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Quest Means Business
Uncertainty Casts Shadow Over World Economic Forum; Fortunes Of Richest One Percent Soar Compared To The Rest Of The World; First Winter Davos In Three Years; At Least 69 People Dead In Nepal Plane Crash; Police Arrest Mafia Boss Matteo Messina Denaro; Biden Speak At MLK Breakfast In Washington. Aired 3-4p ET
Aired January 16, 2023 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: We are in Davos in Switzerland. No trading on Wall Street for Martin Luther King Day, and so those to the
economic and business headlines.
A majority of economists think there will be a recession in this year.
The German Defense Minister resigns over a scandal.
And Richard Edelman with me tonight on the trust barometer.
We have a new snowman. The name is Marty. Marty will be with us all week, nose and all.
I`m Richard Quest with Marty at the World Economic Forum in Davos, where together, we mean business.
Good evening tonight from Davos and the WEF.
I was just reflecting: Do you know, it`s been three years since we`ve actually been here in the winter? Well, now we`re all back and the world`s
most powerful people gathered here, at least some of them up a Swiss mountain, and the object and the ambition to tackle the biggest global
It`s the first time since 2020 that we`ve been at the winter. A record 2.700 people are here, a cause for celebration, perhaps, but perhaps not
because there is also great unease in the air.
Leaders are preparing for a difficult year and there is a warning from the World Economic Forum that is adding to the anxiety.
WEF has taken the temperature of private economists around the world, the banks and the like and the grim picture there is to show, almost two-thirds
expect a global recession in 2023, and the number of people who say a recession is extremely likely has more than doubled since September to 18
The reasons we know, high prices, tightening monetary policy, dramatically so and weakened demand are factors dragging economies.
The OECD is pointing out the global economy is also reeling from the largest energy crisis since the 1970s and there are people here like me who
remember that. A few months ago, the OECD downgraded world growth to just 2.2.
So, I asked the Secretary-General, Mathias Cormann, who joined me earlier, if that number 2.2, does it still hold?
MATHIAS CORMANN, SECRETARY-GENERAL, OECD: We have not forecasted a global recession, but there are significant downside risks, which of course, we
recognize and we have pointed to, which could still eventually, but what I would say is that since our last outlook, if anything, the environment, as
far as energy prices, food prices, and so on are concerned has slightly improved.
QUEST: Do you believe there is much more monetary tightening that has to take place?
CORMANN: Well, this is not a one-size-fits-all. I mean, I think that in the US, we can see that both core inflation, as well as the headline inflation
has started to ease. While there might be some more monetary policy tightening, I think that we might be getting towards the end of that cycle,
QUEST: You think the cycle is -- I mean, we may not be there yet, but the cycle is actually coming to --
CORMANN: The US -- well, the US Federal Reserve has taken very strong action, and I know that the US Federal Reserve will continue to do what
needs to be done in order to tackle inflation, but we can see that there is an easing of core inflation, as well as headline inflation, so things
certainly are now heading in the right direction.
But in many other parts of the world, we would expect to see further monetary policy tightening, and we think that there is still quite a bit
further to go.
QUEST: Within the OECD membership, the diversity of economies give strengths and weaknesses, but if you look overall, is there a common
CORMANN: Well, I mean, the common thread is the fact that lower global growth will have an impact on economies all around the world. I mean,
trading nations around the world will sell fewer of their products and services in an economy -- a global economy that is growing more slowly, so
that is certainly a common thread.
But I mean, there are different challenges in different parts of the world. The energy crisis was particularly acute in Europe, because of a
particularly close exposure to oil and gas from Russia for example or in the United States --
QUEST: That is abating to a larger --
CORMANN: Which is abating also in the context of you know, of course, a milder winter than anticipated, but Europe has gone out of its way to
diversify supply to lower demand, through demand measures, and indeed, I mean if you look at what we thought the situation might be, it is not quite
as bad as what was anticipated.
QUEST: Right. It`s that moment. There`s lots of worries, you admit it.
QUEST: So here is the worry board. We have removed climate crisis, because everybody faces that. So on our worry board, global recession and
inflation, Ukraine and the energy crisis, COVID, China reopening, US political dysfunction, or you can write something yourself in. I know, it`s
not a one-size-fits-all, but --
CORMANN: Well, I do continue to worry about inflation and the impact of measures to tackle inflation that could have on the economy.
QUEST: Right. Something tells me you`re not finished.
CORMANN: No, and I mean, I don`t think this is -- I don`t think it`s fair to single out the US political system. I think democracies are under
pressure all around the world and the need to strengthen democracies is acute everywhere, in all.
QUEST: I think that`s -- I think for tomorrow, we might change that for democracies. You`ve already had an impact, sir.
