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CNN LIVE EVENT/SPECIAL
CNN International's World Business Today
Aired March 23, 2011 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULINE CHIOU, CNN ANCHOR: A very warm welcome to WORLD BUSINESS TODAY. I'm Pauline Chiou at CNN Hong Kong.
NINA DOS SANTOS, CNN ANCHOR: And I'm Nina dos Santos at CNN London. The top stories on this Wednesday, March 23rd.
(BEGIN VIDEO CLIP)
(SPEAKING FOREIGN LANGUAGE)
UNIDENTIFIED MALE: The Libyans are (INAUDIBLE). We will defeat them.
CHIOU (voice-over): Gadhafi stands firm as coalition forces take aim at additional Libyan target.
DOS SANTOS (voice-over): There's more belt tightening in Britain today to try and plug a gaping hole in the country's public finances.
CHIOU: And it was once the engine of America. We bring you the startling new figures on Detroit's mass population exodus.
(END VIDEO CLIP)
CHIOU (on-camera): But before all of that, we want to update you on the situation right now in Japan. Black smoke has been seen rising out of the Fukushima Daiichi Plant number three reactor building. This is the reactor that has been giving the crews. There's some trouble the past couple of days. Tokyo Electric Power Company says some of its workers have been evacuated from the plant. Our Anna Coren will have a little bit more on that from Tokyo a little later on in the show -- Nina.
DOS SANTOS (on-camera): Well, Pauline, let's now turn our attention towards Libya where coalition bombs and missiles continue to rain down. Aircrafts like this U.S. Marine Corps harrier jet have flown more than 212 missions so far against the Libyan forces. Ships in the Mediterranean have launched at least 162 Tomahawk cruise missiles. In the daylight, the damage from the air strikes is becoming clear. This is what is left of several large rocket launchers, trucks and also other military hardware in Tripoli's port area.
Far to the east, a U.S. fighter plane crashed due to mechanical problems. That happened near the opposition strong hold of Benghazi. The two-man crew parachuted from the doomed aircraft. U.S. marines managed to extract one crewman and the other was picked up by rebels and subsequently taken to a luxury hotel suite. He's now back in American hands.
And, in the meantime, two days after the coalition missile slammed into his Tripoli compound, a defined Moammar Gadhafi has been addressing his supporters. He urged Muslims worldwide to join the battle against what he calls blatant aggression.
(BEGIN VIDEO CLIP)
MOAMMAR GADHAFI, LIBYAN LEADER (through translation): We will be victorious in this fight. We will not give up. They will not penalize us. We are making fun of their rockets. The Libyans are laughing at these rockets. We will defeat them. In any way, in any method. In the short time or the long-term, we will defeat them. We are prepared for the fight if it is short or long.
(END VIDEO CLIP)
CHIOU: Well, the tone is rather different in the United States where there is some concern that the U.S. may not have the stomach for a long-term campaign against Libya.
(BEGIN VIDEO CLIP)
CHARLES KUPCHAN, COUNCIL ON FOREIGN RELATIONS: We got two wars going on, both of them going for the better part of a decade. We've got a fiscal deficit here that we're trying to get under control. I think Americans are rightly saying do we not want to take on another major conflict? I think the optimistic scenario is that the Gadhafi regime step back under the pressure that it's now facing and that this no-fly zone essentially come to a stasis.
We can stop the operation sometime soon. I'm not going to bet on that. You know, this may be a long haul and that may confront Obama in his European counterparts with some tough choices.
(END VIDEO CLIP)
CHIOU: And U.S. president, Barack Obama, insists that it's only a matter of days until the U.S. turns over control of the campaign to other coalition members.
DOS SANTOS: And unrest continues elsewhere in the Middle East.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): In Yemen, President Ali Abdullah Saleh has defied calls for his immediate departure, and instead, he's offered to step down at the beginning of next year, but that's not fast enough for his growing opposition.
In the southern Syrian City of Dara, government forces have opened fire on demonstrators. There are reports of up to six people were killed. The bloodshed comes just one day after authorities in Syria arrested a prominent human rights activist.
And finally, to Bahrain, the government is telling its citizens to stay out of Lebanon. This comes after Hamas, the Shiites Muslim group prominent in Lebanon, came out in support of Bahrain's majority Shiite population who have been protesting against their country's minority Sunni rulers.
