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Quest Means Business
The Focus Of This Year's World Economic Forum Is Climate Change; Trump To Arrive In Davos AS Impeachment Trial Begins; WEF Founder Explains Why Climate Should Be A Priority. Aired 3-3:30p ET
Aired January 20, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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RICHARD QUEST, CNN BUSINESS HOST, QUEST MEANS BUSINESS: No trading in New York today. It's a holiday. But we are in Davos where you are most welcome.
The global elites are here. The billionaires, the politicians, the CEOs and the celebrities and things are about to get underway.
The focus this year is very much on climate change. At all levels, people are coming with ideas. We expect to hear from the President. We'll hear
from Greta, a likely clash in the offing at WEF.
And Donald Trump will meet with other leaders. A short while ago, he spoke to Emmanuel Macron. Angela Merkel will be here as well.
I am Richard Quest live at the World Economic Forum where of course, I mean business.
Warm welcome to John Defterios. Guess what? It's John Defterios's 30th Davos. You don't look that old.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Thank you very much. I was here when I was 17. Actually I started at 27. But it was 1990 for my
first Davos. It was an extraordinary want to be at, Richard because it was two months after the fall of the Berlin Wall.
So the convening power was put on display by the World Economic Forum, Helmut Kohl of Germany, his counterpart from East Germany, Margaret
Thatcher; Francois Mitterrand, U.S. Secretary of State --
QUEST: Never mind then. Now, what's happening this year? What for you is the important thing this year?
DEFTERIOS: Now, I'm going to talk about just the inequality gap which is huge and say Mind the Gap. It clearly is the environment. Donald Trump came
here two years ago, and as a climate denier, he didn't even address the Paris Climate Agreement.
This time around, European industry, the European Union, Greta Thunberg of course is going to be speaking two hours after the President, will make it
extremely high on the agenda. I hope the European leaders grow a backbone, Richard and push back against Donald Trump saying this is a global
emergency. It's not just about U.S. economic growth.
QUEST: Donald Trump is very good at making the right noises on this. He says I want the cleanest air. I want the cleanest water.
DEFTERIOS: Yes, Richard. That's what he says sometimes, but he has been trying to protect the coal industry for years. It's 75,000 jobs. I think it
would be an incredible move by the President to say, let's start a green movement, a green infrastructure fund, employ the coal workers, get them
transferred into the new business using natural gas from West Texas and the Permian Basin here to strip out coal and lower again the carbon footprint
of America.
QUEST: Is there a different atmosphere?
DEFTERIOS: In which respect?
QUEST: Davos here this year? Can you feel that the agenda has shifted? There's not an economic -- I mean, there's a nuanced economic debate about
monetary policy and the low growth environment and the sort of things that geeks get off on. But overall, do you feel it's different?
DEFTERIOS: On both fronts. So let's bring in the inequality, the 2,100 billionaires making more money than the 60 percent of the global
population. You can't be numb to that, the wealth gap.
And the environment needs to move on to the top agenda. By the way, final thought, in the Global Risk Report for the World Economic Forum this year,
the top five, if we're looking at the consequences and damage to the environment over the next 10 years, it has to be the number one issue.
QUEST: Good to see you, John. Thank you very much.
DEFTERIOS: Thank you very much and good to see you again.
QUEST: As we continue now, the IMF has lowered its global forecast for 2020. Now, weakness in emerging markets is one of the reasons, but as I
heard from the IMF's chief economist, the situation could have been a great deal worse.
(BEGIN VIDEO CLIP)
GITA GOPINATH, CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: The U.S.- China Phase 1 deal certainly helped to bring down uncertainty. The lower likelihood of no-deal Brexit has helped. But there's also been a lot of
monetary stimulus in the system with easing financial conditions. And that has again, contributed to growth.
(END VIDEO CLIP)
QUEST: Now, Mohamed El-Erian is with me from New York, Chief Economic Adviser at Allianz, is there a real difference, Mohamed? Have things
changed? All right, so we've got the China deal. And Brexit is not going to be a no-deal Brexit, but do you think things are much better?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISOR, ALLIANZ: They're marginally better, Richard. This was a yes, but narrative.
Yes, the immediate risks are lower, and we heard why mainly because of the de-escalation of trade. But -- and then when we get to the but, the list is
really long, which is why there's a very cautious tone to this update.
QUEST: But then you've got this -- here in Davos, there is not the same ferocity of argument on economics. It is much more nuanced about Central
Bankers at the zero bound range about the role between monetary and fiscal. And of course, this idea of continuing monetary stimulus.
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EL-ERIAN: Yes, but I think there's an understanding now at Davos that's much deeper than it was before. One is that, yes, Central Banks can produce
short term relief, but we're basically borrowing from the future. We're borrowing growth from the future. Secondly, we're borrowing returns on
investment assets, on financial asset from the future.
