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QUEST MEANS BUSINESS
China Warns Over U.S.-North Korea Standoff; Oil Prices Bouncing Back; Vettel and Hamilton to Face Off in Bahrain; Bahrain Bourse CEO Not Worried About Volatility; Global Risks Weigh on Gulf Region; Gulf Air CEO Says Laptop Ban Not Necessary. Aired 4-5p ET
Aired April 14, 2017 - 16:00:00 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: No trading on Wall Street or indeed the major markets in Europe, come to that. It is good Friday. It is April
Tonight, a world that seems to be on edge. China says conflict could break out at any moment. Oil prices are bouncing back. You'll hear how the
Middle East is going to react and how it will live with a new reality.
And the faces of Formula One's rivalry. We'll be discussing that on the eve of the Bahrain Grand Prix.
I'm Richard Quest, live in Manama, in Bahrain, where tonight, yes, I mean business.
A very good evening to you from Bahrain. We're here not only because of the F1 which takes place over this Easter weekend, but it's the perfect
place to the to start talking about and discussing a world that's very much on edge. A backdrop of extraordinary tensions across the globe at the
moment that we're going to dissect for you and put into some sort of perspective.
Just hours from now there are public holiday celebration than will get under way in North Korea. It will be another chance for the festivities
perhaps to show a nuclear test which would make an already tense situation considerably worse between Pyongyang, Seoul, Washington, and Beijing.
Already Pyongyang has warned that it will react to any form of provocation.
So, let me point out to you the areas of tension tonight. And we will also put it into the business context. Firstly, North Korea is vowing a
merciless response to any provocation. And the Chinese foreign minister is warning against conflict.
(BEGIN VIDEO CLIP)
WANG YI, CHINESE FOREIGN MINISTER (through translator): On the issue of the Korean peninsula, it's not about who can say the most hateful words,
about who can raise the biggest fist, who will win. Rather, once war breaks out, there will be losses on all sides. No one is the real winner.
(END VIDEO CLIP)
QUEST: This all happens at the same time that the United States dropped something known as the Mother of All Bombs in Afghanistan. It was the
largest non-nuclear weapon ever detonated by anyone. And it was designed to attack ISIS in caves and in deepest parts of Afghanistan. Donald Trump
said using the Mother of All Bombs now was not meant to send a message to North Korea. However, the world is considering what it does mean. And for
that we need to go to Barbara Starr at the Pentagon. Barbara, what -- look, you know, tensions are high. To drop this bomb now might be seen to
be provocative in the extreme.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, good evening, Richard. I have to tell you that the top U.S. commander in Afghanistan, he doesn't see
it that way, even though the rest of the world logically just might. Earlier today, General John Nicholson talking to reporters in Kabul,
releasing video of the actual explosion. The detonation you see it there. Exploding in a deep mountain valley in Afghanistan. He was adamant that
outside events, as he referred to them, had nothing to do with this, that he had a target that he wanted to go after, which was ISIS in this deep
mountain valley in Afghanistan, where they had retreated into a cave and tunnel complex.
But look, make no mistake, this 11-ton bomb, serious business, a serious message on the world stage that the U.S. is willing to use this kind of
firepower, a bomb that is so heavy, as you see there, it is shoved out the back of the door of a cargo plane. Was it aimed at North Korea? Not
really, but, you know, both North Korea and the Syrian leader Bashar al Assad might want to draw their own conclusions from seeing the pictures,
QUEST: So where does Donald Trump or the Pentagon stand vis-a-vis North Korea at the moment? Bearing in mind the President's comments in the last
few days and his tweets concerning China.
[16:05:01] Firstly, China has to deal with it and they get a better trade deal, but if they won't, the U.S. will. What do we make of this, Barbara?
STARR: I will tell you very strongly, we've talked to a number of officials about this, President Trump's constant reference to China is not
by accident. There is a very strong feeling inside the administration that the summit at Mar-a-Lago with President Xi went very well and that the
Chinese are willing to try and get North Korea through diplomatic and economic pressure to, you know, not proceed with further provocation.
But look again, make no mistake, the U.S. military is ready if its commander in chief orders action. Right now, U.S. military policy has not
changed. The U.S. will defend itself. That's what we're told. They will not let South Korea and Japan be attacked. This is the economic powerhouse
of Asia. And what's probably most important there is nobody, maybe the North Koreans, but nobody wants to see conflict in that region. Because
really, I think you know better than me, Richard, any conflict, South Korea, Japan, anywhere in the Pacific region, what that would do to the
Asian economic situation could be absolutely devastating. No one wants to see that kind of destabilization.
