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Google Responds to Diversity Debate Fallout; South African President Faces Secret Confidence Vote; Dow Hits Record on Day 200 of Trump Administration; Kenya Prepares for Presidential Election; Marriot Unveils Alibaba Tie-Up;

Aired August 7, 2017 - 16:00   ET


[16:00:00] RICHARD QUEST, CNN HOST: And there we go. Dow is at a record. The S&P is at a record. No record for the Nasdaq which has suffered losses

in recent days, but the major markets are up. Well that was an OK gavel. Trading is over. The day is finished. There's no major market trading

anywhere in the world on Monday the 7th of August.

Tonight, Google employees search for answers on the companies stats when it comes to diversity.

Jacob Zuma is facing his toughest challenge yet, but the markets betting that he could be out as President.

And 200 days of President Trump. The Dow in the S&P are closed at all-time highs.

I'm Richard quest live from the world's financial capital, New York, where of course, I mean business.

Good evening. Thank you for joining us. It's nice to have you with us as we start a new week of QUEST MEANS BUSINESS. And we begin with this

company, Google, trying to contain the fallout from one employees attempt to rail against the companies diversity scheme.

Senior executives are trying to distance themselves from claims that go against the official Google diversity message. And the reason, a manifesto

from an unnamed staffer who argued, biological reasons are behind disparities between men and women. It quickly went viral amongst Google

employees. But then he went further, not just content with doing gender differences, he also criticized what he described as -- she described as --

highly politicized diversity programs.

The brand-new vice president for diversity calls the memo incorrect. Danielle Brown wrote, we are unequivocal in our belief that diversity and

inclusion are critical to our success as a company and will continue to stand for that and be committed to it for the long-haul.

Laurie Segall has covered the issues of sexism in the tech industry extensively for us on QUEST MEANS BUSINESS. You are a veritable expert on

this. What did this manifesto -- what was the core of it? That women aren't just up to the job of being coders, and computer engineers?

LAURIE SEGALL, CNN TECH SENIOR CORRESPONDENT: Yes, I mean, I think what the headline on it is, women aren't suited for tech jobs for biological

reasons. As you can imagine there is a lot of frustration. And I've been on here so many times covering sexism, unconscious bias, all of these

intrinsic issues in technology. So, I'll say this, there's probably a reason that that minimal leaked. That memo wasn't made public. It was in

these internal forums.

I think, people are very frustrated that while there is the company line on diversity and how we're taking it very seriously and were trying to get

more women in these leadership positions, you have engineers -- many would disagree with what he said, but you have engineers that do feel that way.

QUEST: Right, if we do look at the number of female engineers -- and I'm not suggesting for a moment that we go along with this thesis -- but there

are not that many in relation to the number of males. And that is something that Silicon Valley is doing its best to impress. But why do you

think that is the case? Is it an internal sexism?

SEGALL: I think that's a part of it. I think you need -- more women drop off. The numbers show that at early age women drop off. That's why you

have Google trying to invest in some of these stem programs for women and look at the numbers. Right? Google has 69 percent of their total

workforce as male, 56 percent are white employees. And by the way, that's Google, but that's also so many other tech companies. And so, it is an

issue. And I think you are beginning to see a lot of these women look at Susan Fowler, who worked at Uber. This engineer who was doing great work.

She ended up kind of being forced out of the company.

QUEST: Let me ask you though. Let me be devil's advocate here.


QUEST: If this guy -- or I assume it's a guy -- believes what he writes, should he have the right to say it?

SEGALL: You know, it's interesting you say that, I spoke to a source within Google and he said, I hate what he said but he has the right to say

it, and it would be un-Google-able -- that's what he said -- to fire him for that offense.

QUEST: I think actually, un-Google-able, I think actually what he's doing is quoting, it think it was Voltaire.

SEGALL: Yes, exactly.

QUEST: I disagree violently with what you say, but I will fight for the death for your right to say it.

[16:05:00] Finally, how seriously is Google taking this?

SEGALL: I think they're taking it seriously. They have diversity programs. You know, they're doing a lot with them. Every manager has

diversity training. The question is, isn't enough and are things falling through the cracks? And I think, absolutely they are.

And let me just make one point that I think it's incredibly important that not many people are talking about, which is you need a diversity of

engineers for the future of humanity. Because the people in these buildings are building code. And there building up products that will

change the world, and attitude and bias influence code.

So, if you have one type of male white engineer building out some of these codes that will impact the future of products and humanity that's going to

be a problem. So, this is different too then other industries. Because this is obviously a problem in all industries, but Silicon Valley and the

tech community have the ability to touch all aspects of our lives. So, there's a real business reason too to get this under control.

