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QUEST MEANS BUSINESS
Facebook and Uber Face Regulator's' Wrath; British Prime Minister Wants Brexit Transition Period; New U.S. Travel Restrictions Imminent; Nigeria Emerges from Its Worst Recession in Years. Aired 4-5p ET
Aired September 22, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: The closing Bell ringing on Wall Street. Dow Jones has done absolutely nothing. Barely changed, it's four
points -- five points closed lower. All the major indices are down for the day. Yes, thank you, I thought it was going to be a pathetic gavel. But
no, right at the last minute he pulled it out of the hat. Trading is over. The week is finished. It's Friday. It's September the 22nd.
Tonight, they changed the world and the world is fighting back. Facebook and Uber are facing the music.
Theresa May wants two years of extra time before Brexit is complete. Will the Europeans go along with that?
And the U.S. travel band expires this weekend. Now new restrictions are coming.
I'm Richard Quest live in the world's financial capital, New York City. And of course, I mean business.
Good evening. Tonight, Uber and Facebook. Two of the largest companies of the digital revolution. They revolutionize their industries, I think we
can all agree, they've change the way we travel and interact. Millions of customers, tens of millions of times, and two of the world's most powerful
and popular tech companies. Now, both are facing urgent challenges to the business model that's got them so far.
Let's start with Uber. The company has promised to contest a decision by Transport for London to strip it of its license to operate. Transport for
London has ruled Uber is not fit and proper to operate a licensed Company in the British capital. And has done so on a basis of a lack of corporate
responsibility around safety and security issues. Uber's license expires barely a week or so's time at the end of the month. It can, of course,
continue to serve its 3.5 million London customers as the appeals process continues. 300,000 people have signed a have signed a petition Protesting
against Transport for London's decision to declare it not fit and proper. London's mayor is not among them. Sadiq Khan says he fully supports the
regulators decision. He spoke to CNN's Erin McLaughlin who sent this report from London.
ERIN MCLAUGHLIN, CNN CORRESPONDENT: I'm told this decision involved a lengthy and meticulous review process by Transport for London or TFL, the
regulatory body which governs London's transport networks. There were several reasons for this decision. Primarily relating to safety and
security of Uber. It's approach to be background checks, extensive background checks of its drivers, as well as the way it reports
criminality. Earlier I spoke to London's mayor, Sadiq Khan, who says he supports this decision. Take a listen.
SADIQ KHAN, MAYOR OF LONDON: If you're an Uber driver, if you're an Uber user, you're right to be angry at Uber for failing to play by the rules.
The question you should be asking, why is Uber not playing by the rules? And Uber has said they're going to appeal this decision. Uber employees,
and army of lawyers and public relations teams, and they've already set out there plans to appeal this decision.
MCLAUGHLIN: London's black cabbies are likely to be celebrating this decision. They have long protested Uber's presence in the city. They're
union actually backs one of the Mayor Sadiq Khan. Although, he told me that this had nothing to do with his decision or any sort of political
involvement that TFL is an independent body. The people who are probably are very upset by this decision, of course, some 40,000 Uber drivers,
registered Uber drivers, as well as the millions of people within the city that use their services. We spoke to some of them and they're pretty
UNIDENTIFIED FEMALE: I am like shattered. What will I do want to Sunday night now.
UNIDENTIFIED FEMALE: I use one like every day. It's just an easier, better way to get around. A black cab fare is so expensive.
UNIDENTIFIED MALE: At the end of the day it's a reliable service. Not only in London, if you are foreigner -- if I fly out to New York or go to
somewhere else, and I know exactly by pushing a button I'm getting a reliable driver. He is checked. I know him. We talk and they're all
friendly, all of them. And they also have their families.
MCLAUGHLIN: Uber hitting back at the allegation saying quote, the Mayor and Transport for London have caved into a small number of people who want
to restrict consumer choice.
[16:05:00] It does plan to appeal and to continue to function while the appeal process is underway. Erin McLaughlin, CNN London.
QUEST: The issues facing Uber, now to Facebook. President Trump says news that Russian groups try to influence the U.S. election through placing ads
on Facebook, he called it a hoax. Meanwhile, Facebook itself is pledging to turn over the contents of those ads to U.S. congressional investigators.
It's a nine-point plan Facebook's putting forward to combat election interference. Facebook will now disclose which groups paid for political
ads. Mark Zuckerberg says, that will make Facebook as more transparent than those on television.