QUEST: Thank you, Barbara. And I would only perhaps change one word in that last answer, because I agree completely, from "could be devastating"
to perhaps "would be devastating," because that's where we're going next. Barbara Starr, thank you for that.
We're go to the Korean peninsula now, where in the next 24 hours, the massive military parades are expected in North Korea as the country has a
celebration day. But what we'll be watching for is not a big show, staged demonstrations in Pyongyang. It's whether or not they do another nuclear
test. Alexandra field is in Seoul, South Korea. First of all, what are the North celebrating and what are you expecting to see?
ALEXANDRA FIELD, CNN CORRESPONDENT: This is their annual celebration of the birth of the founder of North Korea. This would be 105th anniversary.
It is the most important day on the North Korean calendar. It is also time where we expect to see a large military parade, full of pomp and
circumstance, an opportunity to show the world the military might and prowess of North Korea. That is the traditional way of celebrating this
holiday there. But the more alarming possibility is whether or not Kim Jong-un will use the day and use the fact that the world attention is on
North Korea to carry out another provocative action like a nuclear test, which would be the country's sixth nuclear test.
The decision on when to conduct that test is Kim Jong-un's. But you do have analysts in the U.S., you do have officials in Washington who do
agree, based on the evidence they observe from satellite images, that this country is ready to go. That they are primed and prepped and ready to
carry out that nuclear test when the commander decides and is timed in fact to do it.
This day is so important, it is so central, because we have seen in the past, Richard, that North Korea has carried out these provocative measures
around this time. It's their way of showing strength and projecting strength to the world. And it would also come after they have opposed the
presence of the USS Carl Vinson in the waters off the peninsula. They see it as very provocative, Richard.
QUEST: OK, but Alexandra, how does South Korea, never mind the North, how do they view what they're hearing out of Washington? Do they view
Washington as being consistent currently in policy, pragmatic in policy, or frankly, flaky with policy?
FIELD: Look, the people here in South Korea are looking for assurances from Washington. They have had that in recent months in the form of high
profile visits from Secretary Tillerson and Secretary Mattis. Now they're preparing to receive the Vice President, Mike Pence, when he makes his way
here for the weekend and then goes on to Japan. He will be talking to his allies here about all of the options that Washington has been considering
when they look at how to handle the mounting threats from North Korea.
And of course, they will be talking broadly about a military option. That's the option that is of course widely feared here in South Korea. It
is always a possibility. We know that. It is always on the table. But it is certain that any kind of action from the U.S. on North Korea would lead
to retaliation, which would put tens of millions of South Koreans squarely in danger. You also have to consider the political context here, which is
that there's a presidential election going on.
[16:10:00] So, people here are looking at how the next leader would work with the U.S., and the current acting president is trying to assure the
public that the U.S. will not act unilaterally, will not make any decisions or carry forward options without consultations with the South Koreans.
They want to be at the table when it comes to this. They do not want their fate to be determined by the U.S. and China alone.
QUEST: Alexandra Field in Seoul, we'll be watching what's happening in North Korea in the hours ahead, as daylight and Saturday arrives in that
And so tonight we are in Bahrain, over the causeway, a dozen miles away or so is Saudi Arabia. Across the Gulf, you have the UAE. Not too far,
you've got obviously, the Middle East. You've got Syria. We're in the Gulf, we're in Bahrain. At a time of great turbulence for this part of the
We've told you tonight, in Afghanistan the U.S. drops, "the mother of all bombs." In Syria, the escalating civil war. A chemical attack with a U.S.
missile strike in retaliation. And the future of Bashar al Assad, perhaps confused on what the U.S. actually wants. Iran is united with Russia on
Syria and warning against more U.S. strikes on Syria.
Then you've got Turkey just across the way. The referendum on Sunday, it could hand more power to President Erdogan. The latest polls are showing
it's simply too close to call. Not surprisingly, Defense Secretary, Mattis, will be in the region next week. He'll have an agenda like none
other. Peter Bergen is CNN's military analyst and joins me now. Peter, a really simple, some might say naive question for you. How on earth did
things get so bad so quick?
PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, you know, I mean, one answer to that is the Arab Spring didn't really create the democratic
Middle East that everyone had hoped. And it produced vacuums in countries like Libya, Yemen, Syria, and to some degree Iraq. And so, five years
after the Arab Spring has turned into the Arab Winter, and we're seeing a fair amount of chaos in the region.
That said, I mean, I don't think there's anything very substantively different under President Trump than there was under President Obama in
terms of the actual situation. After all, we're only, whatever, 85 days into the Trump administration. And there is a fair amount of continuity,
Richard, I think between Obama and Trump in the sense that the operations in Iraq that we see around Mosul are, you know, very much operations that
were planned by the Obama administration.
QUEST: But in this case, you have the "Mother of All Bombs" being dropped in Afghanistan. You have chemical weapons being used in Syria followed by
a military strike. You have bellicosity of an extreme nature between North and South Korea and the United States and warships steaming into the area.
Of these, particularly probably Syria versus North Korea, which for you at the moment is the most troubling and worrying?
BERGEN: I think the North Korea situation is clearly the most troubling. I mean, North Korea has been an issue for every president since President
Bill Clinton. And with every president, North Korea is further down the road of nuclear testing, nuclear weapons, building, you know, ballistic
missiles that are capable of going further and further, mounting potentially nuclear weapons on ballistic missiles. That's the big one.
You know, Syria, as you said, Richard, clearly, you know, with its chemical weapons attack, we've seen that before in Syria, now we have had a Trump
administration response, which I think was widely applauded by both Democrats and Republicans. But it's North Korea that is really the big
issue. By the way, there's 27,000 American troops on the other side of the border in South Korea, apart from anything else.
QUEST: So, let's take North Korea. And Donald Trump says that if China won't help solve the problem, the U.S. will do it alone. Can the U.S. do
BERGEN: I mean, I have no idea, Richard. I've got to assume that joint special operations command and Delta Force SEAL Team 6 and other groups
have war gamed, you know, trying to take possession of this guy's nuclear weapons, because that's what they do. I don't know that as a fact. I'm
not sure how hard it would be to do. North Korea, as you know well, is the at least transparent country in the world, so, you know, would it really be
possible for the United States to take unilateral actions that would succeed?
[16:15:00] There's been war games on this subject. But I'm sure President Trump hopes that the Chinese will put enough pressure on the North Koreans
to kind of get them to change course.
QUEST: Peter Bergen, sobering comments from you this evening, and thank you for those, as we consider the global tensions.
As we continue tonight, QUEST MEANS BUSINESS live from Bahrain. John Defterios will be with us after the break. We're going to talk about oil.
In this environment, at what point will we start to see oil prices rising? By the way, the F1 is here this week. This is Sheik Khalid Road. It's a
thoroughfare where it seems to be every boy racer wants to try to be an F1 driver going along here tonight.
QUEST: Welcome back, we're in Bahrain. We're talking oil prices. Now oil prices have rallied somewhat in recent weeks. At the same time, the amount
of U.S. shale being produced has dramatically increased as well. Emerging markets editor, John Defterios is with us.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Good to be in Manama with you.
QUEST: Good to see you, sir.
DEFTERIOS: Welcome to our territory.
QUEST: Your territory. Oil prices.
QUEST: They're going up or at least holding. And OPEC says it will continue to hold its line.
DEFTERIOS: In fact, we spiked back up again, we're almost at $56 a barrel. I wouldn't pull out the corks yet and pop the corks yet, even at the F1
race. But there's three things to point out I think, Richard. We're up about 12 percent from that March low, which is significant. A firm floor
of $50 a barrel is what they're looking for in the Gulf. The UAE this week suggested that the market is almost rebalancing. I spoke to a couple of
key Gulf sources who said that they have this idea of rolling over in the second half of the year, perhaps for three months, perhaps for six months.
But I think it's fair to say, and you mentioned this in the intro, they miscalculated the recovery of the U.S. producers.
QUEST: Hang on a second, you're 56, even 57, even $59 a barrel, that is not enough for a government here that requires a higher price for oil to
meet its budget demands and deficits.
