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QUEST MEANS BUSINESS
MH370: Best Lead So Far; Improving Flight Tracking; Looking for Audio Signal Source; US Investors Nervous; Concrete Deal; European Market Down; Italian Finance Minister Backs Eurozone QE; World Bank on China; Eurozone "Lowflation"; Ukraine Crisis; European Economy; Skin Trade; Elections Underway in India; A Look at Brompton Bikes
Aired April 7, 2014 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Oh, dear, what can the matter be? The market's down more than 166 points. We will explain why during the course of the program. Once they've hit the gavel -- go on, young sir, hit the gavel several times. It is Monday, it is April the 7th.
Tonight, new leads in the search for Flight Malaysia 370, and a new push for reform in the airline industry. We'll talk about what needs to be done in the future.
Also, threat number one to Europe. We'll tell you what the Italian finance minister thinks. It's an exclusive interview on QUEST MEANS BUSINESS.
And getting tough on trafficking. Dolph Lundgren is fighting a new cause. You're going to hear him on this program.
I'm Richard Quest. We have an hour together, and I mean business.
Good evening. It's one month since Malaysia 370 disappeared, and we have the first real signs of breakthrough in the search for the plane. Now obviously, we've done much coverage it here at CNN and particularly here on QUEST MEANS BUSINESS, so we need to bring you absolutely up to date and tell you why it all matters.
Two audio signals have been heard by a pinger locator off the northwest coast of Perth in Australia. The first detection lasted more than two hours, and the second for 13 minutes. And because of these two receptions, the searchers say this is their best lead so far.
(BEGIN VIDEO CLIP)
ANGUS HOUSTON, AIR CHIEF MARSHAL (RTD), CHIEF COORDINATOR, JOINT AGENCY COORDINATION CENTRE: Clearly, this is a most promising lead, and probably in the search so far, it's probably the best information that we have had.
HISHAMMUDDIN BIN HUSSEIN, ACTING MALAYSIAN TRANSPORTATION MINISTER: Ours has been the most promising lead we have had. I urge all Malaysians and the international community to unite in their prayers and not give up hope. We will continue with all our efforts to find MH370. Thank you.
(END VIDEO CLIP)
QUEST: Now, despite this apparent new lead, there's no confirmation that these belong to the aircraft. It could take several days or even longer to find out.
You'll be aware, of course, from how we've been speaking about this, that the Ocean Shield is now going backwards and forwards across the waters to try and relocate and to recreate those pings before the Ocean Shield will then deploy the Blue Fin, which is the autonomous submersible, which would then go and see if they could actually locate physical pieces of the record.
But whilst they continue the search for the actual aircraft, the airline industry is warming up to changing the way technology is used to keep track of aircraft itself, and on that, there are two key improvements. Join me at the super screen and I'll show you exactly where the industry is going at the moment.
This is the plane. Doesn't matter which plane. But the first is real-time satellite tracking of all flights. In other words, the ability of the plane to remain in contact with a satellite so that its position is always being sent out at all times.
This is one of the most fundamental issues now underway in discussion, satellite tracking. IATA, the aviation industry group, wants a globally- agreed tracking standard to be in place by the end of this year.
It would not only avoid another Air France 447, because five years ago, we thought that was bad enough and could never happen again, little did we realize it was going to be even worse when something like Malaysia 370 happened.
But there's a second aspect to it. Think of it as live data streaming from every aircraft right down to the satellite dish. Now obviously, it would go via satellite, and from there, it would be sent out to the airlines.
What's the significance of that? The answer would be anything happening on the aircraft, the performance of the aircraft, would be sent in real time to the ground. Malaysia has asked the United Nations communications agency, the ITU, to look into this and to develop it. Speaking to Becky Anderson, Tony Tyler of IATA said when it comes to these two areas, much more needs to be done.
(BEGIN VIDEO CLIP)
TONY TYLER, CEO AND DIRECTOR GENERAL, IATA: This whole area, the area of tracking of aircraft and of streaming and so on, really will be an area that ICAO, the International Civil Aviation Organization, will, of course, be very involved in. But the industry can generally move faster, we can generally go and convene people quicker, we can generally get things done.
Much as we've done, for example, on the environment side, we've been very helpful, I believe, to ICAO in helping to bring the industry together on an issue that ICAO is the one that will make the rules, but we've brought the industry together.
I think this is another area where we can help like that together to get things moving quickly, to get things moving in a direction the industry can live with, can support, and honestly, can afford.
(END VIDEO CLIP)
QUEST: One thing to note about these proposals: first of all, the sheer amount of satellite space and bandwidth, is there physically enough for all aircraft to be sending information up? And the second is, of course, the cost. How much will it actually cost to install it on the aircraft, to buy the bandwidth, and to transmit?
