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QUEST MEANS BUSINESS
Trump Destined for Davos After Shutdown Breakthrough; Markets at Records on Eve of World Economic Forum; World Economic Forum Calls on Leaders to Mend Fractured World; KPMG Chairman Warns of Geopolitical Dangers; IHG CEO Says We're Using Tax Break to Grow Our Business;
Aired January 22, 2018 - 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: Closing bell ringing on Wall Street. All the major markets are at record levels. The Dow is closing at the best
of the day. Hit the gavel. A sharp, robust gavel. Trading is over. It is Monday. It is the 22nd of January.
Tonight, the snow is falling in Davos and now Donald Trump will be coming here. Now the U.S. Government is open. Records on all the major markets.
On this program tonight, you'll hear from the Nasdaq president.
And we're living in a fractured, futured world. We'll have analysis on what this means in tonight's program when means when we talk about
inequality. Live from a snowy world economic forum with Bitcoin Bob and we both mean business.
Good evening to you. It's snowing for days. Tonight, the U.S. Government is set to re-open for the time being. And president Trump's trip to Davos
is back on schedule. The White House says it's hopeful Democrats and Republicans can get a deal on immigration.
So how did the day unfold? Senate Democrats ended their filibuster of a bill to keep the government funded for the next three weeks. It now gives
Congress that time, three weeks, to begin work on immigration reform. So, the immediate funding crisis is over, but the finger pointing is as intense
as ever. In Jerusalem, the vice president Mike Pence pinned the blame squarely on Democrats.
(BEGIN VIDEO CLIP)
MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: Now, the American people know what happened here. The minority in the United States Senate chose to
shut down the government, denying our soldiers benefits and wages that they earned, jeopardizing government services just to advance an issue
pertaining to illegal immigration. But the Schumer shutdown failed.
(END VIDEO CLIP)
QUEST: The Democrats, Chuck Schumer, said President Trump deserves no credit for ending the impasse. According to the Senator, the president was
notably absent from negotiations.
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER (D), SENATE MINORITY LEADER: Since our meeting in the oval office on Friday, the president and I have not spoken, and the White
House refused to engage in negotiations over the weekend. The great deal making president sat on the sidelines. The Republican leader and I have
come to an arrangement. We will vote today to re-open the government, to continue negotiating a global agreement, with the commitment that if an
agreement isn't reached by February the 8th, the Senate will immediately proceed to consideration of legislation dealing with DACA.
(END VIDEO CLIP)
QUEST: Now, the shutdown had thrown President Trump's trip here to Davos into question. Now following the deal, the White House press secretary
said the trip to the Swiss Mountains is back on.
(BEGIN VIDEO CLIP)
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: As of right now, if all things go as expected this afternoon with the re-opening of the
government which we expect that they will, the president s delegation will leave tomorrow, and the president will continue on his trip later in the
(END VIDEO CLIP)
QUEST: Let's put some analysis into this, David Chalian is CNN's political director. All right. Call me crass, Mr. Chalian, who won and who lost
DAVID CHALIAN, CNN POLITICAL DIRECTOR: Crass. Who won and who lost? Well, I think that the Democrats in the immediate term lost here. They are
the ones that didn't provide enough votes to keep the government open on Friday. They caved today and now the government is going to be open. They
may not have lost in the long term. Because the whole reason the Democrats did this was to demonstrate to their base really core left-wing progressive
activists, that they were willing to put a stake in the ground and make this fight. And if you've noticed, Richard, the Democrats have been doing
quite well electorally in the last few months, and there's a big midterm election in the fall. They didn't want to do anything that would depress
QUEST: In terms of the president, the fact that this allegation that he is -- he was absent during the negotiations, is it going to stick? And,
David, even if it does stick, does it matter?
[16:05:00] CHALIAN: I don't know that it matters, though, it probably would have mattered if the shutdown went on much longer. Because at a
certain point, the American people will sort of demand to see their president in charge of this. Because the shutdown was only three days and
I'm almost convinced it won't matter at all that he wasn't part of it, except in terms of future negotiations, Richard, and that's the deal here.
If, indeed, it was Mitch McConnell's strategy to sort of urge the White House to keep the president away from the negotiations, that that was the
best way to actually get a deal and get the government back open, well, what does that mean for these future bigger negotiations over DACA, itself,
over immigration, over funding? That, if, indeed, that's a new strategy, that could cause another rift between the president and his own party on
QUEST: Now, I don't want to be depressing in all of this, because we'll be back here in just a few weeks from now. When the issues substantially will
be the same. Look, they may have knobs on, and there may be a little bit of tweaking around the edges, but it is still the same issues, the wall,
DACA, immigration reform and funding the U.S. government.
