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Quest Means Business
America's Financial Woes; U.S. Stock Markets; Twitter's $1BN IPO Plan; Qatar World Cup Dilemma; Mining in Liberia; Interview with Kevin Pillay
Aired October 04, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAGGIE LAKE, HOST: Washington remains deadlocked with neither side prepared to back down and get the government working again. And all the time, we're getting closer to the deadline to raise the debt ceiling.
John Boehner is still trying to get the president to negotiate on the government shutdown. The Republican House speaker remains focused on winning some concessions on ObamaCare before he'll move to break the stalemate.
In a press conference earlier, Boehner's frustration was there for all to see.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: This isn't some damned game. The American people don't want their government shut down and neither do I. All we're asking for is to sit down and have a discussion and to bring fairness -- reopen the government and bring fairness to the American people under ObamaCare. It's as simple as that.
(END VIDEO CLIP)
LAKE: Boehner is holding the line even though he's fast losing the support of the public and maybe even his own party. His favorability rating plummeted to a record low before the shutdown even began. And a majority of Americans polled would blame the Republican Party if the debt ceiling isn't raised.
U.S. Republican Senator Rand Paul was caught on tape questioning the party's strategy in a conversation with Senate Minority Leader Mitch McConnell.
(BEGIN VIDEO CLIP)
SEN. RAND PAUL (R), KENTUCKY: Do you -- do you have a second?
SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: I'm all wired up here.
PAUL: I just did CNN. And I just go over and over again, we're willing to compromise. We're willing to negotiate. I think -- I don't think they poll tested we won't negotiate. I think it's awful for them to say that over and over and over again.
MCCONNELL: Yes, I do, too.
(END VIDEO CLIP)
LAKE: A rare insight into the game of politics that is being played in Washington.
Well, while Washington keeps playing that game, 800,000 federal workers are still waiting to see if they'll be needed at work on Monday. David Cox is president of the American Federation of Government Employees.
He joins me now from Washington.
David, it's great to see you today.
You know, what about this number, 800,000 federal employees. You know, these are -- are your members. These are people that you talk to.
Can you tell us what they're like?
I mean these are not rich people, are they?
How long can they hold out while this mess goes on?
DAVID COX, PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES: These folks can't hold out very long. Most of them make an average of about $500 a week take-home. So that's not a great deal of money. They're processing Social Security claims. They're, uh, you know, they're the FEMA folks that are currently being furloughed with a hurricane coming. They're also -- many government employees are being required to go to work but will not be paid on payday, such as the employees in the Bureau of Prisons and some of the folks in other agencies.
LAKE: So, David, how are they getting by then?
I mean arte -- arte, you know, agencies that are coming to their assistance in the meantime?
How are they making ends meet?
These people have families.
COX: They clearly have families. They have children. They have to have food. They have to have housing. They have to pay from $3.50 to $4 a gallon for the gasoline that they're going to work with.
This is tough and it's really sad that we've come to the point that federal employees, and most of all, the American public, are being held hostage because the Republicans in the United States House of Representatives will not offer the opportunity to pass a clean CR and allow the vote to go up or down.
LAKE: An unbelievable that -- that our global audience has to know what a CR is, but that's what it's come to.
We've been -- unfortunately, we've been here before.
Have you had any word on the issue of back pay? it's very difficult right now, but will these workers be made whole when and if the politicians are able to come together and get an agreement?
COX: There's clearly been a -- legislation introduced in the House and in the Senate that would make federal employees whole with back pay. Again, we have to get the government open and then we have to be able to pass that legislation.
And seeing that currently, the government is closed, number one, because they don't want people to be able to have health insurance or the ability to purchase health insurance, it's -- it's a tough world.
We certainly hope that they will move forward with the legislation and back pay federal employees. But most of all, we want the president, the Senate and certainly the House Democrats to not allow federal employees to be the bargaining chip and for us to be the ransom paid whenever they do finally get to the negotiation process.
LAKE: And I'm sure it must certainly feel like that to many of the 800,000 people that we're discussing in this group.
You know, what about the economic impact and a lot of people are saying well, for the shutdown, as long as it only lasts a couple j a couple of days, you know, it's not going to be that devastating to the economy.
But there is a ripple, isn't it?
These people all now do not have the money to go out and -- and put money into their local economies, go to their restaurants, buy clothing for their kids. That has to hurt communities, not just the federal workers, but the communities they live in.
COX: It's clearly hurting those local communities. I mean you have areas where it's a large military installation or a -- a large federal penitentiary where it's a major employee. And that's pretty much the local economy.
For all of these folks to be out of work or, still yet, being required to go to work, but not being paid on payday, that's a difficult situation. Folks are not going out to eat. They're holding back on expenditures, because it's a constant uncertainty.
Un -- the uncertainty that's going on by what the House of Representatives is currently doing is crippling this country and severely hurting the economy.
LAKE: Well, we certainly wish the best to your members, those 800,000 workers that enter a weekend with a great deal of uncertainty.