QUEST: That is the OECD, and we will of course, be following that board. We might actually get some better handwriting on there before the end of
the week. So at least you can read what`s actually being said.
I`m surrounded in Davos here by the world`s wealthiest people, or some of the most powerful people. On the whole, they have been getting far richer
than everyone else in the last two years.
Oxfam, one of the reports that always comes out at this time of the year, says the top one percent, the fortunes soared by $26 trillion since 2020.
That means the richest people captured nearly twice as much new wealth as the rest of the world. The bottom 99 percent saw their net worth rise by
Larry Madowo is with me. Good to see you, sir.
LARRY MADOWO, CNN CORRESPONDENT: Great to see you in person.
QUEST: Absolutely. Welcome to Davos. Your first.
MADOWO: My second Davos.
QUEST: Your second Davos.
QUEST: Excellent. We would think you`d have loved to put a hat on in this cold weather.
MADOWO: This weather is disrespectful to bald people.
QUEST: With the weather, absolutely.
Look, what do you make of this Oxfam report? Because obviously, your cover Africa, where a considerable number of those people are. The wealth gap is
MADOWO: It is growing and what this Oxfam report, they are calling the survival of the richest shows that in the last two years, since the
pandemic, the wealthiest people have gotten wealthier, and so in the last 25 years, for the first time, extreme wealth and extreme poverty have
increased at a record level, more than we`ve seen ever before.
QUEST: A lot of that is because of the pandemic, people falling out of work, there wasn`t the health or safety nets.
What do Oxfam say needs to happen?
MADOWO: They say the wealthiest people need to be taxed. In some countries, the true tax rates are as low as three percent, when, for instance, a
domestic worker in Uganda, asellus (ph) pays about 40 percent in taxes, and they think this just does not work and that`s why the wealthy are getting
wealthier, while the vast majority of people are getting poorer.
So one example, in about 1.7 billion people in the world right now live in places where inflation has gone much faster than real wages. In Ghana,
inflation just hit a 22-year high, 54 percent.
QUEST: How much in some of those countries is the high inflation because of international things, energy costs and the like, and how much is
mismanagement of government?
MADOWO: A bit of both. I think there is a huge concern, for instance, in Ghana, that the government there just needs to have done a better job of
shielding people against all of these external shots, and they didn`t do that.
So I think domestically, people will be concerned that yes, governments are to blame as much as all of these other international factors.
QUEST: When African countries, leaders, NGOs come to Davos, they come with a different agenda in many ways, but at the same time, one thing I`m
always very impressed by is a recognition that they realized that there still have to be wealth generation and that tends to be from the people who
MADOWO: And they come to promote, no you must come to Somalia, you must come to the Gambia, to Nigeria.
QUEST: But they want to invest, they want investment in those countries.
MADOWO: They want investment and they know that all those people here, the people with a big checkbooks are here they want them to write them to their
specific countries,. And that`s why there is concern about people who are not here such as President Cyril Ramaphosa who cancelled at the last
QUEST: Right. I was just about to say, he is not here. He says he is not coming because he`s dealing with a deepening energy crisis, now suffering
blackouts, rolling blackouts up to 10 hours each day. This has been going on for a long time in South Africa.
The problems with Eskom, the electricity generation in South Africa, I mean, arguably is a disgrace.
MADOWO: It is, and it`s an embarrassment for a country as important to South Africa, in the African system, and President Cyril Ramaphosa now has
to deal with this.
I spoke to one big South African CEO a short while ago who told me this used to be a technical problem, now it`s a political problem and the optics
would have been completely off, there would be backlash back home for him to be here, hobnobbing with the global elites.
MADOWO: . when people are having hour-long, sometimes day-long rolling blackouts in South Africa. It is something that he has to deal with and he
is meeting the leadership of Eskom and trying to make sure that people in South Africa have power.
QUEST: Larry, it`s very good to see you, sir.
MADOWO: Nice to see you, Richard.
QUEST: We rarely get this opportunity to meet up in person.
MADOWO: In person.
QUEST: And even though we see each other on -- thank you. Always delighted to talk to you. Thank you, sir.
Now, since I last saw the snow in Davos, the world has gone through a pandemic, Russia invaded Ukraine, Central Banks began battling decades high
It`s a complicated picture. This year`s theme of the conference is working together, coordinated activity in a fragmented world. It`s just like
getting to Davos.
QUEST: Cooperation in a fragmented world. The first aspect of this is making sure you get your bags back and that is before we get to the really
complicated bit, getting up the mountain.
That horrible moment, when is it or isn`t it? Will it or won`t it?
The anxiety has begun and we haven`t even left the airport.
The journey begins in Zurich, on the train to London Land quart. Taking the train to Davos is a rite of passage. Never mind there is expensive gas
guzzling electric limos, the train is the way to go.
