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Below is the transcript of a CNBC interview with Egyptian billionaire, Naguib Sawiris and CNBC's Hadley Gamble. The interview was first broadcast on CNBC's Capital Connection on 12 February 2019.
HADLEY: Thank you so much for joining us First on CNBC from Milken. My first question to you: Take a step back where we were just several months ago you were talking to me about your prospects in terms of investing in gold. Have you been proven right?
NAGUIB: I think not. Not as much as I would love to see. I think now we're seeing a comeback for gold. I had predicted that at the beginning of the year and I explained the reasons why you know. And most of these reasons are happening now including a shortage in supply. So we're seeing a nice rise and going above the fifteen hundred buried which was a psychological barrier you know. And my prediction that before the end of the year will reached fourteen hundred. That's my prediction you know but even at this level now you've seen a lot of consolidation going on. People understand that it's a good place to be safe. You know just as I said so. I'm still very optimistic even for further upside.
HADLEY: And when you talk about that safety certainly what's happening with the U.S. China trade spat that is impacting markets. Worries about Chinese growth as well impacting prices. What are some of the challenges you see on the horizon this year for markets?
NAGUIB: I think it's the political situation in the whole world has never been worse. We have tons of autocratic leaders where everybody with an ambition to build an empire. We want a Russian empire a Chinese empire a Turkish Empire you know.
HADLEY: But that's something that's not new in the Middle East.
NAGUIB: And then we have your President putting spies on everything. Go back to Twitter.So I think the environment really has never been worse than that you know people expect wars if we don't come to a trade war or a war because we have also China meddling in the Chinese sea with Taiwan and we don't know of North Korea would come to terms. And you have the Middle East still in disarray. You know we are still on the way. Iraq. So everywhere is just not like a very stable world today.
HADLEY: And when you look at what's happening between the U.S. and China specifically there have been a lot questions about Huawei and whether or not people should be using their technology. You of course hold a telecom license in North Korea. What's your take on that?
NAGUIB: I think there is a genuine concern. And I think it's justified. So it's actually taking us very long to. I mean you know telecom was my domain to get worried. I think that they should be worried. I now I don't know how we remedy that because that will apply to everyone. If I were Chinese. I might not take any equipment from Motorola for example so nobody knows what's going to go on you know. And there has to be. It will only be resolved as all the security agencies somehow swear on the Bible that they will not be spying on each other which I doubt they'd do. And if they do, who was going to believe them. So it's a serious situation. I don't know what is going to happen.
HADLEY: When we last spoke you were optimistic cautiously optimistic about the potential for President Trump and leader of North Korea to come to the table and..
NAGUIB: I'm still optimistic because. You know I work in North Korea and I understand the mentality very well and I think a President Trump is doing the right steps now and talking. I mean it's all about talking you know because when you talk to someone, 0you have to hear his point of view. He's right it's something you need to give him comfort about once President Trump does that give some comfort that. It's give and take you know it's not just give. I think we will see some good news.
HADLEY: Do you think that there will be results after this. Because obviously there are a lot of concerns in the United States certainly Congress as well about whether or not anything is going to really come out of these conversations. Will they come to the table?
NAGUIB: I'll explain again to you what I said before because it's important. People don't like to be threatened or bullied. And you know me personally if you do that with me oh my god. As my meeting and discussion will resolve it because that's [what] the leader in North Korea [whether] he is right or wrong, he wants respect. And once he gets that, he will abandon these weapons are no good for anyone including his own people because if there's a war then everybody will pay the price you know. So I'm optimistic here because you know many times they have actually dissolved that weapons and you know blew up their nuclear facilities. Some of it you know. So I think they want to show that they're willing to come to a resolution in exchange for prosperity, commitments not to invade them in regime change all that.
HADLEY: When you look at this China U.S. conversation more broadly of concern that there isn't much progress being made in terms of coming to a deal. Where do you think we're headed?
