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QUEST MEANS BUSINESS
Ministers Call For Transparency At Global Level; Zarak: More Information To Tax Officials; Gordhan: Economy Needs "National Cohesion"; Shareholder Revolt Over BP CEO Pay; Two Years Since Chibok Girls Abducted; Brazil Supreme Court to Meet for Extraordinary Session; Sanders, Clinton Spar Before CNN Democratic Debate; Lagarde: Brexit Serious Risk; Top Oil Exporters to Meet This Weekend; Putin Discusses Economy. Aired 4-5p ET
Aired April 14, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: Most of the big gains just evaporated as the session moved on. Time to hit the gavel. I have a feeling it's
going to be a robust one today. Oh yes, look at that. Knock the bejeebus out of it. On Thursday, it's April 14. We're at the IMF and spring
meetings in Washington. This hour, you're going to hear from Panama's deputy economy minister. Speaking exclusively to us, he's worried about
the damage to his country's reputation. The OECD secretary general, he's called on Panama to be more transparent about its financial dealings. And
South Africa's finance minister, he's warning of the economic damage of a raging political crisis. I'm Richard Quest, live at the IMF headquarters
in Washington, where of course I mean business.
Good evening from Washington where finance ministers, along with central bankers, are all here for their spring jamboree. The organization for
economic development and the international monetary fund and the so-called European G5 ministers are all expected to call for action against tax fraud
and money laundering. They're due to hold a press conference here in Washington where they're going to be discussing measures. They say they
were going to do it anyway, but it's likely they've been galvanized into action by the revelations of the Panama Papers. They're going to be
talking for more transparency, greater openness, and more action against money laundering and anti-terrorism. To talk about this and other issues,
the Eurogroup president of the Dutch finance minister is with me. Good to see you, sir, as always. This collection of ministers, this discussion,
this Panama Papers, what is it that you now want to happen? Because surely the papers told you nothing that you didn't already know.
JEROEN DIJSSELBLOEM, PRESIDENT, EUROGROUP: Part of that is true, and that's why already in last five years, work has started on transparency and
tax issues. Much more open, much more working together between tax services internationally, and that work will continue. But things like
common reporting standards, having an ultimate beneficiary register -- those things need to be implemented everywhere, not just in Europe, but
also, for example, in Panama.
QUEST: Panama's vice minister will say on this program in this hour that Panama does now announce that it is going to introduce -- introduce common
reporting standards. Will you bear with me, minister? We're going to just go to this press conference for a moment or two to listen to it if we may.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The secretary general of the OECD, Angel Gurria, and of course our hosts, the managing director of the IMF, Christine Lagarde.
There's not much time. We do have 30 minutes, so I suggest we -- let's get started. Minister Schauble, would you be -- will you be so kind to kick us
WOLFGANG SCHAUBLE, MINISTER OF FINANCE, GERMANY: Thank you. Good afternoon, ladies and gentlemen. First of all, I would like to thank the
IMF, and especially Christine Lagarde, for their hospitality. It's always a pleasure to be here in Washington. Today it's especially true. I'm very
happy that we managed to hold this press conference today, even on such short notice. It once again shows a high level of ambition amongst a group
of the G5. We already pushed forward the agreement on international steps against tax fraud and unfair tax practices. And the progress we made in
recent years is indeed impressive. Starting at the G5 level with our common reporting standards, we were hoping to take our initiative to the
global level. And the current events of the Panama Papers confirms that we were right to strongly push for such an agreement. But our work is not
done yet. Though we will use this momentum and take further steps along the path we have taken. We need to ensure that all relevant countries and
jurisdictions implement the new standard for the automatic exchange of financial account information. The current events show that identifying
the ultimate beneficial owner behind coverage access is key to fight tax evasion, money laundering, and illicit finance effectively.
[16:05:05] In the future, nobody should be able to hide his activities behind complex legal structures. And with tax evasion, this requires a
global response. At the E.U. level, we already agreed on establishing a beneficial owner register. However, this can only be a stepping stone
towards a global solution. Therefore, we will launch a global initiative to increase beneficial ownership transparency. This includes exchange of
information of the beneficial ownership of companies plus other relevant entities and structures. The OECD, in cooperation with the efforts, is the
most prepared body to develop a single standard for that exchange. I would like to use the opportunity to thank the OECD and thank Angel Gurria for
the excellent work the OECD has done in the last couple of years since we both started the initiative and our Mexican President (inaudible). The
first step, we will launch a pilot initiative within the G5 for the automatic exchange of beneficial ownership information. During the next
days, we will promote this initiative among our international partners and I am confident there will be a lot of support because this issue concerns
all reputable nations.
(END VIDEO CLIP)
QUEST: Listening to this, as the Dutch Finance Minister, you hear what they're talking about. There's nothing revolutionary going to be announced
here, but it's, in many ways, a reaffirmation, isn't it? Now George Osborne speaking now. It's more a reaffirmation that something has to be
DIJSSELBLOEM: I think it's more than that. I think it's what we have agreed in the OECD context that we should sort of roll it out across the
global cooperation. So having an ultimate beneficiary owner register is something we need from every country because otherwise you can't get it
sealed, you can't get the real information. So that's basically what the ministers are saying and I think they're right. What we have agreed so
far, everyone really needs to comply to it.
