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Quest Means Business
US Designates Houthis As Terrorist Entity; Maersk: Two US-Flagged Ships Sailed Through Red Sea; Maersk CEO: Disruption Will Probably Last A Few Months; IMF Chief: Misinformation, Inequality Are Major AI Risks; Zelenskyy Appeals For Further Aid For Ukraine; Rutte: Migration Causing Major Issues For Europe; Dutch Prime Minister Confident About Ukraine Aid; Growing Concerns Over A Wider Mideast War; Judge Threatens To Eject Trump Out Of Court; Interview With Former Federal Prosecutor Michael Zeldin; Following Iranian Attacks, Pakistan Withdraws Its Ambassador; Global Supply Networks Being Disrupted By Turmoil In The Red Sea; Governor Of Bank Of Israel Hopeful About 2024; Interview With OECD Secretary-General Mathias Cormann; Global Minimum Tax Rate Of 15 Percent Set By OECD Now Active. Aired 3-4p ET
Aired January 17, 2024 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:26]
RICHARD QUEST, CNN INTERNATIONAL HOST: With an hour to go of trading on Wall Street, as you can see from the Dow, it is a down day for the markets.
We've got sleet, not snow here in Davos. Those are the markets.
The headlines we're following. The Houthis vowed to continue attacking Red Sea shipping on this program, all angles. You'll hear from the CEO of
Maersk and the boss of IKEA.
AI, the future of jobs, the managing director of the IMF gives her views, along with the Dutch Prime Minister Mark Rutte.
We have a busy hour ahead of us because we are alive in the World Economic Forum. It is Wednesday. It's January the 17th.
With AI Al (ph), I'm Richard Quest and, together, you better believe it, in Davos, we mean business.
Good evening. Day three of Davos, and the weather has actually heated up. It is above freezing, and that's why we -- I mean, you can see it's sleeted
and even though snow on the trees has all gone.
The -- it's freezing, and the World Economic Forum is also heating up. The week is reaching it's crescendo. It's the busiest day so far, and that
means more meetings, more panels and, of course, more top names to bring you on tonight's program in this busy hour that we have ahead of us.
You're going to have them to prime ministers no less than three CEOs, throw in a managing director, and a secretary general, and you've got the full
house.
We first, though, turn our attention to the escalating crisis in the Middle East. Tensions arising in the Red Sea as the US designates Yemen's Houthi
rebels as a terrorist entity. The relisting exposes the Houthis to economic sanctions. And, of course, it follows their attacks on merchant ships.
Data shows that traffic through the Red Sea has now fallen to its lowest point since 2019. That's when a ship blocked the Suez Canal.
The US has launched a third round of strikes against the Houthis on Tuesday. Hours later, the group fired a missile at a Maltese flag carrier.
A Houthi official said today, they will not stop their attacks on what they're calling Israeli-linked vessels.
Oren Liebermann is our Pentagon correspondent, so that's where we find him, at the Pentagon. Oren, lots of ground to cover.
Firstly, what is the goal here from the Pentagon and, indeed, the UK and others? At the end of the day, the Houthis are well-used to being attacked
by missiles.
OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: And there are some officials who believe that the Houthis are an organization -- a militant organization
that thrives at war. And this is sort of them in their element right now.
Still, the US, the UK, and others are trying to find some way to restore safety and security to the Red Sea, the Bab-al-Mandab strait, one of the
world's most critical waterways. The problem is that's just not what we're seeing now with the Houthis vowing to continue attacks against
international shipping. They say they're targeting ships with ties to Israel and no others. US Central Command has pointed out that many of the
last ships they have attacked have no connection to Israel whatsoever.
The latest attempt by the White House and the Biden administration to try to deter Houthi attacks on shipping is re-designating them as a specially
designated global terrorist that comes with economic sanctions. It's worth noting this will go into effect in 30 days. The US trying to send a message
here, also, trying to save a little bit of space so they can work some humanitarian assistance to Yemen. They have not gone as far as to relist
the Houthis as a foreign terrorist organization.
But, Richard, you're absolutely right. All of these actions put together, send a message, but it doesn't look like it's one the Houthis are receiving
right now.
QUEST: Okay. But, Oren, even if they are receiving the message, there's no evidence it's going to work. And this idea of rebranding them as terrorist
organizations, therefore, sanctions, I mean, how many people are actually doing business with the Houthis that it would make a difference?
LIEBERMANN: Well, the crucial backer of the Houthis is Iran. In addition to the strikes we saw, we also saw the US intercept a shipment on a stateless
vessel of weapons, ballistic missile components, cruise missile components, heading for the Houthis from Iran, according to US Central Command. So it's
not just trying to influence economically. It's trying to interdict the flow of components.
But you're right, this isn't likely to stop them from attacking shipping. The Houthis have tried to link their attacks on shipping to the war in
Gaza, saying they would consider stopping when the war is over.
[15:05:13]
The US making it clear that that's not exactly a connection they're willing to make or to accept, and they'll do whatever it takes to protect shipping.
