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Quest Means Business
U.K. Prime Minister Starmer Addresses Labour Party Amid Calls To Resign; Starmer Vows To Fight On As U.K. Prime Minister; Japan's Nikkei 225 Hits Record High After Snap Election; Breitling Chief Executive Officer Is Confident In United States Market Amid Tariff Pressures; Air Canada Suspends Cuba Flights Amid Fuel Shortage; Skepticism Rises Over Role Of A.I. In Corporate Layoffs. Aired 4-5p ET
Aired February 09, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:17]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell is ringing on Wall Street. We start a new exciting week together, and look
at the Dow and you'll see -- well, maybe not so exciting just at the moment, but it gives that tranquility, it is quite pleasing after the last
week of sharp falls and then massive gain and a rather pathetic little gavel from Flotek that brought trading to an end, I suppose, a pathetic
little gavel for a rather minor little day.
Those are the markets and the events that we are talking about.
Sir Keir Starmer, the British Prime Minister, resisting calls to step down as resignations and revolts within his Labour Party threaten the
leadership.
Japanese stocks hit record highs after the country's Prime Minister win a supermajority in Sunday's election.
An Air Canada says it is suspending flights to Cuba because the island doesn't have enough jet fuel. The power shortages are worsening.
We are back, live in New York. It is Monday, it is February the 9th. I am Richard Quest and I mean business.
Good evening.
The British Prime Minister, Sir Keir Starmer, is fighting for his political survival tonight. Over the last few hours, Sir Keir has addressed his labor
party behind closed doors as the scandal is raging publicly, the Prime Minister is facing increasing pressure over the appointment of Peter
Mandelson as the British Ambassador to the United States. This is despite Lord Mandelson's links to the convicted sex offender, Jeffrey Epstein.
Two senior Downing Street, that's where the Prime Minister's office and residence is, two Downing Street aides have now stepped down, including the
chief-of-staff and the communications secretary.
And while senior Cabinet ministers have thrown their support behind Sir Keir, the Scottish Labour Party says it is time for Starmer to go.
Max Foster is in London with the latest.
This has all happened rather fast and sort of in typical British political fashion, everybody is your friend until suddenly they have turned on you
and they want you out.
MAX FOSTER, CNN CORRESPONDENT: Absolutely. Obviously, Keir Starmer not mentioned in the Epstein papers, but the British Prime Minister dealing
with the fallout from people who were mentioned in the Epstein papers. It is blowing up in this country like no other really, not just dragging in
the government, but also the King and the Monarchy.
(BEGIN VIDEOTAPE)
FOSTER (voice over): Tonight, King Charles signaling his readiness to cooperate with U.K. Police in any investigation into his brother, Andrew.
The Epstein crisis now engulfing the Palace and the U.K. Parliament.
U.K. Police are "assessing" reports that former Prince Andrew shared confidential information with convicted sex offender, Jeffrey Epstein. E-
mails suggest that Andrew Mountbatten-Windsor, in his previous role as Trade Envoy, sent Epstein reports in 2010 containing briefings on official
government visits to Asia and investment opportunities.
Prince William breaking his silence on the Epstein affair ahead of a visit to Saudi Arabia, a Palace spokesperson saying the Prince and Princess of
Wales' thoughts remain focused on the victims.
King Charles reiterated the same sentiment in a later statement saying if they are approached by Thames Valley Police, "... we stand ready to support
them as you would expect. As was previously stated, their Majesty's thoughts and sympathies have been and remain with the victims of any and
all forms of abuse."
William's Uncle was stripped of his Royal titles and ordered to leave his Royal Residence last year due to his ties to the late sex offender,
Epstein. This photo showed Andrew Mountbatten-Windsor with Epstein's former girlfriend and convicted child sex trafficker, Ghislaine Maxwell and
Epstein survivor, Virginia Giuffre, who accused Andrew of sexually assaulting her when she was just 17.
He settled a civil lawsuit by Giuffre out of court in 2022. Giuffre died by suicide last April.
On January 30th, the latest tranche of Epstein documents had three undated photos showing Andrew kneeling over what appears to be a woman or girl
whose face has been redacted lying fully clothed and supine on the floor.
Andrew has previously denied any wrongdoing.
KEIR STARMER, BRITISH PRIME MINISTER: He lied about that.
FOSTER (voice over): U.K. Premier Keir Starmer, facing his own storm over his decision to appoint Peter Mandelson as Ambassador to the U.S. in 2024
despite knowing about his ties to the late child sex trafficker. Documents reveal that Mandelson too shared confidential information with Epstein.
[16:05:10]
STARMER: To learn that there was a Cabinet Minister leaking sensitive information at the height of the response to the 2008 crash is beyond
infuriating and I am as angry as the public and any member of this House.
Mandelson betrayed our country, our Parliament and my party.
FOSTER (voice over): Mandelson resigned from the ruling Labour Party and the House of Lords and is under police investigation. Calls for Starmer to
step down have grown following the resignations of his top two aides, including his long serving chief-of-staff who stepped down on Sunday.