QUEST: Glad we had you here to talk about it with us today, thank you very much.

SEGALL: Thank you.

QUEST: Laurie Segall.

Now Bobby Franklin is well aware of Silicon Valley's struggles with diversity issues. As the president and chief executive of the National

Venture Capital Association, a group in Washington which supports the venture industry and joins me now from Washington. Bobby, we've talked

about this before. And I guess you condemn or at least criticize the views of this person at Google.


QUEST: Good, now we can move onto other things then. What needs to be done about it? I know your organization is putting together a task force.

You're putting together a plan. You're not going to rush it because you say you want to get it right. But how far are you along this process of

increasing diversity in venture capital?

FRANKLIN: Well, Richard, were at the very beginning of the process to try to make a difference in venture capital, which by extension would mean

diversity in startups and companies that grew up to be big companies decades later. We started our task force back in 2014. We've accomplished

a lot, which folks can read on our website. But the issue that you and I last talked about was the one of sexual harassment and we're certainly also

at the beginning of trying to have a more comprehensive response to that. The two issues though are linked.

QUEST: Of course, they are, absolutely. Of course, their link. If you view women or the other gender in a particular way you are less likely to

see them as equals with a view to promote, to employing and are promoting. But the issue here is, why does it exist? Perhaps in your industry or in

the tech industry, more than maybe, say for example, and mine.

FRANKLIN: I think, you know, you just had Laurie talk about unconscious bias, et cetera. We actually have had unconscious bias training a couple

of times for our Board of Directors. And I think when you look back on the modern-day venture capital industry that arguably really got started in the

mid-1970s or 80s. It started as a small cottage industry and as it has grown up over the last few decades, I think that unconscious bias has taken

root and made people want to hire people that look like them. And that's the issue that we have to address frankly more forcibly.

QUEST: So, is it ultimately a carrot, a stick, obviously, a bit of both. But at some point, you've got to say, this is unacceptable and you'll be


FRANKLIN: Venture capital firms anybody can really raise a venture capital or put together venture capital fund. The question is are they successful

in raising a fund. And I think it's important to think about the differences in a venture capital firm and some large corporation. The way

I like to think about it is if we can make sure that people understand that it's not only the right thing to do but is the smart thing to do. You'll

see changes much faster. So, when diverse teams make better investment decisions and end up making more money at the end of the day, that's when

you'll see people wanting to adopt those practices.

QUEST: Bobby good to see you. Thank you as always for coming in and talking to us about it. Very much appreciated --

FRANKLIN: Thank you, Richard.

QUEST: -- and joining us tonight.

Uber is on the radar for a potential investment from the company Softbank. The chief executive of Softbank is ???, says he's also interested in the

biggest U.S. rival, which is of course, Lyft. Following on to what Laurie was saying, what we were talking about diversity, it all comes as Uber's

request for a female chief executive, appears to be falling short.

Now here we go. Thank you. So originally report said Meg Whitman was, she rolled herself out. GM's Mary Barra and Facebook's Sheryl Sandberg were

all approached. But apparently those discussions are over with all three.

[16:10:06] And now of course, we're left with three men, which includes Jeff Immelt of GE who is retiring from GE in order to be amongst them. The

other names have yet to be confirmed. So, Samuel Burke, who joins me now from London. Do we have any idea -- what are the other names that are

being mentioned?

SAMUEL BURKE, CNN TECH TECHNOLOGY AND BUSINESS CORRESPONDENT: Really right now we just have the GE CEO. That's the only big name out there. But I

think what's more interesting here, Richard, is that this all really is in the context of exactly what you are talking about with Laurie Segall. The

sexism, which we know has been a huge problem in Uber, much more so than Google and other companies you been talking about today.

But also, Marissa Mayer, a lot of CEOs, people like Sheryl Sandberg who might have jump ship and gone over. Some have Marissa Mayer saying, hey,

let's stay put. I'm in a good position right now.

QUEST: I'm going to argue against you. The other side of the coin here. Surely, you're much better off saying, we want the best CEO man or woman.

Rather than, some might suggest, infantile way of saying, were going to go for three, you know, we want a female CEO. Simply because it will reverse

what is being seen as a previous trend within Uber.

BURKE: Yes, and some people see that as very cynical. Just going after a woman possibly because they've had these terrible issues. And it's ironic

in a way that Uber has had so many problems with sexism. And really the number one person that everybody would like, it seems unanimous, would be

Sheryl Sandberg. Look how that woman helps save Facebook. Most people don't believe that Mark Zuckerberg and Facebook would be what they are

today without Sheryl Sandberg. But I still think at the end of the day, Richard, man or woman, they're looking and seeing how Marissa Mayer had

that slow burn at a company that didn't even have these sexual harassment scandals and they just don't want to take the risk.

