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tv   Bloomberg Best  Bloomberg  September 23, 2017 8:00am-9:00am EDT

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♪ >> coming up on "bloomberg best," conversations from the bloomberg business forum. >> you cannot change the world if you are ignoring it. >> leaders in business mentioned change insights on pressing problems. >> the main weakness of europe is the lack of ambition. i would say china is learning a lot of things that they can progress. francine: from issues -- shery: from issues that speak directly from the bottom line -- >> there will be a recession but i don't know when it will occur. >> if none of that happens, you will see the market take a big hit. shery: challenging society. >> [indiscernible]
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in the world, is more than 50% of wealth and households is managed by women. shery: a day of reflections and resolve. >> we need to cooperate between governments and they cooperate -- operations. >> how we are going to get consensus on that is tricky. shery: it is all straight ahead on bloomberg best. ♪ hello, i am shery ahn. welcome to a special edition of "bloomberg best," featuring highlights from the 2017 bloomberg global business forum. ceos convened in new york to address pressing economic issues facing the world today and begin the urgent work of solving challenges and charting a path forward. it was an unprecedented and
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memorable gathering. our review starts with the ceo of the world's most viable company, apple, tim cook. he joined the parent company of bloomberg news calendar for conversation about business and leadership. all companies should have values, so as a ceo, i think one of your primary responsibilities is should decide what the values of you company is an lead accordingly. the other thing i think is the thing that printed -- president kennedy used to say, originated from the bible, actually, much is given, much is expected. apple had some success, and so we feel a responsibility to get back to some of society's weatest problems, so for us
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tried to look deeply at what issues is government working on, what issues are key in society, and we think about the skills we have. there are some issues we have no skills on. we will not be able to help there, realistically, but there are some that we can either amplify government efforts working hand-in-hand or we can and,y much do ourselves you know, apple has always been at the core about changing the world. arguably, you cannot change the world if you are ignoring the world. that is kind of the way we look at it. as a ceo today and in the past, i think that silence is the ultimate consent. if you see something going on that is not right, the most powerful form of consent is to
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that ising, and i think not acceptable to your company, to the team that work so hard for your company, for your customers, or for your country, or for each country that you happen to be operating in. is kind of the way i see it. i have to say, i am more optimistic today than i have ever been, and i mean that sincerely. sometimes note feeling like that, but overall i think we have been incredible opportunities because never before have i seen the ability all across the world to work together on some of these common issues. tim.agree with companies are collection of people and you have to responsibility to do something from the world those people come
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and live in. our company cares what values are. when i support a cause or do not support a cause, i hear it from employees, customers, my family. we do not live in a vacuum. what i have always respected tim is het -- about has his values and he goes out there. the onlysay profit is thing. if you do the right thing, it will help the bottom line, that the first thing to do is to do the right thing because it is the right thing. and you have to look in the mirror. even if nobody likes you, the last thing you see before you go to bed is yourself and you have to be proud of that. forum broughtbal together heads of companies and states. remarks from former president bill clinton opened the event. bill clinton: the most important thing is what you believe social strength, economic performance,
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and political power flows from division or multiplication. addition.action or you are all here because in one way or another, you intuitively know this. viewers heardand from political leaders around the world, beginning with france's president. >> i am a firm believer in europe. during my election campaign, a lot of people told me, you are crazy. you are a poor european and you think you can win and france? i did believe it was feasible and that is because we need europe in this current environment because we have european values. now, the challenge is how europe can be a supporter with united
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states and china. for me, the main reason europe has the lack of project and lack we are trying to fix crisis at the very last minute without any project. scale in the relevant order to be with energy, and i do promote europe and single energy. it is a multi tool. we have french and european leaders, and europe will be stronger in this. it is a simple, digital security defense. and investment and economy, what does it mean? objectives --e 10 plenty of objectives for europe and we have to decide on
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convergence and investment decisions. we will have to take chances, but we need these new ambitions. for my generation, there is one alternative, do we want the dismantling of europe, with years and years about brexit? and now we have a lot of but in awith poland's, few months or years, we have other countries celebrating and saying i am not working with this your christie with no vision and a lot of constraint, so we need more vision, less objectives, and the process. revert to that next week because i want to launch an
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initiative to europe. but we need the ambition. for me, that is the best way to address the brexit issue. shery: also at the bloomberg global business forum, john mickelthwait with the president of turkey. we will have that interview later in the program. plus, lively panels with business and financial leaders, including larry fink, steve schwarzman and bill gates. up next, conversations with illustrious investors on the market and more. >> may be what the president does is not as critically important to the market as many of us one spot. shery: this is bloomberg. ♪
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♪ this is "bloomberg best," i am shery ahn.
