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Connect the World
Russia Hosts Pared-Down International Economic Forum; E.U. Commission Recommends Candidate Status for Ukraine; U.K. Government Approves Julian Assange's Extradition to the U.S.; Israel Ends Probe into Police Actions at Journalist's Funeral; Colombians Vote for President Amid Struggling Economy; High Food and Energy Prices Fueling Inflation. Aired 10-11a ET
Aired June 17, 2022 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[10:00:21]
(BEGIN VIDEO CLIP)
PRES. VLADIMIR PUTIN, RUSSIA (through translator): The sacrosanct nature of property and trust and world currencies have been significantly undermined,
unfortunately, by our colleagues in the West.
(END VIDEO CLIP)
BECKY ANDERSON, CNN INTERNATIONAL ANCHOR: Well, in his speech in St. Petersburg, the Russian president has used his platform to call out the
West's economic war chest.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: The commission recommends to the council, first, that Ukraine is given European
perspective, and second, that Ukraine is given candidate status.
(END VIDEO CLIP)
ANDERSON: One step closer for Ukraine in its bid to join the European Union, but there's still a long road ahead before full E.U. membership.
And what's being described as a dark day for press freedom. After years of court battles, the U.K. has agreed to extradite Julian Assange to the
United States.
Hello, I'm Becky Anderson in London where the time is 3:00 p.m. This is CONNECT THE WORLD.
Nearly four months into Russia's conflict in Ukraine, an event happening this week in St. Petersburg is a stark example of the economic consequences
of Vladimir Putin's self-declared special military operation. This is called the St. Petersburg International Economic Forum or SPIEF for short.
In past years it was considered the Russian version of Davos. Not this year. The world's Western economic powerhouses are boycotting the SPIEF.
The pared down guest list consisting mostly of Russian allies. Afghanistan's Taliban also appearing.
Russia's president today giving his annual speech at the forum after a delay caused by what the Kremlin calls massive cyberattacks. Putin angrily
denying Russia's economy is suffering under crushing Western sanctions.
(BEGIN VIDEO CLIP)
PUTIN (through translator): The gloomy predictions with regard to the prospects of the Russian economy that we had in the beginning of spring
didn't realize we understand where this propaganda campaign comes from, where this mantras about the dollar, 200 rubles and the inevitable and
rapid collapse of our economy, this is a tool of information warfare. In fact, of psychological influence on our society and on our business
circles.
(END VIDEO CLIP)
ANDERSON: Only the Kremlin says the European Commission's decision to recommend candidate status for Ukraine's E.U. membership, quote, "requires
our increased attention." The announcement on Ukraine coming today from the European Commission president Ursula von der Leyen dressed in the colors of
Ukraine's flag praising what she calls Ukraine's determination to live up to European values and standards.
Ukraine's president says this first move towards what he hopes will be E.U. membership brings his country one step closer to victory against Russia.
Well, let's dig into all of this. Matthew Chance connecting us from Brussels in that leg of the story. Fred Pleitgen is in St. Petersburg,
where, Fred, Vladimir Putin delivered what was an angry rebuttal to Western efforts to punish Russia's economy. What did he say and what was his mood
like?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, a lot of things. And I think a lot of people who thought that maybe Vladimir Putin
was on the cusp of changing course in Ukraine, certainly that is not the case. In fact what we saw was a very forceful and certainly also combative
speech that also seemed to do no less than to call into question the current world political and economic order.
One of the things that he first of all said was that Russia was not going to stop what it's called its official military operation. Obviously that
being the invasion of Ukraine, that the war that's going on over there. In fact he said that Russia would not stop until all of its objectives there
are met. He kept calling it the war in -- the special military operation in Donbas. Of course meaning those areas in the east of Ukraine.
He also said that any claims by Western nations that the economic troubles that they are in, like for instance, inflation, blaming that on Russia's
operation in Ukraine he said was simply not true.
