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Quest Means Business

Detroit Goes Bust; Detroit-o-nomics; Detroit's Future; Live: John Kerry Hopes to Restart Peace Talks; Global Tax Reform; Awaiting Royal Baby; Royal Memorabilia

Aired July 19, 2013 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NINA DOS SANTOS, HOST: Detroit is officially bankrupt. Tonight, how Motown fell into a 60-year malaise.

Time to pay your fair share. The head of the OECD tells me he can fix the world's broken tax system.

And all hail shale. The UK throws open its doors to the controversial technique of fracking.

Hello, I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS.

Good evening. Well, Detroit, the birthplace of the American car industry, has now filed for bankruptcy protection with this particular document. It's the largest city in US history to go bust with debts of more than $18 billion.

The end game follows a 60-year spiral of economic decline after residents and businesses slowly started leaving the city, taking with them vital tax revenues.

The city's debt elimination plan could mean deep cuts to pension benefits. It'll also have an impact on the health care of retired public workers. The government here says that it couldn't be avoided, nor should it have been.

(BEGIN VIDEO CLIP)

GOV. RICK SNYDER (R), MICHIGAN: I don't view this as a terrible answer in the sense that now is our opportunity to stop 60 years of decline. This is fundamental. Has anyone liked the Detroit of 5 years ago, of 10 years ago, of 15 years ago? How long has this gone and people had not stopped to say stop kicking the can down the road and do something?

(END VIDEO CLIP)

DOS SANTOS: Detroit's spectacular decline is clearly evident on the city streets. That's where Poppy Harlow joins us now, live from downtown Detroit. Poppy?

POPPY HARLOW, CNN CORRESPONDENT: Hi, Nina. You really summed it up, because it has been 60 years of decline here in Detroit. So many things led to this: the decline of the automakers, also corrupt politics for decades and decades.

On top of that, the population here has fallen from almost 2 million people in the heyday of this city, 1950, to about 700,000 today. So, that means so many fewer people paying taxes to take care of this city.

The police response time here, 58 minutes on average, 40,000 streetlights don't work, 78,000 homes are abandoned. You get the idea of what has happened in Detroit.

So, yes, this is a very drastic step that is divisive. A lot of people here in the city hate it. Some of them say it was necessary. I did have a chance to talk with the governor of Michigan, who gave the final authorization on this bankruptcy about what this means in the near-term and long-term for Detroit. Listen.

(BEGIN VIDEO CLIP)

HARLOW: Are you worried that bankruptcy, the stigma that comes with it, will scare off potential investors in this city and private businesses bringing money here?

SYNDER: Well, short-term there's a concern, but longer-term, as we show this can really work, this is the right answer, because what would happen if we didn't declare bankruptcy? Detroit would continue to go downhill. And downhill to what point?

So, while people say this will probably be the lowest day in Detroit's history, isn't that a good thing instead of having a lower day tomorrow, the next day, the day after, and having a disastrous outcome? So, this is our way to get to stability.

(END VIDEO CLIP)

HARLOW: And that's the big question: what will this result in when Detroit eventually exits from bankruptcy. That could be months, that could be years. Will the city services get better? Will it get to a place where Detroit doesn't have the stigma and business want to come in and invest, and then it becomes a better place for people to live and work?

That's still really an outstanding question. Again, this is the largest single municipal bankruptcy in US history, so we haven't tested something quite like this before, Nina.

DOS SANTOS: Yes, in the meantime, though, it seems as though it's actually the people of Detroit who are going to be paying the price for this. You've been speaking to city workers, retirees. How are they reacting to this kind of news?

HARLOW: It is, you're right. The brunt of this is going to be born by the bondholders, so investors, and also pensioners, people that are city workers currently or that are retired city workers. They're going to to feel this the most.

I talked to Kevin Orr, the emergency manager here who made this decision to file for bankruptcy, and I said, is there any way you get out of bankruptcy without a cut to these people's pensions or health care benefits, and he said no. The question is, how big is that cut?

But you can't get around it. There are going to have to be concessions. And I talked to some library workers here who worked for the city for more than 30 years, counting on their pension in retirement. Michael Wells is one of them. And I asked him, do you think this is going to make this city stronger? Here's what he told me.

(BEGIN VIDEO CLIP)

MICHAEL WELLS, RETIRED DETROIT LIBRARIAN: Come back and interview me in five years, all right? If I've given up something and I now have a police department that responds on a 911 call, if I have EMS when I'm having an emergency, if the lights are turned on in the city -- I can continue the list, OK? Then, my life has been made better.

But if it's simply to pay off the bondholders and the insurers and all of these other issues are still there, then not only has my city not improved, but I've gone down further as well.

(END VIDEO CLIP)

HARLOW: Not only frustration but fear from some of those city workers about what this is going to mean for them, but this is the future of Detroit now. It's about a court battle to find a deal and eventually get this city out of bankruptcy, Nina.

