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Quest Means Business

Zelenskyy Calls For Maximum Sanctions On Russia; Yellen: Trump-China Tariffs Do More Harm Than Good; WEF Founder: Personal Interaction Creates Trust; Russian Soldier Convicted Of War Crimes Gets Life Sentence; Two People Dead, 120 Injured In UAE Restaurant Explosion; New Australian Prime Minister Anthony Albanese Sworn In. Aired 3-4p ET

Aired May 23, 2022 - 15:00   ET

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

[15:00:16]

RICHARD QUEST, CNN BUSINESS ANCHOR: It is nine o'clock in Davos in Switzerland. The markets are up very sharply. It's all because President

Biden said he might lift some tariffs on Chinese goods, up like a rocket and never looked back, a sea of green. We might be at the best of the day.

Let's see if that holds.

The markets and the main events, which are in a completely different genre.

The IMF is warning that the layering of crisis upon crisis is darkening the outlook for the global economy. President Zelenskyy calls for maximum

sanctions against Russia. He told Davos there needs to be full oil embargo and a total withdrawal of foreign companies.

Also --

(BEGIN VIDEO CLIP)

KLAUS SCHWAB, FOUNDER, WORLD ECONOMIC FORUM: The mood will be much more serious, much more concerned compared to the previous years because we are

at the turning point of history.

(END VIDEO CLIP)

QUEST: Professor Klaus, the founder of the WEF explains to me why he believes the meeting has never been as important as it is now.

We are live from Davos. It is Monday, it is May the 23rd. I'm Richard Quest, and in the rain without the snow. I certainly mean business.

Good evening from Davos where there may be no snow, but the weather is truly appalling tonight. Gorgeous day, and then as you can see now, teeming

with rain. So I do apologize in over the course of the next hour I get more and more wet as I try to stay warm.

But there have been stark warnings here in Davos for the world leaders who are at the Swiss mountains. The IMF says that the global economy is facing

the biggest test since World War Two. The firm said the world is facing what it is calling a confluence of calamities, including market volatility

and inflation and the results could be dire for global hunger warning of ongoing disruptions, in least by the pandemic.

And of course overarching Russia's war on Ukraine. Ukraine's President opened Davos with a keynote speech, it was for a plea to end the war. He

was speaking from Ukraine when President Zelenskyy called for a full oil embargo against Russia. And he told the audience the world must act now

without any economic restraint.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): Do not wait for fatal shots. Do not wait for Russia to use special chemical and

biological and God forbid, nuclear weapons. Do not create an image in the aggressor's mind that the world won't repel enough.

You need to straightaway apply maximum effort to protect the freedom and the normal beneficial for everyone in the world. This is what sanctions

should be, maximum in order for Russia or any other potential aggressor who wants to wage war and its neighbor to know straight away what the result

will be.

(END VIDEO CLIP)

QUEST: On the ground here in Davos, the Ukrainian delegation has been making the point very strongly just up the road on the Promenade, there is

the Ukraine House, which one can visit.

The country's former Finance Minister I met outside the Ukraine House and she told me she's working with business and political leaders to further

isolate Russia. Natalie Jaresko said this year at Davos, it is Ukraine's war that is by far the most important issue.

(BEGIN VIDEOTAPE)

NATALIE JARESKO, UKRAINE FORMER FINANCE MINISTER: It's the most significant because it does affect the entire world, the whole world

economy. We're off to often than not thinking about this as a Ukrainian and Russian problem, somewhere over there in the east or somewhere up there in

the north. But this is something that's going to affect fuel, food, logistics, supply chains.

And in essence, what is happening in the economy now is going to be the beginning or the continuation of a deceleration of globalization.

QUEST: Do you worry that nobody will say it publicly, but it'll just happen, the world will move on, the war will drag on, and somehow the

impetus of supporting Ukraine will become just one of quote "one of those things."

JARESKO: No, I'm not worried because I think with every day the world is going to see that this is going to affect everyone else. Putin has not just

declared war on Ukraine, he has declared war on all of the hungry people in Africa, the Middle East, in Asia. He has declared war on our global

economic system, and with each day, we're all going to realize that with greater and greater intensity, and that's going to return everyone to

ending this war and ensuring that Ukraine prevails.

(END VIDEOTAPE)

[15:10:16]

QUEST: Now, President Zelenskyy, in his speech today proposed seizing -- using seized Russian assets to compensate the victims and to help the

reconstruction effort. He says that effort will be necessary and will need to be of historic proportions, there will be significant opportunities.

(BEGIN VIDEO CLIP)

ZELENSKYY (through translator): I want you to take part in this rebuilding. The amount of work is enormous. We have more than half a

trillion dollars in losses, tens of thousands of facilities were destroyed. We need to rebuild entire cities and industries.

