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QUEST MEANS BUSINESS
Sweden's PM Offers To Help With Ireland's Bailout; Confident In A Celtic Recovery; Brand New India Crisis; Russia Calling; Food Crisis Solution?; Get Ready to Shop
Aired November 25, 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: Sweden stepping in. On tonight's show the prime minister tells why he cares about the troubled Euro Zone.
If you are happy and you know it, well, now the British prime minister wants to measure it. And not so easy, Tiger. Why one year on, golf's golden boy is still battling to rebuild his brand.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
There is no dragging the Euro Zone off the roller coaster it is having of a week. Debt markets continue to spiral and fears of contagion are no longer just confined to the periphery. But there are plenty of people who say the single currency will, and should, survive. On tonight's show we break down the risk and the markets appetite for it. And we'll be talking to Sweden's prime minister, an outsider, looking in.
Well, standing together, the leaders of Sweden, and the U.K., have reaffirmed their offers to help Ireland. Sweden's Prime Minister Fredrik Reinfeldt, who I'll be speaking to in just a moment, says his country doesn't have much exposure to Ireland's debt. The Swedish government, though, is hoping nonetheless to offer a loan of $1.5 billion. The U.K. will loan around $11.5 billion.
Sweden has a keen interest in keeping the Euro Zone healthy. And that is because Germany is its biggest trading partner, accounting for 11 percent of exports and 18 percent of imports in 2008. Sweden's strong economic position makes it able to help out. It's economy is expected to grow almost 5 percent this year. It was one of the few European countries not to enter recession as other nations keep rates close to zero, Sweden's central bank has raised them three times since July. Swedish Prime Minister Fredrik Reinfeldt joins me now.
Thank you very much, indeed, for joining us.
So, where are we in terms of this loan you are effectively offering Ireland?
FREDRIK REINFELDT, PRIME MINISTER OF SWEDEN: Well, are of course looking into what is Ireland doing to solve their own problems. We are just saying that we should be part of helping Ireland, together with the United Kingdom, together with the Euro Zone, basically, because we think if we don't create a solution to this we will also see the effect of the problems coming to us.
FOSTER: If they say yes to the offer, what terms will you offer them?
REINFELDT: Well, I think, basically, they have to solve their own problems. We could stabilize the market reactions by showing that we are able to lend money to them. And it has, when we have done so for Latvia and Iceland, been on the kind of conditions which I can defend to Swedish taxpayers, and that is important for me, of course.
FOSTER: Yes, tell me about the conditions you would attach to any loans to Ireland.
REINFELDT: Well, it is just that we know that this is a moment of a tough time for Ireland. But it is a strong country, they will bounce back. And we think it is a safe way of helping them, but also getting our money back.
FOSTER: Would you insist on lower, or higher, corporation tax?
REINFELDT: Well, the thing is I think we should deal with Ireland the way we would like to ourselves be dealt with in a similar situation. And I think it is very important that the Irish people and the Irish government are to take their own decisions on how to get out of the recession.
FOSTER: So, how to spend the money if you did lend it to them?
REINFELDT: Well, I'm sure that this will be combined by very hard measures on tax increases and expenditure cuts. We have seen so in other countries, but I think it is very important that this is something you can do on your own, that you can form your own policies. I don't think we should intervene from outside to tell them what to do.
FOSTER: But how would you convince your voters that giving money at this sensitive time, in the world economy, is justified? What are you going to say to them?
REINFELDT: Well, basically, I will say that if we have a problem nearby, inside the Euro Zone, this will also affect, exactly as you indicated in the beginning of the program. This will effect, also Swedish markets, nearby markets.
FOSTER: Hardly, Ireland?
REINFELDT: Well, maybe not that much with Ireland. But it is close to us. It is close to the United Kingdom, close to Germany, which are very important markets to us. So I think basically this is also a way of showing that European solidarity also can be a good thing. Because we are very certain that Ireland will come out of this troubles, but they need out help at the moment.
FOSTER: Aren't there a lot of Swedes saying to you, isn't the beauty of being outside the Euro Zone, you don't have to get involved in these bailouts. That is exactly why they didn't want to go into the euro in the first place.
REINFELDT: OK. But we are affected by how the euro is perceived and how it is-if it is strong or not. But again, I think we can do this on a case-by-case study. We have been part of the help to Latvia, part of the help to Iceland. We haven't lost any money on that. And we can actually see that we secure greater stability and this is also good for Sweden.
FOSTER: OK. So, if Portugal is next, would you give money to Portugal?
REINFELDT: Well, I don't think we should accept the idea that this is now followed by other countries. Just let us see what happens now in Ireland. There is a lot of programs introduced to get better public finances all through Europe. This is needed and I don't think I want to speculate that any other countries would follow.
FOSTER: OK, the other piece of useful advice and contribution you can make to the Euro Zone, is how to get an economy through a banking crisis and through a really tough time, and come through it without any social tension actually, that you are seeing in other parts of Europe?
FOSTER: What advice can you give other European leaders right now?
REINFELDT: Yes, well it is easy for me to say now, but we started with a surplus when many others had deficits in their public finances. We did not give the money to the banks or to failing industries. We gave it to the people in tax cuts. By that keeping up demand.
