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QUEST MEANS BUSINESS

Davos Forum Starts; Bombing in Moscow; Future Cities: Mexico City

Aired January 24, 2011 - 14:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICHARD QUEST, HOST, QUEST MEANS BUSINESS: President Sarkozy warns high food prices make for high risk.

And at the Davos Forum the head of the forum warns the economy is suffering from burnout.

I'm Richard Quest. We're live in Davos. And, yes, this I mean business

Good evening from Davos, where this evening delegates are facing up to what's being termed a "new reality". And tonight, of course, events in Russia are casting a shadow over the annual meeting.

The Russian President Dimitri Medvedev was due to give the keynote opening speech on Wednesday. President Medvedev is delaying his departure. He remains in Moscow this evening. And later in the program we'll be talking about what the "new reality" actually means.

For many of us in 2011 the "new reality" can best be defined as expensive. And this was the theme from the president of France, Nicolas Sarkozy, who is laying down the gauntlet, to the world, on this issue. Nicolas Sarkozy says we must stop wild swings in food prices or face food riots and stunted growth.

From Ivory Coast today, a sharp reminder of how volatile the situation is. The price of cocoa leapt to a one-year high. On the streets hardship and hunger is giving people a keen appetite for protest, which began in Tunisia, and now spreading around the region. Yemen, Jordan, Algeria, and even Egypt, where protests are planned on Tuesday.

Mr. Sarkozy's warning about higher food prices and higher risks. Let's go to Paris now, and hear more from our correspondent there, Jim Bittermann.

Jim, why now, has President Sarkozy sounded the alarm? Is it just concern from the French point of view?

JIM BITTERMANN, CNN SR. INTERNATIONAL CORRESPONDENT: Well, no. I think it is more than that, Richard, because France, this year, is going to be hosting the G8 and G20 summits. And one of the things that Mr. Sarkozy has added to the agenda is talk about food prices. About agricultural markets, particularly. He is going to have agricultural ministers in the lead up to these meetings. Meeting here, in Paris, in addition to the economic ministers and labor ministers who would normally meet ahead of these summits.

So, it is kind of a new element that he put in, and today at his new conference talking about the G8 and G20, he zeroed in on food prices, and said that in many cases, that high food prices were a result of speculators. And he said that needed to be regulated. Here is the way he put it.

(BEGIN VIDEO CLIP)

NICOLAS SARKOZY, PRESIDENT OF FRANCE (through translator): It is in everyone's best interest to have a little movement in the markets. And there should be some fluctuation, but a movement that is regulated. The day there are food riots, what country at the G20 table will say that this does not concern them? I don't see a single one.

(END VIDEO CLIP)

BITTERMANN: Richard, it wasn't just the area of food prices, he was talking about greater regulation. He wants greater regulation in all sorts of different economic areas. And one of the things he proposed today is the idea that there should be some sort of a tax on financial transactions. Something that he said would help developing countries and would stop people from speculating so much if they had to pay taxes each time they speculated, Richard.

QUEST: At last year's economic forum it was President Sarkozy that launched an assault, if you like, Western capitalism and banking. When he comes here later this week, is he expected to be controversial?

BITTERMANN: Well, I think he's going to throw down the gauntlet again. I mean, this, I think we are going to hear this now for the rest of this year, from France. They are basically going to push this idea, this agenda, of global governance. And that includes regulation of markets.

He said today, at one point, he was kind of musing, and he said his dream world, the IMF would control the economic situation in the world, agricultural organizations-just one agricultural organization would control the food production. Labor organizations, maybe just one labor organization, one worldwide labor organization, would control social welfare programs. It was quite a-ah, ah, tour de raison (ph), kind of wide view of what the French think should take place in the rest of the world. Now, whether that is going to have any resonance, or gain any sympathy, from the other world leaders remains to be seen, Richard.

QUEST: Jim Bittermann, who is in Paris for us tonight.

At the World Economic Forum, there are obviously going to be talking about this "new reality", but also about how the developed and developing world are coping as recoveries get underway.

There is enormous agenda. Possibly too much. Klaus Schwab is the founder and executive chairman of the WEF. Incidentally, it is WEF's 41st year, they are celebrating their 40th anniversary. Klaus Schwab is seriously concerned. That today the world economy has too much on its plate. I asked him to explain what he means by burn out.

(BEGIN VIDEOTAPE)

KLAUS SCHWAB, FOUNDER, EXEC. CHAIRMAN, WORLD ECONOMIC FORUM: What I mean with it is that we are having to confront so many risks, so many issues at the same time. So people are just coping out, disengaging, the bigger signs of a burnout. Now, what you have to do in a burnout is you have to give new inspirations and you have to give the people the confidence back that they can master the situation.

