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AROUND THE WORLD

Infant Cured of HIV; British Cardinal Apologizes; What the Sequester Could Mean for International Trading; Interview with Jonathan Kalan; Kenya Holds Crucial Election; Palestinian Only Bus Service

Aired March 4, 2013 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

JOHN BERMAN, ANCHOR, "CNN AROUND THE WORLD": Welcome back to AROUND THE WORLD.

Here are some of our top stories right now. Researchers say a 2-year- old in Mississippi has become the first child to ever be cured of HIV.

The child was born to an HIV-positive mother. Doctors gave her three antiviral drugs within 30 hours of her birth and continued that course for 15 months, then the mother stopped giving her the drugs.

That's when doctors discovered the virus was at such a low level that treatment was no longer necessary.

In Vatican City, cardinals meeting right now for the second time today. The Vatican says they may be able to pick the next pope by March 15th. That would give the new pope a little more than a week to get ready for Palm Sunday Mass.

And, while cardinals consider their choices, the cardinal in Britain who denied abuse allegations last week is now apologizing. We'll have the details on that straight ahead.

In Switzerland, voters have overwhelmingly agreed to curb how much money corporate executives can make. The rules give shareholders a binding say on executive pay, ban so-called "golden parachutes," those multi-million dollar payoffs, and the new world's require annual re- elections for directors.

The Swiss public was angered by a string of corporate scandals. In one case, HSBC, the huge bank, paid out billions in bonuses despite heavy losses.

Now, we want to head inside Rome to Vatican City to find out what's going on inside that cardinal's meeting today, the second one.

The Vatican says they may be able to pick the pope by March 15th.

Our Ben Wedeman is in Rome and, Ben, while this is all going on, these bombshells from Britain keep on coming, the Scottish Cardinal Keith O'Brien apologizing for sexual misconduct. This is a total about-face from what he said last week when he resigned under a cloud of suspicion. Let's start with that case. What do you make of all that?

BEN WEDEMAN, SENIOR INTERNATIONAL CORRESPONDENT: Well, certainly, John, it couldn't come at a worse time for the Vatican.

The archbishop of Scotland, Keith O'Brien, is a man who has now admitted to sexual misconduct, but it's not just the misconduct that's causing embarrassment to the Vatican. It's the hypocrisy of it all.

O'Brien was, after all, a hardliner on the question of homosexuality. It also comes on a day when a -- when members of an American network of victims of sexual abuse by priests are also naming names.

They're saying that those cardinals who covered up sexual abuse by priests over the years should not be participating in the general congregation of cardinals taking place at this moment nor in the conclave, whenever that will be.

So, it's a very embarrassing time for the Vatican as they prepare to elect a new pope.

John?

BERMAN: It certainly gives them a lot to talk about as they are in their second closed-door meeting of the day.

Of course, the thing we are all waiting to hear from is if they will give us a schedule for the conclave.

When do you suspect that might happen?

WEDEMAN: Well, we understand from officials at the Vatican that they're not going to decide upon that until all the cardinals who are scheduled to participate in the general congregation are here.

Now, we've heard from a variety of cardinals that they don't expect the -- rather, they expect the general congregation to last perhaps through the end of the week and, therefore, they might not announce a conclave until early -- or rather that the conclave would not take place until possibly early next week.

John?

BERMAN: That would still be fairly quick if they did manage to kick it off before next week.

And, just quickly, because I find it so interesting, when the conclave starts, of course, there is an age limit there. You have to be under 80 to participate in the conclave, but all the cardinals are involved in these discussions right now and I have to believe it is a crucial week for some of those older cardinals who will not be part of the conclave themselves if they want to influence the ultimate selection.

WEDEMAN: It's absolutely crucial. This is really where opinions solidify on who people are talking about, who the cardinals are talking about as potential candidates, because it's during the -- the congregation is sort of an open house and sort of a town meeting for the cardinals where those who have issues that want to be raised will get up and present them.