FOSTER: You didn't borrow too much, either, did you?
REINFELDT: No, exactly. We have actually had a drop in our national debt as part of our GDP ratio. But because we have been very tight with the taxpayer's money, very important also, to have had a "put work first" principle all through this. So the incentives for work has grown in Sweden. That is the way to meet these kinds of recessions.
FOSTER: Other European leaders are very impressed by the way you have handled things, all the European Nordic countries, in fact, and none less so than David Cameron. You have been meeting him today, haven't you?
FOSTER: Some of the correspondents have been ribbing David Cameron, saying he wants to make Britain a Nordic country.
REINFELDT: Oh, well.
FOSTER: He's very impressed. And he is organizing a summit with the Nordic countries, isn't he?
REINFELDT: That's right.
FOSTER: What's going on there? What is he trying to do? Are you going to create some sort of political bloc?
REINFELDT: No, I wouldn't-I mean, we are part of the European Union. But I think it is very interesting. But the Nordic countries, the boarding states, north of the United Kingdom, are very open economies, very dependent on trade; very much in favor of free trade, in the world, at a time when many are calling for protectionism. So I think we are very nearby.
And also our job creation policies are very much alike. And also to introduce choice inside the welfare system, I think we have a lot to learn. And for me, and for David Cameron, we have inspired each other throughout the years, because we have-
FOSTER: You had been friends before he was elected.
REINFELDT: Absolutely. Because we have transformed our parties in very much the same way, so we are very close.
FOSTER: He likes the Swedish as well, though, doesn't he?
REINFELDT: Well, I like also what I have learned from David Cameron. He has been very keen on introducing green theories on climate change, and also job creation, related to green values, which is also very important.
FOSTER: Prime Minister Reinfeldt, thank you very much indeed for joining us on the program.
REINFELDT: Thank you.
FOSTER: Now reassuring talk doesn't hide the fact that Europe's financial crisis is far from over. Members of Greece's two biggest unions walked off the job today in Athens, bringing public services and public transport to a standstill for a number of hours. They are protesting against the deep spending cuts imposed in the 2011 budget, to trim down Greece's obese deficit. Greece has first to fall in-was first to fall in what many fear could be a tumbling of debt dominoes.
Ireland was the second victim, of course. And today the price of its sovereign debt continues to rise. The yields on 10-year bonds past 9 percent and clearinghouse LCH made trading them more expensive. Ireland's governing coalition is also facing another test, as a bi-election in Donougal (ph) threatens to reduce its already slim majority even further.
The next potential bailout casualties are also in focus, as you can see. Bond yields in Spain and Portugal are also rising. Investors mark them as the potentially next to fall. Haven't fallen over yet, though.
European officials are playing down the risk of a Euro Zone disintegrating. Klaus Regelling (ph) the man in charge of the European Financial Stability Facility, told Germany's "Bilt" (ph) that it is inconceivable that euro would fail. I asked Julian Callow, chief European economist at Barclays Capital if they are reassuring words to investors.
(BEGIN VIDEO CLIP)
JULIAN CALLOW, CHIEF EUROPEAN ECONOMIST, BARCLAYS CAPITAL; Not really at this stage. I think the market really is searching for direction. People want to know what the end game is. But that isn't really very clear. Some people think the European Central Bank, when it meets, actually, in a week's time, should come in and do something very dramatic. Buy lots of bonds, for example, to help calm the situation down.
I'm not so sure myself that it is really necessary to go that far. Clearly there is a crisis of confidence concerning certain areas, certain countries, if we look at the current level of bond yields. Right now there is a lot of uncertainty in other places as well. But (UNINTELLIGIBLE) the European Financial Stability Facility, when you combine that with the potential resources of the IMF can bring. It ought to be sufficient in itself. And there is always the scope to expand it.
FOSTER: Belgium is a country we haven't sort of heard a lot about, being in this sort of group with Greece and Portugal, and even Italy. Why are people talking about Belgium now? Is it at risk? And is it going to need a bailout?
CALLOW: The issue really, for Belgium, is that there is, of course, a bit of a weak spot there. First of all, it has a very high level of government debt, which this year we expect the ratio to be quite close to 100 percent. Which is very high, really, anything above 90 percent is a source of concern. And then, of course, you have the very fragmented nature of Belgium politics and some of the debate over separation for Belgium seems to be as strong as, really, we can recall it having been. So you put that together, and people start becoming a little bit more nervous about holding Belgium debt.
But, you know, fundamentally, the way the market is pricing it, it still is within the core group of countries. And there is not a very particularly heavy exposure to foreign investors which is often one of the key factors to focus on if we are looking at risks in government debt markets.
FOSTER: Can I ask you where you sit on the argument finally, that the euro has already failed? Because countries like Ireland or Greece, wouldn't have been in such a bad economic situation if they were able to devalue their currencies, had to control their currencies, would they? So, arguably the euro has already failed, hasn't it?