CHALIAN: Yes. All of those issues remain. There's no doubt about it. And if, indeed, Mitch McConnell does not live up to his end of the bargain,
if he doesn't provide a vote on those issues by February 8th, then we will be back in this realm of shutdown/ showdown politics. But that remains to
QUEST: David, thank you. And, indeed, while we're talking, the Senate is actually voting on the second part of that to actually end the shutdown.
The House will obviously have to follow up. But thank you, David.
Now, President Trump looms large over the World's Economic Forum. The theme this year is "strengthening cooperation in a fractured world." The
forum was the idea, the brain child, if you like, of the economist Professor Klaus Schwab. He founded it in 1971. And it is no mean
achievement that he has managed to get President Trump and a sizable, sizable delegation of senior U.S. cabinet members to come here this year.
The president's view on America's interests are channeling the feelings of many, says Schwab.
KLAUS SCHWAB, EXECUTIVE CHAIRMAN, WORLD ECONOMIC FORUM: He is just the voice of a fractured world. Let's not forget he was elected in a
democratic process and there was a lot of resentment which was behind this vote. We have to not look just at the person, we have to look at the
QUEST: And when we think of that, we see clearly, don't we, in the reaction of electorates. People are -- they're not just tired. They're
SCHWAB: They are afraid. They are afraid, and they don't see clear solutions. They need visions for the future. And the danger is that they
take simple answers for very complex issues.
QUEST: I read the risk report. As I have most years. It's terrifying this year.
SCHWAB: It is worrisome. I agree. And what has changed, what has happened, is that people become not only worried about the economic risks,
but about the political risks. They, for the first time they feel sort of fragility, which even may mean war again.
QUEST: You're going to have five minutes privately, I'm sure, with the president of the United States, when you introduce him, when you see him.
Can you tell me what you're going to tell him?
SCHWAB: I think what's important is that if he engages into the forum, it's not one-time action, but it is a continuous process which -- we always
had a really good relationship with the States since four decades.
QUEST: You want him back next year.
SCHWAB: Why not?
QUEST: Now, over to the trading post in New York. We had records on all major markets. Confirmation of the Dow, they you have it. Green, lighted
up green. We have white here, you got green in the trading post. That makes it 8 on the Dow, 11 on the S&P and 11 records for the Nasdaq, too, on
the boards for this year.
[16:10:00] There were no records in Europe. And we stay thinking about the Nasdaq with its 11 records so far, the U.S. Government shutdown has done
little to dampen spirits on Wall Street. And arguably, as you look at the map of today's trading, as it became clear that the government was going to
re-open, so you start to see the market picking up speed throughout the afternoon. If you look at the graph it becomes quite clear.
The Nasdaq and the S&P both ended the sessions near records. I spoke to the president of the Nasdaq and asked him if he believes this extraordinary
rally in markets is justified.
NELSON GRIGGS, PRESIDENT, NASDAQ STOCK EXCHANGE: You have to look at it at a sector-by-sector basis. And certainly, you start looking at the
corporate earnings which are very solid, very strong. Revenue going up for companies. Profitability going up with a backdrop of the tax policy
changes and the regulatory environment. It's positive. I talk to corporate America every day and they're very positive.
QUEST: What are they positive about? The tax cuts are now a done deal and arguably, it's priced in. It's well it is and truly priced in. We saw
Apple with the prospect of bringing back so many --
GRIGGS: Very positive.
QUEST: What are they telling you they're positive about?
GRIGGS: Well, they look at the whole environment, the regulatory environment, and they're saying that they have more ability to operate
their businesses today than they did in the past. They look at the whole ability to grow their company with the backdrop of the positive -- those
positive aspects are very powerful.
QUEST: And to some extent, that regulatory deregulation, which has happened both by presidential executive order and cabinet secretary's
departments. That's the hidden part in all of this, isn't it? The U.S. is deregulating and in many ways people don't realize it.
GRIGGS: I would say that's absolutely correct. You have to go again industry by industry, company by company, to see how it impacts them. But
the nature of being able to do business in a more unfettered way is a big driver.
QUEST: Now, it's that moment.
GRIGGS: The moment's arrived.
QUEST: You get the choice, first of all, which color would you like?
GRIGGS: Nasdaq blue.
QUEST: All right. On the fracture board. WEF tells us that we are fractured. Where are you on the less to most fractured, where you think
GRIGGS: I'm taking the view of corporate America, and where they see things right now. I'm going to go right here. With a positive direction
QUEST: Why did you say there's a direction?
GRIGGS: Yes. And I look at this in terms of how -- we look at things that are fractured from -- there's a lot of these that could be fractured.
Think about inequality. When you think about the pay gaps. This is important to companies and CEOs. We talk about them all the time. They're
concerned. They say what Apple has done, other companies have done with the tax policy and the ability to bring back more money, more cash from
abroad. They are going to invest. When they do invest, it's going to help the general population. So, that will bring us back together.