QUEST: So beneficial ownership, knowing who owns things, common reporting standards, so that the information is distributed automatically, not just
upon request. What else is there involved here?
DIJSSELBLOEM: I think where tax evasion is concerned, those are the key issues. Where tax planning, aggressive tax planning for corporates is
concerned, we need to do more.
QUEST: What is so wrong with aggressive tax planning? That's what people are supposed to do. If the rules allow you to do it, what's wrong with
DIJSSELBLOEM: Well, first of all, it's very much the question whether it's all legal. I'm not sure all the people that have been trying to hide from
my internal revenue service in Panama have been doing that in a legal way. That's number one. Secondly, I think that we should all pay our fair share
in taxes because otherwise I can't finance the roads, the schools and the hospitals in my society.
QUEST: You're adding a moral element to it?
DIJSSELBLOEM: Absolutely. So the legal issue is very much on the table, also in the Panama case, but also the moral element. We all need to
contribute, and if so required, we will close the net also in a legal way.
QUEST: What is this moral component that you're all banging on about? At a time when -- you know, if the rules say you can do something and you do
it, what's morality got to do with it?
DIJSSELBLOEM: Then perhaps we need to change the rules, first of all. And I'm very motivated to do that when necessary. But I think it's a broader
issue. There is a lot of insecurity in our societies. Populism is at a rise, and it's very much about inequality. People are feeling that they
have to pay into the system, getting less out of it, and the big corporates and the very wealthy are not paying their fair share. It's a big, big
issue in the U.S. and in Europe about fairness, and we need to address it.
QUEST: I need to just ask you briefly and finally about Greece. Are we -- are we going to be back in trouble in Europe with Greece? Is bailout three
going to fall apart?
DIJSSELBLOEM: No, first of all, it's not a bailout, it's a deep reform program.
QUEST: It's in trouble though.
DIJSSELBLOEM: It's not in trouble. We're actually coming to a very important point to take final decisions on big reforms, pension system tax,
and on the depth issue. And inevitably, we need to bring those issues together and come to a political agreement. It's going to happen in the
coming weeks before we're into trouble again.
QUEST: Good to see you, sir.
DIJSSELBLOEM: Thank you.
QUEST: Now, we'll continue to talk about Panama. We're going to now join the British finance minister, George Osborne who's talking at the IMF.
(BEGIN VIDEO CLIP)
[16:09:54] LUIS DE GUINDOS, MINISTER OF ECONOMY AND COMPETITIVENESS, SPAIN: Emerging demand has arisen not only among politicians but by the
society's reserve to unveil the true ownership of corporations in order to guarantee a fair international tax system and to fight against criminal
behaviors. From a practical perspective, the establishments of central registers, we believe, could be a way to accomplish this objective. It is
time for us, I believe, to deliver a comprehensive response. We took a first step through the automatic exchange of information, and now we have
started a new process which I hope to be as fruitful as the first one.
UNIDENTIFIED MALE: Thank you. I invite the finance minister of Italy, Pier Carlo Padoan, to share his views with us.
PIER CARLO PADOAN, MINISTER OF FINANCE, ITALY: Thank you very much, and also let me share my colleagues in thanking the IMF for hospitality and the
OECD for exceptionally good and effective work as usual in these areas and others. Let me just say that we are witnessing today the fact that in the
face of the --
QUEST: So, what they are talking about at this press conference, of course, is the measures that this European G5 intend to take to tighten the
net on financing of terrorism, money laundering, and tax evasion. It all comes about because of the so-called Panama Papers, which seems to have
been a revelation about just how extreme and extensive all this is still going on. Now in an exclusive interview with this program, Panama has
announced it will begin transferring information on nationals to tax authorities. The big complaint in the past has been that Panama didn't do
this. You've just heard the ministers talking about it here at the IMF. Ivan Zarak is the Panamanian deputy economy minister. He joined me a short
while ago and told me, the plan here at the IMF spring meeting in Washington, they're going to do it.
(BEGIN VIDEO CLIP)
IVAN ZARAK, DEPUTY MINISTER OF ECONOMY, PANAMA: Panama has announced from September 30 at the United Nations that Panama is committed to the
automatic exchange of information on a bilateral basis. We're going to do that. We're going to announce that in a more forward way, that we're going
to adopt the CRS standard which is a standard that has been implemented by the OECD countries.
QUEST: What does this mean in English?
ZARAK: Well, we're going to exchange the information of tax persons of each jurisdiction on an automatic way, which has been the system that has
been adopted by more than 90 jurisdictions.
QUEST: So currently, Panama does not automatically send information about nationals to other countries around the world?
ZARAK: That is exactly right. We do it by request.
QUEST: And you're telling me from -- you're announcing today that Panama will, in the future, automatically send names of nationals to national
ZARAK: That is absolutely correct.
QUEST: How far is today's announcement the result of the Panama Papers?
