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Italy's Deadlock; French Super Tax Version 2.0; Insider Trading Arrest; Big Quarter; Road to Recovery; US Economy; Dollar Down; World's Richest Race

Aired March 29, 2013 - 15:00:00   ET


RICHARD QUEST, HOST: Call it a big mess. Italy's parties have failed to break the political deadlock in Rome.

But France's president, the deficit's too high, taxes on the rich not high enough.

And tonight, a bitter blow for the Lindt chocolate bunny. Its copyright court case is -- ha! -- foiled.

I'm Richard Quest. It may be a Friday, but believe me, I still mean business.

Good evening. Tonight, two of Europe's three largest economies are at the mercy of political uncertainty. In the case of France's leader, it's wrestling with missed targets, grim approval ratings, while Italy, in fact, doesn't even have a government at all.

The facts on Italy: Silvio Berlusconi says a coalition deal is the only way to end the country's political deadlock. The People of Freedom party's leader met with the Italian president Napolitano today, so the two met. Now, that was after -- you'll be aware of this because you've been following it all week -- after the center-left leader, Pier Luigi Bersani, admitted he'd failed to form a government.

It was Bersani who won the most votes, but has all but ruled out working with Berlusconi. What a mess. He says it's very difficult to imagine a coalition with the People of Freedom party.

Berlusconi, Bersani, or indeed Grillo. Who is it likely to be? Our correspondent Jim Bittermann is in Rome. Jim, you and I have got quite a bit to get to tonight, because we're not only going to talk about Italian politics, we're going to talk about French politics. I know you're there for the good Pope Francis, but please come back to earth with politics on this Good Friday.

How much -- how -- look. They've held faith and they've got a new leader in the Vatican, but not in the Italian presidency -- in the Italian prime ministership.


JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: It takes a lot of faith to be here from a political standpoint, Richard. They -- at least the church has got a leader. The Italian government still hasn't been formed, and I don't think it's going to be any time in the near future.

They've got at least another day of muddle before we even find out what Giorgio Napolitano has to say about it all. He's been -- the president in meeting all day long with the various political leaders, trying to figure out who could possibly put together a coalition -- a coalition government.

And each one of the leaders have come out with sort of exceptions and saying that they wouldn't work with that side or that side. Silvio Berlusconi said he would -- in a grand gesture, he said he would be willing to go and do a grand coalition with the Democratic party, with the center- left party, even if he wasn't going to be the prime minister. Here's the way he put it.


SILVIO BERLUSCONI, FORMER ITALIAN PRIME MINISTER (through translator): Regarding the content of that government, we are available to meet with the other political forces and examine in detail with the urgent measures on the difficult economic situation.

We already have been able to examine the proposals of the other parties, and we believe that there can be an agreement on the principle measures.


BITTERMANN: And on the center-left, they've said they're not going to in any way talk with Silvio Berlusconi. They fought a very bitter election campaign against him, and they're not going to form any kind of grouping with him.

The third force here, of course, is Beppe Grillo, that new wave sort of demagog but a new force here, a revolutionary force, I guess you'd call it. He's against everything. He doesn't want to be part of any government that he doesn't lead.

So, it's a real mess and Napolitano, who after listening to everyone today, it now appears he will not say anything about what his conclusions are until tomorrow at least.

QUEST: OK. But here's the real issue: despite the horse trading, government goes on, policies -- the existing policies of Mario Monti, the technocratic government, are in place, so the reform process on pensions, on privatizations, on all these other things, are still moving forward. So, Italy is improving despite the politicians.

BITTERMANN: Well, to some extent, yes, Richard, but more improvements and more laws are needed, and they need to get those laws through the parliament to do something, for example, about the public debt, which is -- the public debt-to-GDP ratio is now 130 percent here. Unemployment among young people is getting close to one out of every two young people that are unemployed.

So, there's a number of questions that have to be addressed and have to be addressed by a government and a working parliament, and right now, Italy doesn't have either one of those.

QUEST: Jim, I need you to stay exactly where you are, do not move an inch, because I'm now going to turn my attention to your home country, or at least where you're based, where your home base is in France.

France's budget deficit was 4.8 percent last year. Now, that was higher than the 4.5 percent target that had been agreed with the European Commission. The French president, Francois Hollande, has pledged to bring an extra ton -- extra funds. You'll be aware, of course, the super tax for top earners. Join me in the library.

The tax has already been ruled as unconstitutional. It was a 75 percent tax on income above $1.3 million. But now, the burden of this tax has been shifted from individuals to employers.


