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Quest Means Business
U.S. Congress Stalemate Over Budget Deal Will Cost Government Millions; Putting A Price On Portugal; The EU Says The Bailout Could Top $100 Billion; Hacking Payback; Secret Stars of Bollywood; Migrant Safe Haven; Remittances and the African Economy
Aired April 08, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, GUEST HOST: No deal in Congress, but a big deal for U.S. finances. We look at the possible costs of a government shutdown.
And News International says, sorry, for phone hacking. Tonight we speak to a lawyer for some of the victims.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS. Hello to you.
Tonight, deal making is underway to avert a crisis on both sides of the Atlantic. The U.S. government is just 10 hours away from a potential shutdown. Whilst here in Europe, leaders say a deal on a Portuguese bailout is edging closer. We have been keeping a close eye on both of those stories for you.
But we'll start in the United States with a shutdown deadline just hours away, members of Congress are still bickering over why a budget deal hasn't been struck. This is the scene, live, on Capitol Hill. According to Democrat Majority Leader Harry Reid, a deal involving $38 billion in cuts has been agreed. But cuts relating to abortion are still holding up talks. The Republicans deny that is the case.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER, (R-OH) SPEAKER OF THE HOUSE: It is that almost all of the policy issues have been dealt with and there is no agreement on the spending limit. And we're working to try to get there.
(END VIDEO CLIP)
FOSTER: Well, it has been months of complicated political bluffing but the prospect now is very simple. If there is no deal in the next 10 hours, the government does shut down. Far from being a cost cutting measure shutting the government down could end up costing the United States money. It is difficult to say exactly how much a shutdown could cost, but President Obama believes it could throw the entire economic recovery into jeopardy.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: One of our nation's top economists said, and I'm quoting here, "The economic damage from a government shutdown would mount very quickly. And the longer it dragged on the greater the odds of a renewed recession."
(END VIDEO CLIP)
FOSTER: Well, a look now at the possible ripple effects of a shutdown, then. Let's have a look at this graphic, very cleverly put together. The shutdown length is unknown, so workers are forced to wind down operations and secure the site. So that is an immediate cost. The next ripple effect is something like this, visitors spend $32 million a day in the national parks, for example. But those parks are going to be closed down. So that is another cost that is going to hit the country. And then beyond that, you are talking about back pay when people do go back to work. Agencies are paying overtime for work not being done during the shutdown, for when those workers do get back to work. So, there are costs, it is just very hard to assess at this point.
These negotiations look like they are going right down to the wire. John King is in Washington for us.
John, is it going to happen?
JOHN KING, CNN CHIEF U.S. NATIONAL CORRESPONDENT: Well, Max, that is a great question. There is absolutely no reason for it to happen. You just laid out there in crystal clear terms that the government shutdown not only would cost the government of the United States money it could also cost in a more broad sense, if it disrupts the financial markets. You know, this as well as I do the fragile U.S. recovery not only is very fragile here in the United States, it could have an impact around the world as well.
Did you want me to stop and listen to Harry Reid, there?
FOSTER: Yes, let's go to Harry Reid, speaking now, live.
(JOINED IN PROGRESS)
SEN. HARRY REID(D-NV), MAJORITY LEADER: We use the word "rider" around here a lot lately. And now it has become plural, "riders". Let's remember what is really riding on the proposals we have here.
If the government shuts down, over access, for example, cancer screenings, the fragile economy will really be hurt. Let's remember that in five weeks the GDP would drop 1 whole percent. Our intelligence and diplomatic efforts around the whole world would be significantly harmed. And in the process the credibility of this country of ours will be damaged. We have obligations to allies around the world and we wouldn't be able to meet those obligations that we have made, in many instances.
What if a family has worked and worked, in this fragile economy and they are finally able to qualify for a home loan? 80 percent of them, of course, are government supported loans. They would stop; wouldn't be able to get one. And it is not only that person wanting to buy a home. How about that person who has been trying to sell a home?
Small business won't be able to get their loans, that they need. Taxpayers won't be able to get their tax refunds that they have earned. A federal government shutdown doesn't mean they lock the doors of the capitol building in Washington. But it does mean that as every day consequences for people throughout America.
It is not only federal employees, almost 1 million federal employees are on pins and needles right now. Because they, just like everybody in America, have trouble making all their payments in a given month. They may have waited for a few years to buy a new car. They have been planning for a long time to take a vacation. As Mark Warner pointed out to us today, this shutdown would have a tremendous impact on the state of Virginia. This is Virginia's big weekend. It is the Cherry Blossom Festival. People plan to come here all year. And one of the things they want to do when they come here is take a walk down The Mall. Go to the National Art Gallery. Go to one of the great Smithsonian Museums. Won't do that, they'll close at 12:00 o'clock tonight.