DEFTERIOS: Yes, in fact particular Bahrain, because it's not a major producer, but it relies on 70 percent of its government revenues on that
taxation of the production has right now. But it's a similar story throughout particularly the Gulf states who have a lowest cost rate of
production. Anywhere from 2 to $10 a barrel. Saudi Arabia, Kuwait, the United Arab Emirates. Let's take a look at Bahrain, you go back to 2013,
to balance their budget, it was $130 a barrel. They brought that down to $93 a barrel.
QUEST: That's still beyond what they need now.
DEFTERIOS: Exactly, 35 or 40. So, what are we talking about here? They have to bite the bullet, perhaps freeze wages going forward. Gas prices
went up here 60 percent, wages were cut in Saudi Arabia by 20 percent. I spoke to the minister of industry and tourism who said this is the new
reality, and they can't stop and can't plan for oil above 55 or $60 a barrel.
[16:20:08] Let's take a listen to what he had to say.
ZAYED ALZAYANI, BAHRAINI MINISTER OF INDUSTRY, COMMERCE & TOURISM: We have to adjust to live with this reality. And I think it's a wake-up call. It
is forcing us to look further beyond oil and to diversify our economies, although Bahrain started doing that in the mid-'60s. But now it's putting
more emphasis on finding more diversification. We have to adapt to the worst-case scenario, which is the lower oil price. And anything that comes
on top of that is really icing on the cake.
DEFTERIOS: It's quite a shocking period, post-Arab-Spring, if you will, 2011 even for Bahrain. Have you convinced the international community that
the worst is over in terms a destination for investment?
ALZAYANI: The worst is behind us, definitely. We've seen growth in the economy year after year, even in 2016 we had a positive growth rate for
Bahrain, 2017 is forecasted for further growth. A lot of reform has taken place since then. And a lot of things have transpired as well. What
started in 2011 as mostly a people's movement, a lot of things came out from under the currents, and we see today very clearly, not only us, but
the rest of the world has finally come to see it as well. Is that a lot of it was not really social, socially motivated, it was more political, it was
more geopolitical, more regional. There's much more clarity today. There's much more certainty. And I think where we're headed is well on
track to achieve the 2030 vision.
DEFTERIOS: Zayed Alzayani is the minister of industry and tourism, Richard. In the Bahrain, International Investment Park. By the way, we
visited a food factory. They doubled down on their investment, another $95 million for Mondelez. But you heard what he had to say here, they bounced
back going forward, but clearly, they have to plan for lower, for longer. That's the message coming from here.
QUEST: We'll be talking about that. Good to see you. It's cooler here now.
DEFTERIOS: We don't have the humidity. It's not bad. It's early days.
QUEST: Always complaining about the humidity and the heat. It was boiling here today. We're here of course as well for the F1 race which takes place
third of the season in Bahrain. It's one of the more famous races or certainly one of the more popular races. But it comes at a time when F1
itself is under new ownership. Liberty bought F1 for $8 billion back in January. Anna Stewart now reports on the new face and new owners of
ANNA STEWART, CNNMONEY CORRESPONDENT (voice-over): Blink and you'll miss it. Since the first Grand Prix in 1950, Formula One has been getting
faster. More technical and more valuable. It's worth $8 billion. Entrepreneur Bernie Ecclestone was the driving force behind the
transformation in the `70s, striking lucrative deals with corporate sponsors and global broadcasters.
F1 winners like Ayrton Senna, Michael Shoemaker and Lewis Hamilton all became global icons. What was a low-profile sport is now one of the most-
watched sports events in the world.
Now Formula One is starting a new lap in its history. Last year it was bought by a U.S. group, Liberty Media. And Ecclestone, now 86, is no
longer behind the wheel. He's been replaced by Chase Carey, one of Rupert Murdoch's former right hand men. Carey says he'll make inroads in the U.S.
where Formula One has fewer fans. And he plans to turn every Grand Prix into a Super Bowl style event will be entertainment both on and off the
track. Anna Stewart, CNNMoney, London.
QUEST: Now, to get perspective on what this change meant, more of my interview with racing legend Sir Jackie Stewart. I asked him because he,
let's face it, has seen four decades of Bernie Ecclestone and knew the race before. What did he think life was going to be likely under Liberty?
JACKIE STEWART, THREE-TIME FORMULA ONE WORLD CHAMPION: I think it is significant, obviously, Bernie Ecclestone did a remarkable job to build
what was relatively a small sport into a giant sport on a global basis. And he did a tremendous job on that. Most of us are getting a little bit
older and obviously, Bernie is in that position also. But the purchase by Liberty of FOM has made a huge difference.
