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QUEST MEANS BUSINESS
Puerto Rico "Obliterated" by Hurricane; Trump Signs New Sanctions Against Pyongyang; Europol Warns of Growing Cyber-Threats; Lagarde Says Economic Benefits Not Being Shared Equally; Nikki Haley Speaks After Trump Agrees to New North Korean Sanctions. Aired 4-5p ET
Aired September 21, 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 HOST: Trading coming to an end. The Dow is down. Looks like it's almost down the lowest point of the day. Still only
round about 50 points in terms of the losses, around 1/4 of a percent. Similar for the Nasdaq and S&P 500. Closing bell -- oh, look at that.
That's what you call a robust gavel. There's no trading anywhere in the world. It's Thursday, September the 21st.
First came the bankruptcy. Now Maria. Donald Trump says Puerto Rico has been obliterated. We'll be live in the U.S. territory.
China and the United States tag team new sanctions on North Korea. Will they work?
And throwing money at the mess he made. Ryanair chief executive Michael O'Leary has a proposal for his pilots.
Now, live from the world's financial capital, New York, this is QUEST MEANS BUSINESS. I'm Richard Quest, and l mean business.
Good evening. Tonight 3.5 million Americans already suffering a dire economic crisis facing even greater disaster. Puerto Rico is still without
power after hurricane Maria smashed into the island. And it could take six months to get electricity restored. So, this is what the airport looked
like after the storm hit. That miraculously and extraordinarily, it will reopen to airlines on Friday. Somehow, they'll get the planes landing.
President Trump has signed a disaster declaration for the island.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: So, Puerto Rico is in very, very, very tough shape. Their electrical grid is destroyed. It wasn't in
good shape to start off with. But their electrical grid is totally destroyed. And so many other things. So, we're starting the process now.
And we'll work with the governor in the people of Puerto Rico. But Puerto Rico as a whole different category, in many ways. In many ways.
(END VIDEO CLIP)
QUEST: Now the president added that the storm left Puerto Rico totally obliterated. As you can see, we have a team of reporters covering Maria's
destructive path throughout the course of the region, from the Dominican Republic up to Antigua and Puerto Rico. And it's in Puerto Rico that Leyla
Santiago joins us. You were there throughout the hurricane. We saw how brutal that was for everybody. The aftermath -- I need you to -- I need
you to bring home to us the magnitude of that which is behind.
LEYLA SANTIAGO, CNN CORRESPONDENT: You know, Richard, I think people here are still trying to soak in the magnitude. There is just such shock, such
disbelief. You can see I am right now I Ganado, and there are people who are out and about. Tourists were waving at us. But you cannot ignore what
they are walking through. Take a look down this street where there is debris everywhere. So, things seem to somewhat be getting back to normal
in a sense that people are now out of their homes.
But now they have to deal with all of the cleanup today. I had a chance to go to Ahava, as well as Catano, two areas that -- the roads were now
rivers. And I want to show you for the first time as we show you the aerial view of those areas. I mean, people walking through, again, not
roads, rivers to get to safety. To get to shelters. To get to food, water, hospitals. All of which, by the way, have no power unless they are
So there does seem to be somewhat of a resilience. People do tend to tell me, we'll be fine, we will rebuild. But there's a lot of frustration over
the power. So much so that actually -- let me show you what found when I was on the way here. This gentleman here has set up a sign that says,
"free, 30 seconds call with WhatsApp." and that's for a lot of the tourists who have been here. This is Damion. I know you just started
doing this about an hour ago, and he's had a few -- I think you said three people have come by?
UNIDENTIFIED MALE: Yes.
SANTIAGO: Three people have come by. And that's because, again, communication is key. I have -- yes, go ahead.
[16:05:05] QUEST: Well, I just wanted to -- OK. The debris is dreadful. The way it looks is awful. But what's the core infrastructure? Now
president Trump says the grid, the electric grid, has been all but destroyed. Does that so go four bridges and main roads? That the sort of
things that will take billions to repair?
SANTIAGO: Right. So, a lot of those main roads are still blocked. You actually cannot get to certain parts especially of the southeastern part of
the island. Because not just of the flooding, but also because of the debris, the downed trees. So, there are areas where very few people have
heard from anybody in that area, because of the communication, because of the infrastructure that they haven't been able to get on those highways.
Many of those, as made my way around the island, were block. I mean, police have just blocked them, because you can't get through to them. So,
you know, the infrastructure. We have shown you the debris. We have shown you the buildings. We have given you an aerial view. But Juan Matos,
which by the way, was one of the first areas that was evacuated by the governor, of Puerto Rico. So, this is an island that is used to tropical
storms and hurricanes. But you take this category 4 hurricane, the last time they experienced anything like that was 1932. Add to that the
economic problems, 70 billion in debt. a power system that lacks maintenance because of lack of investment. You know, and that's a problem.
The rebuilding here, what's ahead is not going to be easy, and I haven't heard anybody suggests that it will be.
QUEST: Leyla, thank you, bringing home to us exactly the situation, we appreciate it.
President Trump says he will visit Puerto Rico. The island is stuck in a sort of political meme. In some areas, it relies on the U.S. and others,
it must fend for itself. Let me show you exactly. Now, officially, it is a U.S. commonwealth and residence are U.S. citizens. So, if we just take
the strict legal situation, it is a territory of the United States. What does that mean? Well, everybody who lives in Puerto Rico has U.S.
citizenship and they have the right to live and work in the mainland U.S. The country enjoys military protection, and the United States is
responsible for all foreign affairs, international diplomacy. Pretty much anything to do with the rest of the world.
