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QUEST MEANS BUSINESS
British Prime Minister Lays Out hard Brexit Plans; Chinese President Makes Globalist Rallying Cry; Matt Damon Acts to End Water Crisis; Obama Commutes Chelsea Manning's Sentence; Russian Sovereign Wealth Fund Talks Trump; Underwater Search for Missing MH370 Suspended;
Aired January 17, 2017 - 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 ANCHOR: Oh, dear. What can the matter be? Closing bell ringing on Wall Street. The Dow Jones very sharply up on the
first day of trading after long weekend. The bell finishes, hit the gavel, it's all over. It is Tuesday, the 17th of January.
Tonight, it's a hard Brexit. Theresa May sets out her policy and it doesn't involve the single market. The world's most powerful communist
sets out his strategy for globalization. And I talk to Matt Damon, who sets out why he's trying to solve the world's water problem.
I'm Richard Quest, live at the World Economic Forum. With my friend, where we mean business.
Good evening from Davos. Historic events and it's all about trade. I suspect we'll look back on today and say that there were major movements.
The like of which and the full effect of which we will not see or realize for many months, if not years.
First, China's president invoked everyone from Dickens to Lincoln in an extraordinary defense of globalization. Then the Trump transition team
denied wanting to start a trade war with Beijing. And of course, the big story tonight, Britain's Prime Minister has unveiled the country's plan to
leave the EU, the single market, and the customs union.
The pound rallied after Theresa May gave her most detailed account yet of the Brexit strategy. She said Britain can't be half in and half out of the
European Union. It will be a hard Brexit. Now, calling it global Britain. She said this would be inevitable if Britain wanted to have the freest
possible trade from outside the single market. Because also, it would involve curbing migration by ended the free movement of people and also the
jurisdiction of the European court, a key priority was to preserve the United Kingdom. Northern Ireland, Scotland, Wales and England. And
tonight, the PM has continued her policy drive, calling European leaders to explain her detailed plan in detail. And she had this stark warning for
the EU 27.
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: I must be clear. Britain wants to remain a good friend and neighbor to Europe. Yet I know there are some
voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. That would be an act of
calamitous self-harm for the countries of Europe, and it would not be the act of a friend.
(END VIDEO CLIP)
QUEST: Calamitous self-harm. Businesses and investors have been clamoring for greater clarity about how Brexit will happen. I'm joined now by the
chief executive of Lloyd's of London Insurance -- not the bank. That is Inga Beale. Good to you. It's a hard fight. The sharp intake of breath
there. But you're not surprised.
INGA BEALE, CEO, LLOYD'S OF LONDON: Not totally surprised, but I think it was important that she came out and addressed all the people, not only of
the U.K., but also of the entire world. I can tell you the whole world was watching and listening today.
QUEST: By hard Brexit, one assumes that also means no passporting for, or at least, it will be a negotiating point of any access for the financial
markets for Europe?
BEALE: Yes, she was very clear. We will no longer be a member of the single market. However, she did leave the door slightly open when she said
negotiating a free trade agreement with the EU. Possibly, something allowing some of the financial services sector to then do business in the
EU, continuing a Brexit might occur as part of that, but we're continuing as though it's not going to happen.
QUEST: So, give me insight tonight. I need to understand, indeed, from our other guests this evening, how were you going to manage this? You now
know what the road map looks like. What's your next move?
BEALE: Well, we're continuing, actually, on our plan. That means we've got a certain amount of obviousness from the EU. The EU is an important
market for the Lloyd's market.
[16:05:00] Some of our business will be directly impacted. That means we will no longer be licensed, we will no longer be able to provide insurance
for EU policy holders. So, that means we're going to set up a subsidiary Lloyd's market in a country that's likely to remain in the EU, which means,
not the U.K.
QUEST: So, you're going to go for a subsidiary, rather than trying some very complicated equivalence regulations.
BEALE: Right, equivalence is a slightly different thing. Very technical - -
QUEST: And very difficult.
BEALE: Yes. But we need the licensing to be able to write the business in the first place. The equivalence doesn't give us the licensing. The
equivalence gives us the ability to continue to write some very complex business from London.
QUEST: So basically, what you -- I'm putting the cart before the horse. You need the license before you get the equivalence. Now, can you handle
BEALE: Of course, we can. Of course, we can. We're Lloyd's of London. We've been around for nearly 329 years. We've been facing all sorts of
adversity. We will get through this. We have our plan. Eleven percent of the Lloyd's market, the revenues comes from the EU excluding the U.K. Some
of that will be directly impacted by Brexit. We're going to have an option for that business, that's opening up a subsidiary in the EU.
QUEST: Join me at the scale of uncertainty. Choose your color.
BEALE: Oh, red. Red.