(END VIDEO CLIP)
DOS SANTOS (on-camera): Well, the unrest in the Middle East can also create challenges for companies doing business there, especially if they've already established contracts with some of the old regimes. Daniel Broby is chief investment officer for Silk Invest that helps manage millions of dollars in the Middle East and also in North Africa, as well. Daniel, you have assets right across the spectrum from Bahrain to Egypt. What's it like having contracts in place and then regime change?
DANIEL BROBY, CHIEF INVESTMENT OFFICER AT SILK INVEST: Well, violent regime change presents the problem as far as contracts are concerned. Most of the contracts between international companies are done in jurisdictions that don't cover the local law. So, international law or DIFC, for example, United Arab Emirates, rightly across the middle (ph) region, a lot of contracts are entered into under Sharia law, which, obviously, in that respect, presents a different set of challenges.
DOS SANTOS: Does that protect you more or less then?
BROBY: I think that actually Sharia law is very interesting because it's more focused upon an equitable distribution. So, in that respect, there are certain protections there, but, this is not protections against regime change.
DOS SANTOS: So, let's say, for instance, out of all of these countries that you're invested in, I understand you're not invested in Libya, which one are you most worried about at the moment? Would be it Bahrain?
BROBY: Bahrain is a very small country. So, the unrest in Bahrain, where the total population is 500,000 and the intervention from Saudi Arabia and the United Arab Emirates is over thousand sort of police and soldiers. So, actually, I think that Bahrain will probably stabilize before long. In terms of where I'm more worried about in right where across the region, I would say that it has to be in places like Yemen and so forth.
DOS SANTOS: Now, you have more significant operations in Egypt. You established your own office there a couple of years ago and have staff there. How worried are you about the regime change now? Are they sort of pro-business or anti-business? We got the stock exchange opening this morning.
BROBY: Yes. Well, the stock exchange was suspended for a very long period of time, and that's disappointing. They could have actually opened it sooner. Fortunately, they've now seen the light. They're opening it, and they're all going to effectively remove some of these discussions about having suspensions, although, there will be individual stock suspensions today. DOS SANTOS: Daniel Broby, chief investment officer at Silk Invest, as always, thank you very much for joining us on the show -- Pauline.
CHIOU: Well, Nina, of course, the fighting in Libya and the protests in other parts of the Arab world are continuing to put pressure on oil prices. We'll have more on that in just a moment. But right now, we want to turn our attention back to Japan where the daily press conference is going on with the chief cabinet secretary, Yukio Edano. Let's listen in to the very latest about nuclear reactor number three.
YUKIO EDANO, JAPANESE CHIEF CABINET SECRETARY (through translation): The Nuclear and Industrial Safety Agency made a report with regards to the radiation exposure estimations based on speedy. And the details are going to be announced by the agency themselves, and therefore, please do contact the agency if you are interested in a detail information. Now, this is with regards to the atmospheric, the new fight (ph), and based on the climate conditions, the radiation exposure to thyroid was estimated.
And so far, we have been measuring and monitoring the radiation dosage in the unit of microsieverts, including the site within the nuclear power plant. We have done the measurement, and the results have been announced to you, and also, we have gained a lot of data points. However, when it comes to radioactive materials, in general, in atmosphere, we are now trying to measure it, and then, we will see how much of the radioactive materials are actually emitted from the nuclear power plant.
We are trying to come up with an estimate for that, and based on the estimation, we would like to furthermore see how and where the radioactive materials have been dispersed and whether they are actually elevating to the level which is causing human health hazard based on the climate conditions. So, this is estimations based on simulation that we run. As I mentioned, in the morning, conference as well, by using this system well, we would like to come up with a good estimation.
This is the instruction that we have given, as I have already reported to you, and as I already mentioned as well from nuclear power plant, the amount of radioactive materials have been emitted. Unfortunately, given the current situation of the plant, itself, we are not able to measure the amount of the radioactive materials from the plant, itself, and therefore, we are sort of calculating back to see as an estimate how much of the radioactive materials seems to be estimated to be coming from the plant.
That is something that we are trying to work out. And in order to do this estimation, we, first of all, do need to measure the radioactive materials or nuclide announced (ph) in atmosphere, and furthermore, towards inland side on the upstream of the wind. We do have to take these measurements, and we were able to do this monitoring yesterday. Based on that, we run simulation, and the results of the simulation work was reported. And the result is as follows. After the accident of nuclear power plant in Fukushima, if we assume that we stay outdoor throughout the entire day, then 100 millisieverts per hour or above would be expected to be the level of the exposure to radiation level in certain areas, even within the 30 kilometer -- or even outside the 30 kilometer range from the nuclear power plant, there could be some places where the actual exposure to radiation could go beyond 100.