ANAS SARWAR, SCOTTISH LABOUR PARTY LEADER: That's why the distraction needs to end and the leadership in Downing Street has to change.
FOSTER (voice over): The more we see of the Epstein files, the deeper it plunges the British establishment into crisis.
(END VIDEOTAPE)
QUEST: Max, highly unusual without sort of being bitten and forced for the Palace to make those statements, both from William and from his Majesty. A
reflection, I guess, that every at every twist and turn, they are going to be asked about this.
FOSTER: Yes, well, I think that was particularly the case with William, who was heading on a tour with the British media in Saudi Arabia. He knew the
question would come up, so they dealt with it pre -- you know, ahead of William even landing in Saudi Arabia.
So, I think that was that part of it, but then this police story involving the former Prince Andrew really blew up over the course of the day. It is
not a full investigation. They're just making inquiries at this point, which was significant, of course but for the Palace and the King to come
out and say even before there is an investigation, before they even have been approached by police that they will cooperate with that inquiry,
really shows how they are trying to get ahead of it. I think actually, it also shows how they feel vulnerable as well. The Monarchy now feeling
vulnerable.
Just on, Starmer tonight, we have -- you know, the meeting has ended with his backbenchers, it does appear, though that he is going to survive for
now, certainly because he has got the support of the Cabinet. He isn't -- there are no contenders running for his job right now.
But I think, you know tomorrow is another day. We will see how it progresses.
QUEST: All right, I am grateful. Thank you very much.
Matthew Holehouse is the public policy editor at "The Economist," he joins us now. Over the course of the day, I've heard every phrase about Starmer
from dead man walking to on his way out to can't survive this. You're a seasoned viewer of these scandals. What do you make of it? Can he survive?
Will he survive?
MATTHEW HOLEHOUSE, PUBLIC POLICY EDITOR, "THE ECONOMIST": Yes, I think I'd characterize it as chronic rather than acute although this is a
particularly acute moment. I mean, the reality is that the U.K. has got a pretty weakened Prime Minister, it has been for some time. He has got much
weaker today. His authority has been dwindling for some time. It has been badly knocked by the Mandelson affair, and he has lost two really key
figures in his operation today. His chief-of-staff, Morgan McSweeney and his director of communications.
So, really he is having to work pretty hard to hold onto the job today.
QUEST: I mean, when it comes to Mandelson, he either closed his mind to it. He didn't make enough inquiries about it. He accepted the word of a man who
had lied on previous occasions and was not the most reputable to begin with. There isn't a lot going for him on this one.
HOLEHOUSE: No, the conservative opposition have pointed out that there was a huge volume of information about concerns regarding the relationship
between Mandelson and Epstein prior to the appointment being made. It seems that insofar as Downing Street was aware of that, they regarded it as a
risk that they thought was worth taking because they thought that Mandelson was the right candidate for the job, and that misjudgment has sort of
unraveled in horrendous fashion and maybe the terminal event of his premiership.
QUEST: It is a very strange arrangement isn't it, though, where or goings on where Britain, which is tangentially in a sense concerned with Epstein,
the Prime Minister who had never met the man or hadn't had anything to do with him, is ensnared in a scandal where back here in the United States, it
seems, it doesn't matter who is involved in the scandal, nobody seems to be paying the price at the moment for it.
HOLEHOUSE: It is a very interesting study in contrasting political cultures. I mean one is that Peter Mandelson was a very well-known figure
in the U.K. for 30 years. So, he was a name that attracted a lot of attention, and he had been embroiled in scandals before by different
scandals.
The U.K. has a very sort of high accountability culture. The culture of the British press is for very sort of intensive, some would say aggressive
scrutiny of public figures because you would either have to learn to deal with that or quit.
[16:10:10]
And it comes on an administration that has been weakened for months because its polling is poor and because it has made misstep after misstep. So, it
is a confluence of those three things means that this event really, really does risk being terminal for this Prime Minister.
QUEST: Who would take over assuming -- I mean, he is not gone yet, and you know, but who is the name that is being talked about in the tea rooms?
HOLEHOUSE: There is no single favored candidate, completely different to the situation that we were last time the Labour Party changed Prime
Ministers in office with Tony Blair and Gordon Brown was the obvious -- and one of the things keeping Starmer in power at the moment is that there is
no candidate with a campaign ready, and there is really no candidate who can claim compellingly to be able to do the job or able to command the
political coalition to do the job.
Som it could be Wes Streeting, but he is seen by some as far too close to Peter Mandelson on the right of the Labour Party, it could be Angela
Rayner, the former Deputy Prime Minister, but she has got her own tax investigation hanging over her. It could be Ed Miliband, very, very popular
with the members somewhat on the left of the party, but he was leader of the opposition before and he lost the general election, so it is wide open
at the moment and that is the one thing in Keir Starmer's favor.