QUEST: Things are getting better, not worse.
GRIGGS: On the corporate America, absolutely.
QUEST: And here is the fracture board that we'll be filling throughout the course of the week. Some of our guests already, we'll be putting them
across all our programs. That's no fractures. This is very fractured. See how this develops. See who wants to play safe. See who's going to
give a fully full-throttle view.
Experts here are saying Donald Trump's tax cuts will boost the global economy. You got the chief economist of the IMF, and you're going to hear
from the head of Oxfam next. And all we've got, snow, snow, snow.
[16:15:00] (COMMERCIAL BREAK)
MICHAEL HOLMES, CNN HOST: Hello everyone, I'm Michael Holmes. We've lost communications with Richard Quest. We will get back to him as soon as
possible, because he's better at this than me. Meanwhile, we're carry on.
A breakthrough in Germany. The Social Democrats have voted to enter coalition talks with Angela Merkel's conservatives. Formal negotiations
could, in fact, begin this week with the goal of putting an end to what have been months of stalemate. Atika Shubert with our report from Berlin.
ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Coalition talks go ahead on Monday night. This clears one hurdle for Chancellor Angela Merkel
as she tries to build that coalition government five months after the election in September. Of course, she failed on her first attempt. This
is her second try. And she goes back to the Social Democrats. Now, she has ruled together with the Social Democrats for the last 8 out of her 12
years in power.
But there is a problem with this so-called grand coalition. It's that it would leave as the largest opposition party in parliament the Alternative
for Germany Party. This is a party that is vociferously anti-immigration, nationalist, and far right. Some political leaders have even said some of
its members are neo-Nazis and this would give them a very national platform by which to express these highly controversial views.
Now, in terms of when we're likely to see a coalition government in if place, well, it's going to take weeks for those coalition talks, and even
if an agreement is hammered out, all of the party members of the Social Democrats must vote whether to accept or reject the agreement. All 440,000
of them. So, this is a process that could take weeks or months. March is the earliest we are likely to see a coalition government in place in
Berlin. Atika Shubert, CNN, Berlin.
HOLMES: Pop music and sports are doing the work of political diplomacy on the Korean Peninsula. The head of a popular North Korean girl band is in
Seoul. She's part of a delegation scouting venues ahead of next month's Winter Olympics. As our Ivan Watson reports for us now, not everyone is
happy about their visit.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: A North Korean delegation is here visiting the South Korean capital. And as you can see
there is a huge police presence. This is all ahead of the upcoming Winter Olympics. The delegation includes a North Korean musician named Hyon Song-
wol. She's the closest thing Pyongyang has to a pop star. She leads an all-female musical group and she's been the focus of intense media
attention here. Some media outlets have even been reporting on what she ate for breakfast and how she likes her coffee.
[16:20:00] The visit of the North Korean delegation isn't popular with everybody here in Seoul. A small group of anti-North Korean protesters
here. They tried to burn a North Korean flag and the police won't let them do it. Also, tens of thousands of South Koreans have signed a petition
opposing the move to include the North and South Korean women's ice hockey teams. The North Korean delegation has been scouting venues like this
stadium looking for places where they could perform during the upcoming Winter Olympics.
Meanwhile the International Olympic Committee has agreed to allow North Korea to expand its team of athletes who will be participating to at least
22 athletes. They will be accompanied by hundreds of musical performers, a Taekwondo demonstration team, cheerleaders, and of course North Korean
government officials. The South Korean government has invested heavily in this sport's diplomacy. They have taken to calling the upcoming winter
games the Peace Olympics. Ivan Watson, CNN, Seoul.
HOLMES: Now, many are hoping North Korea's participation in the Olympics will help defuse tensions, of course, on the Korean Peninsula overall. But
in Japan, well, there preparing for the worst. Tokyo held a missile drill on Monday preparing citizens for the possibility of a North Korean missile
strike. Now, Will Ripley has that.
WILL RIPLEY, CNN CORRESPONDENT: Right now, we're inside Tokyo Dome, and just minutes from now, they're going to begin really a rehearsal for what
is Japan's nightmare scenario. A ballistic missile from North Korea traveling toward a densely-populated area. Of course, it doesn't get any
more densely populated than the greater Tokyo area, home to some 35 million people.
This is a nation that is prepared for natural disasters of all kinds, but they haven't had drills like this. Drills to prepare for a possible
bombing attack since World War II. This is a simulation of what's supposed to happen if an actual missile is approaching Tokyo.
People get a message on their phones called a j-alert. It tells them they need to either go underground to a subway station like this or inside a
sturdy building. There have been dozens of exercises like this here in Japan over the last year, but this is the first time they've held one in
Tokyo. And a lot of the people we're speaking with out here say it's frightening.
