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QUEST MEANS BUSINESS
Switzerland Curbs Executive Pay; HSBC Profits Fall; Kenyan Election; Euro Up, Pound Down; EU-US Trade Deal Stimulus; US Stocks Edge Higher; European Markets Mostly Lower
Aired March 4, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Your higher pay is not here to stay, at least in Switzerland, which is curbing corporate wages.
Bill Gates is the second-richest man in the world and one reason to listen to him when he says children should learn computer coding. We talk about that tonight.
I'm Richard Quest. We start a new week together, because of course I mean business.
Good evening. It is a new week and it is the start of a boardroom backlash. Switzerland has banned big payouts, and it's angered business groups who say it's going to damage competitiveness. It's pleasing the EU, who says it reflects a change in attitude.
Now, it's the second time in less than a week executive pay has come under attack. The European Union, of course, agreed to cut bankers' bonuses just days earlier. But the Swiss overwhelmingly backed some of the world's strictest controls on executive pay. The referendum result came last night. The Swiss government is now looking at ways to implement the law.
Two thirds of voters supported plans to give shareholders a veto over salaries and ban big payouts for new and departing managers. Those who flout the rules could face prison. It's called the Fat Cat Initiative, and it's written into the Swiss constitution and will apply to all Swiss-listed companies.
So, it is a victory for the man who spearheaded the campaign, Thomas Minder. The businessman-turned-politician was outraged -- there is no other word -- by the huge payments in the corporate world.
His family nearly went bankrupt when it was nearly destroyed 12 years ago when Swissair came close to bankruptcy -- well, it went bankrupt. The airline reneged on a $540,000 contract with the toothpaste firm that pushed it to the brink. That same year, the CEO of Swissair, Mario Corti, received a huge payoff, a move that Mr. Minder resents deeply to this day.
Now, the anger only grew in Switzerland after the government bailout of UBS in 2008. The Swiss bank blamed its heavy losses on hefty rewards for bankers who made risky bets. At a shareholder meeting in Basel, Mr. Minder rushed the stage, trying to hand the UBS copy a chairman (sic) of the Swiss company law outlining and outlawing corporate temperance.
And there is more that has brought this to the end. Public fury over Novartis, which was going to pay the outgoing chairman Daniel Vasella $78 million despite laying off thousands of workers. These are the reasons why Switzerland has been brought to the brink -- not brought to the brink, over the brink -- of the most, some would say, draconian corporate executive pay laws in the world.
Thomas Minder joins me know from Bern in Switzerland. First of all, congratulations, sir. You must be very pleased. It was a resounding victory. Nobody can be under any doubt about the public's view. And in this interview, I'm not going to rehearse the arguments of the referendum. So instead, how does it now get implemented?
THOMAS MINDER, SWISS POLITICIAN AND CAMPAIGNER: Well, we have one year for the parliament to put the initiative on the law label. We have to make a law. I'm a senator, also, and there is one year in the text of the initiative, so they really have to speed up.
QUEST: There will be the critics who say, fine, legislate in haste, repent at leisure. And bearing in mind all the major political parties were against this, all the big corporations were against this, what you have now is a populist victory which could turn into a corporate nightmare.
MIDNER: No, I don't think so. The parliament, left side, right hand, everybody was saying today that they will take the spirit of this initiative and put it on the law label.
QUEST: But if companies are saying it's unworkable in a global environment and it puts them at a disadvantage -- and again, I don't want to re-work -- I don't want to go over the ground of the debate. It's over, you won. But you have got to be aware that there is still this view that they're going to be at a competitive disadvantage.
MINDER: It will be the best export article. Where do investors go? They go there were the money is most protected and where they have the most to say, and that will be in Switzerland. It's in the constitution, it's not going to change from one year to the other.
We prohibit gold parachutes, we prohibit golden halos, no prime when you purchase a company or when you sell a company, and we give the right to the shareholder on the board level, on the director -- managing director level and on the consultancy board, so everybody knows, all investors in Switzerland, abroad, they know what are the rules.
QUEST: So let me ask you: if it transpires that companies cannot attract not just the good, the better, but the best talent at CEO and director and chairman level because of this, if that is the result, you will have shot yourself in the foot.
MINDER: You know, we have seen where the big cats -- the fat cats lead us with the subprime crisis, with the financial crisis. The best-paid managers in the world have created that crisis. No, we don't want those people in Switzerland.
We have very good people in here on the second level, on the third level, and if you just look for the money, then you're probably going to have to come to Switzerland to get that job.
QUEST: All right. Finally, though, we've got your law now in Switzerland, the Minder law, we might call it. We have the bankers' bonuses regulations now in the EU that probably will get passed by the Commission, and yet jurisdictions like the UK and the US are still very much fighting enforcement and legislation on these matters. Are they behind the times?