I can hear you saying already, how can you put cost against the price of the aircraft and, more importantly, the price of 239 souls onboard? Matthew Chance is with us tonight from Perth in western Australia. Good evening -- it's good morning, 4:00 in the morning for you, Matthew.
The optimism as a result of Angus Houston's statements last night, as it dwindled, or are we expecting further developments today?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think the optimism is at the highest point that we've seen since this investigation and since this search began more than a month ago. And so, that's a very positive sign.
We -- Angus Houston spoke about this being the best hope, the best lead that they've had since the beginning of the investigation, and he's a very measured character, remember. He doesn't say things that he's going to have to potentially retract later on. And so, the fact that he said that is a really good indication that he's pretty confident --
CHANCE: -- that what they've found out there will most likely lead to some kind of positive development. Whether it's today or later on, we don't know.
QUEST: Now, we know that they are now trying to triangulate -- well, first, though, they've got to get the ping location -- the pinger to go again. Then they will triangulate. Any idea when they're going to put the Blue Fin in the water?
CHANCE: Well, it's not going to be until that first stage is over. Each pass -- remember, the ship has to two that pinger locator behind it -- each pass takes six our seven hours to complete, and they have to turn. And so, that will take perhaps a day, perhaps a couple of days before they've located the pingers again and got sufficient information to triangulate its exact location.
When they've done that, they'll send that Blue Fin 20 -- 21 down, that autonomous robot, to try and get a visual on it. And then, only then, will there be confirmation that this is wreckage from the plane.
QUEST: By my reckoning, it is another two or three hours before the first planes leave. We'll no doubt, in the next two hours, get the update of the schedule for the flying day on Tuesday in Australia. Good morning to you, Matthew. Thank you for joining us this morning.
So, the market. Well, you saw at the opening -- the closing bell at the opening of the program, you saw the market was down some 166 points. It started down and, frankly, there it was at its lowest point, and there -- in fact, if I'm not mistaken, it might almost have been the lowest point of the session so far.
The internet stocks were amongst the biggest fallers. One of the best descriptions I've heard is that the market went up on an escalator and came down on an elevator. Amazon was off 1.25, Yahoo! down over 3, Google just off half a percent. Alison is at the Stock Exchange. Ms. Kosik, you have some explaining to do this evening.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know what I saw today? I saw a lot of nervous investors running for the exits today. Investors dumping risky stocks, Richard, ahead of earnings season, that begins this week. They're nervous about what first quarter earnings season is going to be looking like.
Analysts say that's because some of these shares, they've had really big run-ups the past several months, and investors aren't really sure if it's justified. They want to see some hard numbers at this point, before they pump these stocks up even more. Richard?
QUEST: Alison Kosik at the Stock Exchange. Thank you for that, Alison. Bit of damage done today, but tomorrow's the next one.
The world's two biggest cement companies are teaming up. Holcim of Switzerland is buying the French company Lafarge. The companies say the merger will save them nearly $2 billion.
How does it save them money? It saves them money because, of course, they get savings through costs. The sector has struggled with rising energy costs and weak demand. Holcim-Lafarge will need to sell nearly $7 billion worth of assets to overcome anti-trust concerns. Both rose on Monday. The market clearly likes what it sees.
To Europe. The market fell sharply following Friday's slide in the US. Remember, they hadn't seen what was happening in New York today. Sharp losses across the board, more than 1 percent in all the major markets. The Xetra DAX is down 2 percent. Broad-based, tech, and bio stocks were hit especially on the market. German industrial stocks were down, and French stock was off as well.
When we come back, we'll stay in Europe. Reform, reform, reform. Italy's finance minister tells CNN the European Union must succeed, and it's all about revitalizing the labor market.
(BEGIN VIDEO CLIP)
PIER CARLO PADOAN, ITALIAN FINANCE MINISTER: I think that high and persistent unemployment is the threat number one to the European project.
(END VIDEO CLIP)
QUEST: Italy's finance minister says quantitative easing would be good for the euro area. In an exclusive interview with John Defterios, Pier Carlo Padoan said Europe needs just a little bit more pump priming to avoid sliding into the mire of what everyone is calling "lowflation."
PADOAN: Certainly, inflation is very low in Europe and in the euro area. It is much below the agreed medium-term target of 2 percent. And what is most worrying, that it is very low, and in some cases, negative in the south of the euro area.
This, of course, makes -- generates two problems. That if prices do not move enough, then competitiveness adjustment are more difficult for countries that are under pressure, and for countries that have to deal with a high debt level, low nominal growth, or very close to zero nominal growth, makes debt adjustment even more difficult.