The island, however, only receives some federal funding, and some welfare benefits. We're going from green to amber here. And related to that, of
course, it doesn't enjoy -- it will get FEMA federal emergency funds. But it has no votes I Congress. And it has no votes for the U.S. presidency.
They can vote in the primaries, but not in the general election.
So, the territory has already filed for the largest municipal bankruptcy in U.S. history. It owes some $74 billion two bondholders as Leyla was
described a moment ago. CNN Money's Patrick Gillespie is with me. Patrick, the core point into this very unusual situation, it's sort of
American, but it's not.
PATRICK GILLESPIE, CNNMONEY REPORTER: Absolutely. I think, you know, Puerto Ricans actually had a referendum vote last year, where they asked
for statehood, 97 percent voted for it. And it doesn't look like it's going to happen. So, you get this sense that they, feel treated like
second-class citizens like second-class citizens. They can even file for bankruptcy, the way that the United States' cities and the mainland, such
as Detroit, vote for bankruptcy. So, it's in a very -- you know, stuck between a rock and a hard place. And now it's go a further uphill climb
QUEST: And the fact that the United States, foreign affairs, diplomacy, military activity, to all intents and purposes -- no, it is. It's U.S.
GILLESPIE: Absolutely. And, you know, I think -
QUEST: So, it's the U.S. government that is going to have to basically, through emergency funding, put this right.
GILLESPIE: Clearly, the Puerto Rican government cannot foot the bill on its own. U.S. federal government and private insurance firms Will have to
take on the lion's share of this bill this. You know, when thinking about the big picture for Puerto Rico, the tourism season, that's their main
driver of growth. That's coming up in months. And as you heard the governor of Puerto Rico say, they're not going to have electricity back for
several months. So, you know, this is a place where there's already 10 percent unemployment. That's double the U.S. national average. And they
can't get ready for the biggest season that drives jobs on that island.
[16:10:00] QUEST: All right. Let's take a reality check here. All these problems that you rightly point out. I can hear viewers at home saying,
yes, but hang on a second. United States is the wealthiest country in the world.
GILLESPIE: Why can't it --
QUEST: The United States can literally -- the federal government can go in there with the military -- the core of engineers and whatever is necessary,
and start putting things right. In the same way it did with New Orleans, in the same way it's doing with Houston, in the same way it will do with
the Florida Keys.
GILLESPIE: But when you think about this island, people have been leaving for over a decade to look for better job opportunities. The government has
these archaic energy policies. Taxes are going up, unemployment is high. And you have easy access the mainland United States. So, yes, the
government can come in and do a short-term boost. That could create some jobs in the short term. But they have this long-term population exodus.
And I don't think -- I think this storm will only exacerbate that. You're talking about, you know, already grim pictures. This is the worst economy
in the United States. And now you he a massive hurricane that's just thrown everything off.
QUEST: Patrick, thank you.
Hurricane Maria is now heading toward more islands still trying to recover from Irma. Allison Chinchar is at the World Weather Center. I need two
things from you in this report. Where is it going next, and where is it likely to have its biggest impact on the U.S. east coast?
ALLISON CHINCHAR, CNN METEOROLOGIST: Those are great questions. OK, for the first one, right now it is just to the north of the Dominican Republic
and making its way towards the Turks and Caicos. It's a relatively large storm. Winds are about 195 kilometers per hour. And it's moving to the
north and west. One good thing, for any entities in the U.S., as it approaches, it's going to encounter much cooler water. So, what that means
is, you're going to see the storm gradually weaken.
So whatever type of impacts that the U.S. would end up having with this would not be to the same extent that places like Puerto Rico or Dominica
ended up seeing. The flood threat still exists, not just for Puerto Rico, but for the Dominican Republic and Turks and Caico. As we widened the shot
out again, you could still be looking at an additional 1 to 200 millimeters of rain for some of these areas that have already seen it.
We are now starting to see tropical storm watches expand up to the north into area of the Bahamas. The question becomes where does it go from here?
At this point, this yellow line, this was Irma's track. Maria started a little bit further south. But where we are right now, this is at the exact
same point that Irma was. Which means that where it is now, every place that it's dumping rain, pushing strong winds, these locations have now been
hit twice. Both with Irma, as well as Maria. Because there right on top of each other's storms.
But here's where they vary. Because this storm is not going to continue to go west towards Florida. It's going to go up to the north. The question
is from there, what impacts does it have on the East Coast? It looks like, for now, it would be North Carolina up through about Massachusetts would be
your best area for impacts. At this point in time, a direct landfall does not look likely. But even with that said, you are still likely to
experience incredibly dangerous rip currents, coastal flooding, beach erosion, and if it gets close enough, we could still end up seeing tropical
storm-force winds along the coast.
QUEST: Thank you. Thank you very much, appreciate that.
Now, I need to update you on the news from Mexico as it concerns the earthquake. And you'll be aware, of course, you've been watching that we
have been focusing on the school that collapsed. All the children have now been accounted for at the elementary school in the nation's capital. Now,
as Miguel Marquez who's there will clarify the phraseology of "have been accounted for" by no means are alive, 19 children are believed to have
perished. But Miguel Marquez, it does mean now that at least they don't believe there are any more in the rubble and in the building. So how many
are in hospital? Do we know the numbers, in other words?