The company will also strengthen its add review process adding 250 members to its election integrity team. And it wants to use its existing anti-
bullying technology to combat political harassment. CNN's Dylan Byers is in Los Angeles. Let's do the practicalities and then will do the
philosophy. The practicalities, 250 people. So, real live human beings as opposed to algorithms are going to be introduced -- which can only be
probably a blessing. But this idea that they're going to identify political ads. That's not going to be so easy when is not as
straightforward as an ad for a particular position or obviously, a candidate.
DYLAN BYERS, CNNMONEY SENIOR REPORTER FOR MEDIA AND POLITICS: No, it's not going to be easy. And if you look at what CEO, Mark Zuckerberg said just
yesterday, even he's leaving open the door for the possibility that Facebook is not going to be able to catch everything ahead of time. Part
of that has to do with the complicated nature of advertising on Facebook.
It's not like you buy a 30 second spot the way you might on television or on radio. Very often when you buy and add, what you're actually buying is
the ability to sponsor a post. And what in this day and age, Richard, is not political? So, it doesn't have to be about Donald Trump or Hillary
Clinton. It can be about an issue, like immigration, LGBTQ. What happens when you get into that murky territory between business and politics, tech
and politics, media and politics? It's a very tricky space. And that is why you see the addition of this 250-member team because they know that an
algorithm can't do this. They know there has to be a human element here.
QUEST: So, that's the practicalities. Whether it's going to work only time will tell -- to use the old phrase. But on the philosophical,
Facebook wanted nothing to do with this issue. They done nothing wrong. Then they weren't going to hand over. Now they're handing over. It's the
same thing again with this issue of are they a media company. Are they a news company? And where does Facebook now stand?
BYERS: Well, they always seem to be a few weeks late whenever there's a controversy. A few weeks late to accountability, to full transparency.
The issue here is that there's differences of opinion even inside the company. Initially they thought of themselves as a platform. And in that
regard, they were morally agnostic. They said look, here's the platform. Humanity does what humanity does with it. Now they understand they are so
big. They have so much influence. There is even a question of among some people on both the right and the left as to whether or not Facebook or
other major social media companies or digital companies should be public utilities. It comes with a lot of responsibility. And so, Facebook's in
this very murky space now where they simultaneously want to be an open platform that doesn't police speech, doesn't police political advertising,
but also knows that may not be a choice for them going forward in light of what happened in 2016.
QUEST: All right. Since you cover digital and media and all of these areas, let me take you right to the heart of our lead stories tonight. You
may have heard us talking about Uber and how London's banning Uber, because it says basically, you know, this idea of it being a platform, no. Your
transport company. Now Facebook is facing the same problem. They always said were just a platform, as you said. But now, no. You're not. You're
a news or media company. Are these digital companies like Uber and Facebook in their different areas, they've got to grow up and realize, the
world is not going to change its rules just for them. Or will the world change the rules?
BYERS: Well, this is -- this is the big question. And when you talk about growing up, that's exactly what it is. These are young companies. This
whole digital world that we live in now is a young world. We are in this transitory period in which the rules are being defined as these companies
develop. That's a very important question. It's the same question for Uber. It's the same question for Facebook. We don't know yet. I think
what you're seeing now is were dealing with companies that are so big. And the question really is, do they have the power? Do they have the influence
on sort of override the ambitions that Congress may have or that any government around the world may have for regulation?
[16:10:01] QUEST: Dylan, thank you, sir. Have a good weekend.
BYERS: Thank you.
QUEST: Marietje Schaake says Facebook has downplayed its influence on voters. She's also questioned Uber's attempts to avoid scrutiny from
police and regulators. She's a member of the European Parliament and the EU's chief observer in the election monitoring mission in Kenya. She joins
me now from Nairobi. On this Facebook question, does the European Union -- are you in favor of more restrictions or at least more information from
Facebook, Twitter, all of the social medias, when they take advertising that can be regarded as political?
MARIETJE SCHAAKE, MEMBER OF EUROPEAN PARLIAMENT: Well, I believe firmly that the rule of law should apply online as well, whether it's to Facebook
or to Uber. They have a great responsibility. And with greater economic power -- and many of these big tech companies are more influential in terms
of economic scale than some small countries. I think comes greater responsibility. So yes, the rule of law should apply online, and these
companies should be adhering to those fundamental rights and values just as other companies.
QUEST: But were not just talking -- I mean it's fine to talk about the rule of law, which is a sort of wonderfully nebulous phrase that often
means most things to many people. But what about when individual laws are out of touch clearly this new revolution in information technology. I'm
not talking about honesty, truth and justice. I'm talking about practicality, say for example, as in London with Uber.