So, I'm not saying that we should have more inflation than needed. We should simply go back to what the original target was decided. It is an average of 2 percent inflation in the euro area.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: This would give some space, then, for quantitative easing. There's now quite an open debate about when to do it. Do you think it should be accelerated, the sort of pace of monetary policy?
PADOAN: There is a debate about when to do it, but also how to do it. Because yes, I think quantitative easing would be appropriate for the euro area. But of course, it's not like the US for one reason: that in the euro area we still have a high degree of financial and credit market fragmentation.
Which means that monetary policy decided at the center of the euro area transmits in pulses in very different ways across monetary union.
DEFTERIOS: When would you like to see action, though, on this monetary policy to help the growth scenario in Italy? It seems like we're well behind the curve at this stage with inflation at a four-year low throughout the euro zone.
PADOAN: I will not comment on the timing on monetary policy. It's not my job. But certainly, I see that there is broad agreement about the fact that "lowflation" has to be watched very carefully, and action has to be prompt whenever its deemed necessary.
DEFTERIOS: Is the European Union not seeing the message? You have record unemployment of 13 percent, youth unemployment of above 40 percent. This is unprecedented territory for the Italian economy, and it's going to be very difficult to push through reforms with that level of unemployment, is it not?
PADOAN: You are absolutely right. I think that high and persistent unemployment is the threat number one to the European project. We need a combination of policies that stimulate demand with policies that facilitate the way labor markets work. And this is what we are doing in Italy with our broad-based labor market reforms, the so-called Jobs Act.
DEFTERIOS: As you know, traditionally, the prime minister's plans usually do not survive. What is going to change this time around? Is it really that radical? And can he survive this push?
PADOAN: Certainly, the survival depends on the intensity of the push. And the resistance to the push is a signal that it's pushing in the right direction.
DEFTERIOS: He's restructuring the Senate, you're restructuring the regional authorities, which will cut a lot of spending. But there's a lot of political interests at play here.
PADOAN: There is a lot of political interest, but it's also seen by many as a decisive turning point. Or let me put it differently: if there is a failure, which of course, I do not wish, then this would be very, very serious for the country.
QUEST: Finance minister of Italy talking to John Defterios.
"A bumpy start to the year." Those are the words of the World Bank when referring to China. The World Bank says China had a weak industrial production beginning, a bumpy start to the year, weak industrial production for export at the beginning of the year in the first quarter, and crucially, the bank has trimmed China and East Asia's growth forecast for the year.
As we head into the IMF and World Bank spring meetings, China's not the only place where the phrase "bumpy start" could be used. But of course, China is specifically of some interest.
In Brussels, it's a case of -- we've talked many times of not inflation, but "lowflation," because the price of rises has now been at its lowest level since 2009. And as you just heard the Italian minister speak, that is causing grave cause for concern. The managing director of the IMF, Christine Lagarde, calls it "lowflation."
But if you'll also recall, she has referred to the specter of the "ogre of deflation." So maybe she's being somewhat more polite and less -- more diplomatic when they decide to go for the phrase of "lowflation" instead.
And then you have Ukraine and the whole question of the potential of sanctions between Russia -- the EU, Russia and the United States, The cash strapped country owes Gazprom more than $2 billion, as the gas company has hiked the price for gas last week. And tensions are rising along the eastern Ukraine frontier.
Now, pro-Russian supporters have seized state buildings in several cities, and that, indeed, is causing some great concern.
So, there are warning signs in Europe, warning signs in Ukraine-slash- Russia. Warning signs in China. Maybe not warning signs, but at least the question of growth in the United States.
Put it all together, I spoke to Stephanie Flanders, the chief market strategist for the UK and Europe with JPMorgan asset management. With the spring meetings of the IMF and World Bank, how tricky is the situation in Europe?
STEPHANIE FLANDERS, CHIEF MARKET STRATEGIST FOR UK AND EUROPE, JPMORGAN ASSET MANAGEMENT: I think we are in an interesting place. You remember, Richard, at the beginning of the year, there was quite a lot of optimism that the world was at least starting to get back to normal, that you had recovery in America and in Britain and you were getting some green shoots in the eurozone as well.
And yet, nothing has quite gone according to plan in the first few months of the year. Markets haven't really acted the way we expected them to. We've had a lot of weather disturbing the news in the US.
And as you said, in Europe as well, you've had worrying signs, not so much from the real economy, which I think is still showing decent signs of recovery, but from the fall in inflation, just makes people worried that we're going to have once again a disappointing year, that those hopes of going back to normality are going to have to be put off again.