(END VIDEO CLIP)

QUEST: Now with me is Odile Renaud-Basso, the President of the EBRD, the European Bank for Reconstruction and Development, who've committed more

than $2 billion to help build Ukraine.

Were you surprised when President Zelenskyy today said specifically, use the Russian assets, there will be massive opportunities for reconstruction?

ODILE RENAUD-BASSO, PRESIDENT, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, No, I was not surprised. This is not a new issue. The assets -

- the question of the asset has been already put on the table, it triggers -- it's not easy. I think it triggers a lot of question on the legal

ground, and on the opportunities for reconstruction, I think when the time comes, indeed, reconstruction will represent a huge effort, but also a lot

of investment in order to rebuild the country, but also to be better with a green transition, better institution, and so forth.

QUEST: How much -- I mean, do you have any numbers yet on what you believe the damage is?

RENAUD-BASSO: Very difficult to have an evaluation. I think physical damages are estimated now destruction on infrastructure, housing, and so

forth, something between $90 billion. When you look at the overall costs, you know, the loss of growth, human damage and so forth, it is I mean --

the Ukrainian claim $500 billion. So it's huge in any case.

QUEST: Right. It's huge. So what do you see your role as?

RENAUD-BASSO: First of all, the $2 billion package you mentioned is to support Ukraine now in the context of the war.

QUEST: So what is it going for?

RENAUD-BASSO: We are supporting the economy: financing gas, financing electricity company, railway company, private sector to continue with, for

example, agribusiness, food, retail, pharmaceutical also. We are supporting the Ukrainian economy now and companies now.

But of course, we also prepare for the reconstruction, then the need will be much bigger than $2 billion.

QUEST: Right, and you'll have to obviously recapitalize and obviously, there will have to be a major capital raising operation.

RENAUD-BASSO: Yes, I mean, let's see how it goes. Let's see how it will be structured. But we will need in any case, support from shareholders and

from donors.

QUEST: if we look elsewhere in the region, because the EBRD has many projects. Moldova, the whole region, Poland -- all the countries that are

affected by what's taking place, how do you see that's going to hit you?

RENAUD-BASSO: I mean, on this country, we believe these countries will be hit, but it's not going to have I mean, at least what we see in the

affected countries, we have opportunities to finance them, to support them. We don't expect major loss on our portfolio, because the economy are still

going on.

What we see is a very limited market appetite, very difficult for companies, for example, to raise bonds, to go to the market and so forth.

So we see our additionality being increased by the situation in these countries and neighboring countries. And we also need some support for

refugees helping municipalities, for example, to cope and to develop housing infrastructure for the influx of refugees.

QUEST: I often worry that, the multilateral lending organizations, there are so many of you, the EIB, the EBRD, the World Bank. How are you all

going to sort out who does what?

RENAUD-BASSO: I mean, currently the roles are quite clear. The World Bank, EIB, IMF, they are reporting the budget for Ukraine, so providing money to

the government to pay the civil servants, to pay the pension and so forth.

We are more focusing on this report to the real economy, the private sector and the key infrastructures. So it's quite different, both are useful and

both are needed.

QUEST: Right. But what do -- I mean, you know, the EBRD, to a large extent is sort of -- has been around -- I remember when you started, of course and

this in some sense is, is what you are intended for.

I mean, this is exactly the reconstruction thereafter. I mean, God forbid it has to be because of a war.

RENAUD-BASSO: Exactly. I mean, and that's is very heartbreaking for EBRD because we've been working in Ukraine for 30 years, providing a lot of

investment, developing the country and so forth. And now probably we will have to start again, with a lot of new investment.

We see a lot of project for example, we were supporting Mariupol Railway and it has been destroyed them, so all these will have to be redone again.

[15:10:07]

QUEST: Now, you've been to Davos before in the snow. The one thing people talk about here is -- as you can see, there's no snow at the moment,

obviously, well, there's a bit up there at the top -- the question that we're asking this year, snow or -- come over here, come and join me -- snow

or spring? Which would you prefer to have there?

Would you prefer it in the snow when we're running up and down mountains, or in the spring when we're getting wet?

RENAUD-BASSO: I think I would like the spring, but with sun, as it was a bit earlier today.

QUEST: Make your note there and put a sun.

RENAUD-BASSO: Sun, okay.

QUEST: Thank you very much.

RENAUD-BASSO: That's great. Thank you very much.

QUEST: Good to see you. Thank you very much indeed.

RENAUD-BASSO: Thank you very much.

QUEST: For joining us. I appreciate it.

