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Quest Means Business
An Historical Hurricane; Sustainable Agriculture in East Africa; Heating Up An Industry; Ben Bernanke Says Fed Can Only Do So Much To Spur Economic Growth In U.S., Congress, Obama Administration Must Do Their Part
Aired August 26, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: A diagnosis, but no prescription. Ben Bernanke warns the economic healing will take a while.
Hurricane Irene bearing down on the U.S. East Coast. Obama says, do not underestimate its power.
It is a busy hour ahead. I'm Richard Quest. It may be Friday, I still mean business.
Good evening.
We will get to Mr. Bernanke and the U.S. economy in just a moment. But we want to start tonight with, of course, the hurricane that is bearing down on the United States' East Coast. A short while ago, Mayor Michael Bloomberg, of New York, orders an immediate evacuation of low lying parts of New York. This is what the mayor had to say.
(BEGIN VIDEO CLIP)
MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: We are also adding a full evacuation of all people living in private homes or apartments in the Rockaways.
In addition, you should know that MTA service, including subways, busses and railroads will begin to shut down tomorrow at noon. And Jay Waldo (ph) will describe that and other measures in a moment. Depending on the effect of the storm, let me just caution you also, in regards to the MTA, that service may or may not be restored in time for rush hour Monday morning. So I would urge employees checking with their-to check with their employers regarding business openings on Monday.
(END VIDEO CLIP)
QUEST: So that is Mayor Bloomberg with the situation in New York. For the moment, though, the outer bands of rain and gusty winds are bearing down on coastal Carolinas, as Hurricane Irene gets ever closer. Warnings are posted from South Carolina to just south of New York. Guillermo, we will have more details from you later in the program. But Guillermo joins me now just to give me a taste of where the hurricane is and what we should be looking out for. Just a taste.
GUILLERMO ARDUINO, AMS METEOROLOGIST: It is right now, going by the coast of Georgia to have an idea where it is. That is exactly where it is. This is what is going to happen. The Cape Hatteras area, that narrow long strip of land is going to be affected directly by, with landfall. But look at the satellite. It is sort of fiddling out a little bit. It is encountering, on the one hand, cooler waters, and then we are seeing some winds that are implicating, that are causing an impact on the system to weaken it a little bit. So this is the official forecast, the problem is, and this is the main thing. That this is a very rich area of the United States. Anywhere from North Carolina to the Mid-Atlantic and then New England, or even New York, in the Northeast, that is where the money is, real estate, businesses. And that is why everybody is on alert.
QUEST: Guillermo, we'll be back with you for more details and more analysis on what is happening.
Irene is on track, as he was saying, it will follow up to New England and beyond. We have full coverage. Reynolds Wolf is live in this hour from Kill Devil Hills in North Carolina. Jason Carroll is in New Jersey. And John Zarrella will be in Atlantic Beach.
Let's turn to the business agenda now.
Ben Bernanke says the U.S. patient is getting better, but only American politicians can provide long-term cure. He said the American economy has, in his words, endured a trauma. And while the central bank will do everything it can to make the patient comfortable, it is up to lawmakers to conduct the emergency surgery.
Now, Bernanke was speaking at the annual Fed getaway at Jackson Hole, in the Rocky Mountains. The therapeutic setting of where he was speaking gave rise to a number of medical analogies. The clinic is open. Doctor Bernanke will see you now.
The diagnosis, according to Ben Bernanke, stunted growth, painfully high chronic unemployment; a rash of commodity prices, what he called shocks of the past few years, have caused severe damage to the global economy. Doctor Bernanke says U.S. fundamentals are not permanently altered. So the diagnosis is serious but not fatal.
A treatment, exceptionally low Fed funds rate, through until 2013, that much we know. But there was no hint of QE3, in what he said today. Bernanke said he had a range of tools available. The two-day Fed meeting in September, normally one day. However, this is the important point, focus in on that. What Bernanke was really talking on-saying, is that it is government policy, fiscal policy, Congress, the president, the administration, that is where the true, long structural improvement in the U.S. economy lie.
So, the prognosis, from Doctor Bernanke? A moderate recovery, to continue to strengthen over time; the economic healing, he says, will take time. And there may be setbacks. There are no major scars but the core point of what he says, U.S. lawmakers must support spending controls and better fiscal decision making.
The patient is still alive, for the time being. Mohamed El-Erian is the chief exec of the world's largest bond trading house, PIMCO. I spoke to him earlier, and put it to him that the Bernanke speech gave very little insight into what he was going to do next.
(BEGIN VIDEOTAPE)
MOHAMED EL-ERIAN, CEO, PIMCO: He does not pull the rabbit out of the policy hat like he did a year ago. But what he does do, is he says, look, don't rely on the Fed to carry what is becoming a structural burden. We need other policymakers to do their bit. And he points to a number of policy-it is really not as much a speech on monetary policy, as it is a speech on other policies that are needed today.