From Zurich, to Landquart, and then a transfer to Davos-Platz. It is not the most time efficient. But as many policymakers know, sometimes the most
efficient is not always the most practical. I love taking the train.
As I make my way up to Davos, the exciting bit is known as the Landquart Dash. Being Swiss Railways, of course, one train arrives quite tightly on
time, and you`ve got a couple of minutes to get across the station to the next.
It`s a bit like a sort of cooperation in a fragmented world. When it all goes according to plan, it`s fine, but miss the connection, so the wise
traveler gets themselves ready for the Landquart Dash.
Many of the delegates here have had to move quickly in the past year, as Russia`s war in Ukraine and persistent effects of the pandemic have led to
unexpected economic outcomes.
Inflation, slow growth, the prospect of global recession has left many out of breath.
We will wait. People are still sort of struggling, but I don`t really want to take the risk. There`s such a great analogy here between just getting to
Davos and this coordinated in a fragmented world. And also the sheer number of people who make the schlep up to Davos for WEF. It`s quite amazing. I
think I am ready for a strong drink.
Davos has lived through lots of changes in its 53 years, with 2,700 leaders of 130 countries, all descending on the mountain village, their work is cut
out. Now, we just need some snow.
And now, this was indeed a fragmented journey, but there were lots of cooperation, which hopefully sets the tone for the discussions and reaching
on the WEF for the rest of the week.
Now, I`m committed to improving the state of the world -- or something like that.
QUEST (on camera): The journey to Davos, it was worth the effort, because we will be with you throughout the course of the week and joined by some of
the biggest names in politics and business.
So for example, in this hour, the former Finnish Prime Minister, Alex Stubb. We also have the Chief Executive of the Austrian energy firm, OMV,
Alfred Stern, and the CEO of Edelman, Richard Edelman, and they`ll all be invited to put their mark on the worry board.
Germany`s Defense Minister has resigned under a barrage of criticism. Her replacement won`t have much time to get up to speed. Germans are intensely
debating whether to step up military aid to Ukraine.
QUEST MEANS BUSINESS live from Davos.
QUEST: Whatever our worry board may say, the war in Ukraine is the single biggest issue for many of those people who are attending WEF.
Ukraine`s First Lady, Olena Zelenska is in attendance. She is expected to deliver a special message here tomorrow morning.
Her visit comes as yet another tragedy unfolds in Ukraine. At least 40 people have been killed by a Russian strike on an apartment building in
Dnipro, 25 people are still missing. It is the war`s deadliest civilian attack in months and Ukrainian officials say they have evidence the
building was hit by a Russian cruise missile.
CNN`s Fred Pleitgen is in Dnipro where the search is now entering its third night.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): The morning brings to light the full extent of the destruction of the
residential building home to dozens of families annihilated down to the foundation.
Even though rescue crews still work, the chances of finding survivors now virtually zero.
(OLHA NEVENCHAMEYAS speaking in foreign language.)
PLEITGEN (voice over): All night, residents watched in fear, anger, and grief.
Olha Nevenchameyas (ph) says she passed by the building only about half an hour before it was hit.
(OLHA NEVENCHAMEYAS speaking in foreign language.)
PLEITGEN (voice over): "There are many friends and people close to me here. Many, many," she says.
Olena Loyan (ph) stunned by the scale of the destruction curses the Russians.
(OLENA LOYAN speaking in foreign language.)
PLEITGEN (voice over): "I simply hate them. Children, people die here," and then she can`t speak anymore.
Throughout the night, the death toll continued to jump. On top of the many killed, Ukrainian authorities say dozens were injured, many of them
children. In just this location in Dnipro, one of many sites in Ukraine Russia targeted with barrages of missiles this weekend.
The Ukrainians say the reason why the damage here is so extensive is that this building was hit with a cruise missile called the KH-22, that`s
designed to destroy aircraft carrier strike groups and obviously when it hit the building, it completely annihilated it, burying dozens of people
The Ukrainians called the attack state terrorism and President says rescuers will continue to try and save anyone trapped here.
(PRESIDENT VOLODYMYR ZELENSKYY speaking in foreign language.)
PLEITGEN (voice over): "Let`s fight for every person," President Zelenskyy says. "The rescue operation will last as long as there is even the
slightest chance to save a life." But even the slightest hope has now all but died, and this is essentially a recovery operation. The crews searching
for bodies where so many lives were violently ended in an instant.
Fred Pleitgen, CNN, Dnipro, Ukraine.
QUEST: The German Defense Minister has resigned blaming media for its months` long focus on her. Christine Lambrecht has battled scrutiny since
the war in Ukraine began. Many have been critical of Germany`s hesitation to send military aid, and she leaves as the country faces new pressure to
let other nations send German-made tanks particularly, Poland.