QUEST: Disagree, I a burn out you have to rest and see where the damage is first.

SCHWAB: Yes, that is right. You have to contemplate what lead to the burnout.

QUEST: Yes.

SCHWAB: But in addition, you need new inspiration. If you just look backwards you never will move out of the burn out.

QUEST: So, we're looking for new inspiration, globally, at the moment.

SCHWAB: New inspirations and learning from the past.

QUEST: Do you ever despair that the leaders are taking so long to deal with the post-crisis world?

SCHWAB: This year, 2011 will be critical. Because until now, for the G20 and for the political leaders, it was easy to work together when you stand with your back to the wall, or at the cliff. But now you have to construct the world of tomorrow. And at the same time, having the burden of your past also (ph), on your back. Those people who make the decisions, take President Obama, take Mrs. Merkel, they all have elections in 2012. They will not be choosing again because they solved global problems, or the addressed the issues of the future. They will be chosen if they solve the real problems of the man in their own country.

QUEST: Is there a danger, then, that domestic political agendas trumps dealing with global issues?

SCHWAB: That's my biggest fear.

QUEST: Finally, who is the one person this year you are wanting to hear?

SCHWAB: I would like to hear to all those 1,280 active people.

QUEST: Aahh!

SCHWAB: Yeah? And?

QUEST: Ahhhh!.

SCHWAB: No, it is true. And I think for me, the most interesting category of people will be the religious leaders, whom we have here. Not necessarily the politicians. Because if we want to get inspired, I think it has to be based on a kind of change, of values, we speak about norms. And we need a kind of reform of our ethical approach to what we have responsibilities for.

(END VIDEOTAPE)

QUEST: That is Klaus Schwab, the head of the World Economic Forum, the executive chairman. And we'll hear more from him later about what he actually thinks we mean by shared norms for the "new reality".

One of the things they will be concerned about here, in Switzerland, well, they have a lot of chocolate in this country. So they know a thing or two about the production. They'll soon be discovering it is getting more expensive. The price of cocoa is rising and that puts up the cost of chocolate, in a moment.

(COMMERCIAL BREAK)

QUEST: Yep, it is actually snowing here in Davos, which mean, of course, great skiing if anyone ever manages to get on the slopes, which doesn't happen at the World Economic Forum.

Now, rising cocoa prices are the latest result of Ivory Coast's ongoing political crisis. Right now, cocoa is trading at just over $3,300 a ton. That is the highest point in a year.

Alassane Outtara, the man recognized as Ivory Coast, by the United Nations, but not of course by (inaudible) says he's still in office. Has ordered a ban on cocoa exports for a month and puts pressure on the political rival, the former president who lost the election refuses to give up power.

Ivory Coast is the world's biggest cocoa producer and provides around 40 percent of the world's cocoa beans. The commodity is hugely important for Ivory Coast's economy.

So, what effect will this have on the Ivorian economy? Not to mention food prices around the world. Nkepile Mabuse has been following the story and joins me now from CNN Johannesburg.

Nkepile, the short question, by banning or putting a suspension on cocoa exports, doesn't he hurt the entire economy?

NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT: Yes, indeed, he does. I mean, cocoa is 15 percent of Ivory Coast's GDP. But of course this is a political game. Laurent Gbagbo, the incumbent, is currently in charge, pulling the purse strings of the country and what Ouattara is trying to do is this man has not listened to other African leaders who have urged him to step down peacefully. There is, of course, that threat to unseat him by use of force. But now, what Ouattara is thinking is if we starve him of his finances, if we starve him of the money that he is getting from cocoa production in the country, then he will be unable to pay his army, which has so far supported him. And that will weaken his position.

So that is what Ouattara is trying to achieve, but it is going to affect the whole country. But he's hoping that it is going to be a short term measure, just to force Gbagbo to step down. Richard. .

QUEST: It is too soon to say, but from your knowledge of the situation, in Ivory Coast, is this a policy that is likely to be approved of by those ordinary people who will be hurt hardest?

MABUSE: Possibly not, Richard. Be we are hearing reports that cargo, which imports-it's an American company which imports 15 percent of Ivory Coast's cocoa, has suspended purchases of its cocoa from that country. And you will remember that cocoa is not only important for West Africa, because Ghana is also a huge exporter of cocoa. And it uses the Port of Abidjan to get its cocoa out. So, in the region is not-the region is not going to be happy about this temporary ban. Because of course the trade of cocoa is very much linked in that region. And it is a big foreign currency earner in West Africa, Richard.