David Cox, the president of the American Federation of Government Employees.
Thank you so much for your time today.
COX: Thank you so much for having me.
LAKE: Well, the Democratic leader in the Senate, Harry Reid, says all state are losing money while this shutdown goes on. He says he's hearing about problems from all quarters of the country.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D-NV), MAJORITY LEADER: The shutdown is hurting our economy. I had a long telephonic conversation today with elected officials in Nevada, state and local officials. They're really concerned. The state of Nevada is losing their revenue as a result of the shutdown, as all states are losing revenue.
(END VIDEO CLIP)
LAKE: Well, it's jobs Friday in the U.S., just without the the jobs report. For the first time in 17 years, economists are missing a crucial piece of periodic economic data. The jobs report for September has yet to be released. And you have Washington's dysfunctional politics to thank.
Now, the jobs report is one of the most closely watched economic numbers. The Fed is using it to help decide when to start pulling back stimulus. Since the beginning of the year, you see the economy adding more than 100,000 jobs per month. A spike in February, the best we've seen, 330,000. And in August, unfortunately, sort of easing back down to 170,000.
Where that graph goes after that, in September, of course, we don't know, since the government isn't doing its jobs.
We thought we would try to do our best to fill in that number for you. Independent economists have predicted the government added 183,000 jobs last month. So for now, we'll have to take their word for it, at least until the government gets back to work.
John Silvia is chief economist at Wells Fargo and he joins me now from Charlotte, North Carolina.
John, it's great to see you.
JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO: Thank you.
LAKE: Usually when I'm talking to you, we are talking about the jobs report. Unfortunately, we don't have that today.
Give me a sense of, do we have an idea about where the economy is, just how strong the economy is, as we're taking this fiscal hit?
Can we withstand it?
SILVIA: Oh, I think we can withstand it. I think the economy was gathering a little bit of momentum. Yes, on a month to month basis, the employment numbers go up and down, as you described.
But about 170,000, 180,000 jobs a month seems to be the pace. The unemployment rate is gradually coming down. So the economy does have the ability to withstand a little bit of a hit.
But I think as you heard in the prior interview, we're talking about maybe a week or so, maybe 10 days. But the longer this goes on, the more the economy does have to get hit in terms of the loss of income and sales over time.
If it's a short period of time, a lot of those federal workers will get the income, so there won't be a big economic hit. But the longer it goes on, the more difficult it becomes.
LAKE: And that's not even to talk about the sort of lack of confidence, when you think you have a government that's not functioning very well, that's going from crisis to crisis and kicking the can down the road. We hear from business leaders, why should we make long-term investments?
We have no idea what the horizon is.
This puts the -- not only business leaders, but Fed in a pickle, too, doesn't it, John?
They would probably like to start to step back from quantitative easing but how can they, when they're the only thing holding us up?
SILVIA: Yes, well not only are you going to have a challenge now with this employment release, whenever it comes out, but the next release, as you -- as you probably realize, Maggie, is depending upon surveys that should be taking place in the next five to 10 days, so that now the next month's employment number will be thrown off, as well.
And I think you mentioned crisis to crisis, this is -- this is kind of one of those tricky things. Well, even if we got the government back and the budget was put into place, now we have to deal with the next problem, which is the debt ceiling on October 17th. So we may be moving from one crisis to another.
LAKE: And -- and the debt ceiling is so much more serious for everyone around the world.
SILVIA: Yes.
LAKE: That's what investors are really concerned about. We're not going to -- we're not going to start to see the fallout on October 17th, when we hit that deadline. People are going to start to act before that.
How much time do we really have?
And where we will see the fallout first is markets think, wait a minute, these guys might actually not raise this?
SILVIA: Well, you actually have already seen the fallout in terms of very short, one month Treasury bill rates have actually risen pretty -- pretty distinctly over the last couple of weeks.
LAKE: Right.
SILVIA: So you're already starting to see that interest rate effect over time. The dollar also has weakened, as well. So those impacts are already showing up.
LAKE: All right, John Silvia, always a pleasure to talk to you.
Hopefully, when we speak to you again, we'll have a little bit more progress on the front in Washington and some numbers to actually talk about.
SILVIA: Thank you, Maggie.
LAKE: John Silvia there for us.
SILVIA: Thank you.
LAKE: Well, political showdowns over the debt ceiling should be banned, just like nuclear weapons. That's what Berkshire Hathaway's CEO, Warren Buffett, told Pattie Sellers of "Forbes." She sat down with Buffett and his right-hand man, Charlie Munger, earlier in the day.
(BEGIN VIDEOTAPE)
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: Well, I hope what we've learned from this -- and I think we may, because it may go to a real showdown, is that the -- A, the debt ceiling makes no sense anyway, if you're going to spend more than you take in, you're always going to have to be raising it. So I mean the -- what makes sense is looking at the appropriations, you know, looking at revenue sources and that sort of thing. But -- so a debt ceiling really doesn't make any sense.