MIGUEL MARQUEZ, CNN CORRESPONDENT: Yes, so what they're saying now, previously the Mexican government had said that 21 children had died here.
Now they're saying 19 are dead. They were able to pull 11 out, an all the other kids are either in the hospital or they account, for. Their parents
know where they are. They believe there is still one person under the rubble there. It may be a parent, it may be an adult who was working with
the school, may be a teacher who was working at the school. They don't know who it is exactly. But they have been hearing noises.
24 hours ago, there was some word they were talking to somebody named Freida down there. They thought it was little girl. They have since sort
of changed to see that they do have responses from down there. They hear something down there. But it's not exactly clear what they're hearing.
I want to show you what's happening right now. They are still shoring up the they are working. They're bringing in large plates of metal right now.
[16:15:00] Before that, they had brought in very large metal poles and trusses so that they can try to truss up that building. It is literally
like trying to hold up a Boulder with a bunch of toothpicks. They had a partial collapse last night, complicating things. And right now, they are
still in the same situation. Still sort of burrowing in from the top and from the side, trying to get to the place where they think they pinpointed
somebody who is still down there -- Richard.
QUEST: And do we know if there are similar rescue operations elsewhere? Maybe with not the same intensity, but still a search for others who maybe
MARQUEZ: Well, the Mexican President said in the last 24 hours they had pulled 50 people out alive from the rubble. So, there are certainly other
locations here in Mexico City, where that is happening. But keep in mind, the cities of Morelos and Puebla, which are big cities of more than 1
million people in each of those that are closer to the epicenter, there were whole neighborhoods in Morelos that were pretty much devastated by
this quake. So, there were still areas there where they are searching and looking for survivors. It is likely it will be some time before they give
up that and this just becomes a recovery operation -- Richard.
QUEST: Now, where you are at the school -- so I just want to clarify. I mean, the tragedy of the situation, but we do need to get it clear. 19
children are believed to have died. 11 have been pulled out. Stop me if I've got these numbers wrong. 11 are believed to have been pulled out, and
all are now accounted for. That's correct.
MARQUEZ: That is correct. And their parents and the kids know where each other are. I mean, there was a point today where we had somebody walk up
and was making announcements about a 5-year-old who was in the hospital, and they were looking for the parents. This has become a bit of a
community center, but they are saying right now that all of the kids in the school here are accounted for. Either they died in the earthquake or they
were rescued and pulled out, the 11. Or they are now with their parents and they know where they are -- Richard.
QUEST: Final question. And you may not know the answer to this, because it may not have been determined. Is there any suggestion here that this
building was shoddily built?
MARQUEZ: It's too soon. It's a newer building. Part of it survived just fine. It is not clear whether the part that collapsed was part of that
newer build. If it was an older building. Or if there was some construction issue either in the design of materials, upkeep of the
building or all three -- Richard.
QUEST: Miguel Marquez, thank you, sir, for bringing us up to date and for the clarity you brought. Thank you, I appreciate it.
As we continue tonight, the bite behind the bark. Donald Trump issues new sanctions against Pyongyang after the communist regime calls him a barking
[16:20:00] QUEST: Donald Trump has issued new sanctions against North Korea as the U.S. President aims financially to squeeze Pyongyang into
abandoning its nuclear ambitions. He was speaking alongside the leaders of Japan and South Korea. I was just trying to work out -- South Korea was on
that side of the room. And Japan was on this side of the room. It was all at the United Nations General Assembly. The president took aim at people
and countries that trade with the communist regime and revealed that Beijing is also taking action.
(BEGIN VIDEO CLIP)
TRUMP: I want to just say and thank president Xi of China for the very bold move he made today was a somewhat unexpected move, and we appreciate
(END VIDEO CLIP)
QUEST: Economic sanctions against Pyongyang are not new. Donald Trump said today's announcement is different because it's targeting the
individuals and companies who provide the goods and services or technology to Pyongyang, thereby cutting off the financial support and life support to
the country. It allows the U.S. to earmark new industries which include textiles, fishing and manufacturing as potential future targets, crucial to
the country. And China is also taking action, related to this, of course, saying it will insist and clamp down on financial companies and doing
relations with North Korea through its central bank.
The significance there is that the U.S. has basically said, if you do not stop these banks, your banks China, from doing business with North Korea,
we will sanction those banks under this new executive order. Robyn Curnow is at the United Nations. Split views, Robyn, on whether sanctions work,
ratcheting up work. The Russians say they don't.
ROBYN CURNOW, CNN CORRESPONDENT: Yes. I mean, I think as we have spoken about this before. There are not a lot of good options here. And yes, I
think we are a round six of U.N. sanctions. Security Council, Russia has OKed them. So, too has China. So, in the midst of all of those tougher,
tougher U.N. sanctions, North Korea has continued to increase its nuclear weapons program. So, these latest sanctions coming from the Americans,
they're an executive order in many ways, perhaps not as significant as some of the big U.N. sanctions.
But I think when we're talking about all of this, is the significant part of what's happened today is t fact that China is doing what it's doing.
And it seems to be in coordination or at least some of synchronicity with this executive order. That in itself, I think, is what is key here. Mr.