The question is, how long does this go on? Because -- and we talked about this a bit, I think, earlier this week, this has worldwide .
QUEST: Right.
LIEBERMANN: . economic effects from avoiding the Red Sea.
QUEST: Oren Liebermann, I'll say I know we'll talk more about this as it progresses. I'm grateful for your time tonight. Thank you.
We're going to look further today at how the Red Sea crisis is affecting the global supply chain. From the ports the shipments begin, you can hear
from the head of DP World, which runs terminals across the globe.
Then there's vessels that carry those goods. The CEO of Maersk will be with me in just a second or three.
And finally, there are other retailers who are waiting on deliveries to stop their shells for that. We'll be joined by the CEO of IKEA.
So let's begin with Maersk. Its chief executive says the disruption in the Red Sea will probably last a few months. Maersk said on Tuesday that two of
its vessels sailed to waters in close proximity to the US Navy. The two ships turned off their tracking systems. Both are US flag vessels, part of
a subsidiary that typically carries goods for US government agencies.
Now, Vincent Clerc is the CEO of Maersk is with me. Good to see you, sir.
VINCENT CLERC, MAERSK CEO: Thank you for having me.
QUEST: We have a rule here. Whatever the guests does, I follow, so .
CLERC: That's good.
QUEST: . you decided no coat.
CLERC: Exactly.
QUEST: Let's talk the -- so you are still not -- you're not sending your ships around -- through the Red Sea and through the Suez Canal, are you?
You're going the long way round. You tried it. It didn't work. You're not doing it.
CLERC: Yes, that's exactly right. We had an attack before Christmas. Then we worked with the Operation Prosperity Guardian, thought we had the
security cleared and could actually proceed to the danger zone. And then on the 30th of December, one of the ships that we sent there was actually
attacked by the Houthis quite comprehensively, an outside the zone on that had been identified as being a danger zone.
That for us marked an escalation of the threat and a really morphing of the danger for our crew. And we decided to sail all our ships south of the Cape
of Good Hope.
QUEST: And I now see that insurance companies are basically saying to UK, US that shipping -- we're no longer going to insure you're going up --
going through the Red Sea.
CLERC: I think the level of threat today is really, really hard to assess on an objective basis. And I completely understand that. For us, this is
really about guaranteeing the safety of our crew, of our ships, and also of the cargo that our customers are trusting us with.
QUEST: So you're going to have to take the long way round, which is down and rally. That's about 10 to 14 days depending on the -- as I understand .
CLERC: That's about correct.
QUEST: . please correct me. But what is that in terms of cost?
CLERC: So actually, the exact cost of it is something that is really unfolding and that we're trying to get our arms around.
You have different levels of cost. The first one is it takes about 8,000 miles more to get from China to the UK, south of the horn. That takes these
couple of weeks. That means that we have ships that suddenly have to sail full throttle. That means more emission, more fuel.
It means also that they will not be, despite that, back on time in China. That means also the containers take longer time to turn. So you just have
cost piling on here. And the longer this is going to last, the more this is going to cost.
QUEST: So how much of that cost can you pass on? I mean, I suppose it's already on the high (inaudible). But freight costs are going up. We know
that. Is that you pushing them up? I don't mean you personally but, you know?
CLERC: I think actually we have -- thanks to maritime law -- actually a crew makes or has anticipated cases such as this one. We have actually the
possibility to adjust the freight that is on the water for the extent of transit time. And that's also what has been -- what is in the process of
being applied.
But further to that, there is a lot of costs that are going to pile on the longer this takes. And initially, we thought this was going to be a fairly
short disruption. Now, I think our base case is more going towards month of disruptions, and that means a lot more cost.
QUEST: Right. So I'm just going to grab the pens if I may. We're talking AI. Choose your color, sir.
CLERC: Maersk, I'm going to go with blue.
QUEST: Of course, it's Maersk blue. Okay. Where are you on the readiness board? Where do you think we are as a society in terms of ready for AI? Are
we dangerously unprepared or are we nailed it and it's smooth sailing (inaudible)? Where do you think we are?
CLERC: Oh, smooth sailing nowadays, so I would put a small towards the .
[15:10:02]
QUEST: Really?
CLERC: . dangerously unprepared.
QUEST: Dangerously unprepared.
CLERC: (Inaudible).
QUEST: It's probably difficult, isn't it?
CLERC: I think we have yet to see exactly all the potential of the technology. And I don't think we're really prepared for all of this.
QUEST: I'm very grateful to you, sir. Thank you very much (inaudible).
CLERC: Thank you for having me.
The head of the IMF says the situation in the Red Sea has not had a severe effect on the global economy, at least not as yet. Kristalina Georgieva
told me that she's worried about this in particular.
(BEGIN VIDEOTAPE)
KRISTALINA GEORGIEVA, MANAGING DIRECTOR, IMF: We are already seeing cost of shipping going up and reduction of traffic via the Suez Canal. Actually, in
the first week of January, 30% less shipping went through there.