MIDNER: If it's in the constitution, if 68 percent of all citizens say yes to that initiative, then the government has to make a law, the parliament has to make a law --
MINDER: -- and we don't care what the companies think. But again, we protect the goods, we protect privacy, and we protect the companies, actually, for rape of salaries.
QUEST: Sir, thank you very much, indeed, and again, whatever the merits, congratulations. You fought a very, very strong campaign. You did it virtually single-handedly because of your inexperience. And indeed, to use the horrible old cliche, time will tell how it fathoms out. But thank you for joining us --
MINDER: That's right.
QUEST: -- from Bern tonight. We'll certainly be following up with Mr. Minder in the months ahead.
Staying with the banking and the corporate world, HSBC -- it says it will raise its dividend as the profits fall. Europe's biggest bank reports a pre-tax of $20 billion. That sounds a lot of money, but it was down 6 percent from the previous year.
It was a year of misery of scandals -- $1.9 billion to the US settlement over accusations it allowed the money-laundering of drug funds. The bank also put aside $1.4 billion -- $1.4 billion -- to compensate British customers for misselling insurance financial products in the UK, all the big banks in the UK are making huge provisions for the so-called PPI misselling and other forms of misselling.
The weak global recovery took its toll. It increased costs and it put margins under pressure, and the shares were down 2.5 percent. The bank announced it would increase its dividend, saying it had established its capital advantage over its rivals.
Whichever way you look at it, HSBC, which has been such a remarkably well-performing bank at the very core of its roots, has now taken some very unpleasant activity and some decisions. Jim Boulden is with me to talk about it.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I think HSBC's Stuart Gulliver put it right when he said we're in the middle of reforming this bank. They did well in some of the emerging markets, they didn't do very well in Europe.
They did well by selling assets in places like North America. But obviously, they've had to pay out for all these scandals that have been done over the past couple of years. It's a bank in transcend -- transition --
QUEST: Transition from what to what?
BOULDEN: Well, like all these banks, like Barclays, they were all doing all this heady stuff, they were doing all this corporate financing, they were doing all of this -- the banking that got them into trouble in the first place.
And so, the HSBC, like the other banks, are selling some of the assets around the edge, especially North America with HSBC. Now, they can't really get back to core, because this is a huge bank, as we know. But it did very well in places like Brazil, so it's doing well in places the other banks aren't in, and so that way, it makes it different from the other banks.
QUEST: Barclays lost its chief executive.
QUEST: And its chairman. And nearly routed the board, and the whole thing nearly went down the toilet at Barclays. HSBC's scandals, yes, they lasted a day or two when the drug-laundering agreement was announced -- the money-laundering agreement.
QUEST: But -- has it gone a stage further?
BOULDEN: In what way? You mean, in the sense that it hasn't cleaned up itself?
BOULDEN: Yes. Well, Stuart Gulliver will say it's cleaning itself up, but of course, the critics have said all along that at all of these banks, you don't see people actually getting arrested, you don't see people going to prison. And so, Stuart Gulliver has said, this happened before his time --
BOULDEN: So he's the one who's been cleaning it up. But as you point out, Barclays' new CEO has decided not to take his bonus. Stuart Gulliver is keeping his bonus, even if it's a little less than 2011.
QUEST: But Gulliver's predecessor went and lived out in Hong Kong as a very firm message --
QUEST: -- that the bank was the -- the HSBC -- the esprit.
QUEST: Hong Kong banking --
QUEST: -- they're going -- whatever. Gulliver brought it back.
BOULDEN: Yes. Well, brought it -- yes. It's a London-based bank, and this is the debate I was having with somebody today. Under the new EU rules, Mr. Gulliver wouldn't be able to get his bonus, the amount he's getting, starting next year, unless he moves the bank back to Hong Kong. And that may be something --
QUEST: What? You mean under the EU --
QUEST: -- two for one, one for two, two for one or --
BOULDEN: The banking -- yes, the bonus cap. So, it's in their report, and it came out today, they're still debating whether --
QUEST: Oh, they are debating?
BOULDEN: Well, every three years, they always tell us, that they look at this. They should have been looking at this last year. Didn't because of the economic turmoil. So maybe -- maybe -- by the end of this year, that will be confirmed one way or the other.
QUEST: Jim Boulden. Good to see you. Thank you.
One of Europe's top banking regulators will be on this program tomorrow night. He's Michel Barnier, the EU commissioner for internal markets and services. He will be joining me. It's the same time and the same place. It's right here, of course, QUEST MEANS -- well, where else would you be at this time of the night?
Now, millions went to the polls in Kenya's crucial elections. They waited for hours, voters, to have their say, and we will have the latest from Nairobi when we return. It's QUEST MEANS BUSIENSS.
QUEST: Election violence has claimed the lives of at least ten people in Kenya on Monday. Kenyans spent the day lining up in droves to cast their vote for the country's next president. A wave of violence has marred the country's last election six years ago. Then, it led to the death of around 1200 people.