QUEST: Different, big difference as indeed I was hearing today. Big difference between the Marissa Myers for example. In this case Uber has a

product that people use around the world and therefore has a sustainable business. But before we get to that. Finally, I'm hearing rumors that

Travis wants to come back. And Travis is starting to make noises amongst the board. Any CEO that comes in would want to be very clear that Travis

Kalanick is gone and is not going to agitate as the founder and larger shareholder.

BURKE: And no one is surprised by these moves. The second that Travis was out of the company people were already seen, how long until he pulls a

Steve Jobs or Jack Dorsey, and comes back to the company. So, these reports that he's hired a very well-known firm that helps people reshape

their images. Their images really no surprise at all. And again, to your point, one of the reasons why people are probably wanting to back him,

because they know how eager he is having been the cofounder and the CEO to want to come back there. Nobody is ruling that out. Not in the short term

or the long term.

QUEST: Samuel Burke, thank you. Good to see you, thank you.

Two hundred days into the Trump presidency, Wall Street's bulls are charging at break neck speed and look at the numbers. The Trump rally, is

it spreading to the rest of the economy? QUEST MEANS BUSINESS.


QUEST: Look at the number. So, you're down a bit at the beginning. You're down a bit over 11, but the wind first continued for the Dow, which

goes up 25 points, 22,118. Is a tenth straight day of gains with the ninth record high that we've seen so far. Now 200 days into the Trump presidency

the Dow has gained roughly 11 percent give or take. There have been some notable hiccups. There was one here back in May, but the trend you sort of

treaded water over here, that was all to do with healthcare once again. The President has boasted about the stock market on Twitter this morning

saying, job creation and economic enthusiasm are driving his base even closer together.

The issue becomes -- if we look at the broader markets as well. The S&P is at a record. The Nasdaq's not at a record but it still put on quite a bit

of weight over the last few months. The issue that Paul La Monica, over here, needs to discuss with me, is how much of this is at the door of

either the President's policies, or the environment that he's created?

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: That's a great question. I think right now I'm not so sure that his policies deserve that much credit,

because we know it's been difficult for President Trump to get a lot done through Congress. There's been executive orders of course. You also have

to point out that he inherited a pretty good market and economy from President Obama. He's picked up the ball and run with it to his credit.

But I think that what President Trump does deserve credit for is instilling this level of confidence in consumers and businesses. And I think that's

why the stock markets climbing. Why earnings have still been pretty solid.

QUEST: All right, so, we've got the unemployment numbers last month, which came down.

LA MONICA: Yes. Unemployment rate fell to a 16-year low. That was some very good news, 4.3 percent.

QUEST: Job creation number was impressive 205 to 210,000.

LA MONICA: We got more than a million jobs now in the Trump presidency.

QUEST: Obviously, many of those jobs go before that into -- but you know, if we backup even further. So, you just don't take from the inauguration,

you take from the election. Because that's when people knew what was changing and that there would be new policies.

LA MONICA: Yes, I think that is safe to say that people should look at how the market and economy has fared since the election, because that's when we

knew that, OK, Hillary Clinton is not going to be president of the United States. Donald Trump is the next President. Any has a pro-business

agenda, at least in theory that a lot of people are finding to be positive and good news for the economy.

QUEST: So, last week or week before last, the President gave a speech to small business leaders in which he said regulation is already being cut

back. We know this idea of two-for-one rule. We know the EPA has changed its rules. We know the water table rules, and the coal mines and all that.

How many regulations -- I don't know the exact number -- have been abandon, deleted?

LA MONICA: Yes, there has been a fair amount of regulations that he has gotten rid of through executive orders and things like that. But the key

things that so many people are waiting for is when are we going to get a sense that President Trump can undo some of the more onerous parts of the

Dodd/Frank financial reform laws. Will he be able to actually repeal and replace the Affordable Care Act and make some changes for healthcare

companies? That is something he's going to need Congress to help him out with and we don't have any sense that that's going to happen anytime soon.

QUEST: And the tax plan.

LA MONICA: The tax plan is key.

QUEST: Tax reform.

LA MONICA: Because again, lowering taxes is one thing. He's talked about full-blown tax reform and that is another very significant task. That it

might take more time than he expected to accomplish.

QUEST: I'll put you on the spot here, Paul. If you had to say, 50 percent, 60 percent, 40 percent, 90 percent of what this economy in this

market can be laid at the door of Trump, what would it be?