And I think that's what is facing the IMF as they come into these meetings. Is there something else that they should be doing? Can they just rely on central banks to get us out of this slow growth period? Or is it a question of just fingers crosses, waiting for loose money to do its work?
QUEST: The interesting part about that, of what you've just said is, nothing is going quite as intending, but nothing's gone wrong, either, which is surely the strongest evidence of the deep trough, the -- if you like, the sludge, the economic sludge, that we were in the middle of that it's so difficult to get out of.
FLANDERS: Well, I think some things are going right. But you're right, Richard. It's partly about comparing that with what's happened in the last few years. If you look at where the global economy is, particularly the developed economies are relative to where they would be if we'd had anything like a normal recovery, well, we still got a lot of lost potential there.
And I think there's a real question mark, which is being talked about at these IMF meetings, can we get that growth that we've lost back? Are we ever going to get it back, or are we looking at a very long period of slow growth? And that's where you do start to worry about the longterm implications of this recovery.
QUEST: And into this maelstrom of, perhaps, mediocrity or economic mediocrity, we have Ukraine and Russia. Now, on its own, the Ukrainian economy is not going to give us too many sleepless nights. But talk me through the scenarios of worry of Russia versus the EU with the US? And do you think that actually becomes a reality?
FLANDERS: I think of all the unexpected things we've had and the volatility we've had in the first few months of the year, the bumps we had in emerging markets, the news about deflation in the eurozone, obviously the one that was the most kind of out of left field was what happened in Russian and Ukraine.
But I think most people are looking at this in a way that you're, in a sense, looking at it. It's really the size of the Ukrainian economy, even the size of the Russian economy relative to the global economy, relative to global markets, is so small, it's hard for people to see how this turns into an ongoing, longterm issue.
You're quite right that large parts of Europe are very dependent for the gas supplies on Russia, and if you had some kind of massive deterioration of condition -- of relations between Russia and the West, that could spell trouble.
We just can't quite see, even if you have continued kind of sanctions and counter-sanctions, how far could that go without Russia certainly seeing its own interest in preventing it going any further. I think we are seeing Russia probably go into recession as a result of this crisis and what it's done to the currency. It is still very hard to see how it can translate into a major global problem.
QUEST: Talking wonderful common sense on economics, Stephanie Flanders joining me earlier from London.
The United Nations estimates 2.5 million people are in forced labor as a result of human trafficking. It's an issue about to break onto the big screen. When we come back, Dolph Lundgren's big gamble as the actor turns writer to highlight the issue.
QUEST: Now, a Freedom Project story with a bit of a difference. In the 1980s, the actor Dolph Lundgren personified the tough guy on screen.
QUEST: Here now, probably best known for knocking seven bells out Sylvester Stallone in "Rocky IV," he played Ivan Drago. Yes, go on, give it to him! That's it! Nice left hook! One more! Oh, good on.
Now, he's turned his talents to writing a movie about the dreadful issues, very different, but the dreadful issues of human trafficking.
(BEGIN VIDEO CLIP)
DOLPH LUNDGREN AS NICK CASSIDY, "SKIN TRADE": The skin trade's worth billions of dollars. Last year alone, this country saw over 2,000 cases, and I consider every single one of those a goddamn tragedy.
(END VIDEO CLIP)
QUEST: So, how does a man who went from fighting in the ring to fighting for human rights against trafficking? Dolph Lundgren started on his project seven years ago. He began scriptwriting after reading about human trafficking in the news. When he joined me, I needed to know if he was amazed when he looked into this by the scale of the problem.
LUNDGREN: Yes. I am amazed and even though I worked on the script and we wrapped the picture last week and my head's still in there, I -- when I read the statistics, when I read stories, like on your website on CNN, the Freedom Project, I'm still amazed that people can do that to other human beings. It's -- it's beyond me. But I think it has to stop, and we have to all work to stop it.
LUNDGREN AS CASSIDY: How can you do this? Buy and sell human lives?
RON PERLMAN AS VIKTOR DRAGOVIC, "SKIN TRADE": Ask my customers. When they stop buying, I stop selling.
QUEST: Is there a difficulty in creating an exciting movie that people will want to go and see about a subject such as human trafficking? How do you balance those two demands?
LUNDGREN: In our film, we do have a lot of action, and we do have a thriller. We have kind of an exciting -- I think, an exciting story where you don't know who is who, really. But we always keep close -- stay close to the subject matter. Meaning, it's -- it has to do with the victims. It's always about the victims, and we never forget that in the film.
QUEST: And what's fascinating about that is as we go through our normal lives, which are so often so far removed from any issue of human trafficking, to suddenly immerse yourself in that must have been a very moving experience.