CALLOW: Well, I think, the reason we have these problems is because there was excessive bank lending going on, lead to the boons in the construction, and the real estate sectors. And then those markets have come crashing down, in the case particularly of Ireland, but also to a degree, in the case of Spain, in there is weakness there, still, in the case of Portugal. And this really goes quite a long way to explaining why you have these tensions. In contrast, if you look at Germany and Austria, and the Netherlands, and yes, Belgium, and France, you actually find that these countries are performing really quite a cohesive, coherent, core in their economic performance. Which is suggesting that, really, it has been a particular issue related to bank lending, and the real estate sector, that is driving, I think, quite a lot of the problems; and to me that suggests that we can overcome this, particularly, as the problem countries, Spain, Portugal, Ireland and Greece, collectively just add up to just 12 percent of the Euro Zone GDP.
FOSTER: Well, we contacted credit rating agency, Moody's, who says Belgium has a stable outlook and that there are no plans to downgrade it.
Now, let's take a look at how Ireland's events have played out on the markets. As you can see, Europe's major indices all ended the session higher. Rising mining and carmaker shares helped there. And Volkswagen rose 2.1 percent, actually, in Frankfurt. Anglo-American jumps more than 2.5 percent here in London.
It is quite a different story, though, for the peripheral economies, where investors aren't so keen to put their money. Today there were losses across the board, in Spain, Portugal, Greece and Ireland.
Well, that debt crisis worry is taking its toll on the euro as well. It is currently trading against a nine-week low against the U.S. dollar. There is the figure there, trading maybe be a little higher this Thursday, as some U.S. investors take time off for the Thanksgiving. Trading a bit lower, of course, less volume of that.
Now, if you are happy and you know it, this man wants to know it. We'll tell you what government policy has to do with making you feel good, in just a moment.
FOSTER: Time to talk about what it takes to make us happy. It is a happy part of the show. Next April, the U.K. government is going to start measuring how good we feel as a nation. Prime Minister David Cameron wants to go beyond totaling up GDP and measure GWB, that is General Well-Being.
Mr. Cameron, now wants people, in Britain to tell him exactly what well-being is and how we can quantify it. He says governments can and should do more than just make the economy grow. Policies should also promote the good life.
(BEGIN VIDEO CLIP)
DAVID CAMERON, BRITISH PRIME MINISTER: The things that government does has a huge impact on the well-being that we feel. You know, the way we are building shopping centers and how that affects our times. The way we market to children, affects how we bring up our kids. These things are important. And so just as the GDP debate means we properly talk about how we get economic growth and what it is made up of, so I think this debate can make sure we think more carefully about how we are affecting people's quality of life.
(END VIDEO CLIP)
FOSTER: Well, Joe Grice is chief economist at the British Office for National Statistics, that is the body in charge of doing this survey. I asked Joe Grice how we can measure happiness?
(BEGIN VIDEO CLIP)
JOE GRICE, CHIEF ECONOMIST, BRITISH OFFICE FOR NATIONAL STATISTICS: We don't use this term and actually we think in some ways it is a bit misleading. What we are really trying to get at is what we are really trying to get at is what we call well-being. And it is really what matters to people. Happiness maybe one dimensional, but it is wider than that. It is things like sense of belonging. Maybe the effects of what we are doing on the environment, sustainability, quality of life, generally. What makes for life's satisfaction. So it is, happiness maybe a part of it, but it is much wider than that.
FOSTER: It is what makes people feel fulfilled?
GRICE: It may well be. One of the issues we have here is actually being clear what it is really does matter to people. Being fulfilled may well be one. One of the things we've done today, at 12 o'clock today we launched a national debate. And we want to get people's views on what it is matters to them. So that we start to know what it is really ought to be picking up.
FOSTER: This is when statisticians get in trouble, isn't it? Because someone has to make a judgment about how to rate those feelings. How on earth are you going to be able to put that into an index?
GRICE: Well, there is a lot of work that has been done around the world. There is actual evidence that it is possible to make progress in these areas. It is not straightforward, no doubt about that. On the other hand, just to say we're not going to do it seems really just to be a bit defeatist. I mean, if we didn't measure things that really mattered to people, then somehow, you know, we wouldn't really be doing out job.
FOSTER: So, as an economist, you welcome the fact that you are going to be able to consider some of the more social factors involved in an economy, away from the money, and the finance, and the business?
GRICE: Well, the money, the finance, the business, that is incredibly important. Gross domestic product, which we as an office produce, we'll go on producing. That will remain as important as ever. But on the other hand, if there are other things that matter to people, it would be a bit surprising if we didn't take that into account in working out how society was doing. And actually you would think it would be of relevance to governments, to policy making, because you think policy would want to take that into account as well.
FOSTER: The British government is caught up in this austerity drive, of course. Like many other countries and they keep talking about how a simple cut in the budget isn't necessarily bad because there may be benefits elsewhere, which you can't measure financially. So this will play into that argument, won't it?
GRICE: Well, in the sense that, you know, times are hard, and hard choices would have to be made. You would hope those choices would be made, I have thought, on the basis of really all the things that matter to people not just some sub-set of it. So when times are hard, if anything, we think this generally becomes even more important.
FOSTER: When times are hard, money makes people happy doesn't it?
GRICE: Amongst other things, but actually, you know, we'd like, one of the reasons for having the debate that we are having, that we are starting off today, is for people to tell us what really matters to them. And we very much encourage people to join that debate.
FOSTER: Have you had discussions with foreign counterparts? Are they interested in what you are doing?