ZARAK: Well I would say, we've been implementing a series of reforms and this was the next step. Like I said, on September 30, the President said
as much before the United Nations, so -- it's more of a catalyst than anything else, because the President already announced this on September 30
and announced it publicly that we're open to the bilateral exchange of information.
QUEST: But you're doing it now?
ZARAK: I'm reiterating the point now and I'm saying that we're good on the CRS, the common reporting standards of the OECD.
QUEST: How worried are you that this is damaging the very fabric of your economy now?
ZARAK: What worries me the most is the reputational factor. Not the direct factor of GDP, but the reputational factor of people saying, well,
if Panama is not behaving well as a global citizen, we shouldn't go there. So we're going to do whatever is in our power to comply with international
standards, to comply with the expectations of the international community, and to being a good global citizen.
QUEST: Where does Panama stand, in that sense, on the moral question, then? And by that, I mean, again, I'm taking off the table terrorism
financing, money laundering, but I'm putting on the table those people who just want secrecy so that people don't know what they own or they want to
put their assets aside so that others can't see what's happening. The moral, the ethical question -- that's what people say places like Panama
ZARAK: Well, let me put it clearly. We're committed to transparency. We've shown as much these last two years. We're committed to implementing
the necessary measures. We're committed to being a good global citizen, but this is not a problem just of Panama. Let's be clear about this. We
have implemented significant reforms. There are plenty of reforms we have to make, but this is a supply problem. The problem is there. There is
plenty of blame to go around in the Panama Papers.
QUEST: A final question occurs to me. You're here at the IMF and world bank.
QUEST: Be honest with me, minister.
ZARAK: We always are.
[16:15:02] QUEST: In all your discussions here, that's all anybody's asking you about this year, isn't it? Everybody is coming up to you and
saying, Panama Papers, Panama Papers.
ZARAK: I just met with the Pakistani finance minister and, you know, we've never talked and he said, you should be going through a difficult time.
You ran into the Panama Papers. And I said yes, you're absolutely right. But I can tell you the rest about how we're doing in our economy and you
would get a totally different perception.
(END VIDEO CLIP)
QUEST: That's Panama's vice minister on the economy making it clear they will now join the common reporting standards which is something that the
influential names in global finance, who are hear in Washington, who have descended on the IMF. Now, if it is -- the tulips are out, then it must,
of course, be the spring meeting of the IMF and the world bank and indeed, the glory of the tulips are everywhere, along with the cherry blossoms in
Washington. The weathermen for the global economy, though, are warning economic storm clouds are gathering and those tulips could be turning, well
downturn just a cloud or two away. Already, the economy has bloomed too little for too long, and that leaves little room for error. Any cloud
could block out the sun forever. There could be the return of financial turmoil which would include the lowering of confidence, the worsening of
corporate balance sheets, and we'll see that in the reporting season coming along. We've got the low oil prices which you see stabilizing the
exporters. The IMF has made big cuts to the outlook for Nigeria and for Russia, and you've got oil producers meeting in Doha on Sunday. And then,
look at that other cloud coming in, China and the slowdown. The global impact to commodity prices and confidence, all of this raining on the
bright tulips that are here at the moment. The head of the IMF offered some sobering words of an umbrella today.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: We expect global growth this year to be at 3.2 percent and 3.5 percent next year. This makes it harder
to spread economic warmth to the citizens of the globe. And it is not enough to lift living standards, reduce debt, and create sufficient
opportunities for the nearly 200 million people around the world who are officially unemployed and looking for a job.
(END VIDEO CLIP)
QUEST: We're glad that Chris Giles, the economics editor of "The Financial Times" is here. Good to see you. How many of these have you done?
CHRIS GILES, ECONOMICS EDITOR, THE FINANCIAL TIMES: Twelve.
QUEST: Good, so you know your way around them. What do you make of this press conference that they're all having at the moment, the European G5?
GILES: I've seen it before. I've seen it before only six months ago in Lima at the autumn meetings. In fact, they had 20 finance ministers on the
stage there all saying they would do information sharing, they would implement what they had agreed and now is the time to take action. And
we're seeing much the same. We haven't really seen anything very new, just a little bit of a step forward in process. They're now going to do a bit
more information sharing, and that was already agreed, so this is not a big step.
QUEST: Are they genuinely shocked by the Panama Papers? I mean, these are countries with large treasuries, intelligence services, and revenue raises.
They must have known what's going on. Methinks they doth protest too much.
GILES: I think they're shocked by the reaction that's happened in all of their countries to the Panama Papers, not by the facts themselves. In
fact, there wasn't very much that's come out that's been massively surprising about which peoples or which corporations tax affairs that
people didn't know about. So it's more that the public are now engaged and so they're engaged, rather than, we found something new about what rich
people do with their money.
QUEST: Here at the IMF, they're going to be talking a huge amount about that. We've already heard the managing director talking about slow growth.
We've got China on the agenda. There's nothing -- just as with the Panama situation, what needs to be done, they're going to just talk about the same
things again -- structural reform, the need for change, fiscal versus monetary.
GILES: Yes, we've got -- we're very much in a stuck record agenda. The global agenda has been -- it's not terrible but it's a bit disappointing.
It's worse than they hoped.