[16:20:02] LA MONICA: I would say that it's fair to maybe say 50 percent right now. Because there are things that have happened. We've seen a

vibrant housing market that is continuing to strengthen. That is good news for the Trump presidency. You know, retailers are starting to pick up a

little bit. We're seeing in consumer spending hopefully increase as well. But I think that number right there that shows the housing prices --

QUEST: It's the highest it has been since the start of the crisis.

LA MONICA: And we know that is what many people -- it's not the stock market where they feel wealthy, it's in their house.

QUEST: Good to see you. Thank you very much.

Now, not much movement on the European boards. A quick rundown, the FTSE was up 1/4 of a percent. The Dax was down 1/3 and Paris was essentially

unchanged. You can see the numbers for Zurich yourself.

It may be August and volumes are low. Earlier on "QUEST EXPRESS" traders at the New York Stock Exchange told me, they are not resting on their



TIM ANDERSON, MANAGING DIRECTOR TJM: You're certainly going to have volume. You are just not going to have as much volume as you would if we

were in a -- not in a high holiday or high vacation time of the year. All that notwithstanding, I think one thing we've learned this year is that

there are few slow news weeks in the market anymore


QUEST: It's not just the Dow that is rallying. The MSCI index that tracks stocks across the world has also hit record highs. Joining me John

Authers, of the "Financial Times." Good to see you.


QUEST: The FT's got an interesting series coming out, looking at the 10 years since the crisis.


QUEST: If one has to say, should we have seen it coming? I mean, I read the first part. Yes, we should've seen it coming. But could we have

prevented it from being so bad if we'd moved in 2007?

AUTHERS: We could probably have prevented it from being as bad as it was, yes. I mean, by that points the kind of buildup, the historic buildup of

debts was already very severe, and obviously, the amount of subprime debt was also very severe. But if you get to the point when Chuck Prince made

his fatally accurate comment about the music is still playing and while the music is playing you've got to get up and dance. That was the summer of

2007. There had already been subprime bankruptcies at that point. Had prices been falling for a year. The worst of the debt came in those last

months of '07 when it really was obvious that there was a problem.

QUEST: Do you think that anybody realized the extent of this?


QUEST: Or did they all think it was manageable?

AUTHERS: Plainly, most of them thought it was manageable or they wouldn't have done what they did. Even with all the kind of perverse incentives

we've spent the last decade explaining, discovering. I don't think people would have let themselves into quite the horror show that they got if they

hadn't thought that they could --

QUEST: But this is the global. This was the first real global. Because these exotic instruments had got into the sewers and into the foundations

of banks around the world.

AUTHERS: Not only that, but you'd also financialized commodities. You'd financialized -- you'd opened up the emerging-markets to trading that way.

But again, yen carry trade all these various exotic foreign-exchange products, meant that it had a direct read through to the terms of trade, to

currencies. So yes, the first truly global crisis.

QUEST: You may have just turn my discussion with Paul La Monica about the current state of the economy and how much we can say rice at Donald Trump.

The boom in the economy -- well not boom, at least the growth in the economy and the boom in the stock market. He puts it at 50 percent give or

take. What would you say?

AUTHERS: Fifty percent -- sorry.

QUEST: We can say that 50 percent of the good economic news at the moment and the good market news can rest at Donald Trump's door.

AUTHERS: I think first of all I do think that the ability not to mess up a good thing is very underrated. And we certainly can't say that Trump has

done anything thus far to mess up the economy or mess up the markets. I am not sure I would go as high as 50 percent myself. I think the economy is

basically sharing all the positive and negative strands that we had got use to in the -- whether or not you want to call it the Bernanke economy or the

Obama economy that we had been used to for most of the years since the crisis. We've got a labor market that seems to be OK. But a large chunk

of the populace that doesn't feel OK.

QUEST: But if then the President cannot unwind Dodd/Frank or Obamacare or get a tax reform package through, then all of this stronger economy can

certainly, buoyant stock market becomes very much on quicksand do you think?

[16:25:00] AUTHERS: While we have easy money, it would certainly be the market that can carry on like this for a very long time. If you can get

some infrastructure through. If we can finally move through to fiscal stimulus, which was the reason behind the big Trump rally back in November,

December. If that can still be done -- and in one of the interviews we've seen with him recently, he makes the point that, yes, he might even have

bipartisan backing on that. Then yes, that will help the economy, but I am not very confident myself.

QUEST: Really.


QUEST: Not even a modest --

AUTHERS: A modest trillion here or there. A trillion here a trillion there and pretty soon you're talking more money. I wouldn't be terribly

confident about that, no.

QUEST: Good to see you, sir.

AUTHERS: You too.

QUEST: Thank you for coming in. Thank you very much.