It is not significant enough to impact the global economy. The risk is more of spillover of violence and prolonging the conflict. And then uncertainty
is very high. How would that impact the world? I worry it would -- it could be quite negative.
QUEST: The AI issue, it's not even baking. The ingredients are being mixed at the moment. And the IMF report is truly eye-watering.
GEORGIEVA: What I should say here is that wake-up call. It's overdue. Artificial intelligence is already penetrating the economy. And for
advanced economies, they would see 60% of their jobs impacted either positively. They get a boost from artificial intelligence in productivity
or they're gone.
QUEST: Governance and ethics is one area. In a sense, that's the sort of the sexy bit. But the other bits are really the bread and butter,
retraining for jobs, managing to put an infrastructure so that everybody benefits.
GEORGIEVA: When you look at the risks from artificial intelligence, there are two that are overwhelming. One is misinformation/disinformation. It has
to be managed with rigor.
The second one, inequality. And that means that countries have to build social safety nets for people who fall off the cliff, but also social
safety ropes, retraining programs.
QUEST: We are focusing a great deal of attention on the first and very little on the second.
GEORGIEVA: That is very true. And yet, whether AI turns into a boost of productivity, so we can get out of low growth in the next years or it turns
into a Dracon (ph) society and leads to conflict, depends on the second.
QUEST: Okay. The thing I found most telling in the report is this, which I hadn't thought of to be blunt, that when AI comes in, those developed
economies will move forward faster. People will earn more, by and large. It'll be a boom in a sense.
But those developing and low-income countries, they don't even have the infrastructure and the technical abilities to do it. So they fall behind
even further. That's the call.
GEORGIEVA: And that is why we should talk not only about inequality within countries, and it will deepen unless we had the social safety routes. But
we need to talk about the inequality across countries.
And if we are visionary, what are we going to do? We would make a massive investment in digitalization in developing countries. And we would make a
massive investment in developing countries to have good social protection for their own people.
QUEST: This is where, I think, I have to pour some cold water. We're not .
GEORGIEVA: Please don't, please don't.
QUEST: We're not going to do it. I mean, we learned with digitization. We learned with IoT that we didn't spend the money and, consequently, millions
of people were not retrained. They fell into poverty.
GEORGIEVA: So why not dream a better world? That would be this problem is that growth has been remarkably weak, and productivity remarkably low for
many, many years.
What is the problem of it? We don't have the resources to do it. How can we unleash productivity?
I talked to the CEO of IBM. He says, within five years, there can be 3% to 5% jump in productivity if we capture AI for what it is as a positive
force.
QUEST: I'm trying not to be pessimistic.
GEORGIEVA: Join me in the minority of optimists. Can I tell you a story? 1930, John Maynard Keynes writes an essay, "Economic Possibilities for Our
Grandchildren." And he says something that applies to today so much. He says, the world is going to be better in hundred years. Technology is going
to help us to make it a better world.
[15:15:10]
Keynes revolted against that pessimism. Looking forward, he predicted the world economy to increase eight times. It actually increased much more than
that. So why not ditch pessimism and say, we can deliver for our children and grandchildren?
(END VIDEOTAPE)
QUEST: Managing director of the IMF.
When we return an embarrassment of riches. The Prime Minister of Croatia is with me, but we have more than just that. With have prime ministers galore,
Mark Rutte of the Netherlands is also going to be with me. You've got the governor of Israel Central Bank and the head of the OECD. A smorgasbord of
leaders on QUEST MEANS BUSINESS tonight.
(COMMERCIAL BREAK)
QUEST: Just about now, President Biden is meeting with congressional leaders at the White House, where they are expected to talk about a
supplemental spending bill aimed at sending aid to Israel, Ukraine, and Taiwan and again changed the tide to immigration measures in the US
southern border with Mexico after Republicans' insistence.
Now, in Europe, of course, there's also issues and problems. The outcome in Ukraine is going to have consequences throughout Europe, the ability of
them to provide aid.
Croatia's prime minister is with me, Andrej Plenkovic, to discuss how the potential impact of what we're looking at. When we talk about Ukraine, the
ability to give aid, which Hungary is notably holding up, but it's stunning where you are. President Von der Leyen says, she will go to plan B, yes, if
you can't get an agreement at this next extraordinary council meeting. What are you expecting?
ANDREJ PLENKOVIC, CROATIAN PRIME MINISTER: I expect that the aid towards Ukraine will be provided. $50 billion, which we discussed in December, will
be provided one way or another. The normal way would be that all 27 agree to revise the multi-annual financial framework and provide this assistance
to Ukraine.
[15:20:03]
If one of the countries and, as you said, it's Hungary who is against this idea, then we will find the alternative solution that the commission has
been working on. And that is to find a political, legal, and financial agreement to do it outside of the EU seven years budget.
QUEST: You see, that is -- I can see that there is a way in which you can do it. But that goes against the spirit of the idea of unanimity. I mean,
you've got -- you had this principle of unanimity that if you don't have it, you don't do it. But what you're all basically saying is, well, if we
can't get it, we'll sort of look into the teapot and see how much money we can find down the back of the sofa.