GRICE: Very much so. And a number of countries around the world have been doing work in this area.
FOSTER: But you are the first to go on this big scale with the prime minister seriously interested?
GRICE: We certainly think the U.K. is at the forefront in terms of making this part of the policy agenda. But we would like to work with out counterparts around the world of course, an pick up lessons they've learned, too.
FOSTER: Maybe we'll have a global happiness index?
GRICE: Well-being, well done.
FOSTER: Now it has been a year since the biggest name in golf crashed his SUV, and saw his squeaky clean reputation unravel before the world. He says he's a new man now, but can a Tiger tarnished by marital infidelity, earn his stripes back in the world of image and advertising.
FOSTER: Now it was a tough Thanksgiving for Tiger Woods, at least this time last year. The car crash outside his Florida was the beginning of the end, really, for Tiger Woods, as we knew him, up until that point. Uncovering multiple, marital infidelities and ending in his divorce. Sponsors dropped him and fans turned their backs. But now he's making new appeal to fans. Richard Roth has the story for us.
RICHARD ROTH, CNN INTERNATIONAL CORRESPONDENT (voice over): Tiger Woods, once the best golfer in the world, hasn't won a tournament since the accident a year ago. But now he's trying to win more public support on the anniversary of his life imploding on a global scale. He has written an introspective column in "Newsweek" saying he is not the same man he was a year ago. Woods has also opened a Twitter account and appeared on a sports talk radio program, actions very un-Tiger like when he was at his prime.
TIGER WOODS, PROFESSIONAL GOLFER: I think its about time I kind of basically made a connection to the fans, who have been absolutely incredible to me over the past year. Gone through some pretty rough times and pretty low moments, but just want to thank you to them, and just basically reconnect with them.
ROBERT TUCHMAN, EXEC. V.P., PREMIERE GLOBAL SPORTS: It's planned. It is obviously extremely, you know, thought out. And you know he wants that image. He's not a public guy, but he's trying to change that image.
ROTH: Tiger's image still hangs above the amateurs at the New York golf shop. One fan remembered an encounter with the old Tiger.
UNIDENTIFIED MALE: I went up to him and said, Hey, Tiger, can I please get an autograph or a photo, or something? And he did not even look me in the face. He just kind of turned over, and the bodyguard came to me and was like, hey, buddy you gotta go.
ROTH: Wood's public apology in February, after allegations that he was unfaithful to his wife, was more directed at friends.
WOODS: I am deeply sorry for my irresponsible and selfish behavior I engaged in.
ROTH: Wooing back fans may be harder. Woods is credited with attracting millions of viewers to watch golf, even those who didn't like the sport.
UNIDENTIFIED FEMALE: I just lost respect for him, so I don't care about him at all anymore.
ROTH (on camera): Or golf?
UNIDENTIFIED FEMALE: Or golf.
UNIDENTIFIED FEMALE: I still like Tiger Woods, no matter what. I'm not going to say anything negative about Tiger Woods, because I don't like judging people.
ROTH: Would you like to reconnect with Tiger Woods?
UNIDENTIFIED MALE: I really have-don't care for him, so I don't want to reconnect with him.
ROTH (voice over): Analysts estimate Woods' admitted mistakes cost him hundreds of millions of dollars in sponsorship money.
TUCHMAN: He has to start winning again. You know, his image has been shattered.
ROTH: Tiger Woods now writes that he can never repair the damage he's done, especially to his family, but he vows to keep trying. How many people keep watching may be based more on his success on the greens. Richard Roth, CNN, New York.
FOSTER: What else can Tiger do then to brighten his star? Nigel Currie is director of the sports marketing agency Brand Rapport, and knows a thing or two about celebrity comebacks. He joins us now, by broadband, from his home, in Horsham, here in the U.K.
Thank you so much for joining us. First of all, what do you think of the last year and how Tiger has handled his image?
NIGEL CURRIE, DIRECTOR, BRAND RAPPORT: Well, he has handled it pretty well, really. It is a long, it is always going to be a long process on the way back. And he's taking it a step at a time. And this is probably the latest step in the recovery program. But he's still got a long way to go.
FOSTER: What is he trying to do with these latest comments and his latest media involvement for example? What is he trying to do right now, do you think?
CURRIE: Well, I think, primarily what he's-I mean, basically he's changing his image. His image has been fading over the last year and the Tiger Woods brand as we knew it a year ago, is finished. So he has to rebuild that brand. And that is the process that he's going through at the moment. I think he probably wanted to get is golf back on track. He's struggling a little bit with that. And that is still the priority. That is what he has to do first and foremost. But he's also got to manage the Tiger Woods brand and, you know, get some of these things right that he showed that he was getting wrong in the past.
FOSTER: How do you build a strong brand from something so damaging as infidelity?
CURRIE: Well, basically, you change the brand. The Tiger Woods brand, as I said, the one a year ago, is broken. You know, the perfect professional, you know, absolutely at the top of his game, model of professionalism image, that's gone. And it is almost irreparable. So, he's got to reinvent himself and attract new sponsors. You know, possibly a little bit more, you know, less professional in terms of high fauluting sponsors that he's got-that he had in the past. More down market sponsors, if you like.