Kenya's economy has also been dealt a crippling blow. Our own Nima Elbagir joins with, now, live from Kenya's capital, Nairobi. The good and the bad in this, isn't it, Nima? On the one hand, you do have this violence, but on the other hand, you have a democracy in action and people saying they're prepared to wait to vote.
NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: Well, I do think we have to put it into context. Given what Kenya has previously lived through in election time, I think people are just breathing a sigh of relief. Obviously very sad that this incident had to happen at all, but given the fears and the expectations of what could have happened today, the government seems to be taking this one in its stride.
Some incredible stories coming out from those election lines there. The system was a complicated one, it was a very modern one, with biometric voter registration. But by and large, Richard, it worked. And people were willing to put their trust in it.
We spoke to the electoral -- one of the electoral commissioners here, and he was very, very happy with how today went, Richard. Take a listen.
(BEGIN VIDEO CLIP)
ABDULLAHI SHARAWI, COMISSIONER, KENYA ELECTORAL AND BOUNDRIES COMMISSION: A lot of people predicted perhaps not many people will come out because they know what they did, because the Kenyans voted very well even in the last general election. They were happy.
But when the result was messed up, then people thought quite a number of opinions would say, I voted, and I know what happened to me, what happened to my family. I cannot come out.
But I think that was a wrong prediction. I think all Kenyans came out throughout the country, and therefore, it looks like they have faith in the system, in the new constitution.
(END VIDEO CLIP)
ELBAGIR: I think we have to remind our viewers, Richard, what an incredible undertaking this really was for Kenyans. They voted effectively in six separate elections, from presidential all the way down to the local assembly level, in one day, and they're going to be counting that 48 hours after the polls close.
So -- of course, that had to happen to maintain the really tight monitoring and transparency on this process, but it is an extraordinary undertaking, and by and large today, I think people are feeling pretty happy and pretty proud of themselves, Richard.,
QUEST: So, it just begs the question, when the monitors give their final report, and when all the results are in, will the judgment be for -- I admit at this early stage of looking at it, three words: free and fair?
ELBAGIR: Well, so far, we really haven't been hearing many reports of concerns. But of course, it's not just about free and fair polling, it's also about people accepting that this was a free and fair election, that it was transparently done, and accepting the results.
And that's really -- that's the next step, now. When they finally announce that name, the hope is that even if it's a name that other Kenyans don't agree with --
ELBAGIR: -- that the vast majority of the country will accept it and move forward, Richard.
QUEST: Right. Nima, stay -- I've got a question for you. Actually, you don't have to answer it, but I know you'll be wanting to listen closely as I ask it. It is tonight's Currency Conundrum. Kenyans are waiting to see the new designs on their currency. The question is, what is illegal to include on the design of a Kenyan shilling?
Is it A, a map of Kenya, B, the lyrics to the national anthem, or C, a picture of the country's first president? I can't see Nima, whether she's actually nodding or not, whether she actually does know the -- I'm guessing she does know it. I expect everybody in Kenya knows. Anyway, what is the -- what can't you show?
As to tonight's currency numbers, the euro's up, the pound and the yen are both down. Those are the rates --
QUEST: -- this is the break.
QUEST: This is the first working day in the United States with $85 billion in spending cuts now in place and taking effect. The US may yet be on the cusp of the cheapest stimulus package you can imagine, which is, perhaps, hard to believe, bearing in mind the apocalyptic claims over budget deficit agreements and debt ceilings.
But that's how the European Union's trade commissioner, Karel de Gucht, described a planned trade deal between the EU and the US in a speech over this weekend. It is the free trade agreement between these two massive trading blocs, where negotiations will begin shortly.
And on this program on Friday, Mexico's candidate for the top job at the WTO said the deal between these two likely could pose problems in Geneva.
(BEGIN VIDEO CLIP)
HERMINIO BLANCO, CANDIDATE FOR WTO DIRECTOR GENERAL: The challenge that is posed by the negotiations between the EU and the US is enormous. How do you make relevant the --
QUEST: Would you rather they didn't do their negotiations?
BLANCO: I think -- it could be a call for action in Geneva for several countries. I think NAFTA was a call for action that managed to end the euro-wide round. I think this could be a very good incentive to finish the negotiations.
(END VIDEO CLIP)
QUEST: So, joining me now is Myron Brilliant, senior vice president for international affairs at the US Chamber of Commerce. Well, he was begrudging, almost in his sort of, yes it will be good, but it'll be good for the WTO as well. How long do you think it would take to negotiate this deal?
MYRON BRILLIANT, SENIOR VICE PRESIDENT FOR INTERNATIONAL AFFAIRS, US CHAMBER OF COMMERCE: Look, first of all, we've been advocating for this deal for three years at the US Chamber of Commerce. So, we think it's a no-brainer that the United States and Europe should be in negotiations to have a comprehensive, ambitious agenda to not only lower tariffs, which would be a big deal, but also to deal with regulatory issues, to deal with services.