QUEST: He talks about the need for tax reform, macro-economic reform, but-and a lot about-as you say, on the fiscal side, the budgetary side. But he is spitting into the wind on that sense, isn't he? Because that is not going to happen in the short term, and highly unlikely in an election year?
EL-ERIAN: Well, like the rest of us he's hoping two things. He is hoping that President Obama's speech on September 5, will put out a holistic approach to America's economic issues. And secondly he hopes that Congress, when it comes back from holiday, will be in a more cooperative mood.
So what he's trying to say is, look, the Fed has done all the heavy lifting so far. We cannot influence these long term economic outcomes. Other decision makers and other institutions are needed, and he strikingly says as well, Richard, it is not just about the content of policy. But he says it is about the quality of policy making, taking a swipe at the debacle over the debt ceiling a few weeks ago.
QUEST: One thing does come through in the speech, and that is, a caveat that whatever happens it is going to take time. The exact words were, it may take sometime to return to growth rates. And again, and again, do you think that for the first time, Mohamed, people are actually being honest with the public. And saying, you know, you may have thought this was going to be over fast, but it is a lot longer than it has been.
EL-ERIAN: He is becoming more honest I would say. I mean he hasn't fully embraced what here we have called the bumpy journey to the new normal. And the new normal, unfortunately, is one of lower growth, higher unemployment, recurring debt issues. And it requires a structural response. So what you are seeing, seeing Bernanke take a small step towards that interpretation. Away from, oh, it is all cyclical, don't worry. So, he's taking a small step. And it is an important step, but it is not yet what we believe is fully embracing that we face long-term issues that require structural solutions.
QUEST: Do you agree with his assessment when he says the United States does not appear to have permanently been altered by the shocks. And can return to growth rates and employment rates consistent. He says it again and again, this idea that the U.S., the healing process should not leave major scars. Would you agree with him on that?
EL-ERIAN: I do with the following two qualifications. In one of the sentences, in Italics, he says, "If" policies are correct, right? So, I would agree that if policies improve. Then there is no reason why the U.S. would permanently be subjected to lower growth and high unemployment. The second issue is he doesn't mention what permanently means. So, I think if you look beyond three to five years, you can see the U.S. economy coming back. But we need to navigate first the three to five years. So it is one thing, talking about permanent, but let's first get in place what we need to do over the next three to five years.
QUEST: The old questions just keep coming. Where do you now stand on double dip for the U.S.? Are you a little bit more or a little bit less optimistic?
EL-ERIAN: Richard, what keeps me up at night, is the possibility of this feedback loop; weak economic numbers-and today the GDP number has been revised from 1.3 to 1 percent-secondly, a loss of trust in policymaking, and thirdly, volatile markets. These three elements, if we are not careful, will start feeding onto each other and next thing you know the economy hits quite a big air pocket and we are in recession.
So, there is absolutely no time to waste in terms of circuit breakers. Otherwise we will be in this feedback loop and it will be harder and harder to get out of.
(END VIDEOTAPE)
QUEST: That is Mohamed El-Erian joining me from Newport Beach.
The Dow Jones industrials-(DESK BELL CHIMES)-which bearing in mind what we are taking about might seem a little perverse, up 134 points, a gain of 1.2 percent, thin margins (ph), 11,284.
In Europe the markets are mixed closed to the week, if you look at the financial shares which dragged down most of the indices. On the Friday close the FTSE barely changed. The CAC was down, the worst losses of them all. RBS was down sharply down 5.2 percent, that is the down (ph). Mining shares help stem the losses. Anglo American (UNINTELLIGIBLE) gained 1.4 percent. For a week, as a whole, look at the numbers, a volatile week, which actually leaves to the positive. The FTSE gaining nearly 2 percent, and the CAC over that on the week.
Quite extraordinary when you think of the ups and downs we had during the course of the last five sessions.
We are in for a while weekend of weather on the Eastern Seaboard of the United States. A mandatory evacuation of low-lying parts of New York. The first time that has happened in the city's history. We will be back in a moment.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I cannot express this highly enough. If you are in the projected path of this hurricane, you have to take precautions now. Don't wait. Don't delay. We all hope for the best but we have to be prepared for the worst.
(END VIDEO CLIP)
QUEST: President Obama there, who is cutting short his vacation on Martha's Vineyard so he doesn't get stranded and heading back to Washington. The news of this hour, New York's Mayor Michael Bloomberg has ordered a mandatory evacuation of low-lying parts of the city. He says it is the first order of its kind ever in New York. Jason Carroll is southwest of the city. He's in Point Pleasant Beach, New Jersey. And joins us now.
As we know so often with hurricanes and bad weather. Crystal clear, blue skies, wonderful beaches and then it all goes horribly wrong.
JASON CARROLL, CNN CORRESPONDENT: You've heard it before, Richard, the calm before the storm. Take a look at what you see out there. Blue skies, relatively calm seas. But I also want you to notice the few people that you see out there on the beach. Some of those are tourists. And if you take a look along here, where we are on this boardwalk here, this is the Jersey Shore. You see a number of people on the boardwalk as well.