However, at this point in time, there's no necessity for people in particular districts to evacuate from where they are at the moment. And this radiation level monitoring as well as even more accurate simulation are commissioned to be done by the experts. And 100 millisieverts is the level of the exposure to radiation which is going to cause health hazard.
CHIOU: You're looking at the live news conference from the Chief Cabinet Secretary, Yukio Edano. He's mainly talking about the current levels of radiation around the nuclear power plant. He also says that they're still trying to measure the radioactive materials in the atmosphere. He did not touch on yet the latest news that we've been receiving from our own crews out of Tokyo that there has been new sightings of black smoke, grayish black smoke coming out of nuclear reactor number three.
We're still trying to find out what the cause of this smoke is, and we will certainly be following this story throughout the day, and we will pass on anymore new information. But for now, let's go back to Nina in London.
DOS SANTOS: Thanks very much, Pauline. Let's bring you the latest stock market action here in Europe. We're about to close (ph) and send to the trading session, and this is where the markets stand. Of course, they did finish broadly low yesterday. And already, 12 minutes into the trading session, as you can see, we're seeing some of those losses being exacerbated, heaviest losses coming from the markets in London and also in Frankfurt.
And then, in the meantime, let's look at how the currencies are doing. The euro has been slipping today ahead of Portugal's austerity vote. Now, according to today's Financial Times, opposition parties in Portugal have refused to back austerity measures drafted to help the country avoid Greece or Ireland-style bailout. And as you can see, the euro currently trading at 1.4157.
All of this is, of course, important because if it's still the case later on today, that they're refusing to back that, it could trigger snap elections inside Portugal and also dominate tomorrow's EU summit in which some of the leaders in the region were hoping to strike a grand bargain to solve the debt crisis for once and for all.
Also in focus is the British pound ahead of today's UK budget. It's been falling against the dollar. The Japanese yen has been gaining today -- Pauline. CHIOU: Well, Nina, here in Asia, Japanese markets failed to maintain the gains from Tuesday. In fact, it's quite a different story. Take a look. A profit-taking sent Tokyo's main index lower this session as investors reacted to new radiation warnings, this time, in the tap water in Tokyo. So, after the markets close, Japan's government said that the economic cost from the earthquake and the tsunami could total $308 billion.
Meanwhile, around the rest of the region, let's take a look at how they fared. Shares of Cole Companies dragged the market down in Hong Kong. And banking and energy stocks gave Sydney just a slight boost there, and the Shanghai Composite is up more than 1 percent.
Well, a bombshell for Britain the day before the government unveils its austerity budget. Coming up after this break, how will new inflation numbers affect the Britain's ability to meet its deficit- slashing goals? We'll let you know, and we'll be right back.
DOS SANTOS: A bombshell for Britain, even as the country's conservative government prepares to unveil its 2011 austerity budget on Wednesday, data released just yesterday indicates that consumer prices have shot up across the country. In the past year, rising 4.4 percent. Now, this in total means that there's even less money to spend as the government tries to stick with its plan of slashing its record budget deficit by the year 2015.
The plan includes eliminating some $132 billion worth of spending over the next four years to come. It's expected that the finance minister, George Osborne's new budget will seek to boost growth without easing up on those deep cuts. So, Osborne has hinted that he'll be canceling an increase in the fuel tax as planned for the month of April, the budget may also scrap a planned increase in air passenger duties. But, the surprising inflation rate does mean that the government may face some difficult choices today.
(BEGIN VIDEO CLIP)
CHRIS GILES, ECONOMICS EDITOR, FINANCIAL TIMES: Though spending goes up, but actually, incomes haven't gone up, so tax revenues haven't. So, ultimately, this sort of inflation shot we're having in Britain right at the moment doesn't help the public finances, so borrowing will be higher.
(END VIDEO CLIP)
DOS SANTOS: Well, the main goal of the budget is to shrink the country's deficit, the government, and also, British businesses are also hoping that it can, in some way, stimulate growth. But can it really do both at the same time? Joining me now to explore that possibility is Colin Stanbridge. He's the chief executive of the London Chamber of Commerce and Industry. He's also had a long career as a British television journalist. That's an interesting side. Good to see you, Colin. Run us through exactly what we can expect later today. COLIN STANBRIDGE, CHIEF EXECUTIVE OF THE LONDON CHAMBER OF COMMERCE AND INDUSTRY: The word growth is going to be huge as huge amount of time. I think one thing is certain. If you're doing a book on this budget, put your money on the number of times the word growth is going to be used. I think what we'll see is not many rabbits out of hats. I don't think the chance (ph) has much wiggle room.