All this to stop women from getting their regular tests and preventive services that they need; 90 percent of Title X money is for preventive health services. It is against the law that any money be spent for abortions, and they are not. It is against the law. This is all a loss- leader they have. The Speaker Boehner can't sell that to his Republicans in the next few hours, it will be crystal clear to the American people that Democrats were reasonable and Republicans are responsible for shutting down the government. The issue here is funding local health clinics that provide services like cancer screenings, that save women's lives, and save money down the road by catching diseases that are expensive, expensive to treat, and sometimes too far along to treat.
The fact that the Republicans have made this about women's health and not about money or anything controversial is really a shame-Senator Murray (ph).
(END COVERAGE)
KING: That is the Senate Democratic Majority Leader Harry Reid, there, Max. And it is an interesting point he is trying to make. Some of what he said is hyperbole. A lot of what he said is exaggerated. And that is the state of play here in the United States less than 10 hours 'til a potential government shutdown and a lot of this is about politics. The actual differences on money and policy are relatively small. So you would think, given the potential economic impact, this would be settled. But given the recent unpredictable, mistrustful trajectory of American politics, there is at least a 50 percent chance the United States government will, for the most part, not completely, but for the most part shutdown at midnight, Max.
FOSTER: Many people around the world will be looking at this as an extraordinary situation. How does the government continue? How does the country continue without government funding? How will it happen at midnight if the shutdown kicks in?
KING: It is a very important question, because you just heard, again, some political hyperbole from the Democratic leader and the Republicans are equally guilty. They do it as well. The talked about how U.S. intelligence gathering and diplomatic activities around the world could be significantly curtailed. Not necessarily so. Agencies still have broad authority to tell essential workers, so U.S. embassy workers around the world, CIA operatives around the world, the military, U.S. military personnel in Iraq and Afghanistan, and supporting the operation in Libya, they will all come to work tomorrow, even if the government is quote/unquote, "shutdown" here in Washington, D.C. Essential people will be kept on the job.
There is a big question. Those museums he talked about in Washington, D.C., they would shut down. If you are an American traveling overseas, and you are having a problem in a country, you can call the embassy and get help. If you are an American who is waiting for a visa to be processed, well, you might wait a lot longer, because those services will slow down, if not stop. So, essential, emergency services, national security things, those will go forward. Things like museums, national parks, the regular processing of tax returns and things like that. That would come to a halt if this happens.
A lot of time to negotiate, these things will go right down to the wire. And this, right now, is much more about politics and positioning, in part, for the next election than it is about keeping the United States government open tomorrow morning.
FOSTER: It is fascinating John, thank you so much for explaining it. John King, there, in Washington.
Now, Wall Street has been watching these negotiations with great interest of course. Right now, the Dow is off slightly as you can see. We'll wait to see on Monday the effect, if actually this all kicks in. One important thing for investors to bear in mind is how well they'll be able to monitor the markets during a shutdown, if it happens. That is because some government bodies wouldn't be able to publish economic reports, for example, that are due, unemployment benefit numbers on Thursday. And a monthly jobs report due out on May 6th.
And one other company to mention in all of this is the drugs company, Johnson & Johnson, it is paying $70 million in fines after the U.S. Securities and Exchange Commission charged it with bribing doctors to prescribe its drugs in some European countries. Its shares are currently trading flat. But two of the main factors, really, on the markets today.
Next, Portugal's problem. Why Europe Group President Jean-Claude Juncker thinks it is more political than financial.
(COMMERCIAL BREAK)
FOSTER: As European finance ministers thrash out a bailout package with Portugal, Ecofin (ph) Chairman Jean-Claude Juncker says, if-ah, it is more of a political than a financial problem. At a meeting just outside of Budapest, in Hungary, this Friday, Juncker said that there is enough money available, but that Portugal's forthcoming elections have complicated that talks. European finance ministers are insisting on deep spending cuts as part of the bailout deal, estimated to be around $115 billion. EU Commissioner for Economic and Financial Affairs Olli Rehn explains where that money will probably come from.
(BEGIN VIDEO CLIP)
OLLI REHN, EU COMMISSIONER: We have not yet finally confirmed this, but I will assume that we will have roughly two-thirds of a European Union funding and one-third of IMF contribution. And out of the European Union funding a big part will come from the European Financial Stability Mechanism, which is the community instrument created a year ago, for this purpose. It is based on loan guarantees under the Union budget.
(END VIDEO CLIP)
FOSTER: Well, if the bailout is around $115 billion it would be comparable to Greece. In terms of percentage of GDP, that is just under half. Compare that to Ireland, though, you could see just how much the situation there is worse. Ireland's $120 billion loan is more than 70 percent of its GDP.
