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QUEST MEANS BUSINESS
U.S. Economy Speeds Up; Thailand's Former PM Stripped of Fortune
Aired February 26, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST, QUEST MEANS BUSINESS: Growing out of recession. The U.S. economy speeds up, but can it stay on track?
A billionaire no more, Thailand's former prime minister is to be stripped of his fortune.
And pain in the premier league. Portsmouth football club enters administration.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
The U.S. economy is recovering more quickly than we thought. In the past three months of 2009 it was growing at an annual rate of at least 6 percent according to the revised figures from the U.S. government.
We're going to have a look at the markets right now because you want to find out how they are responding of course. Here we are the Dow Jones industrial average is up, but only marginally. Up 0.18 percent, that is 18 points, 10,339 or 340, depending on how you want to add the figures up. So, a positive reaction there from the U.S. market so far, it seems, because these figures were effective better than expected.
Now Tom Porcelli is one of the experts who keeps very close eye on these figures. He is the chief U.S. analyst at the RBC Capital Markets group and he joins me now from New York.
Thank you so much for joining us. Why were they so unexpected?
TOM PORCELLI, U.S. ANALYST, RBC CAPITAL MARKETS: GDP?
PORCELLI: Yes, the GDP report did come out a little better than expected. I what some analysts missed was the upper revision that we were looking for on this number. And that is precisely what we got. But I think, you know, it funny Max, you mentioned at the top, you know, this was a much better. But I think you have got to take it with something of a grain of salt; 3.8 percentage points, of that 5.9 percentage point gain in Q4 GDP, was actually all inventories. In fact, it was because of less inventory draw down. So, when we look at the report compositionally what we see is that consumer spending was actually revised lower on this second look at fourth quarter GDP.
In fact, consumer spending is actually now contributing just 1.2 percentage points instead of the 1.4 percentage point, a number reported previously, and importantly reversed trends that are remarkably weak at this point.
FOSTER: So, what do you interpret from this in terms of the economic recovery?
PORCELLI: Yes, you know, it is obviously this is a very backward- looking report. So we don't really take-it is difficult to extrapolate what happens with this report, forward. Instead, what we are looking at is more high frequency data, like continuing jobless claims or even the employment report, which we are going to get next week. What we can see from those two indicators is that the labor market remains largely in disrepair. We are not looking for, really, any significant job gains at this point. And so if we extrapolate that forward, which we feel comfortable doing, to some extent, what we are looking for is continue modest consumer spending over the balance of this year.
FOSTER: Do you think the Federal Reserve will have a similar interpretation? It is not going to rush in their now, whack interest rates up?
PORCELLI: No, I think you are absolutely right. In fact, we had Charlie Evans, the Chicago Fed president, out earlier, essentially saying exactly that. That, you know, they don't necessarily want to rush into raising rates. Bernanke has said this same idea just earlier in the week in his testimony to Congress. Where he basically said rates would have stay for an extended period, because we are really are just kind of in the beginning stages of this recovery.
FOSTER: And how do you think America is now comparing with other countries, because obviously other countries are all looking towards America? It is the big powerhouse in the global economy. But you think it is doing better than other countries?
PORCELLI: Right. Yes, I think it is difficult to make that determination right now. You know, most of the G7 countries are actually just coming out of obviously a terrible period, so you know if one is going to be a leader I think that is still an open question at this point. What we do know for sure, though, about the U.S. is that, you know, growth below trend is certainly in the cards for us. Again, given some of the factors that I just mentioned, a moment ago.
FOSTER: We just looked at the Dow Jones a moment ago. It was up, but it wasn't up that much. So the markets generally are-
FOSTER: They are not getting too excited about this figure, even though on the face it of it, it looks pretty impressive.