QUEST: All right, teamwork. These are the sort of issues at the moment. You can add your own if you've got one not on that list. Otherwise, that's
very certain this year, this is highly uncertain. Where are you on the scale of uncertainty?
BEALE: Right, well, of course, Brexit is not going to happen this year, but I'm damn certain it's going to happen in the future, so I'm very, very,
very certain about Brexit.
QUEST: But you're uncertain about the future?
BEALE: The future post Brexit, but we're going to determine our own future.
QUEST: So, you put yourself where you want to be on that line.
BEALE: Uncertainty for sorting out the future for Lloyd's, here.
QUEST: Excellent. Thank you very much, indeed. Good to see you.
BEALE: Thank you.
QUEST: I appreciate it enormously. Now, reaction to the British plan has been broadly positive. The EU's chief negotiator, Michel Barnier, tweeted,
"Ready as soon as the U.K. is. Only notification can kick off negotiations." Referring to invoking Article 50 in march.
And German's foreign minister said, finally, there's a little more clarity from Britain. Joining me to talk about that, chairman of UBS, Axel Weber
joins me. You're not surprised by hard Brexit, are you tonight?
AXEL WEBER, CHAIRMAN, UBS: No, because every other solution for the British would have depended on the Europeans going along with it. It's
been very clear from the start. Very little appetite for negotiations at this stage. So, Britain chooses to basically determine its own fate and
what they can do is a hard Brexit.
QUEST: So, what do you make of it, though? First of all, as you heard Inga saying just then, how are you going to respond to that with your U.K.
division, which is huge, sizable, what are you going to do?
WEBER: It's much smaller than our U.S. division. We have 20,000 people in the U.S. We have about 5,000 people, slightly over that in the U.K., which
QUEST: Will you start planning to move some functions across to Europe, no passporting. It inevitably means you're going to have to transfer some
euro clearing and things into the single market.
WEBER: It's all about optionality. We ready have around a thousand people on the continent. We have a lot of people in Frankfort. It's all going to
really mean in the future, the passporting business that we have to do might have to migrate to the European markets. That could impact on about
a thousand of our 5,000 employees. But the rest is largely institutional business, in the largest financial center of the globe. So, that's going
QUEST: We've also heard this talk that if the European -- if the EU 27 doesn't give a decent trade deal or customs union, we have Phillip Hammond
last week talking about a new economic model. Do you know what he means by that?
WEBER: I think Britain has two options. The first one is to negotiate with Europe. And that relationship will definitely be not as good as it
was in the past. So, the status quo is going to emerge on the European side. Britain can negotiate with the rest of the world, financial service
agreements, trade agreements, all sorts of agreements in the former commonwealth, for example. So, I think Britain's fate is not just
dependent on Europe. It is dependent on Europe and the rest of the world.
QUEST: What do you make of Governor Carney's comments just a week or two ago. He sort of tickled the idea that actually, on financial services, the
EU 27 could suffer not as much, but could certainly feel the effects.
Well, Britain is the largest European or EU financial center, and is going to go offshore. That's clearly going to affect Europe as well. We're
based in Switzerland. We don't have market access, but we've been surviving pretty well, also being outside the union, and Zurich is a big
[16:10:00] It's all going to be about being able to exchange services between the major financial centers. And I think Britain's going to strike
some deals there.
QUEST: Right, pull the strands together. Once the British people have voted for Brexit, and now you see the plan that she's putting forward.
Does it seem a realistic plan? Or does it seem like going over the cliff?
WEBER: Well, it's -- the plan that we start from scratch. We have to define our future relationship in what our partners are able to accept.
There's going to be a lot of acceptance for what U.K. wants to do, in terms of exchanging goods and services, but it's not going to be membership.
It's not automatic access. It's going to be more WTO type of agreements than really a European agreement.
QUEST: I need to ask you about Donald Trump and what's going to happen, of course, next -- not next week, this week, on Friday. The level of
uncertainty by the policy and the comments that we're hearing from the President-elect. How concerned are you? Gut feeling.
WEBER: Gut feeling is political uncertainty used to be an emerging market issue and it dropped markets there in the past. Now it's become a key
issue in the most established countries of the globe. It's not just the U.S., political uncertainty and political risk is driving financial markets
in the established world, and that's a new reality. And we just need to get used to that in financial markets.
QUEST: Get used to it and live with it.
WEBER: Live with it and cope with it and work with it.
QUEST: Choose your color.
WEBER: I'm taking red, please.
QUEST: Of course, so, these are the uncertainties in the world. Feel free to add your own if there's one not on our list. Otherwise, where are you
on the scale of uncertainty? That's most certain, this is, the future's very uncertain.
WEBER: I think it's politics for me as well. So, what is here. And I would put it right here. I wouldn't exaggerate.
QUEST: That's fascinating. You haven't -- so many people think everything is so uncertain.