So, it could take us a few years to get through the deal. But the bottom line is, you've got to start somewhere.
QUEST: Right. And when you --
BRILLIANT: The only way we should start now.
QUEST: Are you envisaging a NAFTA arrangement, or a more bilateral US-Japan arrangement? Or with Australia? What sort of arrangement are you in for?
BRILLIANT: Well, the deal is we've got a $5 trillion economic partnership with Europe, right?
QUEST: So what's --
BRILLIANT: So, we've got a good start on this. But there are a lot of issues that are still on the table. There are a lot regulatory issues. Why can't we deal with chemicals? Why can't we deal with food safety issues? Why can't we deal with autos? So, there's a whole --
QUEST: But the end goal is what? A full free-trade agreement, open boarders almost?
BRILLIANT: Well --
QUEST: A la NAFTA?
BRILLIANT: -- let's eliminate all tariffs, right?
BRILLIANT: On goods and agriculture. Let's remove the impediments on investment. Let's remove the impediments on services, let's deal with procurement issues, let's deal with regulatory issue. That's a pretty comprehensive agenda. We're not calling it an FTA, we're calling a trade- investment partnership.
QUEST: Why aren't you calling it an FTA?
BRILLIANT: Well, that's up for politicians to call it. The bottom line is results is what we want. And we think --
QUEST: And the bottom line is you can't do it.
BRILLIANT: No, we can do it.
QUEST: No, you can't.
BRILLIANT: Of course we --
QUEST: No --
BRILLIANT: No, the timing is --
QUEST: Not in our lifetime.
BRILLIANT: Oh, no, you're wrong about that, and I'll tell you why you're wrong about that. The United States needs jobs. We have an OK economy. We've seen a resurgence in manufacturing, we've seen a potential for a reduction of energy prices, right?
But we need a global economic agenda, right? We've got the trans- Pacific partnership. We need a relationship with Europe --
QUEST: I -- I --
BRILLIANT: -- that sets the right standard.
QUEST: -- I'm not --
BRILLIANT: We need to set the right standard.
QUEST: I'm not denying for a minute that if you can succeed, it would be an economic bonus for both sides.
BRILLIANT: $180 billion it would --
QUEST: I'm not denying that! But I'm saying, on agriculture, on procurement -- just look at the argument between Boeing and Airbus, and that's just two companies in a vital industry --
BRILLIANT: Well, I think the --
QUEST: And you're going to try and do it across the whole -- ?
BRILLIANT: Because the politics are aligned now.
QUEST: No, they're not.
BRILLIANT: When everyone was talking about a multilateral round, Europe and the United States were not talking about something in this context. When everyone thought the world economy was strong, Europe and the United States were not prepared to take on the hard decisions. Today, that's not the situation.
BRILLIANT: The economy is weak in Europe, and in the United States it should be stronger. How do you do that? You create jobs. How do you create jobs? You expand trade and commerce.
QUEST: You really -- you realize this, if it gets going, is the death knell of the Doha Round, which is already dead anyway.
BRILLIANT: No, it's not. It's going to spur liberalization worldwide, because how can you not take notice of a $16 trillion economic - - ?
QUEST: Because you're on the outside looking in rather than the --
BRILLIANT: No! To the contrary! If Europe and the United States can say --
BRILLIANT: -- we can create the right standards, the rest of the world's going to take notice. China's going to take notice, India, Brazil. All these countries that have been impediments and --
QUEST: So, what you --
BRILLIANT: We can get something done!
QUEST: So what do you see as being the single biggest impediment in the negotiation?
BRILLIANT: Well, what's most difficult?
QUEST: Will it be agriculture?
QUEST: Will it be procurement?
BRILLIANT: It's going to be regulatory issues. Because this has been --
QUEST: So, on what? On --
BRILLIANT: Across the board. Dealing with food safety. We've got to find a way to recognize --
BRILLIANT: -- each other's standards. Look, if we can fly our planes into Europe and Europe can fly their Airbus planes into the United States, and we can sell Boeing jets to your airline carriers and you can sell Airbus jets, we ought to be able to find a way to deal with these other issues. We've got the same interests --
QUEST: Final question.
BRILLIANT: Same values.
QUEST: Final question. We're talking about the -- you heard me start off by saying the sequestra -- horrible word -- forced spending cuts. How are worried are you that event -- that it's going to take its toll?
BRILLIANT: Well, look. These cuts are not the way to go about it.
QUEST: Well, we know that.
BRILLIANT: Bottom line is we've got to put our fiscal house in order, and it's not just a federal problem --
BRILLIANT: -- it's a state problem, like California and other states. We've got to deal with the tough issues of entitlement reform. We don't deal with entitlement reform, we're tipping the iceberg here. This is not where they deal's going to be cut.
QUEST: A US-EU deal within five years, yes or no?
BRILLIANT: Yes. You're damn right.
QUEST: Dinner if it's not?
BRILLIANT: Yes. You've got it.