Under Lambrecht, Defense capabilities also came into question, some saying the German Army is ill equipped in light of Russia`s war.
Alex Stubb is the former Prime Minister of Finland joins me now.
Well, what do you make of it? She`s gone. I mean, she seemed highly accident prone in terms of what she would say.
ALEXANDER STUBB, FORMER PRIME MINISTER OF FINLAND: Well, I mean, all politicians are accident prone, but I think to a certain extent, if we look
at Germany, what`s happening right now, it`s quite complicated, because they are trying to do a kehrtwende, a complete U-turn in their foreign
policy, but we`re seeing a little bit more zeiten slalom, you know, there are different types of messages coming.
For Finland, it was kind of easier to change tack for us. It was always not about ideology, it was about something practical. But I think Germany has
moved a lot.
QUEST: So she`s gone, but does the policy change?
STUBB: No, I don`t think it usually does. I mean, when you are Defense Minister, you have a very strong civil service that carries you and I think
the policy of the German government won`t change either. It has been very much driven, obviously, by the Chancellor himself, and also the Foreign
Minister. So I don`t see a change in German policy as such.
QUEST: As I look at this year`s Davos, two things strike me. Firstly, there aren`t the same number of leaders who`ve come this year. Now,
arguably, that might be because it is not the same necessity. That`s the first one.
Secondly, the issues don`t seem as clearly defined besides Russia-Ukraine, there`s a lot more civil society, there`s a lot more social issues than
what there have been in the past.
STUBB: Yes, I guess, I think they`re about 600 CEOs and about 50 heads of state in government. If I had a choice, I think we should be talking
about the new world of disorder, because basically, what we`re seeing is now the cold -- the Post-Cold War, which has ended.
And I think it`s an end of an era as well for the West, and I would like to start to have this conversation about, you know, how will the West fit into
the rest of the world? Because the war in Ukraine, it`s not about Russia versus the West, it is also about the West and the Rest.
QUEST: Well, you say that, but isn`t that being sort of pumping oxygen into what`s really a rather simple issue, which is that Russia attacked
STUBB: Oh, yes, definitely. I mean, if you look at things from the ground --
QUEST: But related to that, India continues to buy Russian oil; China, the same supporting. If those other countries were to make it clear to
Russia, that they`re not going to support them, it will be a very different game.
STUBB: I actually think that India and China have tilted a little bit more towards the West than I had expected. And what we`ll find out, I
think, is that India is going to take a little bit of a middle ground here. We might see some kind of cooperation between the EU and India in the long
I will still argue, Richard, that the year 2022 was a horrible year for autocrats. Look at what happened in China with Zero-COVID policy, and look
at the failures of Putin.
So we are in a messy world right now. We`re in a fragmented world, and we don`t know where it`s going to end up. That`s why I think Davos should talk
about a new world order, instead of focusing on specific issues.
QUEST: Also related to this, of course, within the EU, we`ve still got the problems of Poland in terms of judicial issues; you`ve still got --
Viktor Orban is now the longest serving EU Prime Minister, and it is hard to know where Hungary stands.
STUBB: Yes, but you have to understand that the European Union is not a utopia. Basically, it always deals with things in three phases. Number one,
there`s a crisis, and number two, there is chaos and number three, there`s a sub optimal solution.
QUEST: You always -- give me that again. Give me that again.
STUBB: Yes, crisis, chaos and sub optimal solution, but --
QUEST: And I always say, that sub optimal solution is depressing.
STUBB: No, but that`s the way in which the world is, not depressing, but we don`t live in a perfect world. I actually think we should take some
positives from the fact that the EU dealt well with COVID. It has dealt well with the war in Ukraine and is trying to deal with the energy crisis.
This is what the world is about.
You know, you and I were met here in Davos probably since 2013 and every year, there is a crisis and every year, we come out of it, and survive, and
the world goes on.
So if we start to live and learn from our imperfections, I think we make some improvement.
QUEST: Yes, I want to take you to the board.
QUEST: To get your -- first of all choose a color. You have a blue or a green.
STUBB: Okay, I would go for the blue.
STUBB: Yes. Because it`s the -- you know, it`s a blue and white, it is the color of my country.
QUEST: I thought you were going to go -- knowing you, I thought you were going to go for the green at this stage.
STUBB: I know, I`m a little bit greenish, but I`m hidden behind the blue.
QUEST: All right, have the blue. Have a blue.
QUEST: Now, let me just remind you on the board, so it is the worry board. We have deliberately taken climate as not an option.
QUEST: That`s a given.
STUBB: Yes, yes.