[16:25:00] And I think, because of Liberty's experience in entertainment and films and music and sport, perhaps potentially will broaden Formula One
to even bigger than it currently is today, particularly in media and electronic media.
QUEST: Does F1 require that strong -- this is my phrase, not yours, sir, it's my phrase, not yours -- that strong, benign dictatorship type of angle
of an Ecclestone to lead this thing forward?
STEWART: In everyone avenue of business and commerce, there has to be leadership, and there has to be strong leadership. Bernie Ecclestone
created perhaps a unique presence that I can't think of any other sport ever had. I suppose Pete Roselle, perhaps, did that for American football,
NFL. Bernie Ecclestone certainly did it in Formula One.
But I think the enthusiasm, the potential of a large multinational multisport enterprise coming in is going to add a dimension that simply
wasn't there before. And therefore, it's going to take a little bit of time for the CEO and chairman, as both those go and chase his position, and
in marketing for Sean, again, it's a new challenge. Because both of them are not experienced in Formula One Grand Prix motor racing. And they are
both from the United States of America. Formula One is a very global sport. And therefore, that's a lot of nationalities involved, the
idiosyncrasies of those nationalities and culture, et cetera, has got to be learned. I think it will take a little while. But I think the dimensions,
the experience, the knowledge, the financial backing that a big multinational such has been created for Formula One by Liberty, is going to
QUEST: So, Jackie Stewart will talk more about Formula One and the actual race and the rivalry before the end of the program with Amanda Davis.
After the break, QUEST MEANS BUSINESS, there's a lot more still to come. We're going to be looking at risks in the region. The Bahraini Economic
Development Board will be here to tell us what they expect. And the CEO of Gulf Air will put it all into perspective, where he sees his airline. It's
QUEST MEANS BUSINESS on an F1 weekend in Bahrain. I'm Richard Quest.
[16:30:00] QUEST: Hello, I'm Richard Quest in Bahrain. There's more from QUEST MEANS BUSINESS in just a moment when the CEO of Gulf Air will be with
me. He'll talk about his Middle East rivals and how they're faring, and whether he's having problems with electronics. And Bahrain goes up for the
third F1 of the series. Before all of that, this is CNN, and on this network, the news always comes first.
A North Korean official says U.S. President Donald Trump is always, in their words, making provocations with his aggressive words. The North
Korean vice foreign minister spoke in an exclusive interview with AP. North Korea is preparing for its sixth nuclear test this weekend despite
warnings from Washington.
The U.S. is defending its use of the most powerful non-nuclear bomb in Afghanistan, calling at it right weapon against the right target. The
massive ordinance was dropped on Thursday night on a network of ISIS tunnels near Pakistan. Afghan officials say 36 militants were killed. Is
denying suffering casualties.
Authorities in Israel arrested a Palestinian man suspected of stabbing to death a woman on the Jerusalem railway. The Israeli embassy says the
victim was a 25-year-old British tourist. Police are on heightened alert this weekend because of the increase in tourism due to Passover and the
The pope is observing good Friday at the coliseum in Rome. Pope Francis presided over a sacred tradition, the stations of the cross. Good Friday
is the day Christians mark the crucifixion of Jesus.
We've been talking a great deal over the last day or so about the increase in geopolitical tensions. And you're seeing it in the markets, for
example, with the VIX index at a five-month high. CNN Money's fear and greed index is in the extreme fear zone. Investors are worried about North
Korea, worried about Syria, and Washington's relationships with Moscow and Beijing. Now joining me is the chief executive of Bahrain's economic
development board. Good to see you.
KHALID AL RUMAIHI, CHIEF EXECUTIVE, BAHRAIN'S ECONOMIC DEVELOPMENT BOARD: Thanks for having me on the show.
QUEST: Thank you for having us here in your country. Now, no question, volatility is everywhere at the moment. What is concerning you here in
RUMAIHI: Job growth. Jobs growth, making sure that we can have that occur in a low oil price environment. So, for us, I think we look at our own
economy and how we can keep growth occurring despite all the challenges that we see in the world.