QUEST: I choose the restaurant?
QUEST: Thank you.
BRILLIANT: But you're going to pay.
QUEST: I -- we always end up paying some way or another. How did I manage to lose that one so quickly?
Wall Street has been ready for those forced spending cuts for some time. Alison Kosik is at the New York Stock Exchange. Alison, the Dow's going up or down or it's tootling around, forced spending cuts are in, nobody seems to be terribly concerned.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Right, because the way Wall Street sees it, they've been building this up or building this into the market for quite some time. How long have we really been talking about these forced spending cuts? At least a year or more.
So, yes, even though the stock market hasn't had much of a reaction to Washington's inaction, there's really no real conviction to buy, even though in a moment that you just finished talking with your guest, the market has turned a bit higher.
But there are worries on the back burner, and that's part of the reason why you're not seeing conviction in this market, because you look at these federal agencies, Richard, they're going to be cutting $85 billion from budgets over the next seven months.
And you know what that includes? That includes those furloughs, that unpaid leave. That means hundreds of thousands of workers aren't going to be going to work.
Then, there's the Congressional Budget Office saying if these cuts remain in place all year, that's going to reduce growth here in the US by a little over a half a percent, and look where we are now? The last three months of 2012, growth was a mere 0.1 percent.
So, not only can the jobs market take a hit, the economy takes a hit. And it takes the potential for hiring, that takes a hit as well, because these forced cuts, Richard, means $750,000 full-time jobs that would have otherwise been created that they won't be. Richard?
QUEST: Alison Kosik in New York. We'll watch that in the days and weeks ahead, see how it progresses. European markets ended today mostly lower. It was Paris that managed to eke a small gain, but otherwise it was a quiet sort of Monday. Let's not get too excited.
Spare a thought this weekend and this evening for poor old Mark Zuckerberg. This year's Forbes Billionaires List has not been forgiving to the Facebook boss. He was not where he was last year, after the break.
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in a moment. This is CNN and, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Let me tell you, long lines greeted voters at Kenya's first general election since 2007 vote which was marred by widespread deadly violence. This time, the voting has been relatively peaceful. Ten people, though, have been killed in isolated pre-election violence in Mombasa.
Syria's civil war has spilled into Iraq with deadly results. Iraq says a convoy of Syrian soldiers who fled into Iraq to get away from rebels have been ambushed near the Iraqi town of Rutbah (ph). At least 10 Syrian soldiers were killed and many others have been injured. It's not clear who carried out the attack.
Cardinals from across the world have begun their meetings at the Vatican, where they're preparing for the papal conclave that will elect the next pope. The cardinals (inaudible) set a date for the secret election to begin. Vatican's officials say most of the 115 cardinals who are eligible to vote on a new pontiff have now arrived in the Italian capital.
The Queen left a London hospital earlier today. Queen Elizabeth walked out the front door and stopped to shake hands; looked remarkably well for an 86-year old who had been suffering from a stomach bug. She was admitted to hospital yesterday afternoon.
Now these pictures come to us from the U.S. state of Illinois, where a plane encountering problems with its landing gear is circling above the St. Louis Downtown Airport. At least eight passengers are on board the flight, which has been circling over the airport for an hour and a half. And I believe that the St. Louis Downtown Airport is in Illinois, according to what I am told.
So (inaudible). We'll bring you those details when it happens.
(END VIDEO CLIP)
QUEST: The "Forbes" billionaires list is out. I am not on it. And I'm guessing you're not on it, too. But don't fret because we may not be amongst the lucky billionaires, but there are plenty more of them walking around the Earth than ever before. And the richest one of them all is still very much the same.
If you join me at the rich superscreen, the CNN rich superscreen, you'll see what I mean. Ah, look at the face. A familiar face, Carlos Slim is once again number one. It is the fourth year in a row for Mr. Slim, for the Mexican.
Bill Gates stays in the second place, $67 billion. Don't forget, of course, much of that money or much of Mr. Gates' money is now with the Bill and Melinda Gates Foundation, his charitable foundation.
Amancio Ortega, $57 billion, into the top three has knocked out Warren Buffett. Now this chap is the man behind the shop -- the Spanish clothes shop Zara (ph). Who knew clothes could be worth so much money, $57 billion?
Not such a good year for Mark Zuckerberg. Now, look, Mark Zuckerberg, he lost more money than anybody else. We go from number three to number 66. Zuckerberg was $17 -- down from $17.5 billion last. He falls more than 30 places to 66.
Fortunately, though, for both Zuckerberg and for Gates, they are still allowed to collaborate with those higher up the list.
Gates and Zuckerberg are teaming up because they are proving the point that the next generation of Americans need to be au fait and familiar with the dark art of coding. In support of its website, code.org, they're among the CEOs who are out to prove it doesn't take a genius to write a computer program.
(BEGIN VIDEO CLIP)
BILL GATES, CEO, MICROSOFT: I wrote a program that played tic-tac- toe.
