"The West Isn't Working."

Please switch off your phones. We are ready to begin.

This debate is being televised by CNBC, and your presence is considered your

consent to be filmed.

And now, please welcome your moderator,

Maria Bartiromo. [Applause]

Maria Bartiromo: Good morning everyone. Thank you so much for joining us this

morning. For the first time in a long time, if not

ever, there is a conversation happening around the world that is questioning the

sustainability of the super power status of the West.

Why is the West not working? We are here today to talk about one of

the most urgent problems of our time, unemployment.

The global recession has resulted in a massive loss of jobs, creating what the

head of the IMF has called "a wasteland of unemployment," and Dominique Strauss-Kahn

is not the only one concerned.

President Barack Obama: That world has changed, and for many, the change has been

painful.

I've seen it in the shuttered windows of once booming factories and the vacant

storefronts on once busy Main Streets.

I've heard it in the frustrations of Americans who've seen their paychecks

dwindle or their jobs disappear -- proud men and women who feel like the rules have

been changed in the middle of the game.

They're right.

The rules have changed.

Maria Bartiromo: Without jobs, the economy cannot recover.

We are here today to find solutions. Meet our panelists: Arianna Huffington of

The Huffington Post; Naveen Jindal, the head of Jindal Steel and Power; Laura

Tyson, professor at the University of California Berkeley and an adviser to the

Obama administration; and Philip Jennings, General Secretary of

UNI Global Union. Ladies and gentlemen, our challengers.

Today's debate is in two parts and in each of these, a motion will be argued by our

advocates.

They'll have 90 seconds to make their case.

They'll then face questions from our challengers and from all of you,

the audience. We are looking forward to your

participation so get ready with your questions.

Motion 1: For a dynamic workforce, go East.

Most of the jobs lost since 2007 have disappeared from the West.

Meanwhile, some emerging countries have barely felt the recession.

In the battle of jobs, who is winning? Manuel Salazar: We recorded open

unemployment going up by more than 30 million people.

It becomes more and more difficult to get those millions of people out of the

unemployment and into jobs.

Ian Cheshire: Our key challenge in the West is to prepare for the next generation

of jobs, the type of skills that will be needed, the type of industries that will

be around in 20 years. Ben Jealous: We need vision for how we in

the West continue to employ people who have fewer skills or whose skills can be

found somewhere else for cheaper. David Arkless: In places like China,

Vietnam, Indonesia, where the workforce is probably as dynamic as we've ever seen in

the industrial era. President Barack Obama: When global firms

were asked a few years back where they planned on building new research

and development facilities, nearly 80 percent said either China or India.

David Arkless: They should be scared about how efficient the Chinese economy

is becoming because it will, if we allow it, dominate the world economy.

The issue is can we compete? Can the West come back?

Maria Bartiromo: Let me introduce our first advocates.

Arguing for the motion that for a dynamic workforce, go East is Kiran Mazumdar-Shaw,

CEO of Biocon. And against the motion is Barry Silbert,

CEO of SecondMarket. Kiran, please begin.

Kiran Mazumdar-Shaw: Thanks, Maria. Well, you know, in an interconnected

world, it's just bound to happen that jobs will move from the stagnant mature markets

of the Western Hemisphere to the very vibrant and high-growth markets in the

East. And in an interconnected world, I think

companies will be compelled to move money and jobs to make them more globally

competitive to the East.

So there is enough evidence to show that this is happening.

I mean if you look at what's happening with companies in U.S. and Europe,

they are on a hiring spree in Asia whilst they are shedding jobs back home.

So the evidence is there.

We have to accept that jobs will move to regions where there is high growth

and higher returns. Manufacturing, conventional,

traditional manufacturing is going to move East because that's where the lower label costs

are. That's where better capital efficiencies

are. So this is the shape of things to come

and the West has to accept it. But having said that, I do believe that

it's not all bad news because the Western consumer has benefited in a big way.