QUEST: But what do they want anybody to do about it that nobody's doing?
GILES: Well, they'd really love countries to actually get on with it with structural reform, but that's really difficult. They'd love countries to
be a bit more sensible about their fiscal policy, but that's also difficult and also might not have a huge impact. And they'd like to get things
working a bit faster. Let's not be (ph) compulsive about it. It's not going to transform the global economy in the next two years, three years.
There are deeper structural things, and unfortunately, these are just the things we have to deal with.
[16:20:02] QUEST: And the countries are not prepared to deal with them. Finally, I've just got to say, in many ways, and I'm not being glib when I
say this, the sexy issue here is the one that people don't really want to talk about, which is Brexit, the referendum.
GILES: The big thing on the horizon the next two months which could really change, certainly the outlook for the U.K., certainly for Europe, and
possibly even for the world. If it goes -- and everyone here, because this is an international forum, thinks the wrong way, which is for Britain to
leave the E.U., everyone here believes that's the wrong thing for Britain to do. If that happens, people are really quite worried because up to now,
no one thought it was going to happen. Huge complacency, and you have to think, anyone who's a Brit knows that it's perfectly possible it could
QUEST: Great to have you, Chris. Enjoy -- it's a bit of an oxymoron, isn't it? Or a contradiction in terms, to enjoy the IMF. But have a good
As we continue on QUEST MEANS BUSINESS from Washington, shocks of the non- economic kind loom over some countries. I'm going to discuss this IMF warning with South Africa's finance minister who joins me live after the
break. Good evening to you.
QUEST: Absolutely beautiful spring day in Washington. The last of the cherry blossom was just visible as I came into town today. Now, the firm
tied to the scandal involving the South African president, Jacob Zuma, is receiving the cold shoulder from the country's banks. Oakbay Resources,
which is owned by the Gupta family, which has since given up its leadership role, says, one bank saw no reason to meet. That's according to Reuters.
A number of banks and companies have pulled support from the company and from the Guptas. Speaking on this program last week, Oakbay's chief
executive said his company was caught in a political fight. Nearly 40 percent of South Africa's parliament voted to impeach President Zuma last
week and the political crisis risks damaging the economy. That's according to the country's finance minister who joins me now. OK, there's two things
we'll deal with. Let's deal with the economic issue as a result of whether you call it a constitutional crisis or a political crisis. It's a crisis.
What's the economic fallout?
RAVIN GORDHAN, MINISTER OF FINANCE, SOUTH AFRICA: Well, we all know that politics is part of the continuum of issues that ratings agencies and
investors look at. They're looking at, do we still enjoy macroeconomic stability? I believe we do. Do we have a growth plan? I believe we are
beginning to formulate one on the basis of success that we've had, but also lessons that we've learned, and in particular, focusing a lot on improving
confidence from the private sector in South Africa. And like in many parts of the world, emerging markets in particular, but advanced economies as
well, politics is a consideration. The more the political noise, the more the concern in certain sectors.
QUEST: I'm not making -- I'm not drawing too many parallels to Brazil and the question of impeachment there, but I am using the impeachment word.
Whether it's -- I mean, it failed in that sense, but -- how worried are you that it's going to clobber the economy? Investors are going to stay away.
Your currency remains under threat.
[16:24:59] GORDHAN: The currency has been strengthening in the past week, firstly. Secondly, since the beginning of the year and my appointment and
recognizing that we face a potential downgrade from some ratings agencies, there's a greater sense of urgency. There's a greater sense of cohesion
between the private sector, labor, and government, and within the next few weeks, we'll be able to announce a package of measures which we will
implement to convince ourselves, our investors, and others, like ratings agencies, that A, we have a plan, but more importantly, that we are in the
process of implementing those plans.
QUEST: And that includes, obviously, deficits, it includes getting a grip on the national finances, and stabilizing the economy.
GORDHAN: On the deficit side, our budget has more than proven that we're more than capable of doing better than what we said we would do on fiscal
conservation, so I think we've proven our capabilities and credibility there. And in terms of the financial stability, the more we can get
confidence in our own economy amongst our own players, the more we will see growth orientated work taking place.
QUEST: You received a letter from Oakbay's chief executive asking you basically to help sort out this mess. It does seem extraordinary that all
of a sudden, all of the banks, all of a sudden, decide they're all going to quit doing business. Even the auditors quit doing business for the company
they've all done business with for years.
GORDHAN: Well, you know, that's between the client and service provider. So it's not for us to intervene.
QUEST: But they're asking for your help.
GORDHAN: Well, not quite. The letter opened with the line that we are warning you that X number of jobs might be lost, rather than saying, can we
do something to assist, not that we can. Because we can't influence you as a lender to lend money to somebody, for whatever reason, you don't decide
that you want to actually lend money to. So I think the issue here is --
QUEST: Are you saying Oakbay's on its own?
GORDHAN: No, I'm saying like any other company in South Africa or anywhere in the world, they must prove whatever the banks need them to prove or any
other agency needs to have proven in order to earn their services, whatever those services might be. And as a government, where it's necessary, we
will intervene. But at this point in time, all I have is a warning letter.
