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QUEST MEANS BUSINESS
American Jim Yong Kim Named World Bank President; Dow Close to 13,000; Europe Markets Mostly Up; Spanish Economy in Crisis
Aired April 16, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Dr. Kim is in. The American is named president of the World Bank. Ngozi Okonjo-Iweala attacks the selection process. And tonight, we ask two of the candidates who withdrew from the race, was it a stitch-up?
I'm Richard Quest. I mean business.
Good evening. Tonight, convention trumped change at the World Bank as Jim Yong Kim, President Obama's nominee, was named the next president of the organization when Robert Zoellick's term expires at the end of June.
Dr. Kim's selection comes as no surprise. Kim had the backing of the United States and Europe, which have roughly half the votes. Even his main contender, the Nigerian finance minister, Ngozi Okonjo-Iweala, conceded she never stood a chance. She did consider it a victory of sorts, claiming the selection process will, in her words, never be the same again.
Now that the future of the World Bank is secure for the next five years, here's what we know about the man who will be leading that organization. Jim Yong Kim is 52 years old, he was born in Seoul in South Korea, moved to the United States at an early age, has an impeccable history in medical research and in HIV/AIDS work for the United Nations and is currently president of Dartmouth College.
The background in medicine in Harvard -- in science, Harvard-trained physician, former director of HIV department at the WHO. Our new nightly program "Amanpour" will have the first interview with Dr. Jim Yong Kim, along with an exclusive interview with the Afghan president Hamid Karzai. Christiane is just under an hour from now.
As we talk about the financial and worldwide implications of Dr. Kim's appointment, joining me from New York is the former Colombian finance minister, Jose Antonio Ocampo. He's with us. And also is Jeffrey Sachs, the economist, both considered themselves candidates for the top job.
Mr. Ocampo bowed out as the third candidate last week, criticizing the process. We'll come to Jeffrey Sachs in just a moment. Let's turn first of all, though, to Mr. Ocampo. So, now we have the result. You're not surprised, you've made it quite clear what you thought of the process. How damaging is what took place?
JOSE ANTONIO OCAMPO, FORMER COLOMBIAN FINANCE MINISTER: Well, I think the process has -- had many advantages. Certainly was better than the process of selection of the managing director of the International Monetary Fund. There was more competition on this occasion.
But the merit-based process, I think, ceased as such in the middle of last week, and the process turned political, so it was the collection of votes more than the merits of the candidate that were the decisive factor at the end.
QUEST: If that is the case -- the question becomes, did the best man get the job?
OCAMPO: Well, I think we have to see his proposals for the bank, what the team that he makes up to run the bank. I really hope him the best, as I hope the best for the World Bank. But certainly in this race, the -- Minister Okonjo and myself had a more -- a better track record, let's say, in the area of economic development.
QUEST: So, the changes -- what do you fear might now happen at the World Bank? We know -- we do know Dr. Kim has an impeccable history of medical research and of dealing in development issues. So, he comes to the job with a fresh broom and a clean pair of eyes.
OCAMPO: Well, I think, again, that this will depend entirely on how he approaches the job, who he hears to, what sort of economic development issues he takes on, what sort of social development issues, aside from health, that has been his main expertise --
OCAMPO: -- through all his life. On the basis of that, I think -- I hope he will be able to do a good job at the helm of the bank.
QUEST: And when -- when your other rival, Ngozi Okonjo-Iweala says similar things to yourself, a process has begun, she believes. It can never be the same again. Do you agree with her that in the future, this duopoly, certainly, stands little chance of survival?
OCAMPO: Yes, I hope next time it will be even better. This time, I think we made a point by voting with Minister Okonjo that the process has to be different, it has to be competitive. Hopefully, next time nationality will weight less than merits of the candidates.
QUEST: Mr. Ocampo, many thanks for joining us from New York tonight. We appreciate your time. Also live form New York, economist Jeffrey Sachs. Jeffrey, you started off in the race, you spoke on this program the day you launched your candidacy. You pulled out, and you're a supporter of Jim Yong Kim. Was it -- is the criticism of him unfair?
JEFFREY SACHS, DIRECTOR, EARTH INSTITUTE: I think he had strong worldwide support in this process, and it was very much merited. He's a world-leading development figures with a great track record, great management experience. He knows poverty firsthand, and he knows it in many parts of the world.
I pulled out when President Obama nominated him because I think Jim Kim's an absolutely outstanding person
And by the way, Richard, what a wonderful place to launch a campaign. I hope -- hope to do it again sometime.
QUEST: Let me ask you, though. All right, so, let me ask you, does he have to prove, Dr. Kim, that because he was appointed by Obama, the duopoly worked its magic again, isn't the onus on him, now, to prove he can do the job in a meritocratic way?