QUEST: Nkepile Mabuse in Johannesburg, for QUEST MEANS BUSINESS tonight.

Now, it is not only food prices that is on the agenda, that we'll be talking about over the week. Oil is going to be another hot topic. The oil ministers from the most oil rich country in the world says there is nothing to worry about, even if they are some inflationary pressures, perhaps.

Crude is trading at $88 a barrel. The price has been all over the place since it plunged last May. The Saudi Arabian oil minister, Ari Niami (ph) says he expects prices to be stable this year. And you'll hear from him a little later in this program.

Still to come, we are in Davos and ready to plant a vegetable patch in a round about, not here in Switzerland, we'll be in Mexico City where we will be showing you a future city plan to create food for the masses. QUEST MEANS BUSINESS, live from Switzerland.

(COMMERCIAL BREAK)

QUEST: Planet Earth is fast becoming the urban planet. The U.N. says half of the world's people already live in cities. And growth is set to swell, especially in China. The world's fastest growing economy could see more than 60 percent of its people setting up house in Chinese cities, over the next 20 years. And that creates huge challenges. Not least of which keeping food on the table. It means the cities of the future have to work hard now to get people to grow their food near home.

Mexico City is ahead of that urban agricultural curve. Mexico City has already recognized the problem, and as we now report in "Future Cities", is actually doing something about it.

(BEGIN VIDEOTAPE)

QUEST (voice over): Expanding cities, expanding populations, expanding needs. If there is one truth in life, it is everybody needs food. Here in Mexico City, they attack it with relish.

LILY FOSTER, CO-DIRECTOR, SEMBRADORES URBANOS: Mexico City is a city that is a hyperbolic example of everything that can go wrong with a modern urban center. And so what we are living is even a decade ahead of what other cities are living in terms of air pollution, in terms of lack of access to healthy food.

QUEST: Meet the Sembradores Urbanos, Lily, Gaby, Carolina.

CAROLINA, LUKAC, CO-DIRECTOR, SEMBRADORES URBANOS: Sembradores Urbanos is an organization dedicated to urban agriculture.

FOSTER: To teach people how to grow food in their homes, in their offices, in their schools.

LUKAC: In small spaces.

QUEST: Urban agriculture, growing food in the city is becoming more popular. At least 15 percent of our food is produced in an urban environment. According to estimates from the U.N.'s Food and Agriculture Organization.

FOSTER: We believe that the cities of the future have to edible. We have to be producing in the city, because of how far way our food comes from, because of all the uses of pesticides, in the modern food system.

QUEST: On rooftops, roundabouts, roadsides, people are growing food, mainly to eat themselves, but sometimes to sell.

SEDEREC is the city body which funds these projects. It started in 2007 and now helps 184 projects like this around the city.

MARGARITA GARCIA, SEDEREC (through translator): This particular project started in 2007 and has been very successful. It also goes some way to help people cope with the local affects of the global financial crisis.

FOSTER: We grow lettuce.

LUKAC: Oregano, basil.

FOSTER: Five different kinds of tomatoes.

LUKAC: Chives.

FOSTER: We have blue corn, we have red corn, we have red and blue corn, black corn, yellow corn. Nobody is going to dedicate their entire day to growing their food, so what we do is we work to develop grow models that are practical, that people who have an eight-hour work day can still have the opportunity to grow a percentage of their food at home.

QUEST: Learning how to grow your own food could become invaluable, as rapid urbanization means more people competing for resources.

Which is exactly what is happening a this young offenders institution. Sembradores Urbanos comes here every few weeks to teach the young men here about food. Today they're learning compost.

This is one of several community for adolescents in Mexico City. We have carried out a series of workshops on how to prepare garden beds. How to plant seeds, how to plant seedlings. Today we focus on compost. We're hoping to teach youth about the importance of healthy food, and giving them practical life skills. Skills that they can use when the reenter society.

UNIDENTIFIED MALE (through translator): They have showed us how to dig the earth, and plant. What you can plant during each season and how you can make compost. It's great, because we are learning new things.

QUEST: Across town at this busy junction, the women have squeezed a vegetable garden and a tree nursery onto a roundabout.

GABY VARGAS, CO-DIRECTOR, SEMBRADORES URBANOS: This is a roundabout, which is located in one of the-like the major avenues of the city, the downtown area. This is the first like public space that has been turned into this kind of project in the city. We are working with people from the government so we can teach them about urban gardens and they can teach other people in urban places.

