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Quest On The Road Visits World's Economic Centers Of Hong Kong, New York, London

Aired December 24, 2009 - 14:00:00   ET


RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: Hello and welcome to a special on the road edition of QUEST MEANS BUSINESS. For those of you who have been watching closely throughout the year, you'll have known that I grabbed any opportunity I could to get out of the studio and see what was happening in the real economy.

So, let's start with the most ambitious trip of the year, Nylon (ph) Kong. One year on from the financial crisis, we took the show to the streets of the world's financial capitols, whether it was London, New York, or indeed, Hong Kong. It was more a case of Hong Nylon (ph) because we started in Hong Kong, where the harbor provides spectacular backdrop for a topsy-turvy week in business.

Japan crept out of recession, there was turmoil in the Chinese markets, and out and about on the streets I search for a tell tale economic indicator. I learned that noodles, that staple of the Hong Kong diet, is a good barometer of what is happening in the recession.

On to New York, now in New York, well, the sun was shining on Wall Street, and the U.S. markets as well. I received words of wisdom from a trading floor veteran. I got a feel for the pick at the New York Mercantile Exchange, where they live and they breathe commodities. After I had bitten a nice big chunk out of the Big Apple, it was time to cross another ocean. Remember, I had crossed the Pacific. Now, I was crossing the Atlantic; home and back to London, my week above the River Thames was not short of intrigue. For instance, eBay gave up Skype, and the thorny issue of Citi bonuses reared its ugly head once again.


BORIS JOHNSON, MAYOR OF LONDON: People who are going to receive this kind of remuneration, who are going to pay themselves these kinds of bonuses, when their banks have been supported by the taxpayer, they have got to have a sense of their commitment to wider society.


QUEST: When it came to broadcasting from Hong Kong, I was overlooking the Victoria Harbor, famous for its spectacular views.


QUEST: Land of the rising economy, Japan pulls itself out of recession.


QUEST: The harbor is home to most of the port facilities of Hong Kong. It is one of the busiest ports in the world. Out on the shipping lanes, however, the anchors were down, trade standing still.


QUEST (voice over): Hong Kong Harbor, a stretch of deep water that is offers safe haven for ships plying the Asian seaways. Today, though, many are here, sitting and waiting. The DD Master, for instance, a bulk carrier built in 1983. It arrived in Hong Kong around weeks ago. And like all the other ships in this channel it doesn't seem to have much to do.

Arthur Bowing is the managing director of the Hong Kong Ship Owners' Association.

ARTHUR BOWING, HONG KONG SHIP OWNERS' ASSOCIATION: We can see them on the Hong Kong radars and we can see that there is probably 80 to 90 ships out here on a daily basis. But we don't know if they are coming or going, or how long they might be here.

QUEST (On camera): OK, so why would it be better just to leave ships out here, doing nothing? Surely it must be extremely expensive?

BOWING: Because it is the least loss calculation. Your trying to calculate how little or how much you can loose by keeping it here or by trading the ship. And you might lose less by keeping the ship at anchor, than you would by trading it.

QUEST: Arthur is it likely that some of these ships will not sail again with cargo loads for some time?

BOWING: It is quite likely some of them will not sail again with any cargo loads for any amount of time. They could stay here for maybe a year, or two years, maybe even three years. And then be taken off to recycling yard.

QUEST: But you would agree with me, two years ago, they'd all be steaming around.

BOWING: They all be used.

QUEST: And they'd all be around.

BOWING: The order books were huge.

QUEST: Right.

BOWING: We were ordering ships like crazy, and we couldn't build enough ships to cope with the volume of trade. We don't see there are goods being shipped trans-Atlantic, trans-Pacific. We don't see the stuff being moved to the Western consumer, who were the ones keeping up the markets before. We just don't see that happening in the volumes that we would really need, to continue.


QUEST: Most of us have been keeping a close eye on property prices throughout the financial crisis. In Hong Kong, they have been watching them for a very different reason. In August prices were almost back to where they were before the crisis began. Even at the luxury end, prices have bounced back in a spectacular fashion.


QUEST (voice over): The towers of Hong Kong, from the crowded blocks just feet from each other, to the high point of the luxury peaked district. After September last year, prices dropped by around 25 percent, across the board. Buying and selling slowed to a crawl. Now deals are being done again, and at the luxury end agents say prices are back to where they.

UNIDENTIFIED MALE: This is actually, this apartment is actually on the market for sale at $8 million, U.S.

QUEST: $8 million?

UNIDENTIFIED MALE: Yes, that is right.

QUEST (voice over): Two years ago, this two bed roomed apartment was sold for a similar amount. It is back on the market after a brief decline in value, the price, fully restored. It is not only apartments that are selling.