Second, that we're getting close to the point where Central Banks are either ineffective or counterproductive. And third, there's been a lot of
unintended consequences of which inequality is an important one, but sustainability in general is the issue.
So I think there's a lot of -- there is a lot more common understanding that we've lived through this temporary period and we need this handoff.
The question is can the politics allow for this handoff?
QUEST: Okay, the report that we'll be talking about later with the unions is that the 26 richest men have more than 50 percent of the world's you
know, you saw the statistic today. It is gross and it is offensive. But I wonder what anybody does about it.
EL-ERIAN: So I think the most important thing about inequality is less the income and wealth as important as these inequalities are. But there is now
a deep deception of the inequality of opportunity, and that's why people get angry. That's why people in Chile and elsewhere, go to the street
because they say it is problematic because even opportunity now is concentrated among the better off and that causes quite a social pushback.
QUEST: Mohamed El-Erian, joining me from New York. Sir, thank you. We will talk more about certainly these issues and questions of inequality later.
Now, Donald Trump will join us here in Davos. He is the star, if you like, performer. He opens the event on Tuesday afternoon, but he does so as his
impeachment trial gets underway in Washington.
What do we know? We know the impeachment trial will run six days a week. The duration is unknown. Now, bear in mind, Bill Clinton's trial lasted
about five weeks, but they had deposition evidence in that one and they haven't decided here the level of evidence.
So it could run into February 3rd Iowa caucus and Senator Graham says he hopes -- Trump says, he hopes it is behind him by February 4th State of the
Union.
Well, Ross Garber is a CNN legal analyst and teaching impeachment law at Tulane Law School. As we go into this, if they just do opening statements
and constitutional arguments, but refuse to hear evidence or further evidence, this is over in a couple of weeks.
ROSS GARBER, CNN LEGAL ANALYST: I'm sorry.
QUEST: Can you hear me, sir?
GARBER: I've got you back now, Richard. Yes.
QUEST: There we go. There we go. Well, of course, you can hear me. So I'll just rephrase the question very quickly, very briefly, can -- I mean, if
they don't hear evidence, this is over pretty quickly.
GARBER: Yes. If they don't hear evidence, what's going to happen is, there are going to be arguments by the lawyers and then very, very quickly to a
question and answer session by the senators through the Chief Justice, and then some sort of motion to resolve this. That's it. Probably a week or a
week and a half.
QUEST: Do you think that that is the way it's going to go? Or do you think, you know, with hindsight and wisdom, that there will be some form of
evidence that will be called?
GARBER: I think that's very likely the way it's going to go, and, you know, keep in mind, we haven't seen the rules yet. But the Senate Majority
Leader has said that they're going to be adhering to the Clinton rules, and in the Clinton rules, what happened was all of the evidence, every piece of
the evidence that the House accumulated, comes into the Senate.
And I think what we're going to hear from Republicans is that includes all of the testimony from the witnesses who all testified before the House, all
of the documents that the House got, all of that will actually be considered by the Senate and that will be the basis for the Senate's
decision. It's not like there'll be no witnesses, just not all of the witnesses that the House Managers might like.
QUEST: All right, but the idea that you're going to get people like John Bolton, and Parnas and all of the others on the stand holding their hand
up, taking the oath being cross-examined, questioned, is not likely?
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GARBER: Vanishingly unlikely. There are so many hurdles. You know with respect to Bolton, there's going to be an assertion of, you know,
potentially immunity but also executive privilege by the President. It is very, very unlikely that's going to happen.
With respect to Parnas, there's so much vetting of the information that he has provided that's going to have to take place. It's impossible to think
all of that will happen before it's time for testimony.
QUEST: Is there any feeling of the consensus about process that there was in the Clinton impeachment where until it got going, both sides are pretty
much agreed in conference the way forward.
GARBER: Yes, no. And you're exactly right. In the Clinton process, it was unanimous. The whole process and procedure was agreed to bipartisan basis,
unanimously. There is no sense of that this time.
And in part, it's because there was general agreement last time in Clinton that no one really wanted to hear all of the evidence played out before the
Senate because, you know, frankly, the tawdriness of it.
This time, there's no such agreement. You have the Democrats who want to hear a lot of evidence, and the Republicans who say, you know, we've
probably heard enough.
QUEST: Ross, finally, one of the arguments against this, certainly by the Republicans, is that it has lowered the bar of crimes and misdemeanors,
serious crimes and misdemeanors. And in the future, there will be more impeachments.
Well, if you think of Jackson, it was a good few hundred years before from Jackson through until Clinton, only 20 years from Clinton to Trump. Are we
looking at a scenario of more impeachments in the future, do you think?
GARBER: You know, I've done a bunch of thinking about that and you're exactly right. You know, there wasn't much time between Nixon and Clinton
and then Clinton and the current impeachment by historical standards, and I've defended four sitting U.S. governors in impeachment proceedings in
between Clinton and now.