And, Richard, a number of these people are tourists. And right now, Point Pleasant Beach is actually under a mandatory evacuation for tourists. In about another hour they are going to decide as to whether or not that evacuation, that mandatory evacuation will extend to residents. But it is definitely a concern for some officials who are out here as to why so many tourists are still here when they should be leaving. I want you to listen to some of the tourists we spoke to just a little earlier today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm anticipating a long ride home. It should normally taken me maybe an hour and 15, you know? No traffic, but the way they are talking now it will be six hours. I don't know.
CARROLL (On camera): But what do you guys think. Obviously, you know the state, you know Jersey. I don't know if you have seen storms in the past. What does your gut tell you about this particular storm?
UNIDENTIFIED FEMALE: Hoping it misses the coast line, but if it does be prepared. Get all the stuff you are supposed to get. The water, the batteries, and don't do anything foolish like take you kids to the beach tonight.
CARROLL: What is interesting to me is, obviously, you are heeding the warnings, but all of you know, there are some who are not going to do that.
UNIDENTIFIED FEMALE: Thrill seekers, thrill seekers.
UNIDENTIFIED FEMALE: We know that.
(LAUGHTER)
(END VIDEO CLIP)
CARROLL: Those ladies that we spoke to, Richard, actually headed out late this morning, hopefully late this morning, if not early this afternoon. But, once again, you hear from so many officials, we heard from the president, we heard from New York City's Mayor Michael Bloomberg, also heard from New Jersey's governor, about heeding the warnings and making sure that you are paying attention to what you are being told.
And obviously, there is still a number of people, a number of tourists who are still not heeding the warnings and heading out. Because what you don't want to see Richard, is you don't want everyone heading out at the same time, clogging the roads. Now some measures are being taken, here in New Jersey, to try and alleviate the stress on the roadways. But that still might not be enough if everyone decides to try to head out, at the same time, Richard.
QUEST: That's it. Jason Carroll in New Jersey, with that part of the story. Let's go further south from where Jason is, to where Reynolds Wolf in North Carolina.
By my reckoning, Reynolds, the thing is getting quite close. Or at least it is heading-it is off Georgia now and heading in your direction. So what are you seeing and experiencing?
REYNOLDS WOLF, AMS METEOROLOGIST: What we are seeing right now, it is really not-what we are seeing is it is rather what we are not seeing that is so alarming, Richard. You know, on a day like today, this time of year, or in the middle of August or towards the end of August, you would have anywhere around 250,000 people that will be visiting these beaches along the outer banks. If you look just northward, look at that. You see maybe a few people way off in the distance. Of course, you also see the sailboarder, way, way down there. And then if we pan around this way we've got a Orlando Ruiz with us. Orlando, if we can get a shot down this way, pointing south, not a soul to be seen. Just a few sea birds here and there.
But that is the direction that we are going to see Irene coming closer. And I can promise you, other than a few raindrops here and there, and then the surf coming in, we haven't seen much. That is going to change, though, dramatically as this draws closer. One of the big concerns that we have though, Richard, is that the Outer Banks mainly consists of just a giant, sandy barrier island. You have, basically they are made up of three or four islands. On one side you have the Atlantic water, you get a very warm current that is coming up. That is the Gulf Stream.
And then on the other side you've got several estuaries, you have part of the inter-coastal waterway. You have very warm water on the other side, also. So when you have this storm make its way through, with this very, very narrow stretch of land, sand, really. It is not going to do much, really to slow down Irene as it draws closer. In fact, it may even intensify when it makes landfall, possibly overnight and into tomorrow, maybe tomorrow afternoon. But even though the center may take a while to get here; with a storm this expansive, nearly 100 kilometers, in width, we are going to be feeling the effects long before it makes landfall. Back to you, Richard.
QUEST: So, a quick question to you, Reynolds. At what point will you decide it is time to get off the beach?
WOLF: The time that we would decide to get off the beach would probably be when the waves start coming in. Whenever you have these tropical systems a lot of times the force of them, as they spin at a counterclockwise rotation, in the Northern Hemisphere when the winds generate so much energy it actually brings up a wall of water onshore. Sometimes, at least in a Category 2, maybe even a 3, hurricane it could be in excess of 12 feet or so; 12, maybe as high as 14 feet. That would be right overhead. So, there is very, very good possibility that by tomorrow morning we could have the water all the way up here to the line.
In fact, we can pan over here. Let's show Richard, this dune that we have. And of course, the sea oats, here in the background, I would fully expect the water is going to get right up to that point, possibly getting very close to the top. Back to you, Richard.
QUEST: Reynolds, many thanks. Stay safe as you cover this and watch what is happening. Reynolds Wolf will be there, up all night. Covering this particular story, as indeed are our CNN correspondents across the United States, on the Eastern Seaboard, bringing it to you.