QUEST: Because that`s always the one that you`d all go for, otherwise.
QUEST: So this is your worry board. You can either add, for example, the OECD added democracies, inflation. Where are you going?
STUBB: Okay, I`m going to go to Ukraine.
QUEST: Come on. Give it a drawing.
QUEST: You`re a Prime Minister, you can draw.
STUBB: Yes. You will know, Richard, that Finland has a 1,340 kilometer long border with Russia.
QUEST: Right. Yes.
STUBB: So therefore, for me, of course, Ukraine and the energy crisis is the key one. And my big fear here is escalation of the war. And having said
that, I hope that it was --
QUEST: Let me circle Ukraine.
STUBB: Yes, Ukraine, definitely. And escalation is my big fear, not a fear that it would escalate and spill over to Finland, a soon-to-be NATO
country, but in general, escalation and a protracted war.
QUEST: On that question of Finland, I`m having my pen back.
STUBB: You knew, I would have taken it, right?
QUEST: You would have. Will Turkey give in?
STUBB: I think Finns and Swedes have been very calm, cool, and collected.
QUEST: Oh, well, maybe not so much the Swedes in their latest statements.
STUBB: Well, I would assume that Finland and Sweden, hopefully are members -- full members of NATO by mid-summer towards July, the Summit --
NATO Summit that takes place, I think in Belize.
QUEST: They`re going to have to give more ground or Erdogan is going to have to give in.
STUBB: Let`s see what happens.
QUEST: Oh, you`re the ever -- you are such the diplomat.
STUBB: No, no, I`m an academic nowadays. But I`m an academic who wants Finland to be in NATO, and therefore, I am sure that we will find a
QUEST: How good to see you, sir. Really good, as always here at Davos. I am very grateful for you. Thank you, sir, for joining us.
Now, there are about four inches of snow here on the ground. It`s a departure from what has usually been a warm winter in Europe, causing a
sigh of relief from energy CEOs.
The head of Austria`s energy giant, OMV, when we return.
QUEST MEANS BUSINESS. Good evening.
QUEST: Hello. I`m Richard Quest. There`s a lot more QUEST MEANS BUSINESS in a moment. The chief executive of Austria`s biggest gasify OMV says though
winter warm weather means Europe will avoid an energy crisis this year. And economic anxiety is everywhere. That`s the message from the latest Edelman
survey. The chief executive Richard Edelman will be with me, but only after the news headlines because this is CNN and on this network the news always
comes to us.
Officials now say at least 69 people were killed in Sunday`s plane crash in Nepal. Three people are still missing. The police say they`ve recovered the
light box flight recorders from the aircraft. Authorities are working to find out what happened.
Police have arrested the mafia boss Matteo Messina Denaro after 30 years manhunt. Denaro is as one of Europe`s most wanted men was captured at a
private health clinic in Palermo in Sicily. In 1992 he was sentenced in absentia to life in prison for his role in the murder of two prosecutors.
President Biden addressed the Martin Luther King breakfast in Washington, which is held each year to honor the civil rights leader on the holiday
bearing his name. In his speech, President Biden said King`s life and legacy would help show us the way forward. Sunday would have been Dr.
King`s 94th birthday.
Now, don`t be fooled, I`m still wearing a coat, I`m not foolish, but I can`t afford to open it and I don`t need a hat. Because it has been
unseasonably warm so far here in Davos. The snowfall has been unusually light. In fact, we didn`t really see snow until Landquart. Now all this
might be changing. The temperatures around four degrees under zero. So tonight, it`ll be parky and there`s been a snow flurry or two with perhaps
welcome for those hoping to get in some skiing.
Europe has kicked off the new year with a heatwave. Eight countries have set record highs for the January 1st, and some countries are coming off
their hottest year on record. This is not something to be applauded say the experts warm temperatures are a help for nations fearing an energy shortage
to be sure only in the short term. Less heating means less energy use, which blunts Russia`s threat to cut off gas supplies.
Austria`s energy company OMV has withdrawn from the Nord Stream 2 pipeline last year. The chief executive is Alfred Stern. He joined me here to talk
about the impact. And if he thinks Europe`s energy crisis could be coming to an end.
ALFRED STERN, CHIEF EXECUTIVE OFFICER, OMV: I think for this winter, we are out of the woods. But that doesn`t mean that necessarily going forward,
everything is clear. So, more work is needed to further stabilize the situation.
QUEST: What does that mean in terms of practicalities for somebody like yourself?
STERN: practically that means for this winter, we filled our storage in OMV. We also got pipeline capacity on non-Russian gas to get over this
winter and this gas year. And we`ll have to repeat that for next year.
QUEST: When you repeat it and when you do it next time, what have you learned this time around?