FOSTER: There have been other celebrities that have been caught out in other ways and have gone from rock bottom to actually come back stronger because, obviously, they gained notoriety, for what they did. But also they've got a sort of edge as a result of it. I don't want to be cynical here, but is there a way he can come back and be even bigger after all of this?
CURRIE: Look, I think he could, you know. It sounds dark, but he will-if his golf recovers and he gets back to where he was on the golf course, there is no doubt, he is such a big name. And he is such a draw and so important for golf. That, you know, the chances are if his golf game recovers he will be even bigger again. But it will be a different Tiger Woods and it will be a different sort of sponsor he will be attracting.
FOSTER: Nigel Currie, thank you very much indeed. We wait to see who those future sponsors will be. He'll take the plunge.
Well, brand India, has also had a tough time of late. And the latest scandal has forced the prime minister to defend his clean image. Some critics are even using the W word, "Watergate".
FOSTER: Welcome back.
I'm Max Foster.
More QUEST MEANS BUSINESS in just a moment.
But first, here are the news headlines.
The atmosphere over the Korean Peninsula remains charged with tension. South Korea's president, Lee Myung-bak, held an emergency top level meeting on Thursday. His government said it's bolstering defense in the Yellow Sea in response to North Korea's attack on a South Korean island on Tuesday. Pyongyang is threatening more attacks if the South continues what it calls "reckless military provocation."
Police are escalating their crackdown on drug gangs in Brazil. Media reports say armored vehicles have rolled into a slum in Rio de Janeiro. Some 22 people have been killed in the past five days and dozens of others have been arrested.
A day of mourning in Cambodia for the victims of Monday's deadly stampede on a crowded bridge. The prime minister led a memorial ceremony in Phnom Penh, wiping away a tear as he burned incense. The government now says a total of 347 people were killed.
Three teenaged boys have been rescued in the South Pacific after being cast adrift for nearly two months. They left the remote island of Tokelau early last month in a small boat. They were presumed to have died. But today, the boys were rescued by a passing tuna ship off the coast of Fiji, more than 1,400 kilometers from where they set out.
An unbelievable story.
India's prime minister is battling to save his reputation. Manmohan Singh is embroiled in a scandal over the sale of telecoms licenses. It follows an official order, which alleged the licenses were sold for a fraction of their true value, at a loss of up to $40 billion to the Indian government. The minister in charge of the sale is resigning. Mr. Singh was called to India's Supreme Court to explain why he took no action against that minister. The prime minister denies any impropriety. The scandal is the latest in a series of blows to Brand India following a -- a run of chaos in the run-up to the recent Commonwealth Games.
Natarajan Chandrasekaran is the CEO of Tata Consulting Services, one of India's biggest corporate successes. Tata does everything from communications and technology to steel and cars and much more besides.
I asked Chandra why people are still so interested in India.
NATARAJAN CHANDRASEKARAN, CEO, TATA CONSULTANCY SERVICES: I think everyone is interested in coming to India now because it's a huge opportunity, from a growth point of view. So to that extent, there's a lot of interest in going over to India and exploiting opportunities and partnerships and so on (INAUDIBLE).
FOSTER: But at the same time, you're doing the exact opposite, though, aren't you, because you're of India, but most of your business is outside India now?
CHANDRASEKARAN: Well, yes, we are also growing very well in India, but it's just that the size of the I.T. market in India is far smaller compared to the West.
But the rate at which it's growing is significant.
FOSTER: You're a good barometer of what's going on with the global economy. A lot of concern about the Western market, particularly Europe right now.
How do you asses the state of the global economy and are you concerned about things going backward in -- in what are your key markets now?
CHANDRASEKARAN: If you really look at the world market from a macroeconomic point of view, there is still a lot of concern. But from our business point of view, there are two things that are working in our favor.
The first one is all corporations globally are very interested in becoming very efficient. They are really, really focused on efficiency.
The second one, everyone wants growth. And they are pursuing different strategies, strategies, in terms of globalization, strategies in terms of new product and production, strategies with respect to knowing more about their customers so that they can sell products, etc.
So in both of these dimensions, we have a lot to offer. We bring comprehensiveness (ph) to customers and we bring work agility and -- and -- and speed so...
FOSTER: And if I could just ask you about it about India right now, after the Commonwealth Games, you got a bit of bad press. And then after this sell-off of the 2G licenses, I know that's become a big political debate in India. And none of it particularly makes India look good.
How do you think India and politicians in India are coping with all of this?
CHANDRASEKARAN: I think India it is a problem. It's not a good thing. But these kinds of issues exist and these kinds of corruption scandals are there.
FOSTER: Do you think it was corruption involved in the T.G. sell-off?
CHANDRASEKARAN: I think there is a lot of investigation that's going to happen. So we'll have to wait and see what's going to be the final verdict. But the good thing is that we do have a justice system and people will be brought to justice.
FOSTER: And are you very positive about India going ahead?
What are your concerns about this rapid growth of the economy?
Can -- can it grow too fast, do you think?
CHANDRASEKARAN: Well, I think India has a huge potential. I'm very positive about India. You know, we used to grow at 6 percent and now we are close to 8 percent, 8.82 percent. And I am very positive that we will get to double digits in the next couple of years. We can make that growth rate for a decade or more.