The spring and the sun, we will be finding out all week. And the reason I'm asking this, of course is, it's one of these discussions that's taken place

in every dinner at all receptions because it's so unusual to be here without snow, that everybody say well, why don't Davos just make it into

normal in the middle of May?

The markets are rallying sharply on the prospect of lower tariffs. President Biden is considering easing them when he returns from Asia and

the Treasury Secretary, Janet Yellen says the move could help lower inflation.

The Dow is up over two percent. We are up nearly the best of the day. It has been down for eight straight weeks. The NASDAQ is up almost one

percent, although it is still firmly a bear market. The S&P is as you can see also up nearly two percent.

Rahel Solomon is with us. Good to see you, Rahel.

So what changed the sentiment? Is this just simply after the last month of losses, something had to give?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, Richard, you know, for weeks we have been talking about in the midst of this freefall and this

selloff, what would it take to see some green on the screen? And investors that I spoke to said some positive news, and it seems like today, we just

might have gotten it.

Yes, there was comments from President Biden indicating that he may ease or look into easing those Trump era tariffs to hopefully alleviate some of the

inflation that U.S. consumers and businesses are experiencing was enough to send markets in the green and they have been so throughout the day, as you

have mentioned.

One estimate, Richard, puts easing those tariffs, saying that that would ease inflation CPI by 1.3 percent or about $800.00 per household. That stat

coming from the Peterson Institute for International Economics.

As you know, Richard, inflation is President Biden's top priority, but it is also the top priority. I would bet for most Americans who are dealing

with it. So, that was some good news. We also got some --

QUEST: Rahel, so is there a feeling that sentiments changed? I mean, I know you're one swallow does not a summer make, but is there a feeling that

the bottom has been hit? Or would be way too risky to make that assessment?

SOLOMON: You know, I think only time will tell, but in terms of whether a sentiment is shifting, we got some glass half full comments today from

Jamie Dimon, the CEO of JPMorgan saying that, look, you've got the strong economy here in the U.S. and calling them storm clouds, what we've been

experiencing in the market saying that he is calling them storm clouds, because they may dissipate.

So to your point, Richard, yes, one comment from President Biden perhaps is not going to shift sentiment. But then you get some comments from Jamie

Dimon who yes, when he speaks the world listens, certainly American investors.

QUEST: Rahel Solomon joining us from New York, apologies, you dropped in and out of my ear, so I wasn't entirely certain whether you'd finish, but

we'll sort that out next time.

Thank you, Rahel.

Coming up next, an uphill struggle in more ways than one, a closer look at the challenges facing leaders this year in Davos.

(COMMERCIAL BREAK)

[15:16:41]

QUEST: It is two and a half years since world leaders and CEOs and the like all gathered here for a WEF.

Normally of course, it is January.

Now, they did actually try to do it in Singapore, that went out the window. Then they tried to it in January of this year, and omicron got in the way

of that, and they had to cancel it very later in the day.

But suddenly, the race was on to have a WEF in May. They will be trading snow for sunshine. However, it is not only the weather. Wherever you look

in Davos this year, everything is different.

(BEGIN VIDEOTAPE)

QUEST (voice over): The Davos we have known for decades, battling up the mountain in snow, to improve the state of the world.

It is not rocket science to tell what's different at Davos this year.

(on camera): So where is the snow?

This is WEF from Davos. There should be snow.

(voice over): This year's WEF is less "Station Zebra" and more "Sound of Music." Everything from the place to the geopolitics is different, often,

in dramatic ways.

(on camera): This is Cafe Schneider normally. It is an excellent cake shop here in Davos. In recent years, it has been taken over by India, which is

still here now and also, Russia. This was the Russia House.

Well, look closely. It is sort of the same, but different.

Now, it is the Russia Warcrimes House.

(voice over) Ukraine has its own place of honor in the prestigious Promenade.

(on camera): I guess this is one thing that will never change in Davos. How many limos does it take to improve the state of the world?

(voice over): Besides the war, there is a raft of economic issues on the agenda. High inflation, higher interest rates, lockdowns in China, the

possibilities of recession.

(on camera): Over the years, in winter, I have used just about every analogy and metaphor you can think of for skiing in the global economy.

The mountain is in a dreadful condition, and arguably, the global economy is exactly the same.

Like the global economic system, this snow is not fit for the purpose of building a snowman.

There is always the risk in the global economy that something goes wrong.

Now, with Davos in the spring, I've got a whole new vehicle to play with.

So, my mountain bike is the global economy, it has got all the mod cons you can think of. Power to drive it forward when needed, interest rates are

brakes to slow things down, when it is too hot; the latest technology, it is all here.

We think we know what we're doing and then you look at what's ahead. A hard slog to get it right.