QUEST: All right. Finally, you're back on the job. You enjoying it yet?
GORDHAN: It's fun. It's important to contribute during difficult times, to stabilize the situation.
QUEST: When do they get better, minister? When does this political shenanigans, crisis, whatever you want to call it, when does it subside?
GORDHAN: Politics and disruptions are part of the lives of most people in advanced and developing economies. And I'm convinced that within the ANC,
we have the DNA that's necessary, after 104 years of existence, to do the right thing, find the right solutions, and stabilize and lead the country.
QUEST: Good to see you at the IMF, sir. Thank you very much indeed.
It has been the most extraordinary sort of day. Amid an outcry from shareholders, BP is defending a huge pay rise for its chief executive,
despite a difficult few years for the company. Bob Dudley received nearly $20 million last year. It was a 20 percent raise. The company said,
Dudley had an outstanding year. BP lost more than $5 billion in 2015, and so its stock price dropped by around 20 percent. CNN Money's Cristina
Alesci joins me now. Cristina, it was a nonbinding vote which went heavily against the board, and the board have chosen to ignore it. How do they
square that circle?
CRISTINA ALESCI, CNN CORRESPONDENT: Well, they look completely tone deaf, right, because on the one hand they're saying they had an outstanding year
and they have to reward the CEO for it, but on the other hand, the company's clearly still grappling with the fallout of the BP oil spill in
2010. It's still grappling with low oil prices, and it's suspended its dividend. And the board knew before that the shareholders were not going
to be happy. This was communicated before they went ahead and decided to give him a 20 percent pay raise. So it is embarrassing and it's shocking.
Shocking also if you look at U.S. companies and what they've managed to do, the boards here, is really what they call shareholder management, which is
basically trying to foam the runway ahead of time for any of these kinds of contentious issues so they do not spill out into the public domain. We've
seen that happen here in the U.S. The risk for the corporate sector in the U.K. specifically is that if more and more companies take this kind of
action, regulators will step in and say, hey, hey, we have to do more on executive pay here.
QUEST: OK, we're running out of time, but just briefly, the issue of -- the BP chairman says they're going to take notice of this vote. Does that
mean that Dudley gets less next year?
ALESCI: It certainly would indicate that he would get less next year, but again, they're going to say it's tied to the performance, so we're going to
have to see what the company does over the next couple of months and into early next year.
[16:30:11] QUEST: Cristina Alesci with the BP story for us in New York, good to see you, Cristina, thank you very much.
As we continue, it's a huge moment in American politics tonight. Preparing for the Brooklyn/New York debate, which takes place between Hillary Clinton
and Bernie Sanders. We'll have a preview and we'll also talk about the search for delegates and why and how that's under way. It's QUEST MEANS
BUSINESS and we're live at the IMF in Washington, good evening.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS from Washington in a moment. When the Democrats prepare for their final debate
before New Yorkers vote. The OECD secretary calls on Panama to be more transparent. Hopefully you'll hear him this program before the top of the
hour. Before all of that, this is CNN, and on this network the news, it always comes first.
Two years ago, the militant group Boko Haram abducted more than 270 girls from a school in Chibok, Nigeria. On Wednesday, CNN showed a proof of life
video of some of the girls. The first ones obtained in years. Family members and government officials have been expressing hopes the girls can
An earthquake has killed at least two people in Southern Japan. It's been followed by a string of aftershocks. So far, authorities say 19 homes have
been destroyed. Several people are injured, and more victims are buried in the rubble.
Brazil's Supreme Court has requested an extraordinary session for later today when it's expected to discuss a motion to block the impeachment vote
of President Dilma Rousseff. The Brazil's Attorney General filed the motion. It asks the court to rule on what he calls procedural
irregularities. The lower house expected to vote on impeachment on Sunday.
Airlines flying in and out of European Union will now share passengers details with authorities. It's known as the passenger name record or PNR,
as part of new efforts to thwart terror on the continent. It was approved by an overwhelming vote in Strasburg and comes in the wake of the attacks
in Brussels and Paris.
Egyptian authorities say a criminal act was behind the Metrojet crash in Sinai last year. The Russian plane took off from Sharm el-Sheikh. It was
brought down soon thereafter killing 224 people on board. Initially, Egypt had downplayed the possibility of terrorism despite Russian security
blaming the crash on a bomb.
[16:35:00] All five Democratic and Republican candidates for the U.S. presidency are making high-profile appearances in New York today. As time
runs out for them ahead of the state's crucial primary on Tuesday. Now sparks could fly this evening when Hillary Clinton faces off with Bernie
Sanders in debate on CNN now just hours away. As CNN's Joe Johns reports, policy differences have given way to personal attacks, as the Democratic
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: I am so glad to be back in the Bronx.
JOE JOHNS, CNN CORRESPONDENT (voice-over): Rivals Hillary Clinton and Senator Bernie Sanders both hosting dueling New York rallies ahead of
tonight's CNN Democratic presidential debate. Sanders revving up asked the crowd, estimated by organizers to be above 27,000 in Washington Square,
Park. Sanders receiving a rock star welcome with celebrities before he aggressively went after Secretary Clinton.