SCHAAKE: So, if you agree that, for example, competition should be fair. Which might sound like a generic principle, but it's actually a very
fundamental principle in our open economies. It should also apply online. So, when we look at the case of Uber, they have deliberately misled the
lawmakers and the regulators by tweaking their algorithms in such a way that those people who they thought would be regulators would get a
different Uber experience. And so, to say as the previous speaker did, that this is a young company that still has to get used to what laws mean.
I think is actually is completely misguided. They know what the law is and they deliberately try to circumvent it. And that doesn't make sense to me.
QUEST: Are you in a difficult position, in the sense that I can see where you're coming from. And you're right, you have a duty and a responsibility
to ensure a level playing field. But when you've got 3.5 million people using Uber and you've got 1 billion people using Facebook, do you risk
looking out-of-date and Luddite trying to commute, hold back the tide.
SCHAAKE: No. Actually, I think what we have to do is upgrade the laws. Some of them are principled and should already apply online. But where
it's necessary. For example, in dealing with algorithms. We have to look at whether laws need to be updated to be in sync with the digital age. So,
if we agree on the principles of freedom of expression, access to information, fair competition online, we have to make sure that the rule of
law applies wherever that is relevant. Online or offline.
QUEST: Now, we need to talk about the Kenyan election. The reality is that you all signed off -- not you personally -- but monitor signed off on
the election. Yes, there was some qualifications if you read between the lines when it finally came down. But it was the Kenyan Supreme Court that
said this wasn't fair. Did monitoring fail the last time? And if it did, will you get it right this time?
SCHAAKE: Well, I think it's a simplification to say that we signed off on the elections. We offer a lot of critical points and recommendations. In
the argumentation by the Supreme Court that essentially the forms did not substantiate the digital account of the votes. Is very much in line with
the observation that my mission made. So now, I think it is essential that all Kenyans come together and prepare for the next election.
QUEST: Right. But on this question, what are you going to be looking for? I mean, free and fair is again, a great phrase like the rule of law. But
you all said that the last lot were free and fair. So, will you be looking at -- which part of this election will you be concentrating on in
determining whether this time is truly free and fair?
SCHAAKE: Well, European observers like myself and my mission of hundreds of people, never used the words "free and fair." We never do. We never
have. And we won't in the future. Instead, we look at the different elements of these elections. Whether the police conducts itself
proportionately and evenhandedly. Whether there are bribes being paid or state resources being abused.
[16:15:00] Whether there is ballot stuffing or whether people's rights are respected in the fullest extent. From campaign to election day, to
tallying and the results process. And we must learn from past lessons that we've learned through the Supreme Court and our own observations. But of
course, in the next elections there might be other vulnerable points to look at. So, we're going to go in the same way we did as last time to look
at these elections impartially and independently to see whether the rights of Kenyan people have been served.
QUEST: Thank you for joining us. We'll talk, no doubt, many more times as these elections -- and were grateful to you talking to us tonight from
Nairobi. Have a good weekend.
To Wall Street now and the Dow Jones Industrials. You know, frankly, it's barely worth a bell. Minuscule gains for the S&P and the Nasdaq. The Dow
is just off, well, 9, 10 points.
As we continue tonight, the British Prime Minister delivers a major Brexit speech in Florence. It's a city famous for Machiavelli. And in the words
of the diplomat, Renaissance writer, there is nothing more difficult, more perilous, more uncertain then to take the lead in a new order of things.
QUEST: The head of the European Commission welcome Theresa May's overtures to find a good Brexit deal. Michel Barnier again, called on Britain to
spell out exactly what it wants. For the first time, the British Prime Minister agreed to honor the so-called divorce bill. She does that by
paying its budget commitment, or the U.K. pain is budget commitments to the European Union through to 2020. Her speech in Florence was a decidedly
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: The British people have decided to leave the EU. And to be a global free trading nation able to chart our own
way in the world. To many, this is an exciting time, full of promise. For others, it is a worrying one. I look ahead with optimism. Believing that
if we use this moment to change not just our relationship with Europe, but also the way we do things at home. This will be a defining moment in the
history of our nation.
(END VIDEO CLIP)
QUEST: Now, in the same weeks that Europe's largest airline Ryanair has canceled flights galore because of mismanagement and incompetence. It
seems a good opportunity for us to look at May's speech through the lens -- I've got my luggage -- of the EU departure lounge. Join me in the lounge.
We seem to be -- or at least the U.K. -- seems to be the only passenger that's actually leaving at the moment. And we need to know at what point
Brexit is going to happen. Oh, there we are. Where in the lounge. Now, I see that Brexit departure is get scheduled for March 29, 2019. Well,
that's the expected date. But listening to what Theresa May said, we now need to know how much this departure is going to cost.