As part of our summer series of "STORIES FROM THE STREET" where J.P. Morgan shares rose today. They are up almost 9 percent on the year.

J.P. Morgan Chase, a company that has merged, reemerged, but still that first part J.P. Morgan. The man who gave the company its name changed

finance forever. His influence lives on centuries later as we look at this week's "STORIES FROM THE STREET."


QUEST (voice-over): For decades when they talked about the King of Wall Street, they talked about this man, John Pierpont Morgan, J.P. Morgan for


JOHN STEELE GORDON, WALL STREET HISTORIAN: He became the face of Wall Street. He was great at making deals. And he rescued company after

company during the -- especially the panic of 1893. And so, J.P. Morgan effectively became the central bank of the United States.

QUEST: Morgan seat of power was right here in this small building opposite the New York Stock Exchange. They called it "the corner." J.P. Morgan

didn't need a skyscraper to show off his stature.

ANNALINE DINKELMANN, CEO, WALL STREET WALKS: J.P. Morgan knockdown this oldest building and he built a smaller building to show, I'm rich enough, I

don't need the money. He also put no sign on the building. Because he said, if people want to do business with me, they will know where to find


QUEST: In 1920, a horse-drawn carriage filled with dynamite exploded outside the Morgan building. Thirty-eight people were killed, hundreds

were injured.

STEVE AXELROD, WALL STREET WALKS: We don't know if it was Bolsheviks or people trying to break into the bank. They never got the perpetrators.

It'll just give you the idea of the impact of this dynamite.

QUEST: The damage done to the facade remains to be seen today.

AXELROD: It's in the contract with the house of Morgan, the Morgan family, that whoever takes over the building, this has to stay here in honor of the

people who lost their lives.

QUEST: J.P. Morgan's headquarters was sold in 2008 and the building remains vacant today. Very few tenants it seems, can fill J.P. Morgan's

shoes. And so, another chapter in our "STORIES FROM THE STREET."


QUEST: As we continue tonight, the U.N. slaps North Korea with its toughest sanctions yet. Russia has an extremely interesting role in the

relationship with the United States is very well known. Normally in Moscow, but delighted -- the air is more civilized. Matthew Chance --


QUEST: -- will be with us after the break. Come and have a seat, sir.

CHANCE: Thank you very much.


[16:30:51] QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. When the Kenyan millionaire, Chris Kirubi,

tells me he wants continuity in Kenya's presidential election, which is tomorrow.

And Marriott's announced its earning with a new deal with Alibaba. The chief commercial officer from Marriott will be joining us live.

As we continue, this is CNN and on this network the news always comes first.

North Korea has slammed United States in response to the strong sanctions imposed by the U.N. Security Council. The North U.N. Mission says,

Washington is in their words, frenzied and desperate to bring the countries to the brink of nuclear war. The statement went on to say, the U.S. wants

to obliterate North Korea's ideology and in their words, exterminate its people.

Venezuelan authorities are looking for 10 suspected attackers after two people were killed in antigovernment assault at an army base. Police say

they arrested a few suspects on Sunday. The South American country has been dealing with daily riots and anxiety. The tension's increasing

significantly last week when the Constituent Assembly members were voted into office.

The news network Al Jazeera is denouncing plans by Israel to close the networks Bureau in Jerusalem. On Sunday, Israel's communication minister

accused the broadcaster of supporting terrorism, terroristic journalism. Al Jazeera denies the claim and promises legal action against the move,

which it says runs counter to Israel's claim to be democratic.

Fifteen volunteer firefighters in Sicily are under investigation for possible fraud. Italian authorities are accusing them of purposely

starting fire so they can get paid to put them out. The fires date back to 2013. It comes as firefighters are struggling to contain this summer's


North Korea says the U.S. will pay the consequences of the new United Nations sanctions that are designed to deliver punishing blows to the

country. The U.S. Secretary of State, Rex Tillerson, says the sanctions show the international community is united against the North's nuclear

program. The Russian Foreign Minister, Sergei Lavrov, met with Mr. Tillerson and North Korea's North Korea's top diplomats separately at the

ASEAN forum in Manila. The Russian Foreign Ministry says, Lavrov urged all parties to show restraint. Our senior international correspondent, Matthew

Chance, who is normally of course, in Moscow. Staying up late in which we are always grateful, joins me now.

CHANCE: Thank you very much. Good to see you.

QUEST: What is the Russian's goal here with North Korea?

CHANCE: That's a really good question, because they don't have a great deal of economic ties to North Korea. They have some. I think somewhere

in the region of 50,000 North Korean workers have been approved to work in Russia on construction projects there involved in. Building the World Cup

stadiums for next year. And of course, they have a short land border with North Korea. They are neighbors.