PLENKOVIC: Yes, but I was participating in the debates at the European Council. If I understood well, the Hungarian prime minister, he is not
opposing that others give the money to Ukraine outside the framework of the financial framework of the European Union. So in that way, we can find the
balance. But I think the attempt will be actually on the first of February, try to seek an agreement and consensus of all 27.
QUEST: It's a little grubby -- my words. But it's a little grubby when, you know, you have these major events. And the only way you can get it through
is if somebody goes off to have a cup of coffee or you have a .
PLENKOVIC: Which is an elegant way, which is the opening of accession negotiations with Ukraine, yes.
QUEST: Yes.
PLENKOVIC: That's what we had in December.
QUEST: But think about it. If there were children who were doing this, you would say, oh, for goodness sake.
PLENKOVIC: Well, the thing is that within Europe, you need to find compromises. I think we have basically at that point .
QUEST: Right.
PLENKOVIC: . exhausted all the possibilities for compromise, but we find a solution. I think solution is more important than a compromise.
QUEST: Don't you ever just want to shout across the table, for goodness sake, just get it, just do it.
PLENKOVIC: Oh, that's a very elegant invitation for coffee.
QUEST: But you get -- you invite them for a coffee.
PLENKOVIC: No, I -- we were supporting Ukraine.
QUEST: Let's talk about Croatia and, you know, Europe, Eurozone, you're well and truly now in it. But there are in other parts of -- you know,
other parts of the region, there are tensions. And the last thing we need is more instability. How do you view it from Croatia now you're well and
truly, you know, in the fold?
PLENKOVIC: Well, we have worked hard to be here where we are. Last year, when we met here, we just joined Eurozone and Schengen area, which, I
think, were the biggest achievements in my mandate as the prime minister now for the eighth year already.
I just came out of a debate about the Western Balkans, and Southeast Europe, and Ukraine, Georgia, Moldova. I think we've gone through a
evolutionary phase.
Basically, Putin has accelerated the European Union's enlargement.
QUEST: So .
PLENKOVIC: And that's why all of these decision on Ukraine, opening of negotiations, Moldova opening of negotiations, Georgia being granted
candidate status, we're about to pass a final decision on Bosnia- Herzegovina opening of negotiations. This is actually very positive things ahead of us.
QUEST: Shouldn't the Union consider -- it sounds majority of a two speed or a two-tier type. Well, one with free trade, the other with -- let's be
blunt, some of these candidate countries are in no economic fit state to join a union that has advanced economies like Germany, the Netherlands,
Sweden, and the likes. And yes, you can have convergence and the mass strips and everything, but we all know how that's fudged.
PLENKOVIC: Well, the notion of the catching up in politics with those who lived longer decades in democracies, who live longer in the free market
economy, it takes time. It took time for us, and we are still catching up. You want to give me a pen?
I'm sure that our neighbors, with the assistance, especially in terms of economic governance and the growth plan that has been offered to them will
gradually come to a position where their economic and social standard will go up. If they stay out for a long time, they'll be worse off.
QUEST: Come on here and put yourself on the board. How far are we? Are we ready for AI? Are were dangerously unprepared as a society or we nailed it?
Where do you think, Prime Minister?
PLENKOVIC: I don't think we nailed it.
QUEST: Right.
PLENKOVIC: I would agree with whoever was somewhere here, I will put it here.
QUEST: And that, I mean, is the CEO of Maersk.
PLENKOVIC: Oh.
QUEST: He says you're so .
PLENKOVIC: That's not bad. They're actually active in Croatia, Maersk.
QUEST: (Inaudible).
PLENKOVIC: In our port of Rijeka.
QUEST: Good to see you, (inaudible). Thank you very much.
PLENKOVIC: Thank you, Richard. All the best. Thank you for this time.
QUEST: Thank you.
PLENKOVIC: See you next year.
QUEST: Yes, thank you.
Now, the Dutch Prime Minister Mark Rutte says he is confident that Europe will find a way to get aid Ukraine -- what we've just been talking about.
The prime minister is in the final days of his term, in a sense, a caretaker prime minister until the far-right politician Geert Wilders and
his party form a government having, of course, won the last election. Rutte told me earlier why the far-right performed so well in elections despite a
strong economy.
(BEGIN VIDEOTAPE)
MARK RUTTE, OUTGOING DUTCH PRIME MINISTER: Migration. And the big issue in Europe and also my country is migration, particularly, asylum migration.
Last week, again run thousands asylum seekers. Normally, we would have 15,000, 20,000 a year. Now, we are close to 50,000, maybe even up to 70,000
a year. That's too high a number.
[15:25:16]
And we have to bring those numbers down in a way that we still get protection to people who need it, but we cannot, as the Netherlands or
Germany or Sweden take care of all these numbers.
QUEST: Do you see a moderation of goodwill dispositions? You know, as well as everybody, that it's fine to sail on the campaign trail one thing, but
when the weight of office hits you, you realize the reality of what you can do. Do you see a moderating of (inaudible)?