QUEST: According to the U.N. the urban poor, typically spend between 40 and 60 percent of their income on food. And 65 million Latin Americans go to bed hungry every night. So growing your own, could make all the difference in the purses and stomachs of Mexico City's poor.

CAROLINA: For me, urban agriculture is incredibly modern, it is the future. The solution in order to create a more sustainable city is people being responsible about what they consume. If we don't understand where our food comes from or where our waste is going, then there will be not future in the cities.

GARCIA (through translator): Urban agriculture is nothing new. It is some thing which civil society has been doing for years. On top of that, people can trade their products locally, in the local community. It is very satisfying when neighbors come around and ask for a lettuce or coriander, or something, and can cut it themselves.

QUEST: Mexico City is trying to become more green with parks, trees, and its commitment to support urban agriculture.

MARTHA DELGADO, ENVIRONMENT SECRETARY, MEXICO CITY: It is going to be more important with the years. In the future we need to depend less on the transportation of goods. Water is going to be scarce. Fuels are going to be scarce. And everything is going to be very expensive.

QUEST: Positive activity like this and the work of groups, like the Sembradores Urbanos, are for a local solution to the global problem of food security. With more than half the world's population now living in cities, urban agriculture can help provide food for every table, and feed the cities of the future.

(END VIDEOTAPE)

QUEST: "Future Cities" our report from Mexico City.

Now, in just half an hour's time from now, his Golden Globe performance shocked viewers and celebrities alike. Now, see the interview that made headlines of it own. Ricky Gervais on "PIERS MORGAN TONIGHT" 30 minutes from now, immediately, of course, following QUEST MEANS BUSINESS. We will turn our attention to the Q25 when we're back after this break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest in Davos, QUEST MEANS BUSINESS. And we will continue in just a moment. But first, as always, the news headlines come first. And tonight, with extended reports from what has taken place at the Moscow Airport. Hala Gorani is at the CNN Center.

(NEWSBREAK)

QUEST: Hello, I'm Richard Quest in Davos.

QUEST MEANS BUSINESS and we will continue in just a moment.

But first, as always, the news headlines comes first.

And tonight, with extended reports from what's taken place at the Moscow airport.

Hala Gorani is at the CNN Center -- good evening, Hala.

Hala Gorani, CNN correspondent: Good evening, Richard.

First, of course, we want to update our viewers on the situation at Moscow's Domodedovo Airport, where a bombing has killed dozens of people. Thirty-five people dead, is the latest death toll.

CNN's Matthew Chance is there and joins us now on the phone from Moscow -- Matthew, you are at the airport.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right. And the latest from the investigators is the arrival of -- of Domodedovo Airport, which was affected by this suicide bomb blast and has now been sealed off from the public, as security forces and investigators picked through the scene to try and gather what evidence they can. The latest from there is -- is that they -- tarps from Interfax, that's one of Russia's main news agencies, saying that there are parts of the suicide bomber's body that have been identified by the investigators, giving some credibility to this idea that it was, indeed, a suicide bomb attack that took place here.

Also, what we're hearing, five kilograms of explosives are (AUDIO GAP) that caused such horrific casualties. And let's just remind our viewers about those casualties. Thirty-five people confirmed dead, more than 150 injured, some of them very critically, indeed -- Hala.

GORANI: What is the situation at the airport now -- Matthew?

CHANCE: Well, it's a chaotic situation that was -- that greeted us a few hours ago when we first arrived. It's eased somewhat. It's quite surprising because, actually, the operations of the airport do not seem to be as -- have been disrupted quite as severely as you might expect. Indeed, the departures from the airport don't seem to be affected at all. Thousands of people have still been coming throughout the course of this evening to take their flights overseas. Domodedovo is, of course, the main gateway in and out of the -- the Russian capital from -- from countries overseas. The -- the outbound flights haven't been disrupted too much. Indeed, nor have the inbound flights. It's just that the passengers, when they come in, instead of being routed through the normal arrival terminal, which had been locked down, as I say, they're coming through the departures terminal. So it's very crowded inside, but the flights themselves don't seem to be disrupted that much.

GORANI: All right, Matthew Chance, thanks very much, with the latest there, coming to us from Russian news agencies that investigators may have found portions of the body of what they believe to be a suicide bomber.

We'll continue to follow this story, of course, and bring you the latest.

Quickly, before we get you back to Richard, some other stories we're following this hour.