WEBER: Because they look at the short term. We're a long-term oriented investor. We deal with our clients long-term. Long-term political
uncertainties are not going to drive the economy. Short-term, they can dominate the economy.
Wonderful to see you, sir. Thank you for coming out.
WEBER: Richard, thanks for having us.
QUEST: Thank you very much, indeed.
Now, the pound rally -- I told you that earlier -- was by about 3 percent, but all of the European markets, they were down. The FTSE absorbed the
greatest losses, if you look at the numbers on the screen, you'll see the FTSE was down 1.5 percent. And yet, that's somewhat -- that's a knee-jerk
reaction. But it's also, I'm just thinking it through, of course. Of course, that is also because the pound rallied, therefore, that would make
exporters' job a little bit harder. So, the FTSE's got numerous undercurrents that are shifting it.
Now, Theresa May says Britain can't be half in and half out of the EU. The chief executive of Dow Chemical says, that's just fine, as far as he's
(BEGIN VIDEO CLIP)
ANDREW LIVERIS, CEO, DOW CHEMICAL: She's going to learn how to be on its own. This is the poster child of a country that has been on its own for
most of its existence.
(END VIDEO CLIP)
Andrew Liveris, and why he's betting on Britain, and of course, Donald Trump shouldn't take anything off the table in trade negotiations. QUEST
MEANS BUSINESS, we're live in Davos.
[16:15:30] QUEST: Don't be put off by the nice cheery music. It's minus 19 Celsius here tonight, and that's about 21, 22 Fahrenheit for those of
you who still work in old money. A new poll shows voters aren't impressed with Donald Trump's performance since the election. The President-elect is
getting a honeymoon from businesses. The chief executive of Boeing says he has made progress on containing costs for the new presidential plane, the
747 800. Dennis Muilenburg met Donald Trump today.
GM has pledged to invest $1 billion in the U.S., shifting jobs from Mexico back to the U.S. The company says those plans have been in the works for
some time. And a Trump spokesman says Bayer has committed to spend $8 billion on research and create jobs in the U.S. Bayer is in the middle of
a takeover deal to take over Monsanto.
So clearly, maybe these deals were in the works already, or maybe we're just hearing about them because so much attention is being focused on new
business. Andrew O'Leary says Donald Trump shouldn't take any tools off the table in his trade negotiations. He's the chief exec of Dow Chemical.
And Donald Trump tapped him to lead the American Manufacturing Council. All options are open.
LIVERIS: Tariff barriers and non-tariff barriers, i.e., regulatory stances that differ by countries, have to all be looked at. So, I don't think you
take any tool off the table, and so, Yes, I would agree that that's one of the things that have to be looked at. Border adjustment taxes, as an
example. When you have surplus countries and deficit countries, and one is based on unfairness, subsidy, subsidy of capital, subsidy of labor, then
how do you create fairness, fair trade, not free trade, is what I think he's addressing with that statement. I wouldn't take anything off the
QUEST: Do you think it's appropriate to bash companies or CEOs by tweet?
LIVERIS: I think all of us CEOs, I'm 13 years in this job, so I've seen a lot. This advent of operating at the speed of live, where everything's in
the instant, has infected everything we do as CEOs. Everything. So, short-termism, how to make decisions in the instant. Being attacked by
various parties that don't understand your value proposition. I think you've got to work with everyone, so you can actually interact and
communicate in the way they communicate. And I'm OK with this notion of put everything out there and responding to it.
QUEST: What do you think of president Xi's speech this morning? As I listened to it, it was a speech that a communist party had, giving a
speech, that sounded more like the sort of thing that might have come from a U.S. president or Western leader.
LIVERIS: I was in China just last week, and I met not him, but he is right below him, his leadership. I think China's going into a complete new phase
of openness and transparency. But guess what, they want to be global. And to be global, they're going to have to play away. When they play away,
they'll hit the issues we all hit. Which is, what do away look like when you don't have fair advantage? You know, how do I actually do more
business in the United States, as a Chinese company? These are issues that exist for China as much as they do for the United States.
QUEST: Now it seems that Britain has basically ruled out remaining in the single market. There was perhaps an inevitability if they don't want to
take freedom of movement of labor. Will that affect your company do you think? Will you now have to think about your U.K. subsidiaries and
companies shifting more production, shifting more assets, to Europe?
LIVERIS: Absolutely not that way. We won't be shifting just to go to Europe to access Europe. We already in Europe. Does it make us look at
the U.K. differently? It does. I was on record six months ago, when the U.K. went through all of this, and I said, if any country's going to learn
how to be on its own, this is the poster child of a country that has been on its own for most of its existence. The U.K., and its various
manifestations, knows how to compete globally. It gave us many of the modern technologies we now use. I would bet on Britain being able to
operate on its own. My company on what we do, it depends on its market, its regulations and fair rules. And I look forward to seeing those come
out of a U.K. that isn't part of the EU.