In a moment, after this break, we are navigating the baffling city, we are in Beirut.
(COMMERCIAL BREAK)
QUEST: With maps at the touch of a button, finding your way around an unfamiliar city, particularly with GPS and things like that-well, frankly, it has never been easier. After all, you just push the button, and assuming everything does go according to plan, bingo.
However, in Beirut, which is what we are looking at there. Things aren't always quite so simple. For one very simple reason, all these streets that you see, particularly in these very heavily, densely populated areas, they are not signposted. So for the visitor who lacks any local know-how, every twist and turn, every nook and alley, well, it can be punishing.
Now one young businessman wants to change all of that; wants to make Beirut a city which is truly easy to navigate, and a future city.
(BEGIN VIDEOTAPE)
QUEST (voice over): This is Beirut. A major, cosmopolitan, capital city, where people go about their daily lives and they all seem to know where they are going.
UNIDENTIFIED MALE (translation on screen): Don't you want maps like this?
UNIDENTIFIED MALE (translation on screen): No, my map is in my head.
QUEST: Yet, as one entrepreneur set out to prove, five years ago, finding your way around here doesn't work like other cities.
UNIDENTIFIED MALE (translation on screen): What's the name of this street please?
UNIDENTIFIED MALE (translation on screen): That's Arax Street.
UNIDENTIFIED MALE (translation on screen): And this street you're on?
UNIDENTIFIED MALE (translation on screen): It's Arax Street, too!
QUEST: The Beiruti way, it is not a system based on street names.
MAYOR BILAL HAMAD, BEIRUT: In Beirut, if you want to come to my place, I tell you it is near that supermarket, near that shop, near that movie theater, it is stupid.
BAHI GHUBRIL, FOUNDER AND CHIEF, ZAWARIB: Everybody is lost all the time and phone calls from the car. Hi, I'm next to the Pepsi-Cola sign, turn left at the Dunkin Donuts, turn right at the-costly time wasted, road rage. Come on guys, it is not difficult. Make a map, read the book, and get here.
NAOMI SARGEANT, TIME OUT BEIRUT: The directions here are based upon what is next to the place.
UNIDENTIFIED MALE (translation on screen): Where is London Street?
SARGEANT: They won't necessarily be a street name, you need to know exactly where you are going.
UNIDENTIFIED MALE (translation on screen): We don't know where it is.
UNIDENTIFIED MALE (translation on screen): It's in London!
QUEST: The current system may work for the locals but this is a place with ambitions to be a major international business city. And people like Bahi Ghubril plan to help it get there with Beirut's first comprehensive street atlas.
GHUBRIL: Maps, for me is a way of getting this city to go beyond it's traditional-I love the traditional roots in a way, but also it is a way of (UNINTELLIGIBLE) Beirut at the fore of global cities. We don't want people coming here and saying, "Oh, we can't do business in Beirut. Or I can't live here, because if you are not a local, you feel left out."
QUEST (On camera): Are you confident?
GHUBRIL: Sure am, let's go.
QUEST (voice over): Bahi analyzed the current system and designed a map that would work in this city. The outcome is Zawarib, which lists traditional street names, popular names, and those landmarks nearby.
GHUBRIL: So, in Beirut, many streets are named.
QUEST (on camera): Caracas?
UNIDENTIFIED MALE: Caracas?
QUEST: Yes.
UNIDENTIFIED MALE: A lot of them, though, are used, the names that are traditional, as opposed to official.
QUEST: Caracas Street?
UNIDENTIFIED MALE: Yes.
QUEST: Caracas Street, which is also known, incidentally as Kuwait Street.
GHUBRIL: Nine time out of 10 it is, 99 percent of the time we use landmarks.
QUEST: We missed the one thing that we should have looked at, to find out where we are: Costa Coffee.
GHUBRIL: Yes, big landmark.
We have filled the map with what we call points of reference.
QUEST: I was told to get to the Commodore Cinema.
Cinema Commodore, where is it?
UNIDENTIFIED MALE: Follow me.
QUEST: Follow you?
UNIDENTIFIED MALE: No cinema now.
QUEST: No cinema.
(Voice over): Turns out the cinema has long since gone, but the name lives on in the street.
(On camera): What is the name of this street?
UNIDENTIFIED MALE: Commodore.
QUEST: This is Commodore?
The name? Street Balback.
UNIDENTIFIED MALE: The proper name is Street Baalbek.
QUEST: Baalbek Street.
UNIDENTIFIED MALE: Yes, on the maps you find Baalbek Street.
QUEST: Do people still call it Commodore Street?
UNIDENTIFIED MALE: Yes, because it is a very famous hotel.
QUEST: This junction perfectly shows the problem facing Beirut. Here we have a junction where only one of the streets has got a name. It is known as Baalbek Street. But everybody here knows it as Commodore Street, after the Commodore Cinema, which is no longer here. But now they know it because of the Commodore Hotel, which has since been built.