PORCELLI: Yes, I know, I think you are right and I think the market reaction is correct, as well. Again, I think you have to bear in mind two- thirds of the strength in this report came from just one factor, which really may not be necessarily be repeated. I mean, you have to remember that if final sales, which is essentially GDP less inventories, which was actually less than 2 percent. If final sales are going to remain relatively moribund, which is how I would describe that number, then I think it is going to be really difficult to continue to build inventories. And as a consequence this inventory build could be very fleeting.
FOSTER: OK, Tom Porcelli at RBC Capital Markets. Thank you so much for joining us with your insight there.
PORCELLI: Thank you, Max.
FOSTER: Now, as America's economy begins to pick up the pace, growth in India has hit a bit of a road bump. Still growing at 6 percent per annum, that is the stuff of dreams, of course, for most developed economies. But for India, it is a sharp slowdown from nearly 8 percent in the previous three months. And it was partly down to the weather, as well. This is monsoon season, so the weakest rains since 1972, did a lot of damage to crops and the farmers profits as well. Agricultural output dropped by 2.8 percent. Well, earlier I spoke to our correspondent Mallika Kapur, who has been gauging the reaction in India.
MALLIKA KAPUR, CNN INT'L. CORRESPONDENT (on camera): Well, India reported third quarter GDP figures today and that number came in at 6 percent. Now, it is below expectations. The general consensus was for a figure of 6.9 percent. And these figures, of course, are much lower than the previous quarter when we had a very strong figure of 7.9.
What we are seeing now is the impact of the poor monsoon coming through. Remember last year, in India, we hardly had a monsoon season and we had the lowest rainfall in 37 years. That did, of course, affect the agricultural sector. We saw drought in over half of India and that is coming through in the GDP figures today. We saw agricultural output drop by 2.8 percent, almost 3 percent down. But you know what, still, overall a growth figure of 6 percent.
Analysts say that is not bad, especially when you compare it to other global economies. And as one analyst said, you know what, in India, at least there is growth.
FOSTER: Still a huge amount for the government to juggle there. How is it managing, fiscally, to deal with the situation that it has right now? Because it is delicate on a certain level.
KAPUR: It is extremely delicate. And it really has quite a difficult balancing act ahead, because on the one hand it wants to encourage growth. It wants to make sure that the Indian economy has the strong positive momentum, on the other hand, it really has to control India's massive fiscal deficit. That is a huge problem for India.
And one way to control that massive fiscal deficit is to roll back economic stimulus measures which the Indian government had introduced after Lehman Brothers collapsed. That is one of the reasons India has been able to have very good growth over the last year, year and a half.
But today in the budget, the finance minister did announce that India is slowing going to start rolling back those economic stimulus measures. He announced a hike in petrol prices. He announced a hike in excise duty. And overall, though, the markets seem to like what they heard and the Bombay stock exchange, the Sensex, ended up quite firmly higher.
FOSTER: And here are those numbers in some more details. Solid gains to Sensex, as Mallika was saying. Traders in Mumbai focusing on the positive outlook for the economy rather than the present sluggishness, at least. Tata Motors was one of the top gainers on Friday, up 6.5 percent.
In Europe, markets came racing back from some sharp losses earlier in the week. A better reading on economic growth in the U.K. added to the strong numbers for the U.S. Most financial stocks were in pretty high demand. Mining and energy shares were also higher, thanks to higher prices for metal, gas, and oil.
Stocks in Paris made big gains. Only Frankfurt industrials, like Henkel and ThyssenKrupp, also did pretty well.
We are going to get the news headlines for you now. Rosemary Church joins us now from CNN Center.
FOSTER: Now abuse of power for personal gain, that is the verdict of the Thai high court in the Thaksin Shinawatra case. The former prime minister will now be stripped of $1.4 billion worth of assets. Dan Rivers is following the story for us from Bangkok.
DAN RIVERS, CNN INT'L. CORRESPONDENT (voice over): Their hero was about to loose an unimaginable fortune of $1.4 billion. Dressed in their trademark red shirts they were determined to mark the day in good humor and without violence. After Prime Minister Thaksin Shinawatra had given the poor a voice, but his critics say he also feathered his own nest while in power form 2001 to 2006, with policy initiatives which favored his telecom empire.