Palestinian officials are denouncing reports by Al Jazeera that the Palestinian Authority offered Israel major concessions during peace negotiations in recent years. The network claims to have more than 1,700 documents related to those negotiations. CNN has not verified the authenticity of the documents.

Also, potentially a dangerous situation ahead in Lebanon. Protests are flaring up this hour in parts of the country over the possibility the caretaker prime minister will be replaced by a Hezbollah-backed candidate. Supporters of Prime Minister Saad Hariri have been burning tires and blocking roads across Lebanon and they are calling for more protests tomorrow, Tuesday. Mr. Hariri has said he will not be part of a government headed by a Hezbollah candidate.

Also, some significant developments in Tunisia. The army chief there is warning the anti-government demonstrators that a power vacuum could erupt in Tunisia if they force interim Prime Minister Mohammed Ghannouchi out of office before new elections. Demonstrators clashed again with police and security forces on Monday. They say they want another power structure in Tunisia, that the interim government still has too many ties to the ousted president, Ben Ali.

That's a look at your headlines -- back to you, Richard, in Davos.

QUEST: Hala Gorani, many thanks.

Now, CEOs from some of the world's largest corporations will be arriving here over the next 48 hours. There will be major players from the corporate world and the world of finance.

We're in the middle, of course, of the earnings results season from top companies. And so far, as you perhaps can see from our Q25, things have been going rather well for the greens. The greens clearly have it at the moment.

We brought our own little Q25 board with us -- one, two, three, four, five, six, seven, eight -- now, the greens greatly outnumber the reds at the moment. If this is all a little bit small for you, and perhaps it's along the cheap side, we do have the real thing to show you, the big one with all the big boards in -- back in our studio.

Esa (ph) will be putting the balls or the discs down and showing us how the Q25 will be developing. But first of all, we need to find out which companies we are talking about.

Maggie Lake is in New York, where we will talk about the chips -- Maggie, the first company was McDonald's. McDonald's had results today. The results, well, actually, on our criteria factor, there's no real discussion on what they get.

MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: No, it looks like we're evening up the score here a little bit today, Richard. They get a red. They didn't get any of them -- zero out of five. But it -- it's actually not such a bad looking report. Part of it, of course, was due to some really awful weather, not just here in the U.S., but a lot of the unusual cold and snow in Europe. And Europe, by the way, a bigger market for McDonald's than the U.S. I had no idea about that.

But for me, the headline here is they are a victim of their own success. Remember, they had a really good year last year, a good couple of years, in fact. But it wasn't just the dollar menu and the sort of recession offerings that they had. They did coffee, espressos, smoothies, all sorts of drinks. And that really boosted their bottom line. So they have very hard comparisons to meet. And I think that's what's happened here.

QUEST: Ah, but the truth about McDonald's is, even if it's weather- related, Maggie, we've got austerity coming forward, we've got problems of money and cutbacks. So the outlook cannot be that strong.

LAKE: That's right. And that's why they got zero. They were not upbeat about the future necessarily. You're right, there are some big headwinds. And McDonald's acknowledges those. They have to get a red.

Ok, so the first thing, I'm here in Davos. I'm going to put a little red in so we can keep track of exactly what's happening with our Q25 little board -- well, it's cheap and cheerful. But we really need to see it done properly in London.

Esa has got the big disc.

Can we please have a red for McDonald's, if you don't mind?

ESA: For McDonald's -- here you go. McDonald's gets a red.

QUEST: Now, we move on to Halliburton, a company that has been enmeshed in the Macondo crisis, of course, in the Gulf of Mexico. It has been numerous contracts in Iraq, former Vice President Cheney, Dick Cheney, was majorly involved with it.

The results were impressive, though, nonetheless.

LAKE: They did pretty good. They got three out of five, Richard. And you're right, there is always an image issue or they always seem to be in the news for the wrong reasons, Halliburton. But they are looking pretty good. And -- and they didn't -- they weren't optimistic about their future. That's one of the things. They were a bit cautious, a bit concerned about profit margins. But they did have growth in all sorts of areas. They've got more contracts in Iraq. They did a lot of onshore. There's strength in North America. They're developing offshore drilling, which was hurt in the Gulf of Mexico. They're keeping their staff there, but they're developing that in the Eastern Hemisphere.

So they're really rounding out. And one of the things investors really like about this -- it's not one of our criteria -- but they trade at a 20 percent discount to some of their peers and rivals. So it makes them look attractive and they're looking pretty good. So I think they get a green.

QUEST: They most certainly do -- Esa, for -- for Halliburton, I call upon you to do the honors and give us a green.

ESA: Green for Halliburton.