Confused? You will be.
Sir, we want to go to Najib Hadafa Street.
UNIDENTIFIED MALE: (speaking foreign language)
QUEST (voice over): I'm starting to get the hang of the challenges faced by Ghubril.
(On camera): So you don't use a map?
GHUBRIL: The hardest part is to get people to use it. It is very technical. They think.
QUEST: In an effort to make maps an ordinary part of Beiruti life, Bahi is working with the mayor to put them on the streets of the city.
GHUBRIL: Could we afford, as a first step, to put 58 plates like this?
HAMAD: I know every time I go to a city, I see a maps. We don't have maps here. So he came with this idea. I told him, I'm with you. I see it in Europe. I see it in the States, why not in Beirut?
QUEST: Ghubril's expectations are realistic. He knows Beirutis won't change the way they live their lives, overnight. So, making the city accessible, is what this entrepreneur's contribution is all about.
(On camera): But how would you direct me to get to the Clemensu (ph) Medical Center?
UNIDENTIFIED FEMALE: Get yourself hit by a car, and they take you by ambulance.
(LAUGHTER)
(END VIDEOTAPE)
QUEST: Only in Beirut would somebody give you advice that is like that.
When we come back in just a moment.
(DESK BELL CHIMES)
The skies are getting darker, the winds are picking up, Hurricane Irene is almost upon the U.S. East Coast. And fortunately it is not a case of good night, Irene. This thing hasn't even arrived.
(COMMERCIAL BREAK)
QUEST: Hurricane Irene is almost upon the U.S. East Coast. Unfortunately, it's not a case of good night, Irene. This thing hasn't even arrived.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
New York's mayor, Michael Bloomberg, has ordered a mandatory evacuation of low lying parts of New York City. He said it is the first time that this has happened in New York.
Meanwhile, across the region, emergency officials are urging people along the northeastern U.S. to prepare. The region isn't used to hurricanes and there are concerns millions of people could be trapped for days without power, transportation or working phones. It's believed the hurricane could hit New York on Sunday.
President Obama is calling today's attack on the UN's Nigerian headquarters "horrific" and "cowardly." At least 18 people were killed in a car bombing in Abuja. It was the latest in a series of such attacks in Nigeria, most of them blamed on the militant Islamist sect known as Boko Haram.
Rebels are continuing to search for the Libyan leader, Moammar Gadhafi and at the same time consolidating their power in the country. There's no word on where Gadhafi is. The rebel leaders are pleading for access to Libya's frozen assets, saying they need the money to establish peace and stability.
The Federal Reserve chairman, Ben Bernanke gave no hint of new stimulus measures in his annual speech to central bankers. Dr. Bernanke did urge government leaders to work to create jobs and he warned a repeat of the deficit debacle that resulted in the U.S. downgrade would be a disaster.
To the weather story, the hurricane. Barack Obama predicts it will be an historical hurricane.
Guillermo is at the World Weather Center to give us an update on Irene.
And we need to take this a little bit slowly. Let's do this a bit at a time.
Where is Irene at the moment?
How powerful and how fast?
GUILLERMO ARDUINO, ATS METEOROLOGIST: It depends on where it's going to talk about how powerful it's going to be. First of all, let me tell you that it's off the coast but far enough from Georgia. So Georgia is here. This is the forecast. We have it right here, far away from the coast. Probably, we'll see some winds, but Georgia is not going to be impacted a great deal.
Then, as you see, the geography turns and the cyclone is turning on a northeasterly direction a little bit. But it's not going to have enough time to move away from it and it's going to hit this area where Reynolds Wolf is, the -- the Outer Banks, a beautiful part of North Carolina. And that's where the money (ph) starts, from here all the way to the Northeast.
A couple of elements in the -- 30 minutes ago, we got a report. We see some weakening. So the questions that come along is it's going to continue to weaken or not?
We do not know. The conditions, the water here is colder and also the winds in the upper levels are conducive for weakening of the system.
Will it be a hurricane category one when it hits New York?
Question marks. Probably not. It will be a tropical storm, maybe. We will know that a little bit later. But in any case, these areas here, there's a lot of very expensive real estate and a thick concentration of the population, very important airports with so many flights in there, so much going on.
So if we compare this, let's say, with Argentina, where I come from, even though we don't see hurricanes there, the accumulation of money and people cannot be compared to this. So that we're talking so much about this.
The winds, 155, the latest I read. This has not updated. And gusting to 204. Yesterday, it was much higher than this. It was 185 or so.
Also, moving at 23 kilometers per hour. It's good, because it's going to move very fast. It's going to move away fast. And if it moves only at 5 kilometers per hour, then it's going to rain a lot over the same area.
We're expecting rain...
QUEST: Guillermo...
ARDUINO: -- up to 25 centimeters.
Go ahead.
QUEST: Right. Let me just -- let's just -- let me just pause for a breath for a second.