But -- but since it's part of the institution now, the one -- it's -- it makes absolutely no sense to let it be used as a lever for other things. I mean if you want change the laws on abortion or immigration or you name it, tax laws, whatever, let that be a piece of legislation that people hammer out. But to tie it to something about whether you break the promises of the United States government to people all over the world, as well as on citizens, just makes no sense.
So it ought to be banned as a weapon. I mean it -- it should be like -- it should be like nuclear bombs. I mean, basically too horrible to use and...
PATTIE SELLERS, "FORBES": A new weapons of mass destruction?
BUFFETT: Yes, exactly. And -- and both parties should say we've both sinned in the past. Forget about who -- you know, all the past behavior has been idiotic, we won't debate who's been more idiotic, but it's over.
(END VIDEO CLIP)
LAKE: There you go, an amnesty of sorts, if only they'd listen to him.
Well, investors remain cautious at the government shutdown as it drags on for a fourth day.
Alison Kosik is at the New York Stock Exchange -- Alison, I feel like a lot of us think we're stuck in a nightmare. We can't quite believe what we're seeing and yet it still continues.
How are -- what was the mood going into the weekend?
ALISON KOSIK, CNN CORRESPONDENT: You know, it was all about kind of watching and waiting and watching and waiting to see what Washington would do.
You know, the way investors see it, they're kind of trading blind without, uh, that jobs report coming out today.
LAKE: (INAUDIBLE).
KOSIK: You know, the good news is there was some movement in Washington showing that there is some focus forming about the broader budget deal that would include raising the debt ceiling. And it's really the debt ceiling issue that -- that's what kept Wall Street in the red, if you look at the week as a whole, because it is the bigger concern.
Today, we did see stocks end higher, though. The Dow ending up 76 points, as you see there.
But no doubt about it, you know, warning bells are getting louder for lawmakers, Maggie, to get it together, to raise the debt ceiling or face those catastrophic consequences -- Maggie.
LAKE: And, again, maybe some of that buying, there were mixed messages earlier in the day. We thought Boehner was going to come out maybe...
KOSIK: Right.
LAKE: And there was going to be some progress and then that didn't happen. So I guess people started trying to hedge their bets the best they could heading into the weekend.
KOSIK: Yes.
LAKE: Alison, great to see you.
Thank you so much.
KOSIK: Sure.
LAKE: You have a great weekend.
KOSIK: You, too.
LAKE: Well, Ireland may be planning a government shutdown of its own, although unlike here in the U.S., the Irish people will decide. They're holding a referendum to choose whether to abolish the upper house of the Irish parliament. Keeping this chamber open costs an esteemed $27 million per year -- too big a price tag, some say, for a house that cannot alter or kill legislation and whose contributions are mostly negligible. The upper house has been part of the Irish legislature, though, for about 90 years.
It seems it may not survive this period of austerity. Results are expected tomorrow.
A long dead electronics company is getting a burst of life from Twitter's IPO. When we come back, we'll tell you what made traders go mad for Tweeter. The clue is in the name.
(COMMERCIAL BREAK)
LAKE: Twitter has revealed more about its $1 billion initial public stock offering. It showed investors what they could get in a piece of 200 plus page filing. Here's what we've learned about the company in 140 characters, though. This will be a little bit easier. Twitter will trade under the ticker symbol TWTR, though it didn't indicate which stock exchange it had chosen, interestingly. Twitter hasn't recorded a profit for at least the past three years, which is the time period required to disclose in the filing.
In 2012, Twitter said it lost over $79 million and it is on track for an even steeper loss in 2013.
There are some bright spots, though, in Twitter's future, according to the filing.
Sales are increasing rapidly. Twitter recorded $254 million in revenue during the first six months of the year. Mobile ads accounted for 65 percent of last quarter's ad revenue. We know how much that matters to investors.
And three fourth of the company's 218 million monthly active users use Twitter on their phones.
Now, it's time to take a look back at the company's global influence.
(BEGIN VIDEOTAPE)
LAKE: In the seven years since Twitter's launch, we've learned the true value of these 140 characters. They can announce a future king or an election win. They can be part of historic diplomacy, and even revolution in the Middle East.
JACK DORSEY, TWITTER CO-FOUNDER: I think it's changed the way we communicate. I think, you know, we -- we have these -- these headlines and we can immediately share what we're thinking and what's happening around us.
LAKE (on camera): There's sharing, though, and then there's over sharing.
(voice-over): Former Congressman Anthony Weiner Tweeted a picture of himself in 2011, which we can't show, and then lied about it, which we can.
REP. ANTHONY WEINER (D), NEW YORK: Once I realized I had posted it to Twitter, I panicked. I took it down and said that I had been hacked.
LAKE: Even Anthony Weiner's downfall was not enough to stem the tide of Twitter exhibitionism.
The next stop -- the selfie.