ELENA, CLOTHIA.COM: I first learned how to make a green circle and a red square appear on the screen.
CHRIS, MIAMI HEAT: You're trying to make something, trying to transfer something from your mind to the computer or to a tablet. It's an experience.
MARK ZUCKERBERG, CEO, FACEBOOK: The whole limit in the system is just that there just aren't enough people who are trained and have these skills today.
(END VIDEO CLIP)
QUEST: Now I don't know about you, but the idea of coding computers is enough to have me running for the hills. I can barely balance my checkbook, let alone write anything else.
I am one of those people for whom it is intimidating. The mere thought of what you might do. But Hadi Partovi is the cofounder of code.org and cofounded The Link Exchange and then sold it for a quarter of a billion to Microsoft 15 years ago, that was. Today, he wants schools to teach coding and it's time to break the myths, the sort of myths that I've just told you about.
(BEGIN VIDEO CLIP)
HADI PARTOVI, CODE.ORG: People assume that you need to know math to do computer programming, which is totally not true. And people assume that it's really, really difficult.
And you know, one of the challenges is if you ask a biology teacher, hey, can you teach the algebra class for a week, they're like, sure, I can do that. But if you ask them could you ask a -- could you teach our computer programming class for a week, they're suddenly scared like, uh, I'm not sure; you know, you mean me?
And one thing people don't realize is computer programming, it's a lot like reading or writing, you know. A 10-year old can read really simple stuff. A 5-year old can read Dr. Seuss books. And then in college, you can get into Shakespeare or James Joyce or much harder stuff.
But you know, those easy and medium and hard, and the same thing is true with computer programming, 10-year olds can do it on an iPad. And that's not difficult and it doesn't need any math to do it.
QUEST: You've got to admit, it's a bit geeky.
PARTOVI: It's definitely geeky, but I actually geek is the new chic these days. There's people generally realize that the world is changing and that the people who can control the technology around us are really at the forefront of the world. And I think that's starting to become less geeky now than it was 20 years ago.
QUEST: So code.org, you've got some fairly powerful backers, not only financially but also politically and conceptually, haven't you?
PARTOVI: Yes, well, these people aren't necessarily just backing code.org. They're backing an idea. And the interesting thing from my work has been I've never pitched an idea before that I've -- that has been as easy to sell as this. Pretty much anybody I've asked, hey, this is my idea, I think we should have more schools offering this and more students learning, 100 percent of people have said that's a great idea.
QUEST: Right, but they're not --
PARTOVI: And that's why it's been really easy to get people to support it.
QUEST: -- but the Mark Zuckerbergs and Bill Gateses of this world, when they come along and sort of say, yes, we're going to put our weight behind it, and I don't just mean the weight of their pocket. I'm talking about their political weight, that helps you enormously.
PARTOVI: Absolutely it helps. And the reason the Mark Zuckerbergs and the Bill Gateses are doing this is twofold. The one, every tech company is facing a severe shortage of software programmers. Mark Zuckerberg says our policy is literally to hire as many as talented engineers as we can find. We just can't find enough of them.
And that's true in so many tech companies. The salaries in tech jobs are going through the roof, because there's a shortage of software engineers. And yet the schools that are teaching these schools are declining and so it's really confusing. On the one hand, you have the highest -- the highest growth rates from a jobs standpoint and a decline on the education standpoint. It's a complete mismatch.
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QUEST: Now one company that thinks it's already found a way to get kids coding is Kuato Studios in London. It was founded together with the makers of Siri, of course. That's the -- helps you -- you can talk into it and it gives you answers on your -- on the iPhone.
Their solution is to take new, artificial intelligence and turn the whole thing into a game.
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MARK HORNEFF, STUDIO HEAD, KUATO STUDIO: Seeing kids now that just don't want to be part of a website, they want to create their own website.
FRANK MEEHAN, FOUNDER AND CEO, KUATO STUDIO: Only 1 percent of kids in the big developed countries are leaving school today understanding coding. Yet that's where a lot of the jobs are. And kids understand that. They want to learn.
HORNEFF: Currently there's a big trend to -- I think the term is gamevitation (ph) -- it's to kind of bring some of the disciplines that children use in the gaming environment and apply that to learning.
MEEHAN: What Kuato is doing is it's combining next-generation AI into a smart personal cheater that helps you learn, understands how you learn, but then putting up awesome graphics and gaming around that system so that when you're coding, you're doing something.
So in the same second, code their world.
MEEHAN: When you set up to build something, your prime objective, I think, is to build something that someone uses nearly every day, with Siri, with Spotify, with Facebook and everything else that I've worked, that has always come to the fore. Kids need to learn to code. It's a universal language. It's such a key skill of the future.
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QUEST: I told you a moment or two ago about a plane that -- a small Lear jet with eight people on board that had landing gear problems. It was -- it was aiming to land at St. Louis, Missouri, the Lambert Field, not the downtown field. And there we have the pictures of the plane on the ground.