QUEST: You can choose a green or a red.
LIVERIS: I'm going to mark green for the new uncertainty.
QUEST: How uncertain? That is very certain, and that's highly uncertain.
[16:20:00] LIVERIS: The new uncertainty, Richard Quest. OK, how's that? You weren't expecting that.
QUEST: I wasn't.
LIVERIS: Take this away.
QUEST: So you're as unpredictable as perhaps --
LIVERIS: No, I would put -- I would be nearly around this aggregation here. I think we're in a highly uncertain world. And I think this is
getting more uncertain not less uncertain.
QUEST: And in that highly uncertain world, how difficult is your job?
LIVERIS: I think our job as CEO, as I mentioned, 13 years. I'm on my fourth reinvention of myself as CEO. We are tilting more and more because
of that to having to operate external. We're having to be not just at Davos, which is a very convenient place to see people, I travel to many
countries to see heads of state. I need to understand their policies. I need to understand what's in their minds. Here's a statement I've made in
my book and I've made recently. Countries are competing like companies. The new competitor or nation states, we are all competing for jobs and
nation states are competing like companies.
QUEST: The CEO of Dow Chemical. Now, the head of the Chinese Communist Party is mixing here with global elites in a very specific ambition. Xi
Jinping finds himself now seemingly as the standard-bearer for free market capitalism. It's a strange world. Xi Jinping is the first Chinese
president to attend there have been premieres here before. He delivered what had to have been one of the most robust defenses of economic
integration that we've ever heard from anyone.
(BEGIN VIDEO CLIP)
XI JINPING, CHINESE PRESIDENT (through translator): Assuming protectionism is just like locking one's self in a dark room. While wind and rain may be
kept outside, so are light and air. No one will emerge as a winner in a trade war.
(END VIDEO CLIP)
QUEST: Ken Rogoff is a former chief economist of the IMF. Good to see you again.
KEN ROGOFF, PROFESSOR, HARVARD UNIVERSITY: Good to see you, Richard.
QUEST: Strange world we live in. What do you make of a Chinese president becoming the standard-bearer for economic globalization?
ROGOFF: Pretty stunning. It's stunning to see the president here in Davos, which they've resisted sending the president to ever before. He's
clearly stepping into the void. He sees the U.S. retreating, China's moving in. Now, we have to know the U.S. is very open, China's not. So,
it's talk at the moment. But it's quite striking.
QUEST: OK, he talked about nobody wins in a trade war. Well, everybody would agree with that. But he also talked about how it was important to --
globalization is getting -- is not the fault of every ill that we're seeing at the moment. Do you agree with it?
ROGOFF: No, of course he's right. You can get rid of globalization. You still have technology and there are a lot of other things going on.
QUEST: But is he right in saying that the way forward is to restore globalization, at a time when Donald Trump seemingly does not wish to?
ROGOFF: I couldn't agree more with the Chinese Premiere on this one. I do think the U.S. needs to treat its middle class better through tax system
transfers, other programs, not through resisting globalization.
QUEST: So, what do you make of Donald Trump's threats? Tariffs, the bullying of automakers, the comments to the Germans or the Japanese?
ROGOFF: To be fair to Donald Trump, he's a businessman. He sees that they can come in to the United States real easily. He can't get really easily
into China. So, he may think of this as tactics to try to open them up.
QUEST: Brexit. So, Theresa May, it's going to be, it's going to be a hard Brexit, with no single market access and a free trade deal negotiated, if
you like, contemporaneously with the Brexit talks. You almost scoffed with laughter at that.
ROGOFF: Well, only that you can't do it that fast. A typical trade agreement, it's very technical. They're starting from scratch. It takes
five years and people don't understand, it takes five years to implement. OK, maybe they negotiate it in two, but then maybe it will take even longer
to implement it. It's a long period of uncertainty.
QUEST: Can you feel a difference at this year's Davos, in terms of the people who are here, what they're talking about, the sort of uncertainty
that they're feeling?
ROGOFF: It's sort of incongruous. On the one hand, they're in a state of shock that Donald Trump became president, that we had Brexit, and lord
knows what's next. On the other hand, they look out at the economy, U.S. is doing pretty well, Europe's doing surprisingly well. And all in all,
they're kind of happy, but they're nervous.
QUEST: Choose the color of your pen, as we go to the scale of uncertainty.
[16:25:00] ROGOFF: Well, I'm nervous, but I'm going to take green just to stand out.
QUEST: All right.
ROGOFF: And I think I'm going to add U.S. institutions.
QUEST: Right, because that's another uncertainty that's in the cards.
ROGOFF: We're very nervous about that. And I put myself as pretty nervous.
QUEST: Do be careful over the wires as you walk back. Thank you very much.