I need to ask you, if it -- if it goes under hurricane one status and is a tropical storm, what -- I mean how serious is that...
ARDUINO: The same.
QUEST: -- for somewhere like Washington, Philadelphia, New York, to be hit by a tropical storm as opposed to, say, a hurricane...
ARDUINO: Well...
QUEST: -- class one?
ARDUINO: It -- the threshold, it's 120 kilometers per hour that are sustained. That's a hurricane. Less than 120 would be a tropical storm. So at this point, it doesn't matter. It will be a very significant tropical storm anyway. And it's a very dangerous storm. And that's the language that the National Hurricane Center is talking about. They are saying that it's -- it has the potential of damaging winds, storm surge flooding and extremely heavy rain, large and dangerous. All those words emphasize the fact that this is a very dangerous system, even if it is a very powerful tropical storm, for the reasons that I said before, for accumulation of people, to move away all those.
They start now with a mandatory evacuation because of the size of the -- of the place and the population and the routes that they have to use to evacuate all those people.
As an example, Richard, let me go now to the Philippines, where we have a typhoon. In this case, even though this is stronger than what we see in the United States, the number of people, the economic impact that we may have in here cannot be compared to New York, even though this is stronger...
QUEST: Right.
ARDUINO: -- you understand what I mean?
QUEST: OK. A final you know, briefly.
ARDUINO: Yes?
QUEST: Is there any chance, back on the other one...
ARDUINO: Yes?
QUEST: -- is there any chance this thing suddenly veers off and goes out to sea and doesn't hit New York or the -- the places we're talking about?
ARDUINO: Probably not. Probably not. In fact, we are seeing, the progressions that we have in here show that all the models are in agreement that the system will continue to move along the way into the New York area.
QUEST: All right.
Guillermo, thank you for that.
ARDUINO: You're welcome.
QUEST: Clear, concise and extremely serious.
ARDUINO: Yes.
QUEST: Guillermo joining us from the World Weather Center.
In every crisis, though, a potential opportunity. For instance, shares in the hardware company, Home Depot, have risen more than 5 percent over the past week. Home Depot set up an emergency hurricane command center, which is helping customers' stock up on supplies.
Jonathan Mann went to see.
(BEGIN VIDEOTAPE)
JONATHAN MANN, CNN CORRESPONDENT (voice-over): Right now, up and down the U.S. East Coast, people are watching the weather and preparing for Irene. Millions of them are rushing out, literally, to buy supplies, to buy hardware, which is why the largest chain of home hardware stores in the United States and the world, the Home Depot, has established this emergency response command center.
Essentially, we're in mission central for 90,000 employees in the 450 stores that are in the path of the storm, serving 60 or 65 million customers.
Home Depot has been ready for this for a long time. It prepares for hurricane season before the first storm hits, literally positioning products in distribution centers and by the truckload, waiting for the calls to come.
Well, the calls come from here. The trucks start moving what they see the storms approach. And they carry, essentially, two kinds of products, the kinds of products need before the storm hits, things like plywood and tarpaulins and generators.
And then the kinds of storm cleanup materials you need when the worst of it is passed, things like chainsaws and cleaning supplies and still more generators. Thousands of products that are going to be sent from dozens of distribution centers into hundreds of stores in the middle of an unfolding natural disaster.
It is an enormous job. Isdn here. But they've had some experience. In fact, this command center was established in 2005, even before Hurricane Katrina struck.
A university economist who studied the response then said that, in fact, big stores, Home Depot among them, did a better and more efficient job of responding to that emergency than even the U.S. federal government.
Jonathan Mann, CNN, Atlanta.
(END VIDEO TAPE)
QUEST: A fascinating way in which companies respond to these crises. More on Irene in just a moment, as it approaches America's East Coast, what's been done to protect those most at risk.
QUEST MEANS BUSINESS.
Good evening.
(COMMERCIAL BREAK)
QUEST: So, New York's mayor, Michael Bloomberg, has ordered mandatory evacuation of the low lying parts of the city. And the storm track shows Hurricane Irene taking direct aim at New York.
New York's Long Island is home to millions of people and is especially vulnerable.
Kristin Thorne now looks at the preparations that people are taking there.
(BEGIN VIDEOTAPE)
KRISTIN THORNE, WCBS CORRESPONDENT: The question is just how interesting will Hurricane Irene make things?
UNIDENTIFIED MALE: I left a place in the Keys because there's hurricanes and of course we're back here and we're going to get one over here.
UNIDENTIFIED MALE: Me, I'm landlocked and I'm a few miles away from the ocean so...
THORNE (on camera): You're happy about that?
UNIDENTIFIED MALE: I'm happy about that. But this is Mother Nature, the fury at its -- at its best, really.
THORNE (voice-over): In Long Beach, they're taking down this stage that's already been set up for an international surfing event next week that's expected to draw thousands of people.
UNIDENTIFIED FEMALE: Now they're taking it down. They're going to have to put them up again.