I think that's for certain. What I hope we see is a commitment to reduce the sorts of barriers that especially small firms are facing at this moment in time. I think what we're looking for is a commitment to stop things like the default retirement age being scrapped, that changes in paternity leave. All those things that are preventing businesses in HR terms of recruiting people. I don't think we'll see many fiscal moves. I don't think it has the possibility of doing that.
DOS SANTOS: Well, we've already seen so much news already on the deficit and budget front since this government took over. We had the October spending review. It seems as though this is probably going to be more fiscally neutral, isn't it? But inflation is the back drop. That means the tax receipts will be worth less and less in relative terms.
STANBRIDGE: They will indeed, and the last thing that businesses need is a rise in the interest rate. I hope the government -- well, it won't be the government, but I hope the NPC will decide that actually in the long-term interest of Britain and Britain's British business that you can't put the rates up. I think there are some small things that the chancellor can do, because what's really important about this budget is that it gives confidence to companies to want to expand, to want to employ more people which oversee as a huge government goal.
And I think that if they can do some small things -- so, for example, capital allowances. If you're able to roll over your capital allowances, they're going to cut those capital allowances if you're able to roll over those things. If you're able to cut a lot of small firms out of V.A.T., raise the limit to 100,000. There are things that may persuade those businesses to actually get out and do things.
DOS SANTOS: One thing that will help small firms and also the average person on the street, Colin, is obviously fuel prices. What's going to happen there? There's been a lot of talk about this fuel price stabilizer tax that essentially moves in sync with the old price to make sure it doesn't go up as much as it has recently.
STANBRIDGE: Well, we've had the prime minister saying on a number of occasions that the treasury is looking at this. Well, I think it's now time to act, because, of course, fuel prices effects all types of businesses. It effects those people, obviously, who are moving goods around, but also, those people who are just in their daily lives.
So, I hope that we're going to turn this talk about this sort of stabilizer, this sort of balancing mechanism, actually turning into something that actually works, because of course, you know, the rise in oil prices at the pumps means that the government is taking more in V.A.T. DOS SANTOS: Colin Stanbridge, we're going to have to live it there. Thank you very much for your views. That's Colin Stanbridge who is the chief executive of the London Chamber of Commerce and Industry. Don't go away. WORLD BUSINESS continues after the short break.
DOS SANTOS: Welcome back. Live from London and Hong Kong. This is WORLD BUSINESS TODAY on CNN.
CHIOU: U.S. President Barack Obama is unveiling a raft of new partnerships in Latin America to help bring better economic progress and stability to the entire region. In an exclusive interview with CNN in "Espanol's" Juan Carlos Lopez," in El Salvador, Mr. Obama says the partnership needs to go beyond politics.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The entire region is much less interested in ideology, much less interested in left or right. It's interested in practical results. How can we solve problems to help kids get an education, help people support themselves and find a job, help businesses develop, help the entire region grow, and that's the kind of partnership that we want. You know, we still have specific programs that we're involved with here in El Salvador.
You know, they received a millennium challenge grant that provides over $400 million to help this country develop. They are one of four countries that we've selected for a partnership for growth that will involve us working very closely with their economic team to find out what are the barriers to economic development in this country. So, we still have, yes, very specific programs, but, the overall context has changed, because we want to be seen as a partner to a region that is already growing, already vibrant.
(END VIDEO CLIP)
CHIOU: That's President Obama in El Salvador there.
Meanwhile, in Chile, after a year in office, Chilean president, Sebastian Pinera, has seen more than his share of domestic crises. And now, he's looking to the future with stronger partnerships around the world. Our own Luis Carlos Velez has more now on President Obama's visit and Chile's changing prospects.
LUIS CARLOS VELEZ, CNN CORRESPONDENT: Some very specific deals were reached between the United States and Latin America, but it, also this visit, sent a very specific message, and it is the United States needs Latin America today and tomorrow. Earlier, I spoke with President Sebastian Pinera. He's the president of Chile.