DOS SANTOS: We were just saying before, Poppy, that this is the largest city US bankruptcy, public bankruptcy in America. How are people taking it in America? Because obviously, it's a very, very, very damaging reputation, perhaps, for the big industrials cities like this to be just so abandoned and left to their own devices.

HARLOW: Exactly. And I think this is really going to set a precedent. However this bankruptcy plays out is going to be looked at by future cities, municipalities, that consider bankruptcy.

Because you're looking here at a unique situation where potentially those pensions of city workers could be cut. We haven't really seen that in municipal bankruptcies much in the United States. How does this play out, being such a large bankruptcy in comparison to any other one we've had, how does it play out?

Another big question is, how does this affect the municipal bond market? We know the debt in Detroit has been rated junk, so how much worse could it get? But outside of Detroit in other Michigan cities, are they going to have a hard time attracting investors?

And frankly, in municipalities across the country, if they see that the governor appointed an emergency manager, signed off on a bankruptcy, are other investors going to be hesitant to come in not only to Michigan cities but other municipalities across the country?

So, the ripple effects are a bit question mark on this one. It's going to be closely watched, I think, nationally by other cities and certainly investors.

DOS SANTOS: And internationally as well. Poppy Harlow there, live in downtown Detroit this hour. Thanks ever so much for that.

Let's delve into the details here, because Detroit's population has actually shrunk by more than a half since its heyday all the way back in the 1950s. As you can see, back then, it was home to nearly two million people and it enjoyed the highest per capita income anywhere in the entire United States.

These are flocks of workers who were flocking towards the city to live there and also to find work. Now, once the automakers moved out, though, it seems so did everybody else. The city collapsed under the weight of around about 100,000 creditors, a huge liabilities.

In fact, OPEB stands for other post-employment benefits, that's one of the terms that Poppy Harlow was just referring to before, there, is also contained inside that bankruptcy letter I was showing you before, the Chapter 9 filing.

There has also been a breakdown in public services here. This is something else that Poppy was referring to before: 58 minutes is the average wait for police call-outs across Detroit. Compare that with the national average of 11 minutes, and you can see how public services are being so badly affected.

It's also estimated that about 78,000 abandoned buildings are just standing idle, like these ones, as you can see here, waiting for demolition. And public figures also put the poverty rate in Detroit at a whopping 36.2 percent. That's roughly three times the national average of America.

Median household incomes also ran about half the national average, which just goes to illustrate why this particular city is just in dire straits these days and also why the people who filed for Chapter 9 bankruptcy said that they just had no other alternative.

Let's go over to Peter Morici, who's with the School of Business at the University of Maryland. He joins us now, live from Washington this hour. Great to have you on the show, Peter. Now, you've obviously said for quite a while that perhaps Detroit should have been allowed to file for bankruptcy in the first place. How did we get to this predicament, and what do you say about today's decision?

PETER MORICI, SCHOOL OF BUSINESS, UNIVERSITY OF MARYLAND: There were several factors involved. One was changes in the automobile industry, just not the problems of the Detroit automakers, but the way cars are made with fewer people in sprawling factories which are more easily built on Greenfield situations outside the city.

No matter what happened in Detroit --

(CROSSTALK)

DOS SANTOS: Peter Morici, just stay where you are a second --

MORICI: -- the automobile industry was going to partially exit --

DOS SANTOS: -- please, sorry to interrupt you there, but we do have the US Secretary of State John Kerry delivering a speech right now in Ramallah. Let's listen in to what he has to say and we'll come back to Peter later.

JOHN KERRY, US SECRETARY OF STATE: -- in the press are conjecture, not based on fact, because the people who know the facts are not talking about them.

The parties have agreed that I will be the only one making further comments about this. If everything goes as expected, Saeb Erekat and Tzipi Livni, Minister Livni, and Itzhak Moho will be joining me in Washington to begin initial talks within the next week or so, and a further announcement will be made by all of us at that time.

I want to thank particularly His Majesty King Abdullah and the Hashemite Kingdom of Jordan and the foreign minister, Nasser Judeh, who has been really enormously helpful throughout this process. I want to thank all of them for their extraordinary hospitality to our team that has been camped here for several days, and they have helped with all of the logistics and been superb hosts and collaborators in this effort.

I also want to thank the Arab League and the committee -- the joint committee -- the committee with respect to the peace initiative follow-on, who traveled here during the week, made an important difference with their statement of support.

And then, there are many, many others who have contributed many other leaders around the world, all of whom have visited here and pushed and advocated and encouraged the --

(AUDIO GAP)

DOS SANTOS: As you can see, there, that is John Kerry. We've lost the signal there, but the US secretary of state, there, just coming out of his meetings in Ramallah after having met with the Palestinian president, Mahmoud Abbas, who has been talking with him about trying to revive the peace talks of Israel. Let's go back because we have reestablished contact.