Thailand's supreme court was damning in its verdict, declaring Thaksin had continued to own his business interests long after he claimed to have sold them to his family. The judges ruled he changed laws, tax rates, and policy to benefit his company, Shin Corp. But they only confiscated just over half his assets, saying the rest he had made before going into politics.
Thaksin isn't the first Thai politician to be accused of corruption. But the vigor with which his enemies have pursued him perhaps reflects the challenge he posed to the Thai establishment; popular and ruthless, in equal measure.
SUCHI BUNBONGKARN, CHULALONGKORN UNIVERSITY: During his term in office, you see, he has been doing a lot to gain popular support from the rural mass, but it doesn't mean that he is quite clean in doing things.
RIVERS (On camera): The violence that many people feared here on so- called judgment day simply hasn't materialized so far. Instead the red shirts have created a party atmosphere, in spite of today's verdict.
(voice over): Thaksin appeared on his own TV channel to denounce the court's decision, saying it was 100 percent politicized and criticizing those who had ousted him in a coup four years ago.
Thaksin has repeatedly been accused of paying those who attend his rallies. Now he'll have considerably less money to finance his political campaigns. But he'll still have enough cash to fan the flames of this political conflict which shows now sign of ending.
FOSTER: Now, Portsmouth football fans used to call their club the pride of the South Coast, until though, its finances went south. Find out why and English premiership site is headed for almost certain relegation because of what happened off the pitch.
FOSTER: The British football league is now home to one of the sports biggest financial failures. Portsmouth is the first member of the English premiership to enter administration, a legal no-man's land, where managers hand control to an administrator charged with minimizing creditors' losses. The next loss Portsmouth suffers is likely to be a penalty imposed by the league. Pedro Pinto from CNN's World Sports, joins me now.
Pedro, what does this mean for Portsmouth? What will happen to it?
PEDRO PINTO, CNN SPORTS CORRESPONDENT: Basically, Portsmouth will be deducted nine points. That will be sporting disaster. The team is already in last place in the premier league and they will be 17 points away from safety with about 10 matches left. That means they are -
FOSTER: Doomed league.
PINTO: Yes, they are doomed to go down to the championship.
Basically, what they had to do is go into administration to avoid the club from being dissolved, because they owed about $20 million, in taxes, to the government. They had until yesterday to find a new owner who would commit himself to pay that amount. They couldn't do that so this was the only way out.
Let's listen to what the administrator said, Max, because he actually gave a press conference shortly after the announcement and he talked about that.
FOSTER: We don't have it, I'm afraid. But I did want to ask you, if the business fails, does that mean that the club can continue playing football? What happens to the club?
PINTO: The club can continue to play football. What they want to do now and what the administrator says they will do now is cut costs everywhere. They are talking about firing people right and left. They have about 600 employees at Portsmouth. And a lot of them will lose their jobs.
FOSTER: And players will go?
PINTO: Players will go at the end of the season. They can't go now, because they have two transfer windows, one in the summer, one in January. Those two have closed, so they can't make any money out of players now. They'll just have to sell them at the end of the season, generate cash. They'll get parachute payments, as well. Just to explain what that is: When teams are relegated to the championship, they get money to help the transition, to adjust to life in the championship, where there is less money available to clubs.
What is curious here and I think why this is a big story, Max, is because the premier league generates more television and commercial revenue than any other league in the world. And it is curious because the premier league, as an entity, does not look after its clubs. So the fact that Portsmouth wasn't able to survive by themselves, and be self-sufficient, really shows that it is very irresponsible management by the clubs. And the fact that the premier league is really out of touch with that.
FOSTER: And the fans are furious, of course. Kate Charles (ph) has been speaking to one hardcore fan.