Now the Swedish Finance Minister Anders Borg has criticized Portugal's government for not requesting a bailout earlier. I spoke to him earlier, from Budapest, and asked him what progress the ministers have made.
(BEGIN VIDEOTAPE)
ANDERS BORG, SWEDISH FINANCE MINISTER: Well, I mean, we have received the request from Portugal to start a process towards a program. And that is something that has to be a very thorough process. We need to have an IMF assessment and a commission assessment, both of the public finances. And of the situation of the financial sector because we have to make absolutely clear that the situation is, that the data is actually reliable.
FOSTER: A figure being bandied around is something like 80 billion euros. Is that about the figure you are looking at?
BORG: Well, I think this program will be in the same size of what we've seen for Ireland. So that is not the wrong neighborhood, I think.
FOSTER: OK. And in terms of a deadline for some sort of deal with Portugal, Olli Rehn has said he is confident that Portugal will match its refinancing needs in April and May, but June will be challenging. So, can we assume that a deal needs to be reached before June in order for Portugal to be able to manage this.
BORG: Well, I mean, we need a deal with a very tight time schedule, but at the same time there is also the issue of full examination, both from the IMF and the Commission. I think we should actually be quite critical toward the Portuguese government there, because this really should have been done much earlier, so that we would have had the time for a full examination and a full review in a much more orderly fashion. So, we are now in a situation where we are squeezed between very deft reimbursement schedule and the market pressures. So that is actually a quite problematic situation I think.
FOSTER: When you talk about the irresponsible policies in Portugal, can you give us a specific example that you think has been irresponsible?
BORG: Well, the Portuguese have been running a current account deficit for the last seven-six, seven years of almost-somewhat below 8 or 9 percent of GDP. That means that the whole of the Portuguese economy has been indebt (ph). And obviously that should have been dealt with. So this is a not a short-term problem, it is a long-term problem. In the short term I think it is quite obvious that they have not done sufficient measure when it comes to public finances.
(END VIDEOTAPE)
FOSTER: The Swedish finance minister speaking from Hungary there. It is not just finance ministers that are criticizing the actions of Portugal's last government, in Lisbon, CNN's Diana Magnay found there is public outrage too.
(BEGIN VIDEOTAPE)
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): There is so much that is charming about downtown Lisbon. The picturesque trams, each street a treasure trove of old fashioned delights, great for tourists, less so for those who live here.
Carlos Calheiros Cruz inherited this haberdashery from his father. He has seen the business decline in the last 20 years, as Portugal's textiles industry lost ground to foreign markets.
(On camera): Do you think that Portugal is doing the right thing by asking the European-
CARLOS CALHEIROS CRUZ, HABERDASHER: Yes, of course it should have been months before.
MAGNAY: Do you think the situation has got a lot worse because it waited?
CRUZ: Yes, because there was incompetence and corruption on the government.
MAGNAY (voice-over): It is early morning down at the market. Hardly the busiest time, but Alzira Silva says it is pretty quiet, generally. She blames the current crisis on a culture of overspending. And now, the party is over.
"People spent more than they earned," she says, "but also the banks were in the business of lending money to everyone. And people took advantage of that."
JOAO LEITE, BANCO CARREGOSA: Look at this.
MAGNAY (on camera): '09.
LEITE: From '09 we were issuing at 1.5 percentage points, and now we're at 9 percentage points. So, 9 percent.
MAGNAY: So what is that? The one year?
LEITE: 9 percent on the two-year yield.
MAGNAY (voice-over): Analysts predict it will just get worse before it gets better.
LEITE: We are facing a package of austerity measures that will hurt the Portuguese consumer, the families and the companies, so we have like 15 years of the cheapest banking system in Europe. And we'll have now the more expensive banking system in Europe for the next 10 years.
MAGNAY: A desperate catch up after running a current account deficit of 10 percent of GDP each year, for the last 15 years.
(On camera): Portugal used to rely heavily on textiles and on the agricultural sector. But because of a cumulative increase in wages and also increased competition from abroad. It effectively priced itself out of its own export market. A lot of people here you speak to say that Portugal's only real asset now is the sun and that its renewable energies and tourism that are the growth of Portugal going forward. Diana Magnay, CNN, Lisbon, Portugal.
(END VIDEOTAPE)
FOSTER: Well, in a moment, crisis and transformation at Toyota. President Akio Toyoda tells CNN what keeps him going through the tough times. And his hopes that the auto giant will come back stronger.
(COMMERCIAL BREAK)
FOSTER: We have some news, just coming in to CNN for you. According to Nigerian police there has been an explosion in the city of Lagos. Police say the blast was at the offices of the Independent National Electoral Commission. There are, of course, elections underway this weekend there. CNN's Christian Purefoy is working to get more information on any possible casualties for us. We hope to speak to him a little later in the show, once he has got some information.