KERRY: -- this difficult, complicated issues such as Middle East peace. The best way to give these negotiations a chance is to keep them private. Everyone --

(AUDIO GAP)

KERRY: -- this is not easy. If it were, it would have happened a long time ago. And no one believes that the long-standing --

(AUDIO GAP)

KERRY: We know that the challenges require some very tough choices in a --

(AUDIO GAP)

KERRY: Today, however, I --

(AUDIO GAP)

KERRY: -- President Abbas, and Prime Minister Netanyahu, both of them have chosen to make difficult choices here and both of them were instrumental in pushing in this direction. We wouldn't be standing here tonight if they hadn't made the choices.

I'm most hopeful because of the positive steps that Israelis themselves and Palestinians are taking on the ground and the promise that those steps represent about the possibilities of the future. The path to resolution of this long-standing --

(AUDIO GAP)

KERRY: -- crisis --

DOS SANTOS: Let's just bring you up to date with what John Kerry has been saying, as you can see there. Apologies before I -- if I made it sound as though he was talking from Ramallah. He's actually instead talking from Aman, Jordan, after having met with the envoy of the Palestinian Authority, he's going to be moving on to meet with Mahmoud Abbas over in Ramallah later on.

Let's listen back in to what he has to say.

KERRY: -- proud people today have decided that the difficult road ahead is worth traveling, and that the daunting challenges that we face or worth --

(AUDIO GAP)

KERRY: So, they have courageously recognized that in order for Israelis and Palestinians to live together side by side in peace and security, they must begin by sitting at the table together in direct talks.

I thank those leaders, I thank all those who have worked so hard, my team especially, who have been part of this, and I look forward to seeing my friends from this region in Washington next week or very soon thereafter. Thank you very much.

DOS SANTOS: OK, so that's the US secretary of state, there, speaking in Aman, Jordan. Kerry says that he has now managed to reach an agreement that establishes a basis for resuming Israeli and Palestinian peace talks, as you just heard him say before, there.

He met with the envoy there from the Palestinian Authority, and he will be moving on to Ramallah to meet with the president of the Palestinian Authority, Mahmoud Abbas. Do stay with us, because we'll take a quick break. QUEST MEANS BUSINESS will be back with more, including the OECD issuing a warning to multinational companies, pay your fair share of tax.

(COMMERCIAL BREAK)

DOS SANTOS: The golden age of not paying taxes anywhere is over, it seems, for multinationals, according to the OECD. It's action plan on tackling the issue of global tax avoidance today won the backing of the world's leading economies.

G20 finance ministers gathered in Moscow today to unveil this set of proposed new rules. The deal sets out more than a dozen proposals aimed at trying to close tax loopholes and also to foster greater cooperation between governments on this key hot-button issue of tax.

The move comes in response to some pretty high-profile tax avoidance cases that involve all sorts of companies that are household names these days. We're talking about the likes of Amazon, Google, Starbucks, as well as Apple.

The OECD has warned of "global tax chaos" -- those are its words, not mine -- if these rules are not implemented from here on. And in fact, Britain's own finance minister says that he's hopeful a deal can be done.

(BEGIN VIDEO CLIP)

GEORGE OSBORNE, BRITISH CHANCELLOR OF THE EXCHEQUER: There's a clear commitment from the leading economies of the world to progress this agenda, and I don't want to anticipate the communique that we'll be talking about the next two days, but I do anticipate some progress.

(END VIDEO CLIP)

DOS SANTOS: Earlier, too, I spoke with the secretary-general of the OECD, no less, the authors of this particular plan. Angel Gurria told me on the phone from Moscow that it was high time multinationals were prevented from avoiding taxes around the world.

(BEGIN VIDEOTAPE)

ANGEL GURRIA, SECRETARY-GENERAL, OECD (via telephone): Been trying for so many years to avoid double taxation then we produced double non- taxation. So, we have to have -- we have to come back to something kind of in the middle, you know? A fair share, I think, is the proper way to describe it.

DOS SANTOS: It's great in principle, but obviously, the practice is going to be quite difficult. It'll involve adding pages and pages to tax codes of so many countries.

GURRIA: It is going to be difficult, but that's -- it's because it's very important and very far-reaching. And also, it's very necessary. Tight budgets today, countries need the money. Big companies don't pay.

What options do they have? Well, they have to tax the small and medium enterprises more, the captive companies who do not have international presence and do not have an army of lawyers or accountants in order to make it possible to erode the tax base or shift the profits.

DOS SANTOS: You're also going to face, perhaps, some resistance from people inside, basically, the richer countries in the world, the very OECD members that form part of your organization.

Their business lobby groups already saying that this kind of approach towards multinational companies to get them -- to get their taxes in order, perhaps in a draconian fashion, would curtail growth. What's your response to that?