QUEST: And as one labor backbencher said, be careful what you wish for. You may just end up lumbered with it.
Matthew, we will need your help in the days and weeks ahead to understand. I am grateful for your time tonight. Thank you, good evening to you in
London.
Now, CNN has been unable to contact Lord Mandelson's representative. Mandelson has previously said he was wrong to believe Epstein following his
conviction and continue his association with him afterwards.
To Japan now, the rounds -- that resounding victory for the Prime Minister sent stocks to record highs. The Nikkei hovering around 57,000 at one
point. It closed up nearly four percent, a bullish strong session. The yen is less convinced by what it has called a Takaichi Trade and held steady.
The Prime Minister now holds a supermajority and a glowing recommendation from President Trump.
Hanako Montgomery has more on the Prime Minister's ambitious economic plans.
HANAKO MONTGOMERY, CNN INTERNATIONAL CORRESPONDENT: Yes, Sanae Takaichi's huge political gamble, one where she literally put her job on the line has
paid off, I mean, to the extent that we could not really expect -- I mean most experts I have spoken to really said that it was likely that the
Liberal Democratic Party would secure a majority in Japan's Lower House of Parliament.
But the fact that the LDP was able to secure more than two-thirds of seats is truly something unexpected and historic, and what that now means is
Takaichi will be able to pass through any bills really, with little to no opposition, so making her leadership and her really, I suppose, her job as
a politician much, much easier.
Now Takaichi has a long list, a long laundry list of issues that she must tackle from the get-go. First, of course, is the Japanese economy. We've
seen record high inflation, a sliding Japanese yen against the very powerful U.S. greenback, and of course, just voters feeling very frustrated
with the fact that their wages are not increasing, so she will have to tackle the Japanese economy to appease these voters, to appease the
Japanese public and show that she is on the right track to make Japan a much stronger economy.
Now, she must also deal with foreign policy. In her brief time as Prime Minister, less than four months, she has shown that she is quite able and
adept at really tackling different foreign policy issues and developing deeper ties with foreign nations. For example, Italy's Prime Minister,
South Korea's President, also the U.K., Canada and including the U.S. President Donald Trump.
In fact, when it comes to Trump, Takaichi has shown that she has a very good personal relationship with him. In fact, last week on Truth Social,
Trump went so far as to endorsing her as the Prime Minister of Japan, encouraging the people of Japan to vote for her in this very local
election.
Now, Takaichi as early as Monday, so just a few hours ago, thanked Donald Trump for that endorsement and for his kind words, also adding that, "The
potential of our alliance is limitless." So, really just emphasizing the strength of the U.S.-Japan alliance here, also mentioning that her visit to
the U.S. in March or expected to visit will be one of greatness and, of course will be an opportunity to develop that alliance further.
So, again, long list of issues Takaichi must tackle, but for now, a moment of victory for the Japanese Prime Minister.
QUEST: Savannah Guthrie has appealed to the public to help find her missing mother. It was a video only just posted on social, and she says she and her
family are at an hour of desperation.
(COMMERCIAL BREAK)
[16:17:34 ]
QUEST: And so to Capitol Hill today, where there was an extraordinary overture from Ghislaine Maxwell. Now, of course, the woman was sentenced to
20 years in prison for conspiring with Jeffrey Epstein to abuse minors. It was a virtual deposition before the House Oversight Committee.
Maxwell's lawyer said she would clear Donald Trump's name of any wrongdoing related to Epstein if she were granted clemency. Maxwell pleaded the Fifth
Amendment against self-incrimination, of course. The deposition, meaning she refused to answer questions. She is currently serving time at a minimum
security prison in Texas.
Our senior legal analyst, Elie Honig joins us now.
Now Elie, 101 anyone being promised something for giving testimony in favor of one way or the other is almost discounted because their testimony has
been bought. What value does she now have?
ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, it is a transparent, transactional proposal here by Ghislaine Maxwell, and I think to your
bottom line question, what value in my view? Zero.
So first of all, she is laying it right out there saying basically look, I am going to take the fifth because I don't want to incriminate myself, but
if you give me clemency, in which case I can't be indicted again, then I will exonerate you.
Now, two big problems that I see with this, Richard. Number one, even in a hypothetical world, how could Ghislaine Maxwell possibly clear Donald Trump
or Bill Clinton of all wrongdoing ever? She knows what she knows. She knows what she saw, but she is not omnipotent.
Second of all, more to the point, why would anyone believe Ghislaine Maxwell? She spent nine hours face-to-face with the Deputy Attorney General
and said she had done nothing wrong, nobody else had done anything wrong. Maybe Jeffrey Epstein committed a little bit of a crime, but she is not
sure. If you believe that, you're in a different world than I am.
And so therefore, because she has already said that, how on earth would you credit anything she says moving forward?