SACHS: I don't think anybody doubts his credentials, but I'll tell you, it's a very tough job. Of course, all of the challenges of poverty, of disease, of hunger, of lack of access to clean water, electricity for so many people around the world is core to the job.
But then, on top of that, are all the challenges of climate change and environmental destruction, the path that the planet as a whole is on right now. So, this is a very, very tough assignment. I think he's an excellent incoming president. He'll come with a fresh eye, a fresh set of skills, but it's a very, very hard job.
QUEST: But what about the economic side of it, the growth question. Now, I don't for a moment -- I'm not in the camp that says Dr. Kim is anti- growth, I don't think that, what people have been saying and reading, I think that's far too simplistic.
But in the question of balance between a developmental agenda and an economic growth agenda, he's clearly going to be more on the left side of the equation.
SACHS: Well, he's going to have to do three things. He's going to have to fight poverty, he's going to have to promote economic development, and he's going to have to do both of those in an environmentally sound way. Not just him, this is the world's challenge, after all.
This is a pretty difficult path that we need to follow right now. I'm glad he's there, he's got great experience. But he's going to need a lot of help from a lot of fields.
QUEST: All right.
SACHS: The idea that just mainstream economics is the only way to go, or mainstream banking, I think that was a wrong idea, and I think he'll bring very fresh perspectives to these questions.
QUEST: Finally, Jeffrey, whether or not -- how he does in the -- has the process been tainted? Two years ago, and when the crisis happened, we were told the duopoly's gone. Well, guess what. Christine Lagarde's at the Fund from Europe, Kim's at the Bank from the United States. Is the duopoly on its last legs?
SACHS: Oh, I think the process was terrific this time. I'm very delighted to have been a part of that. This is the first time -- the 12th president will be the first World Bank president that is a development professional. It's been seven bankers, it's been people from the military, it's been a congressman, but it's never been a development professional.
This is a huge breakthrough, the process improved tremendously, and I think it is now opened up for quality candidates from around the world in the future. So, I think this was a great, great breakthrough.
QUEST: Jeffrey Sachs in New York and Mr. Ocampo in New York, we thank you both for joining us. And as always, any time you want to announce a candidacy for any job, city mayor, local councilor, dog catcher, whatever it is, you're always welcome on this program, Jeff. Many thanks, indeed, to both of you gentlemen.
The markets are open and --
QUEST: -- doing break -- doing breakfast? Doing business. Well, that's a breakfast look for you, up 116 points. We are flirting promiscuously with 13,000 again, 12,965. It's a strong performance based on the back of retail, stronger US retail sales number, which also helped Europe. Have a look at the European numbers --
QUEST: -- where the major indices gained ground, except for Spain's IBEX. The Spanish stocks were hit by worries over a rising bond yield over six percent, and when you see that number, you do start to worry, what is happening?
When we come back in just a moment, dangerous debt levels and the new talk of the R word. We'll be talking about whether Spain is back in full crisis mode. And although a full bailout is unlikely, certainly some sort of financing necessary. After the break, QUEST MEANS BUSINESS, good evening.
QUEST: Now, before we go -- excuse me. Before we go a moment further, just a quick note, a bit of housekeeping, a quick apology. At the opening of the program, when we were talking about Mr. Ocampo, we may well have shown the wrong graphic, the wrong picture of him.
Well, it wasn't him, and we apologize, obviously, for that. Bit of computer problems and the wrong fingers pushed the wrong buttons, so we apologize for that.
Moving to more pressing matters, and Spain is facing a painfully high price to borrow money on the international markets. Join me in the library, and you will see just -- while I'm walking over there, you look at that number: 6 percent on ten-year Spanish bonds. It's a four-month high.
Now, 7 percent is regarded as the nutcrackingly painful level, but even so, frankly, 6 percent isn't very sustainable. Greece and Portugal had to resort to help after their yields had passed 7 percent.
What's worrying about this number is that the yield had come beautifully down as a result of the LTRO from the ECB. A lot of jargon, there, but basically, the free money -- not quite free, but the generous money handed out by the Central Bank.
As a result, the IBEX down just over half of one percent on the back of that. And tomorrow, investors will be listening for Mario Draghi, who's scheduled to speak. A Spanish minister wants ECB to buy -- to lend a hand and buy more bonds. This Thursday, investors will see just how much Spain has to borrow to spend what it wants to go into the market.
Spain's economy, well, it may have tipped back into recession. The economy minister, Luis de Guindos, warns that Spain's GDP probably fell for the first three months of this year. Europe's fourth-biggest economy already has a jobless crisis on its hands with 5 million people out of work.
The prime minister, Mariano Rajoy, who's only five months into the job, told the Madrid Conference, "The fundamental objective at the moment is to reduce the deficit." Otherwise, Spain could lose access to financing.
All right. Joining me, always good to see, HSBC's head of global research, Bronwyn Curtis, always good to have you with us. Bronwyn, what's your forecast for Spain?