(BEGIN VIDEO CLIP)
SEBASTIAN PINERA, CHILEAN PRESIDENT: We are beginning a new era where the U.S. and Latin America will talk to each other in equal terms, with rights, but also with responsibility for both sides. And I think that's the right way to start the new approach between the U.S. and Latin America this 21st century.
VELEZ: President, why do you think it's beneficial for countries like Chile to sustain a good relationship with the U.S.? One might argue that given the crisis, the economic crisis in the U.S. and that affecting other countries in the world, it will be more interesting and helpful to stay away from the United States right now.
PINERA: The U.S. is still and will stay like that as the most important economic power. So, we have the free trade agreement with the U.S., and it has been extremely useful and fruitful, both for the U.S. and for Chile.
(END VIDEO CLIP)
VELEZ: President Pinera said that President Obama visit to Latin America is the beginning of a new era, and definitely, it's the beginning of a new era. Latin America grew an average of 8 percent last year as a commodity region. It's resistant to U.S. economic crisis, and most importantly, it is peaceful.
DOS SANTOS: We've got much more to come in the second half of WORLD BUSINESS TODAY. So, don't go away. We're going to be taking a look at an American city in sharp decline where one quarter of the population has moved out.
And also, how much does it cost to launch an air war against Moammar Gadhafi? We'll be adding up the numbers so far after this break.
CHIOU: Welcome back to WORLD BUSINESS TODAY. I'm Pauline Chiou at CNN Hong Kong.
DOS SANTOS: I'm Nina Dos Santos at CNN London.
CHIOU: We want to bring you up to date right now on the situation in Japan where there are some developments today. The first one is that smoke -- a blackish gray smoke is now spewing out of nuclear reactor number three of the Fukushima Daiichi power plant.
My colleague Anna Coren is following this story at our CNN Tokyo bureau with much more details.
Anna, we just saw a news conference from the government spokesperson. Did we learn any new information about this smoke coming out of the reactor?
ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Yes, we just heard from Chief Cabinet Secretary Edano. He was actually speaking about the water issue. But we did get off the phone from TEPCO just minutes ago and they have confirmed that smoke, grayish, blackish smoke is rising from reactor three. They say something is burning. They just don't know what it is.
Of course this is raising huge alarm at the site. There's been a mass evacuation around reactor number three. And we believe also that reactors one and two, there have been evacuations from there as well.
Now reactor three has been a problem for officials as we know for the last couple of days. This, of course, is where there was that explosion, the fire, and the build-up of pressure, and then just a couple of days ago reactors two and three, there was smoke rising from both of those.
Officials earlier today said it was barely visible and they had the -- they had the situation under control. And then in the last couple of hours, that grayish black smoke has been seen rising from the reactor.
All the while, Pauline, they've been trying to reconnect power to those six reactors. We know that they've got them to the reactors but they just can't get those pumps working just yet. A lot of that has to be do with the damage caused by the tsunami. That saltwater obviously corroded many, many parts.
So these workers have been in there. They've been trying to replace those parts and get those pumps working, but obviously these fires -- the smoke that is rising is just causing so many, many delays.
CHIOU: So a lot of issues there that TEPCO and the government are trying to get a handle on. Meanwhile, residents have to deal with another issue and that's tap water in Tokyo. What is the latest situation there?
COREN: That's an issue, Pauline, that's just come up in the last couple of hours. And that is something that Chief Cabinet Secretary Edano addressed a short time ago. He said that high levels of radiation have been detected in tap here in Tokyo.
Now we are some 250 kilometers from the Fukushima Daiichi nuclear power plant so obviously this is causing real concern. The government officials are telling people -- parents not to allow their children, infants to have this drinking water. And specifically not to use this tap water in baby formula.
So that is what they are saying. The reason being is that iodine levels are much higher. Now this particular science is measured in Beckrels, and it's Beckrels per liter, and the limit for children is 100. Well, this is exceeding 210. So that's more than double the limit.
So this is why there is that alarm going out. They are asking people to refrain obviously from using that tap water. However they are saying that it's not going to pose an immediate health problem that would only occur in -- over a long time -- Pauline.
CHIOU: All right, Anna. So yet another concern in addition to some of the food safety issues that we've been reporting on. Thanks so much for the latest update.
Anna Coren, reporting live from Tokyo.
So, as that crisis unfolds in Japan, Nina, we're also keeping our eye on the situation in North Africa. DOS SANTOS: We are, indeed. Let's turn our attention towards Libya, Pauline.