QUEST: But you have Saudi on the border, on one border. You've got the other gulf on the other side. You have instability from Syria as well. I
mean, it's very difficult for you to go out and say to people, oh, please, come and invest, anywhere, never mind here, anywhere it's difficult to get
RUMAIHI: Well, I think, you know, this area is resilient. It's not new to us to have conflict in the region. Investors are looking at not only the
risk but the opportunity. And for us to see recently Amazon acquired Souq.com just shows that they see potential in the region. Demographics
are very strong, high per capital income, a $1.5 trillion market herein the 6 GCC states.
QUEST: You are repositioning the country to a certain extent, obviously, in a non-oil environment. More than nearly three-quarters of the economy
is non-oil. Where are you going? What do you want?
RUMAIHI: We want to continue that. We've started diversifying our economy since the 1970s. As you mention, 80 percent of our GDP is not reliant on
oil. We want to continue that. We want to make sure the makeup of the economy is fit for the future. The digital economy is going to play a big
role going forward. We want to make sure that we have the current infrastructure position for that. And this is political change.
Obviously, every investor must come to you and say, about what about the pictures of instability we've seen in the past, what about the criticisms
on human rights issues we've heard about here? Is there process of change continuing?
[16:35:00] Investors are talking to us really about what's going to affect their bottom line. Investors are saying, why should I choose this city
versus competing cities? Last year the economic development board was able to raise double what we had raised in 2015, what could be potentially 1,600
jobs. We're here 30 minutes away from the largest economy in the GCC, kingdom of Saudi Arabia, and we've got an educated population. And more
importantly, we're trying to make sure doing business is easy.
QUEST: Can you promise them stability?
RAMAIHI: Yes. We've seen that. We can promise them economic stability and an opportunity for growth. Businesses want to make sure, is the
environment one conducive to be generating the right profits, having freedom to repatriate capital.
QUEST: And on this question of change, because I can hear viewers will be saying to me, you haven't asked him, does the change process that was begun
a few years ago, do you see it continuing?
QUEST: Reform continuing.
RAMAIHI: Absolutely. It's continuing from when his majesty took the throne in the year 2000, and it continues, whether it's on the economic
front or the political front. Nothing has changed. And I think only when investors come here and see the country for what it is, do they appreciate
that that is truly the case.
QUEST: Good to see you, sir. In uncertain political times, this is the head of the investment board. Earlier I was talking to the head of the
stock exchange, and he said of course, in uncertain times, there's opportunities for political gain and financial gain.
SH. KHALIFA BIN EBRAHIM AL-KHALIFA, CEO BAHRAIN BOURSE: Instability is a general term. We've proved to be resilient in an unstable region. And on
the financial side, we survived the financial crisis in 2008.
QUEST: So now our lead story today is on geopolitical concerns. And you rolled your eyes when I said it, didn't you? Because you've got Syria,
you've got Afghanistan, you've got Moscow and the U.S. you've got Pyongyang, North Korea. How concerned are you about this in terms of the
financial world at the moment?
AL-KHALIFA: I think the concern from my side would be the investors' concern. They look at the numbers. If the numbers and the risk factors
give them the objective not to buy, they won't buy.
QUEST: Do you see the uncertainty creeping in at the moment?
AL-KHALIFA: I don't see it yet.
QUEST: You don't?
QUEST: So, uncertainty, change. There's one company here that's faced it all before and will face it more again. Good to see you, sir.
QUEST: Good to see you.
It's the chief executive of Gulf Air, how nice to have you here. First of all, you were -- Bahrain is not one of those countries that's been hit by
the electronics ban. What do you make of that ban? How necessary do you think it was?
MAHER SALMAN AL MUSALLAM, CEO, GULF AIR: Well, I don't think it is very necessary initially. All we are requiring as airlines as to give us the
chance at least for voice to be heard in the administration or whatever is going to ban anything in the airlines. We have a very important
representative called IATA, and they are the voice of the airlines. And they should be at least consulted in such a ban.
QUEST: Were you quite shocked at the way in which -- particularly, I know you're rivals, but your largest neighbor, it's the largest airport in the
AL MUSALLAM: 100 percent. This is affecting everybody. You can hop on another airline on your way to the states, going to Europe, you can use
your tablets without problem.