So I think there actually is a strong argument that this could result in more impeachments. The counter argument is that people will see that this
is so difficult, so divisive, so disruptive, that it's rare that it's going to happen again.
QUEST: Good to see you, Ross. You'll help us understand what's going on as this continues.
When we come back after the break, Klaus Schwab and why the world is facing an emergency because of the climate.
And also, would you want to live for another 50 years? If I can give you a pill that will allow you to live another 50 years, would you take it? Hear
what Klaus Schwab says when I ask that question. This is QUEST MEANS BUSINESS live in Davos.
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QUEST: Well, there's not that much shoveling to be done here, because there's not that much snow. Yes, there's snow on the ground, but nothing
like we've seen in previous years. Though, of course, some say it is because of global warming.
The environment is very much center stage at Davos, everybody agrees and everybody -- all the pledges are coming in thick and fast.
China for example, says it will ban the use of many single use plastics by 2025. Now bear in mind, 29 percent of those plastics are being made in
China, 29 percent of the world's plastic products come from China and China says it's going to restrict them.
But as Klaus Schwab, the Executive Chairman of WEF, told me know, look, all of this is happening at a time when there really isn't any time.
(BEGIN VIDEOTAPE)
KLAUS SCHWAB, EXECUTIVE CHAIRMAN, WORLD ECONOMIC FORUM: The world is in a state of self-emergency, and certainly, time is running out to address
those issues. So we cannot just talk about those issues. We have to find fast solutions so that's what we are doing in here.
QUEST: Hasn't the world always been in a state of emergency?
SCHWAB: Yes, but the time pressure to act hasn't been as great as it is now.
QUEST: You're talking about the environment, I assume.
SCHWAB: Particularly about the environment, but also about the job issue.
QUEST: Let's take the environment first. Well, for this 50th Anniversary, you have both Donald Trump, U.S. President who is a climate denier, and
Greta Thunberg, who is probably the single most well-known activist now, both coming to the Forum. How will you ensure that it's not just hot air
generated?
SCHWAB: Exactly. Because Greta is here, but not only Greta. We see the business leaders coming here, ready to take action. We have a movement for
green finance. We have here the development of a comprehensive model for ESG measurement. So we want to walk the talk, you have 362 lighthouse
projects.
QUEST: But, you know, the attention focuses naturally on the President. You've got a climate denier President coming to talk to you.
SCHWAB: Yes. That's what we have seen, but I think during this meeting, we may have some influence because we discuss, we bring it on the table the
whole issue of environment.
QUEST: You've been talking a lot about the stakeholder economy. The stake -- the whole concept of the stakeholder.
SCHWAB: I was fighting for the last 50 years for this concept of stakeholder capitalism. Now, we are at the tipping point. We are removed
from the prophets and pioneers to I hope, a mass movement and every company should embrace the stakeholder concept.
But in order to do so, it has to be measured on the basis of stakeholder concept and that's the reason why we put such a lot of emphasis on those
ESG measurement system.
QUEST: Final thought. It is an annual sport at this time of the year to question whether WEF and whether Davos is worth it. The articles are
everywhere, you know, is it worth the elites going up to the top of the mountain? But not just this year? Look back on 50 years and look forward?
Is it worth it?
SCHWAB: It's not only worth it, it's necessary. Look, what we have in the world to avoid the disintegration of our world. We need a platform which
brings people together from all walks of life and sets what -- the U.N. is a very great partner of ours and we work together with everybody, but you
need everybody into the boat, you need a dialogue and you need solutions, which are jointly developed.
QUEST: I assume you'll be here for another 50 years.
SCHWAB: Not necessarily.
QUEST: Are you off?
SCHWAB: You know, we're fostering evolution.
QUEST: Yes?
SCHWAB: Yes, we may have some sort of medicine, you don't know.
QUEST: Would you like that? If somebody said to you, I can give you a medicine that's going to give you another 50 years, Klaus, would you take
it?
SCHWAB: Of course. Of course, but I would say, you have to give it also to my wife.
(END VIDEOTAPE)
QUEST: He hasn't been head of the WEF for 50 years without being the consummate diplomat, Klaus Schwab there.
A program note, I just want to remind you about. John Defterios will put the spotlight on shale, oil and the gas boom in the United States. It is
part of our "Global Energy Challenge" The Series. Global Energy, examining how we can transition to cleaner energy. It is "The Global Energy
Challenge." It comes up in just 10 minutes from now at half past the hour.
A new Oxfam report says that income inequality is out of control. And it has the staggering statistic that 22 men have more wealth than all 326
million women in Africa.
Take that in. Just pause with the thought. Christy Hoffman is General Secretary of UNI Global Union. Good to see you, ma'am as always.