BRONWYN CURTIS, HEAD OF GLOBAL RESEARCH, HSBC: Well, we're looking for a contraction in GDP this year of 2 percent and another contraction next year. And so, what you're not getting, of course, is it's all very well, you can't continue to borrow at 6 percent, or over 6 percent, unless you have tax revenues to make up the difference. And, of course, the tax revenues won't come in if you don't have growth. So, the situation is not sustainable.
QUEST: OK. They've only got two choices, then. One of them was to run a bigger deficit. 5.8 percent, Rajoy wanted and, frankly, he went to Brussels and parts of his anatomy were handed back to him.
CURTIS: Well, I think investors handed it back to him, really. Because investors don't believe that more austerity is going to work for Spain.
QUEST: So, what would work, then? If you can't have more austerity, which you've got, and you can't have higher deficits to a greater spending, and you can't have growth, and you've already started to do structural reform.
CURTIS: Well, a couple of things. First of all, if Germany really reinflated. In other words, we've got growth out of Germany, higher inflation, that would certainly help. Otherwise, it's going to be back to the Es: the ECB, the ESFF -- ESFS
QUEST: I know.
CURTIS: -- all of those Es--
CURTIS: Yes. In other words, a bailout of some sort.
QUEST: And most people now say it won't be a full bailout like Greece, a la Portugal, but it's going to be some form of bank recap, money that will be -- have to be handed over.
CURTIS: Well, of course, the banks are the problem, because they will have to be recapitalized. I mean, there's a lot of debt out there. The government debt is not that high in actually fact, but when you look at the bank debt, the private sector debt, the fact that the housing market is falling. That's a bigger problem.
QUEST: Does it spill to Spain -- from Spain to Italy? Because my understanding is that Spain is just about containable if it's just a bank recapitalization. The ESM's got the necessary funds for that. Bur if you're starting to talk about doing something for Italy, now we're in trouble.
CURTIS: Well, of course, it's this spillover effect, isn't it? And with Italy, I don't think austerity -- more austerity will make a difference. What you need is really a lot of reforms going on there.
So -- but Italy's so big as an economy that if they have yields rising and the fear -- it's really the fear factor from investors, then we're in problems.
QUEST: OK. So, pulling the strands together, are the wheels coming off the wagon, or are we just on a bumpy road?
CURTIS: Well, we're --
QUEST: Sorry. That's a question --
CURTIS: We've been on this bumpy road --
CURTIS: -- for a long time. Now, what it takes is the government to do more in Europe, and in the end, we should get fiscal integration and Euro bonds. I other words, the whole of Europe issuing bonds.
Now, that would probably work. But in the meantime, unless we do get a lot more for Germany and from the center. It's going to be a very tough ride. Whether the wheels fall off right now, I don't know.
QUEST: Good one. Many thanks. Lovely to see you, as always, making sense of these very difficult times. Thank you very much, Bronwyn. Bronwyn Curtis, joining us.
Now, before we update you on the daily currency rates, starting today, we have a currency conundrum. The first recorded use of paper money was in the seventh century. But which country introduced it? Was it Egypt, China, or England? The answer, later in the program.
QUEST: Here are the rates. These are the movements in the currencies. The dollar's fallen back, it's down by almost half of a cent against the pound.
QUEST: Today, whatever the country and wherever the continent, one thing almost all cities have in common is a thriving, bustling Chinatown. And in Vancouver, far from being the exception, it's almost the rule. A third of the population there calls it self Chinese or of Chinese origin, and the city relies on immigrants to keep Vancouver going.
Today, it goes to great lengths to make them feel at home. Indeed, as a Future City, in Vancouver, Paula Newton went to find out.
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT (voice-over): On the west coast of Canada, the city of Vancouver has a long history of immigrant. 40 percent of the population here is from overseas. One quarter of all newcomers are from China.
NEWTON (on camera): Kerry, here we are in Chinatown, sights, smells, sounds --
KERRY JANG, COUNCILOR, CITY OF VANCOUVER: Smells for sure.
NEWTON: It looks incredibly vibrant.
JANG: Vancouver is really a city of neighborhoods. And so, for us, Chinatown is one of the key neighborhoods in the city of Vancouver. As you can see, it's got its own character, it's own feel. And it really hasn't changed since I was born in the 60s.
NEWTON (voice-over): Chinatown, Vancouver, is one of the oldest parts of the city. This clan house belongs to the Lim Association.
GEORGE CHOW, FORMER CITY COUNCILOR, VANCOUVER: We play ping pong here. We play Mahjong here. They sing and they engage in Cantonese opera singing.
NEWTON: Built in 1903, it was a place to stay for new arrivals and is still a regular meeting place for members.
NEWTON (on camera): what does immigration mean to the city of Vancouver?