LUNDGREN: When you actually have to shoot the scene where you discover 50 girls kept in cages, for instance -- and you have to reach down inside and try to reach that emotion, it's tough. And in my case, I used my two daughters a lot. I used the fact that, how would I feel if they were in there? And that was a way for me to kind of --
LUNDGREN: -- to feel the depth of that emotion.
QUEST: When you're sitting, as you are, in Los Angeles, in Hollywood, and you're at some glamorous dinner party or you're at some red carpet event, and people say, well, Dolph, what have you been up to lately? What's this movie that you're on about that you've been banging on about for the last seven years? What are you going to say to them that jolts them out of their comfort zone?
LUNDGREN: Well, I think mentioning some of the statistics behind human trafficking. For instance, it's a $20 billion, $30 billion industry, that there's something like 20 million victims worldwide, that only in the US, they estimate that there are 300,000 children being trafficked every year. I think that's -- the statistics are themselves are kind of jarring. And usually people --
LUNDGREN: -- they go, really?
QUEST: You've taken a risk here. Actors rarely take too many risks with their careers in the sense of putting themselves out on a limb, making the statement in such an area. So, sir, you've taken a risk, how do you feel about it?
LUNDGREN: I feel really good. I'm really happy with the picture, I'm pleased with all the actors, the performances, the crew, the cast. And I think people are going to be moved when they see the film. I really hope so, and I hope we can change something in the world, not just entertain people, but also make them think what's going on out there. So, I fell good.
QUEST: And you can keep up to date with the CNN Freedom Project online, cnn.com/freedom. And as you know, here on QUEST MEANS BUSINESS, there's probably nothing more important that we cover.
When we return after a very short break, I'll have the news headlines for you. And we'll tell you about the world's biggest election underway in India, examining the economic issues, which is very much on the voters' minds. It's QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. First, this is CNN, and on this network the news always has priority. Ukraine's acting president has accused Russia of trying to dismember his country. The comments came after pro-Russian demonstrators took over several government buildings in the cities of Donetsk, Luhansk and Kharkiv, calling for independence from Kiev. Moscow's Foreign Ministry told Ukraine to stop blaming Russia for its problems.
The daughter of the Irish musician and activist of Bob Geldof has died. Peaches Geldof was 25 years old. At this stage, her death is being treated as unexplained, uncertain according to British police. She leaves behind a husband and two young sons.
Oscar Pistorius took the stand in his own defense today. His testimony began with an emotional apology to the family of Reeva Steenkamp. The athlete admits to fatally shooting Steenkamp but says he believed his girlfriend was a burglar.
A candlelit vigil has been held in Beijing. As you remember, those lost on board Malaysia flight 370 it's been a month since the Boeing 777 disappeared from radar screens. Meanwhile, the Australian navy ship Ocean Shield has detected signals consistent with those of a flight data recorder and a cockpit voice recorder. Searchers say it's the best lead they've had so far.
The Pope has decided the Vatican Bank will remain open. Pope Francis has approved a cleanup effort involving compliance and transparency reforms. There'd been speculation officials were planning to close the institution. The bank has been a source of scandal and embarrassment for more than three decades.
The world's biggest election is underway in India. There will be 814 million people registered to vote which is more than the population of the United States and Western Europe combined. It's more than 100 million more than were registered to vote at the last election in 2009. The entire process will take five weeks, voting is staggered by regions to allow proper policing of voting areas. Now, the results will be announced on May the 16th. Sumnima Udas reports from New Delhi.
SUMNIMA UDAS, CNN'S INTERNATIONAL'S DELHI-BASED CORRESPONDENT: It's the biggest election the world has ever seen - 814 million plus eligible voters will determine who will be prime minister. And this year, many say no matter which party wins, the country's in for a change. This is the face of the Congress Party Rahul Gandhi's last rally before voting begins and he's doubling down on the Congress Party's secular ideology and populist economic model.
Male: (SPEAKING FOREIGN LANGUAGE).
UDAS: The 43-year-old is the scion of India's most powerful family. Ghandi's great grandfather was the country's first prime minister. His father and grandmother also held that office. His Italian-born mother Sonia Gandhi heads the Congress Party, in power for the past ten years. But the Congress is losing favor amid some economic slowdown and a state of high-profile corruption scandals. In another part of Delhi, a different atmosphere. Narendra Modi hasn't even arrived yet but it feels like a rock concert. There's live music, a lot of views and plenty of excitement. Modi, one time teaboy now a household name. The Bharatiya Janata Party's prime ministerial candidate rules the ranks of a Hindu Nationalist Group becoming chief minister of Gujarat, one of India's most successful states. His appeal-proven management, development and big business but he has his critics. Some allege Modi didn't do enough to stop anti-Muslim riots in his state in 2002. More than 1,000 Muslims were killed. Modi denies those allegations. In India's Westminster-style parliamentary elections, the party or more likely the coalition with the majority of India's 543 feet lower House of Parliament chooses the country's next prime minister. Who will that be? What path will Indians take with India's growing economic clout? And when every sixth person in this world is Indian, what happens here in the next few weeks matters. Sumnima Udas, CNN New Delhi.