QUEST: And please keep track of where we stand with them all. I'll be wanting an up sum at the end.

Our final Q25 result tonight, Philips. Before we go any further and discuss Philips, bring Esa back, because the results from Philips were deeply unimpressive.

So even before we've talked about it, let's have the street of shame for Philips and give them the red that the numbers suggest.

While Esa puts the red in for Philips, you tell me, Maggie, what was really the dog (ph) of this.

LAKE: Yes, the consumer products division for Philips is like an anchor around that company, Richard.

In terms of our criteria, they only got one out of five and that was earnings growth year over year. And that's basically because they were so bad. This is a reverse of McDonald's. And here, the comparisons were easy, because they were in such a state last year.

But everything else came out a red. And that division -- and we're talking about the TVs, you know, consumer electronics, is really the weak spot. They actually did OK with their health care and some of the lighting divisions. But that consumer products division is an absolute dog.

The other thing people didn't like here is they were sort of cautious talking about consumer sentiments being stifled...

QUEST: All right...

LAKE: -- whereas GE, who competes with them in some spaces, was very optimistic, saying they see the recovery broadening. So investors not happy with that.

QUEST: And we've given the disc the red, but in fairness to Philips, Maggie, we do need to hear from the chief executive for his defense for his results.

(BEGIN VIDEO CLIP)

GERARD KLEISTERLEE, CEO, PHILIPS: We had a few factors working against us. Our low consumer sentiment still in the developed markets of the U.S. and Western Europe; some, less working days than in the year before and not a very good selling season in all at the Kajuma (ph) site.

That all added up together in a negative way to lead to numbers that may disappoint at the end of what actually is a very strong year, 2010, for Philips.

(END VIDEO CLIP)

QUEST: All right, Maggie, that's their justification. They still get a red. And as we come to the end of tonight's Q25, we're nearly at it -- Esa, just bring us some reminders where we stand across the 25 at the moment.

ESA: So at the moment, Richard, we've got 13 green and we have seven red.

QUEST: All right, we'll finish them up tomorrow.

Esa is with the discs.

Maggie is in New York.

We thank you.

The Q25, more on that tomorrow.

The markets and how the Dow is doing. The Dow is edging toward 12000. Now, it's gained more than 7.3 percent, more than 7 percent since Black Friday's sales -- eight straight weeks of gains.

Look at this. Only 30 odd points -- less than 30 points off 12000. It's at its highest level since June of '08. If it goes through that 12000 during the course of this program, we will bring that straightaway to you.

Europe now and the major markets finished up. Mines and farmers did well in London. The Irish ISEC was almost up more than 1.5 percent. With the government there losing its majority, there is now rumors of when that election will take place. It's supposed to be March the 11th. Highly likely that Bank Ireland will have to call it first. It was a day of trading for unfamiliar faces and to an unfamiliar name, a company, International Consolidated Airlines Group made its first debut. It's the name for the new B.A.-Iberia merger. Flat at $285 a share, around $4.50.

When we come back in a moment, food riots, growing unrest and powerful people watching -- we're in Saudi Arabia to find out what the Riyadh Forum made of the new reality.

(COMMERCIAL BREAK)

QUEST: Now, just a second or two, I was talking about Ireland and the possibility of going earlier to the polls because of the Greens pulling out the coalition. Now it seems February 25th is the date that people are talking about, two weeks earlier than the prime minister, Brian Cowen, who had originally chosen March 11th.

Irish politicians have been holding talks to set a time frame. The discussions focused on how soon lawmakers can pass new austerity measures, which are a crucial part of any bailout package from the E.U. and the IMF.

As the world's most powerful people gear up in Davos, North Africa and the Middle East are becoming flashpoints for escalating unrest over the basic staples of life.

In Tunisia, more than 1,000 demonstrators were back on the streets of the capital on Monday. Various reports say the country's cabinet is undergoing a reshuffle. The ongoing protests, sparked by poverty and unemployment, brought down Tunisia's president 10 days ago.

Their effect is still spreading. Violent demonstrations in Algeria erupted over the weekend. The chief culprit, a spike in food prices.

In Jordan, frustration over the high price of sugar and wheat has drawn some 5,000 protesters to Amman and other cities.

The biggest economy in the Middle East is watching the unrest with concern. Saudi Arabia is playing host to the Global Competitiveness Forum, traditionally scheduled before WEF and Davos. Some top chief execs go to both.

