer business at the time of the consolidation, you have a fragmentation of the market opening up with this new micro roasters which are very similar
who or what their micro growers are.
So all in all, I would say the market is changing a lot, which is also interesting from the consumer perspective, becoming more and more dynamic.
The category has a very positive perception nowadays. Because coffee, not only makes you live better and longer because it's really the official
beverage of active life, inspiration, success, social and professional success.
But it's also good for health. And this is a message which is trickling down very quickly also in Asian countries which were traditionally non-
coffee drinking -- non-drinkers, and now they're growing coffee consumption double digits.
So this makes the category to grow more than it used to grow two decades ago, with still a huge potential for project expansion. So this is --
makes the category quite attractive. So I think it's really a good moment for coffee.
(END VIDEO CLIP)
NEWTON: And here's a crush course and how to make beer look exciting on TV. If you yell out beer for a second there, young man, still he stands,
the kind of grand tour but with beer. This is an advert for a streaming service, so it chose purely Craft Beer, it costs -- get this $4.99 a month
in the U.S. and Europe.
It's called the BrewDog and Network from a company that has never shied away from controversy. Now, the company fought off a battle with the
Presley estate over the rights to the name Elvis Juice. It was criticized for launching Pink IPA, Beer for Girls on -- get this, international
women's day.
The company said it wanted to highlight inequality and it prompted its -- that promoted its streaming service by parodying a porn site, I kid you
not. The managing director of this fast growing company is taking it though all in her stride.
(BEGIN VIDEO CLIP)
TANISHA ROBINSON, CHIEF EXECUTIVE OFFICER, BREWDOG USA: And for BrewDog, nearly speak out on social issues and equality. You know, we thought and I
think a lot of people got the joke, but you know, for us, we think that Craft Beer market is unserved when it comes to exciting content made by
people that actually make Craft Beer.
And we think that the network has a great way to address this.
NEWTON: OK, now another question to you though, is that we continue to read about more things the company is doing in terms of branching out, so
we've just talked about the streaming, there's restaurant, hotel, so many things going on here.
Do you worry that you're taking on too much, too soon, especially and at the bottom end of this, you do still want to sell beer, right? Kind of
stick with what you know.
ROBINSON: Yes, absolutely, but our filter for anything that we do, whether it's the hotel or the network, is will it help us sell more beer? And so
far we're seeing that pan out really well.
NEWTON: OK, but at what cost? All of these ventures cost you money and they could also lose money.
ROBINSON: Certainly they could, but so far we have over 5,000 paid subscriptions in our first few days with the network, so we are well on our
way to hitting our goal there, and the hotel has over 2,000 prepaid nights and we're booked solid for the next 16 weeks, so we're -- or 16-weekends.
[16:55:00] So we think that you know, we can't grow and become the world's greatest and biggest, independent Craft brewer without making some big
bets.
NEWTON: Right, it might be independent Craft brewing broadcaster as well, that is quite ambitious, though the ambitions are rooted in Ohio. Why
Ohio?
ROBINSON: So Ohio is a phenomenal community, it's a really smart and open place, also logistically we're within 50 percent -- we're within 8 hours
drive, I mean, 50 percent of the U.S. population, which means that we can get fresh beer to a lot of customers.
NEWTON: You know, another thing that you might face some tough competition with this, as soon as anyone sees any competition in this market, they tend
to buy everyone else. There has been a lot of consolidation, do you worry about that in a way and especially, I know that in terms of brand placement
and all that, this is a crowded field.
ROBINSON: It's definitely a crowded field, which is why we are -- we're doing -- and making this, make a splash. I think that there's a big
opportunities through the network and through our messaging and marketing to make sure that customers are aware of who is independent and who is
owned by big, blend, beer companies.
NEWTON: Big, blend, beer companies, no one would have consumed, that to me sure, that's for sure.
ROBINSON: We are definitely not that.
(LAUGHTER)
NEWTON: I love it. Here's the thing, you know, we've been covering here on our business shows, certainly the convergence between cannabis growth
and recreational marijuana and the brewing companies, will that be something you guys are already looking into or might look into in the
future.
ROBINSON: We're not really looking into that right now, but I would say that my dream collaboration is with Snoop Dog, so he definitely is known to
have ties to that, but in my dream, it would be BrewDog with 2Gs obviously as the reference to Snoop Dog.
And we probably do something also -- and then Hennessy Barrels.
NEWTON: Hennessy Barrels, I love it. Yes, Snoop Dog is connected, again, cannabis, first, if you were, you would select him. I'll give him a shot,
you never know at this point, Tanisha. Thanks --
ROBINSON: Yes --
NEWTON: So much --
ROBINSON: Yes, absolutely --
NEWTON: And we'll continue to follow this streaming business. As we say, $4.99, half the price of Netflix, you're ready for it?
ROBINSON: Absolutely, we think -- we think that all of the big mainstream media has neglected this demographic of people that are really interested
in Craft, spirits and beer, and all of the associated things that go with it. And we think that this is an unserved market that we are making event
in.
(END VIDEO CLIP)
NEWTON: And that is QUEST MEANS BUSINESS for this Labor Day holiday, I am Paula Newton, thanks for joining me, the news continues right here on CNN.
(COMMERCIAL BREAK)
