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Haiyan Relief Effort; Tracking the Damage; Tourism Plea; Tacloban Anarchy Fears; Philippine President Expresses Climate Change Concerns; World Bank President on Relief; US Airlines Merger; US Markets Down

Aired November 12, 2013 - 16:00   ET



RICHARD QUEST, HOST: The World Gold Council brings to an end the trading day on Wall Street. The closing bell is ringing, it is 4:00 on Tuesday the 12th of November.

Tonight, the huge aid effort in the Philippines. Blocked roads and bad weather, they are hindering distribution. We have the details.

I'll also be joined in this hour by the World Bank president to talk about the long-term challenges and consequences of severe weather events.

And tonight, the world's biggest airline merger gets the go-ahead. Everybody, it seems, becomes American.

I'm Richard Quest. I mean business.

Good evening. It is four days since Typhoon Haiyan slammed into the Philippines and the country is increasingly desperate for lifesaving aid. Officials say the most crucial need now is shelter. There are more than 800,000 people who've been displaced by the super storm. And more than 2 million people need food urgently, nay, desperately.

The US commander in the Philippines is asking for amphibious ships that can carry helicopters, vehicles, and other equipment that will unblock terrain, and equipment to filter water.

In Tacloban City, search and rescue teams are removing dead bodies, which continue to line the streets. The original strategy had been to attend to the living first, but the exposed remains pose a serious health risk to the survivors. And we've heard reports that the stench from the bodies is now overwhelming.

Those who are lucky have fled the area, like the survivors you see here. They've been flown from the ruins of Tacloban to the capital in Manila. US Marines helped the people, many of whom are injured, off the flight.

So, the latest position, it's coming up to morning in the Philippines. Kristie Lu Stout is in Manila. Good morning.

KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: Richard, it's now 5:00 AM in the morning here. It is now officially five days since that storm first made landfall. Remember, it made landfall on Friday at 5:00 AM in the morning.

And that means five days survivors there in the disaster zone have been without the basic essentials: without food, without clean drinking water, without medicine, without shelter. The situation there, as you said, it's getting very, very desperate. The aid effort and the pace of it is only now just starting to pick up, but just a little bit.

We know that navy ships are on the way to the Philippines from the US and the UK, and we also know that a US aircraft carrier, the USS George Washington, is on its way from Hong Kong to come here to help just pick up the pace of the air operation as well.

And there are just so many challenges for the relief effort here. One challenge is the number of planes. We've learned from CNN's Ivan Watson, he's on the ground there in Cebu City, he's been saying that the Philippines air force only has three C130 planes, that's all.

An additional challenge is access, and of course, power. There is no power, and not just Tacloban City, to light up the runway at the airport there, but also Cebu City as well. So we have to wait until daybreak before those air flights can begin again.

Now, when it was daylight, my colleague, Anna Coren, she was able to board a military flight in this exclusive report, to get an idea of the scale of devastation, and she also traveled to where the eye of the storm hit.


ANNA COREN, CNN INTERNATIONAL CORRESPONDENT (voice-over): As the disaster relief operation shifts into overdrive, the roar of engines from C130 Hercules fills the air. We've been given permission to board this military cargo plane carrying vital aid and dozens of soldiers and police to one of the worst-hit areas in the Philippines.

As we fly over the township of Guiuan in Samar province, all we can see is utter devastation. This community was the first to be hit by Super Typhoon Haiyan, and since then, there has been no communication.

While the plan is to conduct a search and rescue mission, these men know all too well, they're likely facing a recovery operation.

COREN (on camera): The police and military on this flight have an enormous job ahead. We have just landed at the air field, and as you can see, all around us, these enormous palm trees have been snapped like twigs. Everything has been flattened.

You can see that the local people over here are standing under a shelter that its roof has been completely ripped off. They have been without supplies now for days. This typhoon hit this point first. This was the first town, really, that was devastated, and these soldiers, they have no idea what they're about to see.

COREN (voice-over): As the troops unload bags of rice and boxes of bottled water, the locals desperately watch on.

UNIDENTIFIED MALE: Food to eat, we want.

UNIDENTIFIED MALE: There is a shortage of food, tents, everything. Everything's gone. So we need help.

COREN: Of the 50,000 people in this town, almost everyone is homeless. Dozens of people have lost their lives, and many more are still missing.

CHRISTOPHER GONZALES, MAYOR OF GUIUAN: I don't know where to start. If you will take a look at our municipality, it was totally hit. Total damage, 100 percent damage.

COREN: With the aid off, the sick and injured are carried onboard, some suffering spinal cord injuries. In less than 20 minutes, the engines start up again, ferrying these traumatized survivors to safety.