Toyota says it is getting back to work following last month's super quake. The automaker will restart production at its Japanese factories on Monday, April 18. Capacity will be cut in half because many components are in short supply. In Part 2 of CNN's exclusive interview with the Toyota president, Poppy Harlow asked Akio Toyoda what he has learned about leadership during the latest crisis and the ones which preceded it.
(BEGIN VIDEOTAPE)
AKIO TOYODA, CEO, TOYOTA MOTOR COMPANY (through translator): Actually since I became president, there was not very much in terms of policy moves (ph). There are many, many things that I learned and I faced many trials. And this was a trying period for me.
However, every time I encounter those difficulties I continue to, I think, what is it that I can do? What is it that Toyota as a company can do? And I always went back to the founding philosophy of Toyota Motor Corporation, which is, to make a contribution to the society through manufacturing cars. And I continue to ponder on that founding philosophy. And that resulted in the recently announced global vision.
POPPY HARLOW, CNN INTERNATIONAL CORRESPONDENT (on camera): Do you think that looking at the recall crisis, that Toyota was treated badly by outside media, and by the government?
TOYODA (through translator): I don't think Toyota was treated badly at all. On the contrary, I have been focused on what we have learned from this recall crisis. And in the form of a new Toyota that will be reborn as a result of those trying period, I hope that customers and outside observers will give credit too.
HARLOW: Is Toyota a completely different company today than it was a year ago?
TOYODA (through translator): I think we are the same company, but our desire and the efforts that we are making to become a company that can earn smiles from the customers by exceeding their expectations, I think, is the strongest over the 70 odd years, since our foundation.
HARLOW: In one word, how would you describe Toyota last year, today, and the future of Toyota; one word for each.
(LAUGHTER)
TOYODA (through translator): Very good question, very difficult to answer. Last year I continue to think, why did this happen? So it was a year when I thought and pondered about Toyota, there are (UNINTELLIGIBLE) very deeply. And now, I think, we are trying-it appears when we are trying to find one answer for the future, based on what we have learned last year. And in the future I would like to lead the entire automotive industry by being the most attractive company in the industry.
(END VIDEOTAPE)
FOSTER: Well, this week we showed you some of the darkest secrets of the supply chain; it is all part of the "CNN Freedom Project", our investigation into the slave trade, which is in business right now in almost every country in the world.
We have taken you to Thailand, where men are imprisoned at sea, and they are forced to work. We explored the fight to end child trafficking in the cocoa industry. And we brought you California's legal solution, which is forcing companies to disclose their records to eliminate slavery in the supply chain.
And we heard from two companies who have made their fair trade and freedom their priorities. Divine Chocolate, which is owned by the cocoa farmers, and The Body Shop, which is campaigning against sex trafficking. Here are some of the highlights from a week which began with Dan Rivers' report on slavery at sea, in Thailand.
(BEGIN VIDEOTAPE)
DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Prim Vanack (ph) from Cambodia was imprisoned on a Thai trawler for three years, forced to work 20 hours a day. He tells me how he was beaten by the captain and that murder was common on the boats. Their nets sometimes snagged bodies of crew dumped from other ships.
UNIDENTIFIED FEMALE: Even the companies doing great work don't want to step up and talk about it, because they then have to expose the slavery and trafficking, and forced labor, that has been in their supply chain. I also think it is really important that the consumer acknowledges how challenging this is for business. I think that it is important that we understand it as-this is like a virus that affects the supply chain.
UNIDENTIFIED MALE: After that march, our office was contacted by three girls who had been trafficked. And they said to us, it is great that somebody now is speaking out for us. And that The Body Shop and their customers are uniting in calling governments in Denmark, and around the world, to make change.
UNIDENTIFIED MALE: They offered Mickey a child. And actually given the market conditions of the Ivory Coast, and that Mickey was, as they say a tububu (ph), a white person, the price was very, very high.
UNIDENTIFIED FEMALE: What we have done, and which people thought was unlikely that we have managed to do, is get consumers to buy this product and to go out of their way to buy it and to pay a bit extra for it, because they knew the farmers would benefit.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Mmm.
(LAUGHTER)
UNIDENTIFIED FEMALE: It's all right.
QUEST: This is more fun than humans should be allowed.
(LAUGHTER)
QUEST: Thank you very much.
UNIDENTIFIED FEMALE: Thank you.
QUEST: This is delicious!
(END VIDEOTAPE)
FOSTER: He gets all the best bits, doesn't he?