THORNE: At the Nassau County Office of Emergency Management, they're getting together evacuation plans and prepping local fire departments and rescue crews.
UNIDENTIFIED MALE: I'm not concerned one iota. We have many professionals looking out for everyone in Long Beach.
THORNE: Bay Park fire commissioner, David Dencker, says firefighters are standing by.
DAVID DENCKER, FIRE COMMISSIONER, BAY PARK: They'll ride up and down, knock on doors if possible, you know, if they -- they know if anybody is elderly, especially.
THORNE: The Atlantic already has a strong surf, a big plus for some. It's surely been quite a week in our area.
UNIDENTIFIED FEMALE: so can you believe it, we had -- we had an earthquake and now a hurricane.
(END VIDEO TAPE)
QUEST: I think that really puts it into perspective, an earthquake and a hurricane in the same week.
Finally tonight, it's amazing to see the level of people who have now social networking Tweeting. Tonight's Tweets from the Top include insight from two world renewed economists.
The Nobel Prize winning Joseph Stiglitz has Tweeted on the question of quantitative easing, saying: "QE2 didn't work. Given this fact, why would they go to QE3, except to show they are still relevant?"
And Nouriel Roubini from NYU has Tweeted, fascinatingly: "All commodity currencies have been debased by things for thousands of years. They can be debased as much on paper as paper money."
Finally -- I love this -- from Huffington Post editor-in-chief, Arianna Huffington, who gives us political insight. She says: "Fed Chairman Ben Bernanke is speaking in Wyoming, one of the 49 states whose governor has not recently threatened him."
And that is QUEST MEANS BUSINESS for tonight, and, indeed, for this week.
I thank you for making time and joining us.
I'm Richard Quest in London.
"MARKETPLACE AFRICA" is after the break.
But whatever you're up to in the hours ahead, I hope it's profitable.
(COMMERCIAL BREAK)
ROBYN CURNOW, HOST: You're watching MARKETPLACE AFRICA.
I'm Robyn Curnow here in Johannesburg.
Now, the food crisis in East Africa has been exacerbated by a number of things. The drought, of course; bad agricultural policies and practices; as well as food inflation.
All of those underscore again just how important it is to invest in sustainable agricultural programs.
Well, our guest on FaceTime this week is Obiageli Ezekwesili.
She's the vice president of the World Bank's Africa region.
And she believes investing in agribusiness is more important than, say, telecoms or oil.
(BEGIN VIDEOTAPE)
OBIAGELI EZEKWESILI, VICE PRESIDENT, WORLD BANK AFRICA REGION: In the last decade, Africa actually turned the corner and pursued some macroeconomic policies that actually have really supported the basis of its growth.
And so whereas modern, a decade ago, the continent was growing at very miserable rates of GDP, of less than 2 percent, and sometimes even negative growth, we've seen, in the last decade, until the financial crisis, a continent that's grown at a steady pace of at least 5 percent.
CURNOW: Fueled mostly by commodity -- high commodity prices.
EZEKWESILI: Not -- not completely so. They -- when you look at the evidence of the growth, you would see that non-oil economies even grew at a steady pace of at least 4 to 5 percent. So you...
CURNOW: Like who?
EZEKWESILI: So you're...
CURNOW: Like which countries?
EZEKWESILI: You have countries like Tanzania. You have, you know, you had interesting countries. It's only recently that they have now discovered its oil. Even Uganda, only recently discovered its oil. But during that period, they were all growing.
And the other feat was coming out of very -- the embrace of the principles of the market and really pursuing those macroeconomic policies that were important as preconditions for growth.
Now, for a number of those countries, it remains addressing very important sectoral issues...
CURNOW: Like what?
EZEKWESILI: If you want to di -- diversify your economy, you -- you must pursue the kinds of policies that enable sectors that hold those opportunities to unleash. And so the agriculture sector, for example, is a key sector on the continent. It's the factor that's going to address a lot of the jobs agenda on the continent.
And yet, it's the sector that has not received the kind of attention that it -- it needs in order to make it a sector that not only responds to the food security, the food insecurity issue...
CURNOW: For the whole world.
EZEKWESILI: Indeed. I mean with 50 percent of the arable land that exists today is in Africa, then that's surely an advantage. Africa could become a food belt.
But then it would need to take away all the obstacles and constraints to agriculture production and productivity.
CURNOW: And what are those...
EZEKWESILI: A lot.
CURNOW: -- in terms of the World Bank.
EZEKWESILI: Land and water management, dealing with infrastructure and markets, dealing with technology, and then resolving food insecurity and vulnerability.
If you looked at it from that perspective, it becomes very dramatic. So you're not sort of saying there's a single solution that addresses agriculture. I normally put the addressing agriculture, I look at it from the perspective of how the continent overcame the bottlenecks to the telecom sector. And today, it's a sector that you hear words like, "it's a miracle," "it's been a revolution" being used, because of the level of private capital that's gone in.