MIYAKO MITAMURA, TOKYO resident (through translator): We don't know what North Korea has on their mind. It is very frightening to think about what
would happen if Tokyo is severely damaged.
UNIDENTIFIED FEMALE (through translator): there are many North Korean missiles flying toward us lately. So, I want to be ready for it.
RIPLEY: But these protesters here say this is different. They say the Japanese government is politicizing the threat from North Korea because
they're trying to change Japan's passivist constitution. Trying to make the Japanese military have a more prominent role around the world. These
people say this drill is larger than it needs to be, and essentially the government trying to mentally prepare citizens for war.
HIROYUKI SUENAGA, JAPANESE CABINET OFFICE COUNSELOR (through translator): We know there are various opinions about this, but the reality is that
missiles have been flying over to Japan. The government believes it is important for people to understand what kind of actions that the public
RIPLEY: Last year, two North Korean missiles flew over this country and many more came very close. But things have been quiet lately with those
inter-Korean talks and the upcoming Olympics. But the question on many people's minds here in Japan, for how long? Will Ripley, CNN, Tokyo.
QUEST: Michael, Michael, thank you, sir, for doing --
HOLMES: I'm here for you.
QUEST: -- a sterling duty. Do not -- yes, how are you? Listen, do not think for a moment that we didn't pay the electricity bill. I assure you.
HOLMES: I told you before you have to put a quarter in the machine every 20 minutes or at all goes off. I was excited. I was looking forward to
talking to Paul La Monica about Netflix earnings, all of that sort of stuff. You take it. It's your show.
QUEST: Get back to your -- thank you. Michael Holmes doing duty. No, just dreadful snow, it's getting into all the gremlins and creating all
sorts of havoc and problems. But we will turn back to our business news agenda. Donald Trump's tax cuts has provided a lift to the global economy
according to the IMF. The fund has jacked up its global growth and forecast, 2.9 percent for this year and next. Slightly higher than its
previous prediction last October.
Maurice Obstfeld, is the chief economist at the IMF and told me he's braced for Donald Trump's policies to have an impact.
[16:25:00] MAURICE OBSTFELD, CHIEF ECONOMIST, IMF: The economy has a very long history. It goes back to the actions that were taken to pull it out
of the hole in 2008 and 2009. And it's been a very long, steady recovery. The administration has been there one year, approximately. It's hard to
say what the impact is of the policies that have been taken so far. There's been deregulation which has been helpful in some respects. The
effect of the tax cuts is coming now.
QUEST: So, you end up with this situation, worrying situation, we might arguably say, where you have good synchronistic growth between the major
economies, the big economies of the world. But you have these parts that are not joining in. In other words, the gap, potentially, gets bigger.
OBSTFELD: There are many countries which are not converging in the sense of catching up to growth rates per capita in the developing -- in the
developed world. There are some, quite a few, where it's actually negative. So, we do worry about those places.
QUEST: Choose a color. You can choose a color. Have a color.
OBSTFELD: I'm going to take a different one from -- if you've got it there.
QUEST: Please, sir, join me at the fracture wall. This is -- we're not fractured, we're very fractured. The WEF says it's a fractured world. How
fractured from there to there?
OBSTFELD: You want a direction also?
QUEST: Which direction, are things getting better or worse?
OBSTFELD: I'm going to give it a little bit of that. If policymakers don't get their acts together, that's where we're going.
QUEST: Really? So, it's not very good with the worry that it could get worse.
OBSTFELD: This cyclical upswing is an opportunity. It's an opportunity for policy to make things better. So, policymakers better do it.
QUEST: Maurice Obstfeld of the IMF. And more from the fracture wall. It is the big issue here at Davos at least until President Trump arrives later
in the week. The U.S. Government is set to re-open. Republicans and Democrats have a three-week window now to reach an agreement on
immigration. We'll talk about it after the break.
We've also got plenty more to get our teeth into as we continue, QUEST MEANS BUSINESS live from Davos.
[16:30:00] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment as we continue from Davos. This is CNN, and on
this network, the facts always come first.
Trump says he's pleased that Democrats and Congress have, in his words, come to his senses after news that lawmakers reached a deal they can end a
brief government shutdown. The U.S. Senate has now voted on that short- term spending deal which funds the U.S. Government for the next three weeks.
In Israel, the U.S. vice president, Mike Pence, has said, the U.S. Embassy will open in Jerusalem before the end of next year. Mr. Pence told Israeli
lawmakers during a speech at the Knesset that America stands with Israel. Arab lawmakers staged a protest at the beginning of the vice president's
remarks and there were scuffles with security forces before they were removed.
Pope Francis has apologized to sex abuse victims for comments he made last week during a trip to South America. The pope defended a Chilean Bishop
accused of covering up sex abuse by his mentor, saying there was no proof. The Pope says it was a poor choice of words and he shouldn't have -- should
have said he had no evidence to convict the clergyman.