QUEST: And as you can imagine, the mere sense of excitement is palpable in India at election time. The young voting, the number of people voting and the issues and parties they are voting for. The leading contenders are Narenda Modi of the BJP, who of course stands for one side of the equation and on the other side, Rahul (Rak) Gandhi - excuse me - of the Indian National Congress Party. And in between them - between these two candidates, the increasingly youthful voting public who are demanding economic reform. The issue is which one of these men - which one of their parties - is best qualified to bring the growth that India seeks and needs. And bear in mind, peaks at around 10 percent in 2010 and since then, it has been a rather sorry affair -- 2012 was the next spectacularly bad year at 3.2 percent, 5.4 percent is projected for this year. And that sort of level of growth - when you compare it to the sort of growth you get in China or other fast-growing emerging markets, you get an idea of how seriously the issues are.
Indians are also struggling with rising prices. The IMG has persistently said high inflation has eroded household savings and income and it undermines the stability of the rooping (ph). With these sort of numbers, you may wonder how does India get back to some form of growth model? Eswar Prasad is a senior fellow at the Brooklyn's Institution and a professor of trade at Cornel University. He joins me now. Good to see you as always, sir. Thank you.
ESWAR PRASAD, SENIOR FELLOW, BROOKINGS INSTITUTION: It's my pleasure.
QUEST: The economy is always going to be an issue, but the delivery on the economic promises - which in many ways Manmohan Singh has failed to do in so many ways - is going to be the challenge for whoever wins. So, what's challenge number one?
PRASAD: The key issue right now is to provide an environment where there is policy uncertainty because it's not that the Manmohan Singh government didn't try to do things. But very often, even after it did the right things, it pulled them back in response to political pressure. So what I think the financial markets and the people in India are looking for really - businesses and consumers is a framework of good plan for moving forward and the many things India needs to do to get growth back on track, and some down payment in terms of immediate reforms.
QUEST: Isn't India - I mean, look - I said this before isn't India a classic case of the country that offers lots of promise and always or usually fails to deliver.
PRASAD: That's not quite right, Richard. I mean India has done reasonably well in the last few years, except for the last couple of two years, but that's because of reforms that were put in place in the early 1990s. It took a while for those reforms to kick in, but once they kicked in, they had good effects. Now the question is we need a new wave of reforms for India to get growth back on track and the previous - or the current - government has not been able to deliver.
QUEST: But, all right, so they've tinkered around the edges with deregulation. There have been some changes on foreign ownership, there've been some changes made - some quite far-reaching changes in some cases on distribution and all those sort of issues. But what for you is the single biggest change that needs to take place to dereg - I don't know - it's hard to say a single big change - what's the single thing that you think needs to take place?
PRASAD: I think the financial markets are crucial to everything India wants to do. India needs a lot of infrastructure and India does have a lot of domestic savings. But you need a good financial system that can (intermediate), domestic and foreign savings into productive, long-term investments and infrastructure. Financial inclusion, which is another part of financial development, bringing a much greater part of the population into the ambit of the formal financial system -
PRASAD: -- so they feel more vested and growth is crucial as well.
QUEST: And the Central Bank governor who of course had to raise rates and has had to do things frankly he would not wish to have done since it harmed growth, but he had to because of tapering and other external actions. Does - can that start to be unwound?
PRASAD: It's not just external actions. The problem is that he's working in a very difficult environment where fiscal policy is not supporting him, structural policies are not supporting him, so he has to fight inflation and food prices for instances using monetary policy which is not what monetary policy should be doing. But I think so long as there is a new government that shows it has a commitment to reforms, commitment to getting the fiscal deficit back under control - that will give him a lot more room to help the economy to get back on a growth path.
QUEST: Good to see you, sir. Thank you for joining us.
PRASAD: My pleasure.
QUEST: We'll talk more about the results when -- too long the actual process, but I'll show when the results do come, we'll certainly talk more about it. Now coming up after the break, a few twists and a flick, and you're on your way home. This week's "Executive Innovator" plans to expand his foldable bicycle business all over the world.
