you got used to that voice? >> we all stammer. it's bizarre how contagious a stammer is. what happens to me most of the time is piers morgan, can i have your autograph? i'm zain verjee in london. protests are expected to intensify across egypt today despite police crackdowns. people continue pressing for president mubarak to step down. the muslim brotherhood says its members will join today. the government trying to end the protests cutting internet service. nelson mandela is in

hospital. his health was the subject of speculation since wednesday. the deputy vice president's reassuring people he is not in any danger. we are expecting an update in the condition in around 19 minutes. spectacular volcanic eruption in japan. mt. shin-moe fired into the air. it is still smoking. so far, no injuries have been reported. the volcano's last eruption was back in july. a miami teenager admits he put a piano in biscaine bay with the help of his friends. it went viral and pawned theories of how it got there. nicklas harrington said he was trying to build up the odd portfolio for a college application. those are the headlines. i'm zain verjee. "world business today" starts now.

hello and welcome to "world business today." i'm pauline chu. >> for cnn london i'm charles hodson. >> coming to you live from the world economic forum in davos, i'm john defterios. egypt is on edge as the country reels from the biggest anti-government uprising in decades. spain's job lines just got longer as unemployment reaches 20% again. and as inflation pushes commodity prices higher, i'll ask opec's secretary general if it plans to pump out more oil. the world economic forum in davos in the third day and getting their teeth into big issues. in the next hour, they'll hear from british prime minister cameron and u.s. treasury secretary timothy geithner. many european countries struggle with crippling debt.

some economists say the currency is in question and question how many more bailouts the euro zone can handle. they have defenders, rallying governments around the single currency. he spoke to my colleague richard quest. >> more needs to be done on an individual level, all european countries, all european countries have to do the job. they're all committed to do the job and extraordinarily opportunity they're ahead of the curve. on top of that we call for a very significant reinforcing of governments. >> greek prime minister whose country at the center of europe's sovereign debt crisis says governments won't give up on the euro. >> think think some months ago where there was a discussion of

two euros or a break-up, i think that discussion ended and we have all the strong will to defend the euro and do what is necessary to defend the euro. >> key to europe's fortunes is the price of oil which is high at the moment. coming up, talking to the opec secretary-general. stay tuned for that. well, let's hear how european stock markets are reacting after very, very scant gains on the dow overnight. we are actually seeing profit taking off by about two thirds of a percent in the case of the london ftse. lower metal prices hitting. paris cac off by a third of a percent. disappointing news on a breast cancer drug and some hopes definitely dashed there and off by more than 4% last times i looked and zurich smi hit hard

in thursday's trading edging down slightly. dax led up by bmx. goldman sachs put it on a buy list. have a look at the leading index in spain. so here's the madrid ibex 35. investors looking for signs of recover write in that country. the unemployment numbers show that 20.3% of spaniards are out of work. that can't be a surprise because we are seeing the market moving up as against other european markets. spanish government hanging tough, raising the retirement age and cutting back on pensions to try to shore up the country's finances. and by the way, that is a rise of half a percentage point from the third quarter unemployment which we saw edge down below 20%. now, in terms of the euro, we have seen similar determination

to that of the french president. he promised that he would never give up on the euro, even though economists raised concerns that europe's debt crisis could spend the end of the single currency. >> translator: never. and listen to me carefully here. never will we turn our backs on the euro. we will never drop the euro or abandon the euro. >> so for a currency that some people are saying won't be around for much longer, it is doing quite well, risen over 3% in the dollar in the past month. what's behind that is the fact that the icbc might be forced to raise interest rates in the euro zone. inflationary pressures building up there. it's pretty flat against the greenback today at 1.369. dollar actually gaining against

the currencies. also against the dollar and the yen down just a shade 82.65. pauline? the yen plunged a little bit and recovered in the session and here in asia, most of the markets finished lower led by tokyo. the nikkei lost more than 1% by the close, the first opportunity for investors to react to japan's recent sovereign debt downgrade. standard & poor's cut the rating saying japan will most likely struggle with the fiscal deficit for several more years. the hang seng lost. the shanghai composite gained slightly, about four points despite a lagging performance of the property stocks and a new rez didn residential tax started today.