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of wall street's most respected investors or part of the bloomberg global is this forum and shared insight with erik schatzker. erik: who do you see in the economy now? is in reasonably good shape. i have said a recession is due at some point. we have one that every seven years at average. we are eight years into a gross cycle. like a broken clock is right twice a day, i will be right at some point but i don't know when it will occur. the economy is doing well, we are probably growing at more than 2.5% for gdp. i do not see signs of a real slow down. erik: some people are talking about synchronized global growth. do you think that is true? emerging markets are doing better, but i do not see recession anywhere in the world. erik: does that surprise you?
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>> it does because historically, some parts of the world to not do well while others did, but things are in pretty good shape. i think the worst recession over the last years has been in brazil but they are slowly coming back. erik: you describe a private withy equinox, accelerating inflows and declining returns. it is an axiom, that. oxen's cannot continue indefinitely -- that paradoxes cannot continue indefinitely, or can they? >> sometimes they can continue longer than people think. private equity is attracting enormous amounts of money. why? because private equity has performed every other asset class and that is likely to continue, so money is coming from all over the world because people think we can get these attractive rates of return. erik: have you ever seen this kind of interest in the kinds of assets you manage?
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> i have done this 30 years and have not seen this level of interest. every thing will slow down at some point and as a famous economist said, if something cannot go on forever, it eventually will not read right now, the interest is high. >> people get elected by promising to preserve your social security, but then nothing happens, and people have been talking about this problem for many years, and nothing happens. do the decisions not get made and action taken, you do not even hear any discussions. >> one step american states might consider is following what the canadians and australians did, which is to create professional investors. do you think that would fix the problem? >> not fixed, but i think it would contribute.
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obviously, quality decisions would be one of the important ingredients and a solution. i believe that it is fair to say -- and one thing you left out of the equation is that when they hired the staff for these investment organizations, they pay them salaries that are competitive with the business world. system, thatcal cannot be done today. know,me reason, you people want to not see, people who work for the government, making a lot of money, but then you have to say, well, how can those jobs attract people who are smart enough to solve the problems we have? so, i wrote a memo called ago,mic reality 1.5 years
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and i think there is an example, if you paid people more, you would get some better decisions, which would contribute to the solution. >> listen, i do believe candidate from and i believe -- trump and i believe president hisp an contracts with constituents in the way, particularly twitter, that should volatility to the marketplace. it has not. the only conclusion i can come up with is maybe, maybe what the president does is not as critically important to the markets as many of us once thought, and may be much of the noise around certain aspects of the presidency are not as relevant to the marketplace as many of us in the marketplace one spot. recognition or realization surprise you? >> it does. listen, as a great prognosticator -- [laughter]
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i would not get high marks, listen, i thought volatility would be higher, i thought interest rates would be higher. we have generally been wrong on both. the good news about being wrong is that it forces you and forces us at our firm to try to buy higher-quality asset and that accompanies that can understand higher -- that can withstand higher volatility or interest rates. in a strange way, we have been wronged and it has generally helped our investment focus. erik: would you not say it is pretty hard to find anything that is under price today? >> yes, absolutely. market,ook at our stock that is all anybody talks about. most people tell you it is overpriced. yeah, it still keeps going up, and the reason for that is everybody believes they will have this $2 trillion coming in from offshore that will bring about more jobs, and you will
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get tax reform done. if none of that happens, i think you will see this market take a big hit. erik: ok. and we have to wait how long to find that out? >> i think you will see that in six months. this has got to get done in the next three months to six months. otherwise, the market will say, we do not think any will get done. brazil as ave cited place to have gone shopping. i presume you have a short cbs --n on south korean cds? >> bf, re-think -- we think that is right now, not fairly priced. erik: what else is not fairly priced? valuations have gone up and developed markets, you have been prospecting european loans, or else does it pay to bother doing the work? >> you could still be in europe
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on th and make 15%. what is interesting is the asia today, because of the slowdown in china and what is happening out there, you can do direct around high teens to 20%. erik: given the state of the world today and for you think it might be had it, some of the concerns you have, where do you see the best opportunities? >> our business is about raising large sums of money, having operating people in many countries around the world and waiting for the opportunity to deploy money into property and infrastructure, where capital is not available and their full -- and therefore, will last months. we put a lot of money in south america, specifically brazil, and india today. we move our capital and never know where it is going to be, but it will be in one country where we can make actionable