(On camera): So what have we go here?

UNIDENTIFIED MALE: So, Richard, this is a house. Normally, the house in Hong Kong would have more premium, so this house is worth about $40 million, U.S.

QUEST (voice over): The premium for a house with these sort of views is even greater and this house has many bedrooms.

UNIDENTIFIED MALE: This is one of the bedrooms.

QUEST (On camera): So, this isn't a master bedroom?

UNIDENTIFIED MALE: This is not a master bedroom.

QUEST: The master bedroom?

UNIDENTIFIED MALE: This is not the master bedroom, yet. This is just the second bedroom, of (INAUDIBLE). This will be the third bedroom, here.

QUEST: Oh, the master bedroom?

UNIDENTIFIED MALE: No, the third bedroom.

QUEST: Still not the master bedroom.

The master bedroom. Yes!

UNIDENTIFIED MALE: Here it is. You have the better room now, right?

QUEST: Yes, now you've got it.

UNIDENTIFIED MALE: Now, you have a view. You got a view.


(voice over): There are terraces everywhere.

That is quite an exceptional room.

UNIDENTIFIED MALE: $40 million, U.S.

QUEST: Rick is pretty confident he will sell it.

UNIDENTIFIED MALE: Nowadays we have 15 to 20 percent, you know, Mainland China, peoples, all want to enter into the peak.


QUEST: Coming up, Nylon (ph) Kong, onto New York. I find out what it was like to dive into the pits for a day, in the live of a New York market trader.


UNIDENTIFIED MALE: One who has a weak stomach does not do very well in this environment. You have got to be a little bit tough, if not, you are not going to last.



QUEST: Welcome back to Nylon (ph) Kong, where my voyage now took me to New York, the second leg of our quest to investigate signs of recovery one year on from the meltdown, which prolapsed the world's financial system.

Here I am, anchoring live from the financial center of New York, the heart of Wall Street.


QUEST: Welcome to QUEST MEANS BUSINESS, coming to you from Federal Hall, on Wall Street, just outside the New York Stock Exchange.


QUEST: If you want to know what is really going on in terms of the New York market, if you want to get a feel for the market, you have to go inside the buildings, which is where I found Teddy Weisberg, president of the Seaport Securities. Now, Teddy has spent four decades doing deals on the exchange.

TEDDY WEISBERG, PRESIDENT, SEAPORT SECURITIES: Wall Street it filled with cliches. You know if it was -we live in a world of cliches, but the one thing we know is that markets love to climb walls of worry and there is plenty of worry about still. I mean, you can make a better case for stocks going down than you can for them going up. But the good thing is there is nothing rational about stock markets.

QUEST: The fascinating thing is, whilst you and I are making cases for the stock market going down, it gone up a couple of hundred points.

WEISBERG: More than a couple of a hundred points, pretty dramatic. And even this weekend the financial press was filled with stories that basically were negative. You know, the market has gone too far, it is not sustainable, so forth and so on, and yet here we are on a Monday, we are up 65 points, having been up very strong on Friday.

QUEST: You'll be familiar with the idea that what we are seeing is potentially, and I use the word, 1929, 1930 - look at the face, look at the face. 1929, 1930 all over again, the strong rally which presages a very deep fall.

WEISBERG: Well, you know, and this is what makes it so difficult and so frustrating. Because you look at a market like we are having now and people tend to draw parallels with history. And people who ignore history are destined to relive history, as we all know. But the fact is that it is never quite the same. It really never is the same. And as I just said, you can make a better case, probably, for the stock market going down, than going up. But the fact is, at the moment the tape doesn't lie. And the tape, obviously, sees something out there that it likes and obviously, that is probably an improving economy, which will negate what the bears are saying.


QUEST: From the New York Stock Exchange, to the New York Merc, around the corner, both are as noisy as the other, perhaps the Merc has it when things get really busy. The prices of strategic commodities, bought and sold, change every minute of every day. As I found out, working in any of the trading pits, it is not for the faint hearted.


QUEST (on camera): It is 16, 17 minutes from now, when it opens, what will you be looking for?

RAY CARBON, PARAMOUNT OPTIONS: Today I'm going to concentrate on just putting out information, or we'll just listen to what the pit is talking about, what structures are out here. We put them out to customers and market them. And try to get response on orders.

QUEST (voice over): None of this has got anything to do -it seemingly with the real world. And yet, and yet, it has got everything to do with the real world.

CARBON: That's well put, I can't dispute that. It is a niche like any other business is, except this has repercussions for the real world.

All right. We are ready to rock here. And we go into the ring.



QUEST: So, why are they making so much noise.