Now if you missed any of the installment in our series, you can watch them, or share them on social media. Visiting CNN.com/freedom. Many viewers wrote to us asking what they can do to help. And one of the most interesting things on the Freedom Project Web site, is actually a list of things to look for to spot modern slavery right around you. Things you might not expect and the people to contact, if you see them. If you have your laptop open, head over to CNN.com/freedom.
In a moment a welcome message for celebrities. This paper could owe you money. And this man says, sorry. How picking up voice mail is going to leave Rupert Murdoch's News International with a sizable bill.
(COMMERCIAL BREAK)
FOSTER: Welcome back.
I'm Max Foster. These are the headlines.
We are continuing to watch a breaking news story for you out of Nigeria. According to police, there has been an explosion in the city of Suleja. That's Suleja. They say the blast was at the office of the Independent National Electoral Commission. This on the eve of a scheduled parliamentary election. We'll bring you more on this as we get it.
A source tells CNN more than 22 people have been killed in Daraa in Syria and dozens of others are injured. The source says security forces fired on protesters who gathered after Friday prayers. But the state's news agency says unnamed gunmen fired into the crowd.
NATO has expressed regret, but is refusing to apologize for an air strike that apparently killed several rebels in Eastern Libya. A deputy commander says the alliance had not been told opposition fighters would be using government tanks. Thursday's air strike caused rebels to flee Ajdabiya -- Ajdabiya and the cities now under attack from regime forces.
The White House is urging lawmakers to reach a compromise before the U.S. government is forced to shut down less than 10 hours from now. Some 800,000 federal workers will be furloughed if Republicans and Democrats can't agree on how to fund the government for the next six months.
News International now is admitting it hacked the phones of public figures. The newspaper company owned by Rupert Murdoch's News Corp, has apologized to some of its victims and says it will pay compensation.
This has been a controversial case, with a remarkable cast of characters.
It started with the news of the world's royal -- the news of the world's royal correspondent, Clive Goodman. He was convicted in January 2007 for hacking the British royal family's phone messages, including Prince William's. His editor, Andy Coulson, later stepped down.
There was an investigation by the "Times" of London in July 2009 and "The New York Times" a year that exposed the range of public figures involved here, from politicians to supermodels like Elle Macpherson.
And in January 2011, it emerged the former British prime minister even, Gordon Brown, had asked police if he had been targeted.
The same month, Andy Coulson, who had become current prime minister, David Cameron's, head of communications, was forced to resign from that post.
Now, shares in News International's parent company, News Corp, dipped after the announcement. News Corp's shares are currently off by around .75 of 1 percent on the NASDAQ.
Martin Lewis represents some of the people who claim to be victims of the phone hacking by News International. His clients including the champion jockey, Kieren Fallon.
Mark Lewis explains what this amount -- announcement means to the victims.
(BEGIN VIDEOTAPE)
MARK LEWIS, SOLICITOR: People want to find out the truth first. And once they've found out the truth, they want an apology and an undertaking that these things aren't going to happen. And then they want to be compensated for the losses caused.
Now, I know people have looked at this and said that this is all about celebrities and, you know, they don't need money. But not everyone who's been affected by phone hacking is a celebrity. There are people who have lost their job, had their health affected, etc. Just because the people that they worked for thought that they were leaking stories and they weren't.
FOSTER: How big is the compensation fund, as you understand it?
LEWIS: There's been talk of it being up to 20 million pounds as a -- as a fund. Whether or not that's enough, I mean the -- what's been put forward is that a -- a small number of people will be compensated in respect of hacking of phones between 2004 and 2006.
That doesn't mean to say that hacking of phones didn't happen before or after those dates. And it doesn't mean to say that claims aren't going to be defended for the people other than this small number who it's admitted by News of the World were hacked.
So the -- the court cases will continue. And we will eventually get to the bottom of this and find out the truth. But it is a positive step in the right direction.
FOSTER: It sounds quite conclusive, doesn't it, the statement. But from the way you're talking, this certainly isn't the end of it, as far as you're concerned. You're going to pursue each case individually, whereas they're trying to draw a line on this -- under this, aren't they?
LEWIS: Well, I think -- I think the important thing is -- is to read the statement carefully, because although it says cases will be settled in the phone set up, it also says that cases will be defended.
And I suppose, you know, which side of the coin do you look at, heads or tails, because there's a lot of people whose claims will not be accepted and that have to fight on. And even the ones who will have their cases accepted, they do not have offers that are necessarily acceptable or have been accepted.
FOSTER: In terms of the compensation for each one of your clients, for example, how on earth do you assess that, because a celebrity, for example, having their phone hacked isn't necessarily affecting their wealth, is it?
LEWIS: Well -- well -- well, there are lots of different ways of -- of assessing damages and the compensation for people. There are -- there's special damages for the people who have lost their jobs and the financial consequences. And the courts can work those out.