STERN: We`ve actually learned that the supply of Russian gas has been extremely unreliable and things happen that we didn`t expect. So being
better equipped for this is very important.
QUEST: Is the market now in a position of equilibrium do you think?
STERN: I don`t think it`s in equilibrium yet. We have seen a couple of things. Higher temperatures, low gas usage, but also fuel switching and a
lot of diversification of supply sources. This will continue to go on but the quantities that were supplied from the
East were significant.
QUEST: Now for your company this comes at an interesting moment because you are diversifying away in a sense towards chemicals in the future.
STERN: That`s correct. It`s actually coming at a moment where tactically we have to react to it. But it`s coming at a good moment because we are
diversifying away to become a more sustainable company, to invest more into chemicals, but also to invest into sustainable fuels and feedstocks and
QUEST: Now, the interesting thing is (INAUDIBLE) well, he`s talking about chemicals, and plastics and things like that, that if renewable.
STERN: That what you have to do with chemicals is you have to make it circular, we have to find more ways to recycle plastics. And here OMV is
actually a front runner. We started with this -- with this about 10 years ago and we developed a chemical recycling technology that`s called ReOil.
And that we are scaling up at the moment, our plant, 16,000 tons will come on stream this year.
QUEST: Isn`t there a -- isn`t there a fact that many people don`t want to acknowledge, which is that we cannot at the moment do away with fossil
fuels and traditional fuels? We simply can`t do away with them. The world still relies on them.
STERN: At OMV, what we want to do is reinvent essentials for more sustainable living. But what that means is, it`s a transformation. It`s a
thing that is happening over time. And as we develop more sustainable sources of energy, more sustainable sources of fuels, and more sustainable
chemicals. We have to reduce the use of fossil fuels. But you cannot do this overnight.
QUEST: Choose your color, sir. What color would you like?
STERN: I would like green.
QUEST: You go green, take them. Come and join me over at the whiteboard. Now, you can go for what you can tick, cross, circle or you can add one
yourselves. We`ve got global recession inflation, Ukraine energy crisis COVID, China, democracy, the worry of democracy. What would you go for?
STERN: I think is a key worry, inflation.
QUEST: Inflation at the moment. You say that`s the -- that is the key worry.
STERN: That`s a key worry.
QUEST: If you`re worried at this time about losing your job, you are certainly not the only one. Richard Edelman is with me. And after the break
-- not that he`s about to lose his job (INAUDIBLE) well, at least I don`t think so.
RICHARD EDELMAN, CHIEF EXECUTIVE OFFICER, EDELMAN: Family business.
QUEST: Family business. What kind of more can I say? But he will be talking about -- I wasn`t expected. The trust barometer and the economic anxiety
gripping people around the world. That`s QUEST MEANS BUSINESS after the break.
QUEST: People are feeling less certain as a brighter future ahead according to the latest Edelman Trust Barometer. It always comes out on the first day
of Davos. We look forward to it. 60 percent said they thought their family would not be better off in five years` time. Economic anxiety is tightening
its grip. 89 percent of people are worried about losing their job. And people are almost as worried about inflation as they are about climate
Richard Edelman is the CEO of Edelman, the company behind the trust survey. We`d look at it every year. And I`m fascinated to see this year, basically
governments trust is in the toilet. But companies are still number one. CEOs are still number.
EDELMAN: The big differences that business is seen as both competent and ethical. 50 points higher than government on competence. 30 points higher
on ethics. And it`s -- to do with business doing well in the pandemic, also answering on ESG. And finally, more than 1000 companies getting out of
QUEST: Is that realistic? This very high idea. I mean, ethics isn`t the first word that one thinks of about some companies.
EDELMAN: Business is the most trusted institution in the world. It`s the only one both competent and ethical. It is counted on to do things. That`s
the difference. It gets the job done. And specifically, by consumers and employees, they want CEOs to speak up on societal issues. There`s been this
trend in the last few months since Governor DeSantis and Disney for CEOs to say oh, I can`t do those societal issues. That`s wrong. We need CEOs to
step into the void left by dysfunctional government.
QUEST: Right. But go back, say, five years, seven years, when CEOs were talking with transgender bathrooms, and all those sorts of issues. CEOs
were, as we used to say on this very program, and you and I talked about it, the moral barometers. You say that`s changed.
EDELMAN: What`s happened is that CEOs have gotten cautious because they`ve been such a pushback by certain political elements. But the smart CEO on
sustainability, on wages and reskilling also on geopolitics related to Russia and finally, on diversity and inclusion, you`ve got to stand up
because these are the issues that business can change.
QUEST: And arguably, these are the issues that ploy -- employees will decide where to go.
EDELMAN: Two-thirds of employees say I`m only going to work for a company whose values are similar to mine,
QUEST: Do you believe that when -- that values are great, until the paycheck gets bigger?