The cardinals will be listening. The cardinals who will be participating and those who will not, will be listening very carefully to their arguments, to their presentation, to how they sort of make their case and, so, certainly, it will be crucial.

Because in the conclave itself, cardinals have told me, it's a very quiet affair. There isn't any debate, any discussion, really. It's simply sitting, praying, contemplating and then voting, so this is really the week where those candidates will emerge.

Of course, usually, the cardinals are very tight-lipped about how they are thinking about voting for.

John?

BERMAN: We may not hear about it, but the political machinations very much on. You can be sure of that.

Ben Wedeman, our thanks to you in Rome today.

So, before the next pope is chosen, go inside the Vatican where all this wheeling and dealing is being done as we speak. We'll have a report tonight at 7:00 Eastern on "Erin Burnett OutFront."

Plus, the Dow is down slightly, and the spending cuts not to blame. China has investors on edge.

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BERMAN: The spending cuts are now a reality, but if the market is worried about it, it's not really showing. The Dow finished the day higher Friday.

Today's been fairly flat, down about 52 points right now.

But what does seem to be worrying investors is China.

Richard Quest joins me now from London and, Richard, the Dow's been fairly flat today, but China's stock market had a pretty big sell off and it seems to be because we're suddenly worried about a property bubble in China.

Please explain this to me.

RICHARD QUEST, HOST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": Well, so much of the China growth in the market is fueled by property prices because it ripples through the economy, John, whether it's construction, it's engineering, it's cement, you name it. It's even consumers just going out and buying furniture to put in second and third homes. So, the housing industry in China is of crucial importance, but we also know that housing inflation is back in China with prices rising, month-on-month, one percent or so.

The Chinese government have been very worried about this for some time. It's the clearest indication of overheating, or potential overheating, in the economy.

So, what they did today, John, was basically introduced new measures. They are trying to take the air out of the balloon.

They've raised interest rates. They've raised down payments. They've said they're going enforce a capital gains tax at 20 percent, all these measures designed to make people think twice before buying a home.

Oh, and I've slightly buried the lead here, as we say, because the effect was dramatic, John. The Shanghai market was down 3.5 percent.

BERMAN: Wow. These are the kind of things you can do in a completely managed economy. Back here -- no, go ahead.

QUEST: Well, well, you can do it in a -- you could do it in other -- some would arguably say Alan Greenspan in the era of irrational exuberance could have done these.

They're less dramatic than hitting over the head with interest rates. Israel does them. Quite a few countries go underneath the interest rate and start messing around with the underlying trends. And that's how you do it.

BERMAN: It's obviously having ripple effects around the world right now.

You know, we've been talking about the Dow getting close to all-time, record highs. It feels like we've been talking about it for weeks now. We just can't seem to get there.

QUEST: It just won't -- nearly -- nearly -- no, a bit more.

I tell you, for those of us that have covered markets for years, it's what we call, and I've never given much credence to this, but when you see it, you know it. It's called a psychologically important barrier and that all-time high is the granddaddy of psychologically important barriers.

Computer programs are designed to sell into the market when you get close to it. Profit-taking comes into the market. People get nervous. There's a whole range of technical, financial and psychological reasons, but the gist of it is it's like the child who just thinks, if I just push a bit harder, I'll get there.

It will get there, but I'm not betting my shirt on when.

BERMAN: It sounds like events from around the world are holding us back. Before we go, Richard, just tell me one more time, what does it sound like that, that psychological barrier?

QUEST: We're nearly -- we're nearly there -- we're getting there. We'll get there one day. Just hold your breath a little bit longer.

BERMAN: These are technical, economic terms.

Richard Quest, we hank you for that technical, economic analysis. Thanks a lot.

So, when we go to the polls in the United States, we may endure long lines or cold weather, but nothing like this.

Still to come, we take you live to Kenya where deadly violence is on the minds of voters this election day.

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BERMAN: Welcome back to AROUND THE WORLD.