CHOW: Immigration has been basically sustaining Vancouver.
JANG: About 35 percent of all Vancouverites in the city of Vancouver call themselves Chinese.
JANG: And that's not including folks who are, perhaps, intermarried or part Chinese. But we make up a third of the city. For a long time, one of the problems was that the storekeepers only spoke Chinese.
NEWTON (voice-over): Almost one-tenth of people living in British Columbia register Chinese as their mother tongue. Jade He (ph) is from Shanghai. Now, she's a language teacher here in Vancouver.
JADE HE, LANGUAGE TEACHER: I was lucky enough to get a chance to immigrate to Canada. In 2006, we landed in Vancouver. Ethnic tolerance is a big issue in Vancouver. People acknowledge we have differences. We admit that, but we accommodate that.
NEWTON: Jade has a very well-known student.
GREGOR ROBERTSON, MAYOR OF VANCOUVER: (speaks Chinese) I just said, "Welcome to Vancouver. I'm Vancouver's mayor, Gregor Robertson." Well, Lo Pinchin (ph) is my Mandarin name.
Mandarin speakers are our newest generation of immigrants. We have a long history of Cantonese since the beginning of Vancouver, Southern Chinese, Hong Kong, Guangdong province. We're immigrating, and there was a lot of back and forth. Now, Mandarin is the language spoken by most of the new immigrants.
NEWTON: The flow of new people from mainland China continues.
ANGEL WANG, ROYAL PACIFIC REALTY CORP: This is a brand-new house situated in Dunbar area. Dunbar is one of the best residential areas in west side of Vancouver.
NEWTON: This house is on the market for $4 million. It's brand-new, built to attract Chinese clientele.
WANG: Eighty percent of my clients are from China, most of them from mainland China.
This is the typical Western-style kitchen. Then, this is the Chinese kitchen. As we see, we have four burners and very powerful vent. And the most important thing, Chinese people like their kitchens to have a window.
TETSURO SHIGEMATSU, SHIGGYTV, YOUTUBE: Because Chinese immigration within Vancouver sort of belies the traditional master narrative of the docile and meek immigrant, I think that's really unexpected for a lot of people.
I remember a time where part of my novelty of being in a room was the fact that I would be the only Asian. And I'm not that old. But now, of course, many white people have the experience of being the only non-Asian within a room. So, things have changed extremely quickly within just a generation.
Canadians look at me as Japanese. But if I ask anyone who's Japanese from Japan and ask them, "Am I Japanese?" The answer will always be "no." Often you find yourself between worlds. Canadians will never fully accept me as Canadian. They'll always ask me, "Hey, where are you from? You know, your English is terrific."
NEWTON (on camera): Look at what I have here. This is a Japadog. This has seaweed, Japanese mayo, and teriyaki. You know, multiculturalism is such a large part of this city's identity, and it's infused in everything, the sights, sounds and, of course, the taste.
Came here in 1971. They didn't really know cooking like this here in BC?
TOJO, CHEF, VANCOUVER: Never.
NEWTON: They've never seen it?
TOJO: Because in 1971, people said, "Raw fish, ew!"
NEWTON: In 1971, sushi was exotic, right? Never heard of it.
TOJO: Never. Only Japanese community.
NEWTON (voice-over): Tojo is a Japanese chef who has made Vancouver his home for the past 40 years.
NEWTON (on camera): Is it true, Tojo, then, that you invented the California roll?
TOJO: Yes. That's why I come to outside of Japan. Because I have a lot of good ideas, but I cannot use that in Japan.
NEWTON: You're saying these new ideas were more accepted in Vancouver than they would have been in Japan?
NEWTON (voice-over): Statistics show that immigration is the major driver behind Canadian population growth. The city of Vancouver is Canada's gateway to Asia.
Paula Newton, CNN, Vancouver, Canada.
QUEST: Future Cities in the west of Canada. And we stay in Canada after the break. Canada's Foreign Affairs Minister will be with me here, live on the program, to discuss World Bank, trade, and all mattes related to economics, in a moment.
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first.
The trial of the man accused of mass murder has begun in Oslo in Norway today. As prosecutors say Anders Breivik is responsible for the bloodiest in modern Norwegian history. Breivik acknowledges killing 77 people in two attacks last year. He calls it in self-defense. Breivik's expected to begin testifying on Tuesday.
U.N. observers are beginning to monitor the fragile cease-fire in Syria, and we're still getting reports of fierce fighting. An opposition group says security forces have killed 27 people on Monday, and activists say a military offensive is underway in Idlib. We cannot confirm that information.
The World Bank has chosen Dr. Jim Yong Kim as its next president. A Dartmouth college president will serve a five-year term, starting at the beginning of July. He beat the Nigerian finance minister Ngozi Okonjo- Iweala, who had served as a managing director for World Bank. Dr. Kim will be speaking to Christiane Amanpour in about half an hour from now.