I want to listen to one excerpt of what Vladimir Putin said about that.
(BEGIN VIDEO CLIP)
PUTIN (through translator): Russia's actions in Donbas to deliberate Donbas have nothing to do with it. Today's price rises, the problems with the
gasoline and inflation, are result of systemic mistakes by the current U.S. administration and the European bureaucracy. That's where the causes are.
Only that. I will mention our operation, yes, did play a role but the root causes are in their erroneous economic policy.
(END VIDEO CLIP)
[10:05:01]
PLEITGEN: He then also accused the United States as acting as though it was the only power in the world and then essentially said that the unipolar
moment in the world is over. Obviously Russia he says is challenging the United States supremacy in the world's economy and also in the world order
as well.
It was quite interesting because on several occasions, during his speech he essentially tried to portray the current situation in the entire world as
being one of the West essentially against the rest of the world, calling on nations that are not part of the West to essentially do business to Russia,
to have economic ties in Russia, and he said that all of that would be sorted out by the Russian federation.
And so what we did see today was certainly a combative Vladimir Putin, certainly not someone who seems on the cusp of changing course as far as
Ukraine is concerned and certainly someone who appears to be willing to take on the United States and indeed the entire West -- Becky.
ANDERSON: Fred Pleitgen is in St. Petersburg, thank you.
On the same day that we hear then from Vladimir Putin, Matthew, the E.U.'s executive body announcing that the door is opening to Ukraine.
Realistically, though, this is a very long road to E.U. membership if indeed that is the end of this road, correct?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I mean, I'm sure it is. I mean, it takes countries about a decade to move from getting
candidate status to becoming full members, on average, at the moment. And of course Ukraine hasn't yet been given candidate status, this was just a
recommendation by the European Commission, its executive body.
The final decision will be taken next week at an E.U. summit, although of course with big players in the European Union, France, Germany, others,
easily backing that bid. It's likely to of course go through. And knowing that, the Ukrainians have welcomed it as a positive step. Volodymyr
Zelenskyy, the Ukrainian president, has said it will bring our victory closer, a reference to the conflict that this country is currently engaged
in with Russia.
The foreign minister spoke to me earlier today, of Ukraine, and said that he believed this move would make the E.U. safer, stronger, and more
prosperous. But of course, it was the fact that Ukraine has been fighting so hard and has been, you know, in the eyes of the European Union,
promoting European values so much in the course of the past couple of months in particular that it was decided that this moral boost should be
given to Ukraine. A sort of show of support. Take a listen to what Ursula von der Leyen had to say, the E.U. Commission chief.
(BEGIN VIDEO CLIP)
VON DER LEYEN: We all know that Ukrainians are ready to die for the European perspective. We want them to live with us, the European dream.
(END VIDEO CLIP)
CHANCE: Yes, so quite moving words there. Ursula von der Leyen. Of course it's the reaction in Moscow that has been one of the considerations before
the commission made this. And it will be a consideration for E.U. States finally signing off on it next week.
Moscow has, for years, been fundamentally opposed to the expansion of Western institutions like NATO and like the European Union. And so it's not
going to respond to this positively. There's been a muted reaction so far. The Kremlin spokesman basically saying that this development deserves our
additional attention or something like that. But it's not a good thing anyway. They won't be receiving this very well -- Becky.
ANDERSON: Perhaps it's as much symbolic as it is actually significant where we are at today. But you're making a very good point about the importance
that the West puts on, at least creaking the door open to this candidate status for Ukraine.
And talking about symbolism, it was symbolism that I think was front and center at speed at this conference, which I know you have attended in the
past, a conference where, in days of your -- the Russian president would sort of meet and greet power leaders from the world of politics and
economics. It is very much a forum where we see Russian business, you know, on display. What do you make of the attendance this year and of what we
have heard from the Russian president?