Police in northern Ireland say they narrowly averted what could have been a mass murder when they found explosive devices in a van parked in Londonderry. Police arrested three men who they think are Irish Republican Army dissidents.

So it is a crucial election for an American ally. Kenyans are voting for a new president. A peaceful vote is needed to prove to the world that it is a stable country. The last presidential election in 2011, it was a disaster, which plunged the nation into a series of serious ethnic violence and some rampages. This go around has some sporadic violence, but we're hoping it doesn't get worse. We want in bring in our correspondent Nima Elbagir and freelance photographer Jonathan Kalan. They are both in Nairobi right now.

Nima, let's start with you. The turnout has been huge for this election. Talk to us about the move though. With the specter of violence from 2007 hanging over this time, how is it different now?

NIMA ELBAGIR, CNN CORRESPONDENT: Well, the turnout has actually been extraordinary, John. You know, we've seen queues and queues and queues. And what's interesting for us who have been here in the lead up to this is you really felt this almost people exhaling. There was this tension, this tension. They were bracing themselves for what today would bring.

But, still, just an utter sense of determination. People were sleeping outside of polling stations. From 2:00 a.m. some of those queues were beginning. We even heard about one woman who gave birth at a polling station. She clearly wasn't going to let a little something like a due date get in her way. And I think that really characterizes the way that Kenyans have approached this.

There was a big turn up in the contested 2007 elections and people felt that their vote there wasn't heard, that it didn't count. And this time that just seems to have increased their determination to make sure that this time around that vote that they went to the ballot station, queued hours in line for, this time, that it was going to be heard, John.

BERMAN: You know, it's something to think about when we complain about election lines here in the United States. I should add that Kenya is a major ally in the war against Islamist militants in Somalia. There are eight candidates for president right now. Really we're talking about two major contenders, Raila Odinga and Deputy -- his deputy Uhuru Kenyatta. Explain to me how the election of either one of these candidates might affect the relationship with the U.S. Is one different than the other when it comes to that?

ELBAGIR: Well, obviously Kenya not only is a major U.S. ally, but it's been -- it's been at the forefront in the fight against the al Qaeda linked militants in Somalia. It's taken on a huge burden. Raila Odinga is a very safe pair of hands. He's someone that has an incredible amount of experience. And he was part of that contested election. He was a candidate in that.

Uhuru Kenyatta could be a bit more difficult for the United States. He is an international criminal court indictee (ph). He's charged under allegations of involvement in crimes against humanity in that last election. And the issue for the U.S. is that the U.S. and the U.K. and other major powers do not have anything but essential contact with ICC indictees. And that's going to be a big issue going forward because not only are Kenya playing a crucial role in Somalia, but they're also, as I understand it, talking to my sources, playing a crucial role in providing intelligence against that other al Qaeda franchise across the Red Sea in the Arabian Peninsula. So, you know, in addition to the hopes for a free, transparent democratic process, there is also concern about how the U.S. is going to do business with such an important regional player, John.

BERMAN: All right. Thank you, Nima.

We're going to get to Jonathan Kalan right here.

And, Jonathan, we've had reports of sporadic violence even before the election began. We understand 10 people were killed, including two police officers in an attack on a police station in Mombasa. Now, you are an American. You've lived in Nairobi for a couple of years. You've traveled all over Africa photographing the situation. What does the violence there come down to that you have seen? Is this about tribal divisions mostly?