[15:20:19]

This is why the next few years are really going to be so difficult. Because no matter what policy action is taken, there are going to be huge

challenges, ramifications, difficulties, but eventually, we should be in a good position to carry on the hard work.

In the end, it doesn't matter whether it is snow or spring, the challenges are ahead, and we've just got to stay the course. If we do that, there will

be smooth ground ahead.

(END VIDEOTAPE)

QUEST: Now, the Founder and Executive Chairman of WEF, Dr. Schwab -- Professor Schwab says, this year's event is more important than ever, given

the challenges that the world is facing.

Klaus Schwab says it is crucial that leaders meet in person, as it helps create trust between them.

(BEGIN VIDEOTAPE)

SCHWAB: You see, every day, how the world is falling apart. There is a different crisis, which we have to manage, and you can exchange in small

circles, ideas. You can take certain decisions, but it was so important to bring the global community, the global stakeholder community together in

person again, because it's only the personal interaction, which creates trust, or which recreates trust.

QUEST: Isn't the reality, though, that everything that Davos stands for is on the verge of failure? Give you an example: Number one, the war in

Ukraine. All the idea of some sort of common views on a European way forward. Number two, China unilaterally shut down. Everybody else is open.

Number three, we're failing on our climate targets. So what's the purpose?

SCHWAB: First, Davos never has been as important as it is now, particularly for the reasons you mentioned. We cannot prevent a war in

Ukraine. We cannot take away COVID and so on. But we can create coordinated responses to those challenges. And so that's what we are doing, and those

challenges need the cooperation of business, civil society, and of course, mainly politics.

QUEST: Right. So why didn't you invite Russians? Because if dialogue is so important, then wouldn't it have been better to have had those non-

sanctioned Russians at the table?

SCHWAB: You are right, but at the end, the decision what Russia will do depends on Putin. And you have seen Guterres, Macron and so on trying to

build a bridge. So time is not yet right. But we are ready, and we have announced it. As soon as the time is ripe, to offer our bridge building

capabilities again.

QUEST: The bridge building capabilities will be important. Yes. But don't you need a moment of introspection to ask how did it go so wrong? How did -

- Davos and when I say Davos, I don't mean you personally, I mean, the community -- spent decades trying to bring Russia into the global community

and be part of the global community, only for President Putin to literally go the opposite direction and start a war.

SCHWAB: Yes and we regret it, but if you look at global affairs, some certain developments go into the right direction, and even reform and even

Davos cannot prevent certain issues are not developing as we would like have them to do.

QUEST: In that sense, it is going to be more difficult because we're also entering economic, great difficulties, truly awful times. We've got

inflation, the likes of which we've not seen for 40 years.

SCHWAB: Yes, we are, apart from all the political conflicts, we have a global economy which is out of balance, and what I want to highlight

particularly here is the consequences.

[15:25:00]

We may have little influence on how the Central Banks decide about the future policies, but we know that if we don't change course, we will have

hundreds of millions of people falling back into poverty. We have tens of millions probably dying possibly of hunger, this is a misery and we have to

address it. So to bring it to the forefront of our topics here of our program, and to generate action, that's my intention.

QUEST: There has never been a more important time and a more serious time for these talks to be taking place.

SCHWAB: Yes. Such also reflected in the mood. I mean, it's the most consequential meeting which we ever had in the last 20 or 50 years, I would

say. And the mood will be much more serious, much more concerned compared to the previous years, because we are at the turning point of history.

(END VIDEOTAPE)

QUEST: Turning point of history. We'll talk more about it as we continue tonight from Davos.

In just a moment, walking a tightrope on Taiwan. President Biden's comments today have taken many by surprise.

QUEST MEANS BUSINESS live from Davos.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is a great deal more QUEST MEANS BUSINESS this evening from Davos. President Biden says the U.S. could

respond with military force if China were to invade Taiwan. Now, his administration is walking back those comments.

Also still to come, the Chief Executive of Bain & Co., his take on the prospect of a recession in the United States.

We'll get to all of that but only after I've given you the news because this is CNN and on this network the news always comes first.

[15:30:04]

A Russian soldier is being convicted of killing an unarmed civilian, and now could face life in prison. A court in Kyiv found the 21-year-old tank

commander guilty in Ukraine's first war crimes trial since the Russian invasion. The soldier had pleaded guilty last week. That said he was only

acting on orders.

At least two people have died in Abu Dhabi after a gas cylinder exploded in a restaurant. Police say the blast injured 120 people who have been taken

to hospital for treatment. Several buildings were also damaged and evacuated in the fire explosion.

Australia's new prime minister was sworn in today, Anthony Albanese's election marks the end of nine years of conservative rule over the country.