(voice-over): From kim Kardashian's poses to the former Australian prime minister's shaving mishap and even, yes, the one on the left is the pope. Companies have also jumped on Twitter's promotional power, with varying results. Like fashion designer Kenneth Cole's forays into current events, most recently Syria.
KENNETH COLE, FASHION DESIGNER: I've always used my platform to provoke dialogue about important issues, including HIV-AIDS and war (INAUDIBLE). I'm well aware of the risks that come with this approach.
LAKE: And speaking of risk, who can forget Qantas in 2011, launching a promotion under the hash tag, qantasluxury while its entire fleet was grounded due to strikes.
DORSEY: You want to focus on building a utility, not -- not a product, but a utility that different industries can come to and invent and make their own.
LAKE: Co-founder Jack Dorsey speaking to me in 2010.
Now, Twitter, the utility, gets a new profile as an investment. And if there's one thing we know about this company, it's always unpredictable.
(on camera): @maggielake, CNN, New York.
(END VIDEO TAPE)
LAKE: Now, you have no excuse, you know where to find me.
Well, with all the IPO buzz, it turned out to be an amazing day for TWTR, yes, TWTR. It looks like some investors couldn't wait to get their hands on Twitter shares and ended up buying into the wrong company.
Here's how it happened.
Twitter has chosen this stock symbol -- TWTR. Now, apparently that's been confusing for people trading Tweeter, TWTRQ. It's a penny stock, if you don't recognize it, Tweeter Home Entertainment Group, an electronics retailer that went out of business back in 2008. Q is typically added to the end of bankrupt companies that still have shares trading, penny stocks trading.
Tweeter has nothing to do with Twitter. But today, Tweeter's shares soared as high as $0.15. That was a gain of about 1400 percent. They were up so much, that trading was actually halted permanently midday. I think the gains were still 400 percent. They closed, as you can see, a fraction of a cent, up 600. I was wrong, it was even more. It's 684 percent.
What a difference a Q makes. It teaches you to be careful.
Football's world governing body has been holding crisis talks. FIFA is wrapping up two days of wrangling, with Qatar at the top of the agenda.
We're live in Doha for the latest.
(COMMERCIAL BREAK)
LAKE: Football's world governing body has put off any decision about when to play the Qatar World Cup until after next summer. Today, FIFA agreed to set up a task force to explore moving the 2022 tournament to winter amid concerns over Qatar's intense summer heat.
The decision was made after two days of executive talks in Zurich.
FIFA boss, Sepp Blatter, also addressed allegations of slave labor conditions for migrant workers in Qatar. He says that it's a matter for the Gulf nation to deal with.
(BEGIN VIDEO CLIP)
SEPP BLATTER, FIFA PRESIDENT (through translator): This is not FIFA's first responsibility, but we cannot ignore it and it touches me. But it is not an intervention by FIFA that is going to change something. It is Qatar that needs to intervene and Qatar has confirmed to me that they are going to do it.
(END VIDEO CLIP)
LAKE: Becky Anderson has been speaking to the head of Qatar's World Cup organizing committee.
She joins me now from the capital, Doha, tonight -- Becky, I think a lot of people were hoping for something concrete out of this today. We didn't get it.
But it's moving, isn't it?
BECKY ANDERSON, CNN CORRESPONDENT: Yes, think controversy, think FIFA. And boy, have we got -- or had some controversy today.
Expectations were that this two day meeting of the FIFA executive committee would be very much focused on whether, in 2022, nine months -- sorry, nine years from the first ball to be kicked here in Qatar, whether they would decide that it was simply too hot to play football in the searing summer heat, 50 degrees at times, 122 degrees Fahrenheit, and whether the whole tournament would have to be moved to the winter.
And the repercussions of that are quite something. Compensation, possibly, for the international broadcasters -- I know the Americans have already spent or suggested they will spend $400 million on the rights for a summer World Cup. If it was a winter World Cup in the Northern Hemisphere, the competition would bump up against pro-football, for example.
The leagues who play in the winter seasons in Europe, they wanted him to be compensated.
So this is a real mess. But as you say, I spoke to the executive committee of the -- executive director of the supreme committee for the Qatar World Cup just an hour or so ago.
And I put it to him -- or I certainly asked him -- whether during the bid process three years ago, this whole scheduling issue was ever brought up.
This is what he said.
(BEGIN VIDEO CLIP)
NASSER AL KHATER, QATAR SUPREME COMMITTEE: We've bid for a summer World Cup. All our plans and our delivery is based on a summer World Cup. Our intentions are for a summer World Cup.
Now, based on today's announcement of this task force being set up, there is an understanding that that's going to be a consultation period and any decision will only be made after the 2014 FIFA World Cup in Brazil.
Now, this has no impact on us. Our planning, our delivery, will continue, as we've always planned.
(END VIDEO CLIP)
ANDERSON: Summer, winter, they simply don't care. And they've been saying that for some time.