NAGUIB: Because China was again this you know again President Trump is right about that has been a long time where we we closed eyes on China ripping us. So by the time you come and tell me you need to change I mean it used to be so comfortable and do whatever they want. And I would tell them we need to change. But I think their leadership is smart. So they will change what they can change. You tell them you need to change your whole system. They won't be doing that. So we need to see what we can get without disrupting their system because everybody is happy with this system. I think there's lots of things they can do so they import a lot of things they should import to make a balance between both. Tariffs work both ways. I think they've come to a conclusion too. China has more ambition than to start now another aggravation
HADLEY: I'm joined once again by Naguib Sawiris. Naguib, I have to ask you just a year or so ago I sat with President Sisi. I asked him whether or not he would be willing to extend his term he said he would do whatever it is that the constitution demanded whatever the Egyptian people demanded. Do you think that we're going to see a change to the Constitution in terms of his term limits?
NAGUIB: Yes I think so.
HADLEY: And that's pretty controversial isn't it?
NAGUIB: It is.
HADLEY: And is it the right decision or the wrong decision?
NAGUIB: We'll see
HADLEY: When you take a step back and look at the progress Egypt has made in terms of the economy where do you think they're getting it right and getting it wrong?
NAGUIB: Well they're getting it right that they were not stubborn and they executed all the demands of the IMF because this was for the good. They were right with the foreign currency policy. So we have maintained a higher reserve and stability in the exchange. Right now trying to privatize many of the public sector entities while it's not done in the way I believe it's the best way which is like full privatization. But it's a step in the right direction. They are not right when they increase government competition against the private sector which is happening right now
HADLEY: This is a result of the military or?
NAGUIB: Both. Look I mean but it's also the government investing and building new or being a developer instead of leaving private sector to be to developer. The army also has a lot of activity so in that respect I don't think this is good for their private sector. In their defense maybe investing in the infrastructure and roads and bridges and so on like electricity has been very good. It has also stimulated the economy because maybe they think the private sector is hesitating which is not we're just looking for opportunities. So they were right in a lot of things. And this one I don't think you are right about when they compete with the private sector.
HADLEY: And when you look at what's happening today in the region Saudi Arabia there was a lot of positivity going in to the announcement of Vision 2030. A lot of positivity behind his Royal Highness. The Crown Prince Mohammed bin Salman. And over the last year obviously the bloom has faded from the rose. There are a lot of investors at this conference looking for some kind of accountability from the government whether it be on the conviction of people surrounding the death of Jamal Khashoggi or what exactly happened at the Riyadh Ritz Carlton. There are a lot of concerns about people investing would you invest inside Saudi Arabia?
NAGUID: No. I would not.
NAGUIB: For all the reasons you say.
HADLEY: Do you think that they are missing the boat in terms of what they could be doing?
NAGUIB: Well I think first of all we hear stories about people being repressed you know.
HADLEY: But you also have that in Egypt.
NAGUIB: Yes. Doesn't make it right you know. So personally I can invest anywhere in the world and why would I go somewhere where I'm not convinced that there is a rule of law and order you know and that there is a real democracy and that people are free. I think. It goes with the political stability and economic stability they go together. And also you need to be somewhere where you are comfortable. I encourage what His Royal Highness has done in terms of women liberalization, in terms of allowing music and singing and young people to have a normal life like everywhere in the world. Not this. Excessive fundamentalist ideas that they used to have. I encourage also his vision for the economy but he needs to come straight on human rights and all the other stuff.
HADLEY: OK finally question Europe you've been a big proponent of investing in Italy in the past that government is questionable to many investors these days particularly with what they're doing with regards to the French protests getting involved in other countries affairs. What's your take on the Italian government today?
NAGUIB: I have to be honest I'm very biased to Italy. I love Italy. I love Rome. I think I'm the single largest investor as an individual in Italy. I'm still very big in the Internet era. And I still want to invest in Italy. Actually when they announced that they going to sell some assets you know I'm quite interested. I'm going to write to the prime minister and try to see him. And I would always still invest. Even though they have a populist government because the government still realizes without investment without foreign investment without being reasonable they won't solve their economic problems. You know that they are not fully complying with the European Union requirements and so on. So they need people like us so who is better than someone who loves Italy.
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