FRANCOIS HOLLANDE, PRESIDENT OF FRANCE (through translator): In companies, it's necessary that the salaries are transparent, and the biggest companies, I mean, because only big companies are concerned with these big salaries above 1 million euros.

So, in these big companies, transparency first, the general shareholders meeting will be consulted on these salaries, and when the salary is over 1 million euros, the company will have to contribute financially, all incomes included, which will go up to 75 percent.


QUEST: Now, this is a very clever, nifty weave. Baring in mind that the constitutional council deemed the original plan unconstitutional because it violated the French principle of equality. In other words, you couldn't tax individuals, it had to be taxed on the bases of households. So, by shifting it from individuals to companies, he hopes to get around that.

It really doesn't matter to some extent. The approval rating of Francois Hollande, according to one newspaper poll, is now at 27 percent. It's a record low for the French president. Back to Jim Bittermann in Rome. Jim, you have covered -- I mean, he's not giving up on this 75 percent. Talk about if you can't get it one way, you'll go another. Individuals to employers.

BITTERMANN: Yes, the French say if you can't go in the door, you go out the window. In any case, yes, I think that's exactly right. He's trying to figure out a kind of a wiggle out of this because he committed to voters that he was going to get into this 75 percent taxation rate.

The fact is that what he said last night could be an out because he said 75 percent on salaries would be deducted at source, at the companies themselves.

But many of these people who earn these high salaries aren't getting - - or high rewards, are not getting it in salary, they're getting it in dividends and other things, other kinds of compensation. So, it could very well be that that may be the wiggle out of this whole thing.

But nonetheless, two thirds of the French, according to a public opinion poll that came out just a few hours ago, two thirds of the French do not believe he is going to address the tax on high salaries as he promised that he would. Two thirds say that he will, in fact -- that he did not convince them with his broadcast last night.

QUEST: Right.

BITTERMANN: And 21 percent felt that he could do something to improve the economy, leaving 80 percent believing that he can't do anything to improve the economy, Richard.

QUEST: Jim Bittermann, on -- at this Easter Holy Weekend, we will now leave you to return to a higher calling and a more spiritual matter of the pope's first Easter, or this particular pope's first Easter as pope. Jim Bittermann, who is in -- one has to remember where he is -- he's in Rome. He's in Rome for us tonight.

Now, when we come back, we will take stock of stocks. US equity markets are at an all-time high, and we need to look back at the quarter that was. It's QUEST MEANS BUSINESS, good evening.



QUEST: A high-ranking trader is accused of being at the center of an elite criminal club where, according to the FBI, cheating and corruption were rewarded. SAC Capital's Michael Steinberg is charged with securities fraud. Felicia Taylor is in New York. Felicia, in all the cases that we've seen, why is this one more serious or more worthy of note than others?

FELICIA TAYLOR, CNN INTERNATIONAL CORRESPONDENT: Well, because it centers around Michael Steinberg, and he was one of the most upscale traders at SAC Capital. He's been there since 1997, he is obviously very close to Steve Cohen.

Some people alleged that -- and you're seeing him there, actually, leaving the courthouse where he was -- he posted bail, that $3 million, surrendered his passport. So, this is sort of a celebrity within the divisions of SAC Capital.

A lot of people are alleging that basically they're trying to center around and circle around Steve Cohen himself, but it's very difficult to prove about insider trading. Let's take a look at what he's been accused of.

Five counts of securities fraud. That's the most that anybody's been charged with so far. He faces up to 20 years on each one of these charges. And he's accused of basically wracking up $3 million in illegal profits.

He's already had legal -- legal counsel. He came out and said earlier that Michael Steinberg did absolutely nothing wrong --



TAYLOR: -- his trading decisions were based --

QUEST: Let me -- let me just --

TAYLOR: -- on detailed analysis.

QUEST: Let me just jump in here, because we -- just briefly, Felicia, what does it surround? Is there a particular case, is there a particular series of transactions? Is there a particular famous takeover bid that this is all about?

TAYLOR: Yes. There is definitely certain issues with regards to what these individuals did. You can take a look at Matthew Martoma. He was also arrested earlier. He is basically looking at trades that happened with the pharmaceutical industry and insider trading there.

These also criminal, civil charges on insider trading. He's accused of avoiding losses of $276 million. He too has already pled not guilty.

So far, though, SAC has had settlements with the SEC, which is interesting in and of itself, because a court still has to approve whether or not they're actually guilty of something. And basically, if you're going to settle fro $660 million, but not really admit to any wrongdoing, that raises a lot of questions. So, the SEC certainly, according to a lot of people, are circling around --

QUEST: Right.

TAYLOR: -- Steve Cohen.