UNIDENTIFIED FEMALE: When did you start following the club?
UNIDENTIFIED FEMALE: 1946.
UNIDENTIFIED FEMALE: 1946 is an awfully long time.
UNIDENTIFIED FEMALE: Yes, it is.
UNIDENTIFIED FEMALE: What does it mean to you then, to watch all of this happening today?
UNIDENTIFIED FEMALE: Well, we've seen quantity go down before, but it seemed to hit harder this time I think. Because I think there is so much money involved. We've got the players, the players have gone, but so has the money gone. This is the place where football started, where it all began. There were six men, they had a meeting, "Pompey Born To Beat The Saints".
UNIDENTIFIED FEMALE: When you are seeing a picture of how it all started and then you are thinking about 70 million pounds of debt, can you imagine what that means? Does that mean anything to you, that amount of money?
UNIDENTIFIED FEMALE: No, I wish I had 70 million pence right now.
UNIDENTIFIED FEMALE: You must also be disappointed with the direction that things have taken, as well. That it is just all about money. It is so important the financial aspect. Actually, for example, all the media here today, it is all about the finances. It is not about the club, it is not about the football anymore.
UNIDENTIFIED FEMALE: That's it. No, no, it's not. This all because we are going down. We are going to loose points and that, and it is making history, isn't it? The first thing to go is the premiership and the first thing to go are some of the points.
Well, the true supporters will still come. You will find out who the true supporters are.
(SINGING) Pompey `til I die, I'm Pompey `til I die. I know I am, I'm sure I am, and the rest of the gang will be.
FOSTER: There will be fans forever, won't they? They are not going to be leaving the club any time soon.
But what people are worried about how is the bigger, richer clubs, are they looking vulnerable? Because these companies, as they are, just seem to get into so much debt, just to survive. So, others are vulnerable, are they?
PINTO: I was reading a report, recently, made public by UEFA, the commission's financial institution to look into the debt of clubs. And premier league clubs currently have 56 percent of the total debt in Europe. So, out of the 732 clubs, right now, licensed to UEFA, 56 percent of the debt is coming from premier league clubs. So, here, I really think the issue is that owners come in. They have huge debts toward banks. That doesn't really happen in a lot of the other countries.
I think what the premier league needs to do is crack down on the people who are coming in and buying clubs and make sure they are financially sound to do so, because otherwise, they are asking for trouble. And like Portsmouth, there have been other clubs, like Westham, who are owned by an Icelandic management company and a bank manager. And we all know what happened with the problems in Iceland there. So that affected Westham as well. There needs to be more stability and clubs need to be more responsible on the player wages and in the investments they make in the transfer markets.
FOSTER: They need to spend less on players, right? They need to sort of meet up and have some sort of agreement to spend less, because they are always worried about being caught up with another club, I guess. But that is the main problem, isn't it?
PINTO: UEFA have talked about salary caps in football. I think that is necessary. Avram Grant, the Portsmouth manager, and the players said that they might have to take a wage cut. It is a bit too late for that. They should have done that maybe a the beginning of the season. Right now they paid $2.7 million per month, Portsmouth, to players wages. That is a lot of turnover they need to generate.
FOSTER: Another business wouldn't operate like that would it?
PINTO: No. And that is a small club. It is not like they are in the champions league, you know?
FOSTER: Pedro, thank you very much indeed.
FOSTER: Now, talking to the captains of industry, up next, we'll hear from one of the most powerful men in European manufacturing to find out how he is feeling about the recovery.
FOSTER: Well, nobody can predict the pace of economic recovery but people on the front line, at least, have a sense of what direction they are heading in. People like the CEO of BASF, which is the world's largest chemicals maker. Our Fred Pleitgen sat down with him in Germany and discovered that he's feeling cautious.
FREDERIK PLEITGEN, CNN INT'L. CORRESPONDENT (on camera): Do you think that your company is out of the biggest troubles? Because you say there could still be hiccups along the way, but do you think that you are out of the most difficult sort of phase of the recession?