(END VIDEO TAPE)
FOSTER: The head of Tata Consultants -- Consultancy speaking to me earlier.
Now, telecoms are also big business in Russia. MTS Group is a giant in the industry.
CEO Mikhail Shamolin told me the company now has 100 million customers in Russia and other former Soviet republics. But the next big source of growth has little to do with making calls.
MIKHAIL SHAMOLIN, CEO, MTS GROUP: And the biggest question is how much growth we're going to get delivered from data. And right now, it looks like the data consumption that we see today is only the tip of the iceberg and, really, we can see data going up, you know, a hundred times in the next few years.
And the biggest question for the industry globally, and for us, as well, what percent of that demand will we be able to monetize?
FOSTER: Yes, and you've got to worry (ph) that out, because it's a very expensive thing to invest in, isn't it, in such a vast area?
SHAMOLIN: It is a very expensive thing to invest, but there is really no alternative because the future of the telecom industry is in data and the data networks that we are building right now will be a source of countless applications, not only what we see today, you know, people surfing the Internet, but also machine to machine, all kinds of devices connected to the Internet and that's generating additional revenues for us.
FOSTER: But you're also investing in fixed line.
FOSTER: Because it's surprising, some -- to some people that fixed line is still a big business, but it certainly is, isn't it?
It's growing quite fast.
SHAMOLIN: Well, we're investing in fixed broadband, which is, you know, different from the traditional fixed line. And the reason we are doing that is because home consumption and home entertainment, the way we see it, is going to be totally Internet dependent and we'll have to deliver speeds of 50 megabits per second and up. And this can only be done through cable, which will be different from, of course, mobile Internet, which will remain, you know, there in -- in big quantities.
But still, there will be home consumption based on fixed mobile consumption based on mobile. And we want to be in both places.
FOSTER: OK. And in terms of currencies, a lot of multinationals are struggling right now because there's too much currency volatility.
How are you dealing with that?
SHAMOLIN: Well, we are -- we are months of the time in -- 90 percent or 80 percent of our revenues are ruble denominated, coming from Russia. And, of course, we take, you know, these kinds of risks, we offset it by mainly borrowing in rubles, as well. So from that perspective, we are well balanced. And the stability of the ruble very much depends on the stability of commodity prices, which, you know, I think globally, are not under threat, at least in the next foreseeable, you know, future, unless we are facing some sort of a new major crisis, which I don't think is going to take place.
FOSTER: You talked about how you've penetrated the mobile phone market as much as you probably can. And that suggests that to expand further, away from data, you're going to start looking abroad for take over targets.
So where are you looking?
SHAMOLIN: Well, that is only if we believe that those takeover targets would -- will deliver us better growth than they have the Russian market. I mean right now, we are growing at double digits this year and we'll grow, potentially, in high single digits next year, which, taken the global telephone space, is actually a pretty good growth rate. I mean it's not the 25 percent that we used to deliver back in 2005-6, but still, you know, given the lower level of risk and the stability in the cash flow, I think it's a very attractive investment place.
FOSTER: But I presume you're looking at India and China, like everyone else.
SHAMOLIN: Well, China is a closed market for operators from the outside. The government is not issuing new licenses and -- and not -- not allowing the acquisitions. India is a different story. We are present in India indirectly. We have an NTS India brand in India, not owned by us, but owned by our parent company, Sistema. And we're helping with the development of that business and we are looking at it because, of course, the Indian market is very competitive. And a big question is, you know, how much the cash flow and net profit can be created and in which time frame.
But, nevertheless, 800 million of unsubscribed -- potential subscribers -- is a big potential.
(END VIDEO TAPE)
FOSTER: Well, to innovation that is more down to earth now.
Not enough land?
Try looking up, not down. It may surprise you where this is happening.
FOSTER: We've got to mention this morning that if we are -- in fact, we are getting dangerously close to another world food crisis. The U.N. predicts that the world will produce 63 million metric tons less grain this year than last. That's a 2 percent drop. Nature is the primary culprit, with the Russian heat wave and Pakistani floods blamed for much of the problem. High demand and low supplies are pushing prices higher. Sugar prices already at a 30-year high and the trend is expected to continue.
Food shortages impact everyone.
And as Jim Boulden found out, there are some surprising solutions to this very serious problem and in quite an unlikely place -- a zoo in the west of England that is growing its own food in a very unusual way.
JIM BOULDEN, CNN CORRESPONDENT (voice-over): Tyrone is Paignton Zoo's dominant Macau monkey. What he says goes in this enclosure and he's hungry. So his keeper throws in rocket -- a rather pungent salad leaf. What Tyrone doesn't know, his fodder is grown just a few minutes walk away.
KEVIN FREDIANI, PLANT CURATOR, PAIGNTON ZOO: Well, welcome to the zoo.
BOULDEN (on camera): So they feature food production in this unassuming facade.
(voice-over): As the zoo's curator of plants, Kevin Ferdiani was tasked with growing food on site in a sustainable way. But he was given only a small patch of land.
(on camera): So this former elephant enclosure was what they decided to give you to grow your food. It just clearly wasn't enough space.
FREDIANI: Yes, I didn't know whether it was a joke at the beginning.