Now, billions will watch this and billions will be spent. It's anticipated that the entire project for Qatar will cost something like north of $150 billion. So we are not talking short change here, by any stretch of the imagination.
Why should we care?
Well, it is a competition which is simply the biggest sporting event in the world. And that's, as I say, billions watch.
So this is important stuff, summer, winter, sum -- winter, summer, really important stuff. But as I say, the Qataris say we're ready for whatever FIFA decides.
LAKE: They may be ready but everybody else isn't. I mean, Becky, I know you think, oh, American, you know, you guys are not that -- we -- even here, people book their vacations, they make plans. There are part -- there are huge events that are built up around this, even nine years out. These things do matter, as we know. The savings that has to go in to travel to some of these places.
ANDERSON: Yes.
LAKE: It's sort of baffling. This is a bizarre week, where we keep watching things happen that are predictable, that shouldn't be happening and yet here we find ourselves, whether it's Washington or whether it's in -- in the Gulf nations.
ANDERSON: Yes.
LAKE: Why...
ANDERSON: Yes.
LAKE: -- the technology is there. Everybody knew this was going to be an issue.
What changed from the bid and assuring everybody that they had the technology in these stadiums to deal with the heat so we have ourselves in this situation now where there's a very good chance it's going to change to the winter?
Was there one voice or one group that really pushed this to the top of the agenda?
ANDERSON: Yes, I think it was Sepp Blatter himself. He's a very controversial head of FIFA. A couple of weeks ago, back in the summer, he said he thought it would be sensible to move this to the winter. He thought UEFA, which is the European governing body of football on side.
But the head of UEFA, going into this meeting the last couple of days, Michel Platini, said listen, you know, the issue of when this tournament is going to be played is, to a certain extent, a side bar now given the controversy over the conditions for migrant workers, which has really sort of come to the for. It's an issue in this region. It's not a new one. But the Qatari government has said that they have now got an independent legal firm to lead an independent inquiry into workers' rights here.
This has all come about -- and we've done our own investigation -- some 65 Nepalese workers here -- migrant workers are 90 percent of the labor force is migrant workers -- some 65 died in the month of June, July and August, in just searing summer months.
And half of them died of acute -- acute heart conditions.
So the sense is, you know, they're lowly paid. There are allegations their working conditions are bad.
So there was this sense that there was this cloud overshadowing the whole off. But again, the Qataris telling us today that the workers rights charter in place, they're working with Amnesty and Human Rights Watch.
So these issues are being addressed.
LAKE: Right.
ANDERSON: But, yes, when you asked me who was behind this move, simply, Sepp Blatter.
LAKE: An amazing story. A lot of questions and issues to iron out, Becky. And, boy, the spotlight is on them.
Great to see you, Becky Anderson, for us in Doha tonight.
Well, the business of making money literally -- CNN is the first camera crew in the design room of this prestigious currency maker.
We're going to bring you that next.
(COMMERCIAL BREAK)
LAKE: Welcome back.
I'm Maggie Lake.
Here are some of the stories we're following for you this hour.
Egyptian state media reports four people have been killed and 40 others injured after supporters of ousted president, Mohamed Morsy, fought with security forces in Cairo. The unrest came amid reports that 170 imprisoned members of the Muslim Brotherhood will be held for a further 15 days.
Rough seas have forced rescuers to delay their search for more victims of a shipwreck off the coast of Italy. At least 111 African migrants were killed when their boat capsized yesterday. Some 200 others are still unaccounted for. The U.N. Refugee Agency says all but one of the 155 survivors are from Eritrea.
U.S. President Barack Obama will miss the upcoming APEC Summit in Bali and the rest -- and -- excuse me -- in Bali and East Asia Summit in Brunei next week. He's missing all of it. He's staying in Washington to deal with the U.S. government shutdown.
He personally telephoned the sultan of Brunei and Indonesia's president to express his regrets. Secretary of State John Kerry is going in his place.
FIFA's executive committee put off a decision on whether or not to shift the 2022 World Cup from Qatar's summer to its winter, at least for a year. FIFA said it needs time to properly consult with all stakeholders involved, from Qatar to broadcast executives and sponsors, to examine the poli -- the potential consequences.
Money makes the world go around. And tonight, we have a rare look behind the scenes of the people who make it.
De La Rue is one of the world's largest commercial currency printers and is involved in the production of more than 150 currencies.
Jim Boulden was given access to the firm with the first camera ever allowed into its design center.
He joins me now from London -- and, Jim, I had no idea that one firm was behind almost all of the money...
JIM BOULDEN, CNN CORRESPONDENT: Yes.
LAKE: -- that changes hands.
What was it like?
BOULDEN: Well, it's very interesting, because this is a company, Maggie, that can't tell you who its clients are. Could you imagine going to the shareholders' meeting and them talking about how much money they've made and what they do, but can't tell you specifically who their clients are without permission?