CHRISTY HOFFMAN, GENERAL SECRETARY, UNI GLOBAL UNION: Thanks, nice to be here.
QUEST: What do you make of that statistic? I mean, it's offensive. It's dreadful. It's awful. But it's a fact.
HOFFMAN: Well, the problem with that fact is it's a continuation year-on- year. Every year it gets worse. Every year, it's one of the top risk factors in Davos and it's time to do something about it.
QUEST: What?
HOFFMAN: And I want to raise our -- my issue is I represent working people. There's no solution to income inequality without worker voice
collective bargaining at the core. There is -- it is very important, it may sound old fashioned, but unless we can have bargaining that thrives, we're
not going to take the steps we need to do to protect our democracies, social cohesion, and even build the consensus that it takes to take on
climate change.
QUEST: Do you think you're making progress convincing companies about the necessity? Has there been a turn because for so long, the idea of
collective bargaining was an anathema and still is too many companies.
HOFFMAN: I think where we're making progress this year is that the OECD, the ILO, the global deal, all came out with very comprehensive reports
saying the data is clear. Bargaining goes down, income inequality goes up. Bargaining goes down, societies have slower growth, less strong outcomes,
unable to weather the economic ups and downs, better for gender. There's a lot of evidence.
So the question --
QUEST: The evidence may be there, but are those who need to take the decisions to move your agenda forward being successful?
HOFFMAN: I think you're seeing some progress in some countries where leaders are waking up to the fact that this is bad for our society. But no,
we're not seeing enough progress. And that's why we're talking about it more. You know, that's why it's becoming a bigger issue on the global
stage, because as bargaining goes down, we're going to have the same problem year after year.
QUEST: Does it bother you that Jeff Bezos is worth $130 billion in the sense of, we can see how he got it. He happened to have the shares in the
company that went up on the stock market. Same with Bill Gates and Microsoft, you see how they got it?
HOFFMAN: It's terrible that -- we see how they got it. On the other hand, with this amount of wealth, Jeff Bezos, he has more wealth than one could
have even imagined, you know, 10 years ago, 20 years ago. And Amazon is a problem. Amazon is a problem.
They collect all the data without -- they've got the data. They've got the monopoly power across the platform. They've got workers that are you know,
force to --
QUEST: Do you still buy from them?
HOFFMAN: Actually, I will say, I live in Switzerland. I don't buy from Amazon. But of course people buy from Amazon.
QUEST: But you do have a point.
HOFFMAN: My kids buy from Amazon. I'm not saying Amazon doesn't provide a service. I'm saying they can't own the platform and sell the products that
they own as well at the same time.
QUEST: It's a -- there's a difference in this year's Davos, isn't there? I was saying it to John Defterios. It's not about the economic crises left or
right. It is more guttural in the sense of, it is the environment. And people, even CEOs are determined to come here and grasp it.
HOFFMAN: Yes, I mean, the environment. It's also -- look, we've got social upheaval. We've had the age of anger, where we've had people on the street
every month for the past how many months more so than any time in the post war period of amount of street protests happening.
There is a sense of urgency this year that it's like, this is an emergency. We have to do something about it, and that's why we want to say we've got
to deal with inequality.
QUEST: Which arguably, is the rationale. I mean, Klaus in the interview, he makes it clear, all of this hoopla of parties and this, that and the
other is not really what it's about from him and from most people. It's is about what goes on in the Congress center.
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HOFFMAN: Right. I think that's fair. But at the other -- on the other hand, there's a lot of words, we need action. We need rules. We need
action. This is a -- you know, we are skeptical on my side that the businesses are going to do this just sort of as a race to the top.
QUEST: Skeptical or cynical?
HOFFMAN: I think, maybe a little both, but I'll go with skeptical.
QUEST: Good to see you. Thank you.
HOFFMAN: Thank you.
QUEST: As always, Christy. Thank you very much indeed. Now, think about it. The way we're transmitting to you is digital. No more paper. My scripts
are coming digitally on a tablet. It's digital. It is different and there are risks that go with it.
Deep fake is on the agenda.
(BEGIN VIDEO CLIP)
QUEST: Deep fake, creating a reality that never was. It's much on the minds here at Davos. I'll show you what I mean. Glasses off. Neutral look.
How about George Bush? Or how about Leonardo DiCaprio? Or Will Smith?
The former Prime Minister. You get the idea. What's real and what is not.
Theresa May, George Bush, Leonardo DiCaprio, Richard Quest, CNN, Davos.
(END VIDEO CLIP)
QUEST: And tomorrow, on Tuesday, the President and Greta, not face-to- face, but pretty close as the environment goes right to the top of the agenda here. We'll have coverage.
Also, there's the impeachment trial which takes place. I'm Richard Quest in Davos. As always, whatever you're up to in the hours ahead, I hope it's
profitable.
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