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opportunities into reality, and we take the time to do that and we will move it where it is the most important. erik: you say you are being cautious, does that mean you are deploying capital at a slower pace than you might otherwise? all the time, is, somewhere in the world, there is an opportunity to put money to work. we are cautious in the united states. eirk: and have been. >> and have been for a while, but we put $20 billion to work in other parts of the world. that is not to say we are not always fine in the united states because it is a big market with lots of add-on opportunities, but we don't see those opportunities now in the united states. erik: where else do you feel it is time to sell for it might soon be time? >> i would say developed markets, where there is lots of money and leverage lending market are strong.
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erik: outside the u.s., that is where? >> the u.s. in particular, but canada and australia are good, even though commodities have been tough, and the u.k. and europe. there is opportunity to sell. ♪
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♪ shery: you are watching "bloomberg best," i am shery ahn. let's continue our look at the 2017 bloomberg global business forum with one of the most interesting discussions. hit up the saudi arabia investment fund and talked about saudi arabia's on thec position and
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future of energy in the middle east. >> when you are considering saudi arabia as a focus, what are the headlines, what are the metrics you want to see over the next years? >> i would say realistically, today, still for financial net"tutions, it is still a of capital, so we are still going in but it is the coming increasingly clear to us, and if i were influential in that country and had shares of that can serve, i would want to make sure the people who were doing investing for us were also doing things for us that would increase job creation in the country, that would bring new industries, help diversify the economy, which is a necessity. that ouray the facts current there are two major
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thieves causing changes, which are the restructuring of the energy market, petroleum, a price thing affecting the demand and supply side, and apart from is a compulsion of the demographic situation. been a lot of it has portfolio investing and now i think the region needs the commitment and the help in getting investment done in creating further industries and jobs. >> what are your priorities? in five years time if we come back and say, this guy made it happen, how different the saudi arabia look? >> it is really different than before. to start with the vision as the initial thing, it is a good start because now we have a
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target. we have targets for the medium-term and for the long-term. p, nationalnt transformation plan, and this is 2020, and we have vision 2030. 543he vision, we have different initiatives, with about 376 key performance indicators, so it is not only about the vision, which is complicated, but also the ,xecution of these initiatives so we have everybody in the government from different ministries, ministers, looking at their own initiatives with their own kpi's and we have a counsel for economic development, chaired by the conference -- chaired by the
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crown prince, and they meet on a weekly basis looking at these and the key performance indicators. if, public to p investment fund, which is chaired by me and another eight ministers -- seven ministers, we .ave a lot of these initiatives it would be part of the pif program, and that is one program in the vision 2030. shery: much more still ahead from the inaugural bloomberg business forum. other ceos shared thoughts on the future of business. bill gates has plenty to say about technology and a discussion on trade turns into an entertaining debate. >> what the business community
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is looking for is a level playing field. >> know, they are looking for an advantage but they will take a level playing field. shery: this is bloomberg. ♪
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♪ welcome back to "bloomberg best," i am shery ahn. we are at the 2017 bloomberg global business forum held in new york. in a conference dedicated to solving economic challenges and charting new paths forward, ceos provided input. let's hear from some of the top leaders who spoke, starting with the alibaba founder and executive chairman. shiftingk the world is from big to small companies, and a small companies makes entrepreneurship's, so i am passionate about budget and you
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should and small business. -- about entrepreneurship and small business. if you are not created in small business, if you are not innovative, you don't have a chance. this is my passion and i believe this is the future of the century. >> you heard president trump speak at the united nations, what is your relationship with him? >> he is a unique president and we had an interesting discussion talking about china's trade and relationship. i think the china-u.s. relationship is very, very critical in this century, especially the business side. i think we're making progress. emily: really? because trump's top trade negotiator called china and unprecedented threat. the president blocked the takeover of the u.s. chip company by a private chinese equity firm. what do you make of those?