Mr. Albanese at the Labour Party has vowed to tackle climate change and inequality. They'll be meeting his allies in Japan this week, and says he

expects Australia's relationship with China to remain difficult.

White House aides say President Biden surprised his own administration by promising to defend Taiwan. It was a news conference in Japan, when the

president said he would respond militarily if China tried to invade the island. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You didn't want to get involved in the Ukraine conflict militarily for obvious reasons. Are you willing to get involved

militarily to defend Taiwan if it comes to that?

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Yes.

UNIDENTIFIED FEMALE: You are.

BIDEN: That's the commitment we made. We agree with the One China Policy, we signed on to it and all the attendant agreements made from there. But

the idea that can be taken by force, just taken by force is just not -- it's just not appropriate.

QUEST: Now, after that remark, the White House said that the United States remains committed to the One China Policy under this agreement, the U.S.

acknowledges Beijing's position that Taiwan is part of China. At the same time, the U.S. provides Taiwan with defensive weapons. It's long been

ambiguous about whether it will go to war with China if it attacked its neighbor.

This isn't the first time President Biden has raised eyebrows due to a slip of the tongue. Now in March, he said that Vladimir Putin, in his words,

cannot remain in power following the invasion of Ukraine. The White House quickly clarified that he meant that the Russian leader should not be

allowed to exercise his power in this way, and that he wasn't talking about regime change. In the same month, Mr. Biden appeared to suggest American

troops would be sent to Ukraine.

The White House made it clear again, that was not the case. And then last year, in a CNN Town Hall he suggested he was considering using the National

Guard to the supply chain concerns. Will Ripley is in Tokyo with more on President Biden's visit. Will Ripley is with me now. All right. So, what

will they make of it? What is -- what will they -- the ambiguity that he has created the -- with this, where does it leave policy, Will Ripley?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, you know, it was also at that same CNN Town Hall you mentioned, Richard, back in October, when

President Biden said earlier that U.S. troops would get involved, potentially the U.S. military would get involved if China were to make a

move on Taiwan, to attack Taiwan. So this strategic ambiguity question President Biden has now thrown into question at least three times which

raises the question, is it -- is it really a gaffe or is it deliberate?

Is it deliberate signaling on the part of the U.S. president to his counterpart Xi Jinping in China, that hey, even though we technically have

this policy of strategic ambiguity, my aides are going to walk this back. I'm letting you know, the U.S. military is going to get involved if you go

too far, and trying to take back that self governing island of Taiwan that you have claimed as your own territory and coveted for more than 70 years,

but the communist rulers have never controlled, Richard.

QUEST: Now, Will, let's turn to the actual issue of Taiwan where of course you're now based. And how realistic is the fear of China actually

militarily taking over or doing? Now look, they may do disinformation, their major cyber attacks, but if you're talking about a military attack,

give me the view from Taiwan.

RIPLEY: Well, certainly the view for U.S. intelligence as of a couple of weeks ago, Richard, was that China is actively working towards a goal of

being able to take Taiwan militarily with or without U.S. intervention. And that is obviously very troubling for the leadership in Taipei. They

continue to invest billions of dollars in weapons from the United States. They're being encouraged to invest to evolve their military from a more

traditional models to this asymmetric warfare where they can fight back the way that the Ukrainians have been fighting back against the Russians.

[15:35:12]

Take down big ticket items, big ticket weapons with less expensive but more effective missiles and whatnot, and continue to train and continue to

prepare for the possibility of a military conflict. Taiwan feels a little more secure because they have the semiconductor industry, they have TSMC,

the world's leader in chip manufacturing that powers everything from our smartphones, to our cars, to our computers.

But Taiwan also knows that soft power if you will only get them so far if Xi Jinping of China at some point just decides it's time to move in, it's

time to take Taiwan which China -- Chinese communist rulers believe is rightfully theirs.

QUEST: And you'll be there to help us understand more. Will Ripley, thank you in Tokyo now but of course, based in Taiwan.

Global leaders are confronting the possibility of a coming recession. But everyone says that there can be a soft landing but will (INAUDIBLE) Well,

the U.S. president of the German finance minister have been talking about. Back in a moment.

(COMMERCIAL BREAK)

QUEST: Today, the U.S. president and the managing director of the IMF and the German finance minister all warned of a potential recession that could

be on the horizon. And as the recession, warnings emerge, we look at past downturns for insight. I sat down with the chairman of DAMAC Properties in

January. Remember when I was in the UAE and he told me what saved his business during the 2009 recession.

(BEGIN VIDEOTAPE)

HUSSAIN SAJWANI, CHAIRMAN, DAMAC: The most important reason was admitting that I am in a mess. Very few people admit that they are in a problem. As a

matter of fact, a lot of my competitor at that time, they thought it is a summer cloud. And they said in the press -- I admitted, this is a crisis.