Air cargo arriving in the U.S. From five countries in the Middle East will now face stricter screening. U.S. Transportation Security Administration
says cargo from Egypt, Jordan, Saudi Arabia, Qatar and the UAE will be getting greater scrutiny. It is citing terror concerns for the new rules.
Intensive screening has already been in effect for cargo from Turkey.
KPMG says geopolitical risks are a major concern going into the world's economic forum. Bill Thomas is the chairman of KPMG International. Good
to see you, sir.
BILL THOMAS, CHAIRMAN, KPMG INTERNATIONAL: Great to so see you.
QUEST: Thank you for taking the time to join us. These geopolitical risks, we've known about them, but the WEF risks report was quite
terrifying for the first time talking about war.
THOMAS: Yes. And, look, I think they are -- we do a survey every year, 1,300 CEOs. Geopolitical risk rose to the top of that survey as well.
It's on everybody's mind.
QUEST: Which risk, particularly, are they concerned about?
THOMAS: Well, I think if you're a CEO, you're looking at certainty in an uncertain world and that comes down to trade, primarily. Brexit, NAFTA,
where are we going with that? Give us some certainty and we can adjust our business accordingly.
QUEST: Is it the feeling that things could go -- I mean, the Brexit talks are torturous, but they are going on. It looks as though NAFTA is going
into its final round of talks with no agreement. So, there must be a real fear that nothing comes out of any of this.
THOMAS: I think there's a real fear that that's the case. I hope it's not, but to be honest, Richard, that's the largest trading bloc in the
world. Let's hope they come up with a deal.
QUEST: What about things like North Korea, nuclear risks? I mean, these are so far off the spectrum of CEOs' daily lives.
THOMAS: Right, but the issue that they have is that it creates uncertainty in the areas where they want to invest. And to the extent that it creates
that uncertainty, then they sit on their wallets and they don't invest. That's not good for anybody.
QUEST: So how do you balance that uncertainty, which your report in your survey shows, with the better confidence that we're seeing from chief
executives as a result of, say, for example, in the United States? The tax, or, indeed, in the EU, better European markets?
THOMAS: Well, I think, Richard, they get that certainty, for example, in the U.S., from some clarity on tax reform. So, the tax reform comes out,
that provides some certainty. That's one piece of a number issues that we need certainty on. That's what the discussions are this week in Davos.
QUEST: Before we go to the fracture wall, I do need to ask you about this very strange case in the courts that you'll be aware of. Where former
KPMGs were giving KPMG, staff heads up of audits and in one case even providing you with the details of the audits from regulators. This must be
very concerning for you.
THOMAS: It is very concerning. That case goes back a year, Richard. We found it. We self-identified it. Announced it to the SEC. And we have
followed up with them and we've complied with everything that they have wanted to do since that period and we are fully compliant with their
QUEST: Transparency and trust are the key issues, now aren't they?
THOMAS: Absolutely. Absolutely. And for us, it's the cornerstone of our business. So, we can't tolerate it and we won't tolerate it.
QUEST: Can't and won't, but you will choose a color.
THOMAS: I'll pick blue.
QUEST: All right, blue. You know what the fracture wall is?
QUEST: Where are you going to be on the fracture wall?
THOMAS: I'm going to put us right here, Richard. And we're going this way if we're not careful.
QUEST: Oh, this is diplomacy writ large.
THOMAS: No, it isn't.
QUEST: You have elegantly put yourself in the middle with the proviso that things could get worse.
THOMAS: You know why, Richard?
[16:35:00] QUEST: Go on.
THOMAS: Because we are fractured. There is no doubt were fractured. And so, we're on the line, and it's up to us where we go from here.
QUEST: Excellent to have you with us.
THOMAS: Thank you very much for having me. It's been a pleasure.
QUEST: Thank you very much. Good to see you. Thank you very much indeed.
Now, as we continue tonight, Netflix's stock rose 8 percent in after-hours trading thanks to some impressive fourth-quarter numbers. User growth
easily beat market expectations. There was positive guidance for the coming quarter. It's helping to push the stock higher. The rising share
price means Netflix's market cap is now more than $100 billion.
So, President Trump is meeting with two Democrats on immigration reform following a meeting earlier today with six conservative Republicans. CNN's
Pam Brown is following it all at the White House. This is very complicated stuff, bearing in mind, Pamela, at the same time we've got the Senate just
voting to re-open and that no doubt I'm pretty certain will be passed by the House. So, what happens now?
PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's the big question, how do we prevent being in the same place 2-1/2 weeks from now
when this continuing resolution ends? Now, what the Democrats say they received from Mitch McConnell, the Senate Majority Leader, was a commitment
to get a deal done on DACA within the 17 or so days and if not, then something will come to the floor.