There's the damage, generally, for having your privacy invaded. There might be the damage because stories have been put out in the News of the World which were based on unlawful -- unlawful acts of their phones being hacked.
So there are issues to -- to -- on -- on that. And then, of course -- then there's another issue, which has not been decided by the court yet, is the issue of exemplary damages -- how much or is the -- is the court prepared to say that the News of the World ought to be punished in some way for doing it.
(END VIDEO TAPE)
FOSTER: We're going to be hearing more on this, of course, over the coming months, I'm sure.
Up next, we have our eye on India and a curious question for you -- how does one old lady keep getting the starring role in Bollywood's biggest blockbusters?
We'll explain, after the break.
(COMMERCIAL BREAK)
FOSTER: In the final part of our Eye on India series, we are looking at one of the country's most films exports -- Bollywood. It makes an estimated $2.3 billion in revenue each year and it's created its fair share of celebrities, too.
But as Sara Sidner finds out, the bright young stars have a surprising voice backing them up.
(BEGIN VIDEOTAPE)
SARA SIDNER, CNN CORRESPONDENT (voice-over): In Hollywood, they call it a triple threat -- a person who can act, dance and sing.
(SINGING)
SIDNER: But this is Bollywood, which has a unique formula for success the world outside of India is largely unaware of. The songs can make an actor a mega star. But the actors aren't the ones actually singing.
(SINGING)
SIDNER: Instead, it's guys like Vishal and Shekhar.
(SINGING)
VISHAL DADLANI, PLAYBACK SINGER AND COMPOSER: Just we're not -- it's quite crazy.
SIDNER: They are known as playback singers.
DADLANI: Because the music is such an integral part of -- of the films and because the songs are such an integral part of -- of the story telling, they've evolved specialists who just do, like, for example, who -- like us. We compose the songs. Many times we sing them ourselves. And on-screen, there's somebody else actually mouthing, you know, that vocal.
SIDNER: These two playback singers/composers are the hottest ticket in Bollywood right now, producing hit after catchy hit.
SHEKHAR RAVJIANI, PLAYBACK SINGER AND COMPOSER: Either in the studio, whether we go for a drive or whether we're sitting in a coffee shop somewhere, music is on all the time. We're just composing. We're just writing stuff. So it's -- it's beautiful. I think that's the -- this is the best job in the world.
SIDNER: A few of Bollywood's playback singers have become as famous in India as the actors that lip sync their music.
(SINGING)
SIDNER: Former Miss World Aishwarya Rai isn't the one getting the credit for this song.
(SINGING)
SIDNER: Instead, it's 77-year-old playback singer Asha Bhosle.
(SINGING)
SIDNER: Bhosle is a Grammy nominated legend. She's also been featured in "The Guinness Book of Records" for the most number of songs ever recorded.
(on camera): How many songs have you sung?
ASHA BHOSLE, PLAYBACK SINGER: I think 13,000 songs.
(SINGING)
SIDNER (voice-over): She's been behind the mike for Bollywood for more than 65 years. Bollywood's revenue is estimated at about $2.3 billion annually. Some analysts say the industry wouldn't be anywhere near as profitable without the songs playback singers like Bhosle belt out. The music is released weeks before the movie opens. People get hooked on the music, which then reels them into the theaters.
ATUL CHURAMANI, VP, SAREGAMA INDIA: Music gets bums on seats. And it does help the producer even sell others -- other rights, you know, satellite rights, DVD rights, etc. So whether a film actually does well at the box office or not, if the music starts to -- by doing well, you've got a potential hit.
SIDNER: Still, much of the glory and money goes to the beauties on the screen.
(on camera): Did you ever think, I want to be on screen, I need to be on screen, why am I back here?
BHOSLE: No. Never. A very long time, '60s, yes, '60s, some people - - some producers asked me, can you work in the film?
So I said, no.
Well, they said, why?
I said I have seen my face every morning. So I will not.
SIDNER: Bhosle thought she just wasn't pretty enough and has stuck to sitting behind the scenes -- until now. She revealed to CNN a little secret of her own. This year, for the very first time, Bhosle will be the leading lady in front of the cameras. She'll be her own playback singer in a movie called "Maaee," which means mother. On a whim, she let me take a stab at being her playback singer.
(SINGING)
SIDNER (on camera): You're being (INAUDIBLE) and I can't sing.
(LAUGHTER)
SIDNER (voice-over): It was decided to leave the singing to the professionals.
Sara Sidner, CNN, Mumbai.
(END VIDEO TAPE)
FOSTER: Sara was the true star there.