Coalition pilots have flown more than 300 missions. Tomahawk cruise missiles also continue to pummel targets there. A total of 162 have now been fired from U.S. and British ships in the Mediterranean Sea. President Barack Obama says that he expects to turn U.S. control of the bombing operations over to coalition forces within just a few days.
CHIOU: In Tripoli, Gadhafi's government says coalition attacks are killing civilians. But on Tuesday, Libyan minders took journalists to see one bomb site that didn't seem to have anything to do with civilians.
Nic Robertson was there.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (on camera): This is very obviously, very obviously a military facility here. What government officials are saying is that this was just a repair facility. They're saying that nothing was working here at this particular facility.
But when you look inside the bodies of these rocket launchers here there are no missiles actually inside them. But there's plenty of evidence around here to support the best assessment that this was very much a military target. That it had an ongoing military operation.
(Voice-over): Four of the mobile rocket systems destroyed in the attack, other equipment not damaged. The government not so happy for us to see.
(On camera): The writing on them here is in Swahili, but we're also being told that this whole facility here is a repair facility. But these missile systems written on here, some writing in Arabic, but very clearly what from we can see, Russian made.
So what was this facility here?
CAPT. BASET ABDULLAH ALI, LIBYAN NAVY: You see some cars. A lot of rocket --
ROBERTSON: You have rocket launchers.
ALI: This is rocket. This is launchers, but rocket inside, I guess not active, you see?
ROBERTSON: But there's rockets stored around the corner?
ALI: Yes, you see here, I'm not from this department, but I know this is big -- big storage only.
ROBERTSON: The strike here was a little over 12 hours ago. The smoldering wreckage is still burning here. This was like cables that had been on fire here. And this is a crater from one of the missiles. And this gives you an idea of just how deep and big this hole is. And therefore, an idea of just the size and scale and scope the missiles being fired in here.
We're right in the harbor facility here. And just around the corner, and I'm going to take you to look at it right now, I just spotted it. This is the harbor facility. And just not far from here, there are naval vessels, Libyan naval vessels.
And I'm looking up over there right now, and I can see what appears to be some sort of anti-aircraft guns, some sort of weapon mounted up there.
(Voice-over): Officials say few injuries here. Debris all around the dockyard.
(On camera): It's not clear why the government has brought us to this place that is so obviously, obviously a military facility. But perhaps the answer is up there on that burnt-out rocket launcher.
The man passing down the picture of Moammar Gadhafi. What they seem to want to show is that, A, they're the victims and, B, that they're not, not backing down.
Nic Robertson, CNN, Tripoli, Libya.
DOS SANTOS: Well, the cost of the no-fly zone already piling up. The first day of military action cost more than $100 million alone, and that's just the cost of those U.S. missiles fired into Libya.
A report from a Washington think tank now estimates that the initial stages of this no-fly zone could cost coalition forces between $500 million and also $1 billion. The report also estimates that maintaining a full no-fly zone over Libya could cost between $100 million to $300 million per week.
And if military operations continue for a period of six months, well, the total price tag could end up being closer to somewhere between $3.1 and $8.8 billion. So that just gives you a scale of the cost of this kind of operation in the short-term and also potentially in the long-term.
Now let's see how European markets stand at the moment with all of this and of course the ongoing situation in Japan has been weighing on the world stock markets heavily over the last few days.
Here's how we stand in Europe. Some of these markets, as you can see, currently down to the tune of about a third of 1 percent for the DAX in Frankfurt. On the CAC, we've got the like of the UK budget coming out around midday today. That weighing on the FTSE 100. But not too much.
Also the currencies taking a bit of a battery, namely the euro. We've got the Portuguese austerity vote slated for the calls today. That issue likely to dominate in the EU summit tomorrow. So as you can see markets suffering, adding to yesterday's losses albeit not as much -- Pauline.
CHIOU: Well, Nina, I'm afraid the Asian markets didn't give you a very good lead-in today because here in Asia, Japan led the losses. Profit taking sent Tokyo's main index lower this session as investors reacted to new radiation warnings, this time in Tokyo's tap water.
We heard an update from my colleague Anna Coren about that where parents are being told not to give tap water to their infants.
After the markets closed Japan's government said that the cost of the economy of the earthquake and the tsunami could total $308 billion.
Meanwhile, around the rest of the region, shares of coal companies dragged down the market. The HANG SENG right here in Hong Kong. And banking and energy stocks gave Sydney just a slight boost there.