CARBON: I have got to make my voice louder than yours, to get my information back to my pit.

UNIDENTIFIED MALE: Roy, Roy, what's the bid?

QUEST: How do you know the other person just heard you?

CARBON: We can understand each other, I made this market 30 bid at 40. 150 bid at 300. Because we all know the same hand language.

QUEST: Right?

CARBON: So, I can communicate with someone across, everything I just said to you, I can do it with my hands. This is an Ach, Rue March, 65, 9 defense against 76 and a half.

QUEST: Do you need nerves of absolute steel, to go into that pit?

CARBON: One who has a weak stomach does not do very well in this environment. You have to be a little bit tough, if not, you are not going to last.


QUEST: Construction at the site of the World Trade Center, where the former twin towers stood, while construction is years behind schedule. It is being held up by a combination of design disputes, and complicated litigation. The man who actually has the job of rebuilding the towers is Larry Silverstein. The American billionaire and the real estate investor who owns the lease for the World Trade Center site. I was privileged enough to have a tour of the construction site.


QUEST: This is a rare chance to get inside the World Trade Center site, and now I can really find out the state of the development, for shire size and scale, of this operation.

UNIDENTIFIED MALE: It is hard to believe that it has been eight years and we are still at this stage. The last remnants of the actual site, is being town down right there. Tower three is right next to it.

QUEST: Yeah.

UNIDENTIFIED MALE: And then in that corner, tower four is being built. This is all going to be covered in about three weeks, four weeks, with a new deck. This will be pretty much street level.

QUEST: (On camera): The World Trade Center site is relatively simple in concept; a 16-acre square with four sides that can clearly be seen. But that is when the difficulties begin. Because different parcels of the site are owned by different people and will be developed at different stages and speed. And the money to pay for it all is coming from different sources, which why the man I'm going to visit, up in the office there, Larry Silverstein, knows all about the problems.


LARRY SILVERSTEIN, WORLD TRADE CENTER PROJECT DEVELOPER: I am one of the frustrated people you are going to speak to. At 78 years of age, my frustration is total, because of anathis (ph), trying to get this place rebuilt since 9/11. What we are dealing with here, is a disaster, the project is totally at risk and is going at a snail's pace. The port has suggested completions that go way out into 2036, or whatever. It makes no sense to me at all.

Whatever the buildings finally look like, and I know to some extent, this happens in every major construction project, but there can't be two many that have as much World Trade Center, Tower II. It is not just a few papers it is pages of it. Just about every twist and turn from the insurance claim, to the who owns which bits, to who is going to develop which bits. Even now you are still in arbitration, over vast areas of this.

Well, in point of fact, we have finally gotten disgusted with the pace of activity, or inactivity. Port had certain obligations with respect to the delivery of infrastructure, so we could build our buildings. They didn't deliver the sites to us, which they were obligated to do. They start the infrastructure in a timely fashion. At the rate it is going it's not going to be done in a timely way.

QUEST: You are paying $10 million a month, in rent, for a property that you can't rent out yourself. And you are getting back in return, it seems bizarre.

SILVERSTEIN: $300,000 a day they are paying us, is to cover the rental that we have to pay them. It is just a wash, absolutely a wash. So there is no benefit to us whatsoever.

QUEST: Look at the detail on this. I mean, you can't even read what some of these are.

SILVERSTEIN: It was about six weeks before 9/11 we acquired the World Trade Center. And, of course, disaster followed thereafter. But nevertheless we faced the reality and the reality was we had an obligation under the documents we had signed, to rebuild, and even if anything would happen.

QUEST: Is this the most important project that you've been involved with?

SILVERSTEIN: Clearly. There is nothing that has captured the public's imagination and attention to the extent that rebuilding the Trade Center has. And to have this responsibility is enormous. And I feel it. That is why I'm pressing this as avidly as I am. To move this arbitration process forward, so if the decision can't be made as to who is right, who is wrong, ultimately, my hope and my prayer, is that in a time frame that gets there, between the 14, 15, and 16, so that in the six, seven years from today, at that point I'll be 85, 86, whatever, hopefully I'll be here and be able to enjoy the results of our efforts.

QUEST: If you ever have any doubt as to why you were doing what they are doing in there, that is what it is all about.

Will you make money on this project?

SILVERSTEIN: It is not a case of making money. Money has no relevance here. It is the recognition of the importance of rebuilding this thing. And getting on with it, and whether or not it makes money is really not an issue.


QUEST: A frank chat with Larry Silverstein, there. And when we return, bold words on Citi bonuses from the London Mayor Boris Johnson.

We also have plenty more from out travels in 2009. QUEST MEANS BUSINESS on the road.


QUEST: The third and final part of our Nylon (ph) Kong, Kong Nylon (ph), as we took to calling it, took me to London. The week was marked by a backlash over bankers' bonuses. It was an issue that continues to dominate news casts. The London Mayor Boris Johnson made his feelings quite clear on the matter when we met at city hall. Mayor Johnson also spoke about tough new European rules, which he said could weaken the city's financial heart, and more generally, about London's ability to ride out the financial crisis.

MAYOR BORIS JOHNSON, LONDON: On bonuses, you know, I think it unbelievable that a sector that has been, not just bailed out in some individual cases by the taxpayer, but propped up by the government, by government intervention, with taxpayers' money, is awarding itself this kind of money. I'm not pretending I can come out now with a solution for docking this cash, but I do think the people who are going to receive this kind of remuneration, who are going to pay themselves these kinds of bonuses, when their banks have been supported by the taxpayer, the have got to have a sense of their commitment to wider society.

QUEST: Their failure, in some senses, is to have that commitment and their ease with which they have moved back to a normal operation. Doesn't this give grist to the mill to those in Brussels that want to regulate them? These were, after all, industries that looked for every possible loophole to try and avoid regulation.

JOHNSON: I absolutely - right. And there is no question, at all, that the mood amongst the public, certainly the mood in Brussels, is that this is a very fantastic opportunity to --in Brussels, the mood is that this is a fantastic opportunity to regulate. And what they want to do is seize the crisis, to take from the top shelf, go where they have been gathering dust and several years, various plans, which are designed to fetter the Anglo-Saxon approach to finance.

QUEST: Is it likely that if these new regulations come in the business will go elsewhere? Because that is your argument, which some say, simply just doesn't hold water.

JOHNSON: Well, you know, you have 7,000 jobs in the hedge funds, a sector at least of 35,000 others associated with venture capital private equity, clearly there is a risk of emigration beyond the boundaries of the European Union. And that makes no sense at all. Why should we, in the European Union, be helping to support a directive that would basically favor other jurisdictions? Geneva, Asian economies? I do think that is a sensitive (ph) point. So my argument would be, yes, let's have regulation, but let's do it at a global level.

Because these guys, as you rightly say, these guys are global operators and we need a global solution.

QUEST: I've been to New York, where I have seen optimism. I've been to Hong Kong, where I've seen lots of -

JOHNSON: No, no, no, this is the home of optimism.

QUEST: Oh, come on.

JOHNSON: The New York, the New York, are you saying they have a can do spirit over there.


JOHNSON: We thought it up first. Not only did we think up the language, but we put a copyright on that, but we have the sense of daring do, drive, initiative, dynamism, and general gung-ho-ery, that you would expect from the world's leading financial center. And this is always going to be one of the best places on earth, to efficiently to raise and allocate capital. For all the reasons I've given. We have the time zone. We have got the money (ph), we have the skills and we have a city that people have great talent and intelligence, want to come and live in.

I think in the long-term, of course, London will come through this, and come through it well.


QUEST: Following Nylon (ph) Kong, it wasn't long, before we embarked on our next trip. This time it was to Germany, ahead of the elections, and amid uncertainty over the future of the carmaker Opel. You'll remember, General Motors had initially said it was going to sell Opal, and then delayed the sale. Later in the year, GM said it was going to keep the car company, causing fury in Germany at the different decision making. Heidi Hetzer is one of the first female rally drivers and the owner of one of Berlin's biggest Opel dealers. Heidi joined me at my live location and I'd met me match.


QUEST (On camera): While we are talking about this car, we are going to show you some shots of this car. So, this car is 1911? That is its name? What sort of car is it?

HEIDI HETZER, OWNER, OPEL DEALERSHIP: It is a racing car. A private man had got that built, like the racing car of that time. So, he just wanted a car, but then not as a racing car that you can step in, that you have a trunk, that you -but it is no lights. It has no lights. So, it is a very unique car. There is not another one like it.

QUEST: And there is no -the wonderful thing about -come and join me over here, come and join me over here. Because I know anybody who is used to cars, but look at all the steering and the levers, and the -

HETZER: Now, look, what is very unusual is you give speed, with here.

QUEST: Right?

HETZER: With the hand, not - there is nothing with the foot.

QUEST: Right, so we speed with that.

HETZER: We squeeze it, yeah.

QUEST: And that one, what does that one do?

HETZER: That one is for the compression.

QUEST: Compression.

HETZER: And here is the shifting.

QUEST: Yes? How do we switch it on?

HTEZER: Oh, yeah?

QUEST: Oh, I'm not pushing. All right, QUEST MEANS BUSINESS is back in a moment. The German economy is on our agenda. Keep going. We'll be back I a moment, this is CNN, live in the German capital. Drive on!

HETZER: Wow, that's fast.


QUEST: Hello. I'm Richard Quest. This is QUEST MEANS BUSINESS -- the special, on the road edition of the program.

My travels took me to many places -- India, the economic tiger, roaring through the global downturn as other economies have whimpered and rolled over.

QUEST MEANS BUSINESS went to India earlier in the year as foreign direct investment was soaring. Industrial production was growing -- growing so much, in fact, that Goldman Sachs estimated India's economy could be 40 times the size it is just by 2050.

With that in mind, it's no wonder people are calling it a powerhouse.


QUEST (voice-over): An economy on the march. For more than a decade, India has been one of those countries the rest of the world has looked to for growth, jobs and profits -- a developing nation finally realizing vast potential.

PARANJOY GUHA THAKURTA, ECONOMIST: And what happened in the early '90s, there was a period of de-bureaucratization, a faster integration of the Indian economy with the rest of the world, which was preceded by a major financial crisis, a foreign exchange crisis.

What happened is, from the early '90s all the way till about 2003 or 2004, there was, in a sense, a rightward shift to the polity, a more market-friendly approach towards the economy.

QUEST: Year after year, India achieved rates of growth envied by others, more than 9 percent in four successive years. Then the great recession arrived.

The economist, Ila Patnaik, dispels the myth that because India didn't fall into recession, the country hasn't been affected.

ILA PATNAIK, ECONOMIST: We were hit far more than we thought we would be. We thought we were a closed economy, and closed in many ways. We hadn't opened up our financial sector as much as other countries had. And we thought we were going to not be hit.

QUEST (voice-over): Within months, growth rates slowed to 5 and 6 percent. Impressive for mature economies like the U.S. and Europe, but not enough for India's economic transformation.

(on-camera): With an expanding middle class and a strong market economy, India knew it had to get the growth numbers back up again. So the Delhi government committed the equivalent of 10 percent of GDP to a stimulus package. The object -- get things moving.

(voice-over): The challenges are immense. Two-thirds of the population here still depend on agriculture for a living. This year's monsoon rains have been the worst since 1972. And rains, when they come, have caused terrible floods.

Rural India is facing hardships not seen for a quarter of a century.

PATNAIK: We have to move faster on some of the things that are wrong with us. Yes, we can be a very fast-growing economy.

In terms of our per capita GDP, we have a very long way to go. So, we get around $1,000 per capita GDP, which is very, very low. So, let's, you know, not get (INAUDIBLE) in by the hype.

QUEST: India shares many similarities with another country marching on to powerhouse status -- China, of course. And between them, these two countries are the fastest-growing in the world.

THAKURTA: The fact is, here is the world's most populace democracy, the world's largest democracy, growing -- growing at a time when, I dare say, most of the 192 countries on planet Earth, their economies are actually contracting or shrinking.

So, in a sense, India and China -- together accounting for 40 percent of the world's population -- are the two parts of the world which are growing. And I will perhaps not be exaggerating to say the sun rises in the east, and this part of the world is, to a great extent -- on this part of the world would depend the future of planet Earth.

QUEST: Neither India nor China can really grow while the U.S. consumer remains weakened.


QUEST (on camera): So, clear skies are forecast for India's growth prospects. Can we say the same for its airline industry? Carriers have been navigating high debt, falling demand and fierce competition.

That's not deterring Sanjay Aggarwal, the chief executive of SpiceJet, a no-frills airline, but with some important differences to the low-cost models we might see elsewhere.

As Sanjay told me, there are some things which just won't fly with Indian passengers.


SANJAY AGGARWAL, CEO, SPICEJET: When it comes to the product, I think the Indian consumer will expect to have it no-frills. They will be, I think, OK to pay for seat selection, pay for the baggage, pay for the food.

However, India is a hospitable country. They will still expect the employees to be friendly. There is a phrase in India, (INAUDIBLE), which means, "the guest is like a god."

So, I think offering just water or beverage, being courteous, being nice to the guests, I think that will always be expected, no matter what they pay for.

So, there was some debate. I don't know, one of these airlines, either Ryanair or easyJet, they were looking into charging for using the restroom.

QUEST: Ryanair.

AGGARWAL: Ryanair. I think that's pushing the limit. I think that's where the Indian consumer I know will draw the line and say, you know what? God (ph) bless (ph) their airline.

QUEST: The low-cost model, or the low fares model, in India, came about to rival the railways initially. Now it's an industry in its own right, and you're rivaling each other.

Where does it go next?

AGGARWAL: See, there is still a lot of migration that will happen from trains to air. There are about 10 million people who are still traveling by train every day. And all airlines combined are carrying about 150,000 passengers.

So, aviation will not only win few more customers over from railways, but aviation does -- what it does, it stimulates demand. Because a lot of trips that you wouldn't be able to do by train -- it takes a 20-hour journey out and back -- now, with air travel being affordable, being available, there will be more stimulation, more demand generated as a result.


QUEST: Sanjay Aggarwal, the chief executive of SpiceJet.

India's reserve bank has been buying gold, even as the price reached glittering heights. A moment to remind you of gold's golden years. Prices surged more than 34 percent in '09, and they've risen pretty much steadily ever since.

Back on January the 2nd, as many of you were nursing those hangovers, the metal was just under $900 an ounce. It fell later during the month. It had a bit of an up-and-down, rising in February, falling in April, and then hovering below $1,000 until mid-September -- the ups-and-downs of the market.

But gold marched upwards after that. And despite brief dips here and there, it hit an all-time high in November and December.

But in India, gold is more than just a commodity that investors trade and chatter about. It's part of the culture. It's loved.

Many people have made their livelihoods with gold. World at work -- met one of them.


SUMAN KHANNA, AMRAPALI: Amrapali went into business more than 30 years ago. It's -- I think maybe I've put it wrongly. It's not a business. It's a fashion. To see what jewelry is from all over the country. And then, gone into making it and selling it.

QUEST: But what is the passion particularly for gold?

KHANNA: Gold is precious jewelry, Richard. Look at -- some people think of it as an investment. And some people think of it for just the artistic, the intrinsic value of it, which cannot be put into words. It's poetry. Look at this piece. It can evoke just so many thoughts into your mind. It's a piece of art.

QUEST: Is there a trick, a knack, a skill in selling more expensive pieces of jewelry?

KHANNA: From my point of view, I would like to understand, if you are a customer, I would like to understand, who are you buying it for? What is the age group? Is the person -- I mean, is the occasion very important? Or is it just a gift, because you are traveling?

It's different for -- every customer has a different need their fulfilling when they walk in. And then, try and show you only those items which would be of interest to you. I have to understand the customer.

An Indian customer would maybe look at this bangle, which I personally feel is a beautiful piece. You know, it's got uncut diamonds, which we call "polki." It's got enamel. It's got the elephant.

But if I have a Western customer and I see that he's not looking more towards traditional Indian jewelry, I would show him this, which is a very universal gold. But he's buying gold, because India is known for its jewelry.

QUEST: So, what happens to Suman when you have to deal with this gold?

KHANNA: It's an inner joy, which comes out of just seeing the pleasure of being able to handle something so beautiful, and selling it to a customer who I know will enjoy wearing it. And at Amrapali we believe that there is a sleeping princess in every woman, and we want to awaken that princess and bring her out.


QUEST: There was one thing that was obvious during my trip to Delhi. Despite all the economic numbers on growth and foreign direct investment, the figures don't tell the full story. Because the backbone of India's industrial production is what's called the "informal" economy -- people who work without a regular paycheck, no benefits and, of course, pay no taxes.

Sara Sidner with that report.


SARA SIDNER, CNN INTERNATIONAL REPORTER, NEW DELHI, INDIA (voice- over): This is India at work. No store fronts. No paychecks. Just people beating out a living any way they can. You can get your clothes washed, get a haircut -- even rent an elephant, and much, much more -- right on the street.

Economists call this the "unorganized" sector. And get this -- it employs about 95 percent of India's work force.

UNIDENTIFIED MALE: This is not a sector where the systems are generating jobs. The people are themselves generating jobs.

SIDNER: Radha Kumari is a typical example. She started working before she could finish school to help support the family. She normally charges 50 cents to $1 per hand for the popular Indian artistry called "mehndi."

SIDNER (on camera): Do you make enough to support your family?

"Sometimes there's nothing," she says. "So, it definitely is not enough. But I have to make do with what I have, because there's nothing else I can do, no other source of income."

SIDNER (voice-over): On another street, another informal job. Squeamish customers need not shop here. Yes, these are roadside dentists - - minus the dental degrees.

UNIDENTIFIED MALE: I can extract. I can fill up. I can fill (ph). I can make denture.

SIDNER: Raj Kishor (ph) says he learned his trade from a paramedical course, but didn't have the money to get a doctorate in dentistry or his own shop. He says he can make up to $20 a day.

While the unorganized sector employs the vast majority of people, economists and sociologists say it also comes with obvious downsides. The extremely low pay keeps millions of Indians impoverished.

SIDNER (on camera): And some say they're forced to pay bribes, because they're located on government property illegally and can be kicked off any time.

SIDNER (voice-over): Plus, workers often have no safety protection, don't follow environmental rules and have no real social security. However, the government passed a bill last year to provide a bit of financial help.

But without these jobs, most of India wouldn't have work. And economists say the informal work force has even helped keep the country out of recession.

UNIDENTIFIED MALE: The bulk of the unorganized sector activity is internal, is in the services sector, which does not get hit by the global recession. And that's why this sector can continue to expand.

SIDNER: India needs the unorganized sector as much as any other to continue growing economically.

Sara Sidner, CNN, New Delhi.


QUEST: India's economy for you -- thriving, chaotic, growing. And colorful.

My next stop, we whiz around the globe to Africa, the largest and important economy of South Africa that's undergone significant changes. The view from Johannesburg when we come back.


PRAVIN GORDHAN: We have been prudent for many years, and we intend to continue to be so.



QUEST: Welcome back. In May, South Africa's parliament elected Jacob Zuma as president. In his inauguration speech, he pledged to protect jobs and tackle the economic crisis.

Investors had to get to grips with new appointments that would shape the future of Africa's largest economy. For instance, Pravin Gordhan was appointed South Africa's new finance minister, taking over from Trevor Manuel.

South Africa was facing its first recession in 17 years. And this was a good moment to take the economic temperature. So, we took QUEST MEANS BUSINESS and anchored the program from Johannesburg.

I interviewed Pravin Gordhan, his first as finance minister. And I asked him if he envisaged a significant change in policy.


PRAVIN GORDHAN, FINANCE MINISTER OF SOUTH AFRICA: No, all the policies that this government, or the previous government, has put in place will remain in place. And we'll make sure that there is policy continuity and there is policy consistency.

At the same time, two things are important. The one is that, in South Africa, we have a culture of debate, of engagement. And it's important that people who have different voices and different views need to be heard, on the one hand.

On the other hand, the global situation also keeps changing quite frequently. And we need to have a bit of agility in the way we approach things.

So, we'll try and manage those three to ensure overall continuity and certainty in the way we operate.

QUEST: You see, what I'm trying to understand here, Minister, is, what are you telegraphing in saying -- in saying that there will be debate, are you talking about, as I see in this morning's paper reports of inflation targeting may no longer be the call (ph).

Are you talking about a policy concerning the rand, that you're more open to a more flexible devaluation of the currency for export growth?

GORDHAN: So, to put it plain and simple, the current policy remains exactly as it is. That's what we're telegraphing.

But at the same time, we need to be mindful of the context around us. And if there is any changes, those changes will be consistent with the broad direction that my predecessors put in place.

QUEST: Anybody out there who may be thinking, Minister Gordhan's about to go on a spending spree. He's going to spend South Africa into -- he's going to buy his way out of the recession, and he's going to have deficits as for the eye to see for the future.

GORDHAN: I wish that magical wand was available, but it isn't. The reality is that we have limited fiscal space, if you like. We have limited fiscal resources. Tax revenues will be going down, as it is elsewhere in the world, and we will keep a tight hand on the spending side.

So, there's no recklessness, if you like, that you can expect from the South African government. We have been prudent for many years, and we intend to continue to be so.


QUEST: You've just heard from the man in charge of South Africa's purse strings.

But what do ordinary people on Johannesburg's streets think of their economic situation? Earlier this year, this was how they felt.


QUEST (voice-over): Rosebank Mall. Here, lunchtime delights are international in nature, all local in flavor. And even at the midday break, news of the government and its policies isn't far off.

This is a good time and a perfect place to gauge views.

QUEST (on camera): What do you think about the new cabinet?

UNIDENTIFIED MALE: I think it's well constituted. As it has been said before, it is -- it has new blood, people with energy. And most people from the previous cabinet, like Manuel, are still part of the old (ph) economic plaster (ph).

QUEST: Are you optimistic about the economy of South Africa?

UNIDENTIFIED MALE: Very much so. I am optimistic.

QUEST: Why (ph)?

UNIDENTIFIED MALE: I have looked at the cabinet ministers, and I know that, as Africans, there's so much there (ph) (INAUDIBLE) to (ph), to (INAUDIBLE) our own people that were previously disadvantaged. So, yes. The government is doing quite well to achieve them.

QUEST: But the country is going into a recession, and things are going to get more difficult.

UNIDENTIFIED MALE: Oh, yes. Sure. Yes, for sure.

And I'm not saying it's going to be easy. But, sure, we've got the right fundamentals economically. And I'm sure we'll do well.

QUEST (voice-over): Across at the cafe, there's less rushing, and lunch is more leisurely. And so are the economics.

QUEST (on camera): Are you worried about the next six months to a year with the recession?

UNIDENTIFIED MALE: Not at all. I think, as Volken (ph) said earlier, I think if (ph) we (ph) drop (ph) bottom now, and I think if (ph) the (ph) (INAUDIBLE) are climbing up, I think people will start being more employed. But I think people will employ more carefully and make sure the quality of the people they employ are better as in the past.

QUEST: What about the new administration? What do you think? I mean, new finance minister.

UNIDENTIFIED MALE: We are hopeful. That's all we can be. We are hopeful.

QUEST: Oh, that's -- that is...

UNIDENTIFIED MALE: That's all it can be. That's boring...

QUEST: No, that's (INAUDIBLE) we (ph) think (ph) praise.

UNIDENTIFIED MALE: We hold our breath in anticipation.

QUEST: Black or white, it doesn't matter. The people having lunch here at Rosebank in the northern suburbs of Johannesburg are at the upper end of South Africa's economic spectrum. For President Zuma, it's only by keeping these people on board that he can hope that South Africa's economy survives.

QUEST (voice-over): And that's the crucial point to realize about the Zuma administration. Everyone knows there will be change afoot. The question is how much the country can afford at the time of global recession.


QUEST (on camera): The views on the streets of Joburg. And frankly, talking to you on our travels is the best part of the trip. No matter how many economists and ministers we meet, we really always need to find out what's happening in the real economy.

For instance, when I went to India, it was haggling in the market that gave me a taste of what's taking place.


QUEST: How much?


QUEST: How much?


QUEST: Seventy-five.


QUEST: Fifty.




QUEST: As all business travelers know, being on the road is no excuse for not being suitably attired. Hong Kong is famous for its tailoring and for being able to knock up a suit in 24 hours.

So, when I was there, I took the chance to find out about the latest trends in men's fashions. It was all in the name of research.


QUEST: The three-button suit?

RAJA DASWANI, CEO, RAJA FASHIONS, HONG KONG: They're gone. They're history now. It's now two or one button.

QUEST: Is there such a thing as the classic suit?

DASWANI: The classic suit is the real -- real classic has never failed, has never -- is the two-button style with the side vents, one pleat, no turn-ups. That's the real, real classic.

QUEST: Is there much of a regional and cultural difference over different types of suits?

DASWANI: Oh, yes, definitely. Definitely. Cultural -- like, if you go down to India, there's the Indian collar. If you go to China, it's the Mao Tse-tung collar.

But, of course, with modern fashion, everyone wears suits bought in India and China, so the regular, modern suits are very popular in both those places. But also, the collars (ph) are different.

QUEST: How do you feel (ph)?


QUEST: The suit is sorted. Now I need a tie to top it.

While anchoring the show outside the New York Stock Exchange, I took the opportunity.


QUEST: Look at this. Sunglasses and Italian ties. Jason (ph) is here. I've always believed the best ties are the cheapest ones. They're (ph) hold (ph) -- they're (ph) not the best.

But this is a bargain, $6 each.


QUEST: Four for $20.


QUEST: Give me five for $20.

UNIDENTIFIED MALE: Five -- well, it's a (INAUDIBLE). You know...

QUEST: All right, four...

UNIDENTIFIED MALE: ... I've got to see the cash, you know...

QUEST: Here's the cash. Here's the 20. It's my own $20 bill. I want...


QUEST: I want four...

UNIDENTIFIED MALE: It's an old 20, but go (ph) ahead (ph)...

QUEST: All right. I want four ties that I can wear for the rest of this week on television.


QUEST: So, I have the suit from Hong Kong, the tie from New York. Now, in India, it was time to find something a little more casual. And needless to say, a lot of haggling was involved.



QUEST: How much?


QUEST: Seventy-five?


QUEST: That's about $1.50.


QUEST: Not today.


QUEST: Some short ones.


QUEST: How much?


QUEST: Seventy-five. That's over a dollar.

UNIDENTIFIED MALE: Dollar? Indian price.

QUEST: Yes. Oh, oh.


How much?


QUEST: How much?


QUEST: Seventy-five.


QUEST: Fifty.


QUEST: All right, 75.

Everything costs 75. And you never actually get the change.

How much?


QUEST: Two hundred? Oh.

One hundred.

One hundred. Hold on.

Now we're talking.

How much?


QUEST: One fifty?



QUEST: So, why am I -- why am I paying 150, and he's paying 100?


QUEST: Hang on. Now the price is coming down. (INAUDIBLE).


QUEST: Thank you very much. Thank you very much. Thank you.


QUEST: And that's it for this special program, "Quest on the Road."

I'm Richard Quest in London. Who knows where my travels will take me in 2010?

Certainly, wherever your travels take you, I do hope it's profitable.