[16:20:00] She didn't really say, but the sort of price were seeing is 24 billion -- 20 billion euros, nearly $24 billion. And in this departure, we
need to know how long were going to be waiting for Brexit. Well, Mrs. may has admitted that there should be this transition period, which could be
two extra years or however long as needed. Now that's one issue. The price, the date, but when it comes to moving around in the issue of cargo
back and forth to Europe, Theresa May wants trade to continue. Thank you, with border controls. She insists when it comes to Ireland they'll be no
physical border between the North and the South.
And she's ruled out specific membership of the European economic area. No Norway solution, fearing that the loss of democratic control. And no
Canada style free-trade agreement. Basically saying, that's just not good enough to replace with the U.K. already has. All in all, she's promised
Europeans in Britain can carry on as before.
So, we see the departure lounge and we now turn to Carl Bildt, former prime minister of Sweden. He joins me now from the departure lounge in
Stockholm. Carl Bildt, his Mrs. may deluding herself when she says, firstly, that she wants to transitional period, perhaps two years or plus,
under the same terms and conditions of single market access and customs union?
CARL BILDT, FORMER PRIME MINISTER SWEDEN: I think that is to put it very mildly ambitious. That is a very diplomatic way of putting it. But I
think the key point, which you alluded to in the departure lounge. If you're in the departure lounge, you must decide where to fly. And we still
don't know her destination. I mean, as you pointed out, she says no to single market, no to customs union, no to Norway style agreement, no to
Canada style free-trade agreement. So, there were a lot of noes. But where's the yes? What's the destination? And if there's going to be in
implementation, transition phase, which that might be necessary, it's a question of what to implement. Where is the flight heading? We don't know
QUEST: Right. Well, she does say in the speech, when she rejects EEA and she rejects the Norway and she -- she says there needs to be a creative
solution. Her words, for this deep and special relationship or a deep relationship. So, what she's looking for is, I suppose, the closest you
can get to single market without having single market. Again, is that realistic?
BILDT: Well, it sounds like she wants to depart without departing. And she's unable to define the destination. As you pointed out, she says, no
to all of the existing options that are there. And then she says we have to be creative. Fine, but why isn't she creative? And she indicates
really -- sort of implicitly and nearly explicitly that things are going to be roughly as they are. That unfortunately, I have to say, is not going to
be the case. I mean, there are couple of steps in terms of -- in the direction of a more realistic approach. But I fear that she will have to
deliver more speeches in Florence or elsewhere. You know, to clarify things.
QUEST: So, the issue of the money -- I mean that's going to be settled one way or the other. Whether is 24 billion, whether it's 50 billion. I mean,
that in many ways, is the least contentious. They will agree a figure. Which of all these issues do you think is really going to truly scoff up
the talks? Is it Northern Ireland? Is it the future trade relationships?
BILDT: Well, I think the future trade relationship, which is more than trade, more than trade and goods. It is trade in services. It is trade in
digital, the free flow of data, those sorts of issues, that are really important from the point of view of the economic development of the U.K.
and of the European Union. We have a mutual interest. We are going to go from a relationship that is very, very close to something that is more or
less significantly less close. And of course, that's a price to be paid for that. And we need to be, regrettably, honest about that. Then she
talked today, somewhat more about the security relationship. That's also a tricky one. But I think it was good she brought it up in a constructive
QUEST: Carl Bildt, thank you, sir. I look forward to talking more about this -- next time I promise we'll both be in the business lounge. Where it
will be a bit more comfortable and we can have a proper drink. Thank you very much, indeed.
QUEST: Carl Bildt, joining me from Stockholm.
[16:25:00] Now while Theresa May's political future is unclear, Angela Merkel seems to be cruising towards reelection, fourth term, if she's
reelected over the weekend. The German Chancellor spent the day campaigning in Munich ahead of the countries general election on Sunday.
The nation's auto industry is politically toxic after its major emissions scandal. Angela Merkel, who has been a friend of the industry so far,
acknowledged the crisis in confidence in autos.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, GERMAN CHANCELLOR (through translator): That's why the car industry must do everything it can to win back credibility and trust.
Which is both in their own interest and in the interest of the employees, as well as the entire German economy.
(END VIDEO CLIP)
QUEST: The top representative of the German auto industry told me today that the industry can overcome its current crisis. It does so by investing
heavily in digital technology and electric vehicles. Matthias Wissman joined me on the line from Berlin and I needed to know if he agrees with
the Chancellor. The need to rebuild trust and credibility for Germany's automobile industry.