CHANCE: Well, because of the attendance and what we've seen, it's a must diminished, you know, platform, isn't it? I mean, you're right, it was just
a year ago, this was a major showcase for Russia's investment opportunities, world leaders, business leaders, you know, billionaires,
corporation leaders. They're heading there to sign contracts and to meet with Russian officials to see what business could be done there.
This time we're seeing a very different atmosphere. Vladimir Putin took the stage again as we saw but he was joined only by a video conference from Xi
Jinping of China and from the Kazakh president as well. Other delegations, you know, instead of Western delegations or business leaders being there,
you had delegations from Venezuela, the Central African Republic sent its prime minister, there's a delegation from Cuba, the Taliban in Afghanistan
sent a delegation as well.
[10:10:05]
So, you know, look, that's a really big difference from the kinds of, you know, delegations from, you know, big huge powerful rich countries that
we've seen there in the past. And in terms of what Vladimir Putin said, well, I mean, he is just doubling down, isn't he, on his gambit over the
course of the past few months. He's always been talking about, you know, how there shouldn't be a unipolar world and that Russia needs to be given
the top table at the diplomatic community, et cetera, and claimed its rightful place in the world. But Putin is now very much doubling down on
his current course of action.
ANDERSON: Matthew Chance is in Brussels. Matt, thank you. And you heard earlier from Fred Pleitgen in St. Petersburg.
Well, the U.S. State Department is trying to verify a photo that might show two Americans captured by Russian forces. The pair had been fighting
alongside Ukrainian forces near Kharkiv and have been missing for about a week. A Russian blogger posted this photo Thursday on Telegram. It shows
two men in the back of a truck. They appeared to have their hands tied behind their backs. It was not clear when it was taken.
Kremlin spokesman Dmitry Peskov tells CNN he doesn't know anything about the two Americans. Meantime, a U.S. Marine veteran is also being identified
as missing in Ukraine.
Well, in-depth digital coverage on the war in Ukraine as you would expect from CNN, including Ukraine's bid for European Union membership as we've
been discussing this hour including the complex next steps in a process that could take years to complete. That's at CNN.com on your computer or
from your CNN app on your smartphone.
Julian Assange now has 14 days to appeal his extradition order from the United Kingdom to the United States. British Home Secretary Priti Patel
signed that order today. Her office stating that British court rules extradition is not a violation of Assange's human rights. The WikiLeaks
founder faces espionage charges in the United States for publishing thousands of classified documents and diplomatic cables back in 2010.
WikiLeaks announced that it will appeal the extradition order and called it a dark day for press freedom. Well, years of legal drama in this case now
coming to a head, CNN's Nic Robertson has been following it all for these years and joins me now.
Was anybody surprised by today's decision, Nic?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Not really. I mean, if you go back a year and a half, a high court, a district court judge in the
U.K. said that it would be actually oppressive. This is one of the tests of the Home Office. It would be oppressive to send Assange to the United
States because of his mental well-being. There was a feeling that it could cause further instability.
But clearly now, it passed all the judgments now by the courts that it's been through, give the British Home secretary the space to sign off on it
that it is not oppressive. They decided clearly his mental well-being is OK. That's what they decided that it is not going to violate his human
rights, that this is not going to -- is not sort of abuse of powers and that it's not unjust in what's happening. So it does seem as if the process
has been heading there.
And a couple of other tests that you want to look at as well, that the British hurdles that the British government got over, I mean, they cannot
send somebody, they cannot extradite somebody to the United States if they face a death penalty. That was removed from the table. Another bar is you
cannot extradite somebody to the United States if they then go into -- or anywhere else actually if they then going to face charges that are not
those that are being listed for the extradition.
But his wife, Stella Moris, is being very, very clear, along with the lawyers. Absolutely they're going to contest it. This is how she framed it.