And I have to move fast. So admit there is a crisis, and take quick decisions, and be brave enough to make a surgery.

(END VIDEO CLIP)

QUEST: Sound advice from Hussain Sajwani who's with me now. Good to see you, sir.

SAJWANI: Good to see.

(CROSSTALK)

QUEST: -- join us.

SAJWANI: Thank you.

QUEST: The property market is often seen as a barometer of this. A new build on a large scale. Do you think that we're heading to recession? Do

you see a downturn in valuations?

SAJWANI: Yes, I see a recession especially in Europe.

[15:40:02]

All the indicators saying that high inflation, high interest rate and the war. And a lot of property, all the property companies in Europe versus

America which is different, they revalue that asset every year. And they go borrow against that. Now as their value comes down the pressure away from

the bank, that they have to pay some of the debts, and they will be forced to sell.

And today, most of the people believe there is a recession coming. So everybody's holding from buying assets, including myself.

QUEST: You're not -- you're not in the buying at the moment.

SAJWANI: No. Everybody holding himself thinking in 12 months will be better buys. So whenever he does that automatically price is going to come down.

QUEST: So this is classic deflation. I mean, we know that we have inflation, but if you -- if you believe that prices of assets are coming

down, you're going to hold off until you do it.

SAJWANI: Yes. And I talked the last -- dozen people in the last one, two days. And they all agree to say.

QUEST: But as a property developer, do you worry about higher interest rates because that will feed directly into your borrowing cost?

SAJWANI: That's true. That's true. In Europe, there will be -- I think property prices will come down. And all of these stock prices of property

companies are coming down, and there'll be impact. My -- I am lucky in Dubai, I think we're going to benefit out of that. Because a lot of money

flying around the world to Dubai and Dubai (INAUDIBLE) doing well. And a lot of high end is coming where people buying homes for long term, nothing

like before this, then as a speculator. So, for them interest rate is a secondary factor.

QUEST: You of course have assets and buildings around the world. What is it you now need? What is it you now need as a developer? As a -- as very

successful businessman, what is it you want?

SAJWANI: I want to buy assets in Europe, hopefully in 12 months from now, when the asset price is going to be more reasonable.

QUEST: You've just bought an extraordinary asset. You bought the land upon which the property collapsed in Florida?

SAJWANI: Yes. Well, it was a good piece of land. It's a super location. It was from the court. So we have no issues. No lawsuits. We buying it from

the court very clean. And we've put a bid on it, very good bid $120 million.

QUEST: A hundred and twenty million.

SAJWANI: Yes. And I think that price is very reasonable for that location.

QUEST: What would you -- what would you put on that?

SAJWANI: We're going to put five-star or six-star condos, you know, beautiful apartments designed by Cavalli.

QUEST: But you don't have any qualms about building on a property where there has been such loss of life or where there was such tragedy? You don't

use -- that doesn't -- doesn't concern?

SAJWANI: No, it's not a matter of concern. As a businessman, you buying a piece of land from the court, and you building something. If you don't do

it, somebody else will do it. And we're not doing anything wrong. We're going to build something beautiful there. You know, and we will talk to the

community and we'll put something for the, you know, the people who passed the (INAUDIBLE)

QUEST: And it's not -- it's not important to you to have some sort of memorial or some sort of remembrance.

SAJWANI: Exactly.

QUEST: There seems to be a new -- a new feeling here at Davos. It seems to be more serious, it seems to be a deeper feeling. Can you feel that here?

SAJWANI: I think the feeling -- everybody's talking about recession. And I said, even if the fundamentals are -- the fundamentals are supporting it.

But even if fundamentals don't support when Tony businessman out of 30 say we're not going to buy anything the coming 12 months, the recession is

going to happen automatically. Everybody's saying just check access, check access to cash.

QUEST: And that's also the problem, isn't it? That is a classic problem of the self-fulfilling prophecy. And it's the same with the market. I mean,

we're up to date 600 points, but you can't have the market down 20 percent. And there are not be a recession on the other side of it in many ways.

SAJWANI: This one day going up is typical in the market, going up one day and then go down three days.

QUEST: Right.

SAJWANI: It's not -- it's not a straight (INAUDIBLE)

QUEST: So how many times Davoses have you been to?

SAJWANI: More than a dozen now.

QUEST: Sorry?

SAJWANI: More than a 12.

QUEST: You're in this now?

SAJWANI: Yes.

QUEST: So the question we're asking this year, because in every dinner party, people who come regularly -- come with me, say, do they want the

snow? Would you prefer Davos in the snow or Davos in the spring?