MATTHIAS WISSMAN, PRESIDENT, GERMAN AUTOMOTIVE INDUSTRY ASSOCIATION: If one differentiates, yes. There are some companies, no doubt, which made
serious mistakes. But it's not the whole industry. We are standing for some 600 companies. OEMs and suppliers, and most of them are have no
difficulties, not with trust, not with technical reasons. And the others learn out of the mistakes and do the necessary, you know, look to the last
tests of nitrogen oxides in Europe. Five of the best companies are German, and five of the worst ones are not from Germany.
QUEST: So, what do you think the industry needs to do more to rebuild that trust with the people and with politicians?
WISSMAN: You know, the most important thing is that we follow the big two challenges of tomorrow in the future. The one is digitalization. The
company which is not digitalizing its automotive components will not succeed in the future. And the second is electric vehicle. Some 35
percent of the patrons of electric mobility are at the moment in the hands, as well, of German suppliers and OEMs. That means we invest heavily into
the future. And we know we have to, because we are standing for some 80 percent of the world's cars premium market. And companies who are at the
top and have to do the utmost to invest into the future.
QUEST: You have to admit the last 12 months have been extraordinary for the German car industry, with a major scandal that seems to be bad.
Difficult times in terms of, you know, with Brexit. And an election where one of the industry's leading supporters, Chancellor Merkel, has been
calling for change in the industry. Not easy times, Matthias. Would you agree?
WISSMAN: Not easy times, no doubt. But on the other hand, that Chancellor Merkel at the Frankfurt motor show, Vice Chancellor Gabriel at the
Frankfurt motor show, and the opposition candidate Schultz, very clearly speaking out for the industry were all critics. Some of them justified, no
doubt. We are making it clear that that they want a combustion engine for the long run besides the electric vehicle. And that they are supporting
the industry, because all of them understand the core of German industry is automotive.
Not only the OEMs, but also the suppliers. Hundreds of them are world champions. Don't forget, we are standing for not only 80 percent of the
world's car premium market. We are also standing for three of the five top suppliers in the world are German companies. That means there's much more
than criticism. There is a lot of recognition of the real strengths of the industry, which learns out of mistakes and invest heavily into the future.
QUEST: As we continue tonight, hurricane Maria is hammering the northern Caribbean at the moment. It totally devastated Puerto Rico. At least six
people have died in the U.S. territory. We'll have a full report after the break.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's a lot more QUEST MEANS BUSINESS in just a moment. Will have information on the new U.S. plans to replace
the travel ban once it expires this weekend.
Nigeria's top trade negotiator will be in the C suite, as a country emerges from his worst recession in years.
This is CNN, and on this network the news always comes first.
The escalation in the bombastic rhetoric between the U.S. and North Korea continues. President Trump has called the North Korean leader Kim Jong-un,
a madman on Friday morning. It follows a threat by North Korea to test a powerful nuclear weapon, a hydrogen bomb, over the Pacific Ocean.
New drone video shows rescue efforts at a Mexican textile factory were workers have pulled at least 20 bodies from the rubble. The government
says it will keep searching for survivors for at least the next two weeks. The earthquake has now killed almost 300 people.
A major evacuation operation is underway in Western Puerto Rico as heavy rains from hurricane Maria have caused a dam to fail. And that's led to
flash flooding downstream. Officials are warning it's a very dangerous situation.
Senator John McCain has dealt a major blow to the latest proposal to overall Obamacare. The senator says he cannot support the bill without
knowing how many people would lose coverage. His opposition makes it very unlikely the Republicans will be able to repeal Obamacare when they vote
It's Friday, and hurricane Maria is now kidding more islands that are reeling and getting ready, Turks and Caicos. The storm is moving towards
the Bahamas. It's been from Puerto Rico. It whisked past the Dominican Republic. The Turks and Caicos got it last. And now the Bahamas are in
its path. The storm is category three. Annual be well aware, it's weaved a lethal path through the Caribbean. It's believed two dozen deaths have
been confirmed as a result of the hurricane. And look at the numbers as it goes -- it's down here at the moment. It still at level 3 and is heading
up toward the Northeast of the United States where it will be probably a tropical storm. CNN correspondents have been following the deadly storm as
it tears across the Caribbean. CNN's Nick Payton Walsh is in U.S. Virgin Island of St. Croix. There officials are saying the entire island is
without power, in the main hospital is evacuating patients because of storm damage.
[16:35:00] NICK PAYTON WALSH, CNN CORRESPONDENT: This is where it starts in the in the west of St. Croix, U.S. territory, and obviously behind me,
you can the devastation caused here. They're out of power, and this is a city center that would normally be thriving with tourists. We flew in by
helicopter about an hour from Puerto Rico, and from above, devastation to the east of the island looks not that awful here. It looks a lot worse.