(BEGIN VIDEO CLIP)
STELLA MORIS, JULIAN ASSANGE'S WIFE: We're not at the end of the road here. We're going to fight this. We're going to use every appeal avenue and we're
going to fight. I'm going to spend every waking hour fighting for Julian until he is free, until justice.
(END VIDEO CLIP)
ROBERTSON: You know, 14 days to appeal, there could be some extensions, but it does seem that the fight is running out of ground to stop the
extradition.
ANDERSON: Europe's on the case down. Nic, thank you.
Well, ahead, we are live from Jerusalem for you where the funeral for a prominent Palestinian journalist descended into chaos last month. Now
Israel has wrapped up its investigation of the police that day. Also ahead, high energy and food prices are forcing inflation rates into record levels.
Is there any relief in sight? That's coming up after the break.
(COMMERCIAL BREAK)
[10:16:59]
ANDERSON: Israel has wrapped up its investigation for the actions of police during the funeral in Jerusalem for a slain Palestinian journalist last
month. Israeli police clashed with crowds carrying the coffin of Shireen Abu Akleh, hitting some mourners with batons. Abu Akleh's brother told CNN
he spoke with police before the funeral. Have a listen.
(BEGIN VIDEO CLIP)
TONY ABU AKLEH, BROTHER OF SLAIN JOURNALIST SHIREEN ABU AKLEH: The police called me and asked me to go to the police station and they wanted to know
the routes, the procession, and the arrangements taken for the funeral. They asked us not to have any Palestinian flags risen, any slogans, any
chanting, they didn't want to hear that. And they wanted to know the number of people participating in this funeral and the procession. We -- I told
them I couldn't -- I can't give any promises. We don't know the numbers. We -- I can't control the crowd.
(END VIDEO CLIP)
ANDERSON: For more on what Israel is saying about these events, let's bring in Hadas Gold in Jerusalem.
This has been an investigation into what happened. What were the conclusions of this investigation?
HADAS GOLD, CNN CORRESPONDENT: Yes, I mean, those chaotic scenes that we saw broadcast around the world where the coffin of Shireen Abu Akleh almost
fell in the chaos that unfolded during that funeral drew widespread criticism. The White House called it disturbing. The U.S. Secretary of
State Antony Blinken called it deeply troubling.
At the time, Israeli police said that they were forced to respond to what they said were objects thrown at them. They said that under prior
arrangement, the coffin was supposed to be transported by car. But that mourners demanded it go by foot. But clearly, just looking at those scenes,
they're hard to watch.
Now Israeli police launched an investigation into police conduct, and they said that they have now concluded that investigation. Now they did not
release any sort of details into the investigation, but a statement from the Israeli police commissioner does note that he says it is impossible to
remain indifferent to the harsh images. But then he seems to still direct blame towards the mourners, continuing to say that they must learn from the
incident that in the future sensitive events such as these will not be disturbed by violent rioters and will be respected.
Now, Becky, Israeli media has reported that that no police officers or commanders will be penalized or facing consequences for any of their
actions. We've asked the police when they will be issuing the full investigation, but they have not yet responded to our request -- Becky.
ANDERSON: Meantime, Hadas, there are separate investigations into how Shireen died. Bring us up to date on those, please.
GOLD: Yes, so several news investigations, including our own investigation, from CNN, the Associated Press, and the "Washington Post," have all found
evidence pointing to the fact that Shireen Abu Akleh was likely killed by Israeli fire. The Palestinian Authority investigation which was released a
few weeks ago accused the Israeli Defense Forces of what they said directly and deliberately targeting Abu Akleh.
Now Israel has been rejecting this conclusion. They have been calling they say for a joint investigation with the Palestinians.
[10:20:02]
They say they wanted to be overseen by the Americans and they say that the Palestinians have refused to share with them the bullet that killed Abu
Akleh for an investigation. But we have in actually the last hour or so received a new statement from the Israeli Defense Forces. They say that
this in response to what they're calling biased investigations. They say that they are still conducting their own investigation.