BOULDEN (voice-over): So enter vertical farming. Kevin discovered Canadian company, Docent, was looking for a place to build a prototype vertical growing system.
FREDIANI: We've got a -- a series of trays stacked up that take us to the three meter high system which would -- is -- is growing the equivalent of 12 times the produce that you'd find in the equivalent land area.
BOULDEN (on camera): OK, because you are able to go up?
FREDIANI: One hundred square meters and we can grow 11,200 plants in that one space.
BOULDEN (voice-over): And though this system uses hydroponics, it consumers one sixth the amount of water this number of plants would otherwise need. So instead of paying around $30 a kilo to buy and ship in the feed, the zoo pays around 15 cents each for the plugs of rocket or kale or spinach.
This 18 month old system has cut the zoo's food bill by 10 percent. So while others are here to enjoy the animals, large food companies and governments from around the world have been flocking here to see if there is a business case to made with the next generation system.
FREDIANI: I can imagine somebody thinking sushi bar, because you could sit here next to it and you can crop off and put it into a salad plant and eat it as you go along.
BOULDEN (on camera): Right.
FREDIANI: -- as you go around.
BOULDEN: It can't just be people choose to do it, because, at the end of the day, there has to be a hard economic reason or I don't think that many people would actually do it.
FREDIANI: It has to actually pay for itself. So we had a budget. That budget is -- is given to me out of the animal feed budget. So if I don't make the money back for them, who's hammering on my door is my colleagues. So, in that respect, it's a real model here that has to work.
BOULDEN (voice-over): Chris Bradford is the man behind the vertical farm. He says all the buzz these days is about urban farming. And vertical farms can be built inside a disused warehouse or anywhere close to consumers, human or otherwise. All Valcent needs is that first contract.
(on camera): You're still waiting for that first order?
CHRIS BRADFORD, MANAGING DIRECTOR, VALCENT: We're still waiting for that first order. We're really close to it now. We're -- we're negotiating with four separate organizations or companies.
BOULDEN (voice-over): But a six meter high system costs around $1 million.
BRADFORD: The guy who comes along and says, what's the return on my investment, what crops can you grow, how fast can you grow them, because I want to put these as close to my market as I possibly can and reduce my handling costs and my transportation costs.
BOULDEN: If you're looking for a recommendation...
FREDIANI: Everyone has been quite well behaved today, haven't they?
BOULDEN: Just ask Tyrone.
Jim Boulden, CNN, Paignton, England.
(END VIDEO TAPE)
FOSTER: Well, one advantage for farmers would be that they wouldn't have to complain about the weather anymore if they all adopted that system.
Guillermo, though, is keeping them up to date for now -- hi, Guillermo.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Hey, you know, that today is Thanksgiving in the United States. Yesterday was the busiest travel day of the year. And I was thinking -- I was in New York and I was at the Newark International -- Liberty International Airport thinking what if you are a foreigner, you come to the United States this weekend?
Now, Sunday is going to be a problem -- a problematic day. And then you don't have any idea and you go to the airport and say two hours will be enough. This is a short trip. And you find those endless lines to go through security.
So you need to know and you need to pass this on to your friends. If they are coming to the States for Sunday, for Monday, those are going to be very busy days again. So if you're connecting or if you -- if you have any friends who are going to go through airports in the States this weekend, you need to alert them that it's going to be -- they have to take extra time.
So this is what I'm going to do. I'm going to start with Europe. I'm going to tell you what the weather is doing there, because it's not very good. And then I'll go to the States and I'll tell you if we think that it's going to be bad.
So this is what's going on in England; also, parts of France with the first snows of the season. So it is cold. We are not going to get to double digits anymore, at least in the immediate future. I'm talking about France. I'm talking about Germany and Britain; Scandinavia, too.
On top of that, the closer you are to the flow in the Baltics, Poland, Germany, Scandinavia, Denmark, you are going to see winds. That means problems at airports. And now, through Saturday, we're going to get the arrival of a new low here. So Northern France, the Low Countries and the British Isles with problems there, as well.
So you see into Saturday, we see the snow moving down into Germany and the Low Countries. This is what's going to happen in the next two days. You may see some more snow. I'm talking about Ireland and also Scotland. And more precipitation, some -- in this case, we don't have the color, but sometimes it snows, sometimes it's rain.
Look at these airports for tomorrow -- London, Heathrow; Charles de Gaulle; Amsterdam; Dublin; Brussels; Copenhagen; Zurich; Frankfurt; and all those in the vicinity -- these are some that I picked.
In the south, things are looking fine. Berlin appears to be fine for the time being.
Let's see the temps now -- single digits. I told you. Where you see the blues, those are colder than anywhere else. But Athens, hey, that's the place to go at 20.
Now, Sunday it's going to be a busy travel day in the United States. It seems that we're going to be in the clear. Canada may see some bad weather still. That's a big volume passenger day, again, on Sunday. This is an appeal to all those international travelers. New York now is seeing some problems because that low is going to bring snow into the New England states, especially, so north of New York and into Michigan, the Upper Midwest here and into the Great Lakes and certainly into Canada.
So we are going to see probably better conditions for Sunday, Max. But remember, spread the word. This weekend is extremely busy. Take your time if you come to the States -- back to you.