But the question is, you know, this is a nonbinding agreement, and there a lot of hurdles to go through. If a DACA bill does pass the Senate, will it
get through the Republican-led House? How involved will the president be in getting a bill through the Republican-led House? Still a lot of
questions here. But today, White House press secretary, Sarah Sanders, said that the White House is hopeful a deal will get done in a couple of
weeks. Though she made it clear that the president's stance on immigration has not changed, in fact, if anything, his positions have only hardened,
and that the White House is demanding four pillars, chain migration, the visa lottery, border security, as well as DACA. So, the question is will
they be able to strike a deal in the next couple of weeks?
QUEST: A very simple question back to you, Pam, why should they be able to reach a deal in the next three weeks that has eluded them and took them
over the edge?
BROWN: Well, that is the question. The Democrats will say, look, we got the commitment, you heard Mitch McConnell say that he intends to get the
deal done. And the president, himself, has said that he wants to get a deal on DACA before the March deadline. But like you point out, there are
some who are on the Republican side who have really dug in their heels on this and then on the progressive side, on the Democratic side, who don't
want to give as much in terms of what the White House is asking for. So, we could very well end up in the same position we're in as of late where
the government runs out of funding and it all comes down to getting a deal done on DACA. And, you know, it's unclear sort of what that path to get
there will be to prevent that from happening.
QUEST: Pam Brown joining us from Washington. Thank you.
As we continue on QUEST MEANS BUSINESS live from Davos, the building blocks for a better tomorrow. We're going to look at how leaders here in Davos
can meet the challenge of a fractured world.
[16:40:00] (COMMERCIAL BREAK)
QUEST: Ah, snow wherever you look in Davos. Right now, hundreds of political and business leaders are making their way up the mountainside --
if they can get up here. Many have been delayed and have to stay in Zurich for the next couple days. The World Economic Forum will set them a
challenge. Figure out how to mend our increasingly fractured world. The list of problems they're facing is piling up and is as deep and
impenetrable in many ways as the snow is this year in the Alps.
QUEST (voice-over): There's snow, snow and more snow. For days, it snowed in this rich mountain resort. WEF admits what everyone knows, the world is
fractured. To learn what might be achieved, I've come to build an igloo.
(on camera): It's a lot of snow.
(voice-over): The principles of building this structure in the snow are the same ones to those in discussions will need to sort out the mess in the
(on camera): Immigration. Trade. Human rights. And equality. War and conflict. Climate change. These are the heavy burdens that are being
carried to Davos. As everyone tries to solve the fractures in this troubled world.
UNIDENTIFIED FEMALE: No fractures on the blocks.
QUEST: No fractures.
UNIDENTIFIED FEMALE: Nope. They have to be perfect otherwise the igloo might fall in.
QUEST: And that's the risk.
UNIDENTIFIED FEMALE: That's the risk.
QUEST (voice-over): I try my best, but in the end, fractures in all --
UNIDENTIFIED FEMALE: It's a bit wobbly but it's --
QUEST (on camera): It's a bit wobbly, but you know, that's what the world is like at the moment. So, we'll just have to have a few wobbles.
UNIDENTIFIED FEMALE: Yes.
QUEST (voice-over): If it's a fractured world, many in Davos blame President Donald Trump for doing the fracturing. We've only built -- oh.
And the igloo builders have a message for those who want to live in glass towers.
UNIDENTIFIED FEMALE: Who wants to live in a tower? I mean, you know, it just gets higher and higher.
QUEST: Donald Trump and his cabinet will cast a long shadow at Davos. Enough problems for now. We've got an igloo to build.
(on camera): This is hard work. How many of these blocks do we need?
UNIDENTIFIED FEMALE: 50 maybe.
UNIDENTIFIED FEMALE: Yes.
QUEST: You want me to do 50 of these?
(voice-over): Dozens of blocks later, and finally, the roof.
UNIDENTIFIED FEMALE: Good.
QUEST (on camera): Building this igloo neatly demonstrates the issues facing this year's World Economic Forum. The U.S. Delegation led by
President Trump will be arriving with a message that no longer can it be business as usual when it comes to the USA. That may well be true, but
what everyone's going to discover is that it takes many blocks, some fractured, to make and put together what is undoubtedly a shared future in
this fractured world.
QUEST: For more on the fractured world, Phillip Jennings is with me. The general secretary at the UNI Global Union. Good to see you.
PHILIP JENNINGS, GENERAL SECRETARY, UNI GLOBAL UNION: Thanks for the invite. Good to see you again.
QUEST: Always good to have you here.
JENNINGS: Thank you.