QUEST: And in a word, and without prejudging, because I know that people do say these things. Is it generally felt that the prosecution case is a strong one?

TAYLOR: Absolutely. If they are able to arrest these people, that means that they have enough evidence to actually press charges. But just by the fact that they've actually brought these people in, there's no question that the prosecution has a very strong case.

QUEST: Felicia Taylor, who is in New York for us tonight.

Good Friday's marked around the world in quiet contemplation. So, we need to contemplate -- but in our case, it'll be on slightly more temporal matters. The US equity markets are at an all-time high, and at the end of Q1, it was nothing short of a divine lifting of wealth, as you'll find out from the heavenly screen.

The S&P 500 today -- have a look at that and you'll see. It's a gain of 10 percent, and as you know at this last bit over here, it actually managed to break through its all-time high. It took some getting there, but it finally made it.

The Dow Jones industrials. Now, the Dow, again, besides a minor wobble, again it went through its all-time high here, and it continued on upward. It's up 11 percent so far for the year.

As for Europe, I'm afraid on Europe, we are by no means -- look at the euro top , and you will see what I mean.

So, what we have in Europe, and this -- we know it's all because of the -- Greece, it's because of Cyprus, we have crisis over here, we have crisis over here, we have peaks over here, but then it comes down over here. And that has been the very different nature of the two markets. You've got the Europeans and you've got the S&P 500. Just look at those two charts and you really see the difference.

Now, despite soaring stocks, the US still faces enormous economic challenges. In the last hour, President Barack Obama urged Congress, indeed, to fund projects he says will fund and fuel the country's recovery.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You ask any CEO where would they rather locate their business and higher new workers. Are you going to set up shop in a country that's got raggedy roads? Runways that are pot-holed? Backed up supply chains?

Or are you going to seek out high-speed rail, internet high-tech schools, new state-of-the-art power grids, new bridges, new tunnels, new ports that help you ship products made in America to the rest of the world as fast as possible?


OBAMA: That's what people are looking for, that's what CEOs are looking for.


QUEST: Let's discuss the first quarter's milestones. Robert Shapiro, chairman of the economic consultancy firm Sonecon and former US undersecretary of commerce. He joins us now from CNN Washington, and good to see you. When I look --


QUEST: When I look at these numbers -- and look, we know the reasons why markets -- the Fed, low yields, bonds. We know the reasons. But Robert, it's still remarkable that we have this disconnect between markets and the real economy.

SHAPIRO: Well, actually, there isn't that much of a disconnect, because you have to invest the money somewhere, and so you look at relative returns. If you're investing in an advanced economy and you look around the world's advanced economies, you don't want to be in Europe, you don't want to be in Japan.

That is, you don't want to be in places that are actually in a recession. You want to be in places that are expanding, even if they're not expanding that quickly, and that brings you to the United States, and then your choice is equities or fixed income instruments, bonds. Almost no return from bonds. There's nothing left but the US stock market.

QUEST: But that's a --


SHAPIRO: And in fact --

QUEST: Look. That's a great argument, or that's a great reason for why the market has rallied in such a dramatic fashion, but it doesn't address that point that the underlying fundamentals do not justify this sort of rally.

SHAPIRO: Well, I actually don't agree with that. I think the underlying fundamentals in the US economy do justify it. The pieces for -- the elements for a much stronger recovery are in place.

We have business with enormous amounts of resources for higher investment. We have consumers whose debt burden is back to normal, whose wealth is no longer evaporating with declining housing values, and who have enormous pent-up demand. So in fact, we have the Fed who is committed to - -

QUEST: Right.

SHAPIRO: -- maintaining very low interest rates for both business and consumers for at least the next two years. So in fact, I think we do have the fundamentals for a stronger recovery.

QUEST: And if we now factor in -- since you're in Washington, let's deal with the grief at hand. You've still got the debt ceiling to sort of sort out, but the sequester is working its way through, and we're going to see the furloughs take effect. Now, is there a view now that this is a cake that's bake and baking, let's just let it play itself out? The sequester has happened, nobody's going to reverse it?

SHAPIRO: Well, I'm afraid that may be the case. That does seem to be the atmospherics, at least, in the debate here. And I say I'm afraid so, because the economy, this stronger recovery has not kicked in, the last thing we need is government withdrawing demand from the economy. That's what has driven Europe, in part, back into recession.

So, I think it's a bad thing economically, but I think you're probably right that they've moved on to other things and they're now assuming the sequester, at least for one year, in the baseline that they will argue about with respect to the debt ceiling, with respect to -- which they have already done with respect to the continuing resolution. So, I think it is baked in at least until September, the end of September.

QUEST: Good to talk to you, Robert. Have a good Easter and you and I will talk again before or certainly at the end of Q2 and we'll see who's right on these markets.

SHAPIRO: Wonderful

QUEST: Good to talk to you as always.

Now, tonight's Currency Conundrum. Investor Jim Rogers is reportedly interested in snapping up North Korean coins. This is Jim Rogers, here dining with myself in Singapore. Now, he was at the Singapore International Coin Fair, which opened today, and according to the "Wall Street Journal," he was buying North Korean coins.

So, why is Jim so keen to buy? Is it because the coins are so rare? Because he thinks they're about to surge in value? Or because it's a political protest? Why is Jim Rogers, who you saw there, buying North Korean coins?

As to the rates, the dollar is down against the pound, flat against the euro and against the yen. Those are the rates --


QUEST: -- this is the break.


QUEST: The world's richest horse race, the Dubai World Cup, takes place this weekend. There's a total prize pool of --


QUEST: -- $27 million. More money at stake than football's Champions League final. Of course, just competing in the carnival is a seriously expensive business. A massive cost, flying the horses to Dubai, as the "Winning Post's" Francesca Cumani discovered.


FRANCESCA CUMANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): In this town northeast of London lies the home of British racing. It's early morning exercise at trainer Michael Bell's stables, where his thoroughbreds are breathing some unusual springtime snow. But stablemate Wigmore Hall stays behind, oblivious to what's ahead.

MICHAEL BELL, TRAINER, MICHAEL BELL RACING: This is third year he's run in Dubai, and the prize money is fantastic. The race is total prize money $5 million. He's one of the leading payers, so it makes sense.

CUMANI: This six-year-old has an enviable passport stamp collection. He's raced in seven different countries, picking up nearly $2 million in prize money along the way. And now, this international traveler is being prepared for his latest business trip.

DAVID BARTRAM, VETERINARY SURGEON: The biggest worry for horses like Wigmore Hall that are old or sensible horses, really, is once they get to the place of destination, they develop a temperature and they get a respiratory infection.

CUMANI: With his suitcase packed, all that's left to remember is the plane ticket. He doesn't get any air miles, but this trip is subsidized by the Dubai Racing Club.

BELL: If the owner was to have to pay for it, I would say it would probably cost -- a return for the horse would be about 30,000 to 35,000. Sterling. You ask for your horse to go on a pallet on its own, obviously it's rather like going first class. And Wigmore Hall actually very happy to share a pallet, almost better sharing, because it's -- they're not alone. They like company, basically.

See you in Dubai.

CUMANI: Where a completely different landscape awaits.

This is Wigmore Hall's first morning at Dubai's Meydan Race Track. Head groom and constant travel companion Gill Dolman is putting him through his paces.

GILL DOLMAN, TRAVELING HEAD GROOM: He handled the flight perfectly. It was very cold when we left London, and out here, obviously, the sun's out, it's a lot warmer. But he doesn't seem too worried about it. He's handled it really well.

CUMANI: Michael has just arrived, and after a quick briefing with journalists, he's keen to see his horse for the first time.

BELL: He looks great. This is a nice easy canter run, then we'll do a bit more tomorrow. The traveling takes a fair bit out of the horses. I find you can't do too much with them just going into a race. The preparation's really been done at home.

CUMANI: With all the hard work done, the rest is up to Wigmore Hall on Saturday night.

BELL: He looks so happy, isn't he? He loves it here, doesn't he?

CUMANI: Francesca Cumani, CNN, Dubai.


QUEST: Still to come tonight, a major European fashion chain is accused of links to sweatshops in Latin America. We'll show you which one after the news headlines.


RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.


QUEST (voice-over): Russia's foreign minister says he's increasingly concerned over the nuclear tensions with North Korea, that it could get out of control. The North Korean leader Kim Jong-un has reportedly approved a plan to put rockets on standby to hit American targets in the region and on the U.S. mainland.

Doctors say the former South African president, Nelson Mandela, is making steady progress during treatment for a recurring lung infection. The former president's spending a second day in hospital. A presidential statement says 94-year-old Mr. Mandela is in good spirits and had a full breakfast on Friday.

At least four people are dead and some 60 are missing after a building collapsed in Tanzania. The 16-story high-rise was under construction in an affluent area of Dar es Salaam. One local resident says there was a field nearby where children played football. That field is now covered in rubble.

Italy's president says coalition talks held today have failed to break a political deadlock. The former prime minister, Silvio Berlusconi, who you can see here, had been pushing a coalition with Pier Luigi Bersani's Democratic Party. The president will now take time for reflection according to his spokesman.

Pope Francis is presiding over his first Good Friday ceremonies as pontiff. He read the account of the Lord's passion at St. Peter's Basilica a short time ago. Later the pope will celebrate the Way of the Cross with a candlelit procession around the Roman Colosseum.



QUEST: The global fashion giant Zara has been hit again with accusations of using forced labor, this time in Argentina. A human rights group says there's evidence linking sweatshops operating in the capital, Buenos Aires, to Zara and two other retailers. Rafael Romo reports.



RAFAEL ROMO, SR. LATIN AFFAIRS EDITOR (voice-over): The workshop was a cluttered mess, authorities finding sewing equipment only meters away from bunkbeds at another sweatshop investigators found worn mattresses, unsanitary conditions and all kinds of fire hazards.

A human rights group says 21 mostly migrant workers lived there, working shifts of up to 16 hours under conditions of slavery.

GUSTAVO VERA, DIRECTOR, LA ALAMEDA (through translator): These images show these places were in a dreadful situation. There were loose cables, flammable materials, plenty of dust and overcrowding. They were really living there like animals.

ROMO (voice-over): Gustavo Vera is the director of La Alameda, a human rights organization in Argentina dedicated to fighting modern day slavery.

La Alameda shot this video after a police raid at three workshops and issue see the images as evidence in a federal complaint against three clothing manufacturers, Zara, Iris and Cara Cruz. There's no evidence that the companies own or directly operate the workshops. But Vera says there's definitely a link.

VERA (through translator): They found labels. They also found designs which prove that all of these three workshops worked for Zara.

CNN requested interviews with all three companies. Cara Cruz said it has not been legally notified about the case and it has no knowledge of any links with clandestine workshops. Iris and Zara have not returned our calls. Both Argentina and Spain are on holiday for Holy Week.

But Inditex, the Spanish clothing giant which owns Zara, told Spanish newspaper "El Pais" (ph), that they're "surprised and indignant" about the complaints. "We have no knowledge of the facts and we don't know what they're referring to," Inditex said. "We have zero tolerance when it comes to situations like this. We regularly audit the 60 providers we have in Argentina."

ROMO: This is not the first scandal Zara faces regarding workshops where their clothes are produced. Back in 2011, the clothing manufacturer was fined $1.8 million by the government in Brazil after an investigation showed dozens of Bolivian and Peruvian migrant workers were producing clothes for the firm in conditions of slavery.

ROMO (voice-over): After the scandal the company said that "Zara ha unveiled a series of new internal and external initiatives to reinforce control over the production chain."

Argentina has begun to crack down against trafficking. Last year a series of unconnected raids against other companies also in Buenos Aires targeting 12 sweatshops, 23 Argentine and Bolivian nationals were arrested. Seventy-six immigrants from Bolivia who were forced to sew clothes around the clock were liberated during the operation -- Rafael Romo, CNN, Atlanta.


QUEST: The Freedom Project is still a vital part of CNN coverage.

Coming up in a moment, on QUEST MEANS BUSINESS, a tough job, but someone's got to do it. Life on the front line of the Easter chocolate wars: the winners, the losers, the chocolate.

After the break.




QUEST (voice-over): So the answer, why does Jim Rogers (ph) of Singapore buy North Korean coins in such large numbers this weekend? Well, obviously, he thinks they're going up in value, according to "The Wall Street Journal". Rogers (ph) says those coins will rise should there be regime change.


QUEST: The battle of the Easter bunnies has come to a sticky end for Lindt. The Swiss chocolatier makers of these little bunnies. Now Germany's federal court of justice has just melted Lindt's attempts to stop rival versions from being made. The main one, of course, such as from the Riegelein Confiserie (sic) company.

Now take a look and compare that and compare this. Are they the same? Well, according to the German court, yes, they are. But for Lindt and for chocolate and food makers, this is not just the only thing. Join me on an Easter hunt around the studio for similar stories.


QUEST: Ah! Don't mention Haribo Gold Bears to Lindt. In December, Haribo took them to court in Germany for producing a chocolate bear called Lindt Teddy. The judge says consumers would confuse the two. Gold Bears are ruled in Haribo's favors; Lindt is appealing.

Ah! A bar of Cadbury's chocolate in distinctive purple packaging. Last October, Cadbury won the right to stop rival Nestle from using the same shade of purple. It's Pantone 2685. You're getting the idea. To see how Easter eggs are made, you have to turn the clock back to not that season, but Christmas. Isa Soares visited the Lindt factory in Zurich.


ISA SOARES, CNN CORRESPONDENT (voice-over): For over 165 years, Lindt has been refining the art of chocolate making, something I know very little of.

SOARES: I'm going to be a bit generous.


SOARES: (Inaudible) like a chocolate.

SOARES (voice-over): As my first chocolate bear begins to take shape --

SOARES: How's that?

SOARES (voice-over): -- it's easy to see why this company's success has been so sweet.

But the European crisis has created some bitter challenges.

ERNST TANNER, CHAIRMAN AND CEO, LINDT & SPRUNGLI: The markets are not growing as fast as they used to. When we set our sales target growth for growth between 6 percent and 8 percent, the markets were growing basically between 3 percent and 4 percent. Now some of the markets aren't growing at all. And some are even declining.

SOARES (voice-over): Despite the difficulties, Lindt still has complete control of the whole production process.

ALISON JOUMAA, ASSISTANT PACKAGING MANAGER: We just try whatever we like. We don't have a kind of a closed system, where it's a hands-off kind of a thing.

So people really have their favorites. So every day, every second day, they'll pick up one of their favorites. And it's really good feedback for us, you know, employees to hear anything about the chocolate quality that they feel is different or that they like better.

So it's a good thing. We encourage that.

SOARES (voice-over): This do-it-yourself strategy means that Lindt can focus on churning out more chocolate. During our visit, Easter eggs were already on the production line.

JOUMAA: Easter creeps up on you before you know it and just we have such an intensive work on this product, we want it to really be exact.

TANNER: The Swiss franc has become so strong that when we consolidate the local figures, even though we grow between 6 percent and 8 percent, sometimes it's Swiss franc that's a declining sales.

SOARES (voice-over): Lindt is combating the currency situation which it has no control over, but targeted expansion in the U.S., China, Russia and South America.

TANNER: In emerging markets, where the -- where we have two situations, first, the chocolate consumption is relatively low and the Lindt brand is unknown. And with the boutique, we can really best demonstrate our values, our quality, our breadth of products and this is really a vehicle with which we have established our brand in the States.

SOARES (voice-over): The market, though, is growing, as is my bear.

SOARES: We've got the final touch.

SOARES (voice-over): My amateur attempt is in sharp contrast to Lindt's recipe for success. Stick to what you know, and in time, it should bear fruit -- Isa Soares, CNN, Zurich, Switzerland.


QUEST: Bad luck, Jenny Harrison. There is not a bit of chocolate left.

JENNY HARRISON, CNN METEOROLOGIST: Well, there's not any over here. I just have -- I was just really eating all that up, yes. Very nice.

And --

QUEST: Cold weather, absolutely cold, cold, cold.

HARRISON: It is, very cold, yes. And I have got the data to prove it, Richard. We don't need just to take your word for it. Look at this. It's another very mixed picture. There's more snow on the way as we head through the weekend, rain across the south.

And we've been showing you this for the last few days, but I think it's worth showing again, because the numbers just keep going up and up and up, 22 days, Copenhagen, London now, with the temperatures below the average, 20 in Warsaw. And look at it on Friday. So Paris 6 Celsius; that was your high.

It should be 12; Berlin just 2 degrees Celsius. And the average high is 8 Celsius for this time of year. So now we were talking about London a couple of days ago. It looks as if Berlin, just like London this March, on track to be the coldest in Berlin since the 1880s. The average temperature's just been -1 so far this March.

And overall it should be about 8.5. So we have to see how the last couple of days measure up. But you can see in 1883, -.99 and .24 in 1969. Now having said all that, right now there's about 10 centimeters of snow on the ground in Berlin.

But it's not putting off the people. That man enjoying a very brisk run and there are plenty of people out on the promenade, as you can see, wrapped up well but enjoying the snow nonetheless, plenty more of it in the last 12 hours.

You'll notice a little bit more activity across the south. So pushing through France and quite a wintry mix as well, some thunderstorms into the southwest of France. We have got some slightly milder air in place down here. So as we go through the weekend, the one system pushes up towards the northeast and another pushes through.

That is already bringing those rain -- that rain and those thunderstorms across into the southwest. And just quickly let's just end on this. It is on Sunday, the 159th annual Oxford and Cambridge boat race. It will take place amidst some very, very cold conditions, 1829 was the first race, four miles, 374 years. It is 6.8 kilometers. It promises to be dry but cold, Richard.

QUEST: Jenny Harrison at the World Weather Center, we thank you for that, Jenny; much appreciated.

And that is QUEST MEANS BUSINESS for tonight. I thank you for joining us for our nightly conversation of business and economics. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.




ROBYN CURNOW, CNN HOST: You're watching MARKETPLACE AFRICA. I'm Robyn Curnow in a rather windy Durban, South Africa.

Now Brazil, Russia, India, China and South Africa all make up that group of emerging market economies called BRICS, an alliance that is increasingly investing in Africa's resource-rich economies, which is why some South African aviation companies are offering their services as a springboard into the continent.


CURNOW (voice-over): African skies are open for new business. In recent years, there's been significant growth in air services across the continent. Airline executive Martin Banner, who's based near Johannesburg, explains just how this market is expanding.

MARTIN BANNER, AIRLINE EXECUTIVE: In the mineral and resources sector and the oil and gas sector, there's tremendous requirement for airlift, moving crews back and forth, moving their people back and forth, whether it's mining engineers and support staff, et cetera.

So it's in that context that I think we're seeing a growing relationship between the countries, with the resource exploration and obviously the mining down the road from that.

But then the requirement for us to provide additional services and airlift is one of those. I think it's been developing over several years. But in the last two or three years, we've seen a lot more activity.

And certainly in the last 12 months, despite the global economic downturn, questionable recovery, the European debacle, you know, what's going to happen with the regress in the U.S. economy, what's happening in China, I think Africa is seen by many as the future growth point of the globe.

Almost a billion consumers, very consumer oriented. But of course oil and gas and minerals and resources are a big driver for a lot of those economies. And that's where we're seeing a lot of interest internationally.

CURNOW (voice-over): Much of the road network in Africa is an aging relic from the colonial era or has been damaged by the wars that have ravaged the continent. This means that air travel is essential as business expands.

Africa's new trade is increasingly driven by its growing relationship with the new grouping of so-called BRICS nations, Brazil, Russia, India, China and South Africa.

GOOLAM BALLIM, CHIEF ECONOMIST, STANDARD BANK: Africa has connected with emerging markets over the last decade in a seismic way. So for instance, say even 20 years ago, BRICS, Africa trade was less than 1 percent of Africa's global trade. Today, the BRICS nations account for roughly 20 percent of all of Africa's global trade.

CURNOW (voice-over): The involvement of BRICS nations, especially Chinese investment on the continent and demand for Africa's abundant resources, has meant increased development in formerly neglected areas and improved air links.

BANNER: Well, there's a lot of investment in Africa by BRICS partners. And so this is an example of Brazilian cooperation. And there's been a really interesting cooperation between the manufacturer or the manufacturer's leasing company, the end customer has a requirement to provide airlift to the oil and gas sector.

And ourselves, we can provide the African footprint in terms of crewing, maintenance and all of the resources required to keep the aircraft operational.

I think everybody's aware of the Chinese investment in Africa. Everywhere you go, you're touching Chinese investment. And I think that that's -- there's a growing cooperation between South Africa and India. And so I think just generally across the board, those growing economies are finding ways of working together. And aviation is a key sector that supports those initiatives.

CURNOW (voice-over): Rapidly improving aviation services are transforming trade and adding opportunity to growth.

BANNER: The services between the major hubs has improved tremendously. So your ability to get to a relatively close point to where you need to be has improved enormously. I mentioned those points earlier, you know, whether you want to go to Luanda, and just going up the West Coast, for example, Luanda, Libreville (ph), Lagos, Abuja (ph) in Nigeria, Akron (ph), Ghana and so on around the West Coast.

Well, up the East Coast, Dar es Salaam and Nairobi being two big touchpoints. You can get into the region. From there, however, the intercountry or internal country lift is still questioned somewhat.

And so there's a big requirement for people like ourselves to provide that kind of airlift to companies and resources, whether they've been the resource sector, oil and gas sector. How one sees the growth potential in Africa being -- taking advantage of in time, I think one still has to see. But I think the path is quite clear.

Africa has been identified by many of the BRICS countries and others as the future playground for investment and business activity. And people like ourselves provide services to enable that. And so we're very excited about future growth on the African continent.


CURNOW: As Africa's aviation industry seems to be taking off, after the break, we speak to a major consumer goods company about selling products in an increasingly globalized world.




CURNOW: Toothpaste and tissues, deodorant and detergent, many of Procter & Gamble's products will be recognizable to Africans when they go into supermarkets. Well, recently, I caught up with Procter & Gamble's vice president of global business.


CURNOW: Give me some sense: why are you in Africa?

DMITRI PANAYOTOPOULOS, VICE CHAIRMAN, PROCTER & GAMBLE: We're in Africa because of the size. Huge opportunity; it's about a billion people. That's the size of China and India, for example, just under. And the population is growing and the economies are getting more and more stable. So huge opportunities here.

CURNOW: A billion shoppers, essentially?

PANAYOTOPOULOS: Absolutely. And we want to get to every one of them.

CURNOW: Are you a little late coming into Africa?

PANAYOTOPOULOS: You could say that, yes. I mean, we've got big businesses in places like China and India. It's time for us to, I think, we do have businesses here. We have businesses in Nigeria, in Kenya, Uganda, Tanzania. We're getting going in Angola, Ethiopia. We've been in South Africa for a while.

CURNOW: And the scale, I think, in Africa, (inaudible) the more I do these interviews and the more I travel in Africa, it's the sheer scale of the consumers, the billion potential shoppers, you know, the (inaudible), the people who you want to be getting your product early on and using them for the rest of your life. I mean, how -- is it -- is it just about scale? I mean, in Africa, is it the numbers that are just, say, listen, we have to be here. We need to do this. We're late but, we, you know, we need to jump on this bandwagon now.

PANAYOTOPOULOS: Well, it's the numbers, yes. I mean, obviously that's important. But we want to be everywhere. So we want to be in every country. In the last 10 years, we've gone from about 20 percent of our business being in emerging markets to about 40 percent, call it. And you know, obviously there's huge upside.

This is where the babies are being born, where, you know, consumers are more and more consumers getting ready for our products. So it's really taken off in the last few years, the last 10 years for us.

CURNOW: Absolutely.

Give me some sense of where the African continent fits into your global plans, and more importantly these BRIC nations, these BRICS nations, the emerging markets, do you still feel that it is a relevant grouping? Do you still see the BRICS nations as those that drive growth, particularly when it comes to consumers?

PANAYOTOPOULOS: Yes. I mean, the BRICS nations (inaudible) BRIC came together because these markets have been expanding very, very fast and growing very, very fast for a lot of companies like ours. So we have -- and the biggest growth we have right now would be in markets like Brazil and India and Russia and China. Africa also is very relevant and it's very similar to the BRIC markets, too.

CURNOW: And when you -- when even you travel extensively, you're in these markets, you say you've just been to every continent except Antarctica in the last month. Give me some sense of what you see, the trends you see in terms of global consumers and how do you see the next five years panning out in terms of what you're seeing on the ground as you're traveling?

PANAYOTOPOULOS: Well, as I travel, actually, I see more and more similarities. I think the world is getting smaller with CNN and with the Internet and everything else. The world is getting -- especially the younger consumers.

I mean, everybody now has a mobile phone, you know, they all Google and I mean, all these things. So the world is getting smaller. So you know the world is changing incredibly. And I think, you know, it has its challenges but also the opportunity (inaudible) --

CURNOW: I mean, is that good or bad for you? I mean how --

PANAYOTOPOULOS: Well, no, it's good because I mean, it means that you know, we can -- we can get to these consumers more easily than we did in the past. It also is good for the consumer because they have more control in terms of what they watch, in terms of media, what they buy. So you know, I think it's a good thing all around.

CURNOW: So what you're saying is that a teenager or a 20-something in Beijing is probably having the same sort of likes in terms of products as somebody sitting in Buenos Aires in Brazil?

PANAYOTOPOULOS: Absolutely. And in Lagos and here in Johannesburg. Absolutely, and more and more so.

The world is much more connected.

CURNOW: So how do you innovate? I know that there's been criticism of your company, that innovation is perhaps lagged in the last 10 years or so. I mean, how do you innovate? How do you create products for this globalized youth?

PANAYOTOPOULOS: Yes. Well, innovation has to be our lifeblood, right? If we don't innovate, then obviously we won't exist for very long because we can monetize the market as well. So our role has always been to bring, you know, the very latest --

CURNOW: New products.

PANAYOTOPOULOS: -- new products to the world.

CURNOW: Products people didn't even know they wanted and they needed?

PANAYOTOPOULOS: Absolutely, absolutely.

CURNOW: That's the point, isn't it?

PANAYOTOPOULOS: Well, prior to (inaudible) -- I mean, yes, but when they see them, they will realize just what benefit is brings to them.

CURNOW: It's a different model, isn't it, to try and predict what these kids are going to need or want in 20 years' time or even five (inaudible).

PANAYOTOPOULOS: Yes, absolutely, and that's why we've got to be very in touch with the consumer. Obviously we've spent a lot of money in R&D; we have a lot of scientists in the company who -- consumer research very important, going out there and really understanding and trying to predict for the future.


CURNOW: OK, so that's all from us here in Durban. I'm Robyn Curnow. Please do join us again next week. In the meantime, go online. We're at You can catch up with all of our old interviews and stories there. Goodbye.