Trump appeared to be surprised by it. But at the same time, what you're seeing is coordination. And I mean, if you can bear with me here, Richard,
earlier this week, this president said, you know, Kim Jong-un was rocket man. He said he could totally destroy North Korea. The North Koreans came
out saying, hey, that just sounds like a barking dog. Well, let's give Mr. Trump credit where it's due, this barking dog proved today he's not just
barking. He has some teeth. He's using them, and he's got a pack around him. Who are willing to come out there, you know, to show force. You
know, this is a big day, particularly for this president and his foreign policy deal-making, you know, legacy.
QUEST: Robyn Curnow at the United Nations. Thank you. Robyn, thank you.
The United States Securities and Exchange, the SEC controls the information that has the power to move markets, disclose the takeovers, leadership
changes, corporate accounting, and all that sort of stuff. Now the agency say hackers used a vulnerability in its system to gain access to that
information and may have decided to trade upon it. Embarrassing, certain for the SEC which is under pressure to investigate and punish Equifax over
that company's very own data breach. Cybersecurity, we have talked about it many times on this program and we will continue to. Now Europe holds
warning that the recurrent breaches show criminals are becoming more organized, while companies are not doing enough to protect themselves. We
our lucky tonight. We have the executive director of Europol, Rob Wainwright who is with me. Good to see you, director.
ROB WAINWRIGHT, EXECUTIVE DIRECTOR, EUROPOL: Thank you, Richard. Great to be here.
QUEST: I read the executive summary. It basically said things are bad, and will probably get worse when it relates to cybersecurity.
WAINWRIGHT: That's the tale. That's the tale. That's what we're seeing. Cyber crooks generally getting smarter while many in business are staying
pretty dumb around this I'm afraid that's how it is. We've seen this as the year of the ransomware global epidemic, 230,000. You remember,
businesses around the world being caught up by having very poor digital hygiene standards. Billions of internet devices being exploited on a mass
scale, as well. So, all the world, while criminals as you said, are getting smart around this.
QUEST: Why are we lagging behind? This I not new, this threat. We have known it's be, coming for some years. So, what has gone wrong?
[16:25:00] WAINWRIGHT: We still haven't had great successes. You know, Europol and the FBI others took out the two largest stock market places
recently as well. So, we are having some successes.
QUEST: You're behind the -- no disrespect, but you're behind the curve.
WAINWRIGHT: I think we are facing an uphill battle, that's certainly true. And the problem is that we have these -- the syndicated movements of cyber
criminals. They're starting to pull their resources. The largest cybercrimes syndicate we've seen within the last year, 20 major global
groups coming together, producing a million phishing emails a week. Victims in 180 countries.
QUEST: Who are these people? When you talk about this, I'm trying to imagine, you know, the James Bond sort of villain sitting there,
Goldfinger, saying now we're going -- is this who these people are? Isn't that organized?
WAINWRIGHT: No, because a cyber-enabled crime can interconnect thousands of part-time, small time, cyber criminals. Each with their niche
specialization. They come together in a great conglomeration and they provide a service which drives up innovation, drives up capability. And
we're starting to see hi-end attacks again banking networks, for example, manipulating card balances. Absolutely taking over ATM networks and the
payment processes. This is highest stuff.
QUEST: So when you talk about that, because you've just really put your finger on the dirty bit that nobody really wants to talk about. I mean,
it's serious that hospitals got hit in the U.K. It's serious the ransomware. But if the cybercriminals get into the banking system, and
pardon the phrase, screw that up, then they're in a different league.
WAINWRIGHT: We are in a different league. I have to say that the banking system is generally operating at a higher cybersecurity controls and
standards. So that's something we can breathe a little more easily about.
QUEST: But they're being hit every day by hundreds of thousands of attacks.
WAINWRIGHT: Now they are being targets. It's no longer the banking customer, you and me that used to be attacked. They're going after the
banks themselves directly.
QUEST: What's the answer here? I mean, you're going to tell me more coordination between the national polices and more money being spent. But
you've been saying that for a long time.
WAINWRIGHT: Well, I have to keep saying that. I'll keep saying, we have to pool our intelligence much better across borders. Of course, the answer
is in industry. Industry standards have to be higher. Banks and other have to make sure they are taking this absolutely seriously. And that's
the big message. We have been saying, I've been saying for years.
QUEST: How worried are you that after Brexit, for example, the U.K. is going to become somewhat -- not divorced, but -- there will be a divorce,
but will be sidelined in terms of information crossover with European counterparts.
WAINWRIGHT: Well, we understand in the policing community in Europe, we've built up years of an integrated network. Policing network to fight the
highest terrorist threat we have seen for 20 years. So, we can't afford to have a major partner dislocated from that. We've got to get it right,
Richard. That's the message I think. There are many important legal issues, not legal issues to deal with. There's a whole dollop of politics
all over this. But in the end, the imperative which I think the grownups in the room understand, is that the collective security interest of Europe.
We've got to get a deal.
QUEST: Want to talk finally about the issue of money laundering. Because it's all related in some shape or form. It's criminals doing things they
obviously -- they shouldn't be. But money laundering. All governments have been putting in place vast anti-money laundering rules and
regulations. And you basically think most of these rules are pretty useless.
WAINWRIGHT: I don't think they work well any more. $115 billion the size of the criminal economy in Europe. And we know at Europol, the coverage of
this, we're seizing 1.1 percent of those criminal assets in the end. So, this huge regime, billion-dollar regime, hugely robust that we put in
place, is running at a 1.1 percent success rate, only. Not good enough. Of course, it isn't good enough. And I'm working with global banks and
regulators right now to introduce a much better system. This is a system that is mired in stick box bureaucracy. We have to have a closer
partnership with the police. We've got to have this intelligence-led and more integrated use of the great regime that we put in place.