JUERGEN HAMBRECHT, CEO, BASF: This year will be a transitional year. With slow recovery, and even development around the world, there will be costs (ph).
PLEITGEN: What do you think needs to be done?
HAMBRECHT: I think confidence has to be brought back. So especially looking to Greece. Greece has to do its homework, has to reduce the spending, within the country, it is very clear. And with this, confidence will come back.
PLEITGEN: How do you view the euro, being a global company, you know it is sort of the devaluation, is that sort of helping you? Is that making things more difficult? It seems like a very volatile environment to be doing business, especially if you are such a big company?
HAMBRECHT: You need to think back to the times before the euro. And we had a crisis in'91, '92, '93, big recession. And all different countries coped with their currencies accordingly in order to improve their competitiveness. This is gone. We have now one whole market. It is our whole market. This is a huge advantage. It is a huge advantage. And now, looking into the euro, I think for us, as a company, we are producing where we are selling, in the region. We are not having a lot of transaction of activities. We have only-
FOSTER: The head of BASF, talking to Fred.
Now companies like BASF are relying on an economic recovery, of course, to come through in 2010. This week we are looking at some of the European economies that are at risk of missing the boat, though. And tonight the former Celtic Tiger that is looking more like a Celtic kitten. In Ireland's boom years growth came largely from the construction business, which quickly turned to dust, when the financial rot set in. Ireland is still part of a dubious fellowship, the recession club, along with Spain and Greece, with jobs hard to come by, unemployment is at a 15-year high of 12.5 percent.
In its latest budget the government was forced to take drastic measures to plug a $5 billion hole in its budget, it announced cuts in pay for public servants, and reduced social benefits as well. Two months before Greece was forced to take very similar measures.
Well, earlier I talked David McRedmond, he is the CEO of the Irish commercial television station, TV3. And I asked if his working life had become more difficult because of the downturn.
(BEGIN VIDEO CLIP)
DAVID MCREDMOND, CEO, TV3: It has been a tough job. And it is, you know, what happened in Ireland like anywhere else, with the recession, in television and advertising it was more like a crash. The market crashed and actually it fell off very quickly around September 2008. So, ever since then it has been extremely difficult.
FOSTER: How has your business coped? How have you managed to get your business through?
MCREDMOND: Well, in a curious sense, the fact that it was so sudden and so severe meant we had to take immediate action.
FOSTER: So, job cuts?
MCREDMOND: Job cuts, and most interestingly, pay cuts. And that is actually what happened across the private sector in Ireland. People took pay cuts, different companies, different industries, and all of in a sense of what has happened in Ireland, in terms of any fiscal rectitude has been driven initially by the private sector. Saying, you know what, we really need to make sure we cut our costs, and cut our cloth so that we can meet this head on.
FOSTER: And amazing how workers, actually, in Ireland have accepted these pay cuts without too much fuss. There has been some local problems, but there hasn't been widespread strikes or walkouts.
MCREDMOND: No. There is actually-I mean it is an extraordinary situation in Ireland. You know, we've been through very bad times in the past. I left Ireland in the 1980s, so did an awful lot of people who were running businesses. We know what emigration is like and we don't want to go through that again. We're fighters and we want to make sure that some of the recent wealth we got, that we don't lose it all. And so, so, for that reason, everybody-everybody in the country has got behind a sense of making sure that we turn this around.
You know, the most-in many ways the most extraordinary thing was for the government, introducing the budget this December, the minister for finance, who is absolutely determined and has done a great job at driving through public sector cuts, to follow on from the private sector cuts, everybody was worried that the government wouldn't go far enough in the budget.
FOSTER: Extraordinary situation.
MCREDMOND: It is. And it is encouraging, because it should mean that we should be able to recover faster.
FOSTER: But it could mean that they knock on the head any recovery that is there right now?