RUTTE: Campaigning is poetry, and governing is prose. So it is always a bit more difficult.
QUEST: Right.
RUTTE: We have to see me because I cannot, of course, talk for Geert Wilders and his party. And there'll be a coalition probably with my party
being part of it. And if my party is part of it, it means that we will stay not only focused on the country, but also on the multilateral institutions
because they are crucial for our economic safety and also our direct safety. But also, that we will stay involved in Ukraine, et cetera.
QUEST: Let's talk about this. So there's going to be an EU summit to provide -- to discuss the issue. Now, standing where you were yesterday,
President von der Leyen basically said, I'll give it one more go to get unanimity and then well have to go to plan B.
RUTTE: Yes. That's true.
QUEST: Can't you just ring up Viktor Orban and say, Victor, for goodness sake, just come along with us.
RUTTE: I must say he agreed by leaving the room with the accession talks for Ukraine. And I am cautiously optimistic that by early February, when we
have this extra European Council, we could get an agreement on the money for Ukraine, the 50 billion.
It will be good to do with just the 27. I agree with Ursula von der Leyen, if necessary, raise to 26.
QUEST: What a terrible message this is sending to Volodymyr Zelenskyy. First of all, the US can't get it through Congress with the Republicans.
Now, Europe is being held hostage by Viktor Orban, and the poor man is -- you know, country's fighting its war. It sends a really negative message
and a lack of hope.
RUTTE: I understand that, but at the same time, he knows that you will eventually lag from allies. So yesterday, I agree with her. We will somehow
come to an agreement with the 27 or the 26 early February.
So one country, at this moment, creating this discussion. But I do think that we will find a compromise with Viktor Orban and with Hungary on the
1st of February.
The main issue now is not money because he can still survive for a couple of months.
QUEST: Right.
RUTTE: The main issue is weapons, is making sure that he has all the material to keep the airspace in Ukraine safe. That has to be the main
issue. And there is my worry at the moment that we have to do more.
QUEST: The other issue, of course, is which is very close to your country's heart is shipping.
RUTTE: Absolutely.
QUEST: The Red Sea.
RUTTE: Yes, (inaudible) you said the free sea. 17th century, we designed it. There was a Dutch guy (inaudible). He comes to my country and,
basically, he created this understanding that our -- the seas on this world, the waterways, should be free and for everybody to sail them.
QUEST: So you we're involved?
RUTTE: We are because we believe that was the Americans and the Brits did. It was crucial .
QUEST: And you were involved.
RUTTE: . (inaudible), yes.
QUEST: The French one.
RUTTE: No, no. So here you see that there are different countries take different positions. But in the end, we'd all agree that it was crucial, of
course, that this ends and .
QUEST: Right.
RUTTE: . but the question here is, do you try to fend off the workers coming from the Houthi territory or do you try to attack them on their own
territory, which I think is more effective?
QUEST: Your future. Now, you knew this was coming, so you don't look surprised. Since you inelegantly suggested you want -- you are available
for NATO. Another job has come up, Chair -- president of the council.
Now, if you are, you know, had to choose between -- first of all, are you interested in president of the council? It's coming vacant.
RUTTE: I knew the question was coming up. My answer is .
QUEST: Are you interested?
RUTTE: . I'm (inaudible), my answer is that what I sat in October, I did say and I'm still sticking to that, but I'm not going to add to it. It
doesn't help. And if I'm now talking about any other job coming up, even yours, presenting CNN in the future, you found work.
QUEST: Choose a color.
RUTTE: Yes. I think the color of my party.
QUEST: Yours and everybody else's, right. Come on over here.
Now, this is not -- this is a societal question. It's not about your country. It's not about you. It's all you can be. How ready or otherwise
are we? Are we dangerously unprepared?
RUTTE: The risk is this, Richard, that we will try to regulate it so much .
QUEST: Yes.
RUTTE: . that we cannot have the positives from AI, which we needed to society. But we should not be naive. So I would really put it in the
middle.
QUEST: You go ahead.
RUTTE: This is very boring. Sorry for this.
QUEST: Well, (inaudible), you know.
RUTTE: I will put it here.
(END VIDEOTAPE)
QUEST: Right in the middle. That's the Netherlands prime minister (inaudible).
As we continue, Iranian strikes on neighboring countries have set off an unusual dispute this week, how that plays into fears of a wider war in the
Middle East.
QUEST: As we continue, Iranian strikes on neighboring countries have set off an unusual dispute this week. How that plays into fears of a wider war
in the Middle East.
(COMMERCIAL BREAK)
[15:33:54]
QUEST: Plenty of drama during Donald Trump's New York defamation trial. The judge threatened to kick Trump out of court for commenting during
testimony. The former president replied when he heard the judge, he said in undertones, I would love it. E. Jean Carroll, who has accused Donald Trump
of rape, said he shattered her reputation and made her fear for her safety as he denied her allegations.
The former magazine columnist has already won a sexual abuse and defamation case against Donald Trump. This trial is to determine the amount of
damages.