QUEST: Why do you think she added that last line? I will tell you that they didn't -- that Bill Clinton -- I think -- why not just simply say, if you
give me clemency, I will tell you all because I don't want to have self- incrimination. Leave it at that. Instead of that last little -- which could have been left unsaid because everybody would have known what it meant.
HONIG: Because she knows where the bread is buttered, so to speak, because she is trying to entice the one person who holds the clemency power right
now, which is Donald Trump, and she knows what he wants to hear, and so she is offering it up to him. She is saying, basically if you give me a pardon
or a commutation, this is exactly what I will deliver and you're going to like it.
[16:20:10]
You're not going to get burned, you're not going to get taken by surprise, and by the way, important to understand when you're thinking about
Ghislaine Maxwell's incentives here. She is 64 years old. She was sentenced to 20 years in prison. She has, if you do the jail math, she has got about
11 years left.
So if you're 64 years old and you're looking at 11 years for certain in federal prison, that is a big deal and she is desperate to do anything she
can to get out of that.
QUEST: Now, I am sure if you are still a prosecutor, you'd be horrified by the whole business, but if you're sitting in the Oval Office, what is your
calculation?
HONIG: Boy, well, let's put this as if I was the President of the United States. I am not going to try to get inside Donald Trump's head. I would be
utterly uninterested in that.
First of all there would be no chance I would ever pardon a convicted child sex trafficker like Ghislaine Maxwell. And second of all, even if there was
some way I might consider that, in my view, whatever Ghislaine Maxwell said, nobody who I wanted to convince would believe that. She has all the
bad incentives in the world she has already spun this fanciful version of reality.
And so if I am thinking, well let's see, if I issue this pardon, it will be a massive political cost to pardoning a convicted child sex trafficker. And
I don't think she is going to persuade anyone of anything either. And by the way, if anyone wanted to see what she said, she already testified for
nine hours in front of Todd Blanche. Now, I think that was mostly false, but that too exonerates Donald Trump.
So, if he attaches any value to that, he already has it, so I don't see why pardon her on top of that.
QUEST: I am so grateful we had you tonight. Thank you very much indeed, sir, thank you.
Now moments ago, Savannah Guthrie, the T.V. anchor posted a new video on social media appealing for the public's help to find her missing mother.
(BEGIN VIDEO CLIP)
SAVANNAH GUTHRIE, NBC NEWS ANCHOR: She was taken and we don't know where, and we need your help. So, I am coming on just to ask you, not just for
your prayers, but no matter where you are, even if you're far from Tucson, if you see anything, if you hear anything, if there is anything at all that
seems strange to you, that you report to law enforcement.
We are at an hour of desperation and we need your help.
(END VIDEO CLIP)
QUEST: The NBC anchor's 84-year-old mother, Nancy Guthrie was apparently abducted from her home in Arizona nine days ago. There was a purported
ransom note that seemed to demand $6 million with a deadline set for today.
John Miller is with me, our chief law enforcement and intelligence analyst. So, where are we at the moment in terms of -- the deadline is just a few
hours away, we've had this latest desperate plea. It is difficult. I mean, what happens next? They pay up and wait and see. Who knows?
JOHN MILLER, CNN CHIEF LAW ENFORCEMENT AND INTELLIGENCE ANALYST: Well, we are not behind the curtain here, but I mean, we know Saturday night, the
message went through the media, social media channels to the kidnappers, which is we got your message. We understand. We want our mother back and we
are willing to pay.
Today's message is directed not at the kidnappers, although, it is expected that they will see it. They're obviously monitoring the media as part of
this conversation, but at the public, which is she is trying to reinforce the crowdsourcing of you may hear that there are negotiations going on,
there may be a ransom paid. There is a deadline coming up. That is no reason to stop looking for clues or stop looking for my mom, or stop
reporting suspicious activity because you think somehow this is being handled quietly and privately.
Her message is, we need your help, and she is very specific, even if you are far from Tucson. And Richard, we know you'll remember these cases from
the Elizabeth Smart case, the Jaycee Dugard kidnapping, the Steven Stayner case, we know that there are cases where victims are kidnapped from home
and taken hundreds of miles away.
So, what she is saying is, we need everybody in the game, not just the people in this neighborhood who we believe are on alert.
QUEST: So also, we know from Maglione and from the Boston case that it is somebody noticing something. You know, whenever I often hear these things,
if you see something, I always think, oh come on, who is going to see something? Who is going to -- but with your experience, you're going to
tell me that's exactly how you solve these things.
MILLER: A hundred percent of the time. I had ten people shot in the subway during my last month in the NYPD, and we had a citywide dragnet going on
for an identified gunman. And where did we get it? We got it because someone took a picture of him, posted it to social media, and says that
looks like the guy the police are looking for.
The Brown University shooting just a couple of weeks ago, they posted information crowdsourcing as best they could with very grainy blurry videos
and who came forward, which was a guy who was walking down the street and encountered this guy and managed to associate him with a car, get a part of
a license plate. That cracked that whole case, opened and identified the shooter.