And on the ground, it is quite frankly, devastating. And there are people here that are beginning to get quite angry. What they see as the lack of
attention given towards them. In fact, some were of the statements from the governor of St. Croix. People on the street here have been saying,
that sounded like there wasn't too much of a problem. Well, here their lives have been devastated.
One man behind me screaming, I would much rather spend another year at war in Iraq than stick around here much longer. It's devastating, really, to
see this whole business community torn to pieces. The Lost Dog bar around the corner that has its back torn clean off. The owners they're not sure
when they can begin serving drinks here again. There is a bees nest that was blown straight into their refrigerator. Quite a devastating series of
stories we've been hearing here.
The relief effort, well, we saw ourselves. It's beginning to slowly get underway. FEMA brought food to the school, not so far from where I'm
standing. But it ran out very fast. 500 or 600 people formed a huge queue there to get it and then it ran out. A bit of discontent growing there as
well. It may soon be alleviated, because we just saw recently an enormous C-17 cargo plane landing at the airfield here. But still, this U.S.
territory without power potentially for months now. It's life utterly transformed by hurricane Maria. Also battered by Irma too. And a sense I
think of anger growing here that they feel their lives are transformed. And they need so much more help than they feel is coming their way.
QUEST: Nick Payton Walsh. As we continue our program and conversation tonight, President Trump is tinkering with his travel ban. A replacement
is on the way. It's no longer a one-size-fits-all. Jessica Schneider in Washington will help us understand what this new ban looks like.
QUEST: Donald Trump is expected to sign a replacement for his controversial travel ban by Sunday, according to senior administration
officials. There will be new tailor-made restrictions varying by country. Jessica Schneider's in Washington. Oh, this is going to get complicated
isn't it, Jessica? So, the one-size-fits-all against the six predominantly Muslim countries is going and we don't know what's coming in its place. Is
that the just?
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: That is the gist, Richard. Right now, the world is just waiting for any official proclamation from the
president. So, homeland security officials, they talk to reporters on a call today, but they really didn't get much information. All that they
said is throughout this past summer they been coordinating with countries all over the world. Working with them to make sure that there are travel
security measures and vetting were proper. They said that there were a handful of countries who at the end of that 50-day process, they still
weren't in compliance.
[16:40:00] So, homeland security officials are saying they are looking for a number of things from these countries. They're looking to see how
countries establish the identity of travelers. They want countries who are also willing to give any information about any terrorist or criminals who
emanate from the country. But if those countries don't cooperate, then yes, they will be put on the list that either bans people from traveling
from their country to the United States, or maybe restricts some of the travel.
So, the question is, which countries will be on this list when the last executive order expires on Sunday? That's what were still waiting to see.
We don't know if these six countries that were on the list previously, whether they'll be on again. If there will be additional countries added?
What exactly the restrictions will be? So once again, the White House sort of waiting on this, keeping everyone in limbo. And Richard, were just
wondering if we're going to see the same sort of chaos or confusion that we saw the last two times these executive orders were rolled out.
QUEST: So, that begs the question, if when the list comes out, I'm asking -- I realize Jessica -- I'm asking you questions to which you probably do
not have the detailed answers. But help me understand. Whether or not it comes in immediately on the Sunday. In which case you are looking at
perhaps chaos and confusion, or is there some grace period?
SCHNEIDER: Well, the executive order currently expires on Sunday. So, if they were to let that lapse, then we would let travelers come in from all
those countries again. The word is from the White House that the president will in fact issue some proclamation, either Saturday or Sunday. So right
now, Richard, it doesn't look like there would be any lapse in time where things might go haywire. What will be interesting to see is what countries
will have restrictions on them. And then what exactly the restrictions will be. Because it wasn't quite clear last time. The administration said
that no one could come from those countries. But then of course, the Supreme Court redefined it, saying only if you didn't have a bona fide
connection to this country could you not come in. So, we'll see what exactly homeland security has been working with these other countries to
improve their vetting procedures and of course, if they don't comply with that, that's when some of those restrictions will take place as to either
how visas are issued or if there is a complete ban from any countries in particular that haven't cooperated at all. But yes, it's sort of were in
limbo right now. It's a wait and see to see what the president issues this weekend, which the White House says he will.
QUEST: Something tells me you're going to have a busy weekend, Jessica Schneider.
QUEST: Hope you didn't have plans. Well, you do now. Thank you very much, Jessica. Have a lovely weekend.