ROGOFF: Thank you.
QUEST: Ken Rogoff joining me as look at the scale of uncertainty. Thank you, sir.
ROGOFF: Thank you, thank you.
QUEST: Now, Wall Street has largely been optimistic. Ken was just saying that so far, and questioning why this should be the case. The markets
bucked that trend on Tuesday. The Dow lost 60 points. It was down 100 earlier in the session. Essentially, what traders are doing is absorbing
the weekend comments, where Donald Trump once again said he would take on drug pricing. Big pharma was also a sharp fallout.
And so, we have the scale of uncertainty. On this scale of uncertainty, we have Russia as being a potential issue. When we come back, Andrey Kostin
of VTB Bank will be with us to talk about the Russian aspect.
QUEST: Now breaking news just in to CNN. President Obama has commuted the sentence of imprisonment for Chelsea Manning. You'll remember that Manning
is the former U.S. army soldier who was convicted of stealing and then releasing via WikiLeaks 750,000 pages of documents, diplomatic cables, and
videos. Now, Manning is currently serving a 35-year sentence at Fort Leavenworth. Recently, of course, Manning, who is transgender, Manning
wrote to President Obama, asking not for a pardon, but for a commutation of the sentence, in other words, which is an immediate release on the grounds
of the difficulties that she is facing, being in a male prison, in a male army prison, that has neither facilities, nor medical treatment for her,
for her transgender conversion.
So, there will be huge reaction to this. The Republicans are -- the Republicans are adamant that Manning, Bradley Manning, as was now Chelsea
Manning, that Manning is a traitor that should stay in prison.
[16:30:00] But the president using the power of the presidency, has decided to commute that sentence. Manning have become already served some seven
years. We will continue to talk more about this. Also, we're waiting to see more pardons and commutations from the president. This is normal at
the end of a presidency, when a president has the absolute power, granted by the U.S. Constitution, to either commute sentences or to give full and
President Obama has actually commuted more sentences and given more pardons than any other president almost combined, particularly -- Evan Perez is
with me now to just talk about Chelsea Manning. Manning wrote to the president, asking for the sentence to be commuted. Is it still a surprise
to you, Evan Perez, that Obama decided to do it?
EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Yes, it is. It's a tremendous surprise, because I know that there's a lot of opposition inside the U.S.
national security circles about, in opposition to this decision. Look, the view inside the national security arena, inside the United States, is that
Chelsea Manning, frankly, had blood on her hands, because of some of the leaks. Some of the leaks of documents from the State Department that ended
up being released by WikiLeaks. People believe that some people's lives were put in danger because of this. And so, there was a tremendous
opposition inside the government to doing this.
And so, we now have seen that a 35-year sentence, which was a very, very harsh sentence, has now been reduced. She's going to be released in May.
She has served about seven years of that 35-year sentence. And I can tell you that inside the government, there was a lot of opposition, because they
felt that without Chelsea Manning, we wouldn't have the problem of WikiLeaks or what the U.S. government views as the problem of WikiLeaks.
Frankly, the Manning leak is what made WikiLeaks the thing that we now know today. And of course, in light of the recent election and the charges that
the WikiLeaks website was working, essentially, hand-in-hand with Russian intelligence to release documents of Hillary Clinton, there was a
tremendous amount of opposition.
QUEST: OK. But now, Manning has had several suicide attempts --
QUEST: -- while at Fort Leavenworth. And indeed, in the commutation notification or request, one of the reasons is that on the grounds of
mitigation, that she was suffering from mental incapacity, because of what she says was her problems with sexual identity. Essentially, the anxiety
and stress when she released these documents, she was not in her right mind.
PEREZ: Right. And it goes on to describe a person who has actually been suffering inside this military prison, that she's been in, that it's been a
very difficult time, especially because, again, I think she's asked for, for the government to help with her gender reassignment. That is
something, I think, still under discussion inside the government. So, yes, you're right. There's a tremendous amount of support from the human rights
community, for her request. And the view was, as you said, she has -- she has even threatened some hunger strikes, as a result of all of this. And
there's this view that her mental state was not one that would survive, frankly, many more years of incarceration. So, there was a lot of support
from outside the government for this, for this request.
QUEST: Evan, what I want to just bring you, a pardon this time for the former vice chairman of the U.S. Joint Chiefs of Staff, four-star general,
James Cartwright, who pled guilty last October, to a single count of making a false statement to federal investigators, all about leaking top-secret
information. Now, this is -- he pled guilty. It was a major scandal at the time. But now President Obama is basically pardoning him and saying,
you may have done something wrong, but your service to your country means that we should respect that.