Michael Zeldin is with me. The fascinating part, Michael, is this sort of battle between Judge and Trump. You know, the judge knows -- he had said,
you know, I know you'd like me to kick you out. So, it's a difficult one because at what point would he actually do it, recognizing his duty, if you
will, to the court and to justice?
MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, his first obligation is to ensure that this trial is fair to the parties in the trial, E. Jean Carroll and
Trump himself. And that the jury is only presented with evidence that it's allowed to consider in its deliberations.
[15:35:00]
If Donald Trump tries to poison the jury or inject into the trial evidence that is not permitted, then the judge has an overriding obligation to
protect the sanctity of that proceeding. And if that means holding Trump in contempt, or ask him to leave the courtroom unless he's able to control
himself, that will be a so be it decision.
QUEST: Right. Do you think the judges in all of the Trump cases are just dreading it? You know, when they pulled the case, they're just dreading it
because they know that the former president is also campaigning and is going to use their courtroom as best he can for his own purposes.
ZELDIN: Yes, absolutely. I think it's a short straw that is drawn to have any of these Trump cases, not only for the reasons that you just expressed
that it's going to be a political circus but because there are real physical threats that have been leveled against all of the judges handling
all of these cases. So, one has to be really mindful of the well-being of themselves, their court personnel and their family. So, for sure, this is
not the desirable case to get.
QUEST: So, Michael, of all the cases as they are progressing, which is the, one in your opinion, we need to keep the closest eye on?
ZELDIN: I still think the January 6th case is the most meaningful of the cases, because were he convicted in that case, that is a case where he is
accused of conspiring to deny the orderly transfer of power, a bedrock of our democracy.
So, fundamentally, the issues of that case are most profound for our society, and I think for the reputation of Donald Trump. I think the Mar-a-
Lago documents case is a more narrowly ring-fenced case and could go to trial very quickly once the judge sets it down for trial. But she seems to
be slow walking in a bit. And so, we'll have to see.
QUEST: Glad to have you with us. Thank you, sir. Michael Zeldin on the case. Thank you.
Pakistan is recalling its ambassador from Iran over what it's calling an unprovoked airstrike. Iran says, it fired missiles and drones at two
militant strongholds. Pakistani officials say, the attacks killed two children. Iran's foreign minister said, the strikes were aimed at
terrorists.
(BEGIN VIDEO CLIP)
HOSSEIN AMIR-ABDOLLAHIAN, IRANIAN FOREIGN MINISTER: None of the nationals of the friendly and the brotherly country of Pakistan were targeted by the
missiles and the drones of Iran. It only targeted Iranian terrorists on the soil of Pakistan.
(END VIDEO CLIP)
QUEST: The latest flare up in the region that puts the Middle East Even further on edge, if you will. Officials in the region and around the world
say they are concerned about further escalation. Israel's war in Gaza is threatening to expand into Lebanon, and attacks on ships in the Red Sea, as
we've been talking about, leading to Western strikes in Yemen.
We heard earlier from the CEO of Maersk, and how trouble in the Red Sea is affecting his ships. Now, let's go further down the supply chain. I spoke
to Jesper Brodin, the CEO of Ingka Group, in other words, known better to you and me as IKEA or IKEA. I asked him how bad things are right now for
the company.
(BEGIN VIDEO CLIP)
JESPER BRODIN, CEO, IKEA: If I compare to the challenges we had during peak pandemic, that really disrupted our supply chain. We had massive issues
with stock and so forth. Today, we don't experience any disturbances on our stocks or availability or such.
QUEST: And you're not expecting to?
BRODIN: Well, who knows in this ever-changing world. But at the moment, the extra 10 days or so when you look at -- basically, where we are in our
capacity and fulfillment. We don't see -- foresee that at the moment.
QUEST: The supply chain for IKEA is what? I mean, how complex is it?
BRODIN: Well, how long time do we have now? But listen, you know, we have an integrated supply chain. We develop our own products, right?
QUEST: Right.
BRODIN: So, we standardize in automizing industry and we have fewer suppliers than many would think. It's about, I would say less than a
thousand main suppliers. They are more local and regional than people would think as well. But ultimately, we big -- build big volumes. So, we are
building on economy of scale and that's the way we're building sustainability and prices and whatnot.
QUEST: Prices is something you're very keen on at the moment, isn't it? You're almost -- well, not almost, you are basically saying you will
continue to lower prices even though that's going to hit the bottom line.
[15:40:00]
BRODIN: So, we basically never optimize or maximize the bottom line. We try to maximize the amount of customers and benefits we do. It's interesting
right now because we have, of course, inflation in the customer, but we have massive deflation upstream. So, right now we are lowering prices more
than we ever done.
(END VIDEO CLIP)
QUEST: So, that's the view from the retailer. Remembering, we're following the supply chain all the way from the shippers to the retailers. Now, let's
go to the source. The CEO of a major port operator, who tells me the situation in the Red Sea, he says it's being sensationalized. One of the
largest operators in the world. Sultan Ahmed bin Sulayem is the chief executive of WP -- of DP World. The chairman says, shipping delays are the
bigger problem.