QUEST: In New York, it's coming up to quarter to five in the afternoon. It's time for many to head off home, particularly office workers. And for some, it's time to unfold the vehicle and get on the road if you own a Brompton bicycle. The Brompton packs neatly away and can be ready again in less than a minute. Brompton sold 45,000 last year. You'll see many of them in London. Managing director Will Butler-Adams is doing his best to change the expansion for Brompton bikes. So, here's this week's "Executive Innovator."
ISA SOARES, REPORTER AT CNN INTERNATIONAL: From bike highest schemes (ph) to cycle super highways, London offers plenty of incentives for pedal power to commute. The number of those cycling to work here has more than doubled in the past decade, and that hasn't gone unnoticed by the U.K.'s top bike maker. Bromptom Bicycle has spent 25 years cornering a unique market for those wanting the wheels without the baggage.
WILL BUTLER-ADAMS, MANAGING DIRECTOR, BROMPTON BICYCLE: Handlebar pops up like that. Saddle comes up, little flick, and off you go.
SOARES: Less than ten seconds.
BUTLER-ADAMS: Less than ten seconds. Easy-peasy.
SOARES: The managing director Will Butler-Adams is leading a massive company expansion. He's take this once small family-run firm to 44 countries, and they can't get enough of this foldable bike. The business has been growing 20 percent year on year, generating sales of $45 million. Most of that demand is from overseas markets, and it seems they don't mind the hefty starting price. How important is innovation to your brand?
BUTLER-ADAMS: If you with your experience and with the advantage that you have from being a first, do not leverage that advantage, do not use that knowledge to keep moving faster, you will be consumed by the competition. The only way you can beat that is by using your brains, using your knowledge and your experience and your understanding to out-innovate. And if we don't do that, we will not be here in ten years' time.
SOARES: At the heart of this brand strategy is getting the product right.
BUTLER-ADAMS: We have four million combinations and permutations of bike, and that little system knows every one of them. So when the bike comes along, it can tell the person whose building that bike exactly what that bike requires.
SOARES: Key to the company's success is accountability - from the factory floor where parts are stamped and traced with single worker all the way to management.
BUTLER-ADAMS: Our company's totally open-book. Everybody knows what I earn, how much cash we've got in the bank. We are a team that is all-aware of how this business is doing.
SOARES: And despite a barrage of imitations from Asia, Brompton remains unrivaled by keeping its brand truly British.
BUTLER-ADAMS: We've managed to create tremendous value in being in London. It's a great way to protect your intellectual property and it's become so much part of who we are. We will make it work. And that's part of the fun and the challenge of the journey.
SOARES: Isa Soares, CNN London.
QUEST: The Brompton Bike. Charming little device. Now, I actually thought spring had sprung in New York yesterday. It was just a moment. Tom Sater is at the World Weather Center. I know you have - I know you have bigger fish to fry than my spring and sprung-ing, --
QUEST: -- but I did - I thought it had arrived.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: You know, it's funny you say that, Richard, because in just a few minutes, we'll share with your viewers around the world a live picture of New York City and it looks like winter. It's still in the grips of winter. More on that in just a minute. Let's talk about traveling. If you are traveling let's say in Europe, no major delays, maybe 30/45 minutes to get to around Vienna into Tuesday, and this is mainly for low clouds. We don't have any real violent weather to speak of, the winds are not that strong, maybe 15 minutes flight delay. Possibly more for volume than weather really in Munich, in Berlin.
Let's talk about the satellite picture. We have a little bubble of warmth - a little ridge - of some nice temperatures actually in parts of Portugal into Spain. We have a cold front though. You can see the patchy clouds here. This is a signature on satellite of cold cumulous clouds. So a little bubble of cold temperatures will drop the mercury as that slides across the north. You can actually see it across the U.K., north central parts of Germany, north central Poland and so far - and so forth. Here's the cool - the warmer - weather down of course areas of Spain as mentioned. Now, on the radar picture, we do have some pretty good returns. You'll see the brighter colors here with a chance of some weather becoming slightly violent in the forms of damaging winds, maybe even a isolated tornado. Eastern areas of the U.K. you could see there as it makes its way in the Low Country. Now some pretty good rainfall, bucketfuls just coming down right now. As we look at the temperatures, however, the cool trend will continue I think for the days ahead in Berlin. That's that little pocket of cold air. So we go from 16 down to 12. There's an area of low pressure that is spinning right now in western Turkey where they - besides the chance of scattered showers, I think temperatures' got to cool down parts of Bulgaria, Romania - look at Bucharest. We go from 21 down to ten on Thursday. So, a brief reprieve of the spring-like temperatures.