You can have hundreds of FBI agents and police detectives, Sheriff's deputies working on a case, but what you want to do is, use the power of
the media, use the power of social media to engage millions of investigators who are just people out there who know what they are looking
for.
QUEST: I am grateful, sir. Thank you. We will follow and we will talk more. Thank you, John Miller.
MILLER: Thanks.
QUEST: Now, the Swiss watchmaker, Breitling has had a tumultuous few months thanks to U.S. tariffs. The Chief Executive will be with me to talk about
it. There he is! Good to see you, sir.
After the break, we will talk about how you are navigating pressures and what you're up. Thank you.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Swiss watch -- let start that again. Swiss watch exports have returned to growth after four months of declines. The Federation of the
Swiss Watch Industry says, exports gained 3.3 percent in December from previous. Watchmakers were hit by a 39 percent U.S. tariff in August, the
current rate is now 15 percent having been reduced.
The Chief Executive of Breitling says, the U.S. will still be his main market, Breitling just released watches for Super Bowl LX starting at just
over four--and-a-half thousand dollars, some of the premium watches can reach up to $85,000.00.
Georges Kern is the CEO of Breitling, he joins me now. Good evening, sir. I am grateful for you.
[16:29:54]
You are grateful for the relief in tariffs, but you'd like to see them come down a bit more. You'd like to see them come down all the way. Have you
gotten much hope of that?
GEORGES KERN, CEO, BREITLING SA: Well, of course we would like the tariffs to go down. The two main arguments of the Trump administration was number
one, the trade deficit versus Switzerland was $41 billion. Now, the US has a surplus of $8 billion. So, that was one of the main points which
disappeared. And the second point was always OK, the U.S. would like to protect its industry, but there is no Swiss. Obviously, Swiss watch
industry in the U.S.
So, I really hope that the negotiations, which I guess are ongoing with the Swiss government will lead to zero tariffs for the Swiss watch industry.
QUEST: In terms of where you're positioning your own company. I'm just looking -- I mean, you describe subscribers as casual, inclusive, and
sustainable luxury brand is how it described. But I wonder, do you sometimes have to position yourself so you don't fall between the stalls,
between those that sell extremely expensive and those that sell more modestly, and you have this middle three to 7,000 range, which can be the
more tricky when times get hard?
KERN: Well, our average price is 7,300 U.S. dollars consumer price. And that price point is basically representing the big escape. You have two or
three brands which we all know, plus us, which are dominating that segment.
The segment is still there. Indeed, today, the consumer sentiment is not that positive, because you have crisis all around the world. You wake up
with a new problem, and some consumers just postpone their purchases.
But wealth is there, especially, in the U.S. The U.S. represent 25 percent of our turnover. We invest a lot of us. We suffer from the strong Swiss
franc, and we can increase our prices as the Swiss franc is increasing, all the dollar decreasing. But U.S. remains a very wealthy country. We are very
confident on the growth here in the U.S., and this is why we need so much. And we started last year, in particular, with the NFL, and yesterday, I was
at the Super Bowl, which was very exciting.
QUEST: It's a fascinating thing to work out what works and what doesn't, whether it's your association with the NFL or, for example, you're
returning to Formula 1, with Aston Martin in a global partnership.
I find it faster because the connection -- I love Aston Martin cars, but is it going to make me go and buy a brighter watch and vice versa?
So, this relationship between brands, which is so symbiotic is also tricky.
KERN: Well, at the end of the day, you never know what works and how much a sponsorship or a partner is influencing your sales.
It's a some of the different elements which makes a brand successful, and at the end of the day, you are buying into a lifestyle. We want to be a
cool, relaxed watch brand. We have values, obviously, technical values, which correspond extremely well to Aston Martin, which is super, super
technical.
But also, we want to be social phenomenon. And the NFL -- and I was in the stadium yesterday, is there is nothing more American than the NFL. And
being part of that is extremely helpful for us in terms of visibility and connection to the American customer.
QUEST: Is it still important to you to have the cachet of the extreme, the pushing of the boundaries, which for some years, was very much this idea
of, go further, go harder, go faster, go bigger, go stronger?
KERN: Well, you know, we have these extremes with our watches. For instance, if you take a diving's watch up -- which is to prove up to 300
meters. I mean, who is -- who is going to dive to 300 meters with the watch? Nobody. You are under the shower, you know, at the beach. That's a
maximum.
But the point is, the story is that the analog watch has the performance to deliver that promise. And I think this is the inspiration. You are buying
to an emotion, you are buying, like the watch I wear here with a titanium watch, which we worked together on with Aston Martin. You sell an image,
you sell an emotion, you sell a dream, even if you don't play that dream in your daily life.
[16:35:01]
QUEST: What a good point. I'm grateful to you, sir. Thank you very much indeed for joining us. And beautiful watch it is too. Thank you, sir.
Canada's largest airline says it is suspending flights to Cuba because the island does not have enough jet fuel. Canada says it will have to carry out
ferry flights to get 3,000 customers' home.