If the continent addresses the policy issues, the institution issues and the quality of investment, both public and private investment into agriculture, it stands a chance to really transforming the most significant private sector on the continent today.
CURNOW: You get very excited, quite elevated, when you talk about this.
EZEKWESILI: Yes, because I really see -- I see the great promise that this holds. I think that agriculture is the next big thing on the continent and this is a sector where the participation of the public sector and the private sector can really make things happen...
CURNOW: All right...
EZEKWESILI: But it has to be not just the public sector and the private sector, in the firm of the beak (ph). It's actually about building the collaborative partnership between the small holder farmers, a very big private sector and the government. All of the interaction of investment, policy and institutions require a definition of roles for every of these three participants in ways that are socially responsible and aiming toward taking advantage of what the market can offer the poor farmer in Africa.
(END VIDEO TAPE)
(ON SCREEN)
African Agriculture
About 65 percent of the labor force is in agriculture. Accounts for 32 percent of the continent's GDP. World Bank lends more than $1 billion a year.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This is what it looks like when it's finished. It takes about seven days for the wood to be burned into charcoal after it's been lit. Then the farmer clears all of this earth off, leaves it to cool for another five days and then the charcoal is ready to be sold.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
CURNOW: You're watching MARKETPLACE AFRICA.
Now, this is a makeshift restaurant in a market area of Central Johannesburg. When South Africans dry or barbecue their meat, they, of course, use charcoal. Cooks all over the world use it. Which is helping to fuel the charcoal industry in Nigeria.
But just how viable is charcoal as a business?
Well, Christian Purefoy now has the story.
(BEGIN VIDEOTAPE)
CHRISTIAN PUREFOY, CNN CORRESPONDENT (voice-over): Digging through the ashes to get at one of Nigeria's hottest commodities -- charcoal. It's being bought up by local suppliers like Matthew, who say they're barely able to meet international demand in Europe and America.
(on camera): How many containers of charcoal do you sell a month?
MATTHEW: In a month, we can sell more than 40 containers in a month.
PUREFOY: And how much does each container sell for?
MATTHEW: It's 450,000 naira.
PUREFOY: So that's about $3,000 -- over $3,000 per month?
(voice-over): Timber is the essential ingredient for charcoal, still found in plentiful supply here in the forests of Southwest Nigeria.
(on camera): The wood is then collected, piled on top, and the farmer then piles dirt on top of the wood. And if you follow me around here, this is what it looks like when it's finished. It takes about seven days for the wood to be burnt into charcoal after it's been lit. Then, the farmer clears all of this earth off, leaves it to cool for another five days and then the charcoal is ready to be sold.
(voice-over): There is, however, a problem. In this one community alone, they say they cut down up to 400 trees a day. Conservationists have expressed concerns about deforestation in Nigeria, as land is cleared for fuel and timber export. The Nigerian government, earlier this year, committed funds to tree planting projects. And here, the village head says 200 trees are replanted every day.
But as we drove deeper into the forest, we saw little evidence of the reforestation projects that they say were underway here.
Still, they maintain every effort is being made. The charcoal industry is a vital part of the economy.
OGUNTADE SUNDAY, LOCAL CHAIRMAN: It is only because we are doing it here now, because it has helped many peoples. Because of the -- in the olden days, people had not many work to do. They had many thieves and there the trouble was. But when you bring charcoal to this village, not (INAUDIBLE). So we are enjoying the business.
PUREFOY: Obumneme Umeokafor is one of Nigeria's large scale charcoal exporters. There are no official figures for Nigeria's charcoal exports, but Umeokafor estimates he exports over 11,000 tons a year and he is well aware to keep local storehouses full in the long-term, he needs sustainability.
OBUMNEME UMEOKAFOR, JOCAROL EXPORTS: Demand for it is actually good. And fortunately enough, I think we have enough forestation to make sure that we can (INAUDIBLE) with the demand. (INAUDIBLE) is so conscious of the forestation problem, trying to not (INAUDIBLE), our environment, because we know the consequences.
But we try to measure that as we cut these trees with (INAUDIBLE) and make sure especially we don't (INAUDIBLE) into the forest reserves.
PUREFOY: A reminder once again of the delicate balance between economics and the environment.
Christian Purefoy, CNN, Oyo State, Nigeria.
(END VIDEO TAPE)
CURNOW: Here's what's trending in African business news this week.
(ON SCREEN)
Power Boost
Zambia signs a $650 million deal to build two new hydropower plants.
The projects will boost power to the Copperbelt region and help ease nationwide power shortages.
Major Competition
Three of South Africa's major retailers announce expansion plans.
Massmart will open 27 new stores. Woolworths plans a "big push into AA" with 16 new outlets and Shoprite will spend $416 million in upgrades.
CURNOW: And remember to go online, CNN.com/marketplaceafrica. Links to my blog and Twitter page are up there.
But until next week, I'm Robyn Curnow.
Thanks for watching.
END