BERNIE SANDERS, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: Our differences with Secretary Clinton go beyond how we raise money. It goes to an issue
which the media doesn't cover. That is our disastrous trade policies which are costing us millions of jobs.
JOHNS (voice-over): Clinton making the case to voters in the Bronx, urging them to back her over Sanders.
CLINTON: I was honored to be your Senator for eight years and if you will give me the honor of your vote on Tuesday, we will continue to make life
JOHNS (voice-over): And keeping her attacks on the Republican hopefuls.
CLINTON: One of them denigrates New York values. Mr. Trump wants to set Americans against each other. He wants to build walls. I want us to build
JOHNS (voice-over): Tonight's high-stakes debate comes as the heated war words between Sanders and Clinton intensifies.
SANDERS: I have my doubts about what kind of president she would make.
JOHNS (voice-over): And accusations from the Sanders campaign that the primary process is weighted in favor of Clinton.
UNIDENTIFIED FEMALE: It's not a Democratic way to carry out an election.
QUEST: Donald Trump, Ted Cruz and John Kasich will all attend a Republican Gala in New York in a few hours. It's going to be very interesting when
Mr. Trump takes the stage considering he's at war with his own party over delegate rules. Ted Cruz is accusing Mr. Trump and his supporters of
acting like union boss thugs as they try to secure the nomination for the GOP front-runner. He says that Trump is feeling the pressure.
(BEGIN VIDEO CLIP)
TED CRUZ, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I think anyone who knows anything about Washington knows that the establishment is not rooting for
me. That they have been battling me every day I've been in the Senate. But the rules are simple. The way you get elected is you win a majority of
the delegates in elections. What Donald is unhappy about is that in the last three weeks there have been a total of 11 elections in four states and
we've beaten Donald in all 11 elections.
(END VIDEO CLIP)
QUEST: Mr. Cruz's best bet is to win the Republican nomination in what's known as a brokered or contested convention. He's got a strategy in the
hopes of doing just that. CNN's John King. John, we need you to explain how on earth does he -- look, you've got delegates who are pledged to vote
for Donald Trump. How do those delegates become Ted Cruz delegates?
JOHN KING, CNN CHIEF U.S. CORRESPONDENT: It's an interesting process here in the United States, Richard. Some people in the United States don't like
it. Some people watching around the world might not understand it. In many states, what you do is first Donald Trump can win a primary. So the
delegates are bound to him on the first ballot, and in some states they're bound to him on the second ballot. But then on the second and third step
in the process, they actually pick the people, the individuals who will be in those delegate spots. And that is where Ted Cruz is out organizing, out
hustling Donald Trump. Because he's going to the state party conventions and he's getting people who, yes, may be bound on the first ballot to be
for Trump, but they're actually Cruz supporters. So they will vote for Donald Trump on the first ballot. As I said, some of them are legally
bound to vote for Donald Trump on the second ballot. But once the requirement is lifted, they're Cruz delegates. So what it tells you is
this. If trump does not win on the first ballot of the convention, Richard, he is unlikely to be the Republican nominee.
[16:40:00] Because dozens, maybe even more than 100 people are already in the process, bound to vote for Donald Trump on the first ballot, but ready
to bolt as soon as they get the opportunity.
QUEST: if I understand you right throughout this primary process we have been focusing on the number of delegates the candidate gets, but not
focusing on the people who are the delegates that actually go. Because it's the people who might change their mind on subsequent votes.
KING: Exactly right. And we've never had to worry about this in the past at least since 1976 was the last open convention, contested convention here
in the United States on the Republican side. And that one was clear it was a race between then President Ford and Ronald Reagan. It was dead clear it
was going to be either one of them. They were so close, it was two candidates, he was going to be one of them.
What makes this one so fascinating is that Donald Trump, he's going to have a big win in New York tomorrow, Richard. He's probably going to win the
rest of the contest in the month of April. In the Northeast and in the mid-Atlantic part of the United States where Trump is popular and Cruz is
not so popular. Cruz is focusing on the some Midwestern states still to vote. He's focusing on the big prize of California, which comes at the
end. But it is almost certain -- look, Donald Trump might be able to get to the magic number before the convention, but if he does not, if Donald
Trump has 1150, you need 1237. The question is, can Donald Trump negotiate with enough uncommitted delegates to win on the first ballot? Because if
he doesn't win on that first ballot is unlikely to win.
QUEST: So this is fascinating, John, fascinating. So Donald Trump's inability or failure to tie the delegates to him rather than somebody else,
other than the first vote, was that inexperience or incompetence?
KING: A little bit of both. He's never won before. Now he's complaining about the rules. Look, a lot of people don't like these rules. A lot of
people don't like the way this is done. Nobody's twisting the rules. Nobody's changing the rules in the middle of the game. The rules have been
in place for months, in some cases, for years and in other cases for decades. It's the second and third step of the process where you actually
pick the people who go to the convention and vote that the other campaigns are working very hard. And Donald Trump simply did not have good people in
place, did not quite understand. That just because you won the Virginia primary by a big number doesn't mean you're guaranteed about all those
votes. If you don't do the first, second, third and fourth step of the process. Again, on the first ballot, state party rules requires in most
cases, in a place where Trump won, on the first ballot to vote for Trump. But he is just being outhustled. The deck is stacked if you will, because
Cruz mostly, is getting all of these people to show up in Cleveland as Trump delegates, but once that requirement is lifted, Richard, they're free
agents and they will vote for Cruz.