Take for example mobile phones. If it wasn't for the huge economies of

scale created by India and China, you couldn't get those bargain prices at

Walmart or Best Buy. So the way I look at it is that times have

changed and I think the West has to accept that fact that there has to be a different

way of creating new jobs. Jobs being lost have to be replaced with

different jobs. Maria Bartiromo: Kiran, thank you very

much for that side of the argument. Now let's hear the other.

Barry, over to you.

Barry Sibert: When I was first approached about participating in this debate, I was

hesitant to accept the invitation to defend the West.

Aside from the fact that I have two very large Asian investors in my company,

how can I overlook the success of incredible entrepreneurs like Ms. Shaw and the many

startups in developing countries blazing paths oftentimes against significant odds?

But it got me thinking given that small businesses are the largest job creators,

what does it take to start a business? I quickly realized that contrary to the

title of the debate, the West is working quite well.

There are really kind of four key critical elements that are necessary to starting

and growing a business. First, you need a skilled and educated

workforce. Second, you need rule of law,

including intellectual property protection. Third, you need a proper balance between

government regulation and free markets. And lastly, you need access to capital.

And it is this final element that I believe the West outshines the East in

particular. The West I believe has the most developed

capital formation process, from angel investing to venture in private equity

funds to the markets both public and now private necessary to support innovative

businesses, and it is these types of companies that create long-lasting

sustainable jobs. So I offer to the audience that the West

can in fact be the engine for future job creation, particularly if the government

and business can work together to find easier access to risk capital for small businesses.

Maria Bartiromo: Thank you very much. You both make terrific arguments.

Challengers, these are the two arguments. Who is right?

Naveen Jindal: Well, I think Kiran Shaw is completely right, that it is happening

in the East.

We are all the time looking for people. We are hiring, say, in our steel

and power business, we are looking, we are hiring thousands of workers,

skilled, semi-skilled, even unskilled people and giving them those skills which are

necessary. In fact, we have a problem of not finding

enough skilled people, and that's a very big responsibility.

We almost need an additional 300 to 350 million trained people by 2020.

And I completely disagree with what Barry said because if the West was working well,

now why would the unemployment rate be so alarming?

And all those clippings you showed,

why would there be such an alarm? Why would CNBC host a program called "The

West is Not Working?" if it was working well?

So CNBC can't be this wrong.

Maria Bartiromo: A fair point. Philip J. Jennings: We need a message of

hope from this event. The working people of the West are ready

to save the West if they are given the chance.

There was a rotten business model in the West which brought those economies to

their knees. It was the people that paid the bill.

They are angry. They are cornered.

And if we have the argument, if I have to face a group of workers and I say,

"The future is in the East," they will be more Jasmine Revolutions by the day.

Maria Bartiromo: And we've seen protests. Philip J. Jennings: People have to wake

up. People have to wake up.

The G20, wake up. We've asked for a working party at the

G20 on unemployment. We are still arguing.

Sarkozy is here tomorrow. I hope he's got his jobs mojo with him.

We have to -- there are things to address.

The G20 has to wake up. We have to look at inequality.

Henry Ford was right. You put money in workers' pockets

and we'll make the wheels of the economy turn. It is not happening.

The top 10ths of one percent in the

States took 30 percent of all the income during the course of the last 20 years.

Maria Bartiromo: So you agree with Kiran? Philip J. Jennings: We got to plan.

Maria Bartiromo: You agree with Kiran? Philip J. Jennings: No, I don't agree

with Kiran. Kiran, we need to grow in the East and the

West. India, you have to create 270 million jobs

in the next 20 years. You are going to need the help of the

West to help you get there. You have 100 million people living in

poverty today.

Kiran Mazumdar-Shaw: Well, you know, Philip, I do agree with you in a way that

this is about creating a new kind of global job market.

This is about creating complementary and equitable jobs in both hemispheres, and I

think we have to create jobs that share risks and resources across the innovation

and commercialization continuum. So I agree with you to that extent and I

think the West will have to become more, depend on countries like India and China

to be globally competitive. You cannot build vertically integrated

job markets in the Western Hemisphere or in any hemisphere for that matter.

Maria Bartiromo: Arianna. Arianna Huffington: What is missing in

the West is what really was here in the introduction to the show, which is that

sense of urgency. I think the introduction to this show

should be played at the White House and on Capitol Hill and in parliaments around

Europe everyday because that sense of urgency around jobs is really missing.

I mean politicians, as the President said in the State of the Union, talk about jobs

but they are not really doing anything about jobs and it's this dysfunctional

political system in the West that's making it so difficult to produce anything but

suboptimal solutions that's creating that danger because remember, when the West

brought a sense of urgency to saving the financial system, they saved the financial

system. We have enough tools in our toolbox.

It's just that we never brought that same sense of urgency around jobs.

And yet, it's not just the economic problems that ensue.

It's the political instability that is growing.

And I have two daughters in college and increasingly, we have college graduates

who cannot get jobs. Just imagine that.

That really disrupts the natural course of events.

So as well as all the other problems we are facing, the problem of youth

unemployment in the West is particularly large and so we cannot just,

unfortunately, assume that things will get better by themselves.

Laura Tyson: Can I say something here? I think actually Barry raised a very

important point. I think we should realize that until the

crisis, if we had a discussion here five years ago, we wouldn't have this

discussion. Five years ago, and the evidence is very

strong on this, it's not an either/or proposition.

There was complementarity and jobs growing both in Asia and in the emerging markets

and certainly in the United States. So we have here a very profound deep

cyclical problem. It does not mean if we go forward,

we cannot find a world with enough growth that we have jobs growing in both places.

So I don't agree it's like a shift, oh my God, a job there is a job lost.

It's just not true. Research establishments in emerging

markets are complementary in many respects to research establishments in the U.S.

or Europe. To Barry's point, I think Barry is making

a very important point. Look at issues of ease of doing business.

That list is dominated by many Western economies, including the United States.

And with the right capital market conditions, with the right demand

conditions, with the right physical and monetary policy, the U.S. has been

and will be in the future a powerhouse of entrepreneurship.

Most jobs that most people have in the world for now and the foreseeable future,

even though they will be globally integrated, will be local jobs.

They will be jobs that are service jobs for the people who live in their regions,

their communities, their states, and their nations.

And those jobs will depend upon two things: one is the amount of demand,

how healthy the macro-economy is, and two is the strength of the educational system in

those economies. And we can talk about that.

That's going to be the second session here, but I think that's, for me,

I believe the U.S. can get its macro house in order.

I worry very much about the educational challenge.

Maria Bartiromo: Education is a critical part of this and we are going to get

there. Let's bring in our audience and our

special invited guests will kick that off with the front row.

Comments? Who is right?

Adi B. Godrej: I think that what we should realize, as Laura mentioned,

that the recent rise in unemployment in the Western world has little to do with job

transfers to the East. It has to do with the slowdown of the

economy post the financial crisis.

The system worked very well just prior to that and we need to encourage that.

Comparative advantage will create for productivity increases which will add to

global growth and lead to employment creation in both parts of the world.

I think we should also distinguish between unemployment and unemployability.

Some of the unemployment may be because of economic factors.

But a lot of it is because of unemployability created by lack of

education, lack of training. I don't see why in the Western world

where unemployment benefits are paid out in large numbers simultaneously insistence

of those people going through training programs is not done.

Maria Bartiromo: This is a very critical point and we will get to the skill sets

that are required to get the jobs of tomorrow in the next segment.

Zhu Min, you've spent a long time running the People's Bank of China and then moving

over to the IMF. You have a special vantage point here in

terms of what's happening in the world. Give it to us.