QUEST: Fractured world. There's a tax cut in the U.S. More money going to corporations. And also, more money going to middle-class and ordinary
JENNINGS: Nonsense. This is another lie from Mr. Trump. Another falsehood. 83 percent of those tax cuts are going to go to the top 1
percent. Mr. Trump has launched a war on the working people of America. He's slashing their benefits, he's slashing their rights. He's slashing
their ability to negotiate. The American worker will be worse off as a result of this budget --
JENNINGS: Another reason why we have a fractured world.
QUEST: And those -- many of those workers voted for Donald Trump and still support his America-first policy.
JENNINGS: I don't think they support him in the same numbers that they did a year ago.
QUEST: You can't prove that.
[16:45:00] JENNINGS: Look at the opinion polls. This is not fake news for me, Richard. The reality on the ground is that people are in anger and
upset about the economic policies of this president. And under the radar, what we are seeing is an all-out assault on working people. Their
benefits, their rights and their wages and their ability to organize. The good news in all of this is that the American trade union movement has
grown by 250,000 members last year.
QUEST: So that's --
JENNINGS: Workers are on the rise. And they're not going to take it. They're standing up in communities everywhere.
JENNINGS: That's the U.S. If we take a look at Europe --
QUEST: -- and other parts of the world.
QUEST: This fractured world that Klaus Schwab was talking about, where do you see the fractures?
JENNINGS: The fractures are very clear. First of all, when you look at the global labor market, 3 billion people in the world labor market, half
of them in vulnerable work. One in three surviving on 2 bucks a day. The other problem we see is a problem of the distribution of wealth and the
distribution of income. The 1 percent are winning big-time, practically everywhere.
QUEST: So, what --
JENNINGS: I want to ask you a question. The workers of the world need a pay raise. So, when you get these American CEOs up here who've had this
windfall of a tax break, ask them, is that going to make a difference to workers' wages? Will workers get a wage rise?
QUEST: Walmart would say yes. Walmart would say you may not think it's enough, but Walmart would say, yes, we give bonuses and increase the
minimum wage. You wouldn't say enough, but it's a step in the right direction.
JENNINGS: It's a wake-up call that people in America realize that it's a rig system against them. There's a problem with Walmart, however, why
don't they sit down with the trade union movement and do a proper contract? A proper negotiated collective agreement like they do in many other
countries. We have managed to build unions in Walmart. They have collective agreements. They negotiate. But not in the United States of
QUEST: Why do you still come here?
JENNINGS: Because I've got something to say. It's a forum. And I want to get this message across about what the union movement is doing. About what
civil society is doing. And to talk about the crisis that we have in terms of human rights, and the fact that this global economy is working for the
few and not the many. One piece --
QUEST: Choose a color.
JENNINGS: I will choose the red color.
QUEST: You know why you're doing the fractured wall that's not fractured, this is all Klaus Schwab's idea that we are a fractured world.
JENNINGS: Fractured world. You know, that was an interesting thing on the --
QUEST: How fractured are we?
JENNINGS: On the fractured side.
JENNINGS: I'd put us over here. And the tendency in terms of wages and in terms of quality of jobs with the big T revolution, we are not prepared for
this revolution. However, one slight change we are seeing, Mr. Larry Fink, $6.3 trillion worth of assets. They sent a letter to all the companies he
invests in, where is your social purpose. Are you respecting human rights and the environment? So perhaps a slight change is taking place in
people's opinions. Because this world is not sustainable as is.
QUEST: Good to see you, sir.
JENNINGS: All right.
QUEST: It's too cold for this sort of --
JENNINGS: I hope I got my point across.
QUEST: I don't think there's any doubt. Always good to see you, Philip. I look forward to seeing you for some more projects that were doing later
in the year.
QUEST: Liverpool. Where I was born and brought up.
JENNINGS: We're making it happen in Liverpool.
QUEST: Thank you, good to see you.
JENNINGS: Thank you.
QUEST: As we continue tonight QUEST MEANS BUSINESS, a consistent and distinctive heritage. This is if you've got the prominence -- what does
that mean? My next guest knows what a good brand should be about. The chief executive of IHD -- the new chief executive of IHD, spells it out,
after the break.
[16:50:00] (COMMERCIAL BREAK)
QUEST: For the last two years, IHD reports has been all about addressing the customers' needs. Now the latest report is about building a brand.
And if it's not a trusted brand, you can't bank on consistent growth. Keith Barr is the new chief executive of IHG. Good to see you.
KEITH BARR, CEO, IHG: Great to see you, thanks for having me.
QUEST: First of all, I do need to ask you because our last guest, Philip Jennings, you heard him vociferously say, ask all those top CEOs, ask them
what they're doing to give back that tax break that day got from the U.S. Now, you pay tax in the U.S. You also pay tax in the U.K. So, what are you
going to do about that tax break that you've got?