FOSTER: OK, Guillermo.
Thank you very much, indeed.
ARDUINO: Thank you.
FOSTER: Let's check the temperature, then, of the European markets, as well, as they close Thursday's session. As you can see, Europe's major indices all ended the session higher, actually. Rising mining car makers helped there. Volkswagen up 2.1 percent, in fact, but Anglo-American up more than 2.5 percent in London.
But it was a different story for the peripheral economies, where investors aren't so keen to put their money right now. There were loses across the board in Spain, Portugal, Greece, Ireland, as worries over Europe's continuing debt crisis continue to plague investors.
The back story on Black Friday in the U.S. We'll check in with Walmart and see what's in store as holiday shopping heats up, coming up.
FOSTER: And a Happy Thanksgiving to you.
These are pictures of the annual Thanksgiving Day Parade in New York. Usually at this point in the program, we would show you how the markets in the U.S. are trading, but as it is Thanksgiving, a national holiday, the markets are, in fact, closed there. They've got balloons instead.
So let's look ahead to the big shopping day tomorrow and see what's in store for shopping -- shoppers.
Well, the day after Thanksgiving is known as Black Friday and it is very big business. The National Retail Federation estimates that last year, shoppers in the U.S. spent over $41 billion on the day.
Farija Kavilanz is a senior writer for CNNMoney.com.
She's been seeing how retail giant Walmart is preparing.
UNIDENTIFIED MALE: Oh, good morning.
FARIJA KAVILANZ, SENIOR WRITER, CNNMONEY.COM: Good morning.
UNIDENTIFIED MALE: Welcome to Walmart.
KAVILANZ: I'm here at one of the biggest and newest Walmart stores in the country. It's a 2,000 square foot Walmart Super Center. And we're here to find out from Walmart how the company is preparing all of its stores for one of its biggest shopping days of the year, Black Friday.
This is a very important nerve center for Walmart's, actually the gut of a Walmart Super Center is your back room.
How important is it to the Super Center store that we're in right now?
STEVEN RESTIVO, DIRECTOR OF COMMUNITY AFFAIRS, WALMART: This is where inventory is housed. And it's really key for us to be as organized as possible back here, so that we can efficiently move product from the back room out to the sales floor. We have about 12 trailers of merchandise behind the store, as well. So merchandise will be moved from this back room out onto the sales floor. It will be moved from the trailers into this back room. That process will continue Thursday right through the end of Sunday.
We've got about 30 associates that are exclusively working here in the back room. We'll probably bolster those numbers on Thursday and Friday. On a day like the day after Thanksgiving, the speed in which merchandise gets from Point A to Point B is critically important to keeping our customers happy and keeping those popular items replenished throughout the day.
KAVILANZ: What about managing the crowds on Black Friday, because that's a problem not just for Walmart, but a lot of retailers?
RESTIVO: Sure. This year, we'll have about 17 items that are special for 5:00 a.m. Hot item specials. And we'll have 17 cue lines throughout the store, spaced throughout the store. Each cue line will have an associate supervisor who will be supervising that cue line, making sure customers are being communicated with, to make sure they know just how much of it in the store that we have.
KAVILANZ: So if you see a line is getting too long, are you going to limit the number of people who can be on line for a deal?
RESTIVO: We'll let folks know if we have a limited number in terms of quantity. And we have given out those number of tickets. We'll let new customers know as they approach that line that that item is -- all the tickets have been distributed for that particular item.
We have a lot of space in this store and we obviously want to use that to our advantage. So this area is set for holiday decorating, Christmas trees. But we also use it as a staging area for some of our large screen televisions. We're going to have about 4,000 televisions in this store and we expect to sell all of them by Sunday. So customers can come here. Registers are -- are right behind the televisions here. And they can find what they're looking for, check out and get on with the rest of their day.
KAVILANZ: Now, once you're sold out of the television sets, how quickly will you replenish that stock?
RESTIVO: We'll be constantly replenishing from our back room. And I think the important thing here is communication is key. We want to continue to let customers know just how many items of a particular product are still available. And we also want to let them know when that item is - - is completely sold out or close to being sold out.
(END VIDEO TAPE)
FOSTER: There you are, Black Friday. It's coming soon.
Where's Richard, you may be wondering?
Well, he might be in one of those cues for those cheap products. But we don't really know where he is. But when he is traveling, you can -- you can follow him by following his messages and photos. He sends out even more than usual when he is away. So check out the great places and, of course, the airplanes that he's been visiting. @Twitter.com/richardquest is the address for that.
We'll be back in just a moment.
FOSTER: Well, as we told you before the break, it's a big day in the U.S. And as families gather today for -- to give thanks, some breeds of birds can count their blessings they're not turkeys. Last year, the Thanksgiving turkey business was worth $3.6 billion. That's 46 million turkeys ending up on U.S. dinner tables. In terms of turkey flesh, 736 million pounds or 334 million kilograms of turkey meat, according to estimates from the National Turkey Federation. A thought for you. You don't want to be a turkey at this time of year.
That is QUEST MEANS BUSINESS, though.
I'm Max Foster in London.
Stick around, because "WORLD ONE" with Fionnuala starts right now.