GURRIA: Well, Nina, first of all, as I said in the beginning, we wanted to avoid double taxation, but nobody said this was about double non- taxation. So, that's the first thing. Second, this is not against the multinationals. We want to give the multinationals peace of mind and legal certainty that they will only be taxed once, but also they need to do their fair share.

Otherwise, the whole of society is putting a lot of pressure on the political leaders, on ministers of finance, on the tax people, how can it be possible everybody's making a big effort and these companies go pay 2 percent or some of them are paying zero? It doesn't really add up.

And as I said, it's not against the companies. This is simply making sure that everybody in the society pays their fair share.

(END VIDEOTAPE)

DOS SANTOS: Angel Gurria there, the secretary-general of the OECD, talking about those new plans to try and make sure multinationals can't move their profits from one place in the world to another to avoid tax.

You're watching QUEST MEANS BUSINESS on CNN. Stay with us, we'll be back after this.

(COMMERCIAL BREAK)

DOS SANTOS: Welcome back. Britain is eagerly awaiting signs of new royal life amid a frenzy of speculation about the imminent birth of William and Kate's child. Our reporter Max Foster has been parked outside London St. Mary's Hospital in Paddington, central London, for some time now. Working on your tan, presumably, Max? Any signs of life yet?

MAX FOSTER, CNN ROYAL CORRESPONDENT: We had a sort of moment earlier. There were some rumors that Kate had left Berkshire, because the police presence had gone down there a bit, and then moments afterwards, we saw this.

We may be able to show you the images of a Range Rover turning up with security apparently in the front, and then you see the couple bounding out and heading up the stairs.

Clearly wasn't them, but pretty good lookalikes. I think this was -- well, it was a publicity stunt by one of the newspapers. But it did cause a bit of a frenzy. We never really thought it was them, because they wouldn't be coming in the front like that, but everyone's a bit jumpy, Nina.

DOS SANTOS: Jumpy, indeed, I must admit. The two people walking out behind you look rather relaxed. We'll get back to you later on in the show, Max Foster, there, joining us outside the Lindo Wing, there, at St. Mary's Hospital in Paddington, Central London, which is, incidentally, where I was born a number of years ago.

Well, at London's Windsor Castle, they're keeping a very close eye on these kind of events. One person in particular is wondering where to hang the next commemorative plate, as I found out.

(BEGIN VIDEOTAPE)

DOS SANTOS (voice-over): Windsor Castle is famous the world over for its historical collection.

EDWARD WHEELER, MANAGER, WINDSOR CASTLE PUB: People come from all over the world to come and visit here. I have people from Australia come regularly, from America, Japan and China.

DOS SANTOS: From coronations to christenings, to death and divorce, the stages of Britain's Royal House of Windsor are immortalized on the castle's walls. Yet, this isn't a place for princes or any other royal residence. Rather, a London pub with a penchant for monarchic memorabilia.

WHEELER: This one here of Charles and Diana, and there you've got others here of the queen with Ann and Charles. And we have to keep up-to- date with all our memorabilia, so we've got in that cabinet the latest memorabilia for the Jubilee.

DOS SANTOS (on camera): Do you buy it every time it comes out?

WHEELER: We do. All of this has been built up over the years, and it's given an atmosphere, and that's what makes it special.

DOS SANTOS (voice-over): Special for sure, but what are items like these worth these days? We asked an antiques expert.

TOM KEANE, AUCTIONEER: Individually, as much as $3 or $5 each. The other bits you can see sort of $300 and $400. But they're rarer pieces, but fair quality factories. I would advise don't buy modern memorabilia for investment. Buy it because you like it.

England are a nation full of collectors. Over 70 percent of us collect. Now, nothing would be better for collecting than collecting more memorabilia right now. Not valuable, but collectible just to have a piece on the shelf, I was there, and there it is. And it's a memory.

If you want to sell this sort of thing, you need to sell it around a big royal occasion, a birth, coronation, jubilee, when the market's hyped, then you get your best return.

DOS SANTOS (on camera): Will you ever sell it?

WHEELER: No. It has to stay with the pub. It's priceless. Royalty is part of our life, it's heritage, and there is that continuity of that heritage. And that's why we have the memorabilia and we have the photographs, to make it live, continue.

DOS SANTOS: And the arrival of a royal baby obviously rekindles that kind of spirit.

WHEELER: That rekindles it.

DOS SANTOS (voice-over): From the walls right the way to the ceiling, the Windsor Castle Pub is rammed with memorabilia. The main priority now, though, is to find some space for another royal baby.

(END VIDEOTAPE)

DOS SANTOS: Well, the UK vies for an American-style shale gas boon. That's what we're going to be talking about after the break, is that the British government offers a sweetener to energy companies to start fracking. Find out what's on the table. That's next.

(COMMERCIAL BREAK)

DOS SANTOS: Hello and welcome back. I'm Nina dos Santos. This is of course CNN, and on this network, the news always comes first.