BARR: We're continuing to grow our business, by growing our business, we're hiring people all around the world, so in the U.S., in the U.K., in
China. That's the best thing we can do to support economies and support markets as they continue to grow and mature. Hiring people is a great
thing for the environment and for the economy.
QUEST: This -- the criticism, of course, is dividend -- raising the dividends and share buybacks, which I can see there are legitimate reasons
to do both. But both sides of the equation have to share the spoils, don't they? The workers as much as your shareholders, as much as your owners.
BARR: Certainly, I mean, the only we that we can deliver true hospitality around the world, we are in the hotel industry, and taking care of
customers is making sure we have colleagues that love doing what they're doing. So, they have to be paid fairly. They have to feel like they have
a career path. I'm a great example. I started working when I was a teenager in this industry. Full-time working through University and now
I'm chief executive of a global hotel --
QUEST: But do you do all the jobs?
BARR: I've done most of the jobs -- I started washing dishes when I was 13 in a restaurant. I worked as a chef all through University. I got my
hands dirty throughout my career.
QUEST: Let's talk about the survey you brought out that says there has to be trusted brands. That it has to be providence, very posh sounding words.
Which basically means what?
BARR: Providence is basically having a history and a heritage, something that means something to people. And so, you have the Intercontinental
brand, which has been around for over 70 years hosting delegations all throughout the world. The Holiday Inn brand, over 60 years. Again, where
many, many people have spent holidays or most important meetings and events. It's having brands that mean something and consistency and that
they can really trust day in and day out.
QUEST: Choose your color.
QUEST: Come and join any at the fracture wall.
BARR: I think actually we're pretty fractured at the moment around the world. I think you're seeing governments fractured --
QUEST: Getting better or worse?
BARR: I think we're getting better because we're talking about it.
QUEST: Right, brave CEO. You've gone over here.
BARR: I have.
QUEST: Is that because you're new as a CEO and you haven't sort of skated on --
BARR: Exactly. I'm sure I'll be told to put it over there later on.
QUEST: I was about to say. but this is a worrying problem. Particularly for somebody in an industry like yours. Where I'm not being unkind when I
say that many of your employees are at the lower end of the pay scale. And, therefore, they are the ones that are going to suffer more in a
fractured world than, bluntly, me or you.
BARR: Absolutely. I think that's what the whole conversation about this week, what is the role of business and companies and corporations in a
fractured world to improve the environment, to improve the life of our colleagues, to give people career opportunities? So, it's a challenge for
us. But, again, I think I'm living proof of it, you can make it work.
QUEST: You've been with IHD for how long?
BARR: 25 years.
QUEST: And you're the CEO.
BARR: I'm the CEO.
QUEST: Is there -- you were the CCO.
BARR: I was.
QUEST: Is it different that first day that you are the CEO? I mean, you've been in the C-suite. You sat next to Richard for years. You were
part of the top decision making of the company. But all of a sudden, there's that day when it's now you at the top of the chain.
QUEST: What's it like?
BARR: You quickly realize there's no one else to blame. All the things that aren't right, you just look in the mirror and recognize it's your
accountability. I think also you recognize you have to spend a lot more time going out and talking to people in the business when you're not
running it hands-on anymore, to really know was going on.
QUEST: Please, sir, let's in the next 12 months, go and wash a few dishes in one of your hotels.
QUEST: Are you up for that?
[16:55:00] BARR: Maybe I'll cook you a meal instead.
QUEST: OK, you cook the meal and I'll wash the dishes.
BARR: Sounds like a plan.
QUEST: I think we would agree with that. I'm not sure what I just got myself into it. But I think I'll probably live through it. Good to see
BARR: Thank you.
QUEST: As we continue, markets are at records. We're in Davos. The snow -- I was going to say it stopped. It sort of turned a bit sleety. The
music is rousing. And we a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment. A bit like Davos each year, so the QUEST MEANS BUSINESS snowman gets ever bigger and more elaborate. This
year, let me introduce you to Bitcoin Bob. We decided it was entirely appropriate with all the trinkets and it looks magnificent. But got to
really wonder what's going on behind those gold teeth. And it's a similar situation, but we really have to ask ourselves about this year's Davos and
World Economic Forum. The agenda seems very similar to things that we've seen before, inequality, trade, immigration.
But there is this big unknown, and that is Donald Trump and a large U.S. delegation that will arriving on Thursday and Friday. Perhaps a bit like
Christmas, everything will build up to those days here. There's a real risk and danger. It overshadows the very real work and discussions that
need to take place. But whether we like it or not, a bit like Bitcoin Bob and his cryptocurrencies, it's going to happen sooner rather than later.
That's why we're going to have a great week with Bitcoin Bob here in Davos. That's QUEST MEANS BUSINESS for this Monday night. I'm Richard Quest in
Davos. Whatever you're up to in the hours ahead I hope it's profitable. I'll see you tomorrow with Bob.