Looks as though the landing gear is there, so this might have been a monitoring problem where they thought the gear wasn't down and locked, but actually it does appear to have been down and locked, or at least down.
Anyway, all's well that ends well, as they say; plane is down in one piece. And as far as I can tell, everybody seems to be safe and off the aircraft. We'll let you know if that changes.
China's got a property problem, Beijing has to decide how to handle (inaudible).
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QUEST (voice-over): The answer to tonight's "Currency Conundrum," what is illegal to include on the design of a Kenyan shilling? The answer, C, the picture of a president. The Kenyan constitution specifically bans coins from using the picture of any individual, no leader, past or present, can appear on the coins.
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QUEST: Markets worldwide have struggled their way into the new week to a sharp selloff in Shanghai. China today emerges the world's top importer of oil, the first country to overtake the United States since the 1970s.
And what triggered the selling, of course, not only these two factors, was Beijing's measures to cool down the housing market. Of course, you're starting to see how the whole things becomes as one. That sent shares in some sharp (ph) Chinese property companies down by about 10 percent.
Cyclical stocks across Europe and the U.S. also fell very sharply. The slowdown, the gentle slowdown, the soft slowdown, whatever you want to call it, the soft landing of China is still being aimed for. But the economic upheaval comes at a quench time for the country's political future.
The National People's Congress is to start in Beijing. David McKenzie now reports, the state of the economy is the top concern.
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DAVID MCKENZIE, CNN CORRESPONDENT: The delegates are streaming in to the Great Hall of the People here in Beijing for a series of important meetings. They have them every year, but this year, the National People's Congress in particular is crucially important. It will bring in a new raft of leaders to rule China. And many people believe that China is at a crossroads.
MCKENZIE (voice-over): The 3,000 delegates of the NPC are a virtual rubber stamp for incoming President Xi Jinping and his top leadership. But they face many challenges.
Number one: the economy. Manufacturing, export and investments sparked China's meteoric rise. But now the government wants to move to a consumer-driven model, anchored on urbanization to avoid the much dreaded hard landing. The goal is to grow the middle class.
MCKENZIE: "To unify under socialism and strive for a well-off society," it reads. But propaganda aside, with the middle class growing, there's a real sense that cracks are appearing.
MCKENZIE (voice-over): This winter, China has seen its worst pollution in living memory, angering a population already jaded by a series of high-profile scandals, like the spectacular fall of party kingpin Bo Xilai. It's all tainted the reputation of the Communist leadership.
And protests for accountability online and on street corners are increasing. But while domestically the party is under pressure, internationally it's flexing its muscles, standing up to its neighbor, Japan, over a disputed chain of islands, launching its first aircraft carrier and trying to match the influence of the Obama administration's so- called pivot to Asia.
This week, Chinese leaders are looking to project strength, not just locally but on the global stage.
MCKENZIE: The NPC is a stage-managed event, so don't expect any surprises; where China's going is anyone's guess. But with new leaders coming in, one thing may be more certain, that they'll prioritize power and stability over reform -- David McKenzie, CNN, Beijing.
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QUEST: Tom Sater is at the World Weather Center this evening. And although things may be a little bit easier here in Europe, by and large, by and large things are not very good in the States. Or things could be worse in the northeast.
TOM SATER, AMS METEOROLOGIST: I certainly hope you do not have a flight plan to the U.S. in the next day or two, Richard, because --
QUEST: Not in the next day or two, no, but in a couple of -- but next weekend. So I'm taking an unhealthy interest in your (inaudible) --
SATER: Hopefully by then they'll have it all cleared out, because a major winter storm is possibly brewing. And more on that in a moment. I want to start with Europe, because a completely differently weather pattern has set up. And you know, we always point out the storm systems first. Today, different.
Look at the number of countries and the countryside and all that's been enjoying sunshine, what a change in the weather pattern. And with this, you know, before you know it, a preview to spring; the flowers will be budding. The trees will be budding and the pollen, of course, will be sky high.
But this is good news, too. I mean, after a year and a half of drought conditions in parts of Portugal and Spain, it's nice to have some rainfall, even in northern areas of Africa. But high pressure, the dominant factor is that slide to the southeast, a nice southerly flow is going to help the temperatures get unseasonably warm.
And that is a nice preview to spring. And this is something you don't see very often as well. In our radar picture, that is relatively dry, some moisture starting to streak up from the south, getting into extreme southwestern areas of France.
But the numbers really tell the story. We'll start in London. The average is 8 degrees for a high, near the double digit. I mean, 13, that's wonderful for Tuesday. Paris, 15 degrees when your average is 9. But it's even the nighttime lows. Berlin has had a couple of streaks this winter, good 16-17 days where it was unseasonably cool. So it's nice to see a positive chart.
Now with the storm system moving in, of course, to parts of Spain, you can expect maybe some disruptions due to the winds, always call ahead.