QUEST: John, you have explained it beautifully.
KING: Kind of.
QUEST: And we are grateful that you have done so tonight. Believe me, I understand it more than I did three or four minutes ago. Thank you, sir,
Hillary Clinton and Bernie Sanders will hit the stage for their CNN Democratic debate in just a few hours from now. It's their last head to
head before that crucial New York primary. Just five days away. Now, of course, well obviously you're going to watch because it's here on CNN.
It's at 9:00 p.m. U.S. Eastern time, 2 a.m. on Friday and it is only on CNN. And it is only on CNN.
As we continue, until death do us part. Christine Lagarde hopes Britain doesn't leave the European Union. And says there is lessons to be learned
from marriage. We'll continue.
[16:45:00] QUEST: The IMF says political discord is the key reason behind their forecast cuts. We're here at the International Monetary Fund. This
is the atrium as the spring meetings get underway. The IMF boss Christine Lagarde, has pinpointed one of the major threats is Britain leaving the
European Union. She offered some marriage counseling earlier today.
(END VIDEO CLIP)
CHRISTINE LEGARDE, MANAGING DIRECTOR, IMF: It's been a long marriage between members of the European Union and it's really my personal hope that
it doesn't break. And like all marriages, good talks can actually help. And I hope that the dialogue can continue.
(END VIDEO CLIP)
QUEST: Tonight, Britain is on the eve of the official Brexit campaign window opening. The U.K. government has spent around $12 million of
taxpayer's money on so-called pro-Europe leaflets. CNN's Nic Robertson took to the streets London to ask voters, when you look at that sort of
money if it was worth it.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Here it is, the new government handbook on why British people should vote to stay in the
European Union. The Brexit battle, the future of the U.K. in Europe is just beginning to heat up. Two months to voting.
Have you guys, have you read this yet?
UNIDENTIFIED MALE: Not if it's about politics.
ROBERTSON: Have you read this yet?
UNIDENTIFIED FEMALE: No.
ROBERTSON: Are you going to read it?
UNIDENTIFIED FEMALE: If I had a copy of it. I would read it.
ROBERTSON: Have you read this from the government yet?
UNIDENTIFIED FEMALE: Yes, we have.
ROBERTSON (voice-over): Polls had the "In and Out" campaigns more or less neck and neck with the outs edging ahead. But so close to such a momentum
event there is confusion.
SEBASTIAN PAYNE, DIGITAL COMMENT EDITOR, FINANCIAL TIMES: I think people are confused because the arguments about numbers and immigration are very
technical. You turn on the radio and you hear about fishing quotas or trade tariffs. Ordinary voters have no idea what this means, or whether
it's good, or whether it's bad.
ROBERTSON (voice-over): As Churchill might have said, never before in the field of referendums have so many known so little about something so
(on camera) Undecided why is that?
UNIDENTIFIED FEMALE: Undecided.
UNIDENTIFIED FEMALE: Because basically, there's not enough information out there to help me make up my mind, and if there's too much fear, it's very
ROBERTSON: It's confusing.
(voice-over) And now they're asking me for help.
(on camera) Do I think it will help?
UNIDENTIFIED FEMALE: Yes.
ROBERTSON: Let's read it and have a look. It tells you which day, the 23rd.
UNIDENTIFIED FEMALE: Yes.
ROBERTSON: Here, OK. Over 3 million U.K. jobs are linked to exports in the E.U. Do you believe this stuff when you read it?
UNIDENTIFIED FEMALE: Well, it depends. Is it evidence based? Where's the evidence from?
ROBERTSON (voice-over): They're not the only ones doubting the government.
UNIDENTIFIED MALE: Government says about how many jobs the U.K is dependent on.
ROBERTSON (on camera): 3 million.
UNIDENTIFIED MALE: Yes, but the assumption is all those jobs will get lost if we leave the E.U. and that's rubbish, because we would renegotiate the
ROBERTSON: When will you make your mind up?
UNIDENTIFIED MALE: Probably when I have more information from the other side.
ROBERTSON (voice-over): The other side, that's flamboyant London Mayor Boris Johnson. When he came out for the outs, he was promptly pummeled for
playing politics, a gamble, his critics said, to get Cameron's job, prime minister. For his part, the PM says even if he loses, he'll stay on to
negotiate the exit. The drama is building.
PAYNE: The biggest decision British voters are going to take for a generation. Last referendum was in 1975. So unless you're nearing
pensionable age, you haven't had a chance to vote on Britain's membership.
ROBERTSON (voice-over): For some we found that day can't come soon enough.
(on camera) Have you read this?
UNIDENTIFIED MALE: Oh I see, yes, I'm a believer we should get out of the E.U.
ROBERTSON: Why is that?