MCREDMOND: There is always that argument. But you know, I think that the situation got so severe, and in Ireland it was exacerbated by a huge property bubble, and exacerbated by problems with the banks, that were on top of the world banking crisis. So, I don't think anybody could look at Ireland and say well, actually there aren't difficult situations that have to be tackled. They have to be tackled and the great thing is they are being tackled.
So, now you know, in February, in the end of February 2010, the situation is not so much that the situation is much better, we are seeing a bit of an upturn in advertising, a bit of an upturn in the economy, though it is very small. The point is the attitude of people is absolutely to make sure that we drive a recovery.
FOSTER: There is a real sense of support for the European Union, the Euro Zone, at least, with in Ireland, isn't there? Because you benefited so much from that; there was this huge long boom that was --
MCREDMOND: Well, it is there.
FOSTER: But isn't that, you are now paying the price for that. So, it was a double-edged sword, isn't it?
MCREDMOND: Well, you know, we joined the European Union in 1973. It was an important culturally, and important politically, and important economically. It is actually been the definition of modern Ireland, has been what the EU has done for us. And what actually happened in Ireland, recently, was there was a debate in the Lisbon Referendum, about two years ago, and this was at the height of the boom. And we voted against it. And we voted against a major European treaty.
And I think then, when the crash came, we all looked and said, what the hell were we doing? You know, Europe is our base. Europe is our major trading area and the euro is our major security. And the euro is, in many ways, what distinguished us from, for example, and economy like Iceland. We were in the euro and the euro gave us that stability. So, while you loose some control, you loose control over interest rates, you loose that. It is a great comfort to know that, you know, you have the backing of a major currency.
FOSTER: The head of TV3, in Ireland.
Now, India's economy is the envy of many in the West, but is it in danger of overheating? Up next, we'll hear from the minister responsible for commerce there.
FOSTER: Welcome back. I'm Max Foster in London and this is QUEST MEANS BUSINESS, here on CNN.
Now, we were telling you earlier about India's economy hitting a sticky patch. Their growth is slowing, it slowed in the last three months of the year. But the government is talking about an upturn in 2010. CNN's John Defterios went to New Delhi to talk with a man in charge of commerce and industry in India.
JOHN DEFTERIOS, CNN FINANCIAL CORRESPONDENT (On camera): It is budget season here in the Indian capital, which means that the ministries are busy carving out their strategies for the next year. Unlike their European counterparts, who are trying to stave off a double dip recession, India is on a staircase to growth; 7 percent for the past year, 8 percent projected for 2010 and '11. And even 9 percent, thereafter.
So, if growth is not the real threat, perhaps it is inflation. This is a premise I put forward to an Anand Sharma, the minister for Commerce and Industry.
ANAND SHARMA, MINISTER OF COMMERCE, INDIA: How to find the right balance. When there is a flow of capital, and there is an increased economic activity, more production, more demand, then there is bound to be liquidity in the system, which is a contributing factor. For inflation, that would be a matter of concern. How to keep it within manageable limits?
We moved from a point when we were talking off deflation, in this country and elsewhere in the world. Thereafter, there has been a significant departure and change, primarily because of the strength of the domestic economy. The performance, both of industry and overall, has been robust.
DEFTERIOS: How do you provide the right calibration here? Not removing the stimulus too quickly, and also keeping a lid on inflation?
SHARMA: What I have been saying calibrated and cautious withdrawal. Though there has been a clear turn around in our industrial production, and also in exports, we cannot overlook the fact that industrial production had nose-dived to 0.1 percent. But we have been able to recover very quickly, primarily, because of the inherent strengths to domestic economy and the consumption, sustainable incomes, and demand. And we have recorded the best industrial production in the last 15 years. It is 16.8 percent. And the core sectors are doing very well.