In the U.S., however, we're stuck in a pattern where we're just going to have to sit it out. One storm system after another, and this is the one up to the north. It's going to gather some steam, start to see some circulation taking place. But it's really going to start to develop when it gets to the coast.
Look for possible flight disruptions in Minneapolis towards Chicago, I mean, the numbers do not lie here. We're already watching the watches and warnings start to take effect. Notice Chicago, we're looking at a good -- well, 20, possibly 30 centimeters. It could be double that when we get to areas of Washington, D.C., on Tuesday night into Wednesday. That's Philadelphia, that's Newark, that's New York City and that's Boston. So we're going to be watching this one closely, Richard, in the next 24-48 hours. Could be the fourth massive storm this part of the U.S. has seen.
QUEST: Tom, thank you for that. Keep us informed over the next 24-48 hours and we'll, of course, be watching very closely.
Now I need to bring you -- it's been a busy day -- a plane carrying passengers and cargo has crashed in the east of the Democratic Republic of Congo. Earlier reports from the Congolese officials at the scene say that around seven of about 30 people on board have died. Three injured passengers have been taken to hospital.
Looking to see if the Compagnie Africaine d'Aviation (ph), the -- that's a Congolese airline, the plane was a Fokker 50 operated by the airline. And we're still waiting for more details, of course, the route, the passengers, the -- any details that we'll be able to bring you. But that's what we know so far.
And to one bit of information; the sort of passenger numbers that in a single class configuration of this aircraft will be about 50, maybe 40 in two-class configuration. Anyway, when we find out more information, we'll bring it to you. This is QUEST MEANS BUSINESS.
QUEST: Tonight, a second week of strike action at the Spanish airline Iberia has begun. Cancellations of more than 1,000 flights took place on Monday. It's the second time this year Iberia's dealt with industrial action. The airline is undergoing a major restructuring program which includes losing 4,000 jobs.
Our correspondent in Madrid is Al Goodman.
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AL GOODMAN, CNN CORRESPONDENT (voice-over): The second strike against Iberia in recent weeks started loudly, like the last one had ended. Ground personnel and cabin crews, this time joined by pilots, marched toward Madrid's airport, protesting Iberia's plans for 3,800 layoffs, about 19 percent of the staff. And salary cuts for the remaining workers.
Iberia merged with British Airways in 2011, and has been trying to reduce its losses, more than $350 million last year.
Iberia said it lost $19 million in the first week of the strike in mid-February. Now comes the second part this Monday to Friday, and Iberia expects to lose another $19 million, 1,300 flights canceled this week by Iberia and at three smaller Spanish airlines which use Iberia's ground services. Most passengers were put on other flights.
Negotiations between Iberia and the unions have stalled, despite Spanish government pressure to reach a deal and the appointment of a mediator. The unions have set another week of strikes starting March 18th.
GOODMAN: But the unions are now openly talking about extending the strike to Easter week itself, a period they previously said was off limits. Iberia and the tourist sector are already starting to worry about that -- Al Goodman, CNN, Madrid.
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QUEST: A "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment," we started the show telling you all about the new draconian, very hardline rules in Switzerland following the referendum on the back, of course, of bankers and corporate pay.
Well, ever since the crisis started, bankers have been a lightning rod for criticism. Bonuses, knighthoods, they've made apologies. They've had catastrophes of their own making. An understandable outpouring of public anger. Governments, now, are now, across the world, taking that public outcry and codifying it. Europe wants to cap bankers' bonuses.
The city of London said they would flock to Zurich instead. Ha, ha, ha!
Now the Swiss have voted for even tougher measures on executive pay. Banking is like any -- is like no other industry. They got us into the crisis and they eventually will drag us out of them.
But remember, it's not that we love them all or that we hate them. It's that we need them because the banks are the ones that lubricate the economy and ultimately will have to get us out of this mess. It's not pleasant to say it, but it's true.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.
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QUEST (voice-over): The headlines: Congolese officials say at least seven people have died in a plane crash in the east of the Democratic Republic of Congo. Early reports believe three passengers were injured and taken to hospital. It's thought 30 people were on board the aircraft when it landed or came down near Goma.
Long lines greeted voters at Kenya's first general election since the 2007 vote was marred by widespread bloodshed. This time, voting has been relatively peaceful. Ten people have been killed in isolated pre-election violence in Mombasa.
Iraq says a convoy of Syrian soldiers who fled into Iraq to get away from rebels have been ambushed near the Iraqi town of Rutbah (ph). At least 10 Syrian soldiers have been killed, many others injured. It's not clear who carried out the attack.
Queen Elizabeth has left a London hospital earlier today, walking out the front door and stopping to shake hands; all in all, looking reasonably well, all things considered. She's 86 years old and was admitted on Sunday with a stomach bug.
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QUEST: The news continues. You are fully up to date with the stories we're following on CNN. For now, we take you live to New York. "AMANPOUR" is live.