QUEST: On the question of cybersecurity, are we just destined to have this deteriorate further? I mean, are we all just resigned? I have had
everything hacked, -- not in terms of -- at so point, I've had my bank, my credit cards, my store cards, my insurance company, my health care company.
All write to me to say that my information has been compromised. Is this the inevitability?
WAINWRIGHT: Because you're such a big celebrity, Richard.
QUEST: You're very kind.
WAINWRIGHT: I'm afraid either --
QUEST: I don't have the police resources that you do, to protect me.
WAINWRIGHT: You're a target for these kinds of things, Richard. That's the problem. For the everyday citizen, not quite as bad as you. But it's
still a pretty big threat. I'm afraid it's here to say. That's the point. We have to manage this risk in the same way we have to do other things in
our homes and in our businesses. We have to do it in a smarter way than what we do at the moment. Get used to it. Cybercrime will be with be with
us for at least a generation and beyond.
QUEST: Is anyone listening to you?
WAINWRIGHT: Well, you are. That's a good start.
QUEST: Well, believe me, if that's all you've got listening to me, I've got no budget, no power and I have no ability to give you any more
resources. The people that have those three things, are they listening to you?
WAINWRIGHT: They are. The European Union launched a cybersecurity strategy this week. Which is great. I think the U.S. is taking it very
seriously, the Trump administration. So, people are listening. And I'm on your show.
QUEST: We'll I hope we both get out of here in one place. Good to see you. Thank you very much indeed. QUEST MEANS BUSINESS you hear the
biggest names on the most important subjects on this program. Good evening.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. As we continue with QUEST MEANS BUSINESS in just a moment, Christine Lagarde tells me her biggest fear for the
global economy is come complacency and slow growth. We'll talk about that in just a moment.
Mark Zuckerberg says Facebook will hand over those notorious Russian ads to U.S. Congress. And as we continue, this is CNN and on this network the
news always comes first.
Mexico's navy now says all children have been accounted for in an elementary school that has been the subject of search and rescue efforts.
More than 48 hours after a devastating earthquake hit. Rescuers are now hoping to reach at least one person who may possibly still be alive. The
quake has killed at least 250 people across central Mexico.
Officials say the island of Dominica has gone into survival mode after being hit by hurricane Maria. People are in desperate need of food, water
and medical supplies. Even the Prime Minister's homeless. At least 15 people on the island are known to have died in the storm.
President Trump has announced new sanctions against North Korea targeting firms and individuals who trade with the country. He also says China has
ordered to stop its banks doing business with Pyongyang. No official response from China's central bank. The Canadian Prime Minister, Justin
Trudeau, took a dig at the United States during the United Nations on Thursday. Saying there is no country on the planet that can walkway from
the challenge and reality of climate change. Remember, President Trump announced in July he's pulling the United States out of the Paris climate
Kenya says it's moving the new presidential election to October the 26th. The country's Supreme Court annulled last month's election. President
Uhuru Kenyatta says that amounted to a coup. His opponent, Raila Odinga called it fraudulent.
Wall Street's winning streak has come to an end. The Dow briefly had an intraday high and then it fell back -- very briefly. Look at it. Right at
the beginning of the day. A smidgeon of green on the top left of your screen.
[16:35:00] Things turned thereafter. It was off 53 points, ending nine straight days of gains and seven days of record closures. The S&P and
Nasdaq both closed slightly lower, as well. Let's put this into context. The Dow is still up 30 percent for the year and is closed at a record of 42
times since the beginning of the year.
The IMF's managing director says she's worried about complacency as markets hit record after record and economies enjoy steady growth. Christine
Lagarde is warning there's a whole generation that is yet to experience a serious market correction. Speaking to me, she urged governments to make
structural changes now and ensure a rising economic tide lifts all countries.
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: Most countries are growing, you're right. Particularly the case in Japan and Europe., less so in the
U.K. And it's also the case in the U.S. and we had expected a bit more earlier on. But it's participating in global growth. But there are quite
a lot of low-come countries, developing countries, that are still suffering. And that on a per capita basis, are not growing.
So, I'm concerned about the development and the growth in Africa in general. There are a few exceptions where things are going OK. But in
general, on a per capita basis, because there is a strong fertility rate in most of those countries, its growth is not there. Actually, it's
declining. That's point number one.
Point number two, I'm concerned about the kind of growth that is happening. In other words, is it inclusive? Is it shared? Are people benefitting
from growth in general? Or is it going to be mostly channeled towards those countries or those categories of people who already have a lot?
That's my second point.
QUEST: You know the answer to that -- the answer is, yes, it is.
LAGARDE: Richard, Yes. And that comes -- I'm coming to my third point. Which is, to make sure that it's inclusive. To make sure that we fight
against gender discrimination. That we reduce excessive inequalities. Policy measures have to be taken and structural measures have to be put in
place. And my concern here is that because it's better, you know, growing up 3.5 --
QUEST: And we leave the managing director. We join Nikki Haley, the U.S. Ambassador to the United Nations.