SAJWANI: I will -- I will give my choice one condition.

QUEST: Go on.

SAJWANI: If it's a democracy and the majority prevail.

QUEST: You need to tell Mr. Schwab.

(CROSSTALK)

QUEST: Oh, look at this.

SAJWANI: A hundred percent.

QUEST: Really?

SAJWANI: Of course, you know, in the snow you can't walk, it's uncomfortable. You can try if --

(CROSSTALK)

QUEST: You don't think that there's a certain camaraderie, a certain energy. Oh.

SAJWANI: No, in the snow, if I want to go to ski resort, I'll go with -- I'll go every year with my family. But here, you need to -- people in to

move around and it's uncomfortable.

QUEST: It is good to see. I'm grateful that you've taken time. Thank you very much indeed.

SAJWANI: Thank you.

QUEST: Coming up next. The chief executive of Bain and Company on how global business should respond to the myriad of crises. And where will he

go? Is he a snow or a springer? The question of the night. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[15:47:35]

QUEST: The German economy minister has warned simultaneous crises are threatening to take the world into recession. Robert Habeck said leaders

need to address inflation and food shortages immediately. He was speaking to Julia Chatterley. It'll be difficult to navigate all the issues at once.

(BEGIN VIDEOTAPE)

ROBERT HABECK, GERMAN ECONOMY MINISTER: Well, it's demanding, I would say because we have high inflation. We have an energy crisis, we have the

climate crisis as well. So we can't -- we can't solve the conflict about the energy and sharpening the conflict about the climate crisis. And then we have a coming crisis of food

security.

JULIA CHATTERLEY, CNN INTERNATIONAL CORRESPONDENT: They're all connected.

HABECK: They're all connected. But if you are only concentrating on one issue, then you lose you -- you lose the other ones. So, it's quite a

maddening situation. But -- I mean, politics is mainly about finding solutions, and we can act, we are human beings, we can find a solution. And

this forum, I think, is one step for an extricate of solutions.

CHURCH: Is -- at least in the short term, global recession some kind of recession inevitable or can we avoid it?

HABECK: No. Nothing is inevitable. We are human beings, we can change the course of history. There is a threat of a global recession. But there are

also solutions on the table. I mean, the inflation is raised by the war and the war has increased the speculation and the demand for energy. So, if we

have more energy on the market, fossil energy from other suppliers and renewable energy, then we -- energy efficiency, so if we save some of the

energy, then we -- smoothing the inflation. So it's possible to do it.

(END VIDEOTAPE)

QUEST: President Biden speaking in Tokyo. He was talking about the pressure Americans are feeling from inflation. Gas prices are up seven percent on

average just over the last two weeks alone. And the president said he's trying to provide some near-term relief.

(BEGIN VIDEO CLIP)

BIDEN: This is going to be a haul, this is going to take some time. But in the meantime, this seems to me the best thing I can do in addition to try

to get the Middle Eastern countries including OPEC to raise the production of oil and move along that route, is to see to it that we continue to grow

our economy. Create jobs.

(END VIDEO CLIP)

QUEST: Manny Maceda is with me. He's the CEO of Bain and Company.

[15:50:02]

It's good to see you, sir. Thank you for joining us. The issue is really one of -- do you see recession? Do you think that the Fed will avoid a

recession?

MANNY MACEDA, CHIEF EXECUTIVE OFFICER, BAIN AND COMPANY: I'd say, expansion cycles don't go forever. And so, the question is yes, you know, this will

come to an end. The question, is this the end of the cycle, as it always does? Or is the end of the long, long term supercycle that we've been in?

So it's just -- it will self correct. And we will go through it. Question is really when? Not if. And that's -- I think that is -- that is the

question.

QUEST: But just taking what our previous guest, Mr. Sajwani was saying, you had these massive dislocations, which eventually take a toll on psychology.

What are your clients telling you?

MACEDA: They are anticipating all different scenarios, you know, not that long ago, 28 months ago, we were in the same place, optimistic trying to do

PSG. And we've seen so much shock in the world in the last 2-1/2 years, that the first thing to think about is not -- if there's going to be a

recession. It's how do we -- how do we plan and have strategies that can achieve our long term goals which we're still trying to do but also

navigate the next quarter, the next six months?

And that's the -- that's the balance everyone's trying to figure out. Even in all the halls of this conference two days in,

QUEST: Do you feel there's a difference here at this year's Davos? Can you feel a difference in that -- there is a series -- I mean, obviously, the

war is a -- is a crucial aspect to this, the most (INAUDIBLE)

MACEDA: I think the war, COVID, there is obviously -- we're happy to -- the world is getting back together to some degree that once when we saw the

pandemic, versus 2-1/2 years ago, but absolutely, it's a very -- it's a very different sentiment, you know, it's -- everything is weighing on us in

a way that we have to solve so many problems at the same time.