But it's nothing like the kind of economic interdependence or dependence about North Korea on Russia that exist between North Korea and China. And

Russia's main I think, concern here is not to go up against China. It allows China to take the lead diplomatically when it comes to what to do

about North Korea and its missile program. There's this unspoken deal between the two.

QUEST: Right, let's turn to President Putin. We saw some pictures of him shirtless in the last 24 hours.

CHANCE: I didn't see them.

QUEST: They only came out this morning. I mean, he's quite shameless about sort of shucking off the shirt.

CHANCE: You know, there is a cultural gap isn't there? We're not used to seeing our political leaders with their shirts off. And heaven forbid

we're ever treated to images of Donald Trump topless golfing or anything like that. But in Russia it goes down really well. I mean, this is kind

of what Russian men do. They hang out in the mosquito infested countryside in the summer. Then they take their shirts off and get ravaged by the

insects into a bit of fishing. And this shows that he's one of the people. He's a Russian guy and they love it.

QUEST: You recently were at a press conference, where you threw question to Putin. It was a fairly brutal question as I seem to recall.

CHANCE: It was a question calculated to enlist a response that he hasn't made in the past.

QUEST: But as he answered it, could you feel his eyes boring into you. I mean, you've met the man. Is he the sort of man you can feel what he's

thinking or not?

CHANCE: You can certainly feel if he's not particularly happy with you. And I did get that feeling slightly, because I think it was an unexpected

thing. It was in Finland. They weren't expecting a question from CNN. In fact, it's the first time that CNN has managed to get a question to Putin

and some time. In almost 2 years I think in fact. And so, I think there were some surprise that it was CNN who was asking that question.

But you know, Putin is an accomplished diplomat when it comes to these kinds of difficult questions. I asked him whether he regretted the day

that Donald Trump came into office, became the president. And he sort of sidestepped that and said, what I do regret is that the relationship

between the two countries has come to this.

QUEST: They celebrated Trump's election victory with champagne in Moscow. They are not celebrating it now, or are they? What is the actual

undercurrent there, Matthew?

CHANCE: When Trump was campaigning for the presidency, he made a promise. He said he wanted to turn around the relationship with Russia. Wouldn't it

be great to get on with Russia? That fueled all sorts of expectations in Russia that he was going to be the man to bring these two countries

together. To see the world from Russia's point of view. He completely failed to do that. And I think were at an important juncture right now,

because the U.S. has passed the sanctions bill. It's taken the power to lift the sanctions out of the hands of Trump and put it in the hands of


And from a Russian point of view this was the main reason they wanted to get on with Trump so he could lift the sanctions. If he can even do that

he become sort of a sidebar to the broader story as far as the Russians are concerned. I think we're going to see much stronger language directed from

the Kremlin towards Trump. In the past, some have been saying from the worst criticism. That may change in the future.

QUEST: Really delighted that you came in tonight. Thank you very much. You didn't even have to stay up too late.


QUEST: Only 4:30 in the afternoon. Thank you. Good to see you.

As we continue tonight, South African President, Jacob Zuma's survive party defections. Street protests, corruption allegations, even the Supreme

Court of the country heavily criticizing him. Now, procedural change to a vote tomorrow could be the president's toughest challenge yet. We'll talk

about it after the break.


[16:40:12] QUEST: Jacob Zuma's political fate will be decided by a secret ballot, the change which was announced on Monday has raised the chances

that the South African president will lose Tuesday's no-confidence vote in parliament. Which will be quite remarkable and indeed a sea change within

South Africa. The news of the secret ballot pushed the South African Rand higher against the dollar, as CNN's David Mackenzie now tells us from

Johannesburg, if lawmakers vote down Mr. Zuma, and frankly, keep watching closely, change will be quick.


DAVID MACKENZIE, CNN INTERNATIONAL CORRESPONDENT: The ruling by the speaker is hugely significant, she says that the vote of no-confidence in

President Jacob Zuma will be a secret ballot in parliament, that means if the opposition can get more than 50 ANC MPs to back the motion, you could

be seeing a new president in South Africa as soon as Tuesday.

President Zuma has faced many scandals in the past and many allegations of corruption, allegations he denies. But this is certainly the sternest test

of his presidency to date. There are large scale protests planned in Cape Town at parliament on Tuesday and this vote certainly could go either way.

It is a key test of Zuma and the ruling ANC to see whether they will back say many the president or the country?

David Mackenzie CNN, Johannesburg, South Africa.