QUEST: There's so much talk, when you saw the United story the other day, I was asking Willie Walsh about this the other day, did you all think we
now need to look at our procedures about how we handle anything that might happen? Did you think we must just look and make sure our producers are
AL MUSALLAM: Well, we have a very good procedure. We have been following and would define this as necessary, as possible, in order for us to make
sure that we don't lose our customers. This is harming everybody. And it's harmed united, of course. They could have handled this matter
QUEST: Where are you going to position Gulf Air? What do you see as the role for gulf air, now you have so many large competitors on your doorstep?
[16:40:00] AL MUSALLAM: Of course, the competitors, one day they have been my partners, they have been my owners as well. And gulf air was the only
airlines here in the gulf. Now all of a sudden, the whole thing has changed, the whole game changed, and here we are defending for our self and
competing with the others. We find ourselves as a medium sized airline, that it will be this country, infrastructure for the rest of the time.
QUEST: OK. But do you -- I mean, obviously, you're going to add in various strategic routes. Have you given up or is it unrealistic to expect
to be a global carrier, in which case you're going to have to either join an alliance or increase your shares, your partnerships with other carriers?
AL MUSALLAM: Gulf Air is a very famous name.
QUEST: It is, one of the oldest names in the business.
AL MUSALLAM: Exactly. We will be very much honored if we could just join an airline and to go with them, because this is the way forward. But
again, this alliance is, again, you might join it and you know sometimes you are on probably a smaller player in this alliance and it might not help
you the way you thought that it will. So, I think Gulf Air will do better. I am very much optimistic of gulf air's future, especially with the new
fleet coming next year.
QUEST: Looking forward to flying you back to London tomorrow morning.
As we continue tonight, if I say the word to you block chain, I know something about it, it's something to do with bitcoin or bit electronic or
digital money. The way it operates is going to be extremely important in Bahrain. I'll explain after the break. The traffic is still going strong.
It's quarter to midnight on a hot Friday weekend. F1, they race down this road, it's quite extraordinary. Slow down!
QUEST: Welcome back. Here in Bahrain, the country here is making a big plan to adopt something called Blockchain technology, a system best known
for bitcoin, but now other places, particularly places like Bahrain, are seeing the future of it. Secure digital transactions. The chief executive
is with me, good to see you, sir.
PETER SWIFT, CEO, BLOCKCHAIN: Good to see you.
QUEST: What's the goal here as regards your role with Blockchain here?
[16:45:00] SWIFT: I think the government in Bahrain has taken a very progressive approach to Fintech, they're looking to invest in their
financial technology infrastructure. They're in the beginning stages of learning how to do that. I'm here to kick start that process.
QUEST: At the end of the day, most of us, and I put myself in this category, only know about bitcoin, and we all know, or we were told, it's
very shady, it's used for nefarious purposes and it's not the sort of thing decent folk go about doing. I imagine it's not the same with Blockchain.
SWIFT: It's not the same with bitcoin and Blockchain. A very small percentage is illicit transactions.
QUEST: So, what does Blockchain do?
SWIFT: We build software that makes it possible to transact in digital currencies. The most used digital currency in the world today is bitcoin.
So that's really the one that's got a lot of inertia behind it. Increasingly you're starting to see what's called sovereign Blockchains,
backed by state governments. So, you've seen the Bank of England talk about this, you've seen the Nordic banks talk about it. And you're seeing
other countries that are very progressive in their financial technology infrastructure, like Bahrain, start implementing their own sovereign
QUEST: Is it your goal, do you think, to be a partner with a place like Bahrain, to set up an outpost, because you're in London and New York, and
if so, what function would a Blockchain serve here that's not being served in a London or New York?
SWIFT: I think there's going to be Blockchains that are going to be regional and country-specific. You have the London pound, in the future
you're still going to have that, but it's our thesis they'll all be on Blockchains. For us, the reason that we do it is because we want to get to
a global, interoperable world where people can change money and assets with zero friction.
QUEST: I'm 55, am I too old to understand all this?
QUEST: I beg your pardon? That wasn't quite the answer I was expecting. Who is going to win tomorrow? Or Sunday.
QUEST: Good to see you. As we continue, there is a race going on. I am not too old at 55! Just for that, I'm going to prove you wrong, sir. Maybe
I'll try, maybe I'll fail. When we continue, is it going to be Hamilton, is it going to be somebody else? After the break.
QUEST: It's F1 weekend here in Bahrain. And the man to beat, if today's practice is figure to go anything to go by, he was the fastest in
yesterday's practice. There is one man determined to stop him.