SCHNEIDER: Thank you.
Now, this suit is the right outfit work in an office, a serious office. It's a rather nice little number, where you can present a television
program. In New York's steamy summers though, it's not much better than wearing a winter coat. One company founded by MIT students wants to change
how we buy suits, how they're made and how they feel. Is the first in our series highlighting traders around the world. We joined the ministry of
UNIDENTIFIED MALE: In the corporate world, the epitome of work attire has traditionally been the suit. Today, science has been used to redefine
workwear at the Ministry of Supply.
GIHAN AMARASIRIWARDENA, COFOUNDER, MINISTRY OF SUPPLY: Our mission is to invent apparel, our work clothes and life clothes are no longer defined.
When you get up at 7 AM you take your shower, feeling fresh and by the time you get to the office
after you commute you are sweating through your armpits, and you are now and then an over-ACed office though and so you start to shiver. So, we
said let's actually solve this with interesting material that NASA actually used for space suits. And it is called a phase change material.
And it acts kind of like a thermal battery, so it absorbs heat when you are too hot, stores it in the shirt, and then when you are cold it releases
that heat back to you.
UNIDENTIFIED MALE: Shirts, Ts, blazers and knits analyzed, reinvented, even the humble sock rebooted.
AMAN ADVANI, COFOUNDER, MINISTRY OF SUPPLY: We can rapidly prototype, we can bring concepts to market significantly faster, always a help of modern
AMARASIRIWARDENA: With 3D Print Knit unlocks many different things, there are ways we save money in terms of sustainability, in terms of using less
material, but also looking at less overproduction.
ADVANI: The jacket I am wearing started off his yarn, in 93 minutes later with the blazer that I am wearing right now.
UNIDENTIFIED MALE: The trade-onomics a fashion is experiencing a style change, faster fashion cycles, currency fluctuations and tech changes have
exposing multitrillion dollar apparel industry to decline in sales have exposed a multitrillion dollar apparel industry to decline in sales.
Sports inspired fashion or ath-leisure is outpacing every other category. Earning $78 billion.
But wearing a sports gear doesn't necessarily mean you want to walk to the store. With online sales increasing their share of the market. With e-
commerce dominating the routes to a global market MOS uses customer engagement to determine brand direction.
[16:45:00] ADVANI: We have decided to go almost entirely direct to consumer. We said let us approach it differently, let's approach it more
like a car company where we have models come out every year. Let's continue to look at the feedback we get, every single piece of feedback we
have ever gotten since our company started is logged in a single document, and categorized ruthlessly.
So that we can take those insights and when we build our next garment we can act upon them, and so they continue to get better and better over time.
AMARASIRIWARDENA: Our roots we are engineers at heart, but we also are designers and innovation is at the intersection of those. And that is what
we are really trying to do is bring together design and technology, and create a product that allows us to perform better but also feel better as
QUEST: Breaking news on the business front to bring to you, the ratings agency Moody's has downgraded the U.K.'s long-term debt from AA1 to AA2,
and in doing so it has changed the outlook. Which is perhaps the most important part from stable to -- to change the outlook to stable from
negative, which suggests that there won't be any further deterioration.
Now, it cited weakening public finances, higher budget deficit, along with the pressure to raise spending. The gist though, the headline if you like,
the U.K. continues to have economic issues and now one of the ratings agencies downgraded Britain's debt, which will increase borrowing costs on
the mountain of debt that the U.K. has.
As we continue tonight, still to come Christine Lagarde tells me she's got the answer to South African corruption, sunshine.
QUEST: KPMG is being called out in South Africa. The finance minister there says all work with the company should not be under review because of
its ties to the Gupta family which has been accused of improperly influencing the South African government.
Speaking to me on Wednesday, the IMF Managing Director Christine Lagarde said, South Africa should deal with its sprawling corruption scandal in
ways that will help put things right.
CHRISTINE LAGARDE, IMF MANAGING DIRECTOR CHRISTINE: As we know, corruption is not a one-way street, and I am not here passing judgment on who has done
what in relation to any South African case, and connections with the authorities. But it is a two-way street, where somebody gives a bribe, and
somebody receives a bribe. And while we are not directly involved with the private sectors ourselves we are directly concerned about what use is made
of public finance.
If somebody builds a completely unnecessary airport or bridge, which goes to nowhere, or a massive stadium, or the convention center that will never
be used, there is public money spent on something that is unnecessary, which is going to be helpful for all sorts of kickbacks, in all sorts of
funny ways offshore in general. And through funny shadow accounts, that is where we can be involved as soon as we are informed. Because we can raise
the flag, we can just disclose that, we can redraft our program.