QUEST: Right. And that solving of so many problems at the same time. It's created an overload. And I wonder whether the system can cope with it.

There seems to be an anxiety in the system that we've never seen before not for a long time.

MACEDA: There is anxiety, there is pessimism, there is also optimism in the various sessions I've had. Partly because we did navigate the last 2-1/2

years, you know, a lot of things that we actually didn't think we could do during the COVID time. They've had to work virtually, get the benefits of

digital transformation, perhaps make some progress on ESG, before the war started 90 days ago. So, there is -- there is anxiety, but there's

underlying hope.

QUEST: But what's the one thing that most of your clients are coming to you for? What is it the one thing the nirvana that they are seeking you give?

MACEDA: Resilience and strategies. Nobody -- given everything that's happened now, these are not black swan events anymore. You know, shocks

will continue to happen. So, if we can have a strategic plan or initiative for the next few years that can adjust for the next pandemic, for the next

war, for the next inflationary cycle.

QUEST: Like can we? Can we? Isn't it the nature of these things that you can't plan for them?

I mean, this time last year.

MACEDA: Yes.

QUEST: If I'd said to you, well, China was still being lockdown. And there'll be a war in Europe, you would have said, well, that might happen,

Richard, but what do you do about it?

MACEDA: Well, it's not necessary just planning for one outcome, for one scenario, if you can plan for multiple ones, and have the ability of

organizations to pivot fast enough, you know, the speed in which we dealt with a pandemic, the speed in which we moved from working physical to

virtual, the speed in which companies chose to pull out of Russia. All of those our ability to react fast.

And if you can do that, that's what -- that's what they want. They want to be able to handle shocks not fully predict them.

QUEST: And on this question of Russia, I'm guessing it's going to be many years before companies will be going back in, because even if the war were

to end, the sanctions aren't going away anytime soon. I'm sure that you and others are planning for a sanctions regime for the foreseeable future.

MACEDA: I think for most scenarios that says how will this war resolve itself and, you know, you're -- you can talk to all the many different

experts, there will be some kind of sanction environment for a long time to come. And so, we want to be able to come back and by the way, we want to go

back into the Ukraine too and hopefully that's a more manageable thing, and that's a very large country as well.

QUEST: How many Davoses have you done?

MACEDA: About seven.

QUEST: Seven. So you've been here at the snow. And are you a skier?

MACEDA: Grew up in the Philippines, Richard, and I never learned.

QUEST: I asked for that, didn't I? I asked for that. Come and join me at the moment. So if you have a choice --

MACEDA: All right.

QUEST: You can chose any symbol if you're going to go to that side or anything or just put a take or whatever. Would you prefer Davos in the snow

or Davos in the spring?

[15:55:08]

MACEDA: Believe it or not there's only been two days. I've already changed my mind. Sunday was a beautiful sunny spring day. And it's been raining.

And somehow, I miss the joint efforts of walking and trudging through the snow for a town that set up for snow -- for skiers.

QUEST: Good to see you, sir. Thank you very much indeed.

MACEDA: Thanks for having me, Richard.

QUEST: Quick look at the market. I'm going to show you exactly how things are trading. It is a good day. Things are strong on the market. At the

moment, we are up more than -- well, we know where we are, we've come off the top. But that's where it is. I'll have a profitable moment after the

break. QUEST MEANS BUSINESS live in Davos.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment from Davos. So, the first time we've been here in some two years and before I got here, I didn't really wonder

what was the point. Was Davos (INAUDIBLE) so desperate to get people here that we had to have a mid-year meeting. I wrote about it in an article

saying, what was the point? Now I'm here, I've changed my mind. I remember the old saying of Lord Maynard Keynes.

When the facts change, I changed my mind. Why so? What do you do? Well, that changed my mind. There is great value in us all being here because at

the moment, the seriousness of the situation is so great. Remember that line from the American President, the movie with Michael Douglas, when he

says that we have serious problems that need serious people. And I can tell you the mood here now is completely different.

There are CEOs and NGOs and there are government ministers. But there's not the frippery and the nonsense and all the hoopla that there used to be.

Yes, there's bit of it up on the promenade, but not a huge amount. Instead, people are talking about really serious issues, war, food and, hunger,

rising inequality as a result of the war and inflation that's hitting every one of us in some shape, form or description.

That's going to get worse. But I don't want to leave you on a depressing note. Because we have a week of discussions and maybe, maybe, maybe just by

the end, we'll get some idea of a way forward. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest as we start Davos.

[16:00:02]

Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.

END