The United States been working to cut off oil supplies to Cuba after of course, Maduro was ousted in Venezuela.
Our correspondent is Patrick Oppmann, and he's in Havana.
PATRICK OPPMANN, CNN CORRESPONDENT: As more and more time goes by and oil shipments don't arrive to Cuba, stop by the Trump administration's
insistence that countries are no longer able to send the government -- the Cuban government, any kind of oil, saying that Cuba's represents a threat
to United States. We are seeing the impacts more and more here. There are less cars on the road. Now, we're hearing that airlines are cutting flights
to Cuba because there is not any jet fuel for them here to be able to refuel and bring the passengers back home.
So, this is going to, of course, impact. There will be less tourists coming here, really becomes a chain reaction for the already struggling Cuban
economy.
Mexico is sending aid. Tons, hundreds of tons of food, but they are not, at this point, sending any oil under U.S. pressure to not do that.
The Kremlin has said that Cuba is now facing a crisis. The government here essentially their ally, their old ally, is in deep trouble, as what they
call a U.S. choke hold continues on and on.
We know the U.S. and Cuba are exchanging messages, they are holding talks. Remains to be seen, though, if any deal can be struck, because the U.S. is
really insisting on regime change, the government leave power open up to multi-party elections that political prisoners here are afraid, and a lot
of other steps that the Cuban government up until now has been unwilling to agree to. Patrick Oppmann, CNN, Havana.
QUEST: Blame it on A.I. good excuse for just about any ill that might be befalling your company, particularly, if you're getting rid of jobs. Last
month was the worst January for job cuts since '09, according to Challenger Gray and Christmas, corporate layoffs made the large portion, Salesforce
4,000 jobs. Why? A.I.
Pinterest, losing 15 percent Why? A.I.
The list continues. It's known as A.I. washing, part of this larger trend that's taking place. Challenger, Gray and Christmas also found 54,000
companies referenced A.I. in the layoff plans.
Some skeptics are calling it A.I. washing, blaming A.I. for basically job cuts that were otherwise going to be made regardless.
Next is Peter Cappelli, the professor of management at Wharton and director of Wharton Center for Human Resources. Good to see you, Professor. I lovely
to see you.
Now, look, I guess, there is an A.I. kernel of truth somewhere in there, but it's a really good umbrella to blame when you don't have anything else,
because you just throw your hands up and say, look, what can we do, it's A.I.?
PETER CAPPELLI, PROFESSOR OF MANAGEMENT, THE WHARTON SCHOOL: Yes. No, I think you are right on that. I think the other thing, maybe a little more
honest that some of the companies are saying, is that they anticipate that A.I. will take up the work. Amazon has said this as well.
But, you know, I've been looking at companies that introduced A.I., as opposed to just talking about it, and introducing it takes a lot of time to
get it to work, a lot of money, a lot of resources.
So, you know, even if you think it will take over the jobs, you better think carefully about that. It's going to take a while to do it.
QUEST: And anyway, is A.I. at the level of sophistication that does justify losing 10,000, 15,000, 20,000 jobs. Is it that far down the road, because
we are not seeing the productivity gains, or indeed, the profitability yet?
CAPPELLI: Yes. No, I think that's right. I mean, the companies I have looked at are seeing productivity gains, but they are not cutting headcount
now. So, it is hard to justify cutting jobs based on A.I.
And as I understand, companies have actually stopped recently claiming that, as much as they did before, that is they are not claiming that A.I.
is the reason they are cutting jobs. I think, because they have been kind of called out on that, because it's not true.
QUEST: The big problem we had with digitization and the fourth industrial revolution was we promised blue collar workers, retraining, reskilling, and
we never did it. We broke that promise, and that led to populism, et cetera, et cetera. Are we -- do you see us making the same mistake? Do you
see any governments actually putting in place worthwhile policies for the retraining, reskilling, et cetera of those being lost for A.I.?
CAPPELLI: Well, I don't think there is all that many jobs being lost because of A.I. The one place you could really say that it is happening is
with call centers and chat bots taking over.
[16:40:06]
But most of that work is actually already outsourced, and even offshored, and the big places where that's affecting is Philippines and India.
So, I don't think that there's a lot of retraining that needs to be done. Not that many people are losing their job. There is a lot of talk about
needing different skills to use A.I., and I don't think that's true. The tools themselves are very complicated to build, but that doesn't mean
they're complicated to use. That's why so many people are using ChatGPT, and it's like.
QUEST: Right. But when we saw anthropic with its recent announcement about what it was going to do, in terms of, you know, which scared the bejeebees
(PH) out of many software companies, but also gave the impression that using AI in, for example, legal services, was going to be that much easier,
because you will be able to write the thing yourself, et cetera, et cetera. Do you buy into that or not?
CAPPELLI: Well, some of those, it is easier, but that doesn't mean it's really easy. So, for example, if you look at computer programming, where
they say the A.I. tools really, really can take over a lot of it, but programmers only spend about 30 percent of their time writing code right
now, anyway.