Pentagon officials think that the Haqqani Network carried out Sunday's coordinated attacks in Afghanistan. President of Afghanistan Hamid Karzai has blamed both Afghan and NATO intelligence for what's happened.
Authorities say nearly all 36 attackers were killed, along with eight Afghan security forces and four civilians.
QUEST: The World Bank has picked an Ivy League president to be its next chief. The selection of the Korean-American Jim Yong Kim, who currently runs Dartmouth College, is not a surprise. The U.S. keeps its grip on the bank's top job, despite questions from emerging economies.
One of those economies supported Dr. Kim is Canada. I'm joined by Canada's foreign minister, John Baird. He joins me now.
The critics say, Minister, it was a stitch-up. No one else stood a chance? Am I right?
JOHN BAIRD, CANADIAN FOREIGN MINISTER: You are right, and there's no one -- it was going to go to an American. I mean, President Obama nominated a great candidate. We supported it. We haven't been afraid to go -- to buck the trend.
I love Christine Lagarde. Canada loved her. We supported the Mexican Mr. Carstairs (ph). So buck the trend sometimes, but we think President Kim's the man for the job.
QUEST: Why? I mean, why does the World Bank now require a more development-minded, rather than a, say, banker/financer and so economic growth?
BAIRD: Well, I think the fundamental jobs of the World Bank is development. And the president will bring a different skill set. We think Bob Zoellick, the current president, has done a phenomenal job, and we think Kim will be a great replacement.
QUEST: And in the future, you're -- do you think that the days have gone when Europe and the U.S. carve up the two big jobs?
BAIRD: Yes. I think you should never assume, you know, the --
QUEST: Oh, come on.
BAIRD: (Inaudible) the world's changing fast. Who knows what's going to happen in five years? You know, hopefully, we'll -- President Kim will have done such a phenomenal job, he'll be reappointed for a second five- year term and we'll be debating other things. But I think, you know, as long as -- as long as the world is changing the way it is, it'll -- that'll be part of the agenda.
QUEST: Canada's economy is robust at the moment. It is strong. It doesn't suffer anything like the deficit problems or economic problems, say, the Eurozone suffers or, indeed, the southern -- your southern neighbor, United States. So how worried are you, in the Canadian government, about these other problems?
BAIRD: Well, we're very worried. I mean, we can do what we can in Canada. That's strong leadership, cutting taxes, (inaudible) corporate tax rates to make Canada a magnet for jobs, investment and opportunity. We also want to return to not just balanced budgets, but to surpluses. Just a few short years ago, three or four years ago, we had big surpluses.
We've now more than half the deficit, and we'll balance the budget in the next two or three years, and that's showing that we're running a good ship, I think. We can't, you know, with the challenges that the United States is facing, the uncertainty in Europe, those are obviously big factors for Canada.
QUEST: OK. So in that regard, you're shifting your focus, aren't you, as, indeed, so many countries are. It's no longer you want China?
BAIRD: Well, United States, our biggest market, always will be, we were pursuing a free trade agreement with European Union. That's really important. But China and the Asia Pacific region are tremendously important. Our trade with China was up by more than 30 percent last year. Chinese markets are incredibly important. We've got to invest in protection --
QUEST: But is that only expense of, say, a shifting emphasis in priorities to China, to India, to those other emerging markets, at, say, the expense of Europe?
BAIRD: I mean, we couldn't be more focused on Europe, working out a free trade agreement, we think we can boost free trade, trade between Europe, the European Union by 20 percent. Last year, it was up by 15 percent. With a free trade agreement we're negotiating right now, we hope to get it up by 20. So it's not an either/or scenario.
Europe, yes, is the number one priority for our trade arrangements this year. We're also focusing in a big way, expanding markets, whether it's China, whether it's Vietnam, Indonesia, India, all important.
QUEST: Don't you make the point of the complete and utter failure of the World Trade Organization, and the Doha round, when you are -- and your colleagues are gallivanting around the world, snapping up as many bilateral deals as you possibly can, which, of course, is the antithesis of what the multilateral system's about?
BAIRD: That's the only game in town. If we wanted to wait for Doha to succeed -- we've been waiting a long time, and we can't afford to wait. We want to make Canada's economy more competitive. We want -- we're big believers in free trade. We think it means more jobs, and we're aggressively taking that agenda around the world.
QUEST: Minister, we'll talk more about it. Thank you very much indeed.
QUEST: Now, it is the platform that Google's Android is built upon. It's called Java, the programming language, not (inaudible) at the center of a billion-dollar (inaudible). It's Google versus Oracle, and it's next. QUEST MEANS BUSINESS.
UNIDENTIFIED MALE: CNN MARKETPLACE EUROPE "Face Time."