(BEGIN VIDEO CLIP)
SULTAN AHMED BIN SULAYEM, CEO, DP WORLD: The whole thing is exaggerated. When you look at it, no ship sunk. Maybe two dented after firing a
thousand. This is something we don't need. I believe that a lot of people are excited by it, but everybody talk about who did not go to the Red Sea.
They're talking about who's going to the Red Sea. Most of the vessels are crossing the Red Sea and going to their destination.
QUEST: Now, we saw that on the various online map --
BIN SULAYEM: Yes.
QUEST: -- that still show quite a lot of traffic going through. But the big stuff.
BIN SULAYEM: It's exciting people, of course. We don't like to see this. Listen, trade is resilient. No matter what happen, trade will always
happen. People want to eat. People want to consume. When it comes to supply chain, it is not resilient. It's frag -- it is very fragmented. We tested
it. Just a ship stranded for 40 hours in Suez Canal. Delayed cargo by three months. The problem today is delays.
(END VIDEO CLIP)
QUEST: That is the chairman of DP World ports. "Quest Means Business" continues tonight from Davos. It's quite warm here tonight. I'll be asking
the head of Israel's central bank how the war against Hamas is impacting his country's business relations around the world.
(COMMERCIAL BREAK)
QUEST: The governor of Israel's central bank, Governor Amir Yaron, says he's confident the world will still want to do business with Israel. He was
joining me here in Davos more than 100 days into Israel's war with Hamas.
[15:45:00]
(BEGIN VIDEO CLIP)
AMIR YARON, BANK OF ISRAEL GOVERNOR: Prior to the war, we were on a super softish landing. Inflation was coming down probably in the first quarter
into the target with growth around 3.4 percent for '23 and above -- slightly above three for '24.
Now, after the war, we're expecting two percent and two percent in '23 and '24, and going to five percent in '25, but this is under the scenario where
the war is primarily confined to the south. And its intensity, sort of, gradually goes down into the first quarter of '24.
QUEST: Right. But all bets are off, I suppose, on those forecasts in the event of an expansion in the North.
YARON: I think an expansion in the North brings about, obviously, much bigger costs, and it's a different ballgame. I would say one thing on the
fiscal part, which is, you know, the war is costly. Our estimates right now, it's that -- it's about 10 percent direct -- 10 percent of GDP direct
cost, another two percent in terms of lost revenue over the years of '23, '25.
And I'm glad to say, and this is very important. We just had a national budget done for 2024. And significant fiscal consolidation steps were done
against, particularly the permanent component, consolidation on the order of one percent of '23.
QUEST: Are you, in the back of your mind, factoring in, even if it's not a document. You know, somewhere the cost that Israel, however this plays out,
may wish to or may want to pay or help pay for the rebuilding in Gaza?
YARON: I don't think we have that in those fiscal costs. I think the day after is a big question. Hopefully there will be a mechanism that brings
about or some political arrangement that brings about both security to Israel, but security to -- in Gaza. A mechanism that is an umbrella with
other entities, moderate states.
QUEST: As the criticism against Israel grows, is there a concern that it will become more difficult for your companies to trade? I don't mean stock
market. To do business. You know, I use when I say the word pariah, you know, people just won't want to be associated with Israel technology. The
startup nation will have ground to a halt.
YARON: It's a good question, but I think, first of all, people have to understand, we -- this is probably a temporary event to some extent --
first. Second, people understand Israel has grown out of military crisis and out of COVID immensely and have shown its resilient and its dynamic
economy. Third, Israel's products, whether in security, whether in high tech have huge know how. They're highly desirable. People understand it.
They will be there with our high-tech firms.
QUEST: It is a bit weird, isn't it? Sort of, we're putting it into these dispassionate terms when there's a real hot war going on. Did you find that
in your daily business that whichever side you look at it, we're talking about it in a way that is quite removed from the reality?
YARON: Well, first of all, let me say, it's heartbreaking to see any innocent citizens on both sides killed or injured, that's first of all.
People -- when you talk about Israel's economy, I want to remind people, Israel did not initiate this. This was a barbaric terror attack on Israel.
Israel has the right to defend itself. Clearly the U.S. defended itself far away from its border. This is 200 meters from villages where Israelis live.
So, security is essential. It's needed.
I am -- and again, it's heartbreaking to see citizens getting hurt. But we have to understand also, Hamas is cynically using citizens as body shields,
mosques, hospitals, et cetera.
(END VIDEO CLIP)
QUEST: That's the Governor of the Bank of Israel.
This is the Secretary General of the OECD. With me after the break, a new global minimum tax affects as many as 140 countries. And you're delighted
at the idea of a standard tax. We'll talk about it in a moment and of course, A.I.
(COMMERCIAL BREAK)
[15:52:21]
QUEST: The global minimum corporate tax which was led by the OECD is now part of a reality as of the beginning of the year. 36 countries have
already introduced laws. Setting a 15 percent flaw on corporate taxation. More than a hundred countries -- well, they have to, in a sense, follow.