Well, we were allowed into their design center, which is south of London, just to see how they go through the process of designing the currencies. They work with central banks from around the world and trying to make sure that the currency is relevant, but not one that has to be changed every time the government changes.
And we did get the head of design for De La Rue to show us around the design center.
Take a listen.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Every banknote is individual. The banknote itself actually starts to speak about the culture of that particular country. And, obviously, many countries all right proud of their cultural background. So it's important that we capture that, in essence, onto a banknote.
The banknote really is the calling card to the international market about what that country is really about.
This is one of our house banknotes which celebrates the 200 year anniversary of De La Rue. The heron was put on there to show some of the features on our polymer substrate, showing the clear substrate when it penetrates through. And therefore, the heron literally is beaking through the water.
This particular banknote is about flora and fauna of the UK. But you're trying to either capture either a technology, capture (INAUDIBLE) or historic people or capturing the wildlife of that particular country.
When we design banknotes, most banknotes stay in circulation between seven and 10 years. So it needs to stand the test of time. The durability of these banknotes far outstretches that of paper.
The number of security features that are typically within a banknote are around about 20 to 30. (INAUDIBLE) we incorporate whether or not into the substrate, into the security thread, into different parts of the ink are going in different layers to try and deter the counterfeiter.
We incorporate all of the security features into the banknote. So on this one here, we have the transparent window, which is a security feature for polymer. And they're going -- there's some covert features into the banknote, as well, which when you expose the banknote to different types of light source, reveal some security features.
There are effectively three levels. Level one are typical public recognition features. So for instance, here we have this magnetic ink on it. And these are typically features that enable the public to determine that the banknote is genuine.
Level two are security features that require some other teleroses (ph), or that require either a UV lamp or a microscope to actually examine the banknote.
And then level three security features, some times they're sleeper features which are not used or certainly not announced to the public. The central banks hold those features in reserve to be able to sort their banknotes out if there are counterfeiting issues.
For a designer and working for De La Rue, it's to show that -- the product that you're producing touches the live of everybody every day. So most people have a product in their pocket. Whether or not that will be a banknote or a passport or a driving license that's been designed and developed by De La Rue.
(END VIDEO TAPE)
BOULDEN: Now, Maggie, you'll notice we had to blur out the names of some of the countries on some of the bills there. And you saw a lot of birds, which is interesting, because De La Rue decided that birds are very safe, even if there's an election or a coup, that maybe the currency can continue on despite who's in power.
And I asked the CEO about this, because what's so interesting about De La Rue is that it does have some competitors around the world. It doesn't make the euro. It doesn't make the U.S. dollar. But it needs to have the countries come to them, and say, look, we need you to make the newest currency with a lot of updated technology to thwart anybody trying to counterfeit this money.
Take a listen.
(BEGIN VIDEOTAPE)
TIM COBBOLD, CHIEF EXECUTIVE, DE LA RUE: Strictly, the sort of established norm within the industry would be a good deal longer than that. It could be six to 12 months. And -- but one of the things we saw very hard to do in De La Rue is to shorten that -- that time, so that we can design notes very, very quickly in order that central banks can issue them quickly. And often events happen where they want to be able to do that. And whether that's the creation of a new country or there's a new regime, that's something that -- that often central banks like to do to support the change in their country.
BOULDEN: Well, that takes me to some of your customers, because you created a new currency for the new country of South Sudan in 2011.
COBBOLD: Yes.
BOULDEN: And that was a very quick turnaround. We've had regime change in Libya, for instance. And so you had to go out and (INAUDIBLE) and make new currency there.
COBBOLD: Sure. So obviously, everyone knows about the changes that took place in Libya. And what followed on really quite swiftly, after things began to settle in that country is that they recognized that they wanted to change the banknotes to reflect the new status quo, shall we say.
And as a consequence of winning that business, we then worked very, very closely with the Central Bank of Libya. And in a period of nigh on three months, we designed a family of notes with the central bank and were able to launch the first note by the 17th of February, a date I know, because it was the second anniversary of the Libyan revolution. So it was very important to them, and, therefore, important to us, that the notes were ready on that date for the launch.
And this is what one might call a commemorative note. On the front of the note here, you can see the Libyan people celebrating the revo -- the revolution. And on the -- on the back of the note, you see the new Libyan flag and if you're holding it closely enough, there are actually 17 doves on the back of the note there, of course, symbolizing freedom and peace.
BOULDEN: Now one of the dangers, of course, of this kind of regime change and the change in the currency is something else could happen again and there may have not the same for Libya, but other countries might go to -- through, as what we're seeing in Egypt right now, where you might see multiple governments.
And are countries changing their currencies just for political reasons and on a whim and are they having to do it again and again and again?
COBBOLD: No, the vast majority of times when a banknote or a family of banknotes is changed, it can be for two reasons. One, that the family has got old and needs refreshing and to reflect new technologies. Or, secondly, there might be a particular pressure on a particular note, perhaps from counterfeit. There's always a counterfeit threat. And so a central bank might decide to upscale the technology on a particular note.