FRANCESCO CAIO, CEO, AVIO GROUP: I think Europe runs the risk of being squeezed between the muscles of low-cost China and the innovation of high-tech America.
And I think the issue for Europe is to identify financial systems, funding systems and education systems that can develop the new frontier of innovation. This Europe is not determined to go all the way. We run the risk of having a half-baked cake, which would be very, very dangerous and indigested.
UNIDENTIFIED MALE: Executive insights, in association with Germany Trade and Invest.
QUEST: No compromise and no settlement, a billion-dollar patent dispute between Oracle and Google is underway in San Francisco. Oracle versus Google, jury selection's begun. It's a case that will see the chief execs of both these giants called to give evidence.
Now, look, it's complicated stuff, but basically Oracle says Google's Android operating system infringes its copyright patents on its Java programming language. Oracle picked up Java when it bought Sun Microsystems in 2010. Google insists the software is free to use, and that Oracle's case is baseless.
Java, as you guessed, is not just about the coffee. Let's just look at this and do -- most of you, many of you will know more about this than I do, but here, for the primer, for those that don't, Java fundamentally -- Oracle says Java is the largest and most active programming language in the world, with 61/2 million users.
Now the beauty of it is, you write it once and it runs anywhere. At the moment, if you want to write some software for televisions, laptops, tablets or phones, you have to write the code again and again and again and again. It is time-consuming. It is expensive and it just necessarily doesn't always work. It takes great resources to do this.
And in this day and age, that is not something anybody wants to do. This is where Java comes in because Java, as the old line says, do it once and they will all recognize it. So Java is the bit that makes it all work and it all comes from the same one. It makes life easy for app developers and it would be difficult without it.
Ilya Kazi is the partner of intellectual property law firm Mathys & Squire, and joins me now. How big a case is this?
ILYA KAZI, PATENT LAWYER: Well, I don't think it's as big as everyone thinks it's going to be. It started at $6 billion. It's now down to $1 billion.
What I've heard recently is the justice saying, get real; it's probably no more than $100 million, which is what he was thinking about settling for previously. I think this will be a flash in the pan and at some point, people will settle. We're having jury selection now. I think when --
QUEST: But fundamentally, Google -- who is claiming what? I mean, Oracle is claiming that Google shouldn't be using, and now they want money from it. And Google's saying it's open.
KAZI: Yes. Exactly. And the two sides, put very simply, are -- Google is saying it's just a language. Oracle is saying it's our language. That's (inaudible).
QUEST: But if Google wins, does that basically scupper to Oracle elsewhere?
KAZI: Well, Oracle, as you may know, sued Microsoft some time ago successfully, and there was a small settlement. They did a deal. Now Microsoft used Oracle's version of Java. Oracle want to get out of this, I would imagine, a closer deal with Android, where Android and Java are more interoperable and --
QUEST: But that would involve Google ultimately paying Oracle?
KAZI: They may pay, or there may be a deal where Android is more friendly with Java, because I think Oracle's issue is partly that Android has had massive upsurge recently. Java is getting squeezed as a platform, as a result, and I don't know what Oracle hope to achieve from this, but one possibility is that Java become more prevalent. Maybe they have a friendly deal.
QUEST: Right. Now you and I have talked about this before, because people (inaudible) think it's all about money, and the actual (inaudible). But you're the first person to tell me no, it's not (inaudible). It's about doing deals. It's about penetration. It's about market share. It's about a whole variety of other things.
KAZI: Well, (inaudible), OK. We're talking about a billion dollars headline figure; real figure probably $100 million. That's relatively small change to both of these companies. It would be quite nice for you or I to have it, but it's more a small amount in the scheme of things. It's not about money.
If Oracle wanted $100 million, Google could write a check and get on with life. It isn't about that. It's about operating systems, market share. Google want to compete with Apple. They want an operating system which is friendly to developers, so they have a competitive platform. Oracle want Java to be a universal platform. If it's universal and it's on Android, then --
QUEST: So there is a deal to be done?
KAZI: There is a deal to be done. Whether it will be done, remains to be seen.
QUEST: Good to see you. Many thanks indeed for coming in. Many thanks.
Now (inaudible) closely. He says it'll be $100 million. (Inaudible). If that. All right. You'll hear it first. There, now, as there has been a rash of tornados tormenting 10 U.S. states over the past three days.
The monster storms roared across the Great Plains. They whipped out almost everything in their path. 2012 is shaping up to be a costly weather year all-round. Let me join with Jennifer Delgado, who's at the World Weather Center.
You know, whenever I hear this, I wonder, is there a -- is there a reason why there are more tornadoes? I mean, obviously, there's (inaudible) weather created. But is there a reason particularly this year?
JENNIFER DELGADO, AMS METEOROLOGIST: This year, you know, I can tell you this, it's been unseasonably warm. And (inaudible) we were dealing with a very active jet stream. That combined, so fueled more active weather, and that's what we've been seeing over the last couple weeks.