The OECD estimates it will bring in $192 billion globally, and it expects this will reshape the flow of foreign investments. Now, the more likely to
driven by workforce, education, infrastructure instead of tax bills.
Mathias Cormann is the secretary-general. What -- it's coming in. How long do you think you'll see before the benefits flow?
MATHIAS CORMANN, SECRETARY GENERAL, OECD: Well, we expect that by the end of this year, about 60 percent of relevant revenues will be subject to the
Global Revenue tax center by 2025. About 90 percent of revenue around the world will be subject to this tax.
QUEST: The problem with the tax or -- is the -- there's no ring fencing of the product of the revenues, in a sense. So, to get the full benefit is
really up to each individual government and how they choose to do it.
CORMANN: Well, no. But in the end, if a government doesn't collect at least 15 percent, then other governments can collect the difference, and which is
why this will become a self-perpetuating tax over time.
QUEST: Right, but how it's spent by the countries is a cold question.
CORMANN: Well, I mean, that is ultimately a matter for the internal processes of individual countries. But what this will do, it will -- in
particular, it will reduce pressure on developing countries to offer inappropriately low taxations in order to attract investment.
QUEST: If we look at the OECD's latest forecasts for global growth, anecdotally here, and people are telling me, things are -- it's not going
to be a dreadful year, but it's not going to be a brilliant year either. It's going to be one of those years that you trudge through the mud. Do you
believe that? Is that what you're seeing?
CORMANN: The first point to make is that the global economy has been remarkably resilient, given everything that's been happening in recent
years. The second point is, yes, I mean, we do see an easing of growth in 2024. And to a degree, I mean, that is the result -- the deliberate result
of monetary policy tightening in countries around the world. But we do see a slight pick-up in growth then in 2025 as things start to normalize.
QUEST: There are some worrying signs on inflation out of Germany and the Eurozone, which could delay an easing of monetary policy. You know me --
you know journalists like me, you know, the sooner the rates got up, the more we want to know when they're coming down. Now, last night, we got a
sort of an idea that it might not be as soon as we think.
CORMANN: Well, the truth is that there's a lot of downside risk in the global economy and there are a lot of external shocks that -- I mean, there
are a lot of things that could happen.
[15:55:00]
But our current expectation is that inflation in most countries will continue to trend down over 2024, '25 and that there will be an easing
cycle starting towards the end of this year, early next year.
QUEST: And what -- as you've been listening to our program tonight, there are so many potentially exogenous events that could just throw this whole
thing, particularly, of course, what's going on -- you know, the Red Sea will have an effect. Maybe not huge, but it will have an effect. You've
just got an escalation. I think it's arguably foolish to talk about, will the war in Israel-Hamas escalate? It's escalated. It's already in other
parts of the world.
CORMANN: Geopolitical tensions are a very significant downside risk for the global economy, no question. And, you know, clearly the Suez Canal, the Red
Sea, is a very important transport corridor when it comes to global trade. And, of course, I mean, you know, the world would be much better off if we
could resolve some of those conflicts and get onto a pathway towards peace.
QUEST: Choose your color. There's -- blue. What a surprise. Come over here. Where are you on the ready for A.I.? And as a society, and for bankman, the
OECD, you're very concerned about A.I.
CORMANN: Well, I mean, the first point to make is that a lot of upside benefits come with A.I.
QUEST: Yes.
CORMANN: We need to ensure that that can be widely shared and fairly shared. But there's also a lot of downside risks and disruptions that need
to be managed.
QUEST: So, where are we at the moment?
CORMANN: Well, look, I mean, I think there's quite a bit of work to be done to be properly prepared.
QUEST: Yes.
CORMANN: And, you know, all -- these are all relevant issues that need to be addressed.
QUEST: Oh, do that again. Do that again. Do that.
CORMANN: All of these issues --
QUEST: Oh, there we go.
CORMANN: -- will need to be addressed.
QUEST: There we go. Very grateful to you, sir.
CORMANN: Always grateful to you.
QUEST: Thank you very much indeed. Thank you very much indeed. The Secretary-General.
Now, we will take a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment". You know something, A.I. Al, people are saying I'm too negative. They're saying I'm pessimistic. They're
comparing what I've been saying tonight and yesterday, and over the week, with the optimism of the managing director of the IMF, Kristalina
Georgieva. I think they may have a point in all of this.
In fact, the reality is there is a lot of optimism out there, which is quite hard to talk about when it's sort of bucketing it down with sleet
down the back of your neck. But that shouldn't detract from the fact that everybody's wanting to point out the negatives. But as the secretary-
general just pointed out the positives of A.I., a positive of you.
The issue, of course, is how we manage the changes that are coming down the road. Particularly with things like training and new jobs and blue-collar
workers and white-collar workers. Should we have the confidence that we'll get it right when we didn't get it right with digitization and are paying
the price for many years to come?
That's the core issue, I think. Don't you? I'm glad you agree with me. He always does. And that is "Quest Means Business" for this Wednesday night in
Davos, where it's raining. I'm Richard Quest.
END