(PRESS CONFERENCE WITH AMBASSADOR NIKKI HALEY)
NIKKI HALEY, U.S. AMBASSADOR TO UNITED NATIONS: -- The United States was out in full force, and I think the U.N. felt it but I think it was
extremely productive. You look at the beginning of the week and we started with U.N. reform. You the President and the Secretary-General rolling out
massive reforms for the U.N. What was extraordinary was we had 130 countries that have now signed on to that reform. That is two thirds of
the General Assembly, which is who will vote on this at the end. So, that was a great start to the week.
Then, you saw the President's address to the General Assembly. And I think it showed the strength of the U.S. But it also asked the world to come
together and it asked all the countries to come together as we fight these rogue regimes. And mainly, North Korea and Iran. And I think what you saw
were how a lot of countries responded. They were very positive to the speech. And they appreciated how blunt and honest he was. I think that
has been the overall theme from the international community this week. His how straightforward he was and how refreshing it was as they heard him
We also today, we met with our allies Japan and South Korea. Obviously, a lot to talk about with North Korea. And so, we had a good conversation
with them. And the President reassured, obviously, Japan and South Korea. But they also talked about strategies going forward for North Korea.
On Iran, that was the topic of conversation throughout the week. I think everyone was talking about the destabilizing activities that they continue
to do throughout the Middle East, whether it is in Syria, Iraq, Lebanon, Yemen, and the list goes on. So, it is something we will continue to talk
about and continue to move forward to make sure that were stopping any of their reckless behavior as well.
We also cohosted a meeting with Secretary Boris Johnson, as well as the Dutch Foreign Minister, Bert Koenders, on human rights reform. And really
talked about the fact that it need to be representative of its name. We have a lot of bad actors on that counsel, both the President and the Vice
President spoke about it in their speeches and the need to see better quality countries that are on that counsel in order for it to be effective.
Obviously for the United States to stay on it. If we do not see changes in the human rights council, we will continue to advocate for human rights,
but will do it on our own if we have to.
And then the Vice President attended a security council meeting yesterday on peacekeeping reform. We have made great progress these past several
months in terms of reforming peacekeeping so that is actually going toward a political solution. It is transparent. It's accountable. But we're
also giving the troops the equipment they need and the ability to be trained in order to do their job. Since we're introducing smarter
peacekeeping and I think that came together in the peacekeeping reform vote that we had yesterday.
[16:40:00] One of the topics that everyone had to talk about this week, and all had an opinion on, was Burma. And as we're dealing with the crisis in
Burma and we're seen how much migration has taken place from the Rohingya going out of Burma, every country is concerned. They are concerned that
the military continues to be aggressive in their concerned that the government continues to be in denial. And so, I think you will continue to
see the international community talk about that. I think you will only see them get more active on that as we go forward.
And finally, today, the Security Council took a great step forward. It was a measure that I think the international community has been working on a
long time. We certainly worked with our British friends on it. And that was ISIS accountability in Iraq. If you look at the fact that there have
been mass graves, there is been all types of terrible conducts to women and girls in those areas. Whether it is what is happening with the Yazidis or
the Christians, or the Sunni and Shia Muslims, what we now have is part of the U.N. body that's going to be able to go in there and actually collect
evidence. And make sure it can be used in trials. So, that the victims finally have their say and get their day in court, or at least their
families do it if they have lost loved ones. That was a big day for the security council today.
And with that, there was obviously, a lot more. I think the president met with multiple countries. There were lots of talks and planning and
productivity. But overall, we can say it was a solid week at the U.N. this week. And it was highly successful. But with that I will answer any of
your questions. Yes.
UNIDENTIFIED FEMALE: Why do you expect this latest round of sanctions will work when an array of sanctions have failed in the past against North
HALEY: This is in reference to what Secretary Mnuchin talked about. This is pretty amazing because when you look at the sanctions that we have in
place, North Korea is already feeling it. You can hear of the lines at the gas stations that they have. And the fact that they are having a severe
reduction in revenues, is the sanctions are working. What this does is take it a step further. This says anyone that deals with North Korea, any
financial institution that deals with North Korea is going to be punished. And so, I think it's important. And it's like Secretary Mnuchin said, if
you're going to support North Korea then you have to be prepared to be sanctioned as well.
UNIDENTIFIED FEMALE: say that sanctions have been working and yet North Korea hasn't stopped nuclear provocation. Do you think that these
sanctions are going to actually North Korea to end this?
HALEY: We always knew that the sanctions may not work. What the goal of the sanctions was always intended to be is to cut the revenues they can do
less of their reckless behavior. If they do not have the funding for the ballistic missiles, for the nuclear production, then they can do less of
it. That is the goal of the sanctions. It doesn't mean it will necessarily going to change Kim's attitude or his belief on what he wants
to do, but it will slow down the production of the nuclear process going forward. Yes.
UNIDENTIFIED MALE: Ambassador, thank you. When the president spoke in his speech about totally destroying North Korea if forced to defend ourselves
and our allies, what exactly did he mean? Under what circumstances when he considered totally destroying North Korea?
HALEY: Well, I think that's just common sense. I mean, if you look at it, we have said multiple times. The President said it. Members of his team
have said it. We do not want war. That is the last thing anyone wants. We don't want loss of life. That's the last thing anyone wants. But at
the same time, we're not going to run scared. If for any reason North Korea attacked the United States or our allies, the U.S. will respond.
Period. That's what's going to happen. What you're seeing now is we continue to go through diplomatic measures. We continue to exhaust
everything we have. And the key is that other countries actually support the sanctions and follow through with them and they also continue to
isolate North Korea until we can get them to come to the negotiating table.