Now as I show you, and you asked me, and you were saying it's been a very costly year, in fact, it has been. When we talk about the tornados that came through this week, and let's go to some video, they give you an idea the damage that was left behind.
And through parts of Oklahoma as well as Kansas, they're all recovering from this tornado damage. I think we're going to pull that video up for you, hopefully, in a second or two.
And, Richard, you're looking at this, and this is coming through Tornado Alley. So it's not unusual to see something like this out of this area, and they're usually prepared for storms like this. They have basements as well as cellars.
But, certainly, when you see the damage left behind, it still catches you off guard. As I take you back over to our graphic, for January as well as into March, for the U.S. and Midwest as well as the Southeast, we're talking $2 billion in damages alone from March 2nd to the 3rd.
And then you remember earlier this year, we talked about the flooding in Australia for New South Wales as well as into Victoria, estimated to be $1.58 billion. And then, of course, for the U.S. outbreak we just for April 13th and 14th, the total right now just not available because it's still so fresh, but certainly we're going to see millions if not billions of dollars in damages.
We're still looking at a threat for severe weather for areas, including West Virginia, (inaudible) Pennsylvania and down towards Texas. And Texas, of course, has been dealing with heat as well as flooding and tornado damage. We talked about that a couple weeks ago.
Now through Europe and a little bit active there, in fact, we're going to see an area of low pressure dropping through parts of the U.K. That's going to mean cool as well as unsettled conditions through parts of France as well as into Spain. It's going to be cool there for the next couple of days, and we're also looking at a low right on top of Greece.
That's (Inaudible), Albania, and that's where we'll keep some scattered showers around as we go through the next couple days. But I have some incredible video for you, and I'm sorry I'm going to have to show this to you really quickly. This is coming out of Riyadh. Imagine getting out of your car. This is in Saudi Arabia, and this was on Friday, one of our iReporters caught this.
This is a dust storm, also called a haboob, rolling through as a man and a lot of people were getting out of their cars. They had to run to safety to avoid these dust storms. And they've been popping up a lot this year as well. Isn't that incredible?
QUEST: Good grief.
DELGADO: I mean, that is massive, something heading in your direction.
QUEST: Yes. You'd have to clean your car after that one.
DELGADO: You would.
QUEST: Many thanks --
DELGADO: -- car wash, right, somebody --
QUEST: Absolutely. (Inaudible) after the break, a woman who knows how to motivate you to go for the burn. We meet the fitness instructor, Siobhan O'Connor. It is her world at work, and I am exhausted just watching her.
QUEST: It is Monday, and this morning, as I usually do, I went to the gym before starting the day's work. But I promise you, whatever I did in the gym, in -- with weights and working out, it's nothing compared to what we're going to see now.
Siobhan O'Connor's job as a fitness instructor is to make sure those endorphins stay high throughout the working week. One research group said the industry takes in $25 billion a year in the United States alone. We followed Siobhan for one high-octane day. It is her exhausting world at work.
(BEGIN VIDEO CLIP)
SIOBHAN O'CONNOR, FITNESS INSTRUCTOR: Let's rock 'n' roll.
O'CONNOR: The key element that teaches successful class is to be prepared. You need to know your stuff and you need to have the confidence in standing in front of the class that they believe what you're saying.
O'CONNOR: It's not over.
We can do this better and stronger.
One of the things I think about when I teach the class are predominantly who's in front of me, what are they doing, why are they doing it, how can I coach them better? I have a very (inaudible) background in music and dance, and that allows me to bring that out. I see a little bit of all that (inaudible).
O'CONNOR: (Inaudible) really open and approachable. So no matter what day you've had, your members haven't had one of those days. They could be having the most fantastic day of their lives.
O'CONNOR: It's not your workout. It's their workout. And I need to make sure that (inaudible) I'm able to pull back to make sure everybody in that room (inaudible) that they deserve.
My ultimate goal to get out of any class is for the members to have a fantastic time and for them to not be (inaudible) fitness is a chore, fitness is fun. They need to be enjoying what they're doing without watching the clock or wondering when their class is going to be over.
(Inaudible) possible. (Inaudible).
The best that (inaudible) members without a doubt it is the enjoyment on their faces, it is the confidence that even the small things (inaudible) class, those on the back rows to the front rows.
Yes! Whoo! You want to do some more?
(END VIDEO CLIP)
QUEST: (Inaudible), for goodness sake. Ready to sit down and have a cup of tea.
And, well, if you're familiar with the moves featured in that video, you'll know they're from a workout called "Body Attack," which is part of the Les Mills Training Program. Its instructors operate in 14,000 clubs across 80 countries. The chief executive, Phillip Mills, joined me and told me the world of exercise is moving indoors.