But one thing that is sort of new from their statement is saying the IDF investigation clearly concludes that Miss Abu Akleh was not intentionally
shot by an IDF soldier. They still say it is impossible to determine whether she was killed by a Palestinian gunman shooting indiscriminately in
her area or inadvertently by an IDF soldier. And the IDF is reiterating its call for the Palestinians to cooperate with them and to hand over the
bullets so the IDF could also investigate that -- Becky.
ANDERSON: Hadas Gold is in Jerusalem for you. Thank you.
Get you up to speed on some of the other stories that are on our radar right now. And in other story happening regionally for us and let's
remember this show is normally broadcast from Abu Dhabi, in the Gulf region.
The U.S. turning up the heat again in an attempt it seems to get Iran back to the 2015 nuclear deal. It is slapping new sanctions on some companies,
from China, Hong Kong and the United Arab Emirates, as well as a network of Iranian firms. Now authorities say they are fronts to help Tehran export
petrochemicals to Beijing.
Thousands of people in Bangladesh protested anti-Muslim remarks made by two officials with India's ruling BJP last month. Protest leaders called for a
boycott of Indian products and demanded that the prime minister file a formal complaint with India. Controversial comments have triggered anti-
Indian protests across the Muslim world.
The United Nations is painting a grim picture of human rights in Nicaragua. The high commission says rights have been on the decline in recent months
with reports of people being arbitrarily detained. She says people leaving the country in record numbers. The government dismissed the comments as
part of a U.S.-led campaign of, and I quote them here, "lies and fake news," end quote.
Well, in nearby Brazil, the government is conducting DNA testing to positively identify two bodies found in the Amazon. They may belong to
British journalist Dom Phillips and indigenous affairs expert Bruno Pereira. The two went missing on June 5th in a remote area of the Amazon.
The bodies arrived in Brasilia for testing on Thursday. The suspect in the disappearance confessed to killing the two and told police where to find
their buried bodies.
The government's handling of the disappearance sparked protests among the indigenous populations in Brazil and around the world. They believe someone
didn't want the two to report the crime and environmental issues in the Amazon and now worry about their own safety.
(BEGIN VIDEO CLIP)
DINAMAM TUXA, BRAZILIAN INDIGENOUS LEADER (through translator): Bruno and Dom Phillips were victims of the government's policies. A criminal
organizations who pay no heed to revelations about wrongdoing in the Amazon. Bruno and Dom Phillips were there precisely to gather information
to denounce what is happening in the Brazilian Amazon.
(END VIDEO CLIP)
ANDERSON: Well, next door in Colombia, it's the economy that is causing concern. The country's economic problems are playing a huge role in this
Sunday's presidential runoff election there. Now Colombians choosing between two men with very different visions of how to overhaul the economy.
Stefano Pozzebon joins us from Bogota with the details. And just somehow explain who these two challengers are if you will and what problems they
are likely to face if elected.
STEFANO POZZEBON, JOURNALIST: Yes, Becky, we often hear that a country is facing a historic choice or that an election could define an era. Well, let
me tell you this one truly carries all of that potential with it because this one, Colombia is one of the most conservative country in South
America. For the first time has put not one, but two disruptors through to the runoff. One is a former guerrilla fighter who wants to open a new
progressive era in South America.
The other one is a populist, a firebrand ala Donald Trump or Silvio Berlusconi perhaps. And the plans that they proposed to overhaul the deep
economic crisis that has still reeling from the impact of the COVID-19 pandemic and inflationary wave caused by the Russian invasion of Ukraine
are truly different. Take a listen.
(BEGIN VIDEOTAPE)
POZZEBON: Niober Siagama and his extended family live in two rooms in a cheap hotel in Bogota. At nighttime, 12 people squeeze into bunk beds and
on the floor, sleeping wherever there is some space. It wasn't always like this. Last year, this group of indigenous people lived in a house in
another part of town.