PEREZ: Right. And this one was not a surprise, Richard. This one was one that had garnered 38 letters from inside and outside of the government,
national security circles. People inside the Bush administration and the Obama administration. People in government had come out in support of
General Cartwright. He was seen as frankly, a bit of a victim of an overzealous prosecution at the Justice Department. If you recall this
whole story, he met with reporters to describe the Iranian nuclear program and the efforts by the U.S. and the Israel's to try to defeat that program.
And then he was prosecuted for doing that.
[16:35:00] QUEST: Evan, are we expecting anymore surprise -- well, they wouldn't be a surprise if we were expecting them, but you know what I mean,
what I'm asking.
PEREZ: I think this might be it. I think, Richard, I think the president has now just got a couple more days in office and I think this was the
intent. Already, if you think about this, he has granted 1,597 acts of clemency, that's 1385 come commutations, 212 pardons. That far outpaces
President Bush, President Reagan, President -- the earlier Bush. Altogether, he has far surpassed those presidents in what he has done here.
And Obama really views this as a civil rights issue. Something that is meant to bring some fairness to the judicial system, especially the
harshness of some of these sentences.
QUEST: Evan Perez, thank you. Very quickly, you came to us once these announcements were made and we are very grateful.
PEREZ: Thank you.
QUEST: Now, the head of the Russian Direct Investment Fund says he's spoken to the Trump team here in Davos. The funds chief executive
describes a win-win scenario.
(BEGIN VIDEO CLIP)
KIRILL DMITRIEV, CEO, RUSSIAN DIRECT INVESTMENT FUND: We talked to some people from the new administration, and we believe the overall approach is
a partnership on win-win scenario in Russia, while acknowledging that we also have some difficulties and some differences and we obviously need to
have a process to resolve them and address them.
(END VIDEO CLIP)
QUEST: Andrey Kostin, our good friend who's always with us, says U.S. sanctions on Russia are expected to be released this year. You're the
chairman of the VTB Bank. You join me now. So, you are expecting, at least a shift in the sanctions regime, sooner rather than later?
ANDREY KOSTIN, CHAIRMAN VTB BANK: I hope so, from what we've heard from Mr. Trump, at least, in his statement, show that he's interested in
building up relationship with Russia, constructive relationship, business- like relationship, definitely part of this discussion should be easing or a release of sanctions.
QUEST: What is it that President Putin wants from Donald Trump? We know what Donald Trump wants in return, but what is Putin sees in Donald Trump?
KOSTIN: I don't know. I think you'll be able to ask Mr. Putin when probably they met, when they'll meet. But also, I think Russia is
definitely looking for better relationship with America. Because over the last bit of time, they worsened substantially and there's not much worse
they can go I'm afraid without reaching the level of Cold War. So, we definitely should now see and look what we can do to improve this
relationship. I think the whole world is interested in this, not just our two countries.
QUEST: In Russia, as much as it's been reported, the dossier, the leaking, as much as it's been --
It's stunning news. I think what --
QUEST: Do people believe that the Russians have material on Donald Trump?
KOSTIN: No, I think people believe that some unprecedented vicious campaign on President-elect, which surprises us a lot. Because we haven't
heard such campaign for the case.
QUEST: What about this hacking business.
KOSTIN: To a certain extent, America is becoming the area for uncertainty itself nowadays. With such domestic politics. But hackers, I don't know,
but I think not even in America people will think that it one way or another it can influence the result of elections. I think that's nonsense.
QUEST: So, we're in this very interesting situation where a relationship is building up between Trump and your President Putin --
KOSTIN: Not yet, because they never met. They're just some exchange of wording. Which is quite positive, but still has to be seen.
QUEST: But the potential for President Putin to make great strides and benefits is really quite enormous here, isn't it? If he doesn't annoy
KOSTIN: I personally believe they can go business together, because they - - to a certain extent, there are certain similarities in both gentleman. And I believe that they can have a good relationship that would be very
useful, I think.
QUEST: The scale of uncertainty awaits you. What color pen would you like?
KOSTIN: Of course, red. I would not be so much uncertain. I think when we met in 2007, 2008, we had much more uncertainty.
KOSTIN: I think so, yes.
QUEST: Everybody's very uncertain at the moment. But you're not.
KOSTIN: No, no, no, somewhere here.
QUEST: How much of you going there is because President Putin and Donald Trump might get on with each other?
KOSTIN: Very much so. I think that that is definitely the direction in this way. And but, still, still, I would say the politics and probably
growth is something which I --
QUEST: Watch the wires as you come back. Thank you very much.
KOSTIN: Thank you. Thank you, Richard.
QUEST: Thank you very much. Andrey Kostin joining me here.
[16:40:00] When we come back, we will continue to look at MH370. So, the announcement has been made to stop the search or at least suspend the
search. Is that justified? We'll talk about it after the break.