half a percent to 1% for luxury homes as china tries to rein in soaring real estate prices and speculation. the u.s. markets managed to tick higher on thursday, pushing the dow and the s&p to the highest levels since the summer of 2008. the dow just into the positive range but basically flat there. earlier in the session it did hit the 12,000 mark again. the nasdaq gained more than half a percent an the s&p 500 added a quarter of 1%. tensions are ramping up in egypt as police and protesters prepare for what's expected to be the biggest day of demonstrations there yet. egypt has been rocked by violent, anti-government protests since tuesday. many people are angry over president hosni mubarak's economic policy. trading on egypt's benchmark exchange suspended briefly on thursday after the cairo market sank for a second straight day,

lost more than 10% by the close and it's down 20% for the year. the market, of course, is closed on fridays. well, the egyptian nobel reform activist returned to egypt to take part in protests today. a facebook group puts the total number of sbepded participants at more than 80,000. frederick pleitgren is following it all from cairo. we understand the government is doing what it can to cut communications and stop the protests and arrested large numbers of people. right? >> reporter: certainly has, charles. arrested one of the leaders of one of the opposition groups here in the country, muslim brotherhood. we learned that police raided the home around 2:30 a.m. this morning and arrested the gentleman and not so far derailed the plans of the muslim brotherhood to participate it

says in the protests that are going to be happening today. looking around cairo there's a lot of police movement. you can see a lot of vans with riot police in them already moving down the streets seemingly get ready for what many believe to be a big and possibly also a very violent day here in this country. right now it's still fairly early here. you don't have gathering here. we are looking for an hour, after friday prayers, we believe the demonstrations start in central cairo and the egyptian government trying to also seemingly stop communications here between the protesters. we are seeing a lot of internet access blocked. 3g network appears to be blocked. one small provider of internet still up which is still actually able to function. that's mostly used by the banking system here in this country. otherwise it is difficult and the past couple of minutes we have been seeing cell phone network deteriorate considerably so it's quite difficult,

charles. >> what do we hear about the leadership? as far as we know, where are mubarak? presumably he is still in cairo. are we hearing from the government at all? >> reporter: as far as we know, yesterday, hosni mubarak was in sham el shake. his son was here in cairo and also a press conference yesterday by the ruling party here in cairo and sort of said that it was willing to talk to some of the protesters, but also, felt that most of these protests were coming from a couple of what they call troublemakers and didn't seem as though the government were willing to negotiate with these people and interesting to see how it pans out today, how heavy handed the security forces are going to be on the street. we'll see that later as the day progresses, charles. >> okay, fred. joining us there live from the nile, actually, hazy nile there in cairo. many thanks to you.

john? the rising cost of commodities is a major focus and concern here at the world economic forum this week in davos. the worry is rising commodity prices undermine the global economic recovery and the head of kuwait's petroleum corporation said that 0 pem may have to raise prices to rein in prices although it just pulled back the price of crude reach two weeks ago. the opec secretary-general joins me live here in davos. look at the markets and the plans for opec. good to see you again. thank you for joining us on the program. we are entering an unusual phase where in the front end of a recovery, although the demand from china is strong, prices are above $90 a barrel. is this the -- can i call it a new normal for prices? >> you know, now we are talking about brent. brent is not usually -- doesn't represent the crude oil.

we used -- we used the wti. now we are coming back to brent. i don't know why you are talking about brent. >> okay. but -- >> brent is $90. so brent does not represent the whole crude. >> so your view is to still use wti, west texas, as a benchmark? >> yeah. >> even sew, secretary-general, a high price at the beginning of a recovery, a fairly sluggish recovery in the united states and europe. wouldn't you say that's a fairly high price? >> no. we are producing every day. we have 6 million barrel a day excess capacity. we have a stock of 60 days. so, we have even if loading storage of 62 million barrel, so there is a lot of oil in the market. there is no shortage. and this is my -- this is our

problem at opec because the ministers there are asking, but we don't see any shortage. opec interfere when there's a shortage. >> okay. >> physical shortage in the market. interfere in 2004, 2005. when we see there is real shortage. we don't see it unfortunately. >> let me clarify if i can. >> no. when we see a shortage we will act. >> very good. you are not looking at the price so much, that won't prompt you to put more production on the market but the five-year running advantage and there's oil in the market to clarify what you're saying. >> excess capacity and stocks, 60 days. 60 days is a lot of days. usually 53 days average. that's why i'm saying there's no shortage whatsoever. >> the international energy agency said that the price could undermine the recovery in the

g-7 or the industrialized countries do. you agree with that premise? >> you cannot look at the barrel today and see 85 or 85 or 86. we have a high price, let us open the valves. to open the valves you need two, three months and when you open the valves and there is nobody's buying it so you are reading problems. you cannot go back and close it. we have to see a real shortage in the market. >> okay. one final question because we're a little bit short on time. is it the low interest rate environment right now prompting the hedge fund money into the commodity money and driving 10% to 15% on the price of oil today would you say? >> yes. some of it. because you have the stimulus packages. money is in the banks. people go to the banks. borrow money without any interest whatsoever. >> right. >> and then instead of investing in very -- in a very beneficial product that will take some people from unemployment instead they go to commodities and they

buy any commodities. you know? >> okay. one final question for you. daily demand up 2.7 million barrels a day, high for 2010. what's your best estimate at this stage and the research within opec for daily demand growth for the year? >> for 2011 -- forget now about 2010. >> of course. >> let's say about 2011. 2011 our forecast increase. we are very close as far as increase in demand. >> okay. so decent. >> we are ready. we have excess capacity. if the market need it, we will, for sure. >> okay. good to see you again. >> thank you. >> thank you for joining us on the program. the political unrest is a concern here at davos. i'll speak about foreign investment and what reforms might help ensure long-term stability. while a body in motion tends to stay in motion.

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people attending the world economic forum here in davos, switzerland, are watching the huge protests. demonstrations appear to be about economics. millions of young people are without work, and therefore, right now without hope. what's the prospect for foreign investment and reform to encourage jobs and growth in the future? i'm joined by director of the middle east and central asia for the international monetary fund. thank you for joining us. >> thank you, john. >> i want an honest assessment. even a personal assessment of what you see unfolding right now in north africa. you have been a proponent of reforms for years, asking to reform quickly, strublcturally r job growth here. is that the reason it's moving so fast? >> i think the condition of each country is different, complicated. i think the common feature running through them is in all of these countries growth has

been too slow to provide enough jobs for a young and rapidly-growing population. young people get out of school, university, they come into the marketplace, they can't find jobs. they can't see a future. the key for a lot of countries to accelerate the process of improving the business environment, that will bring in foreign investment and at the same time to look and see whether the skill set they're giving their young people in the schools and colleges is appropriate anymore. a lot of these kids were trained to do public sector jobs. >> this is a discussion for a long, long time. it's a mismatch on the education system into the jobs but let's take both tunisia and egypt as examples. five, seven, ten years of reforms, some say we didn't go far enough. we reform, reform, but don't touch me at the board room level's, the president's level. is that fair? >> i think that's right. in egypt, for example, they've

gone through in the mid-2004, '05 set of reforms and see the effect. investment picking up. just not fast enough. tunisia, same thing. the macronumbers look good. underneath and start looking at the business environment, you discover that it's not the same for everybody to start up a business. if you're connected, you can get your business going faster. i think the next phase is really to generalize the process of reform to make sure you or i or anybody else can start up a business. make sure the banks are providing investment to everyone. foreign investment to come in and invest and look at barriers to trade across the countries of the region. >> okay. we don't have a huge amount of time here. honest assessment. what happens next with the changes going on, can they keep up the economic reforms and reach those at the bottom of the ladder, 20%, sometimes 40% that

are still in poverty, if you have this much chaos at the top level with the change? >> i think there is going to be a period of transition right now and no doubt they'll have an impact also on economic growth for the year and probably a little bit lower than the 4.5, 5 you're projecting but i think the imperative to accelerate reforms because without that the problem won't go away. >> good to see you. >> thanks. >> thank you for joining us on the program. we're going to turn our focus back to the energy sector again. i'll be taking closer look at the sector with chairman of oil giant shell about the competition and his expansion plans for the near future. stay with us.

welcome back to "world business today" live on cnn. >> earlier on in the show we saw spain's latest unemployment numbers up by half a percentage

point and more to 20.3% overall. so that makes it obviously a huge problem as far as the economy is concerned. cnn's al goodman is on the line from madrid. this is quite a serious setback. i mean, the labor market is bad in spain, very bad, and getting worse, al. >> reporter: indeed, charles. there was a bit of a breather in the third quarter of 2010 when the rate dipped below 10% for the first time in the crisis, but now, it's back in force. nearly 4.7 million unemployed, highest absolute number of unemployed seen apparently since records started being kept at the spain's transition to democracy in 1976. in terms of the rate, 20.3% rate, that's highest in 13 years. very bad news for the socialist government. now, this comes at a time when there has been relatively good news this week for the government and the unions and overall the feeling in spain as the government and the unions

reached a deal and the cabinet at this hour is approving this as a decree law going to parliament to raise the retirement age from the current 65 to 67, less pensions for people down the road and seen as something that is showing the world that spain is trying to get very serious about their finances. also, the government has put new requirements in for the savings banks which have been troubled. they have been a lot of local political control at the savings banks requiring them to have a lot more assets, a lot more capital and seen as another sign to the world, to the financial markets internationally spain trying to get serious. those two good pieces of news for the government generally and then this horrible news on the job front. charles? >> okay. al goodman joining us there live from madrid, thank you very much. stubbornly high unemployment plaguing the united states and a new study shows just how damaging it's been for americans

out of work. it found that more than 30% of the 14 million americans who were unemployed in december have been jobless for more than a year now. that's more than 4 million people, 25% increase over the previous year. still ahead, from green power to black gold, the talk in davos is heavy on energy. coming up, chairman weighs in. the cost of fueling up hit airlines where it hurts last year. as part of the coverage of the new reality, what airlines can expect in 2011.

welcome back to "world business today." i'm pauline chu. >> from the world economic forum in davos, i'm charles defterios. >> i'm charles hodson. we are seeing a little bit of edging back there, particularly in the case of london ftse off led down by the minus lower metal prices. par cac 40 off. a breast cancer drug is clobbering the stock off by 4%. zurich smi after a drubing and certainly selling on thursday, a little bit -- faring better, off

very slightly and same story for the xetra dax. here in asia, most of the markets finished lower led by tokyo. the nikkei lost more than 1% by the close. standard & poor's cut japan's rating to aa minus on thursday saying japan most likely will struggle with the fiscal deficit for several more years. the hang seng and asx 200 lost nearly 1%. the shanghai composite gained slightly despite a lagging performance by some property stocks. and let's go now to john again in davos. japan made big news by the downgrade by standard & poor's. the yen fell and then regained a little bit s. this something they're talking about there at davos? >> not particularly, actually, pauline. traditionally, as charles knows, there's not a big presence here

by the japanese delegation at davos. for example, from asia, it is the south koreans and chinese dominating even though there's not a lot chinese government delegations but i would put it in another category right now, that is, this financial repression discussion within the g-7 of a long period of sluggish growth that lost decade we have talked about in japan over the last ten years likely to continue with the debt levels we see both in the u.s. and europe. well, here in davos, i have been able to pry peter vosser away to talk about the direction of the energy and oil sector. he is the chief executive officer of royal dutch shell. i started by asking him something that's a big conversation in the halls of davos this year, the so-called new normal with prices around $90 a barrel. >> there will be a lot of supply coming on next few years. we have still opec production shut in but on the other side, you are right.

likely china and india driving the demand side. i think it's too early to say what's the new norm. i think that's the range where i see it long term. >> $100 a barrel in 2012. we see a full stage recovery unrealistic then is what you're saying? >> no. i think it can happen but that's not the way we look at long-term forecasts in our business but it can happen depending really on how fast the recovery will go in these energy-hungry emerging markets at this stage. >> it's fascinating. during the recession you really revved up spending, $30 billion of capital investment to be ready. how's that positioned you with additional production coming online? >> very well. we will actually have 13 projects comen on stream in 2010 and '11 delivering 11% growth compared to '09 in terms of production. we are really going into the harvesting period now which

positions us well to delivering to our demands, gross, which is going to come. >> what are the new frontiers for you? going into brazil, offshore, west africa, the field in kazzing stan, a challenge and a gigantic field and where are you looking for new finds? >> for new finds, i would say australia is key for us. we are very good expirations success there. in the gulf of mexico, we have good expo ration success and obviously you mentioned some areas but qatar for us is very important. we have two major projects coming on stream there. we have got good prospects there. >> there's an interesting trend emerging right now. the national oil companies like a petro nos, petro china, the major players. when do we get to point to compete head to head with you?

right now they are partners. when will they nudge you out because they have their own cash? >> they're competitors today. that's fine. we are used to competing in the market so through our technology, innovation, our brand we can compete but we have more than 20 of those partnerships already. some very international partnerships, as well. an enthis has been part of the business model for last 20 years so i think it is what it is and we'll just deal with it. >> peter voser there, the boss of shell. and one wonders, actually, how long it will be before the ripples from tunisia and now egypt affect the oil company's operations in the far east. when's the buzz if you like on egypt? does davos think that mubarak is on his way out, john? >> well, i tell you, it's on a knife edge, charles, to be candid. one thing we didn't talk about with the protests down there, this government is very

predictable for business. the current president and this discussion of a transition to his son, this was the plan for the business community investing in the market of 80 million consumers with growth of 5% to 6% and now as we discussed on richard's show last night, you speak to some bankers saying it's a coin toss. we don't know which way it will go. today will be an indicator of the public unrest and the public feeling well beyond cairo. people coming from the suburbs on this friday. a lot to talk about and following "world business today" we will have the central bank governor of saudi arabia, tony blair and a full panel of business leaders looking at egypt, tunisia and the middle east and north africa. charles? >> john, thank you very much. john defterios, live there in davos, of course. in davos this week, the focus on organizers call the new reality, that's the name of the annual meeting. for the airline industry, could

mean the rising cost of doing business from in-flight meals to fueling up. as part of the continuing davos coverage, we look at what airlines can expect in 2011. >> reporter: the end is in sight but there is still a long way to go before the aviation industry can start to celebrate and emerge stronger. the last two years have been difficult riding out the economic storm that saw airlines spiral into debt. keeping costs down and saving wherever possible has paid off. profits in 2010 beat expectations but the total of $15.1 billion. even so, there's a forecast that profits this year slip to 9.1 billion. >> good numbers but not enough for an industry that has revenues of $560 billion. this is 2% margin.

it's peanuts. we are not a charity association. you have to make money. and what do we see in front of us? some clouds. >> reporter: the biggest threat to economic recovery is rising fuel prices. hedging can be a useful tool. the center of global energy services recommends a rolling hedge of 30% to 40%. >> the saudis are getting nervous from what we understand about the prospects of the global economy with $95 oil the plus and rising to 100. they're nervous. they don't really need the price to go that high to fulfill their obligations. this year. they might release more oil and allow the price to drift down again to i think around $80 a barrel. don't over hedge because you might get a pleasant surprise as it goes -- as the price goes down. >> reporter: one sure bet is there's safety and profitability in numbers.

we'll see more consolidation this year as the survival strategy where a smaller or struggling airline can slot into a bigger family. >> what's really exciting is we have now three big, heavyweights in europe. lufthansa, the largest, of course, sweeping up the smaller carriers that it can. air france, klm and ba with i beer yeah to increase the scale and muscle. you need to have fewer, bigger airlines if the aviation industry is going to be in sensible shape for the future. >> reporter: after a two-year hiatus, there is optimism that airline operating cash flows will come full circle. and get back to pre-crisis levels by the third quarter. with passenger demand steadily rising, this may be the break the industry's been hoping for. cnn, london. and that's it from davos for

the time being but more from industry leaders and in a few hours paul walsh joins us "world business today" at 9:00 a.m. if new york. 10:00 p.m. here in hong kong. and bill and melinda gates talk to quest means business. that's 8:00 p.m. in berlin, 7:00 p.m. watching from london. now before we wrap things up, a quick preview of what's coming up later on on cnn. taiwan-based next media's animated spin on real news events are a viral sensation on the internet. now cnn's christie lou stout and next stream get the animation creation. they tell us why and he does it on "news stream" here on cnn. and that is all for "world business today." thank you for watching. i'm pauline chu. >> and i'm charles hodson. stay with cnn for "marketplace

middle east." we'll here from the country's minister for trade about the desperate need for new jobs and that is next.

this week a special edition of "marketplace middle east." sand to snow. we head from riyadh to davos. look at the region's new realities as youth unemployment and rising prices take center stage.

the start of 2011 has been a rocky one in the middle east. it was debated both in riyadh and here in davos. high unemployment and rising food prices have changed the game and let's not forget about palestine and lebanon. i sat down with the central bank governor of the region's largest economy, saudi arabia. we talked about managing through these issues. >> this is not the first problem that arises in our region. there was the iran-iraq war. there was the invasion of kuwait. there was the liberation of kuwait. there was the invasion of iraq. we have had more than our fair share of problems but if you watch what happened to the saudi economy and its stability, continuing to grow, continuing to address all of the needs of its population and its investors, we have been doing very well. >> so to be clear, you don't see a spillover of the events of north africa reaching in?

>> absolutely not. >> how do you stave off quite fast rising prices particularly for food in the gulf states and also the broader middle east? when does it become a challenge that you're behind the curve? >> no, we're not behind the curve. the inflation, we have about 5.4% now, dominated by food and housing rental. food as you well know is a very global problem now. we have very significantly rising demand for food and emerging economies like india and china with huge populations while the supply response hasn't been as great, particularly because of the climatic changes and the harvest problems that we have seen. the source of this inflation is not monetary and, therefore, all nations will have to address it and saudi arabia in the past there's been a living adjustment in the wages and salaries to

compensate for that. and this is what is being done for this. but what i want to emphasize, it is not really a monetary phenomenon in our case at least. >> it's quite acute in north africa and this is one factor behind the protests that we have seen over the last two weeks, in some cases double-digit food inflation. that is a danger in the neighborhood, is it snot. >> food supply chain and the logistics of getting food from the farms to the consumers is a major challenge, especially in heavily populated countries like india, if you will. and therefore, i think the world would be well advised to concentrate on the supply response. >> rising prices not only a challenge in the middle east. french president sarkozy put it on the agenda here in davos saying we must eliminate the wild swing in prices or face

further riots and even stunted growth. i sat down with the middle east envoy tony blair and talked to him about all the pressure that is are building in the region. >> the way the world works today, particularly with new media and mass communication, is that things happen very, very fast. i think the important thing always, though, is to see where's it going to end up? we need a steady process of change and modernization. we need, obviously, a resolution that the middle east peace process and the israel-palestine issue but to happen in a way that pushes away the extremists. >> if i say this, you almost can't have a steady flow because of the tapping in to social media and a younger generation. is this leadership in the region leaddy for the rapid change? >> some ways not probably but i think what's interesting is how the rest of us can partner that process of change. the fact that the old order is changing in many countries doesn't mean that what replaces it is necessarily the right

thing unless we manage that process properly. the key thing of the region, people in the west don't understand it, population's set to double in the next 25 or 30 years. now, that young population, that's a quite different situation of europe or the u.s., i guess, how are they going to view this world? are they going to say, right here is our opportunity for greater freedom, greater openness, greater respect? you know, we want to mix with those of other nations, other faiths, or do they get take sboon an alternative route that's more closed? i think that's the challenge. >> not a great start to 2011. the government in lebanon collapsed, stalled talks on palestine and israel and then iran at a stalemate walking away from the party. this is a huge investment concern for outsiders that are looking at the region and the fast growth. but also, a security concern. how do you get it back on track? >> yep. and it's true that some of the indicators, the beginning of 2011, haven't been great.

on the other hand, i tell you what i notice everywhere in the region. there is a new and younger generation that are open minded, that do essentially see there is a fantastic opportunity for the arab and for the muslim world in what is happening and want to embrace it. >> political intabstability to new political reality after the crisis. we have a roundtable when we continue from davos. a man can only try... and try...and try. [ male announcer ] honey nut cheerios tastes great and can help lower cholesterol. bee happy. bee healthy. ♪

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price rises. leads to inflation. less economic growth and social and political instability. >> the echos of the unrest heard in the arab world and the halls of world economic forum here in davos. from algeria to jordan to yemen,

rising unemployment and high food prices have led to increased incontent. in a special roundtable with those attending in riyadh and davos, we talked about navigating the two, crucial issues. >> i feel that the sector is a massive engine for growth, for employment, for taking away some of the imbalances that currently exist. and most important of all, taking advantage of something that we in the arab world have not yet picked up on, which is that we are a region of 350 million people, number one. number two, the only similarity that we actually have is language. and we're not exploiting that properly enough. if economic barriers between the countries of the region come down, if businesses are allowed to trade across them, then i think the growth in employment, the growth in the creation of a single market of 350 million people is greater than the population of the united states

of america. >> do we need to accelerate cooperation within the arab world to avoid the spillover effects of the rising costs of food and a restless population of youth who don't have job opportunities? >> this region has one of the lowest intertrade between countries in the world and continues to be. it's been and continues to be. and i think the key thing is how you get labor and capital to migrate freely between them. >> tunisia is a model reformer on the economic tools that it had. it did open up to textiles. it did open up the farm sector and opened the tourism and technology sectors but it didn't trickle down. is that the challenge that we're talking about here? >> everybody has potential to benefit from freer trade, freer investment and it doesn't guarantee, though, that those benefits will trickle down immediately. there are countless examples around the world where they don't trickle down quickly

enough. keeping inflation under control is the best protection for those at the lower end of the economic scale. inflation harms those who are the most defenseless and so i think the target must be to accelerate the trickle down but equally it's not going to remove the fact there will be a hard road when you do the reform process, whether it's a developed country or a less developed country. >> ariff, egypt, the largest population in the middle east. 80 million. they have been reforming for better than five years. we see per capita income come up, foreign direct investment coming up. do you feel it can remain a stable market for foreign direct investment? >> egypt is undergoing this issue internally and externally people are more worried about the transition and succession than the fundamental issues that affect the economy. egypt is a very stable location for foreign direct investment. jobs are created. it has a reform-oriented

government and they're focused on bringing business in on a level playing field with local business people. having said that, egypt's problems are also quite different. but at least i see in egypt a government that's willing to engage with the private sector and look forward. >> good. how about you? i like your thoughts on if we can predict the next crisis. in the 1970s, late 1970s, all that capital flowing into latin america and it ended in tears. in the 1980s, late '80s all that capital flowing into southeast asia and ended in tears. what makes us believe in 2011 with flooding into emerging markets it won't end the same way? >> well, i'm afraid nothing tells us that it will be any different. i believe that as -- as capital market actors we don't learn. and unless every regulation is

in our way, we will commit the same crimes and mistakes that we have committed in the past. i think this is a safe assumption because greed will not go away. in the end, in the capital markets, we are all deal makers. we do deals when we can and as long as it's legal and it's there and it's available, and it's profitable, we'll do it. this is what this business is built upon. this is the nature of capitalism. as long as we don't abolish that, that will be there. >> that's all for this edition of "marketplace middle east." i'm john deaf defterios. thank you for watching.