(BEGIN VIDEO CLIP)

DOS SANTOS: Let's give you a recap of the headlines this hour.

The U.S. Secretary of State John Kerry has been trying to restart Israeli-Palestinian peace talks. He said an agreement had been reached to resume direct negotiations between Palestinians and the state of Israel. Mr. Kerry, who has visited Jordan these days says that the agreement is currently in the process of being formalized.

Police in northern India reportedly have discovered what led to the fatal school lunch poisoning that killed a number of students there. Reuters reports that cooking oil used in the food given to these students had been stored in a container that had previously been used for pesticide.

Well, 23 school children died after eating their free lunch on Tuesday. More than 2 dozen still remain unwell as a result of that meal.

Supporters of Egypt's ousted president are lining the streets of Cairo right now, demanding the reinstatement of their former leader. The protests mark the anniversary of the start of Egypt's 1973 war with Israel. Opponents of Mohammed Morsy are promising protests of their own, though.

Russian protest leader Alexei Navalny is out of prison pending an appeal just a day after a court found him guilty of embezzlement of a state-owned company. It's not clear if Navalny will plan to run for mayor of Moscow. He won't be allowed to if that conviction does stand, though.

And as we were saying earlier on in the show, the U.S. President Barack Obama has spoken candidly about the not guilty verdict for George Zimmerman in the trial of -- his trial for murdering the -- his trial -- excuse me -- for the murder of the young black teen, Trayvon Martin. The president says that he's looking into training on racial profiling for police at the state and local levels.

Mr. Obama also says that now it's time to invest in African-American boys' rights across the nation.

(MUSIC PLAYING)

DOS SANTOS: Well, Israel and the Palestinians have finally laid the groundwork for resumption of peace talks, as you just heard earlier in the show after almost a three-year stalemate. You heard the U.S. Secretary of State John Kerry mentioning these words a moment ago. But let's just remind you of what he had to say.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: Today we have reached an agreement that establishes a basis for resuming direct final status negotiations between the Palestinians and the Israelis. This is a significant and welcome step forward.

The agreement is still in the process of being formalized. So we are absolutely not going to talk about any of the elements now.

(END VIDEO CLIP)

DOS SANTOS: Fionnuala Sweeney joins us now on the telephone from Jerusalem. She's been following these events of late.

Fionnuala, what exactly is the likelihood of really getting something concrete down now? Obviously it's a great thing that these talks have resumed after a three-year hiatus. But really, what is the possibility that we could see something inked in paper?

FIONNUALA SWEENEY, CNN CORRESPONDENT: Well, you know, it's always a rocky road to peace in the Middle East. So I think this was demonstrated again over the last couple of days because John Kerry has been to the Middle East since March at least six times. And he met with (inaudible) Palestinian authority president at least three times over the last couple of days.

So I do think that there's something more concrete on the table than there was before. This morning the Palestinians were talking about meeting written commitments from the Americans about exactly what Israel was going to talk about with them in terms of commitments (inaudible) pre-'67 borders. That's always an issue in settlements.

And we didn't hear anything of that in the press conference. And interestingly, from John Kerry, we did hear about the need to keep mum, so to speak, about what might be going on behind the scenes.

(BEGIN VIDEO CLIP)

KERRY: I think all of us know that candid, private conversations are the very best way to preserve the time and the space for progress and understanding when you face difficult, complicated issues such as Middle East peace. The best way to give these negotiations a chance is to keep them (inaudible). Everyone (inaudible) not easy. If it were, it would have happened a long time ago.

(END VIDEO CLIP)

SWEENEY: And there speaks a man who, two days ago, really gave rise to the speculation that there might be something happening, something happening on the ground. He spoke at a news conference in Amman in Jordan after talking with Mahmoud Abbas.

And he -- his body language was extremely comfortable when he talked about how the differences between the Israelis and Palestinians, when it came to talking about certain issues, had really narrowed over the last number of weeks.

And then yesterday there was a report that Israel felt it needed to deny about the pre-'67 borders. It denied it very strongly that that was on the table for negotiation. And then following that, there was the meeting that Palestinians had lasting. It didn't go well as far as John Kerry would be concerned, which is why (inaudible) met with him today in Amman, Jordan, not once but twice.

And then there was a meeting scheduled for 3:00 pm local time in Ramallah with Mahmoud Abbas. And that actually fell back until 6 o'clock. And then we had this news conference which is actually quite a breakthrough.

I think it's going to be more than just the issues of let's sit around the table. I think there's probably been a lot of background on either side about sort of issues that can be negotiated going forward, not just the pre-'67 borders but (inaudible) conditions, but also in terms of (inaudible) fine line, a distinction between pre-conditions and the consensus.

DOS SANTOS: Yes, and also this news comes on the anniversary of the 1973 war with Israel and some of the Arab countries. Thank you so much for joining us there, Fionnuala Sweeney there, joining us on the line from Jerusalem.