JONATHAN KALAN, PHOTOGRAPHER (ph): Well, I think, John, that, you know, many times a lot of these conflicts can be wrapped into a narrative of tribalism, ethnic violence quite easy. But the truth behind it is that, you know, they're often a lot more complicated than simply ethnic rivalries. And, you know, I can only speak based on experiences of places I've been in travel, but, you know, many time it's a complex mix of land, of politics, of resources, many other factors. And while tribalism is many times (INAUDIBLE) you know, the only factor. So when it comes to something like Tana (ph), which a story that I photographed for "The New York Times," you know, they -- it was a conflict very much to do with tribalism but also over land and resources. You had a herder population, the Orma (ph), and a (INAUDIBLE) population the Pacomo (ph). And so a lot of it was about land and resources. So it's difficult to say that, you know, it's tribalism and ethnicity all the time, but it certainly plays a major role. And especially in Kenya, where politics are very linked to tribalism and parties and coalitions are linked to tribalism still. But I think there are other aspects that have come into the violence here.

BERMAN: I should tell you, we're looking at some photos that you've taken, as we're talking right here and they are stunning photographs. They're also photographs which really show I think struggle. The struggle that people are going through there as they head to the polls. What is the message of hope that you see? What is driving people to vote amidst this struggle?

KALAN: Well, I think, you know, one of the things I found this morning as I went to the polls at 4:30 this morning, you know, as she said, there was a line of people who had been waiting there all night and there was a real sense of optimism, a real sense of hope, a real sense that, you know, Kenya is turning around. That people have learned from their mistakes of the past and that they want to overcome that and that they want to prove to the world that they can really, you know, achieve a democratic election peacefully and fairly. So, you know, the sentiment is, there is sort of a cautious optimism. You know, while there is still violence in some part, I think that, you know, generally the sentiment is that people are hopeful of the future. They are hopeful that they can get through this and that, you know, like I said, there's a real sense of optimism there.

BERMAN: All right, Jonathan Kalan, our thanks to you also. Thanks to Nima Elbagir. We will, of course, all be hoping that these elections go through without much violence.

Moving on now. It sounds like a story from the civil rights era. Israel is now launching a Palestinians only bus service. And officials say it will actually improve travel. We'll explain.

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BERMAN: Separate but equal in the Middle East. Today, Israel started its Palestinian only bus service. The bus service will carry only Palestinian workers who are traveling from the West Bank to Israel. The Israeli government says it's just a way to improve service, but critics call it straight up racism. Our Sara Sidner is following this story from Jerusalem.

And, Sara, you know, Israeli transportation officials say the idea here is to reduce congestion to replace pirate bus services that overcharge Palestinian riders, but is that explanation selling over there?

SARA SIDNER, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I can tell you, John, that it's certainly not going over well with human rights organizations or the Palestinian government who say that the new bus lines announced for Palestinians only smack of the same kind of racial discrimination used during apartheid in South Africa or, as you mentioned, the separate but equal policy once used against blacks in America.

However, Israel's transportation ministry told us that the buses and the two new lines were not set up to discriminate against Palestinians, but instead to improve services for Palestinian workers and that Palestinians would not be prohibited from using regular public buses. Now, the ministry also said that officially anyone could use the new bus lines, but they were set up to allow Palestinian workers to avoid going through so many security checks after the first check point and the service replaces, as you mentioned, private bus companies that have been charging much higher prices.

We talked also to the bus company that's going to be doing this service and it said that people don't understand that Palestinians had to use private expensive buses and that they can't usually use regular buses that Jews use because they have very different security checks when entering into Israel. As you might imagine, human rights groups are saying, look, this is really about yielding to the settlers who live in the West Bank and have complained that having Palestinians on a regular buses is simply a security threat.

John.

BERMAN: A delicate situation to be sure and maybe a bit of a public relations problem. Sara Sidner, in Jerusalem for us today, our thanks to you.

Anheuser-Busch was accused of watering down beer. Now the company is fighting back with a full page ad in major newspapers.

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BERMAN: Let us take a look at what is trending right now.

Anheuser-Busch responding to accusations it's been watering down its beer. The company, which is best known for making Budweiser, was sued last week. Now, striking back with an ad. It says, "they must have tested one of these," referring to drinking water that the company has donated to the Red Cross. Anheuser-Busch Inbev is now based in Belgium. It is the world's biggest beer maker.

CNN NEWSROOM continues right now.