You know, they are negotiating with the users. They are trying to get budgets. They are managing the inside of the organization around software.
So, even if it took over some of those tasks, you still have in programming, say, 70 percent of the job that has to be done, and it's
really hard to cut 30 percent of a programmer.
QUEST: Thank you very much, sir. I'm very grateful to you. We'll watch and we'll follow more. Thank you.
Now, I do want to show you what's been happening, because we are at that rather interesting. But we are waiting for new economic data that will give
some more direction on which way interest rates and things like that, and my economy is going to go.
The Dow closed up only 20 points. It hit an intraday high. You can see that little nugget of green once or twice. If you look at the 30, was the
healthcare stocks, Merck, Amgen, they were down. You know, whenever I look at this, I try and clean the trend of the day. And when you can see
straight away, it was tech recovering there, Microsoft, Nvidia, Cisco, with bit of banks, and you know, so that that's where the trend was recovering
from last week's turmoil.
Gives you an idea of the way things are looking. We are in New York all this week. A busy week on QUEST MEANS BUSINESS. And that is QUEST MEANS
BUSINESS for tonight. I'm Richard Quest in New York. Whenever you're up to in the hours ahead --
This bell, we really got to get a new bell. We are 17. You think we could afford a new bell? That's better. I hope it's profitable.
"CONNECTING AFRICA" is next. Maybe I'm a whip round for a new bell.
(COMMERCIAL BREAK)
[16:45:53]
ELENI GIOKOS, CNN ANCHOR: Welcome to CONNECTING AFRICA. I'm Eleni Giokos.
This month, we are looking at how financial services, especially mobile money transactions, are transforming the continents. They help us spend,
save, and borrow money.
For small businesses, they power everyday trade and support growth. Behind every transaction of banks, Fintechs, and mobile money platforms helping to
power Africa's economy.
Between 2011 and 2022, account ownership doubled across Sub Saharan Africa. As of 2022, 49 percent of adults had a bank or mobile money accounts. But
the level of adoption varies.
In South Sudan, just six percent have an account. In Mauritius, almost everyone, 91 percent has one. And in South Africa, 85 percent of adults own
an account.
A correspondent, Victoria Rubadiri, has been to Johannesburg to see how one bank, Capitec, is driving financial inclusion in some of the poorest
neighborhoods.
(BEGIN VIDEOTAPE)
VICTORIA RUBADIRI, CNN INTERNATIONAL CORRESPONDENT (voice over): It's another busy trading day in the heart of one of South Africa's well-known
townships.
RUBADIRI: This is Swazi Inn Market in Tembisa, often called informal markets like these, millions of dollars every year. Traders here run very
real businesses, but mainly based on cash, keeping them invisible to banks. No credit history, no paper trail. But Capitec has changed all that with a
no doc sign up policy, allowing traders to access the bank services, build a credit history, and turn everyday trade into opportunity.
LEAH MORIPE, HEAD, HEAD, EMERGING MARKETS: Capitec is the bank for the people. We bank the unbanked in the underserved.
RUBADIRI (voice over): They are doing it, thanks to mobile phones, which are ubiquitous here. Through an app, this device is not just a
communications tool, but a mobile bank. Helping people to save, spend, and transfer money.
MORIPE: We currently have 25 million retail clients, and we recently started business banking division, and we have just over 1.5 million
clients, including the small businesses, which we call emerging businesses.
RUBADIRI (voice over): It's Capitec's dealings with small and medium enterprises that sets them apart. Through a focus on mobile banking and
transaction details, instead of formal paperwork, it's allowing the informal economy access to the banking system.
MORIPE: From a Capitec perspective, they are deemed informal, which means they don't have documentation. They can't prove that I own a business or,
you know, this is my inflow, because they don't have financial statements.
So, what we do from Capitec is we allow them to open the account, which, from the fee perspective is quite low. We enable them with a digital POS
device, point of sale device, to start taking payments. When they ask for credit, we then look at the inflows that would have come, you know, through
their digital means, whether they have deposited money, whether they have swiped on the POS machine, and we take all those into consideration, and
grant them credit.
RUBADIRI (voice over): The Capitec CEO says that their approach to granting credit should unlock small business growth across Africa.
GRAHAM LEE, CHIEF EXECUTIVE OFFICER, CAPITEC: We are only just scratching the surface of SME financial services in South Africa and throughout
Africa. There is so much work still to be done. The majority of them don't have access to what they need most, which is funding to grow. It's funding
to be able to buy stock, which will dramatically accelerate how quickly they can earn revenue in a month.
The means of production is only available if we are able to provide those businesses funding, and given that they don't have the capital to start
with, we have to look at them differently. We have to look at all of the opportunities available in them and the communities around them, and take
that into account, and apply a different credit model.
[16:50:03]
RUBADIRI (voice over): With access to credit. It's allowing the owner of this restaurant to thrive.