So the vast majority of reasons why banknotes are changed are quite innocent, if I can put it in -- put it that way.
And I think what's always true about a note is that they're -- that they're far -- clearly, far more than a product. They're something -- we sometimes say they're a calling card for a country.
BOULDEN: Yes.
COBBOLD: And they reflect that national identity.
BOULDEN: One of the more silly stories in the lasts few years was that you were going to be printing Greek drachma. Now, I know you never talk about other countries, but obviously that wasn't true. But you couldn't deny it, either, because of the way you work with your customers.
COBBOLD: Well, I know that it sometimes makes us sound a little bit evasive, but probably the first -- the first rule in working with central banks is to respect confidentiality. So that's why you tend to get something of a stalling answer on anything around that.
BOULDEN: Yes.
COBBOLD: And but given the promise of that particular story, it's probably easier just to say nothing. So that's the path that we took.
(END VIDEO TAPE)
BOULDEN: So, Maggie, no -- not only no comment about making Greek drachma, just nothing to be said about it.
LAKE: Discretion.
And I love the anecdote about the birds, Jim. I could think of a few that come to mind when I'm looking at Congress in Washington these days, but I'm not going to take the bait.
Jim, thank you so much.
Jim Boulden there.
Time for a very quick check of the weather.
(WEATHER REPORT)
LAKE: And that is it for QUEST MEANS BUSINESS.
Thanks very much for watching.
MARKETPLACE AFRICA continues on CNN.
(COMMERCIAL BREAK)
ROBYN CURNOW, HOST: This is MARKETPLACE AFRICA and I'm Robin Curnow.
A $140 million gold mining project will be Liberia's first when it starts producing in early 2015. And in the once war-torn nation, getting into the gold game is not just about securing funding for the mine, it's about building community.
(BEGIN VIDEOTAPE)
BARNETT: (voice-over): Heavy construction vehicles, workers in hard hats, mounds of earth being moved -- all typical sights you'd expect at the excavation site for a mine. What's not typical, the location. London- based Aureus Mining is targeting deposits of gold in a northwestern region of Liberia. It's the first commercial gold mine being developed in this country, which is more known for its iron ore mining.
Liberian Debar Allen was hired by arias to manage the first project for the two-year-old mining company. He returned to Liberia from the United States after fleeing during the country's civil war. He jumped at the chance to help rebuild his country.
DEBAR ALLEN, COUNTRY MANAGER, AUREUS MINING, INC.: For me, with a business background, I thought that this was excellent for our country, excellent in the sense that this now presents an opportunity for us to showcase who we are as Liberians. We can mine something that god has given us and turn the resources into something that's positive.
BARNETT: Almost 5,000 acres of land was licensed by Aureus for this project. About a quarter of that is being what's called clear-cut. That means villages in the path of the mining operation need to be relocated.
It's a very delicate issue that Allen is tasked to manage.
ALLEN: First, the decision is only made bearing in mind that you -- you relocate only when it is necessary. And the village that is -- that is being relocated now is really a -- it has to be, because it sits -- it sits on the footprint of where the deposit is.
It's a consultative process that is guided very closely by the government of Liberia. The community itself and the company, to ensure that the rights of persons being relocated are respected to ensure that they are not just physically relocated, but that economically, they are made better.
BARNETT: Aureus says it's essential to include locals in the process. They have regular meetings with community leaders and Aureus CEO, David Reading, has even been made an honorary chief in one of the neighboring villages.
ALLEN: We've had one of the most rewarding relationships with our -- with our local community. We have had a relationship that has been free of major incidents and we think we have in place a model that, if replicated, other places can be successful.
BARNETT: Liberian labor is being used for the majority Aureus's workforce. They say 97 percent of their more than 800 workers are Liberians and almost half of them are local villagers who usually rely on farming for income.
THINUS STRYDOM, GENERAL MANAGER, CONSTRUCTION & OPERATIONS: The local villagers have been really responding well to our -- our attempts to train them. Most of the people you can see working around here today is from the local village. And eight months ago, they'd never been in a dump truck.
SHIRK SONI, COMMUNITY RELATIONS OFFICER: Most of the workers you see there, they are all farm workers just go in the farm. So (INAUDIBLE) farming work here and there. But from this work today you'll find most of them now -- most of the young people are going to go learn skills like carpentry and masonry, because we have other institutions here training people how to -- how to acquire these skills.
BARNETT: Baze Fombuley (ph) is a mother of two and local resident. She tells us she used to sell goods at the local market, but now that she's been trained to operate the brick machine, she has a better way to make money for her family.
ALLEN: There are about 325 homes that will be built on this facility to house the 325 families that are being relocated here. As we speak, there's a school building that is being constructed. We'll also construct stores. We are putting into place a sort of a civil compound. What it is is is a police station and some place where a legal magistrate can -- can function.