(BEGIN VIDEO CLIP)
PHILLIP MILLS, CEO, LES MILLS INTERNATIONAL: The world is changed. The gym industry, fitness has become the biggest sport in the world. There are now more adults going to gyms than are playing football and golf and tennis combined.
The problem is we're not a very (inaudible) social sort of a sport, or we haven't been in the past. So we're -- our industry is trying to go, is to become more motivating, more of a fun, exciting type of activity, more social. And that's what my company does.
QUEST: Is all the truth of it, the majority of the people, may have a good time when they go to a fitness program, or whether (inaudible) or whatever, they may enjoy it, but they're never going to see the sort of results that they've got in the back of their mind that they want?
MILLS: No, absolutely, not. Really, if I look, I -- this is my 44th year in the fitness industry. I started working after school in my parents' gym in the '60s. And I've seen the technology change, the technology of exercise.
When I started working in the gym, we had exercise bikes with a little speedometer like that, you know, and it was so boring and you'd -- my job was to get people magazines sitting on the bikes to keep them exercising. And then we had computerized bikes, and then we had cardio theater, where you could watch TV on your bike.
And then we had spinning classes, with a teacher motivating you and music motivating you and the energy of the crowd. And the evidence is very clear that you do three or four times as much exercise in a spinning class as you do trying to work out on your own on that bike in the gym.
QUEST: So what is the single most -- I think I'm going to regret the answer to this -- what is the single most successful exercise you can do?
MILLS: Right now, the new trend is what's called HIIT training, high- intensity interval training, and that is it is short repetition bursts of very high intensity, exercise. It's something that we've been doing in sports for years, in aerobic interval training.
But it has really just coming into the public domain right now, and it's the big, hot trend, these short 25-minute, half-hour classes. You get a tremendous exercise response (inaudible) hormonal response, really taking ordinary people to a very high peak of intensity. It's hard work, but it's over quickly and you get fabulous results.
QUEST: A bit like this interview. Many thanks indeed.
MILLS: Thank you.
(END VIDEO CLIP)
QUEST: There you have the Les Mills CEO. And, Jim Yong Kim has announced that he's honored to succeed Robert Zoellick as president of the World Bank. And more. And he said he's grateful for the broad support he has received.
Mr. Kim has written that he will seek a new alignment of the World Bank group with a rapidly changing world. He says he will foster an institution that develops more powerful results to support sustained growth, (inaudible) evidence-based solutions, evidence-based -- that's important. But of course, this is one of the things he, as a scientist, versus an economist.
Anyway, to get back to what he said, evidence-based solutions over ideology and amplifies the voices of developing countries. So already the change taking place as Kim gets ready to take over at the World Bank. When we come back in a moment, I will have my final thought. It's a profitable moment on the World Bank after the break.
QUEST: Tonight's "Profitable Moment," it is hard not to be cynical about Dr. Kim's appointment as the new World Bank president. With a U.S. passport, he was all but guaranteed the job. Traditionally, it's reserved for American citizens.
It is mindboggling that, having been told the old duopoly of IMF for Europe, World Bank for the U.S. would no longer exist. Well, guess what? Now we have at least five years of the traditional cadre (ph).
And however unlike the IMF election, where Christine Lagarde was by far the strongest candidate, but Dr. Kim has to prove that he is worth the trust that's now been placed in him, especially as he did beat more objectively qualified candidates, like Nigeria's finance minister, Ngozi Okonjo-Iweala, who said tonight the decision was not based on merit.
Perhaps the best that can be said of this sorry matter is the process has begun. It is a process which, in time, will ensure a real truly meritocratic, transparent process, arguably, some would say, more than the lip service that we have had this time 'round.
And that's my last word on that subject, because that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I do hope it's profitable.
QUEST: The headlines, drama in an Oslo, Norway, courtroom as the trial of an accused mass murderer began. Prosecutors say Anders Breivik is responsible for the bloodiest chapter in modern Norwegian history. He acknowledged killing 77 people in two attacks last year, but calls it self- defense. He's expected to begin testifying on Tuesday.
New concerns about Afghanistan's security after an 18-hour assault in the capital. Militants believed to be from Haqqani Network launched a coordinated attack on Kabul and three other parts of the country on Sunday. Most of the militants were killed. Eight security forces died along with four civilians.
U.N. observers are beginning to monitor the fragile cease-fire in Syria. We're getting reports of fierce fighting. Opposition groups say security forces have killed 27 people this Monday. Activists say a military offensive is underway. We cannot confirm that.
The World Bank has selected Dr. Jim Yong Kim as its next chief. The Dartmouth College president will serve a five-year term starting in July. He replaces Robert Zoellick, who was chosen over the Nigerian finance minister, Ngozi Okonjo-Iweala.
Those are the headlines. You're watching CNN. Now the debut of "AMANPOUR" begins right now.