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jack: that happens here and there, now and when, and this is a way that if you see that positively,ly, or they should understand each other better, so i think the next two years, there is a lot of conference all the time, but whether it will be a fatal asaster, whether it will be line on the wisdom of the leadership. emily: how about when it comes to your business in china? president xi has taken more steps to put restrictions on the internet. this is your business. what do you make of that? jack: really? emily: shutting down of the vpn's is one way. jack: we probably see a different view because this is the weight i see business. -- is the way i see business. in the past 18 years, i have been questioned by censorship,
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this and that all the time, but i am the first internet guy in china since 1995. has been enjoying democracy for 250 years and china has just had it in the past 30 years. china is learning a lot of things that they can progress. if there is controlling here and there, it is like 5% of the issues. what we should do is focus on the 95% of the positive things. , when theovernment governing or regulatory of the internet is new to the government, i have talked to thousands of businesses every year because i think it is my responsibility to tell them, do not worry about it. this is the way to do it and how to do it, so i never complain.
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i try my best to educate them. emily: you think they will ultimately be on the right side of history, the chinese government? i am 100 percent sure because nobody can stop this technology. everybody is learning how to govern and regulated. >> they need to be aware of the issues out there and integrated in corporate strategy. that is what i call earn a seat at the table, which might mean moving to green energy, making sure your material is sustainably supplied and you treat people fairly. and then you work in your value chain. that is easy because these are your suppliers and you have relationships. extend your value chain. you cannot outsource your value chain and responsibilities. the consumer are not accepting of that anymore. the third step is you work with associations on transfer much of initiatives -- on transformative initiatives.
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there is not the transportation initiative limited to the combustion engine and initiatives on human rights, and there are many industry initiatives happening now you can attach yourselves too. and the final point is to be proud of helping the risk the political process. it is difficult to blame the politicians if you are not actively trying to find a solution. >> you are one of the early spear headers of this, hasegawa more quickly than you thought or slower? ago, and seven years it was seen as revolutionary. it was a little scary what we were doing. targets to increase their overall social impact, and doing that across the total value chain. bigas a big asian, --
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vision. unfortunately, what we were trying to do was probably not ambitious enough with the way the world was going. we were on trend, but it is ever-changing. >> one of the experiments we are very, very interested in and optimistic about is in the city in india, where we are supplying the cars, the drivers have signed onto a ridesharing company, and the government is providing the charging stations initially for this to begin. it is working well, and if it works, we will replicate it. that is an example of the government actively produce a painting and stepping in, so you need a public-profit partnership to work -- public-private relationship to work and it can happen. i do not believe in subsidies at all because i believe these businesses are all profitable. you need the leader of the
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country to give a direction. let me give you an example, when the prime minister modi laid out his vision for solar power and when it to make india the leader in solar power, he stated clear the plan in which we invested. they look for direction. you do not need that much more if you are living with opportunity. in three years, we built a company that is the second largest builder of solar plants. we say, tell us if that is attractive. if you will do that, there will be money made and return. >> how would you consider the growth of africa and nigeria at the moment? >> i think the growth has been slow but we are moving. everything is in a cycle. when we reached the bottom, if you look at, for example, the business we have, there are
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businesses today making more money than last year when we had the recession. because we have very good , and we believe in what we are doing. when we rolled out two years ago about refineries, chemicals, that is not one single project that was stopped. we still continue with the devaluation and everything. francine: are you looking at acquisitions? >> we're looking at acquisition that will be taken in south africa. i hope we will be able to agree they reallycause need consolidation and i think that is the right thing for us going in there. it is not really a rumor. francine: there are other
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bidders, right? >> that is what makes a good. there are other bidders, but we will be sensible. -- there areders other bidders, it does not mean we are going to be very high -- to bid very high. we would do it where it makes sense for our shareholders and we also do not want to do something that will affect valuation. we have to be very careful. ♪
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♪ shery: i am shery ahn, and this is a special edition of "bloomberg best," focusing on the 2017 bloomberg global
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business for them the main objective was to foster partnerships. an example of that mission was to find common ground. it featured a pair prime minister's and the head of two of the investor -- of the world's largest investment firms. >> they're looking for a level playing field. it is all you want. you do not want to be advantaged. you just do not want to be disadvantaged in certain countries or historical reasons and have barriers were you have a superior product and you cannot sell it there. that is the kind of thing that , the best player is supposed to win. one team is not supposed to that per nine innings and the other for three. it is hard to win if you can only do it one third of the time. >> full disclosure, prime
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ministers, when you received the visits of the likes of steve and larry, who do not charge you anything for their advice, views, access to information, do you take that with a pinch of salt or for granted that the are right? >> government is about partnerships. you listen to citizens, you listen to interest groups, you include the business community. you hear a range of perspectives and when steve says, we are looking for a plane level field -- a leveled playing field, no, you looking for an advantage but they will take a leveled playing field. [laughter] you listen to it they are doing, but i have had great meetings. steve came up to talk to the canadian government cabinet two days after the inauguration of the administration to give us a sense of where their priorities are going to be. i have been working with larry for two years now to talk about
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global investment and drying it to canada and what kind of framework -- and drawing it to canada and what kind of framework we could give to people so they notice canada is a great place to invest. they have been great on thoughts, but you always know there is interest there in growing the economy for them. we are interested in growing the economy for everyone. there is larger overlap's and you have to be cynical about it that you have to be conscious of who you are talking to. >> i agree. they are nongovernmental organizations. their companies and want to make a profit. at the same time, they have a wealth of knowledge on what is happening over the world. i would take the position that the big issues in terms of climate change, in terms of fighting instability, we need to cooperate between ngos,
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governments, and big corporations, companies like show, many companies -- like shell, many companies in the positived they play a role in trying to get ngos and governments to change the course of events. we cannot do this on her own. what i like about the u.n. is the are revising more and more that -- they are realizing more and more that organizations need to work with the business community. this is a change i find positive. >> you are investors and you have quite a few of them and they are looking to you to help navigate all these courses, trades, economic integration, financial flows, technological changes. how do you think large financial are driving,urs shaping trade, shaping economy
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integration? benefit that to the company and their benefit? >> how we are navigating this rise of protectionism, it means, obviously, one, more than ever before, we have to be the mirror of our clients. one of the main reasons we have to have at least gender equality , but the reality is in the world, more than 50% of households wealth are managed by women. if i will be a mirror of my clients, we are going to need more women at our firm, so this is what we are doing. more importantly, if i am going to be that great pension manager wenetherlands or canada, have to be dutch and canadian. we cannot be an american firm trying to put american values into those places. that is our biggest transformation. in my mind, companies navigate
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about the problems of protectionism. >> one thing that governments game garychange the was talking about because often it is governments that insist on certain mixes of assets, which end up being not in the best who are of the people supposed to be the beneficiaries and the government that ultimately gets left with the bill. make no mistake who will end up underwriting the underperformance. it will be the governments because they cannot default on their people. and so this is a big problem. typically, the governments allow what we would think, from , andience, odd outcomes governments have to encourage certain types of asset allocation mixes or they will be
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stuck with the same underperformance that is a danger for the solvency of the government's long-term. shery: another perspective on the world political and rolled order came from turkey. the president sat down with john mickelthwait from bloomberg. years, turkey waited at the gate of the eu. wonder if i can be told this, can they say whether there are those who came later? who is being done to turkey's political embargo and the disrespect to turkey's character and personality? it is in a force contrary to the eu and no country has been shown this approach. they are lying to us. they did not speak the truth with us. they told us a lie on pieces.
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as i was talking earlier on the subject of refugees, in 2016, they told us they would give us 3 billion euros. they are not giving to us. who are they going to give it to? you are going to give it to organizations they decide on themselves. they said at the end of the year, we are going to give another 3 billion euros. the figure as of now is 820 million euros, so where is the honesty? there is none. look, it is really interesting. leaders took charge of france and germany, and at the time, i was part of the summit. in germany, the three of us had many meetings, and they were basically preparing us, but then
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merkel came and macron came, and the band leaders from these meetings. -- banned leaders from these meetings. they stopped them. chapters were being opened and closed at that time. ok, so what happened with this? the opening and closing. there is just opening, no closing. how many chapters? there were 15, but then they made it 35. who was this done against? these are measures taken only against turkey. let them express that to me. why not give up? it strikes me if there are many business people in this audience
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, when somebody else talks about you pulling up the drawing bridge, that does not normally imply a great deal of partnership, white is in turkey seek the future outside the european union? seek adoesn't turkey future outside of the european union? arrogantuestion is an question. i think those who are in the position to decide on them. let them close the door to us and we will make our decision easily. we are not all that interested, let me say that, too, but what they want is for turkey to run away. no, we never ran away. let it the them to run away. let them make that decision our decision. ♪
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♪ on -- i sheryeryl ahn. let's complete this special edition of "bloomberg best," with highlights from another high profile session. pepsico andnd nigerian commodity sat on a panel to discuss the many possibilities created by
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disruptive technologies. by like oney killed out of 1000 mosquitoes, and the idea -- the main thing is it is precedent setting. if you think humans can get this specie, what is your criteria for anything that might be a nuisance and you might make a mistake. if you got rid of all mosquitoes, there are some bats that feed on those ghosts -- those mosquitoes, and there is no other species that is dependent on that. this new genetic approach called gene drive that is still in the labs but it has a good chance of being able to knock down populations by about 99% over a
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five year time frame. that probably, for the toughest nigeria, soclude that the center, where malaria is a huge problem. we probably need that tool, so how are we going to get consensus on that is tricky because some people worry. i suppose there must be worries on mosquitoes. some people worry on the precedents of how the decisions are made. >> we hear about great technology leader and the majority are men, is that because it is sexist or men do not intend to let women get the opportunity, or some other reason and you think it will change soon? an expert on women in technology but i was at no mighty event on sunday and the president of m.i.t. was telling me that 50% of the engineering graduates from m.i.t. are women,
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but if you go to companies, 50% of the engineering staff are not women, and if you read stories in the press about what happens in the silicon valley area, 50% of the people getting the funding are not women. obviously, there is something causing that breakage between m.i.t. and practice. if we want to utilize all of these resources that we are spending money on, we have to do something different. >> final question, is artificial intelligence a good thing for humans or not a good thing and a robots going to take over humanity? >> i think the misuse of artificial intelligence could be horrible, but there are thousands of good reasons to use it that are good for humanity. diseases,ved
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unsolvable disasters, and many other things, so i think it is really good catholic ♪ -- really good. shery: you can find more panel discussions from the is this global format and all the latest business news and analysis 24 hours a day. that will be called for "bloomberg best" this week. thanks for watching. i am shery ahn. this is bloomberg. ♪ is this a phone?
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