India is quickly becoming a global business center and we'll take a look at the country's leading industries this weekend in a CNN special. CNN's Mallika Kapur and Sara Sidner will show you around some of the most sought after real estate in Mumbai and get to know the Indian city some people call the new Detroit. That's on Saturday at 9:30 p.m. in London, 10:30 in Central Europe, only here on CNN.
We continue, though, in the meantime, to watch a breaking news story for you out of Nigeria. According to police, a bomb has exploded in the city of Suleja. They say the blast was at the offices of the Independent National Electoral Commission. It comes on the eve of the parliamentary election in Nigeria. A police spokesman says there were no immediate reports of casualties, but we're watching that for you.
that is QUEST MEANS BUSINESS.
I'm Max Foster in London. : "MARKETPLACE AFRICA" is next.
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ROBYN CURNOW, HOST: This is MARKETPLACE AFRICA.
And I'm Robyn Curnow here in Jovul (ph), a bustling inner city neighborhood in Johannesburg.
Now, economic migrants from across Africa have come here and found safe haven in much the same way Egyptians have gravitated toward an area now called Little Egypt in New York.
That neighborhood has become a business center for North Africans.
Isha Sesay has this In Focus look.
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ALI EL SAYED, OWNER AND CHEF, KEBAB CAFE: (INAUDIBLE) is an easy spice for reduction.
ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): When chef and food aficionado Ali El Sayed opened the Kebab Cafe in Astoria, Queens some 24 years , no one there had even heard of Egyptian cuisine.
EL SAYED: It was the first Egyptian restaurant in New York here, because everybody was adapting what we called before Middle Eastern cuisine.
Hey, Bolly baby, I love you, man.
SESAY: Ali El Sayed was the first to open an Egyptian business on Steinway Street, a bustling neighborhood and small business hub now known as Little Egypt.
Back in Cairo, El Sayed had been an engineer. His family, like others the world over, came to America lured by the promise of a better life. He opened a business in a neighborhood where other newcomers had found success. Astoria has long been a home to immigrants, first Germans, then Italians and Greeks, and most recently, Arabs.
The transformation a sign of vibrance, according to El Sayed.
EL SAYED: The neighborhood would be changing, because if the neighborhood doesn't change, it means it's a dead neighborhood.
SESAY: It's certainly not dead, but it is ailing. Forty-six percent of businesses here are minority-owned. The recession hit the borough's businesses harder than others in the city, a result of high rents and fewer customers.
But resilient newcomers have found ways to capitalize on remaining customers from selling hookah pipes to selling Islamic clothes, recently arrived merchants from North Africa have found ways to set up shop.
They're not just weathering the economy. Shifts in style and taste affect the merchants here, as well.
El Sayed's brother, Moustafa Abdel Rahman, is chef at the Mombar Restaurant across the road. He's pragmatic about the winds of change.
MOUSTAFA ABDEL RAHMAN, OWNER AND CHEF, MOMBAR RESTAURANT: You know, the recession affected everybody. The recession, 9/11, all this stuff, the snow affects this business.
SESAY: For him, like for many of the immigrants who pass through here, less income has far-reaching consequences. Most merchants in Little Egypt work with one goal in mind -- to support the families they left behind. Their paychecks may be smaller these days, but Nile Deli owner Hesam Makhlos says every little bit counts.
HESAM MAKHLOS, OWNER, NILE DELI: A lot of people supporting so many back home, at least if you send like $100 a month to support your family or you have a wife over there or you have a sister, a mother, you know, a lot of people need help.
Can you give me two sea bass, not too large, not too small?
SESAY: They depend on each other locally, too.
MAKHLOS: What we do with that money, it goes around. And we want to take care of our neighborhood and our merchants.
SESAY: But it's not just about the money. Mohame Zohny likes doing business with other Muslims in Little Egypt. He believes immigrants with common origins have common ideals.
MOHAMED ZOHNY, OWNER, ISLAM FASHION, INC.: This is all the halal money. And like, for example, there is no liquor and no ham, no pork, nothing. So everything is 100 percent, I know it halal.
SESAY: Individual preferences aside, Steinway Street is just like the rest of America, when it comes to surviving difficult economic times. But it's something of a cultural cocoon as well. At the end of the day, when work is over, neighbors get together for a dose of good old-fashioned Middle Eastern R&R.
For MARKETPLACE AFRICA, I'm Isha Sesay.
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CURNOW: Let's take a closer look at the money generated by Egyptians living abroad.
The World Bank estimates that last year, they sent home $7 billion US. Remittances are Egypt's third largest money earner, after oil and tourism. And in some of Africa's poorest countries, Somalia, for example, 40 percent of families rely on remittances for their livelihood.
But helping to send that money back home, despite the best intentions, isn't always met with success.