QUEST: The chief executive of Malaysia Airlines says he's surprised and saddened that are authorities have decided to suspend the search for MH370
which disappeared in March of 2014, 239 victims onboard. The families have described the decision as irresponsible. Malaysia Airline's new CEO says
he'll continue working to rebuild the carrier's image.
(BEGIN VIDEO CLIP)
PETER BELLEW, CEO, MALAYSIA AIRLINES: I'm incredibly surprised myself and I'm very sad about the whole thing. Plus, we do our best for everybody to
kind of put Malaysia Airlines back to being the pride of the nation that we have again and we try to do our best for ow employees and the people who
lost family members.
(END VIDEO CLIP)
QUEST: David Gallo is a CNN contributor, senior advisor at Columbia University's Earth Observatory. Now, David, found or was part of the team
that found Air France 447 after convincing investigators to allow them to go back out again. They found the wreckage seven days later. David joins
me from Newton, Massachusetts. David, are you surprised that they have suspended the search when the first principle's report just a few weeks
ago, identified a new area just a few miles -- well, a bit further north, as highly probable.
DAVID GALLO, LAMONT DOHERTY EARTH OBSERVATORY OF COLUMBIA UNIVERSITY: Yes, I was very surprised, Richard, and I became angry and a whole range of
emotions, but it's a very bad decision.
QUEST: From your understanding, why did they take it? I mean, they literally have this report from the experts saying they've identified a new
area just a bit further north. It's only 25,000 square kilometers. Why do you think they stopped?
GALLO: It's, you know, maybe it's the money issue, but it's hard for me to justify it that way. You know, this is -- they said they would keep going
as long as there was positive evidence, and, you know, the search teams were so confident that this area was very high priority, that I can't
believe that they would give up all they've done so far, in terms of mobilizing a team, getting the right equipment, learning how to use it.
They're fully primed and ready to go into this area, and to pull the plug right now is just horrible.
QUEST: You see, that's the point. They say they're suspending it, but once the resources have been dispersed or put on ice, it's enormously more
expensive to get it up again. You faced that issue with 447.
[16:45:00] GALLO: Yes, it was horrible, Richard, because we spent two months in the first year in an area that we were told, thanks to backtrack
bottling, that the plane would be in that area. And as the days went by and weeks went by and months went by, you know, the pressure starts to
build on you, from the community, from the family members, from the agencies involved, and you start to have self-doubt. It's a horrible
situation to be in. And, so I know, I have some idea what they're feeling now in Australia. Yes.
QUEST: So, so finally, David, would you support an independent search or at least a search that was also going to be funded by say, Boeing, whose
plane it was, by Rolls Royce, the governments, basically something to get the thing started again.
GALLO: Absolutely, Richard. I think there's plenty of equipment out there. The sad part, though, as you just pointed out, the equipment, the
team, the ships, everything is there ready to go. So, if this is the only resort, I think we have to find the plane. I think we all agree to that,
that the plane needs to be found. And so, I think that's the next step, which could be very embarrassing for everyone involved, in pulling the
QUEST: David Gallo, much appreciated, sir. Good to have your analysis tonight. QUEST MEANS BUSINESS, we're live in Davos.
Matt Damon is swapping Hollywood for Davos. Now, he tells me about his water charity and development work. You'll meet Matt Damon after the
QUEST: The woman sounds as if she's in pain. I suspect it's because she's outside in this temperature. To give you an idea, it's minus 20 Celsius
now and the temperature's falling. An interesting discussion of what that is in Fahrenheit. My colleagues tell me it's minus 4, I'm told. Sounds
Matt Damon says the global water crisis is difficult and complex, but not insurmountable. Matt Damon is here in Davos to promote his clean water
charity. He's part of water.org. And today the owner of Stella Artois announced its continuing fundraising partnership, to provide 3.5 million
people with long-term access to clean water by 2020. Matt Damon told me why he believes they can make a difference.
MATT DAMON, COFOUNDER, WATER.ORG: I think the most exciting part of all of it is looking at it and genuinely feeling and genuinely knowing that there
are solutions in place. An and if I leave you with anything today, it's that there are practical solutions and we can solve this problem in our
QUEST: Did you think, oh, god, here we go, I've got to explain to some overblown Hollywood star why water is important and he might have interest
that will last ten minutes if I'm lucky.
[16:50:00] GARY WHITE, CO-FOUNDER, WATER.ORG: No, from the outset, I did not feel that way, because his reputation proceed him as being intelligent
and almost graduating from Harvard.
WHITE: That was enough for me. And Matt is actually one of the world's water experts now, himself. And this complexity is key, but the way we
respond to that is going down to the level of looking at it from the perspective of that poor person, who doesn't have water. That makes it
much more simple and what we've discovered is its access to affordable finance, so they can get the water and sanitation solutions that they want,
and that's where we've taken off.