UNIDENTIFIED MALE: Why? Because it's far too much money for far too much bureaucracy we don't need.
ROBERTSON (voice-over): It won't be the last word. That's for sure. Nic Robertson, CNN, London.
QUEST: As our program continues tonight, good news for oil producers. A report from the International Energy Agency, says the oversupply of oil
could shrink in the second half of this year.
[16:50:00] QUEST: Oh, isn't that a gorgeous day? The Washington Monument. Now that's around the basin, but the cherry blossoms appear to have all
gone so far. There was a little left as I drove in from Dulles Airport this morning. As we continue tonight, a report from the International
Energy Agency, the IEA, says the oversupply oil could shrink in the second half of the year. Brent crude prices were down a little less than one
percent. All happening as crucial meetings this week of the world's top oil exporters. CNN's money John Defterios has the meeting.
JOHN DEFTERIOS, CNNMONEY EMERGING MARKETS EDITOR: The long awaited rebalancing in the oil market may finally arrive in the second half of this
year. International Energy Agency believes U.S. shale production is starting to show severe cracks. Meaning the OPEC fight for market share
may pay off after all. This is how it stakes up today. For the first half oversupplies will remain severe at 1.5 million barrels a day. But the IEA
says that in the second half that will shrink down to just 200,000 barrels of oversupply. Here are the two big components on the supply and demand
side. First, supply, non-OPEC supplies are expected to tumble by 700,000 barrels a day led by the U.S. shale producers. On the demand side the IEA
sees that rising by over a million barrels a day in the second half of the year.
NEIL ATKINSON, HEAD OF OIL MARKET DIVISION, IEA: So the insurrection of reasonably strong demand growth of 2016, falling supplies from the non-OPEC
producers and relatively limited growth from OPEC with the exception of Iran that is all adding up into a gradual return to a balanced market.
DEFTERIOS (voice-over): This report plays right into the hands of Saudi Arabia ahead of this weekend's OPEC/non-OPEC meeting in Doha. The kingdom
is looking to freeze not cut production as it aims to drive out high cost producers and Russia feels the same way. While OPEC sources are keeping
tight-lipped, the market seemed to believe the two heavy weights will agree to freeze production. Meanwhile, Iran has made it clear it won't be party
to that deal and its added 400,000 barrels a day since the sanctions were lifted with plans to double that.
(on camera) At this stage, there's still way too much oil in storage, over 3 billion barrels, which may dash hopes near term to get oil to $50 a
barrel. John Defterios, CNN, Dubai.
QUEST: The IMF says a deep recession and cheap oil has slowed Russia's economy more than expected. While the Russian President Vladimir Putin has
been fielding questions from ordinary Russians as part of his choreographed live television show. It's a marathon event that he holds once a year.
CNN's Matthew Chance in Moscow with the highlights of Putin on TV.
MATHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well it was another epic Q&A session of the Russian president answering dozens of questions for
nearly four hours. Including many, of course, about the Russian economy which he acknowledged was in, what he called a gray period. He spoke about
foreign policy and some of his responses as well, the night for instance that Russia had abandoned Syria. And talking up that country's armed
He also had words of praise for President Obama of the United States. Saying that his admission of the mistakes being made in Libya meant that he
was a, "Good man." One 12-year-old girl asked a slightly awkward question of President Putin, about President Poroshenko of Ukraine, and Erdogan of
Turkey. Both at odds for different reasons with the Kremlin. Which one would he save, the girl asks, if they were both drowning? President Putin
said he would extend a hand to anyone who takes it, but if someone decided to drown, he said, it's hard to stop them.
Other questions believed to be closely vetted and the responses staged. A second awkward moment came when Putin was asked about his ex-wife,
Lyudmila, who's reported to have recently remarried.
[16:55:00] When will you introduce a new first lady, the president was asked. The Russian President notoriously guarded about his personal life
joked that his private affairs are not a priority as they don't affect the ruble or oil price. But he said that maybe one day he would satisfy that
public interest. Matthew Chance, CNN, Moscow.
QUEST: Even in Russia, they're interested in the president's wife. We'll have a Profitable Moment after the break.
(BEGIN VIDEO CLIP)
GEORGE OSBORNE, BRITISH FINANCE MINISTER: Strong words of condemnation are not enough. Populous outrage doesn't by itself collect a single extra
pound or dollar in tax or put a single criminal in jail. What we need is international action, action now, and that's precisely what we do today
with real concrete action in the war against tax evasion.
(END VIDEO CLIP)
QUEST: Tonight's profitable moment. That's George Osborne, the British Finance Minister at the press conference where he talked about what had to
be done. The problem is they've been talking about what needs to be done on tax evasion for as long as I can remember. 2009, you've got the G-20.
You've got 2014, the G-20. You've got last year, the G-20. It's the Panama Papers that shamed them all into actually maybe doing something
about it. The question is what and when. Watch this space.
And that's QUEST MEANS BUSINESS for this Thursday night. I'm Richard Quest at the IMF in Washington D.C. We'll also be hereby tomorrow as well.
Whatever you're up to in the hours ahead I hope it's profitable. Join me in Washington tomorrow.