GODFREY BHEMBE, OWNER, DELISABHEM RESTAURANT: Most of the time, some banks, they don't understand us, small businesses. So, but Capitec understand each
and every detail of our small businesses. They give us funding. Most of the time, it's funding that we, small businesses are looking for.
RUBADIRI (voice over): It's this funding that these stall owners in Swazi Inn Market hope will turn their daily trades into sustained growth and
endless opportunities.
(END VIDEOTAPE)
GIOKOS: When we come back, we go to Kenya and meet the man behind one of East Africa's largest banks.
(COMMERCIAL BREAK)
GIOKOS: Welcome back.
Kenya has one of the largest financial inclusion rates on the continent, as of 2022, 79 percent of adults had a bank or mobile money account. Based in
Nairobi, equity bank has played a role in providing that financial access. James Mwangi is the Group Managing Director and CEO of Equity Group, with a
market capitalization of $1.37 billion, it operates in Kenya, Democratic Republic of Congo, Rwanda, Uganda, Tanzania, South Sudan, and Ethiopia.
It holds assets worth $13.5 billion and has more than 22.4 million customers across 402 branches.
Our Victoria Rubadiri sat down with him recently to discuss the bank's growth and competition across East Africa.
(BEGIN VIDEOTAPE)
JAMES MWANGI, GROUP MANAGING DIRECTOR AND CEO OF EQUITY GROUP HOLDINGS: We started equity to solve a problem of exclusion. Only four percent of the
population had bank accounts. And as a result, they were not on the table of resource allocation, and we felt that we could champion financial
inclusion with a net game of socio-economic transformation of the people, and that has been the purpose that has driven equity for the last 35 years.
RUBADIRI: Where are you now? And what lessons can you say you've learned from operating in different regulatory and economic environments.
MWANGI: We are currently operating in seven countries. Our ambition is that by 2030, we'll be in 15 countries. In markets that has an addressable
population of 700 million people, and that then will give us the scale that one really require.
Technology is enabling us to penetrate to those markets very easily. Out of the seven markets that we are, five of them we are in the top four banks in
each of the markets. So, we have realized that the most we can do is to enable trade, and you will not enable trade if you are not systemic in each
market.
RUBADIRI So, let's zoom out to the continent and talk a bit about what the state of banking, commercial, retail in Africa looks like now? From your
perspective, what would you see? Yes.
MWANGI: I see the banking space in Africa as the greatest opportunity, because we are moving now from financial inclusion to usage, and value will
be created by usage, because that is consumption. Africa is a massive continent, 20 percent of the world sway, and sooner going to be 25 percent
of the world population.
Africa provides us an opportunity for mass banking. It provides us an opportunity for technology-enabled banking, such that it's not brick and
mortar.
RUBADIRI: The African continental free trade area is in play now. What impact do you see it having on cross border banking and financial flows
across countries?
[16:55:01]
MWANGI: At the moment, the cross-border trade deal is about 15 percent to 16 percent of trade that Africa does. So, it means that 85 percent of the
trade is outside.
Given the trade that has been established by regions like the European Union, where over 60 percent is cross border trade within the block, the
African continent of free trade area is becoming a platform that will enable Africa. The fact that the African continent is now starting to build
a significant middle income. It means that, that will be followed by production within the continent, because it has labor and it has the market
or the consumption.
So, essentially, the two major ingredients of supporting industrialization or manufacturing. And once the country starts to do finished products,
then, they will be able to trade with each other very efficiently.
The reason why cross border trade has been low, is because all of us are producing raw materials, and nobody consumes raw materials. So, but once we
then start producing, and we have seen increasingly that is happening, then, cross border trade would grow very significant, and that is why we
want to have a Pan-African presence, and at a scale that we can allow that trade to happen by being a solution to the multicar lenses that you have to
deal with, that providing trade finance solutions that allows ease and convenience of trade.
RUBADIRI: What keeps you up at night?
MWANGI: The pace of technological change. It's no longer the time that you could have 10-year planning cycles. And the last one, of course, is the
issue of disruption.
We thought in the past, competition with banks, suddenly, telecoms came in and disrupted the payment space and transactions were taken away from the
banks.
Now, Fintechs have come and they are eating the lunch and breakfast from the asset point of view. They are better in using data, they are better in
scoring, and so, they are able to underwrite a better risk than banks.
So, the question is, how do you cope in such a competitive environment where you could say your competition is a competitor from hell. Is not a
competitor from the industry that regulated, is not your peer, is not the other bank besides you, but he is somebody you have never understood, who
is using a very different model from yourself.
So, the disruption can be very fatal if one doesn't catch up much faster.
(END VIDEOTAPE)
GIOKOS: That's it for this month's CONNECTING AFRICA. If you want to know more about the subjects we cover on this program, you can check out our web
site.
Until next month, from me, Eleni Giokos, let's keep on connecting.
(COMMERCIAL BREAK)
END