One of them is CNN's John Defterios, who is in Riyadh, to find out what leaders there think of the unrest spreading across North Africa.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN CORRESPONDENT: We're in the home of the world's largest oil reserves, the largest oil producer, and, by far, the largest economy in the Middle East. But despite those facts, there's a watchful eye by government and business leaders on the activities in North Africa.

It's fair to say there's been a domino effect. Of course, it started in Tunisia, spread to Algeria, to a minor effect, Egypt, and over the weekend in Jordan and south of Saudi Arabia's border, in Yemen.

(BEGIN VIDEO CLIP)

AHMED FATTOUH, CEO, GLOBALIST CAPITAL MANAGEMENT: If you are unemployed and don't have income and the cost of all goods and services are going up, it his you very directly. And it's not a theoretical issue that you have a problem with corruption or a problem with the political system. It's you can't put food on the table and -- and you get to a -- a tipping point.

(END VIDEO CLIP)

DEFTERIOS: Unemployment, for example, here in Saudi Arabia is running 10 percent. It's 14 percent in Jordan. And the general rule of thumb is that it's double the rate amongst the region's youth, which makes up about two thirds of the population.

The other key factor in place here is the rising cost of food. We're talking about meat, rice and wheat. And this also took people to the streets in response.

(BEGIN VIDEO CLIP)

KAMAL AHMED, COO, BAHRAIN ECONOMIC DEVELOPMENT BOARD: We have to be proactive. We have to look ahead to the issues. We should not wait to have a crisis in order to address the issues. If we understand our challenges, our situation as countries, we will be able to put the plan which will address all the challenges that we are going to face. And we should not wait until we have the problems and then trying to fix it.

(END VIDEO CLIP)

DEFTERIOS: This rising inflation is forcing governments to hand out subsidies. We've seen that in Saudi Arabia and also in Kuwait. So that works for the wealthy Gulf oil producers, but not in North Africa, where the budgets are constrained.

John Defterios, CNN, in Riyadh.

(END VIDEO TAPE)

QUEST: At least one participant at the Riyadh meeting is talking about price stability. Saudi Arabia's oil minister seems more demand for crude this year, thanks to the growing recovery.

(BEGIN VIDEO CLIP)

ALI AL-NAIMI, SAUDI ARABIAN OIL MINISTER (through translator): The market this year will be in total equilibrium in terms of supply and demand with the appropriate commercial stock and spare production capacity that can be used in any unexpected political or natural emergencies in the producing or consuming regions.

(END VIDEO CLIP)

QUEST: Now, when we come back in just a moment, in Davos, they're talking about the new reality. We'll question what that actually means.

(COMMERCIAL BREAK)

QUEST: Now, welcome back to Davos.

There are more details are now becoming clear about what's been happening with President Medvedev, who, as, of course you'll be aware, has delayed his visit to Davos. now, the World Economic Forum is saying he is still expected to give the opening address on Wednesday night; however, obviously, as a result of the events at the Moscow airport he is bringing -- he's cutting short his visit to the World Economic Forum and to Davos.

But the clarification tonight is that Medvedev will still be coming here. And, obviously, we will be coverage his opening remarks if and when they take place on Wednesday night.

The theme in Davos, as all last year, was rethinking, redesigning and rebuilding.

A year later, how far have they actually come?

This year's theme is all about the new reality.

But what does that actually mean?

Here's Klaus Schwab.

(BEGIN VIDEO CLIP)

KLAUS SCHWAB, EXECUTIVE CHAIRMAN, WORLD ECONOMIC FORUM: It's very simple. We are living in a completely new reality. It's the first meeting of the second decade of the 21st century. And during the first decade, the world has completely changed. And what we need is all those new shared values to deal with this new reality.

QUEST: But what is that reality?

SCHWAB: Yes, it's -- it's clear. Look, I would call it post- digitalization and post-globalization, which means we are now in a completely digitalized world and we are in a completely globalized world. So we have to find some mechanisms of values to deal with the post- digitalized and the post-globalized world.

QUEST: So that new reality, then, is a much grander concept than just unemployment, slow growth, potential inflation?

SCHWAB: No, those problems still are all around. But we deal with those problems in a completely new context. You have the shift of the geopolitical and geo-economic center from North to South. You have WikiLeaks. I could go on and on and tell you what's the phenomenon of this new reality are.

(END VIDEO TAPE)

QUEST: We're going to hear that phrase again and again. You'll be sick and tired of it by the time we get to the end of the week -- the new norms -- the shared norms for the new reality.

Well, some fear that the U.S. job market is exactly what the U.S. -- new reality is all about. A debate is raging over whether millions of jobs lost during the Great Recession will ever come back.