[10:25:04]
But in January, rent became too pricey. They had to leave, now they must pay for their rooms every night to have a roof over their heads. And money
is very tight. Everything got more expensive, says Siagama, who told us he sometimes skips his meal to let his two children eat a little more.
NIOBER SIAGAMA, FATHER OF TWO (through translator): I know I can make it. I have faith in myself and I know with my work I can get through this. But
sometimes the system plays against you.
POZZEBON: Their situation is not unique. Millions of Colombians are increasingly struggling to make ends meet, and food insecurity is on the
rise. According to the World Food Program, Colombia's food prices have increased the most across Latin America since the start of the year. In
part as a consequence of the war in Ukraine.
YURITH SUAREZ, BUTCHER (through translator): I'd say it started about five or six months ago that prices have really gone up.
POZZEBON: It sounds like a paradox after 10 years of solid economic growth, but three out of five Colombians responding to a late April poll said young
people will be worse off than their parents. But things are set to change.
(On-camera): After decades of the same economic recipe, Colombians are voting for change. Two disruptors have progressed to the second round of
the presidential election on Sunday. Each with his own plan to fix the country's economy. But even within change, there are different trends, and
which one of the two will come up on top?
(Voice-over): Left-wing candidate Gustavo Petro is at his third attempt to win the presidency, laying out his proposal in an interview with CNN, he
sets his eyes on household income.
GUSTAVO PETRO, PRESIDENTIAL CANDIDATE (through translator): There is a gap between how much the salaries grew, little, and how much the food crisis
grew, a lot. And that has caused rising levels of hunger. And that's where you have the crisis.
POZZEBON: Petro plans a radical rethinking a Colombia's economy, doing away with exporting fossil fuels and focusing on food production supported by
public spending. That will include renegotiating a free trade agreement with the United States.
His opponent, Rodolfo Hernandez, instead is in favor of free enterprise and lower taxes on basic goods to help everyday Colombians. Running on a
companion against corruption, he pledges to lead the government in austerity.
RODOLFO HERNANDEZ, PRESIDENTIAL CANDIDATE (through translator): I'm going to rule by example, let's start there. Taking away all the privileges of
the politicians that have no justification and are no good to the common people.
POZZEBON: The two candidates are neck and neck. And Siagama is still decided. He hopes, however, that whoever prevails will be able to open a
new chapter for Colombia. What we have now is unbearable, he says.
(END VIDEOTAPE)
POZZEBON: And Becky, just as a cue, this country is really heading into this election without ever having seeing the two candidates speak with each
other because they both refused to hold a debate even though a judge had demanded for the candidates to express and lay out their plans in public.
Whatever who will comes up on top, Colombia is truly welcoming a new era on Monday.
ANDERSON: Fascinating. All right, well, we will check back in with you then. Thank you, sir.
Still ahead on CONNECT THE WORLD, skyrocketing inflation rates around the world. Just how bad could it get? We are going to take that on after this
short break. Stay with us.
(COMMERCIAL BREAK)
ANDERSON: Welcome back. Out of London today where the time is half past 3:00. I'm Becky Anderson. You're watching CONNECT THE WORLD.
French President Emmanuel Macron says the European Union is looking for an alternative route for Ukrainian grain. In a French TV interview, Mr. Macron
said grain could be exported from Romania through the Danube River and into the railway system there.
The rise in food and oil prices due to war in Ukraine of course driving up inflation around the world. These are the latest global inflation rates for
May of this year. Just pick these ones out. Central banks in the U.S. and across Europe have increased key interest rates to cool down what is this
skyrocketing inflation.
Well, the IMF first deputy managing director Gita Gopinath says this. "We are in a period where interest rates are going up. They are expected to go
up and central banks have a challenging problem on their hands in bringing down inflation. We are in a time when it was very risky for financial
markets."
And Gita Gopinath joining me now live from Washington.