Now the government here in the U.K. -- in completely different topic here -- is offering a sweetness (ph) for companies which go in search of shale gas. The U.K. treasury has proposed halving the tax due on some of the income generated from production. According to U.S. official data, let's have a look at exactly how much shale gas the U.K. actually has.

It's sitting on a pleasant 26 trillion cubic feet (inaudible) for the gas but if you think that that's lucrative which it probably is a little bit for the U.K., take a look at this. The lion's share of it is actually over in continental Europe. France has 137 trillion cubic feet that the French President Francois Hollande says, well, fracking ain't going to happen under his watch.

And as you can see here, Poland actually eclipses what France has, 148 trillion cubic feet worth of gas. But if you think this is a lot, well, it's dwarfed by comparison to the amount of gas that the United States has. It's believed that America has access to 567 trillion cubic feet worth of shale gas. It's hoped that this in turn will help America to become energy independent by the year 2013.

So the shale gas industry has already generated around about 600,000 jobs. It's a big generator of revenue as well for some of these governments, too.

The benefits of shale gas are purported to be pretty substantial. But actually the process of fracking has been incredibly controversial, especially from an environmental point of view. Let's bring in Dan Whitten from America's Natural Gas Alliance. He joins us now from CNN Washington this hour.

Great to have you on the show, Dan Whitten.

First of all, shale gas: if you take a look at what's happening in America, this is arguably one of the most important foreign policy tools America has to become energy independent by 2030.

Is that the future of shale gas for some countries that have access to it?

DAN WHITTEN, AMERICA'S NATURAL GAS ALLIANCE: Well, Nina, thank you for having me on the show. We view this not as energy independence but as energy security. And really what that means is that we have an enormous resource here; it's contributing to our economy. It's creating jobs. It's improving our environmental, our air quality.

And so this has been just a great opportunity for the United States. And we think that it could have similar effects in other countries as well.

DOS SANTOS: So if you take a look at something like the U.K., what can the U.K. learn from the shale gas boom in America? OK, we don't have the same number of cubic feet; it's small by comparison, but policy wise, how beneficial can this be? And what can be enacted that's been learnt from your side of the Atlantic?

WHITTEN: Well, you know, the resource in the U.K. may be much larger than your statistics indicate. We believe that the U.S. resource is about four times what you had on that chart.

We've found that we have produced it safely and responsibly with significant state oversight and in our view, state regulation has really worked because there are different characteristics in different states.

Now in other countries, there will be other regulatory regimes and those are things that would have to be worked out. And I'm not sure exactly what would be best for the U.K.

DOS SANTOS: OK, Dan Whitten, I'm afraid we're going to have to leave it there, from America's Natural Gas Alliance, joining us from CNN Washington this hour.

And we'll return after the break with more QUEST MEANS BUSINESS but also the check on your world weather forecast for the weekend.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

DOS SANTOS: Hello and welcome back to the program. Well, as you can see, many of us in London have been wearing our summer clothes for some time now. Let's go over to Jenny Harrison at the CNN International Weather Center for the weather forecast for the weekend.

And I hear it is going to be a rather cool weekend, at least where I am, Jenny.

JENNY HARRISON, CNN METEOROLOGIST: I think (inaudible) a bit cooler? Is that what you said, a bit cooler, Nina?

DOS SANTOS: Well, I don't know. Is it going to be cooler?

(CROSSTALK)

DOS SANTOS: Or is it going to be warmer or a barbecue weekend?

HARRISON: Oh, a barbecue weekend. Yes, it's going to be another -- I mean, come on, Nina, it's been -- it's been barbecue weekend for the last (inaudible). I've just come back to the States and I was over there in the U.K. And my goodness, it has been glorious.

But actually in London, not as hot as it has been. So we were having all these days above 30 degrees Celsius. But London didn't quite make it this Friday. But generally, look at these temperatures, certainly the longest hot spell since 2006. And certainly on track to be one of the driest Julys in history.

So these are the temperatures on Friday. So this sort of mean London, 29 degrees Celsius, didn't meet that 30 Celsius but let's be honest, what's one degree Celsius really? Not when you're out there enjoying the sunshine, 28 in Glasgow, Birmingham, Belfast at 27. So again, of course, well above the average.

High pressure is up to the north. So keeping all those systems well at bay, not quite so fine and dry across areas of France and across into Italy, northern Spain. In fact, there will be some warnings in place there. But this is the general picture; high pressure to the north, so staying dry and warm.

Good for the Gulf, continuing through the weekend. And then an area of low pressure really across more eastern areas of Europe.

But because of these thunderstorms, you can see them across the south, this is why, as I say, we have got these warnings in place. So we could actually have some pretty strong winds with some of these thunderstorms, usual the large hail and also there is that threat of tornadoes.