EDELMAN: I fundamentally believe that this group of employees is committed to having its companies stand up and be counted. You know, after George
Floyd, you know, after the Glasgow meeting, they`re constantly pushing.
QUEST: I heard something interesting about your company. You have an extremely generous, long service leave policy.
QUEST: When people can take a decent rest and a decent sabbatical which is extraordinary compared to what other companies do. Why do you do it?
EDELMAN: I do it because I want people to stay for the long term, and they need to refresh themselves. I`m the only one who doesn`t take a break.
QUEST: Oh, this is a case of physician heal thyself.
EDELMAN: Of course.
QUEST: When we look at this question of societal issues, what do you do? And I`ve asked you this before, but on the controversial, a woman`s right
to choose where, frankly, reasonable people can disagree.
EDELMAN: I think that companies should handle that with their employees, talk to them, give them access to proper medical service, be sure that they
are taking care of. That you also listen to what your employees have to say about voting rights. Also, about the idea on immigration. You know, these
are issues that the country, United States has to deal with in the coming years, and employees want a voice.
QUEST: If we look at this years` worth and this year`s Davos, there doesn`t seem to be the same level of engagement, say leader. I mean, people said
there are 50 leaders and 60 CEOs, but it doesn`t seem to have the (INAUDIBLE) of previous years. Now, maybe I`m being previous because we are
only on day one.
EDELMAN: I think you`re not correct. I think for example, you know, our clients Standard and Poor`s Global is here to push a single standard for
ESG. There are 180 ways to measure ESG. That`s absurd. We`ve got to unify behind that. We also have to make sure that business makes religion, gender
and race part of DEI.
These are specific things that business can do.
QUEST: But the more you add to those issues, the more difficult it becomes in the business area.
EDELMAN: I don`t agree, Richard. I actually think that business done properly is having a positive societal benefit that the smart companies
are, you know, PayPal changing how people, you know, do their commerce. This is actually changing and enabling entrepreneurs.
QUEST: Times (INAUDIBLE)
QUEST: Do you want to red -- a blue or green? Well, forget you`re a red if really want --
EDELMAN: No, I love blue because it`s Edelman color. But the thing --
QUEST: That seems to be everybody`s color.
EDELMAN: But the thing is, Richard --
QUEST: Come over to the board. Yes.
EDELMAN: I have to circle this because the number one concern I have --
QUEST: Do it again. Make it a proper --
EDELMAN: A proper circle.
QUEST: Proper circle (INAUDIBLE)
EDELMAN: -- is we have a record divide between the top 25 percent and the bottom 25 percent of income in terms of their attitudes towards
institutions. And when you have that kind of gap, 23 points in the U.S. Now 19 points in China, from for two years ago. There`s a fundamental problem,
which is heat or eat. People have really been affected by inflation. And it`s now personal issues that are affecting them.
Also concerned about nuclear war. We`ve got to get people to a place of Zen and optimism about the economy. Not a single democracy has over 35 percent
belief that I`m going to be better off in the next five years with my family.
QUEST: OK. But if we`ve got ourselves into this position, with high inflation, for whatever reason, we can discuss that until the cows come
home. Then dealing with that, central banker after central banker has said, you know, inflation is a tax on the poor, and therefore dealing with it, it
comes first. Therefore, there will be a slowdown, therefore, people will hurt.
EDELMAN: There`s no question there`s going to be some slowdown. But if businesses smart, they`re going to do reskilling of workers so that they
can get on to the next jobs, they`re going to calm people down about their ability to get forward in society. If we actually train people for the
future, community colleges, these sorts of things actually give us hope. That`s the number one thing.
If people feel that there`s a huge sense of inequality in society, then they become angry, then they sign off of the political system, then the
country becomes polarized.
QUEST: Richard Edelman, good to see you, sir. As always, thank you very much.
EDELMAN: I thank you.
QUEST: thank you very much. Now, as we continue, it`s still suits and ties here at Davos. That`s -- leisure wear certainly won`t cut it. The relaxed
clothing style is certainly taking off nearly everywhere else. African sportswear and athleisure brand AFA, which wants to expand its reach on the
continent. The company`s founder speaks to CNN in today`s Connecting Africa with the Eleni Giokos.
ELENI GIOKOS, CNN ACNHOR (voice over): Merchandise and apparel company AFA Sports was born with a global mindset to capitalize on the profitable
athleisure and sports market.
UGO UDEZUE, CO-FOUNDER, AFA SPORTS: We came into a space where there was really no ecosystem at all to support the kind of industry we are trying to
GIOKOS: According to market research firm Data Bridge, the global sports apparel sector will be worth almost $280 billion by 2030. AFA Sports is the
brainchild of former agent Ugo Udezue who returned to Nigeria in 2015 after living 20 years in the United States.