But on exports, we have been registering negative growth for 13 months, continuously. Having fallen, in the negative, too close to 40 percent in May. We have moved to the positive territory, but every sector has not recovered. There are many sectors which continue to hurt. And the recovery can be largely attributed to timely interventions, policy initiatives, stimulus and incentives, which we have done.
DEFTERIOS: From your vantage point, with growth perhaps over 8 percent in 2010-11, the next fiscal year, how do you see the debt crisis playing out in Europe? It must look, almost very strange, this struggle in the Mediterranean countries get growth back and deal with the mountain of debt.
SHARMA: I think it has to be a coordinated effort. Like the EU is doing it in case of Greece. And this is also a lesson to be learned. How to manage the financial issues, not only at the macro level, but beyond that; banks, financial institutions, lending and the credit policies.
FOSTER: The commerce secretary-the commerce minister of India, speaking to John there.
Now, staying with an economy that is on the up, how is this for a profession that requires a head for heights. If you think your job has its ups and downs, find out why India's coconut pickers are a dying breed.
FOSTER: A brand new feature for you, today. It is a one off item. Let's see what you think of it. We were wondering where Richard is so we decided to attach a camera to him. We are calling it "Quest Cam" today.
There he is. He is talking, of course. He's actually taking your questions for "Back Story", speaking there to Michael. Taking your questions via Facebook. You will be able to see that next week. As you can see, he is working. Rest assured.
Let's have a look at the markets for the last time this hour. The Dow Jones is currently up slightly. Up 0.1 of 1 percent; up to 10,335. Today some posted news on GDP figures. But people aren't getting to excited about that just yet, as you can see.
Now, we live in a fast-moving world. The way people work and live is changing all the time. That includes the types of jobs that we do. Liz Neisloss reports now from India on a profession that is starting to die out.
LIZ NEISLOSS, CNN INT'L. CORRESPONDENT (voice over): Before your coconuts get here, they have to come from here, the farm. And in India, as in many other parts of the world, this is how they get coconuts from the trees, sometimes as high as 70 feet.
India, with its rapidly changing society has a dwindling supply of these climbers. Natason (ph) owns a coconut farm.
(On camera): How hard is it for most people to find climbers these days.
UNIDENTIFIED MALE: Oh, it is very, very difficult.
NEISLOSS: It would seem that there are other ways for people to make a living that is not as dangerous?
UNIDENTIFIED MALE: Or risky. And since they are not getting employment through the year, they take a permanent employment. Once they find it is lucrative, they abandon this profession all together and go for construction work or as a cook.
NEISLOSS (voice over): Chiddibabu (ph) climbs part time. He is using a traditional safety harness. This man's job is to soften the fall of the young coconut to keep it from cracking. No such help for the climber. Once a job passed from father to son, more and more and young people are staying in school. Thirty-six-year-old Dona Shaker (ph) wishes he had.
He tells me, "My father was a climber, and said, stay in school. But age 14 I learned without telling him. One day I was climbing down from a weak tree. The tree started falling and I slipped down 50 feet. I broke my back and I was in the hospital for a year. I can't climb anymore and can't do heavy work."
At age 62, Moonavell (ph) climbs with only a single rope because it is faster. I ask him, when you are climbing, are you afraid?
"I'm not afraid," he says. "You have to forget about height and just climb. Only when people get educated, then they become afraid. I'm not educated. That is why I'm not afraid."
Arjunin (ph) seems to defy gravity. He climbs smaller trees with no rope at all.
From plucker, to seller, they are still counting coconuts, but they know the days of the traditional climber are numbered. Climber Moonavell (ph) tells me, "There is no future in this. But as long as I live, I will pluck coconuts. But that is my career and my life. And then my life ends."
Liz Neisloss, CNN, Chennai, India.
FOSTER: Well very warm there, very different picture though in America's Northeast. And seriously cold conditions that is causing real problems, Jenny.
FOSTER: That is it for QUEST MEANS BUSINESS. I'm Max Foster in London. "MARKETPLACE MIDDLE EAST" is up next.