But this just shows you the temperature trend over the next couple of days. So you can see this pool of cool air here; one out across the Atlantic. And that is where those two areas of low pressure are situated. But nothing really happened with that warm, dry air across those central areas. And look at these temperatures for the next few days.

So in London, down to about 27 on Saturday, 29 then by Monday, 33 Celsius, 31 in Brussels by Monday, 32 in Paris. So still it is staying on track to be warm and dry, just that rain across the south. And then those temperatures generally will all be in the 20s and 30s. It's just really across Eastern Europe, Kiev, for example, will see about 22 on Saturday. So that's where that cool air is.

So, Nina, enjoy your barbecue or many (inaudible) this weekend.

DOS SANTOS: Thank you very much for that. I certainly will.

And before we go, I want to leave our sports fans with news that Tito Villanova has now quit as Barcelona football coach due to a relapse of his cancer.

On that note, it's time to say goodbye. Thanks for joining us. Have a great weekend, whatever you're doing out there.

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ROBYN CURNOW, CNN HOST: You're watching MARKETPLACE AFRICA. I'm Robyn Curnow. Now it was here at the union buildings that Nelson Mandela took an oath of office and then set about transforming South Africa.

Well, this week, the former president celebrated his 95th birthday. He's long been out of the public view, battling illness here in Pretoria. But Mandela the icon remains. And his brand also remains one of the most recognizable in the world.

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CURNOW (voice-over): These are Nelson Mandela's granddaughters, starring in their own reality TV series called "Being Mandela." In answer to criticism that they are tarnishing his name, the Mandela granddaughters say it's their name, too, and that they are treating it with respect and integrity.

UNIDENTIFIED FEMALE: I'm concerned about my brand.

CURNOW (voice-over): The CEO of the foundation Mandela started to continue his work after he retired says they can't prescribe how others choose to honor him.

SELLO HATANG, CEO, NELSON MANDELA CENTER OF MEMORY: You can't tell people how not to celebrate their father or grandfather or great- grandfather because they are using their own name. It would be arrogant of the foundation or the Center of Memory (inaudible) that saying to me as a Hatang to say you can use your name so it's assuring that we stick to what we believe is their legacy.

CURNOW (voice-over): The Mandela family has other projects, a clothing range and a collection of fine wines called the House of Mandela. His daughter, Maki, and his granddaughter, Tukwini, spoke to us after the launch in 2011, answering critics to say they are commercializing the Mandela name.

(BEGIN VIDEO CLIP)

TUKWINI MANDELA, GRANDDAUGHTER: TUKWINI MANDELA: I think that the Mandela name has been commercialized already, Robyn. And when you look at all the people that have used my grandfather's name to benefit themselves. You look at my grandfather's -- his face is on a clock, a piece of clock. His face is on a gold coin.

And what we're saying is that that is not the true story and the true reflection of Nelson Mandela's (inaudible) --

(CROSSTALK)

TUKWINI MANDELA: It's a small part. The people that can tell the story, the real story, of Nelson Mandela, or the House of Mandela, is us, his family.

MAKI MANDELA, DAUGHTER: Why can't we use our name in a responsible manner, in a manner that actually honors who we are and what -- how we come to this place, and say to people, share a bit of this and tell your own story.

CURNOW (voice-over): In a way, Mandela's story is the story of South Africa, which is why so many people here feel like they'd like to own a little piece of him.

His image is on South Africa's banknotes, on T-shirts, even on salt and pepper shakers.

VERNE HARRIS, ARCHIVIST: Legacy is not something you receive in pristine form and your all is to hold it over time. We believe that legacy is made. It's constantly made and remade.

NELSON MANDELA, FORMER PRESIDENT OF SOUTH AFRICA: So help me God.

CURNOW (voice-over): But hard to balance Mandela's legacy, its values with the commercial potential of his image, his brand estimated to be worth millions. When Mandela's name was used by Viagra without permission, there was a backlash, says Hatang.

HATANG: Viagra, when Madiba was turning 90, they put up their own saying, Madiba turns 90; Viagra turns 10. And it was members of the public who objected. So it tells you that it's -- the legacy's not just been preserved us, but it's been preserved and protected by many others.

CURNOW (voice-over): How Mandela's legacy, image, brand endures depends on all those who have a stake in it, his family, his party, the ANC, the people of South Africa. Those who know him say he's comfortable with that, never prescribing how he should be honored.

HATANG: I think we tend to not want to (inaudible) Madiba (inaudible) brand and he represents something in humanity that we should all have and it's that thing that's special in each one of us, where we need to reach deep to find it.

CURNOW (voice-over): And everybody can tap into that. It doesn't cost a thing -- Robyn Curnow, CNN, Johannesburg, South Africa.

(END VIDEOTAPE)

CURNOW: From print to the big screen, after the break, I sit down with the producer of the film version of Mandela's autobiography, a "Long Walk to Freedom."