But until then, that is just the reality. If they were to strike the United States, of course we would have to respond back.
UNIDENTIFIED MALE: Just to clarify. So, you are specifically saying that if North Korea attacks first.
HALEY: We can't play out the scenarios on what's going to happen, but obviously, it would take something very serious for the president to have
to make a decision to do something back.
[16:45:00] But there's a lot of things between where we are now and that situation that can be done. There are a lot of military options that can
be done. And so, the president's not going to spell out specifically what he's going to do, when he's going to do it or where he's going to do it.
But there are many options that he's discussed with the national security team that should North Korea do anything irresponsible or reckless that he
has to choose from.
UNIDENTIFIED FEMALE: Ambassador, thank you. Just a quick one on the sanctions on Korea and then I have a question on Iran. On Korea, the
administration has said this is not aimed at China, but you heard the president say today that China has told it's central-bank not to do
business with North Korea. Secretary Mnuchin said that he called on the Chinese. So, how is this not -- especially you talked about how China is
really the main financial backer of North Korea. So, how can this not really be directed at China? And then on Iran, is there a way to talk
about -- to ramp up pressure, is what you are talking about -- with Iran destabilizing activities throughout the Middle East, which I think a lot of
your allies agree on, without violating the agreements per se as Secretary Tillerson said? I mean, is there a way to get allies to rally around more
terrorism type and other sanctions while keeping the nuclear provisions in place?
HALEY: First of all, with the sanctions on North Korea, it only impacts those that continue to do business with North Korea. If China does
business with North Korea, yes, it will impact them. If there are countries in Africa they do business with North Korea, it's going to impact
them. So really, it depends on countries that choose to continue to support North Korea over the rest of the world that is asking them not to.
In reference to Iran, you have a couple of processes that take place. On October 15, the president has the decision to make on whether to certify or
decertify. And that's U.S. law. That has nothing to do with JCPOA or the Iran deal. That's U.S. law and U.S. law requires the president every 90
days to decide whether the Iran deal and other elements of the U.N. resolution, which would include ballistic missile testing, which would
include arms smuggling, which would include supported terrorism, those things -- it asks the president to look at all of those things. And if he
still thinks that the deal is in the best interest of the United States, then he certifies. If he thinks that the deal -- that the situation is not
the best interest of the American public, then he doesn't certify. At that point, he goes to Congress. And he works with Congress on how to reshape
the situation. But the Iran deal and U.S. law are two different things.
UNIDENTIFIED FEMALE: -- if he could decertify without specifically withdrawing from the deal?
HALEY: That's right. That's just the option that he has and that's the Corker-Cardin law that came into effect that allow that to happen. What I
will tell you from the U.N. perspective, what we're looking at and what you're going to hear is very vocal on, is the fact that 23.31, the
resolution that was in place, what we saw was it basically wrapped in with the nuclear deal. It said, if Iran did any of these things, it would be in
violation. Since then, the Secretary-General has come out with a report that said, they have violated all of those things. Their support for
terrorism, their arms smuggling, the idea they continue to do ballistic missile testing and they need to be called out for that. And that's
something that you will see us do as we go forward in the United Nations to make sure they know that just because we did the nuclear deal, it doesn't
give them a pass on all the other things they are doing wrong. Yes.
UNIDENTIFIED MALE: Ambassador, you said that in your opening remarks that one of the topic everyone has an opinion about this week was Burma. The
president gave an 4600-word address today to the global U.N. body and which he didn't mention the word Burma or Myanmar at all. Do you have any direct
input into the speech? Did you press him to address Burma in the speech that he gave and when you did the forum today?
HALEY: I can tell you he was very concerned about Burma. Because he's talked to the national security team and asked exactly what is going to be
done. He asked the vice president to speak about it in his speech, which is why the vice president has. And he's been very involved in the
decision-making. I think that he, like every other leader, can tell you we're scratching our heads over Burma. Because all this has happened in
three weeks. You have almost 1/2 a million people who have left and the tragedies and abuse that happened there is something that a lot of people
cannot stomach. So, no, it's mainly if you listen to all the leaders, everybody is just trying to figure out who can move the officials in Burma
and where to go.
UNIDENTIFIED MALE: -- they don't think he has spoken publicly about it.
[16:50:00] HALEY: Well, he's very concerned about Burma. And I think that I did talk with the vice president about it quite a bit. And that's why he
was very passionate about -- but really, he was speaking because the president asked him to.
UNIDENTIFIED MALE: -- President Trump since he's taken office spoken directly with Aung San Suu Kyi and if he had do in the past few days or
buddy in the administration talk to her about what's happening. And would publicly to do more in her role as state counsel?
HALEY: Not only have we pressed her, we present the military. So, we had two things happening. Secretary Tillerson did called her and did discuss
the situation with her. But then also General Dunford is calling the head of the military to say, look, we've had a relationship with you, but this
cannot continue. And we need to know what you're going to do about it. Yes.
UNIDENTIFIED FEMALE: Madame Ambassador, you've been very vocal on the shortcomings of the Iran deal and Iran's behavior. Perhaps beyond the
strict confines of your job here, where does it come from? Is this your own direct opinion after hearing about Iranian because you're here? Or
through conversations with the president or just talk a little bit about that.