Well, Japanese exporters, no surprise, have been hit especially hard by the earthquake and the tsunami damage. Sony closed slightly lower. And the world's biggest carmaker, Toyota, lost more than 1 percent today. Both companies have been hurt by parts supply shortages.
Sony says it's cutting output at five more plants at least until the end of this month. Meanwhile Toyota says its 12 assembly plants will remain shut until at least Saturday.
Well, it was once the engine of America. And we bring you some startling new figures on Detroit's mass population exodus. That's coming up next.
DOS SANTOS: Hello and welcome back to WORLD BUSINESS TODAY.
CHIOU: Well, after being closed for 38 days, Egypt's stock exchange finally reopened today but only to close again within a just a couple of seconds.
My colleague Ivan Watson is at the exchange right now in Cairo.
Ivan, this all sounds a little bit bizarre. Do we know why it closed so suddenly?
IVAN WATSON, CNN CORRESPONDENT (via phone): It's just one of the circuit breakers has been put in place to stop what traders were predicting would be a bloodbath here. Basically the main index dropped 5 percent then automatically the market shuts for half an hour.
And that is what happened. It was remarkable. The finance minister led a rousing performance of the Egyptian national anthem, confetti was thrown, and they waved the Egyptian flags, and then rang the bell. And within less than 5 seconds, the entire stock market closed due to this circuit breaker. Traders here are telling me they've never seen anything like this happen before. CHIOU: So suddenly the party stopped.
All right, Ivan Watson live at the stock exchange, following what's going to happen throughout the day there. Thanks so much, Ivan.
Let's bring in our Leone Lakhani for some analysis. She's at CNN Abu Dhabi.
Leone, we were expecting a selloff when the Egyptian stock exchange opened. But does this kind of a selloff surprise you?
LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT: It don't surprise anyone, to be honest, Pauline. This is the first time the stock market has been open since January 27th, as you said, that's two months. And investors haven't had a chance to even react to the uncharted changes we've seen in Egypt.
We've seen a regime change, we've seen a revolution. So this is the first time investors were able to react. Now the stock market chairman himself said he expected a selloff for three or four days. For the next three or four days.
Now the circuit breakers were in place as Ivan mentioned. The EGX 100, if it falls below 5 percent automatically shuts down for 30 minutes. That's what we've seen. We're told that it dropped about 9 percent within the first few seconds.
Now the next circuit breaker, after these 30 minutes, if it falls below 10 percent, the chairman will decide what happens then. Now so far the chairman has told CNN, our Ivan Watson, that he will let trade continue, and he won't stop the market again. But we'll have to see if that really does go into effect.
The reason it's important, Pauline, that they did open the stock market, as we've seen so many false alarms over the past couple of months saying they're going to open, then they don't open. Open then they don't open. That's not a good sign for investors. Investors want to see clear, transparent decisions. They want to see the authorities stick to them. And that's why it was really, really important for them to actually open the stock market today -- Pauline.
CHIOU: As you mentioned there were so many delays in trying to open the exchange. Why did they wait this long?
LAKHANI: Again, Pauline, as we mentioned, it's just completely unchartered territory. They really didn't seem to know what they were doing or didn't know how to react to all the changes in their country.
Now a couple of things that might have pushed them a bit this week. First of all, we've talked about this before. The stock market has been shut for 38 business days. Now, if they were shut for 40 days, it would have risked being taken off the MSCI, which is a key emerging markets index.
Secondly, the political situation, Pauline, as we know, has been really uncertain over the past couple of months, but over the weekend we saw a referendum being passed in Egypt that paved the way for free and fair elections. And that would be a positive sign for investors. And a better environment in which to open the stock market. So that probably be -- helped them make a decision to open the market as well.
And as our Ivan Watson spoke to the chairman of the stock market, he did say that today the market would be open no matter what the consequences. And they've basically just fallen through -- come through with that decision. We'll just have to see what happens when they reopen in 30 minutes, and if we see another circuit breaker kick in again -- Pauline.
CHIOU: It should be a very interesting day there in Cairo. Thanks so much, Leone Lakhani. Reporting -- giving us her analysis from CNN in Abu Dhabi.
And when we come back, right here on WORLD BUSINESS TODAY, we're going to head to the U.S. and to Detroit to find out why so many people are leaving that city.
CHIOU: Welcome back. You're watching WORLD BUSINESS TODAY.