[16:50:00] QUEST: Are you prepared to do that? Are you prepared to do that because, you know, the thing we've discovered in South Africa and
elsewhere with corruption, if that usually involves people at the top? It usually involves naming and shaming. And it always ends up as a nasty
sewer of a mess. So, are you prepared for that?
LAGARDE: Not only are we prepared for that but there have been cases where we have actually stopped financing a program until such time when what was
covered up, what was done in the shadows comes out transparently and is disclosed in the public account. And then transparency just like the sun
is the best disinfectant. People understand what is going on and who has done what. That is where our job stops, beyond that it is for people to
decide what they want to do in terms of government, in terms of elections in terms of steps to be taken.
QUEST: Turning to Nigeria, the country says it is not producing too much oil for OPEC to start getting annoyed. The old group met in Vienna today.
The old group suggested that Nigeria is producing too much oil along with Libya. Joining me here in the C Suite it is Nigeria's chief negotiator of
trade. Good to see you, Sir.
CHIEDU OSAKWE, CHIEF NEGOTIATOR, NIGERIAN OFFICER TRADE NEGOTIATIONS: Thank you, Richard.
QUEST: Come on, you are producing too much oil, I am not saying cheating on OPEC quotas but cheating on OPEC quotas.
OSAKWE: I don't think we are. The country is coming out of a recession but it's a low growth environment, we need cash and reserves and stability
in the foreign exchange market, to stabilize the economy and give some propulsion to growth in the economy. So not too much for the circumstances
and vulnerabilities of the economy.
QUEST: But the overproduction, sir, of say Libya and yourself, one of the factors is keeping the oil price down according to OPEC.
OSAKWE: I think it is much more than that. There is a move now to move away from a fossil economy from a hydrocarbon economy. I think that
economies basically are re-gearing their minds to grow their economies beyond the oil age.
QUEST: When I was in Nigeria earlier this year, besides of getting into Jollof rice mess, when I was there the issue was always diversification.
But you are a country addicted to oil wealth. Would you agree with me?
OSAKWE: In the past, yes, but now we have a plan and we have to improve our play, and we have to execute that plan to diversify the economy. And
if you want to talk about that plan I am happy to talk about it with you.
QUEST: Yes, we've got a couple minutes, so this idea of diversification, but you need infrastructure spending on roads. And you need more spending
on telco and power. You need spending on airports. How do you diversify when you still need to spend on the basics?
OSAKWE: It's the market, Richard, it is the market, you have got to basically take the government out economy. And just let the government do
what governments do best regulate in pro-competitive, pro-market, pro- business environment. This creates an abundance of opportunities for diversification.
QUEST: Let's turn that to what Christine Lagarde was just talking about, transparency and sunshine as it relates to the issue of corruption. I know
huge steps have been taken and more needs to be done. Anticorruption commission is looking into this but there still needs to be more
prosecutions, there still needs to be more of them. Would you agree with me?
OSAKWE: I would agree with you completely. Nigerians accept that corruption is systemic, and it is one of the major demons that we have been
dealing with it in Nigeria, it is one of the top three agenda items of President Buhari, you know that well enough. It is a key priority for the
chairman of the economic management team of Nigeria, the vice president, Professor Osinbajo. And we are doing this institutionally, there must be
prosecutions, more of them. More people going to jail. But we have to build them into our institutions and do a lot more. And do it
consistently. And do it in a nonpartisan way and do it across different governments.
QUEST: All of that, sir. And you will succeed, thank you very much indeed. Not a mention of Jollof rice anywhere.
[16:55:00] OSAKWE: Come back to Nigeria, you know you are a star in that country.
QUEST: I am not sure after the Jollof rice incident. Thank you very much indeed. We will have a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment, Uber and Facebook, two companies that have revolutionized the world are now facing the back lash because of their
business practices. In the case of Uber, transport for London saying they are not fit and proper to operate in London. In the case of Facebook, over
the appetizing ads and Russia.
It is really very simple, yes, by all means change the world. But don't expect the world to change for you. In what we heard tonight on the
program is the rule of law remains paramount, and there may need to be tinkering of laws to accommodate the new economy. But fundamental truths
And that means you have to know who your customers are, you have to be transparent, you have to deal fairly, and you have to follow the rules.
Both of these companies have learned to their cost that they cannot just railroad past regulators and past rules as they exist today.
And that is QUEST MEANS BUSINESS, for tonight and for this week, I am Richard Quest in New York, whatever you are up to in the hours ahead, I
hope it is profitable. I will see you on Monday.