HALEY: I have conversations with the president. He was very concerned about Iran. He was very concerned about the deal. And so, I went to learn
about it. And to find out from the IEA. To look at the resolution, to look at the violations. And so, it was just digging deep on the situation
of what we found. And then that's why I gave the speech on the scenario that the presidents being faced with on the decisions to be made. But this
situation -- it's not an easy situation by any means. Because you look at North Korea and you look at the fact that for that for 25 years we were
looking at bad deal, after bad deal, after bad deal. And broken promise, broken promise, broken promise. So, here we are again and we don't want to
be dealing with the next North Korea. And so that's why he's taking it so seriously and saying we need to look at every aspect of this and make sure
that it truly is in the best interests of the American public. Yes.
UNIDENTIFIED MALE: The German foreign minister said today that any disavowed of the Iran deal with reduce the likelihood of getting any
similar disarmament deal with North Korea. Do you share those concerns that any reactions on the Iran deal might reduce the possibility of getting
a deal with North Korea? And separately, as a point of clarification, do you support a full oil embargo on North Korea?
HALEY: So, I think let's go back to Iran in the first place. What I will tell you is, a lot of countries are going to have their opinions on whether
the U.S. should stay in the deal or not. But those countries don't have Iranians saying, "death to America." They're not saying, "death to
Germany." They're not saying all of those things. What we can see is terrorist attacks happening everywhere with ties to Iran. And that's
something we need to be careful about.
And so, it has never moved the U.S. to care about what other countries say. What does move the President is, are we doing everything in the best
interest -- security interest for the American people. And that's what you're seeing is playing out.
In terms of comparing Iran to North Korea, that's exactly what we're doing, is we had so many bad deals with North Korea and everybody looked the other
way. And every time they broke that deal, they looked the other way. Well, where are we now? They now have a hydrogen bomb. They now have
ICBM. So, if we don't do something and we make the same mistakes we made with North Korea, we will be dealing with Iran that has nuclear weapons and
ballistic missile technology. And so that's the concern and that's what we're trying to do with that.
UNIDENTIFIED MALE: Madam Ambassador, the President said this week that he's made a decision on Iran. Can you tell us what it is?
UNIDENTIFIED MALE: All right. I wanted to try. On a separate issue, the President also addressed Venezuela in his remarks this week at the U.N.,
and he also had a meeting with Latin American leaders. Can you tell us a little bit more about what he said to them? And I understand in particular
that they suggested that the President place an oil embargo on Venezuela would be the most effective way of addressing that problem. Is that
something that the United States would consider?
HALEY: Well, I think that -- I was in the dinner with our Latin American friends, and I could tell you there was a lot of concern from all of them
on what's happening in Venezuela. They have all tried. We saw they tried through the OAS, and Venezuela got out of that. We've tried to do it
through multiple avenues to get to Maduro and let him know what's not acceptable. The U.S. has moved forward on sanctions, and they were not
opposed to that.
So, yes, there were some conversations on what they recommended going forward, but I don't think I should share that. I can tell you that
there's a lot of support in Latin America to see Venezuela start to respect its people and go back to the democracy it's supposed to be. And I think
every one of them was concerned about what's happening right now.
UNIDENTIFIED MALE: Can you share just your own thoughts about an oil embargo on Venezuela, though? Is that something that --
HALEY: Well, you know -- I mean, look, if things don't improve, all those options are always there, and so that's what we're watching to see. First
it was sanctions and now we'll look and see. It's not off the table, I can tell you that.
Q Ambassador, thank you. There's been a lot of speculation about your political future and your future within the Trump administration. Some
people are even saying that you're gunning to be Secretary of State and trying to push Rex Tillerson out. Can you please address these
HALEY: I mean, there's going to be chatter about things. Ever since I was a legislator, people have talked about what I'm trying to do or what I'm
supposed to do. What I'm trying to do is do a good job, and I'm trying to be responsible in my job. And I'm trying to make sure that I inform the
American people everything that I know. That's what I'm trying to do, and I'm trying to serve the President and this country the best I can.
If people want to take it to mean something else, that's their issue -- it's not anything I spend time on.
[16:55:00] QUEST: That seems a good moment to leave Ambassador Nikki Haley at the United Nations. A lot of questions there, robustly answered by the
ambassador. The gist of it I think is most important. She says refreshing bluntness and honesty from the U.S. President when he gave his speech,
which she says has been welcomed by other countries in the United Nations and General Assembly.
A Profitable Moment after the break.
QUEST: Tonight's Profitable Moment. Having just heard Ambassador Haley at the United Nations, it seems like a good moment for us to take stock of the
Trump administrations first week at the U.N. And all in all, it's been an impressive one, if you look under the surface. Ambassador Haley just said
then that other countries had been impressed by the President's bluntness and honesty. And whilst it might be true that they were somewhat shocked
at his saying that they would destroy North Korea if allies or U.S. was threatened, the reality is that look under the surface and what you see is
an administration that has actually performed extremely impressively. You had Vice President Pence talking about the Human Rights Council. And
you've just heard Ambassador Haley, who has to be one of the stars of the administration with a command of her brief seemingly second to, none.
Maybe not surprising from a politician honed in Southern politics of South Carolina. Who had the tricky job of removing the confederate flag from
over the capital building. But she's mastered it beautifully. And now they move forward, with everybody saying that just perhaps the U.S. has
managed to bring countries together. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the
hours ahead, I hope it's profitable. Will do it again tomorrow.