QUEST: Why did you get involved? Why should a beer company from one of the largest organizations in the world -- what's in it for you? You've got
to put money behind this.
RICARDO TADEU, AFRICA ZONE PRESIDENT, AB INBEV: Definitely. And not only us, but also consumers can put their money on this. We never had such a
good response in our research from consumers than this campaign.
QUEST: Gentleman, if I ask you if you would like a glass of water, I tend to sort of say, would you like still or sparkling.
DAMON: Yes, yes.
QUEST: I mean, that's the way we do it in Davos type of thing. Matt, do you find it surreal that we talk about bottles of water, still or sparkling
here, and yet there are people in the world, in large parts of the world, who, frankly, this is just ludicrous.
DAMON: Well, you've identified one of the biggest messaging hurdles that we have to overcome within our own work, which is to just explain to people
in the West that this issue is -- the magnitude of this issue. Because, you know, you and I don't really have any friends that we grew up who have
ever been thirsty. A clean drink of water is never more than five meters away. The water in our toilets in the West is actually cleaner than the
water that about 650 million people on the earth have access to.
QUEST: Do you find, Gary, in a world of multiple issues, where everybody's crying for resources, because of what Matt says, most people out there
could have -- I mean, we can think of illness and cancers and deformities of birth. But people in the rest of the world, you are fighting against
all of these other issues to get --
DAMON: And all of those issues are relatable, right?
WHITE: Yes, Yes. They're either caused by or exacerbated by water. Lack of education. Women and girls are off carrying water, right? But the key
is that we know how to solve this problem. We've made water safe in the U.K., in the U.S., for more than a hundred years. It's not the moonshot to
cure cancer, it's not the miracle cure for aids. While those are important, and need funding, this is something that's solvable today. And
it's a crisis today. It's not a looming crisis, like global warming. People are dying, a million people every day -- every year -- every 90
seconds, a child under the age of 5 is dying from water-related disease.
DAMON: It's completely preventable. From something like diarrhea, I think of it as a parent. Your kid has a bout with diarrhea, they might miss a
day of school, but what's the cure? Clean water.
QUEST: You said, I have four daughters. It's tough to imagine them having to walk four hours every day to get clean water? I've got an even tougher
question for you. You've got four daughters. How are you going to explain to them the changes about to take place in the world on Friday? Changes,
with obviously, a new president. Changes in Europe, but changes that will have ripple effects, not beyond jobs somewhere else, but ripple effects
around the world. How are you going to explain to them?
DAMON: As I always do. I'm going to be honest and, you know, I think in terms of foreign aid, it's yet to be seen where the President-elect stands
on that. There was that kind of alarming issue in "The New York Times" a couple days ago, that article where basically, kind of, his transition team
had asked kind of a list of questions of the State Department that kind of had a real negative slant. It seemed like they were coming from a real
place of skepticism about foreign aid. I don't know. I haven't really heard him talk about it. I don't know where -- I think right now, I have
to -- I'm rooting heavily for him. Because if he is successful, that is a good thing for everybody. And I think you have to get behind your
president and root for your president. And, Yes, it's no secret that I didn't vote for him, but, if he does well, we all do well.
QUEST: Are you prepared to put every bit of you behind this, as you have so far, and go all the way to the Oval Office, if necessary?
QUEST: And say -- and tweet! And tweet, and just see what you get back?
DAMON: Look, if this president is open to this concept, are you kidding me, we would never pass up an audience with an American president. And who
knows, maybe he will be. He's a businessman. For every dollar you invest in this sector, you get back four. And he would appreciate that. And so,
I think, you know, there are a lot of things to recommend this type of intervention from everything because it's -- from being the right thing to
do to being smart, kind of pragmatically, and smart as an issue of national security. There are a lot of things to recommend this
[16:55:00] QUEST: Give me one word to describe the fact that the situation is so bad. One word. The first word that comes into your mind.
TADEU: Lack of awareness. For sure.
QUEST: Unconscionable, unproductive. These are the thoughts. We'll have a Profitable Moment after the break.
QUEST: Tonight, PROFITABLE MOMENT, along with Jeff, the global economic forum snowman. And so, it was a very strange day here in Davos. You had
President Xi here, talking about global, globalization, in a way you might have expected from a U.S. president, and then you have Theresa May, talking
about Brexit, and making clear there's no single market. And both of them are talking about going out and finding new markets, at a time the U.S.
president's talking about protectionism and the EU and other leaders are going to look to shut out Britain from the single market.
It's a strange world that we saw today, and it really is indicative of the great uncertainty that now seemingly exists in the world. Put it all
together, and frankly nobody here can tell you what the outcome of any of these issues is going to be. That's QUEST MEANS BUSINESS for tonight. I'm
Richard Quest in Davos. Whatever you're up to in the hours ahead, hope it's profitable. I'll see you tomorrow.