UDEZUE: AFA Sports means Africa for Africa. Before we used to import all our products from China. So, I went in front of my board and said, I think
we should go into manufacturing. They took a risk chance at it. Six months later, COVID hit and we were the only people in manufacturing and bringing
in sports products in Nigeria. So that was how AFA became very popular.
GIOKOS: AFA Sports is hoping to tap further into the athleisure market, estimated to hit more than $20 billion in Africa and the Middle East by
WILL MBIAKOP, EXECUTIVE CHAIRMAN, AFRICAN SPORTS AND CREATIVE INSTITUTE: We have a booming middle class coming up. And obviously it`s a massive
domestic market that we have, right? So, when we look at the sports industry, we definitely need to pour in additional investment.
UDEZUE: Kenya is actually one of our biggest opportunities, but every time we ship products there, they have to pay duties that sometimes even more
than the products they are buying. So, if this opens up, you`re talking about billions of people (INAUDIBLE) and opportunity. These are up for
GIOKOS: With a grain production foot prints and a distribution partnership across Nigeria, AFA Sports says they hope to build a legacy that will
impact generations in and outside of Africa.
UDEZUE: You know, in the next three, four years, I see us as the Nikes of Africa. Africa is the next frontier.
QUEST: Now, as we continue tonight, I`m going to be delighted to give you a tour of Davos, it had been snowing, so you need a pair of decent shoes.
We`ll take a tour of the village. See what`s new this year. For example, our snowman, Marty, who joins us after the break. Well, but Marty is still
there. But we`ll be back after the break.
QUEST: I`m one of these people who has a certain amount of skepticism, the prospect of coming to Davos. I`ve been going here for more than 20 years.
But once here, I do enjoy it. And particularly, I enjoy seeing what`s changed. And I don`t necessarily mean who`s here. If you look behind me,
you can see tonight, of course, it`s all dark and just barely lit up. But that is the village, that is where so much of what happens takes place. And
that is where you see the change.
QUEST: It`s the little changes you notice like this restaurant where a stalwart of DeVos just about everybody would battle the famous, the rich
and better you are you had to battle for a table for lunch here. And now it`s gone. It`s been taken over by Davos works future hub. I guess they
must have sold out for Davos.
By the time you`re watching this, a security cordon will have come down and it will be just about impossible to make any form of movements. The
barriers will be here, the gates will be closed and Davos will be a fragmented world.
That`s new. It`s the Emirates and they`ve obviously realized that good way to get to people is hot chocolate.
Where`s the hot chocolate? It is a sad reflection on Davos that often it is the quality of your hot chocolate that determines whether people go in.
You know it must be important when they turn up having spent so long telling us to meet virtually, they`ve decided to come here in person. It is
the ability of Davos to adapt that`s probably kept it going for so long. For instance, this is new. Why is Manchester United taken over a shop on
the Promenade west? Why is why are the Red Devils in the Davos white snow? We`ll find out this week.
I promise you, I`m determined to find out why Emanuel is here. But that`s only peripheral to our overall agenda. Look at what we`ve got as the worst
kicks off in earnest. Tomorrow we`re going to have Qatar`s finance minister. You`ll hear from the chief executive of Bain Capital and
Telefonica from Spain on tomorrow`s QUEST MEANS BUSINESS. I`ll have a profitable moment for you after the break.
QUEST: Tonight`s profitable moment. I want to explain the whiteboard for you. Because every year we have to work out a way in which to ask questions
that people don`t devolve into the middle, some wishy-washy answers that everybody can sort of agree upon. Now, that`s all what this is about. This
is making people cut, nail their colors to the boss. So, we`ve got a global recession and inflation, which is already leading the way.
You`ve got Ukraine with escalation, and you`ve got democracies. We`ll redo the board overnight with some bigger letters so you can see clearer. And we
took climate crisis deliberately out because everybody would have gone for that. Otherwise, we wanted to know what people really thought were the
underlying issues. Issues at this year`s Davos which is why we`ve come up with our selection.
I`m sure you might disagree @RichardQuest is where you can tell me what you would have put on this instead. It`s going to be a busy week here for us in
Davos. We`re delighted that you`re with us. It`s the first time for three years that we`ve been back here, but that`s where it goes. Just good to be
back. And that`s QUEST MEANS BUSINESS for this Monday night. I`m Richard Quest in Davos. Whatever you`re up to in the hours ahead, I hope it`s
I`ll see you tomorrow. The closing bell would be ringing but there`s no trading on Wall Street. Martin Luther King Day. "THE LEAD" is next. Ah,
Marty the Snowman.