Have they gone forever?

He CNN's Maggie Lake in New York.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I know many of you are figuring out what calculator you're going to bring in.

LAKE (voice-over): A new semester has just begun at the Mildred Elley School in Lower Manhattan. One of the students back in action, Jeff Bodkin.

He lost his full-time job as a construction worker last year and decided to make a major career change.

JEFFREY BODKIN, NURSING STUDENT, MILDRED ELLEY SCHOOL: How is everything?

My name is Jeff.

I'm you're nurse for today.

LAKE: He's training to become a licensed nurse.

UNIDENTIFIED FEMALE: Excellent.

BODKIN: This is a whole new opportunity for me, I mean experience. I never expected in a million years I'd be turning into a nurse, but here I am today.

LAKE: Bodkin is not alone in being forced to rethink his career. Despite a rebound in economic growth more than 14 million Americans remain out of work. Officials at this school specializing in retraining say it is a whole new reality out there for job seekers.

FAITH TAKES, PRESIDENT, EMPIRE EDUCATION CORPORATION: It's not the same old same old. They need new skills to enter the job market, because those old jobs are gone forever.

LAKE: Part of the problem, the abundance of workers in countries like China and India who will do similar jobs for a fraction of the cost. But some economists say structural changes such as advances in technology are having an even bigger impact.

ZACHARY KARABELL, PRESIDENT, RIVER TWICE RESEARCH: Even if you're a small business that's doing well today, you have at your fingertips technologies that actually make it less meaningful for you to hire an additional worker. You can use PayChecks for your payroll. You can use Intuit and Quicken for your accounting. And those are the kinds of things that you would have hired an administrative assistant for even five or 10 years ago.

We are using technology more and more to become more efficient. And one of the downsides of that is that it's eliminating the need for certain types of jobs.

LAKE: Among the hardest hit, factory workers. Since the late 1970s, the U.S. has lost more than seven-and-a-half million manufacturing jobs.

But not everyone is convinced the most recent round of job losses is permanent. Economist Mike Konczal argues much of the pain is due to temporary factors stemming from the financial crisis.

MIKE KONCZAL, ROOSEVELT INSTITUTE: We're not less productive. We're not less smart. We're not less capable as a people, as a nation. What happens is we had the shock to the -- we -- we made a bad mistake with thinking housing was worth more than it was.

LAKE: Konczal says the housing crisis delayed the jobs recovery by limiting people's ability to find work.

KONCZAL: If you have an underwater mortgage, it's very different to sell it. It's very difficult to sell a house period in this economy. So if you want to move to a new city to get a promotion and start a new career and your house is 30 percent underwater, you -- your options are much more limited than if you could sell it.

LAKE: Economists in this camp insist as the economy heals and demand returns, so will jobs, even in hard hit areas. Ford's announcement that it will hire 7,000 people by 2012 seems to support that.

But Jeff Bodkin can't afford to wait for his old job to return. A family man, he must have a steady paycheck.

BODKIN: I hope to finish the first (INAUDIBLE) in September and graduate with flying colors. And from there, just take off flying in the - - in the medical field and hopefully work for a hospital.

LAKE: A former construction worker forced to build a new career in a changing workforce.

BODKIN: Take care.

LAKE: Maggie Lake, CNN, New York.

(END VIDEO TAPE)

QUEST: And all throughout the week, we'll be talking about the new reality. And we want to know what your new reality is.

You can Tweet @richardquest what your new reality is. And you can also e-mail, which, of course, is CNN.com/quest. @richardquest and quest@CNN.com. And by the end of the week, we will have given away a few of these to some of the best responses. They are what the -- what the fashionable forum wearer has got this year -- a CNN scarf and hat. You'll see it after the break.

A Profitable Moment is next.

(COMMERCIAL BREAK)

QUEST: Appropriate for tonight's Profitable Moment from Davos, where it is snowing tonight.

They are theming this forum Shared Norms for the New Reality, a phrase that you'll be sick and tired of before the week is out.

While many of us are wondering what it actually means, Klaus Schwab tonight was robust. He told us of the things it involves -- a shift in global power from North to South, West to East, a world that has seen globalization at its ugliest, that is tangling daily with digital technology.

Some things don't change -- the questions about whether it's worth being here will be raised again and again.

Well, I hope by the time we get to Friday and you've heard from the top chief exec and government ministers, you can all agree you heard the best right here.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in Davos, Switzerland.

Whatever you're up to in the hours ahead, I hope it's profitable.

Piers Morgan is after the news headlines.

END