Our guest knows from personal experience and now he's helping to change that, when MARKETPLACE AFRICA returns.
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CURNOW: You're watching MARKETPLACE AFRICA.
Now remittances are a crucial lifeline for millions of families across Africa. Essentially, the African Diaspora sends home about $40 billion U.S. every year.
But because much of that money comes through informal channels, it's estimated that the actual amount is around $70 billion US.
Now, to make the whole process easier, Ismail Ahmed founded World Remit.
He sat down with Nima Elbagir for this week's Face Time.
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NIMA ELBAGIR, CNN CORRESPONDENT: The use of mobile phones to transfer funds, it's not new. It's something there's been growing hugely in Africa. But what -- what is new is the degree that you've managed to refine the compliance.
ISMAIL AHMED, CEO AND FOUNDER, WORLD REMIT: That's true, because regulators are -- in the West, are still concerned about the fact that people can carry their money on a mobile. So what we have done is we have built a robust compliance system which does the -- more than what is required to screen both the senders and recipients. And -- and this meets the regulatory compliance or requirements in the -- particularly Europe and North America.
ELBAGIR: Because of the main issues has always been, with the transfer of money and definitely with Islamic names, is that you get a lot of false positives, a lot of kind of, you know, alarm bells ringing in the system, because there's a similarity with a name that's on a terrorist watch list. And that's something that you actually suffered from personally before you started developing this, isn't it?
AHMED: True. Yes. I share my names with a former spiritual leader of the Hamas. His name is Ahmed Ismail. My name is Ismail Ahmed. So every time I use a money transfer -- that's including my own system -- the screening software comes up with a 100 match.
But imagine someone who lives in a small village in Africa who shares all his names with someone on the sanctioned list. You know, that is very hard -- or much harder to prove that the person is not the terrorist.
ELBAGIR: And given how dependent many African economies are on money being sent back home from the Diaspora, things like this, I mean they -- they sound like they're small irritations, but they have a huge impact on the economies.
AHMED: Remittances are lifelines for most of the economies in Africa, particularly East and Southern African. And, yes, so we're talking about something where I mean it's -- it's -- in some places like, I mean, the Horn of Africa, up to 40 percent of houses rely exclusively on remittances for their lifelines.
And some of the transfers are for urgent reasons -- somebody was ill or wants to go to a hospital, it's for school fees.
So you can't -- even any small delay could, you know, make a difference -- could be critical, certainly.
ELBAGIR: And what other -- you were a compliance offer with UNBP (ph).
What other issues did you feel were needed to be fixed within the system that you're hoping that World Remit addresses?
AHMED: Up to 90 percent of transfers are small amounts -- $100 or less. But on average, it takes up to an hour to travel to and from an agent. We are transforming the way money transfer is conducted, because, one, we are enabling these migrants to send money from the comfort of their home 24-7. So it means when the agents are closed and if they receive an urgent call because somebody is ill, so they need to take to the hospital in the early morning, yes, somebody can do that transfer now.
And because we are also partnering with the mobile operators in Africa, the money can sometimes go direct to the mobile account. So even the recipient doesn't need to travel to a big city to collect the money.
ELBAGIR: It's interesting that, in Africa, the way that the technological model has worked is that mobile phones completely circumvented the need for land lines. And it almost feels like with your system, you're circumventing the need to have local bank branches around the continent.
AHMED: Yes, Africa is leap-frogging and moving to a -- closer to a cashless society. I mean, in Kenya, you have 13 million Kenyans who use Empressor (ph), the local mobile money transfer service. In Somaliland, Canoviav (ph), 90 percent of currency transfer sendings are conducted through, you know, mobile money transfer.
So I mean those are really -- these are mobile -- the mobile money transfer system is transforming the way transactions are conducted in large -- in many parts of Africa.
(END VIDEO TAPE)
CURNOW: Ismail Ahmed there from World Remit.
Now, here's what's trending this week.
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CURNOW (voice-over): The South African private bank and wealth manager, Investec, will list its $254 million property fund on the Johannesburg Stock Exchange. The unit has 29 office, retail and industrial properties. Investec said the fund will be a platform for future expansion.
The company expects a profit of $2.8 million U.S. for the year through March 2012.
Pan-African Ecobank will open a china debt to manage its flow of Chinese loans for infrastructure projects in Africa -- yet another indicator of China's huge investment role on the continent. Ecobank says it anticipates large volumes of Chinese assistance for upcoming infrastructure projects, especially in Liberia, Ghana and Sierra Leone. Ecobank Ghana facilitated Chinese funds for the country's $600 million electricity project.
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CURNOW: That's it for MARKETPLACE AFRICA.
I'm Robyn Curnow here in Jovul in Johannesburg.
Until next week, good-bye.
END