As we talk about the delays right now. Current delays in the U.S., most of this is volume in parts of New York, JFK, Newark, LaGuardia. Then you get into Washington, D.C., and it becomes more of a weather pattern even into Atlanta - heavy, heavy rainfall in the southern part of the U.S. The Southeast just copious amounts of rainfall over 100, 150, 200, 250 millimeters of rainfall, so the chance of thunderstorms causing some delays in Charlotte into Washington D.C. Here's our chance we'll get quickly into the delays for you. You can see in the next 12 to 24 hours, northern parts of Florida and toward Eastern Carolinas. We did have some heavy rainfall as you see - 112 in Birmingham, a report of a tornado. Twenty-four million Americans were looking at the threat of this. Unfortunately the death of a nine-year-old girl getting swept away in the floodwaters in Mississippi.
Quickly for you as you see the tornado watches, currently now along the Southeastern coastline I want to quickly give you an idea, Richard, I promised you this live picture. Here it is, the rainfall moves up into, yes, New York City. But the trees are still in the dead of winter. Where are the budding, beautiful flowers and the trees? A live picture of New York City. Hang in there, Richard. I here there's still residual snowfall in the higher elevations.
QUEST: the budding, beautiful buds of beauty. Tom Slater, thank you very much indeed. Now, Kathy Giusti was diagnosed with multiple myeloma, a rare form of cancer in 1996. Eighteen years later, we're going to talk to her about the charge that she is leading. You're going to be joining me in the C-Suite.
KATHY GIUSTI, CEO, MULTIPLE MYELOMA RESEARCH FOUNDATION: Great.
QUEST: In a moment.
QUEST: Twenty-four thousand Americans will be diagnosed with multiple myeloma this year. An estimated 11,000 will die from it according to the Multiple Myeloma Research Foundation. That's the organization dedicated to eradicating the disease. In the last 16 years, it's raised $250 million, used the money to start 45 clinical trials and help launch six new FDA- approved treatments. The chief exec is Kathy Giusti. She was named 19th on Fortune's list of the world's greatest leaders - 19!
QUEST: You are above Apple's Tim Cook and Starbuck's Howard Schultz.
GIUSTI: I know, and I'm humbled by it. Nineteen is good, really good.
GIUSTI: Yes. But you know --
QUEST: It's more than good!
GIUSTI: It's more than good. But here's the thing, I think when they were putting the list together, they were looking for people that were transforming the industries that they worked in, and at the MMRF, that's what we do. We are transforming cancer research. Not by ourselves, but with great partners and a great team.
QUEST: When you talk about being a chief exec -
QUEST: Are you running - you're running an organization but you're also at the same time it's a charitable organization.
QUEST: It has a sort of a - it has very good works at its core. It's different to the Schultz at Starbucks or the Tim Cook at Apple. Do you find it contradiction sometimes that you have to grapple with?
GIUSTI: No. I don't think it's different. I think I'm a CEO running a company. I never worked in a non-profit sector before I started running this company -
QUEST: But you've got to be touchy-feely in a non-profit.
GIUSTI: No you don't, no you don't. As a matter of fact, that would be the worst thing we could do. Our entire culture at the MMRF is results, innovation and urgency. We like to just say we're going to transform the field and we're going to run it like a company.
QUEST: How do you do that when you're dealing with people's lives? And lives and deaths and an illness that kills?
GIUSTI: Well, the first thing we have to do is we have to understand the problem, right? The problem is in cancer you need a critical mass of patients, patient tissue, patient data. If you don't bring everybody together, you will never find a cure. So, we said we will build collaborative models, so we did. We built our own tissue bank and we bring everybody's tissue together.
QUEST: So, how would you describe -- finally - how would you describe your method of management?
GIUSTI: My method of management is set a vision, look to see where we need to go to find a cure. Identify the obstacles are there, bring the best team and partners to work with me, execute flawlessly and because everybody's dying of this disease, do it fast.
QUEST: Brilliant. Thank you so much.
QUEST: Where do you think you'll be on next year's list?
GIUSTI: Ah, I don't know. Maybe 18. Any improvement would be good. (LAUGHTER).
QUEST: Thank you very much.
GIUSTI: You're welcome.
QUEST: We will have a "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment." Will you forgive me if I blow our own trumpet. On the program tonight, you heard the Italian finance minister talking about low growth in Europe and the worries of high unemployment. You heard Dolph Lundgren talking about financial and the question of human trafficking. Not often you hear something like that from an actor of his cal-EYE-ber - and caliber even (LAUGHTER). And you had the CEO of one of the big charities talking about how she is a CEO and it doesn't matter what sort of organization, you are the CEO of, it's the same standards throughout. And you wonder. Ah, business world isn't boring. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York.
Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow.