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QUEST MEANS BUSINESS
U.S. President Obama Announces $50 Billion Highways, Railways Stimulus Package To Generate Jobs; Fastest Growing Jobs; Workers Protest; Livestock and Livelihoods; Gulf Oil Spill; Golden Age for Pawnbrokers; The Business of Bollywood
Aired September 6, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: A $50 billion gamble, President Obama says he'll be spending more not less to create jobs.
BA's 12 takeover targets, CEO Willie Walsh tells CNN that consolidation is key.
And a huge challenge ahead, in this week's "Future Cities" we navigate the congested roads of Cairo.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
Hello to you.
Barack Obama is making new push to jump start the struggling U.S. economy. The U.S. president is set to announce to announce two different proposals. This week, today, he's unveiling a $50 billion plan to improve the nation's transportation infrastructure. He calls for rebuilding a 240,000 kilometers of roads, would you believe. Constructing and maintaining 64,000 kilometers of railways, and improving airports and the air traffic control system which is under a lot of pressure, a huge project.
The administration hopes the plan will boost job creation because you need people to build those things. On Friday the Labor Department said the U.S. lost more than 50,000 jobs last month and the unemployment rate is now up to 9.6 percent.
The plan comes two months before congressional mid-term elections, but a recent CNN survey shows the White House still has work to do to win over the public in its ability to manage the economy.
Now, President Obama will lay out his building plans in around an hour from now. For more let's cross live to the White House, where we CNN's Dan Lothian.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Hello. Glad to be with you.
You know, the big challenge for the president really is to somehow convince Americans that what this administration is doing will in the end turn the economy around. There is still a lot of uncertainty out there on Main Street. People uncertain, so they won't spend the dollars they do have. Businesses won't spend and hire more workers because they don't know what direction the economy is going in. And so that is why you see the president out in Wisconsin today, as you pointed out, laying out this new infrastructure investment, $50 billion for 150,000 miles of roads, 4,000 miles of rail, rehabbing 150 miles of airport runways, and also creating an infrastructure bank to help target federal transportation dollars.
All of this, the administration believing will ultimately, in the long-term, help to spark the economy and to create jobs. But even the president admitting that we won't see anything happening anytime soon, in fact, some administration officials held a conference call this morning. And one of the last questions was when can we start to see some of these jobs being created from this proposal? And an administration official saying, sometime in 2011, then the follow up question was. Well, will it be in January of 2011, or perhaps in December of 2011? And they simply didn't have an answer, at all. So, even though this is meant to really get people thinking about how this economy will eventually turn around, it is something that the administration admits will not be happening in the short term, Max.
FOSTER: And Dan, if he doesn't he convince people today, he's got another chance on Wednesday, hasn't he, in Ohio, where he's making a speech?
LOTHIAN: That's right. He goes to Cleveland, Ohio. To roll out a plan to invest $100 billion in permanent tax breaks for companies to do research and development. This will then, if they do R&D hopefully from the administration's point of view, that will create new ideas, therefore, new opportunities for hiring.
So, you know, this administration has talked about how small businesses really are the engine for this economy. So, if you can get them doing research and development, you can give them some money for this, it is believed that they will also hire. But, again, you know, all of this will need congressional approval. And even top Democrats and Republicans up on Capitol Hill, before the president even rolls out these proposals are saying they are dead in the water. That he really doesn't have the support there to make this move forward. So, those are the big challenges. First of all, laying it out, will it work? And secondly, will lawmakers up on Capitol Hill support it? And they are saying already that they won't.
FOSTER: Dan Lothian from the White House, thank you very much.
Well, whatever happens with the U.S. economy it is bound to have a ripple effect around the world. For more on that we're going to speak to Jim.
And, Jim, it is-Dan's point is correct, isn't it? These are just words at this point, there is a long way to go before anything takes effect.
JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: Yes, especially in 2010. You know, we are-this is Labor Day, isn't it? So, it is not surprising that he's going to make an announcement that he hopes will create jobs. Labor Day is also the beginning of the end when it comes to the U.S. elections, the mid-term elections coming up. So, a lot of this is politicking as well.
So it all has to do with, can he do anything to the economy between now and November 2, when the Democrats are expected to have a drubbing on the House and the Senate side.
FOSTER: So, he just wants to convince people that he's in control of the economy, but this effort to chuck money into the economy hasn't had the desired effect, so far has it?
BOULDEN: Well, you know, we have all these people who come onto this wall and talk to us about should we stimulate more, should we cut more? Here in the U.K., now the idea is to cut more. That hasn't happened yet in the U.S. It is still about stimulation coming from the U.S. government, federal government, to create jobs. The critics will say it may have saved some jobs, but doesn't create jobs. What creates jobs is tax cuts and tax cuts for small businesses. And that is what he's going to talk about a bit more later in the week. So there is this whole push and pull. Do I stimulate more? Could it do anything to help us economic-wise, or maybe more importantly, politically wise.
FOSTER: As you say, we've had lot of very senior economists arguing about the best way forward, whether to cut or to spend. Is there any sign yet that either Europe or America have got it right so far?
BOULDEN: Well, the U.S. has got a really bad unemployment rate, doesn't it? I mean, the fact that it actually ticked up and got a little bit worse is remarkable given all the money that has been spent. So those who say he should never have spent it, that Bush should never have spent it, that there shouldn't have been either of them, the stimulus packages- feel that they have been proven correct in that. But here, of course, we saw in Germany, we've seen unemployment coming down quite quickly. So, I think there is some-enough meat for both sides to continue to say that one is working or the other is working.
FOSTER: I guess most countries got an interest in the U.S., or Obama, succeeding in this, because if he can stimulate demand then every other country that exports to America is going to gain.
BOULDEN: One of the biggest worries in the last couple of months, hasn't it? It has been the fact that the U.S. economy looks like it is going into reverse. We can't say double dip yet, but that has been a real worrying time for the markets. You see it happening here in Europe. Because who is Germany going to export to if you saw a slowdown in the U.S. along with maybe a slowdown in China, of course. But the point is, with this election coming up. Depending on what-it is all about the economy. If the voters decide that Obama isn't doing a good job, and the Republicans take control, then you have the next two years where maybe a lot of stuff doesn't happen. So he won't be able to get any more stimulus through. But there may be stalemate, which could be even worse for the economy as some people would argue. And that could make it hard to see any movement, as far as any kind of growth in the economy over the next two years.
FOSTER: Jim, thank you very much for joining us with that.
Now, going to have a look at the European markets right now and see how they responded today. They were the main markets operating around the world, really, outside Asia, because obviously Wall Street was closed today. You can see the European markets all were up. So, pretty good news between sort of a 0.25 of a percent and 0.33 of 1 percent, all the main markets across Europe.
(INAUDIBLE) utilities shares. They rose after Germany said it would extend the life of its nuclear power plants in the region's main indices all up, as we were seeing just there, all those green arrows.
Now, a shopping spree for Willie Walsh, is the mind behind the British Airways, eyes a new deals, BA CEO also tells CNN why he's very keen on India.
FOSTER: He's going shopping. The British Airways' chief executive is eyeing further deals. A sign of BA's new dawn, despite the summer strikes, spring's volcanic ash debacle, and a drop in last month's passenger traffic as well. Not been a great period for them. Executives of the newly merged BA and Iberia Airways are considering more ways to expand and they have targeted 12 airlines for possible takeovers. Asia tops the list, without releasing names, Walsh says many of the airlines are in the One World Alliance, a bit of a hint there. Some pretty solid information, really.
Another sign of BA's big plans is the carriers first 77-300ER plane, built by Boeing has officially launched. It is being used on some flights this autumn to Mumbai, Delhi, Dubai, Chicago. Two more of the new planes are due to arrive by the end of 2010, as well with more to follow over the next two years. On top of that, two Airbus A318 aircraft for trans- Atlantic services from London City airport. British Airways and Indian carrier Kingfisher are to start co-chairing in each other's flights across India, Sri Lanka, the U.K. and Continental Europe. And both carriers will each use each other's flight network as part of their expansion plan.
This is the first time BA has co-chaired with an Indian airline and BA has been flying in India for more than 80 years. So that is a big move for them. Kingfisher is India's number two carrier. Shares of Kingfisher jumped almost 9 percent today in Mumbai trading, so the Indians certainly think it is a good idea. Malika Kapur caught up with BA's CEO, Willie Walsh, in Mumbai, and asked him why India is such an important market for BA?
WILLIE WALSH, CEO, BRITISH AIRWAYS: India, for British Airways, is our second biggest international market, after the United States. We fly 45 flights a week from Heathrow to five destinations in India. And it is just a fantastic market. And clearly a great growth opportunity for British Airways. So, I'm very excited to be back in Mumbai, and particularly pleased to be here to announce this new venture with Kingfisher, our co-chairing.
MALIKA KAPUR, CNN INT'L. CORRESPONDENT (on camera): You have your choices in India. Why did you pick Kingfisher?
WALSH: We were really pleased to be able to work with Kingfisher. I think they are an excellent airline. They aspire to achieve the same things as British Airways. They have clearly got ambition for the future. They are a high quality airline. Excellent network here, in India, and everything just fitted very, very well.
KAPUR: At the moment as the co-chair, going forward, if the government changes its rules, could we see an even closer association?
WALSH: I would not rule that out. Personally, I've always held a view that consolidation will benefit our industry. And this is such an important market, with great growth opportunity. I think if the possibility did exist I would certainly be looking at that. And I have no doubt that there are lots of airlines, international airlines, who will be looking at India and an opportunity to develop even a closer, more closer, relationship with the Indian airlines.
KAPUR: I understand the customer benefit, but what about the financial benefit? What sort of savings do you hope to achieve with this agreement?
WALSH: Co-chairing is not about saving, in fact, it is exactly as you have outlined, it is all about customer benefit. And customer benefit, therefore, means greater revenue. So, where we see co-chairing benefiting us is on generating more revenue. We don't really see opportunities to reduce costs as a result of these arrangements. But we definitely see an increase in revenue. And that has been the experience of British Airways over the years with the co-chair arrangements that we've had with other airlines. And I know that this particular relationship with Kingfisher will benefit Kingfisher and British Airways from a revenue point of view.
KAPUR: Speaking of partnerships, how is the merger with Iberia moving along?
WALSH: We're having very good discussions. There is still quite a bit of work to do. We're optimistic that we will be able to complete everything in time to start the new company at the beginning of next year. But there is still, you know, quite a bit of work for us to do. But we're making good progress and I'm pleased with the developments so far.
KAPUR: A problem that refuses to go away for British Airways is strikes, or the threat of strikes. In fact, parts of the union are meeting again this week. Where do things stand between British Airways and the labor union?
WALSH: We will be meeting with the union whenever they want to talk to us, but at the same time as being hopeful and optimistic that we can reach agreement. We have developed plans if we are faced with further industrial action. And what I can say is that if we face further industrial action British Airways will operate all of our long-haul flights.
So during previous periods we operated most, 40 out of 45 of our weekly flights to India, operated through the last industrial action. If we face further industrial action all of our long haul flights, and that includes all flights to India, will operate as normal. We're very confident about the plans that we have developed, if we have to face further industrial action. I hope we don't. I hope this trade union that we're dealing with realizes that it is futile action on their part and reaches agreement with us.
FOSTER: Willie Walsh there, speaking to Malika Kapur.
Let's take a close look now at India's aviation market then. And industry trade group says the world's most populous democracy is also one of the fastest growing markets. International Air Transport Association says it is all about India, along with China. Boeing is also keen on India. The jet making giant says the burgeoning superpower will need lots of planes, to the tune of $130 billion worth over the next two decades alone, or close to 1,200 commercial aircraft.
Boeing also points out there are plenty of people in the air. India's airlines expected to carry 50 million passengers this year alone. That is up from the 44 million they carried in 2009. Don't forget investment. India is pumping more than $8.5 billion into its aviation industry over the next five years.
Now it is a-it's growing at a breakneck speed, but it's traffic is traveling at a snail's pace. (INAUDIBLE) to see how the city is planning for a faster more reliable future.
FOSTER: Well as the world changes, the places where we live and work need to change too. As part of our "Future Cities" series. We've traveled to London , to Los Angeles, Hamburg, Istanbul, and to Delhi. Today we're heading, though, to Cairo. The first of four special reports, Sir Richard looks at how the largest city on the African Continent is trying to transform its transport system.
RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS (voice over): There is traffic chaos, and then there is Cairo. Some 20 million people, with 3 million vehicles all jostling for space in this mega city on the Nile.
(On camera): Dare I say it? The biggest mystery in Cairo is not how they built the pyramids, but how to deal with the congestion.
(voice over): Perhaps the ancient pharaohs would have planned things differently. But modern Cairo is in danger of choking on its own growth.
ALAA FAHMY, EGYPTIAN TRANSPORT MINISTER: Everybody asking for solutions for that issue, but it has been years now that we need a very effective solution to resolve these issues. Because actually the demand is increasing right now.
DR. ABASS EL ZAFARANY, ENVIRONMENTAL PLANNING, CAIRO UNIV.: You have history and you have not a lot of space. And you have a lot of people. So this heritage, human, tangible, intangible, all this heritage is threatened by the congestion of cars. We have to save Cairo from this dilemma.
QUEST: Cairo's population has trebled in less than 50 years. In the center of town, vehicles average just 11 kilometers an hour.
ZAFARANY: We have to enhance the roads system and the transportation system. We have to concentrate on public transportation. We have to change our way of commuting.
QUEST: The scale of this daily problem is relayed in real time to Cairo's transport control center. It is a rather modest affair for the job at hand. There is talk of a new facility, but for now, just 32 cameras are in place to help enforce law and order.
These roads are statistically amongst the world's most dangerous. Discipline is thin on the ground.
This is part of our country, this is part of our culture, this is part of our history. So we have to adapt ourselves to that culture. So now we are looking for a new (INAUDIBLE) framework. One of the variables in this equation will be the culture of people. How to deal with the culture of people.
QUEST (on camera): This sort of gridlock is ebbing away the economic life of the city. And solving it is now one of the priorities for Cairo of the future.
(voice over): Last year the government announced Project Cairo 2050. Over four decades the plan is to transform the Egyptian capitol into a city that moves and breathes more easily. Infrastructure, housing and green spaces, are all on the agenda. Already new white taxis have become the symbol of a government lead scheme to rid the city of old polluting cars.
Currently Cairo has 85,000 taxis, 40,000 of them are older than 25 years. So, we want to get rid of this. And this will cost the government about 400 million Egyptian pounds. The prime minister approved. And he allocated the funds. And in the first year we succeeded scrap 30,000 old taxis and to provide them with the new ones, which are the white taxis that you can see cruising in the streets. Also, we have 30,000 on a waiting list.
QUEST: Salvation is also being sought below ground. The only one on the African Continent, Cairo fledgling metro system is to be expended.
(On camera): Getting people underground and on the train is the way forward. And frankly, it seems to be a lot more civilized than taking your chances on the road.
(Voice over): Clean and efficient, it is a different world down here, where the trains run every two or three minutes. The two existing lines carry 2 million passengers a day. Construction on a third line has begun and a fourth is in the pipeline.
Line number 1, line number 2, that link the north to south. The new lines will link the east to the west. It is very important to, I mean, to relieve the traffic network in the (INAUDIBLE).
QUEST: Project Cairo 2050 will also target the expansion of Cairo itself. Creating space outside to east the pressures within. Head out of this city in any direction and pretty soon you find mile after mile of construction. These are Cairo's satellite cities and they are springing up in the desert.
We have to work on five or six different ways to try to solve the problems. One of them is expanding.
QUEST: Cynics argue that master plans like Cairo 2050 have come and failed in the past. More than 200,000 new cars are licensed in this city each year. And the population could be double what it is now, by mid- century.
(On camera): Cairo is a wonderful city with many marvelous places to visit, provided you can get there.
(Voice over): On the banks of the River Nile, the ancient Egyptians built one of the cradles of civilization; 5,000 years later, and Cairo is building again.
FOSTER: Well, we are downsizing next with a look at small businesses. Stay with us. Find out what this company did to survive the recession. And why others like it are so important to the U.S. economy.
FOSTER: Welcome back. I'm Max Foster in London. More QUEST MEANS BUSINESS in just a moment. But first are the main news headlines.
Now we are less than 45 minutes away from the start of President Obama's Labor Day speech in Milwaukee, in Wisconsin. We are expecting to hear about the new projects to create jobs in the U.S. When it comes to private sector job creation small businesses are key. The U.S. government says two out of every three new private sector jobs are created by small businesses. A bill to help them out is currently stuck in the U.S. Senate. The Small Business Jobs and Credit Act, would give cheap credit to smaller banks. And that would then trickle down to small businesses that desperately need it. A series of tax cuts are also on the bill to encourage entrepreneurs.
Now for some business owners that help can't come soon enough. In Washington, Kate Bolduan met one woman who had to downscale her company in order just to survive.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: My second floor was a showroom for the high end types.
KATE BOLDUAN, CNN CORRESPONDENT (voice over): We met Denise Demore (ph) nine months ago as she was closing down Capitol Hill Bikes, in Washington. After nine years in business a victim of the recession.
UNIDENTIFIED FEMALE: Lack of cash, we couldn't support this real estate anymore.
BOLDUAN: That was then, this is now. Demore (ph) has reopened what she describes as a leaner, meaner operation in a much smaller space. The good news customers are starting to come back. But Demore (ph) says, she, like other small businesses is still facing the same challenges that got her in a tough spot to begin with, access to cash and credit.
(on camera): The last time that we spoke you said we need ready access.
UNIDENTIFIED FEMALE: Easy access to cash, to support some cash flow through the hard times.
BOLDUAN: Is your message the same today?
UNIDENTIFIED FEMALE: Absolutely. Absolutely.
BOLDUAN (voice-over): It's something President Obama is trying to show he's tackling urging Congress Friday to move forward on a bill designed to help small business including a $30 billion lending fund to help ease credit and $12 billion in tax breaks.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: One thing we have a responsibility to do right now is to lift up our small businesses, which accounted for over 60 percent of job losses in the final months of last year.
BOLDUAN: Economic policy analyst, Anne Mathias says the measure will help, but it's no silver bullet.
ANNE MATHIAS, DIRECTOR OF POLICY RESEARCH, CONCEPT CAPITAL: It's not going to bring rush - you know, a rush of people into stores to buy whatever it is these different small businesses have to offer, but it will help. It will help tie it at the back end.
UNIDENTIFIED FEMALE: Perfect. You look like a cyclist.
BOLDUAN (voice-over): In the meantime, Denice Demoore says she has adapted to tough times and is looking forward to making it through another bicycle season.
BOLDUAN: But remember we're heading into election session here in Washington. Congress is set to return in just over a week and even if the small business bill passes quickly, midterm elections are fast approaching leaving little time for the measures impact to be felt before voters head to the polls. Kate Bolduan, CNN, Capitol Hills.
MAX FOSTER, CNN ANCHOR: For a look at now of the some of the fastest growing professions then according to the U.S. Bureau of Labor's statistics. This is interesting reading.
Nursing is a big growth area. The number of nurses is expected to jump by 23 percent by 2018 compared to 2008. As a percentage of (INAUDIBLE) in the U.S. rises, more people will be needed to look after them.
And as people get more pets, we'll need more vets. The profession is expected to grow by more than a third. Pet care was one of the few retail sectors actually to grow during the recession.
And here's a direct effect of the rising popularity of smart phones. Software developing is another growth area. It's expected to jump 34 percent by 2018 that's because of our - appetite for apps.
Now, a new development now from South Africa where crippling national strike is set to come to an end. Union leaders have announced they are suspending a three-week old walk out.
Schools have been shutdown and hospitals barely running since mid- August. Around 1.3 million public workers are demanding a wage increase of more than 8 percent. So far the government has offered a 7.5 percent plus a housing subsidy.
Union leaders say the strike suspension does not mean they've accepted the offer.
Here in London, underground commuters are trying to figure another way home. The first in a series of 24 hours subway strikes kicked off a couple of hours ago here. Ten thousand workers are protesting 800 job cuts, which they say will put transit security at risk.
And there's a similar story in France where a nationwide strike is causing serious travel destructions. The walkout (INAUDIBLE) transport workers - on Tuesday will get a lot worse when school, post office and civil services staff take to the streets.
It's all in response to the government's plan to increase the minimum retirement age. Jim Bittermann has more now from Paris.
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Isabel Alosh (ph) feels angry and abandoned by the system. After 30 years delivering the mail, the post worker had been planning to retire next year when she turns 55. That was the idea at least before President Nicolas Sarkozy came along with his reform of the National Pension Plan.
But if it becomes law, to earn a full pension, she may have to work until 60 or beyond. It's physically exhausting she points out. All the heavy lifting and all kinds of weather, and they keep the changing the rules.
An official of her union says postal workers feel the trade because he believes they are being made to pay by working longer when the government could (INAUDIBLE) pension plan deficits by imposing more taxes on the rich.
NICKO GALAPIDES, PTT SUD UNION: My feelings (INAUDIBLE) because there is a bad sharing of the wealth, maybe we can call it a national will (ph). The main thing is (INAUDIBLE).
BITTERMANN: And so postal workers like hundreds of thousands perhaps millions of other workers in France are on strike on Tuesday hoping they can force the government to back down.
Pension reform is likely to be a defining moment in the presidency of Nicolas Sarkozy. They have already been repeated national strikes and demonstrations over the question and it has unified the opposition like no other previous issues.
Opponents have drawn a line, which they believe must be held to stop further advances by Sarkozy's conservative majority. But the government too has drawn a line.
One of Sarkozy's top aides said over the weekend that there while some flexibility on the details, the fundamentals of pension reform must be enacted since increasing life expectancy increases the financial burden on the pension system.
Complicating things for the government is the president's poor approval ratings in the opinion polls over the summer hitting the lowest point of his presidency.
GUILLAUME PETIT, TNS-SOFRES POLLS: There is a kind of anti-patty against Nicolas Sarkozy at the moment. His approval rating is very low. We have just 30 percent of French opinion trusting him.
BITTERMANN: Last month the polling agency set another political wakeup call when surveys for the first time indicated that several other French politicians could beat Sarkozy if he runs for re-election in 2012.
Analysts point out that a lot can happen in the 20 months between now and the next presidential elections, but Sarkozy must successfully get the pension issue behind him.
(on camera): As one newspaper here pointed out, what's even more important than the one day strike on Tuesday is what happens after that.
If the strike is extended beyond the 24 hours specified by the unions or if it leads to similar protest over other issues in other sectors, the president's approval ratings could take even further yet. Jim Bittermann, CNN, Paris.
FOSTER: (Inaudible) the cost after mother nature strikes. How communities are coping after the massive lost of land and livelihoods in flood ravaged Pakistan.
FOSTER: Now we see the devastating economic effects of the floods in Pakistan. The rushing waters took more than lives. It took livelihoods too when thousands of lives got drowned.
Sara Sidner reports on how one Pakistani pay the ultimate price trying to save his family's economic future.
SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT (voice-over): (INAUDIBLE) stares out at the flood in this river. The current is still a swift as when it swallowed his father a few days ago.
Seventy-year-old (INAUDIBLE) had escaped the flood waters rushing towards his pastured land in (INAUDIBLE) Province, but when the river sucked one of his animals under, he dove in to save its life.
(on camera): Knowing how fast flowing the flooded river is, why did your father risked his life for one animal, one buffalo.
The livestock is worth more than even our own lives because it's the only way we make a living, he says, we are making our entire living and feeding our families off of these animals.
Navy divers on (INAUDIBLE) says he pulled (INAUDIBLE) body from the river just 100 yards downstream. Mowen (ph) says people are so desperate to save their livestock that they even try to bring them on small rescue boats.
When we cannot take their animals on our boats, people sometime to refuse to be rescued.
This must really add to the difficulties for the rescue effort because people are trying to save their animals.
(voice-over): The United Nations estimate the floods have killed some 200,000 animals. A devastating toll in a country where nearly half the people live off the land and livestock are the key to survival.
(on camera): In the villages, people learn at a very early age how important animals are. Kubedar (ph) here is nine years old and he helps his family make a living by using his donkey to take feeds to the buffalo.
(voice-over): Buffalo are priced possessions. They provide milk and farm labor even their dung is useful as fertilizer and dried and burned as fuel for cooking fires.
The animals cost about $1,000 each, a fortune for those who earn about $1 per day. People pay handsomely to have them loaded on a truck and carted to safely as the flood waters approach.
Not everyone could afford such an expense. Farmer Nadiv Dahani (ph) suffered a long and exhausting track to get his herd out of harm's way.
(on camera); How did you get your animals out when the floods came?
"We herded our livestock and walked three or four days to bring them here" he says. In (Sin) Province alone, 1.7 million acres of farmland has been flooded. The U.N. is asking for millions of dollars to help livestock survive because even if they escape the deluge, most of their pasture has vanished in the swirling waters. Sara Sidner, CNN, Yari Dero, Pakistan.
FOSTER: OK, the weather in your off scene not nearly as severe, but we're going to have a look at it now with Guillermo.
Hi, there, Guillermo.
GUILLERMO ARDUINO, CNN INTERNATIONAL WEATHER CORRESPONDENT: Hey, Max, you know, I was thinking Pakistan is in the clear right now. We're not going to see any rains because the monsoonal flow started to recede.
In India, we still have weeks until it retreats completely and especially in central part of this world we see more rain. Now you mentioned Europe and the concern is coming along the news that we get from the U.K. Met Office.
So we will see some significant accumulations of rain here and also in the south especially and also some severe weather. So look, there's the radar, look at Wales, also England here towards the south.
We see some severe storms popping up, a lot of rain in northern island. We may see also some storms in central part of France and northern parts of France. But most of the precipitation is going to be in England.
You see what this newly formed systems that is going through the area. The east appears to be fine, but central med, western and the eastern med are going to be fine if you're on a cruise over there. It's fine. If you're on a cruise in the Voltics (ph), you're going to see some clouds and that's about it because most of the rain is going to be towards the west and in front.
The French river unfortunately with some storms, 21 the high in Paris for Tuesday, 19 in London and the south still very nice. It's going to be chilly especially here to the north when the sun is not out. That is to say morning in the evening late night hours.
Well, also the heat continues here in the Arabian Peninsula in the Middle East in general close to 50 degrees. Look at Medina in Saudi Arabia here. Also we have Abu Dhabi and the Emirates close to 47, 46 degrees and we will see that trend that will continue.
These are the highs that we expect for Tuesday. Karachi (ph) 33 degrees and Jeddah 39. Medina is very close to Jeddah. Well, we are following what's going on in the tropics. We have a system that's very close to Texas here and into Tamaolipa (ph).
It's a tropical storm, but we're following that closely because it's about to make landfall. We'll tell you the details now and also remnants of Gaston (ph).
That tropical cyclone had weakened and there's 70 percent of chance of redevelopment that's why we're looking at it closely. It hasn't gone anywhere yet, it may come back. We're here to track it down.
So you see the Gulf of Mexico if you are there and you thought that you're going to have a nice day at the beach, I don't think so maybe with a surf board. The winds are going up a little bit in speed, 97 kilometers per hour.
We expect landfall there near Bronxville, near Matamoros here in the border between Tamaolipas and Texas. So we have advisories and warnings all posted and watches.
In Australia in the meantime, we have a storm that actually affected the Salvies with a lower rain. That system is moving into New Zealand now, north island (INAUDIBLE) we got a lot of rain in here.
But ultimately we're going to transition very soon into the springtime so nice time is coming up southern hemisphere patience. Back to you.
FOSTER: Patience he says. Thanks very much, Guillermo.
ARDUINO: Thank you.
FOSTER: Now, here in the U.S., BP says it has spent nearly $8 billion on its Gulf of Mexico oil spill. So far, the ruptured well's blow out preventer is now in the hands of U.S. authorities.
CNN's Andrew Spencer reports of the massive device maybe key to figure out exactly what happened.
ANDREW SPENCER, CNN CORRESPONDENT (voice-over): The beginning of hopefully the end. The suspect blow out preventer from the deep water horizon rig has been brought to the surface.
Once raised, the device was taken into custody by the U.S. Department of Justice as an important piece of evidence in the ongoing investigation in the explosion that claimed 11 lives and dumped massive amounts of oil into the Gulf of Mexico.
National Incident Commander Thad Allen said earlier this week it would join other evidence experts are looking at to determine the cause of the April 20th explosion.
THAD ALLEN, U.S. OIL SPILL RESPONSE COMMANDER: Ultimately be taken to a point somewhere on land where everything we put together with the other debris and pieces that have been recovered from the rig itself.
SPENCER: One of the dangers of bringing the blow out preventer to the surface was the hydrates or crystals that formed on the device in the cold deep water. Crews had flushed them out as they melted and formed a gas.
MARVIN MORRISON, BP WELL SITE LEADER: We're taking all the safety precautions necessary so that gas is contained and held and led off properly.
SPENCER: Once the new blow out preventer has been tested, BP will be able to complete the drilling of a relief well to intercept the damage. BP said in a statement on Friday that could happen by mid-September depending on weather conditions.
One BP official present at the raising of the device said he hope this recovery would help the families of those who died.
MORRISON: For the investigation to move forward for the families is a major, major thing for the memory of the 11 men.
SPENCER: Reporting from Atlanta, I'm Andrew Spencer.
FOSTER: Well, hard times and the high price of gold. We'll show you why it's a profit making mix for a once dying industry.
FOSTER: Now with the gold hovering around, $1,250 an ounce, in tough times pressing down for the last couple of years, you've got a rich money making environment for pawnbrokers. CNN's Jim Boulden caught up with one who's seeing a new gold rush and they discussed the (INAUDIBLE) time of this industry.
JOHN NICHOLS, CEO, H&T PAWNBROKERS: Well, you got them on (INAUDIBLE). You've got to give your customers no matter what they're buying with it, retail financial or retail jewelry, a nice place to go and transact the business.
You know, what's wrong with giving them a nice place to transact. It's going to be light. It's going to airy and something you want to come in. It's not hidden at the back of a jewelry shop.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: It's not just pawn brokering going on here, you've got jewelry sales. You're buying gold, loans off to people's checks before they can get paid. How much of what you do is now just pawn brokering in the traditional sense.
NICHOLS: In the traditional sense, it's still a major part of our business. We take an advantage of - the number of people when the sell goes as opposed to pawn brokering and we found (INAUDIBLE) slightly different customer.
That people found little bits of jewelry in the back of a drawer, got no use for it, but of course, for the high price of gold. Why don't just change it for something else, some cash. Some actually just trade it in for other pieces of jewelry.
BOULDEN: You look at the pawn brokering statistics. We are talking about people who are - many of them are unemployed.
BOULDEN: Many of them live in social housing. Many of them are having trouble in these troubled times and there are some critics who say behind your trade, you're taking advantage of these people. What do you say about that?
NICHOLS: Well, our interest rates and charge had been the same for many, many years. You know, we've seen the increase in pawn brokering customer because we've done what you said. We'd open up the premises that bright there and are inviting and on high streets where people can see them.
The charges are quite clear. People know what exactly what they've got to pay, what we're going to lend them and there's no hidden charges at the end of it. It's quite a simple transaction and of course, when we lend money to customers on their gold, we want to make sure they come back and get their gold again.
BOULDEN: You're a publicly traded company of shareholders. You just come out with your results. As far as the city was concerned, there were fantastic results. What do you (INAUDIBLE) 70 percent increase (INAUDIBLE) profit -
NICHOLS: Yes. I mean, I think what you got to look at is the rise in '09, the second half of '09 in gold purchasing. It really hit the headlines with a lot of postal buys, advertising, very heavily on TV media, massive spends, getting people aware of what was available to them when they sell their gold.
I think a lot of people just didn't want to put their gold into an envelope and send it off. They much prefer to come to people like myself and lots of others on the high street who will give them a fair price for their gold.
Sure we've got an economic crisis at the moment, but we haven't - we don't believe we're seeing more pawn brokering customers as a result of it.
BOULDEN: You have not.
NICHOLS: No, I think we've seen more people on the sell go. Now is that because of the high price of gold or because they need the extra money, I don't know. But certainly pawnbrokers have been increasing, you know, year on year about the same rate on a (INAUDIBLE) basis over the last 10 years.
BOULDEN: When somebody pawn something and they have to renew the loan, over a year time, it's 100 percent interest rate in some shops.
NICHOLS: Yes, I mean, I think -
BOULDEN: That's a lot.
NICHOLS: It is when you compare it to normal of credit cards, but actually it's (INAUDIBLE) hundred per month. Now the average redemption, just over three months, can you compare that to (INAUDIBLE) overdraft charges or doing some (store) cards now. If you're redeeming it at three and a half months, that's actually not a bad deal.
We never claimed it's the cheapest, but the pawn brokering customer, you want them to keep their asset because that's their way of obtaining credit in the future. So my (INAUDIBLE) would be to get every pawn brokering customer to redeem their goods. Just over three quarters at the moment. In fact, it's slightly improving.
BOULDEN: And if they come back again with the same of piece of jewelry?
NICHOLS: They come back time and time again and it's quite often that, you know, you can go back three generations of the same family using the same (INAUDIBLE) -
BOULDEN: With the same piece of jewelry.
NICHOLS: With the same piece of jewelry absolutely.
FOSTER: Well, there you go (INAUDIBLE) doesn't it? And another reflection of the times really is that low budget films are doing well at the Box Office both in Hollywood and in Bollywood. CNN's Mallika Kapur finds out. It's seems the smaller the budget, most successful it maybe.
MALLIKA KAPUR, CNN INTERNATIONAL CORRESPONDENT (voice-over): Songs and dances, glamorous stars are typical Bollywood movie has it all along with a budget of around $8 million to $10 million. That's big by Indian standards.
But this year, some highly anticipated films with big budgets starring big name actors have bombed here. The ones raking in the money are films made on a budget.
It's cost just $2 million to make this one. The filmmaker say thanks to satellite rights, music deals and clever marketing, Beeply Live (ph) recovered its cost even before it was released. It has no star cost, but a very famous actor produced it.
AAMIR KHAN, ACTOR/PRODUCER: I've always believed that a film is good and it works. So you can't kill a good film and a bad film, there's nothing you can do to save it. No matter how big the stars are. No matter how much you spend on the promotions.
KAPUR: He says lower cost means producers and directors are willing to take more risks.
The results, films that are different and daring like "Love Sex Aur Dhokha," which used handy cams and flip cams, no films at all. It is one of this year's small films that made it big.
DIBAKAR BANERJEE, DIRECTOR: There is an unproven mathematical rule in filmmaking circus, the lower your budget, the higher your freedom.
I actually would like to make a film for 30 bucks because then I know that I can do exactly what I want, and if 50 people see it, I'm in the black.
KAPUR: This analyst says these changes are a result of India's new multiplex culture.
KOMAL NAHTA, TRADE ANALYST: Earlier, (INAUDIBLE) film to prove profitable in any given cinema is try to get at least 500 people because there were thousand capacities and about thousand seaters, 1,200 seaters.
But now we have multiplexes, which are 200, 250 seaters sometimes even 150 seaters. So to become profitable in that particular cinema house, you need just about (INAUDIBLE) audiences, (INAUDIBLE) 70 people, which is not too much.
KAPUR: Audiences now have a wider variety of films to choose from, but for some fans, different isn't always better.
(on camera): Some small budget films have very short song and dance routines or don't have them at all. Fans say, if we lose this song and dance routine entirely then Bollywood, well, it's going to be Bollywood. Mallika Kapur, CNN, Mumbai.
FOSTER: She has a point. A reminder about top story now because in around 15 minutes Barack Obama is making a new push to jump start the struggling U.S. economy.
U.S. president is set to announce two different proposals this week. Today, he's unveiling a $50 billion plan to improve the nation's transportation infrastructure. The cost for rebuilding 240,000 kilometers of roads, constructing and maintaining 6,400 kilometers of railway and improving airports and the air traffic control system, which is under so much pressure.
The administration (INAUDIBLE) job creation. Now on Friday, the Labor Department of the U.S. lost more than 50,000 jobs last month and the unemployment rate is now up to 9.6 percent so it's a tough challenge.
With that, we've round up all of the (INAUDIBLE) in action on the short break.
FOSTER: Stocks around the world have had a pretty good day actually. European stocks managed to hang on to Friday's gains (INAUDIBLE) the market is going to boost after Friday's better than expected U.S. jobs report.
(Inaudible) worries that globally economic growth is faltering the payroll picture of its (INAUDIBLE) utility shares and let the session (INAUDIBLE) because they rose after Germany said it would extend the (line) of its nuclear plants.
Asia's stock markets started the week with a bit of a bang. The region's (INAUDIBLE) all finished higher. (Inaudible) was the standout, gaining more than 2 percent like Europe. Asia also got back the boost from the U.S. jobs report.
And some good news out of South Korea meanwhile, Samsung said it's considering beefing up its investment budget next year by a whopping $25 billion would you believe. Asia's biggest maker of chips, flat screens, mobile phones and the like gains 2.5 percent on that news.
So it's a good news around the world on stocks. We'll find out how the U.S. market (INAUDIBLE) tomorrow, close this Monday for the Labor Day Holiday.
That is it though for QUEST MEANS BUSINESS. I'm Max Foster in London. "World One" starts right now with that news from Barack Obama coming soon.