QUEST: The vote in South Africa is only one of crucial political developments taking place in Africa this week. Let's go through some of

them. In Rwanda, preliminary results show that the President Paul Kagame is heading for an overwhelming reelection, 98 percent of the vote so far.

Official results will not be known to the end of the week until Saturday. And then we go eastward to Kenya, where the result is much tighter or will

be is believed to be much tighter. The voters are going to the polls on Tuesday, the election has focused economic issues, both candidates are

promising jobs programs.

The former president of the United States, Barack Obama, urged the Kenyan people to reject violence. And the former U.S. Secretary of State John

Kerry who is there as an election monitor, and says canyons must have confidence in the vote and result.


JOHN KERRY, FORMER U.S. SECRETARY OF STATE: In the end, is up to Kenyans to make this choice and it is up to the people of Kenya and the leadership

here to provide the atmosphere within which this is a peaceful election, and we all will do our part to observe and to try to give confidence to

people about it.


QUEST: Chris Kirubi is one of Kenya's leading businessmen and director of the Centum Investment company, he believes the government should be allowed

to continue with its economic projects of improvement. So, I asked him if the business community could live with an opposition victory?


CHRIS KIRUBI, DIRECTOR, CENTUM INVESTMENT: They have not been very clear about their policies on the economy. They have been mobilizing and trying

to get the support of the masses, and some of these people have done nothing to gain or to lose. They like to hear about so many promises which

does attract them sometimes to the opposition. But, you know, government they know when they promise something they have to deliver. So, if they

come on board and do not change the capitalistic way of doing things allowing people to develop their own issues, without too much taxes. In

the building, the continuation of building the infrastructure, I do not see why business will not support them. Kenyans believe in democracy, yes.

QUEST: The work that has to be done in Kenya, whoever wins, look, here you have a country with great resources. It has obviously a security problem,

it certainly has a corruption problem. But I am wondering what is the solution for example Tuesday corruption issue?

KIRUBI: When it goes to action, to taking people to court, this is a matter of the courts. Today, there are a lot of people who have been

charged on corruption but they are all piling up in the courts. It is just like a parking bay for the corrupt people.

QUEST: So, to anybody watching now, bearing in mind again that the Kenyan people go to the polls in the next 24 hours, tell us why we should be

optimistic about the economic situation, the business environment in your country?

[16:45:00] KIRUBI: I personally believe this country called Kenya has been growing at GDP of over 5 percent every year compared to other regional

markets in Africa. It has initiated some very major infrastructure programs. They have expanded the ports, they are building a second port in

Lamu. There are working with international companies to find oil resources which have been found now but not yet exploited. There are so many

projects they have started. Equally they paid a lot of attention to the youth, education level, trying to transform education. It is really I can

go on and on and on and on.


QUEST: Now one of the most significant certainly well-known businesses, companies is of course Kenya Airways. And yet the carrier has been beset

by financial problems. Just a few years ago it was highflying, seen as a great growing success. Now, competition is taking its toll, and the

government has had to back and bailout, or at least put up more money towards Kenya Airways.

It is one of the challenges facing the new chief executive, Sebastian Mikosz who finished turning around the Polish carrier Lot. Sebastian spoke

to me just a few days after arriving at Kenya Airways, we haven't really had a chance to see exactly what was deep down below. But on a

philosophical basis, he said he feels the weight of responsibility. He calls it the pride of Africa. That it may be, stiff competition from low-

cost carriers to the Middle East, back can all take its toll on pride.


SEBASTIAN MIKOSZ, CEO KENYA AIRWAYS: This is what makes it interesting and even more challenging. And again, this is what is happening in all of the

world. Protectionism is over, you can protect your market for a certain period of time, but then the pressure becomes bigger and bigger. Be it

from the airlines are not flying to the country where you operate, but also from passengers because less competition means less choice for the


QUEST: Many have tried to grow airlines in Eastern Africa, Western or Southern, and they always come across the same things, governments that

don't want change, protectionist moves between governments that eventually mean that you run out of money, or simply poor infrastructure. These are

going to be the challenges you face as you grow Kenya Airways.

MIKOSZ: Most likely, yes. But are these challenges really different from Europe? Europe has made a long, long way to the open sky. But there is

lots of protectionism also today, and there's lots of protectionism when you want to fly a little out of Europe. Look, Turkey is out of Europe

being a very strong provider services into Europe. You have the same situation that we face with Ukraine, for example. I think this is part of

the challenge of being an airline in general terms.

For me, the support given by the Kenyan government for Kenya Airways is really doubtful since many years. So, I prefer to be in an environment,

when I have competitors, then to be a CEO of a good airline in an environment that is very much protected. That is much more fair and that

is much better in terms of quality of the service we can provide.