DOS SANTOS: Once the bustling industrial and car-making hub, Detroit's appeal seems now to be dwindling. A new U.S. Census report shows that Detroit's population fell by 25 percent between the year 2000 and last year. That's a difference of nearly 240,000 people. And it puts Detroit's current population at its lowest level in a century.
Americans rushed there in the mid-1900s. The auto industry began to take off. And in its heyday, Detroit was home to nearly 1.9 million people. But a slump in the American car market has sent residents seeking greener pastures.
Detroit officials say that the latest U.S. Census report is concerning because it could mean millions in lost federal funding for the city and also the state.
CHIOU: Well, let's turn our attention now to the forecast. And our meteorologist Jennifer Delgado is tracking more snow and rain for parts of the U.S. So let's get an update for all the business travelers out there right now who might be heading out to the airports.
Jen, what do you have for us?
JENNIFER DELGADO, CNN METEOROLOGIST: Hi, Pauline. Well, guess what? We have spring snow coming down through parts of the northern area of the U.S. And you can see exactly where I'm talking about for North and South Dakota.
You can see from Minnesota that snow even spreading all the way over towards the east, including parts of Pennsylvania as well as New York. But in addition to that, we're also dealing with some rain out there. And with the rain, we've got a cold front and a warm front just to the northeast.
We're going to be dealing with the potential for some strong storms today, and some of those storms could certainly produce some tornadoes as well as gusty winds.
And speaking of tornadoes, let's get right over to some video coming out of Iowa. And you're actually seeing a funnel cloud. You see the roping there. And it's actually, if you look real closely down towards the bottom of your screen, you can see some of that debris being kicked up by that cloud that you're seeing.
So this is out of Creston, Iowa. This is from one of our iReporter, Jennifer Walsh. We're happy to report she did this safely.
Now in addition to the threat for severe weather for today, as well as through Thursday morning, want to take you back over. We are going to be dealing with some snow, as I said. It's coming down right now. And potentially we could see about 15 to 25 centimeters of snowfall.
And we're also going to see more snow working in to parts of California. More of that mountain snow. But anywhere you're seeing for areas up towards the northern part of the U.S., we're talking for the Midwest as well as over towards northeast. We could see potentially 25 centimeters of snowfall, roughly about five to seven inches coming down as we go through the rest of today.
As I show you what's happening across Europe, a little too warm to support snow through parts of western as well as central Europe. We have a big ridge of high pressure means mild temperatures in the afternoon as well as some cool nights. But look at the temperatures there, for Paris, for Wednesday, today a high of 16 degrees. Oh my goodness, it gets better for Thursday as well into Friday. High temperature of 18. Temperatures running about 7 degrees above average.
And for London, Nina, you're going to enjoy these temperatures right near 15, as well as 16 degrees on Thursday. Lots of sunshine out there. And on a wider view across Europe, really temperatures are going to be above freezing, so a good-looking day.
Pauline, not so bad for you over in Hong Kong. I know you started off with a lot of clouds but you'll stay dry, and that should please you.
CHIOU: Yes, dry is good.
DELGADO: Doesn't take much, right?
CHIOU: I don't like the humid rain storms here.
CHIOU: All right. Thanks so much, Jen.
CHIOU: Nina, let's get a look at the markets starting with Europe. DOS SANTOS: Yes, indeed. That sunshine that Jennifer was just telling us about putting people in a good mood but then again investors have still got their eyes firmly focused on a number of factors here.
We've got Portugal facing a bailout -- threat looming as the government nears collapse there. This after the opposition parties have withdrawn their crucial support for austerity policies needed to avert an island of (INAUDIBLE) bailout. That's dragging down some of the markets. It's also dragging down the euro.
And in Britain we've got the budget looming. And this is coming just a day after we found that inflation was way above the central bank's 2 percent target, coming in at 4.4 percent.
Also not good news was that public sector borrowing last month hit a record for the month of February, a total of 11.8 billion pounds. That means that the total public borrowing in the UK now stands at 123.5 billion.
So adding that to the mix of issues that investors have already had to cope with over the last few days, Pauline, such as Libya and Japan, as you can see stock markets still in the red, although just waiting to see what's going to happen later on today in Europe and the UK.
CHIOU: Right. A lot of issues for investors to digest and also the Asian markets for the most part ended in negative territory as well, Nina.
Well, that is all for this edition of WORLD BUSINESS TODAY. Thanks for joining us. I'm Pauline Chiou in Hong Kong.
DOS SANTOS: And I'm Nina Dos Santos in London. "WORLD ONE" is next.