[16:50:00] (BEGIN VIDEO CLIP)
QUEST: Every great sport is built on great rivalry. Messi versus Renaldo. Federer versus Nadal. Now Formula One has its next great rivalry. To
define the sport for years to come. Sebastian Vettel, hungry for his first title with Ferrari. And Louis Hamilton, eager to reclaim the limelight at
Mercedes. Two superstar drivers with cars and teams and money invested to match. Two weeks in, with one victory each, they're neck and neck. After
years of Mercedes' domination, this year's title is anything but a one- horse race. Vettel versus Hamilton leading the way, transforming the sport across the great. This year's cars are lower, faster, more difficult to
Every tweak can change, designed to make the race more thrilling, entertaining. And it's not only on the track. There are new faces in the
boardroom too. Liberty media, the new bosses, with plans to turn each race into a turbo charged super bowl. Bahrain is no exception. It will decide
whether Vettel or Hamilton takes the upper hand in F1's biggest rivalry in years. Amanda Davies from World Sport is with me. How could it be, you've
got 20 cars, but it really is about at the moment these two men?
AMANDA DAVIES, CNN WORLD SPORT: Well, you would say it's about these two men, but actually people at the practice today got really excited, because
Louis Hamilton posted only the fifth fastest time in qualifying today, behind others on his team. It is so hot in here. All the teams are
testing out these new tires. We don't actually know who is going to make out in practice tomorrow. It's really exciting.
QUEST: But at the end of the day, you take the totality of last year and you look at the way things are going, it does come down to seemingly and
simplistically Vettel or Hamilton.
DAVIES: That's how it's shaping up. F1 fans are very excited, the season has gone by, it's been two drivers of the same team going head to head.
This year, for the first time in a long time, we've got two world champions, separate teams, but seemingly cars that are pretty level
QUEST: What happens to the rest of them? Why do they bother? The other eight teams, thank you for turning up but don't worry about the podium?
DAVIES: Red Bull will be a little bit upset, that you're writing them off so early. They're making gains. Engine tokens, teams only have a certain
number of engines per season, that's gone out the window. The rate of development with these new regulations as well is much greater than we've
seen in years go by so it could go much further.
QUEST: I said in my report, faster, more exciting, but not as much passing expected this year, is there?
DAVIES: Not as much passing on paper. But one made a great pull through the field and finished on the podium from way back down the grid. It's
harder to pass. But the good, best racers say this is what it should be about. This is about the sport.
QUEST: But we're a business program, and the business change, liberty bought -- Bernie is here, Bernie is out, a bit of a straining
contradiction, honorary president, a title he doesn't like or want, however, when do we expect to see liberty make changes?
DAVIES: Changes have already started. But I think liberty are approaching it in a very impressive manner. And they had to, actually, because the
head of the commercial side at liberty, when I interviewed him the day after he had come in as part of this takeover, he had even been to the
race. He's a very impressive commercial guy with a commercial background. But he's learning.
QUEST: But the idea that they're going to turn this into a super bowl at every event, what will that look like?
[16:55:00] DAVIES: How do they make it happen? That's the big question. And there's a lot of uncertainty, this nervous enthusiasm. There's so many
questions and nobody is too sure. One of the widespread feelings is that Formula One hasn't done enough in the past to harness the fan power, to
engage in a new audience and embrace social media. Up until this season, teams weren't allowed to post their own things from inside the garage
without the say-so of Formula One management. That's already changed.
QUEST: And you are in the paddock.
DAVIES: And we are in the paddock. We haven't got access to the race, we're never going to try to be a race broadcaster, but we're here and we
can tell the story, and it's fantastic to be here.
QUEST: Thank you very much. A Profitable Moment, after the break.
QUEST: And so, gentlemen, start your engines, vroom, as indeed the F1 get under way. You heard Amanda Davies talk about Vettel versus Hamilton, and
let's face it, who knows what the other teams will be doing the rest of the season. What struck me was the bloodless coup by liberty, the ouster of
Bernie Ecclestone, a billion-dollar investment that has to capitalize and grow a sport that is frankly so famous but needs to introduce new viewers,
spectators, and participants. At the same time, you don't want to let any of the glamour or the champagne or the vroom-vroom disappear from Formula
One. That's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in Bahrain. Whatever you're up to in the hours ahead, I hope it's profitable.
I'll see you in New York on Monday.