Anna Coren, CNN, Guiuan, the Philippines.


STOUT: An exclusive report, there, from my colleague Anna Coren, there, showing us not only where the eye of the storm hit but also the scale of the devastation. And according to the government here in the Philippines, they say over 600,000 people are displaced as a result of this super typhoon. And in terms of the total number of people affected, 9.8 million. Richard, back to you.

QUEST: Now, putting this into perspective, there have been some concerns about the security situation in the Philippines. Obviously, for those who are involved in the rescue operation, that will be a concern. What is the worry?

STOUT: There are a lot of concerns about security because of these reports of looting and lawlessness in the disaster zone, in Leyte province, in Samar province as well. We know that the government of the Philippines on Monday, they sent in special forces into the hard-hit Tacloban City over there just to make sure that there could be law and order there.

But what I heard just a couple hours ago from Richard Gordon, he is the head of the Philippines Red Cross here, he said that he had an aid convoy in Samar province that was hit by a fire fight and by gunfire, and he is now requesting security for all his aid workers on the ground. So, just an additional challenge for the aid relief effort here in the Philippines, Richard.

Just out in Manila it is five minutes past 6:00 in the Philippines. As and when events move on, we will, of course, bring you up to date. But the United Nations today announced humanitarian relief Valerie Amos will visit Tacloban on Wednesday. The UN also pledged $25 million to help victims across the country.

One way, of course, is through trade and through tourism, and the return of tourists, or at least tourists not staying away from the Philippines, is what is being called for by the country and by the tourism industry. It might seem somewhat unusual when we're talking about bringing large amounts of aid into the country that people should also say tourists should not forsake the Philippines.

Well, I spoke to the secretary-general of the UN World Tourism Association -- Organization, Taleb Rifai, and the Philippine tourism industry is telling travelers to come to its islands. I asked the SG what the tourism sector had in mind.


TALEB RIFAI, SECRETARY-GENERAL, UN WORLD TOURISM ORGANIZATION: The travel and tourism industry has asked to encourage people not to stop traveling to the Philippines and to continue to travel as they did for the last months and years.

QUEST: Right, but clearly, obviously, there are some parts of the country, the central Philippines and the parts affected, that one can't and shouldn't travel to, and also, one would hesitate to put pressure on a system, a travel system, that may be feeling the strain from the rescue and recovery efforts.

RIFAI: But that's not the message we're getting from the Philippines. They're telling people please don't stop traveling, and they're telling them we are ready. And I think even if there are some areas, and they're very limited areas, our information are that all the airports are open.

Even if there are some areas that cannot receive some people, people should make the effort to go. It's going for a good cause, and it's also going to make the people there feel that the world is with them. We can't just keep paying them lip service. This is the best way of contributing to the recovery. Turn them back to normalcy as soon as you can.

QUEST: The tourism industry in the Philippines, roughly 8 percent of GDP, give or take, on a different year, but there is great potential, because it is below the world average, and it is a tourism market that requires development and infrastructure and funds.

RIFAI: That is correct, Richard, but the story of the last two years in the Philippines has been a remarkable success story. In the last eight months of 2013, there was an 11 percent growth. The year before, it was 9 percent growth.

So, these people are on their way to making it up as a good and strong destination. And this thing comes to really stand in the way, and we should make every effort to make the efforts that they have done in the last two years worthwhile, and that's precisely why we feel a bit saddened about it, because the -- tourism industry in the Philippines was very strongly on its way up.

QUEST: There was an earthquake, now there has been this super typhoon. Is it difficult, do you think, to try and promote a tourism industry in a country that is experiencing such tremendous natural difficulty at the moment?

RIFAI: My natural answer would be no, Richard, it's not difficult. We've seen this happen in many other countries. We've seen it happen during the tsunami in 2005, a very prime tourism destination like Thailand was hit, and it was remarkable how resilient and how quickly the industry went back to business.

I think it's been done before, it can be done again. It needs a collective will, it needs solidarity, it needs support from the international community.


QUEST: That's the head of the UNWTO, the World Tourism Organization. We know many of you have been inspired to help after seeing the images from the Philippines and CNN can help you connect to the groups that are already providing relief on the ground. Go to our special webpage,, a ready-made pre-screened list if you're looking for somewhere to donate.

"I fear anarchy, and I fear what may come next." Those are the views of those on the ground. We'll talk about that later in the program. QUEST MEANS BUSINESS, good evening.


QUEST: "I fear anarchy in Tacloban City. It's like survival of the fittest." It's the view of one survivor from the typhoon. The piles of rubble are endless. Dead bodies are strewn among the debris, and clean water and food are scarce. CNN's Andrew Stevens, of course, you'll remember from last night's reporting, was there when the typhoon hit and now reports.


ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT (voice-over): More misery on the ground as some relief efforts are halted overnight when yet another storm hit the devastated city of Tacloban.

The strongest typhoon on record struck days ago, leaving behind a humanitarian crisis of unprecedented scope.

UNIDENTIFIED FEMALE: I am the only survivor of the family, and I want to know if they are still alive.

STEVENS: From the sky, miles of destruction as far as the eye can see, while on the ground, rows of lifeless bodies.

UNIDENTIFIED MALE: Only one missing is my eldest daughter. I hope she's alive and OK.

STEVENS: Pews of a church chapel now filled with the dead. Inside, a mother weeps over the loss of her son.

UNIDENTIFIED MALE: I've experienced a lot of typhoons, but this is the worst thing.

STEVENS: The living cover their noses and mouths because the stench is unbearable. As they search for their loved ones, a young student cries for her mother.


STEVENS: "I'm still here in Tacloban," she says, "and I'm still alive."

Hundreds of thousands are now fighting for survival.

UNIDENTIFIED FEMALE: I must go out of this city.

STEVENS: The few hospitals still functioning are overwhelmed, leaving the injured with nowhere to go.


UNIDENTIFIED MALE: The president of the Philippines has declared a state of national calamity.

STEVENS: In need of food and water, residents write signs of inspiration in hope that someone will see.

UNIDENTIFIED FEMALE: We don't have enough water. Even though we are not sure that it is clean and safe, we still drink it, because we need to survive.

STEVENS: The warden of this local city jail says they ran out of food. The inmates threatened a mass breakout as one stands on the roof of the prison, ready to jump. Haiyan victims dangerously take gas as transportation out of the destruction is vital for their survival, thousands uncertain of when aid will reach them.

STEVENS (on camera): And here at the airport, the lights have been turned on for the first time, which means that this now can effectively become a 24-hour operation to get more supplies in. More supplies, which are so desperately needed, not just here, but right across this province.


QUEST: Now, the Philippine President Aquino spoke exclusively to Christiane Amanpour. The president said the world must take action on climate change or be prepared for more disasters like Haiyan.


BENIGNO AQUINO, PRESIDENT OF THE PHILIPPINES: I think it's already an accepted reality for the Filipino community that global climate change is a reality and there should be no debate that it is happening. There are times when it should be raining, suddenly become dry. The dry months suddenly become very, very wet.

For instance, since I assumed office, practically every year when we are supposed to be in the Christmas spirit already where we never had typhoons, we have very, very strong and devastating typhoons like what happened last year.

We're again at the tail end, our wet season is supposed to have been over, and we have this super typhoon. It wreaks havoc, also, on our planting season, wherein our farmers are getting hard-pressed to adjust to this global climate change.

And we all live on one planet. Either we come up with a solution that everybody adheres to and cooperates with or let us be prepared for meet disasters, ever-increasing disasters on a global level.


QUEST: Now, viewers in Europe can watch the rest of President Aquino's interview with our chief international correspondent on "Amanpour" in around 40 minutes' time, that's 10:00 PM in London, 11:00 PM in central Europe.

The World Bank president, Jim Yong Kim, has made and been greatly concerned by these events and the climate change issues. The World Bank president joins me now.

Mr. President, we'll talk about climate change, because it's a crucial part of what we need to discuss, in a moment. First of all, give me an idea of how the World Bank can help in this situation and what your staff and organization are doing.

JIM YONG KIM, PRESIDENT, WORLD BANK: Well, Richard, we're not one of the first responders, and so we don't really engage in the direct humanitarian aid immediately after an event, but we do everything from an assessment of the extent of the losses. We have a lot of technology that helps us to do that. We also are able to trace the money, where it's going and if it's actually getting to the people.

But the bigger issue is that right now, the poor people in that area are in such desperate need for food and water, one of the things that we find is that the poorest become extremely indebted in just trying to respond to a crisis --

QUEST: Right.

KIM: -- like this. So, we make cash available to some of the poorest.

QUEST: This is crucial because in the fullness of time, this operation shifts, doesn't it, Mr. President, from a rescue and recovery operation to a rebuilding operation. And at that point --

KIM: Right.

QUEST: -- the World Bank does have a very real role that you can play for the future.

KIM: For example, Richard, in Aceh, we played a huge role, and more recently, in Haiti, everything from the removal of debris to building back homes are things that we get involved in, that we will be involved in, I think, in this disaster.

One of the things that's important, Richard, you had President Aquino on. The Philippines was one of the leaders in the world in preparing their country for disasters just like this. Since 2009, their spending has gone up 26 percent a year on trying to improve their early detection and response.

They were able to evacuate 500,000 people, but a storm of this severity just far overwhelmed even their efforts --

QUEST: Right.

KIM: -- which are among the best in the world.

QUEST: Now, on this point, because you have spoken previously about the issue of climate change, the necessity of preparation, but also the dangers that we are now facing. Mr. President, is this a classic case where the warnings have been ignored, the chickens are now well and truly home and roosting?

KIM: Well, Richard, it's impossible to connect any single extreme weather event to climate change as a whole. But what the climate scientists have told us is that we should expect the severity and the frequency of these kinds events to go up over time.

Now, we normally refer to category 5 typhoons as once in a lifetime events. We've had two in that region in the last month: Phailin, that hit India, and then now --

QUEST: Right.

KIM: -- Haiyan. So we should stop calling these once in a lifetime events and really think hard about what it will take to prepare developing nations for these kinds of shocks.

QUEST: OK. Now, that is the crux of the debate longer-term, isn't it? That really goes to the heart. So tell me, sir, what does need to be done?

KIM: Well, we know that investing $1 in prevention will save $3 to $4, generally speaking. But we've also looked at very specific systems, like early-warning systems. Early-warning systems can pay back almost thirtyfold --

QUEST: Right.

KIM: -- if you get them in place. There was one in place, but we need to do more. Now, the overall numbers are pretty striking. Right now, we spend about $6 billion a year in responding to these disasters, but if the climate scientists are right that these disasters are going to increase in frequency and intensity, by 2050 it will be a trillion dollars a year.

QUEST: So who --

KIM: So we need to spend now.

QUEST: Well, you were saying, we need to spend now. Who is preventing --

KIM: Right.

QUEST: -- well, preventing is pejorative, let's not go down that road. What is preventing the spend now if the danger is so imminent?

KIM: There is a good example right in front of us in that sense that the Philippines has committed to the spending, but they now need more and they need assistance to really build those disaster risk prevention systems from the rest of the global community.

If you go to the Archipelagos, if you go to the island communities, there is no doubt in the minds of any of those leaders that climate change is real and it's having an impact right now. We're trying to get things moving. There's so many things that we agree on already around climate change, we've just got to take decisive action over the next few years.

QUEST: If your warnings and that of the president of the Philippines are not heeded, bluntly, Mr. President, what do you fear?

KIM: Well, I -- I fear that we're going to have destructive cycle after destructive cycle after destructive cycle, just like we're seeing right now in the Philippines. And the worst part is that the people who are least able to withstand these kind of shocks are going to be facing them.

We had a very direct experience here in the United States, and for a few weeks after Hurricane Sandy, the awareness in this country that we're in right now, Richard, in the United States, to the reality of climate change's impact on these extreme weather events was in our minds, but we seem to have forgotten it.

We've got to get serious about making the investments we need. And we estimate that it's around $50 billion a year that we're going to have to estimate to prepare countries to withstand these kinds of extreme weather events. But that investment will be very well-spent if you think about the trillion a year that we might be spending down the line.

QUEST: President Kim, the president of the World Bank, joining us on QUEST MEANS BUSINESS. Always good to see you, Mr. President. Thank you for taking time in what I now is a busy day --

KIM: Thanks so much, Richard.

QUEST: -- to talk to us this evening. When we come back after the break, the US government has struck a deal. It would allow for the merger of US Airways and American to go ahead.



QUEST: Now, US Airways and American Airlines are free to merge after they reached a settlement with the US Justice Department. In August, the government -- the US government, that is -- filed an anti-trust suit against the airlines that said the merger would restrict competition and drive up prices for consumers on hundreds of routes, AMR and US Airways.

But the two airlines involved were determined to see this through. Now, an agreement has been reached with conditions. The airlines are required to sell 104 slots at Washington's Reagan Airport, National Airport, as it used to be called to those of us in old money.

Those slots will go to low-cost carriers. If they hadn't got rid of the slots at DCA, the airlines would have controlled 69 percent of takeoff and landing slots at this crucial airport. Many of you will be familiar with that left turn as you're about -- or is the right turn? -- or whatever one, as you go out to land and you go over the monuments.

Other divestitures required by the US government: 34 slots at New York's LaGuardia, rights and gates at Boston Logan, Chicago's O'Hare, Dallas Love Field, LAX Los Angeles International, and MIA Miami Airport. All of which the two carriers have to either give up slots, gates, or rights.

Now, Tom Horton, the president and chief exec of American said in this statement, "This agreement allows us to take the final steps in creating the new American Airlines." And he continued, "There's much more work ahead of us, but we're energized by the challenge."

It all happened in the middle of the day. US stocks, though, they retreated from the highs and the records that we saw yesterday. The Dow, the S&P 500, it was a very -- as you can see from the trend, it was a lackluster sort of straight down at lunchtime, a little bit of a recovery towards the end. Fixated investors on the Federal Reserve and when they'll be slowing stimulus programs.

There was one interesting stock: Dish Networks rose 6 percent on stronger earnings. DR Horton, one of the nation's biggest home builders rose almost 5 percent that met expectations.

Now, as we continue our coverage in detail of what's happened in the Philippines and what continues to happen, the people in Tacloban, well, they're desperate. They're waiting for food, for water, for medical treatment. We will talk to the hardest-hit cities in the Philippines in a moment. It's QUEST MEANS BUSINESS.


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

The delivery of aid to the Philippines is moving forward, although progress remains painfully slow. Rainfall is slowly pushing inland to the hardest-hit areas. Health officials are now concerned about the outbreak of disease and they're trying to get medicines and supplies to the central islands.

The World Bank president says we need to spend now in order to help vulnerable countries prepare for shocks like Typhoon Haiyan. Speaking to me on QUEST MEANS BUSINESS a few moments ago, Jim Yong Kim said if nothing is done today, countries like the Philippines may face destructive cycle after destructive cycle.

An Egyptian court has lifted the country's state of emergency. The controversial decree was originally put in place in August to stop protests from boiling over. It was later extended following the crackdown on supporters of the ousted president Mohammed Morsy.

A Costa Concordia crew member is claiming that the ship's captain, Francesco Schettino, did not slip or fall into a lifeboat on the night the ship capsized. Instead, he told an Italian court that Schettino jumped into the lifeboat while passengers and crew remained on the sinking ship.

The US Justice Department is clearing the way for two US airlines to merge, which will create the world's largest carrier. American and US Airways have agreed to sell slots and rights and gates and fulfill conditions set by the government on the grounds of competition.

Tensions are rising in the Philippines five days after the typhoon left a path of death and destruction. The estimated death toll has now been reduced. It's still horrendous -- it's two and a half thousand people, it's believed to be. Initially it was put at 10,000. But even though, thousands more people are injured, two million survivors are desperate for food. Countries around the world are pledging millions of dollars -- hundreds of millions in total in aid. Groups facing enormous challenges as they try to deliver lifesaving supplies to people in isolated areas. It's not just that the supplies -- getting them there -- there's debris that's blocking roads, electricity is out just about everywhere. Tacloban borders the -- bore the brunt of the storm. The city is in ruin. Nick Paton Walsh is there and joins me now.

Nick, good morning to you. I see morning has arrived in Tacloban, and I'm imagining with that just further evidence of the scale that needs to be done.

NICK PATON WALSH, SENIOR INTERNATIONAL CORRESPONDENT WITH CNN: It is quite remarkable, Richard. Dawn really not bringing any hope to the people here at all. We're seeing days of promises, we've seen days of the aid machine slowly working itself into action. We saw a trickle of American military and Philippine Air Force aircraft arriving here just yesterday. But it's not really made a dent in the massive task ahead. I'm at the airport here. There are, I would say, a couple of thousand people trying to use it's their ruins here for some sort of shelter, and you head further down the street and there we went for a couple of hours walk into the town since -- almost an apocalyptic vision. Only concrete structures remaining and very few of those still the same.

People are lighting fires inside those -- the kind of flicker of those flames as they try to keep themselves vaguely warm. A real sense of people having left though as well and the police having moved in to try and restore some sort of security amongst a number of checkpoints. We saw one man who earlier in the day a dog helped find his son buried under the rubble, and just when we arrived, found his daughter but was continuing the grim task with other men searching for bodies there with surgical gloves to try and look for his ex-wife also in the ruins there.

Just bear in mind we're hearing the first noise of a carrier aircraft arriving here bringing some of the supplies. It's possibly Filipino American military here. But a real sense of among people that the aid machine has not swung into action, they feel their government is absent from this crisis, and you really have to -- when you look at this town and its devastation, it's hard to see quite where they can start to rebuild, Richard.

QUEST: Nick, those -- when we talked about these things before -- whether it's Haiti or the tsunami or this -- it does take time to get a massive relief operation underway. Is it your feeling this is just one of those occasions where time is too slow, or is everything being done?

WALSH: I think the issue here really is the conditions. I mean, you're seeing me standing here in one of the multiple showers that keeps blighting this area over the past few days. The roads are tortuous, the weather has been atrocious at sea, planes have failed to land here regularly as well. Now if it's simply an airlift of aid, then that is going to take weeks to even begin to bring in basic provisions for people around this area.

So, I think the desperation increasing hour by hour but with that no real sign of the aid machine is quickening in pace at all. You can hear though I think this is a Philippine military aircraft, the first arrival of the morning. Very noisy, waking people up here, but with that, a slight sense of hope some of them will be able to leave this devastated area on that aircraft to go back to Manila. Richard.

QUEST: Nick Paton Walsh who is in Tacloban this morning. It's just - - (inaudible) half past five in the morning. Jenny Harrison is at the World Weather Center. Jenny, you just may have heard Nick talking about the showers that continue --


QUEST: -- to come across. And yesterday we were being warned of another system that is sort of out there. What can you tell us about current conditions?

HARRISON: Well first of all, Richard, it's typical for this region of course to see showers and to see tropical thunderstorms -- it's very much a tropical climate, particularly further south in the Philippines. But this is a system that has brought the recent heavy rains and the more persistent rains as well. Now it is clearing away. It has been doing that in the last few hours. We're watching it very closely because as it falls out into the warm waters of the South China Sea, this has got all the ingredients to develop into a tropical storm. But it's pushing away from the Philippines. So, that is the better news there.

But you can see in the last few hours as I say the skies are certainly have cleared. It looked fairly clear behind Nick right now, but we will be seeing more rain in the forecast and certainly in the last few hours. Just since late on Monday there has been quite a lot of rain that's come down. Sixty-three millimeters in Surigao, 87 in Davao, and this is the sort of thing of course when you have these very heavy thunderstorms, the rain comes down in a very, very short space of time. None of it good at all of course for anybody on the ground. But in the next couple of days, we will see some more rain.

There's actually quite a heavy band coming through and you can see the time up here, Wednesday on into Thursday. This is local time, so, really, Thursday morning local time. Then once that clears, it is a much clearer, drier picture as we go Friday -- really late Thursday into Friday. But still we've got quite an accumulation to actually pick up. In fact, look at this -- in Tacloban itself, 49 millimeters. That is a substantial amount of rain still to accumulate in the next 48 hours with at that debris it could also lead to some flooding of course in some areas as well.

So this is the forecast that Wednesday into Thursday, more of that rain, more of those thunderstorms. Thursday and Friday it is going to be a lot drier, Richard, but having said that, the temperature is also set to rise. Now, probably in the low 30s -- 31, 32 Celsius. But remember, these temperatures are for the shade. People have no shade there. They have no shelter, so the temperature actually in the sunshine much more likely to be in the mid-30s Celsius. And certainly of course since the rain came down, some of the totals again Haiyan. But believe it or not, as I say, this is an area that sees a lot of rain typically, and in fact the monthly average is Surigao over 330 millimeters, but you'll see here in Maasin, --

QUEST: Jenny.

HARRISON: -- again, 41 millimeters since Monday, and the monthly average has now been met with the rain that came in from Haiyan. But it's a better forecast, Richard, Thursday and Friday.

QUEST: All right -- I just want to jump in there, Jenny, because I just want your assessment. And you may -- because you and I have talked about this over many years, and you may have heard the World Bank president earlier in the program specifically talking about two category five typhoons in this part of world in very short order, and warning about the future effects. From what you're seeing, and you cover this day in and day out -- Pacific, Atlantic all over. Are we seeing a greater ferocity in these storms?

HARRISON: You know, the short answer is it is. This one particular storm as the president -- the many you were talking about from the World Bank -- as he said, you can't take that from this one storm, but you can look at things like the increase in the sea surface temperatures, the fact that the sea was so very warm at a much, much deeper level and also of course the rise in sea level as well. Those two factors, certainly, but when it comes to the Atlantic, if you look at the hurricane season this year, Richard, it's been fairly average but we've not had any major, major storms, so you know -

QUEST: Right.

HARRISON: -- so is it a one off? Is it a sign of something to come? There's not enough data, but the signs are there that we need to be taking heed of some of these facts that we do know for sure.

QUEST: Jenny, always good to talk to you on these sort of things. You and I have been going over these fences over more than once -


QUEST: -- and it's that perspective is what's so crucial for us. This evening, Jenny Harrison, at the World Weather Center. When we come back, we'll change directions completely. Nissan -- now Nissan is changing gears in the Americas and Nissan's choosing Mexico as a main production hub. You would expect and you'd be right to hear from the chief executive of Nissan.


QUEST: Now, Nissan is betting on Mexico as a key to its global strategy. It's opened a plant in Aguascalientes that will produce 175,000 cars a year. And it turns the city into one of Nissan's largest production hubs in North America. I asked Nissan's chief executive Carlos Ghosn what his goals were for the new plant.

CARLOS GHOSN, CEO, RENAULT-NISSAN: We want to report the development of our Mexican operation, we are already leader in Mexico. Our leadership is based on 25 percent market share, but we want to continue to grow and today we (lock) our product. So this capacity's first to unlock the potential in Mexico, and also (inaudible) the United States, you know we're going to be producing the Sentra in this -- in this plant. And particularly, to report the development of the sales of the Sentra in the U.S.

QUEST: These cars will be exported throughout the NAFTA region and throughout the continent, is that correct?

GHOSN: Exactly. The main -- I mean the first objective is report (the surge) in Mexico, the second objective is report the sales of Sentra in the United States and then after this there will be also some export to South America. I would say this plant is kind of a plant of the Americas based in Mexico, because it will be supporting and supplying Mexico, the United States, Canada and the South American continent.

QUEST: Is Mexico becoming a car -- a major regional production center because of expertise or because it's a low-cost production center? Which is it?

GHOSN: Building cars in Mexico becomes an asset and this is due to the fact that not only the cost of salary is moderate, but particularly you have a pro-business, you know, federal government, you have a pro-business local government, you have a lot of development of infrastructure -- a lot of good things going on in Mexico to favor the competitiveness of Mexico. The bottom line is that, you know, we are shifting all imports from all the regions of the United States to locate them in Mexico. So obviously, just to give you an idea that in our plan is to have one million cars produced in Mexico. From the one million cars produced in Mexico, our forecast is that 30 percent of that will be dedicated to the Mexican market, and 700,000 cars will be exported to the United States, to Canada and to the Americas -- to the rest of the Americas.

QUEST: If you had to choose in production terms between producing in Asia, Europe, in the Americas, where now is the most favorable environment for you to produce?

GHOSN: Well, without any doubt today, in the present circumstances, Mexico becomes number one. You know, we have at the level of the lines, we have more than 50 plants in probably 30 countries in the world. And we benchmark every year -- we look at the performance of each plant in term of quality, in term of cost and in term of responsiveness -- being on time and be able to respond to market variation. You know, in this classification today, the Mexican plants come at the top. That mean they are competing against China, they're competing in Japan, they're competing in the United States and they are competing very well. So, I would say today Mexico is really a very good place if you want to have a very

QUEST: Right.

GHOSN: -- competitive capacity. Obviously it's mainly for the Americas, because if not, logistical costs become a handicap. But for the Americas, it's one of the best places to be.

QUEST: Coming up next, shale gas and the revolution. We'll talk about the rise of U.S. global energy and the director of the International Energy Agency talks about this report in a moment.


QUEST: The United States will knock Saudi Arabia off its perch as the world's top energy producer by 2015. That's the finding of the International Energy Agency's latest report. I spoke to the executive director of the IEA who says U.S. shale gas boom -- well, it's certainly important -- just don't expect it to happen everywhere.

MARIA VAN DER HOEVEN, EXECUTIVE DIRECTOR, IEA: What he mentioned is that that the shale revolution in gas and in oil is very, very significant. Not only in the United States but maybe everywhere -- maybe somewhere else as well. But it's not something that can be replicated very easily. The other thing is that although because of this (inaudible) the United States and the situation in the United States, there will be a need to import less from the -- from Saudi Arabia for instance -- but nevertheless, the (thirst) for energy and especially the (thirst) for oil is tremendous.

QUEST: Does the shale revolution change the fundamental dynamics of the players in the industry?

VAN DER HOEVEN: It changes quite a lot of things, you know, because it adds, it adds a lot of new resources in oil and in gas and what it adds as well is that in the -- in future of the United States and North America, will be more and more self-sufficient. And that's a fundamental alteration of course. But what we also can see, is what I mentioned before, there are new players coming into this market -- for instance, Brazil with its free- salt resources. Other gas players like the -- (inaudible) some countries in Africa. But it changes quite something, yes, that's true.

QUEST: Right, but I'm having difficulty understanding from you whether you think it's a game changer -


QUEST: -- or do you believe -- or do you believe that OPEC remains as the principal player collectively of the industry?

VAN DER HOEVEN: It's a game changer, definitely. But OPEC will remain quite important because as I mentioned before it will change the game in the United States because there won't be -- there will be the less need of -- there will be a less need of imports. But nevertheless, the rest of the world -- and that's why I would like to mention that as well -- the rest of the world will be in need of the crudes that comes from Saudi Arabia and from OPEC countries. Because as you know, the -- as far as I know until now -- the United States do not have any plans to export their crude.

QUEST: So any idea that OPEC ceases to be a fundamental strategic player or indeed some would say has the oil market very firmly in its grasp is wrong?

VAN DER HOEVEN: Well, you can't do without OPEC oil. Let's make that very, very clear, and at the same time, what we can see because of this technology, because of high oil prices, new resources are coming to market like the (lycophyte) oil in the United States. But you can't do without OPEC oil, you can't do with Saudi Arabia because you can't do with the Middle East. What is happening is that the only source of more -- well, how should I put it? -- easy to access oil, the other (source) that are more easy to access -- are in Iraq, are in Saudi Arabia. Spare capacity is in Saudi Arabia.

QUEST: Let's stay with oil and gas for the moment because leaders of the industry are in Abu Dhabi right now discussing the future of world energy. Our correspondent John Defterios is at Adipec, and he sat down with the group, CEO of BP, that of course is Bob Dudley.


JOHN DEFTERIOS, CNN'S EMERGING MARKETS EDITOR AND ANCHOR OF GLOBAL EXCHANGE: It's the oldest event of its kind in the region that has the most proven reserves. Adipec though has a particularly large turnout this year because it's the first time the UAE has opened up the oil and gas sector to concessions in 70 years. All the talk on the ground is the influence of the oil and gas shale revolution in the United States. The CEO of BP, Bob Dudley, suggests that some of the projections leading up to 2018 are too ambitious.

BOB DUDLEY, CEO, BP: People are using that figure of six million barrels a day out of North America from shale. It's gone well for the last five years, and I think the question is shale, is shale is shale? There's some really good shale, there's some shale that's still questionable. But to be able to get to that, shale oil wells decline very fast. The amount of activity to do that will be enormous. So I think to me it's a question mark whether that activity can ramp up to that scale in North America. People are looking at the trends and drawing the maps straight up, and I think actually the activity level may mean we need to be a little bit more tempered on this growth rate.

DEFTERIOS: We're sitting in the Middle East here, and when you look at the region right now, do you find it still tension-filled and we're not past the worst of the security situations?

DUDLEY: Well, you have to be very long-term in energy. You make big bets and make investments that sometimes don't even produce anything for ten years. We've been working in Egypt for 50 years, we've gone through ups and downs, and we are deeply committed to working -- continuing to work -- and build projects in Egypt. We work in Iraq. The Syrian tensions though have moved across the region, as well as the events in North Africa that we had in Algeria as a company and of course Libya. So I would say the tension is palpable across the region in a way that I haven't seen it in many years.

DEFTERIOS: Iraq you have concerns about. They wanted to get to eight million barrels a day by the end of the decade. They've come down and said more realistically probably around six, right? But your concerns are what?

DUDLEY: What I would say is that the country's doing everything it can to move its oil production. A lot of it is they've got to de- bottleneck the export infrastructure. I mean, literally it's bottled up there. I think Iraq still has a lot of potential. The terms have to be more economic if they're going to attract a lot more foreign investment, and we'll see.

DEFTERIOS: BP has its roots in Iran as a founding company there. Do you think this time next year you'll get a green light or the other ICOs'll get the green light to go in and start producing in Iran again?

DUDLEY: Iran has a lot of resources. The production has been curtailed. I think they've not been exposed to many of the new technologies in the oil and gas industry, and so I think there's a lot of potential there. But I think as any complicated political process, let's take our time and watch this carefully.

DEFTERIOS: We've seen $100 a barrel for three years if we completed in 2013 -- this is the new floor?

DUDLEY: I think in a peaceful world you could see given supply and demand today, the oil price gliding down, you know, 80 or something. But it's not a peaceful world. There's a lot of disruption out there. So, $100 does seem like a reasonable point. While we evaluate our projects at $80 a barrel, before we make the big investments, $100 does feel like it's the new norm.

DEFTERIOS: Bob Dudley of BP looking at the inherent risk in the Middle East and the pricing center areas (ph) we still see today. John Defterios, CNN Abu Dhabi.

QUEST: And when we come back, a "Profitable Moment" and we'll consider the views of (inaudible).




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QUEST: Tonight's "Profitable Moment." On the show tonight you heard two presidents. The president of the Philippines, President Aquino, who made the point very clearly that something needed to be done and that his country could not continue to bear the sort of costs and brutality of the events that they've seen in recent days. And then the president of the World Bank who reminded us it's everybody's business and money needed to be spent. He put it this way -- President Kim -- $50 billion spent each year now to put things right versus a trillion dollars from the devastation of the sort we've seen. Unfortunately, whilst we never count dollars before bodies and death and destruction, ultimately this will come down to an issue of how much society is prepared to spend to help put this right. It's a question of -- it's a question of sustainability and is a question of survivability. And it's a question probably of economics. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, hope it's profitable. I'll see you tomorrow.