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CURNOW: Welcome back. Well, later this year, Anant Singh will finish the film adaptation of Nelson Mandela's autobiography, a "Long Walk to Freedom." And for Singh, like Mandela, the filmmaking process has been a long one.

How long? Well, I'll put that to the movie producer for this week's "Face Time."

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ANANT SINGH, SOUTH AFRICAN FILM PRODUCER: I was writing to him while he was in prison --

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CURNOW: Asking for the movie rights?

SINGH: No, I -- yes, I said I think this is a movie that I have to make. And I have letters in his handwriting, you know, modestly saying, well, will people actually want to see a film about my life story?

Lo and behold, here we are, 23 years later. There's probably been four films about him.

He's had such a powerful and amazing life, you know, and to try and put that into 21/2 hours is a mammoth task. What do you leave out? What do you put in? How do you tell the story?

And so we've been through maybe 60 drafts of screenplays --

CURNOW: Sixty?

SINGH: -- over the years; you know, this is the biggest film ever to be made in South Africa.

We have two foreign actors and the other 143 are all South African. And you know, I think that what we've tried to do is make a South African film and make it in a way that it can engage audiences everywhere.

I think it's in our grasp that we've actually accomplished that. You look at "Gandhi;" that's kind of -- was a role model for me trying to sort of emulate a film.

CURNOW: But what it boils down to it, you are looking for box office success. You're not doing this, you know, to pay respects to a great man. Understandably that's perhaps one thing, but "Gandhi" also made a lot of money for its maker.

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CURNOW: I'm assuming you're a businessman and this is perhaps the greatest business opportunity when it comes to moviemaking, at least in South Africa.

SINGH: I think, you know, you never know with box office. You do the best you can. You put it out there and hopefully it does do well.

But I think that given that the little that people actually know about Mandela, you know, they --

CURNOW: You mean outside of South Africa?

SINGH: Even in South Africa. Most of them know from the time he came out of prison, he was everywhere. But before that, you know, people that have heard stories, the young kids that are today 22 were not even born when he was released.

You know, so his journey, you know, becoming a lawyer, being in the royal village, you know, being groomed to be an adviser, all of these little things that made him what he became is so remarkable and so cinematic.

So I'm certainly hopeful that it's embraced by audiences. But ultimately until you put it in front of an audience, you never know.

CURNOW: Mandela is a brand, essentially is probably the most famous brand in South Africa or in Africa.

How does that play into what you're doing in a way that's creating more than this about this man?

SINGH: The man was the man who became a brand when he came out of prison. Well, actually a little before, when he became the icon for the freedom of South Africa. But I think they're totally in parallel. I think also that he is this brand not only for Africa; I think you go to west -- some community in Alabama; they know who Mandela is. You know, so in Tokyo or Hong Kong, same thing.

So I'm -- I think the one thing that this film has, which I hope that audiences are ready for, is that in this complex life that he led, he always stuck to his values, that he always stuck --

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CURNOW: He understood his own brand.

SINGH: Exactly. And I think that's a very good point, that he knew his power, even in prison, you know. He commanded the whole -- he orchestrated things that you'd never think about, you know, but little things, like they asked for long trousers. It took them five years to get long trousers. And -- but they got it. But little battles that he played.

CURNOW: But it is a difficult situation you find yourself in, being part of this debate, perhaps, when it comes to the power of his brand, but perhaps the legacy that might or might not be controlled by different people. It's still unclear as to who will control that Mandela brand for the next 10-20 years.

SINGH: Well, I think you're correct about that. But as far as the film goes, the film is based on his autobiography. So it's very much that brand that is entrenched in his story.

So you know, that's what I have.

CURNOW: So he's defined again. He's defined that story and (inaudible) as long as you stick to this book, which is quite a thick one, I must say. You're on the right track.

SINGH: Absolutely.

And what we did was, you know, we had people like Ahmed Kathrada, who was in prison with him for 26 years, you know, help us and you know, guide us in places where we felt, OK, well, we need more detail about this part of the story, you know, and the Nelson Mandela Foundation has remarkable resources of information, which we harnessed a great deal. And they were very helpful.

CURNOW: But for him to tap you on the shoulder and say, I'm giving you this one. This is my story. I trust you to do it well. It's an extraordinary responsibility because this is going to last longer way after he's gone.

SINGH: Many generations. And it's a tremendous responsibility. And it's terrifying on the one hand, but on the other hand, when you are cast with that responsibility, you have to deal with it. You've got to do it. And that's what I've done, you know, cut it every way and introspected it and came back to a place where, hey, we've done it or almost done it. And here we are.

CURNOW: It's taken you 20 years.

SINGH: Hey, you know, good things come to those who wait.

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CURNOW: A difficult balance then between commercial success and preserving a historical legacy.

I'm Robyn Curnow. You've been watching MARKETPLACE AFRICA. See you again next week.

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