QUEST: You won't have the resources, for example, to subtly create a long- haul low-cost, assuming you would want to, whatever. And it is early days, your low-cost carrier.

Are you going to grow that quite quickly, do you think?

MIKOSZ: I think we are going to grow it, I think that the market in Africa is going to go a similar path that I saw in central Europe, 6.5 percent GDP

growth in Kenya, the middle class is growing. If you drive through Nairobi, it doesn't take too long to understand that there are roads being

built, massive investment in real estate. So, it is done for someone, for people living there. Plus, business because of course Kenya has a very

strong image of tourism, but I would not under estimate the financial universe, the technology, the Safari Valley so-called. And lots of fruit

exports, flower production. There is lots of industry that are not well known but are very present in Kenya and are considering a really huge base

for business growth as well.


[16:50:00] QUEST: Kenya Airways. Staying with travel, Marriott calls them a new and growing traveling class. The hotel chain has a plan to get

middle-class Chinese travelers into its hotels, not only in China but around the world. And it is doing that with the deal with Alibaba. After

the break, the chief commercial of Marriott,


QUEST: Shares in the hotel group Marriott are down after hours, after the hotel chain results for the second quarter beat analyst's expectations.

More importantly perhaps than just a quarterly number, and certainly more relevant longer term, today Marriott announced plans to woo Chinese

travelers and quite a dramatic way.

Now, these are its current and planned hotels in China from A to Z. Starting up there, Harbin, Hangchou, Hong Kong, Nanjing and right the way

down to Zhejiang and Shenzhen on the way. But Marriott has entered a joint venture with Alibaba. Marriott will gain access in many ways to Alibaba's

customer base. And operate a storefront on Alibaba's travel platform.

Stephanie Linnartz joins me now, she is the global chief commercial officer for Marriott. This is fascinating because everybody wants to be in China.

But I know your chief executive Arnie Sorensen has made it an absolute priority, so where does the deal with Alibaba fit in?

STEPHANIE LINNARTZ, GLOBAL CHIEF COMMERCIAL OFFICER, MARRIOTT: Well, we are really excited about the deal with Alibaba for a variety of reasons.

First and foremost, the size of the opportunity is incredible, when you think about outbound Chinese travel as you touched on, it is significant.

One hundred and fifty million travelers this year out of China. That number will grow to 700 million trips over the next five years. The

Chinese traveling consumer marketplace is tremendously large.

QUEST: Right, but from Marriott's point of view, is this seen as an increase for your China hotels that we were looking at, or for your global

business, I think it is 32 or 33 different brands you have now?

LINNARTZ: That's right, we have 30 different brands, and 125 different countries, over 6000 hotels. And the first focus of this partnership with

Alibaba is on outbound Chinese tourists. It is through the digital platforms that you mentioned. Their online website as well as our own

websites, from online to off-line meaning all the way through at our properties creating a seamless and integrated experience for Chinese


QUEST: OK, this is even more interesting. Because every time that we have looked at this, this means that Marriott, I mean, the numbers are there, I

will grant you that. The growth, it is going to be the largest business travel market in the world, if it is not already. And it is going to dwarf

every other country soon. But are your hotels and the rest of the world, how much upgrading in terms of soft product, Chinese, Mandarin speakers.

Redoing of menus. Redoing of hotels to accommodate their specific needs. How much are you aware of that?

[16:55:00] LINNARTZ: That is a big part of this, Richard. It is the off- line, the hotel experience. So, we have rolled out a program across much of Asia Pacific and are doing so across the rest of the world called Lee U.

It is a program that focuses on exactly what you talked about making sure we have Mandarin speaking Associates at the hotel. Making sure that we can

connect with Chinese consumers via WeChat with a Mandarin speaker who can help not just with reservations. That is an incredibly important part of

it of course, but also with the entire planning process. The excursions when you are in the city, restaurant reservations because Chinese consumers

like all consumers are looking for experiences more than things.

QUEST: Good to see you, Stephanie, thank you for joining us. It is an important deal, thank you, I appreciate.

Now, as we continue tonight a Profitable Moment after the break.


QUEST: Tonight's Profitable Moment, the next 24 hours will be crucial for two major African countries, Kenya which goes to the polls on Tuesday, and

South Africa with a vote of no-confidence takes place in Jacob Zuma, and it is a secret ballot which might allow more ANC members of Parliament to vote

against him. We will have the details tomorrow night, but once again Africa will be very much on our agenda. And that is QUEST MEANS BUSINESS

for tonight. I am Richard Quest in New York, whatever you are up to in the hours ahead, I hope it's profitable. I will see you tomorrow.