There are three brick making machines. Those machines, our intention at the end of the project, is to turn those machines over to this local cooperative. We set them up. We assisted them in their formation and they now will be able to manufacture bricks and sell it outside of this community to those who may have the need for that.
BARNETT: Following that same model, Aureus helped the cooperatives start a sawmill business and now purchases all the wood for the project from that operation.
Now, look, the profits are nowhere near what Aureus may make from the estimated 600,000 ounces of gold they'll extract over the next five years, but they say it's a small part of their plan to empower the community.
ALLEN: We also want to see that as a result of our business work here in this part of the world, that we will improve the lives of people.
BARNETT: Errol Barnett, CNN, Liberia.
(END VIDEO TAPE)
CURNOW: From a new mine in Liberia to bigger and more efficient cities in Africa, after the break, I speak to Kevin Pillay from Siemens in this week's Face Time interview.
(COMMERCIAL BREAK)
CURNOW: Welcome back.
Now, African cities are growing and growing fast. But what's not keeping up is funding.
According to the African Development Bank, about $45 billion U.S. is spent annually on infrastructure projects.
But to make a real difference, the bank says almost twice that amount is needed.
So what will it take to make African cities grow more efficiently?
Well, for this week's Face Time interview, I sat down with Kevin Pillay from Siemens.
(BEGIN VIDEOTAPE)
KEVIN PILLAY, DIVISION DIRECTOR OF MOBILITY, SIEMENS: In Africa, we have quite an established setup, but a selective setup. It is definitely and according to our projections, also the continent of the future.
So at this stage, we see everyone wanting to play in Africa.
CURNOW: In just a short time, Africa is no longer going to be a rural continent. It's going to be primarily urban. And that shift is happening now.
How does that play into your vision?
PILLAY: We see this everywhere in a place like Johannesburg, for example. You see it, you feel it, you're frustrated by it and you notice it.
Very few things are going to change in life in our opinion. People are still going to want the needs. They're still going to want the good life, the good technology, the good facilities and more of them are going to want it over a shorter period of time.
This is where we positioned ourself, because we think two things will happen. One is we will see a big surge in infrastructure spend in Africa.
And by infrastructure, what am I referring to?
Power stations, distribution grids, rail infrastructure, roads infrastructure. Cities itself will need more modernized buildings, more significant buildings over a smaller space.
And at that time, what is going to happen is cities are going to come under tremendous pressure in terms of traffic, being able to move people. And...
CURNOW: That's already happening. I mean you go to Maputo, you're in Lagos, you're in Kinshasa...
PILLAY: Correct.
CURNOW: These are problems...
PILLAY: Yes.
CURNOW: -- that people are already feeling. So it's going to get worse.
PILLAY: Yes. And it's going to get worse and the big thing now is to start planning now to change the future.
We are not going to eradicate it. We are not going to build new cities overnight. We're going to have to utilize what we have better.
What do I mean by that?
We need to send more trains through a grid quicker and faster. We need to integrate transport systems so you jump out of a cab into a train, from the train to the airport, take a connecting flight, land in Cape Town, follow the full -- take the full road of transport in that way.
And we want to do the same thing throughout Africa.
CURNOW: Lagos and Kinshasa are going to overtake Cairo pretty soon as the largest cities in Africa. Already, there's a network of -- of slums, essentially. Most of this urbanization is being seen in slums.
How do you -- how do you change that?
You can't change that landscape.
And how do you upgrade the slums, essentially?
PILLAY: We start by engaging the with right stakeholders. So it's a game of various stakeholders that need to be invested in and consulted at the right time.
So I'm referring to national governments, provincial governments. I'm referring to the mayors of the cities.
We are not going to go in isolation and say, OK, this is what we have and take this forward.
So we go through a dialogue. We create a plan for them and we work together with them to create a plan.
For an outsider, as a company like Siemens, the biggest benefit we add is giving advice at the start and offering the technology to solve the problem.
What the governments expect from us is not just to -- to land into a country, drop a technology and fly out of the country.
They expect you to be part of the solution, to maintain the solution and to grow the community along the solution.
And this is where, I think, a bigger company has a better chance at doing that. And you need to be strategically positioned to do that. You need to be -- to make a strategic decision in your country that this is -- or in your company -- this is what you will do in Maputo. This is what you will do in Mozambique.
CURNOW: Are African leaders, though, taking the issue of urbanization and the challenges associated with it seriously enough, though?
PILLAY: To answer the question directly, I think yes.
Should the impact be greater or the effort be greater?
I think that will change with time.
For me, it's very satisfying to note that -- that thought is there. I think leaders want to do it. They have the political will. I just think that it's a very complex matter. And I hope private institutions can play more of a role to help unlock it sometimes.
(END VIDEO TAPE)
CURNOW: Thanks there to Kevin Pillay from Siemens.
You can watch that interview and all of our other stories at cnn.com/marketplaceafrica.
I'm Robin Curnow.
See you again next week.
END