It is good to have you on. Do you agree with the U.S. Federal Reserve's decision to raise interest rates by three quarters of 1 percent this week?
GITA GOPINATH, FIRST DEPUTY MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: Hi, Becky. It's a pleasure to join you. And apologies for my voice, I'm
still recovering from a cold. The policy rate path that the Federal Reserve announced a couple of days back, we believe, is appropriate to tackle sky
high inflation in the U.S. and to strike the right balance between bringing inflation down and preserving employment as best possible.
These are very challenging times, but we do believe that price stability is essential for long run growth and for financial stability. Also, on a
longer term basis. And therefore it needs to be tackled head on. And we do think it's good that they made it more front loaded, which is they moved
interest rate increases to the near term as opposed to postponing it out. So the target in getting to somewhere around 3.5 percent to 4 percent, and
doing most of that in 2022 is a good thing.
ANDERSON: I note that you say this is good for the U.S. economy. It has consequences of course outside of the U.S. What effect will this week's Fed
rate rises have on developing markets?
GOPINATH: The increase by the Fed and by several other major central banks when we're seeing this global tightening of monetary policy is going to
raise borrowing costs around the world, without a doubt. I mean, that is part of what is needed to bring down inflation, not just in the U.S., but
globally. So that is going to be a consequence of it, which is rising borrowing costs. And if you are a country that imports commodities, which
means that you are paying the higher commodity prices, and therefore having, you know, costly fiscal issues to deal with.
And if you're are a country that's borrowed heavily in dollar terms, in a foreign currency, then you are particularly vulnerable to the current
period of rising interest rates.
ANDERSON: The IMF has slashed its growth forecast alongside the World Bank and the OECD. This is the third such downgrade. Why is this slowdown so
much worse than predicted at the beginning of 2022? Let's just be quite clear about what your perspective is at this point.
GOPINATH: So April we had a sizeable downgrade to global growth. We went from 4.4 percent to 3.6 percent, and that was almost entirely a consequence
of Russia's invasion of Ukraine and what we saw in terms of rising food and energy prices.
[10:35:02]
This spilled over to the rest of the world. But going forward, I think there is a high likelihood that we will have a further downgrade when we
put out our numbers in July. And there are three reasons for that. One is that the war is under sanctions have escalated, the consequences of that
for Europe are more severe, and of course for the world as a whole, too. The second reason is in China, which is facing COVID waves and combined
with its zero COVID policy and its lockdowns had a very serious contraction and made retail sales much worse than we expected.
And third, we are in a global monetary tightening cycle with all major central banks raising interest rates at a much steeper rate than was
expected.
ANDERSON: Right.
GOPINATH: So all of these factors are going to slow growth even more going forward.
ANDERSON: So you're talking about another downgrade to your forecast? By how much?
GOPINATH: We --
ANDERSON: Can you be clear?
GOPINATH: What is clear is that we will have a downgrade. The exact magnitude of that is yet to be determined. We will have those numbers in
July.
ANDERSON: Policy makers across international organizations and central banks have, let's be quite frank, been pretty despondent when talking about
developing nations. Have a listen to this.
(BEGIN VIDEO CLIP)
DAVID MALPASS, WORLD BANK PRESIDENT: We think it's the biggest slowdown of the global economy in 80 years.
MATHIAS CORMANN, OECD SECRETARY-GENERAL: The low income and vulnerable households are being particularly hard hit.
ANDREW BAILEY, BANK OF ENGLAND GOVERNOR: And that is a major worry, and it's not just I have to tell you a major worry for this country. It is a
major worry for the developing world as well. And so if I have to sort of sorry for being apocalyptic for a moment, but that's a major concern.
(END VIDEO CLIP)
ANDERSON: And this is a man who called himself helpless recently in the face of these inflation numbers, and as the Bank of England's governor. You
heard the narrative there. Do you agree with what is a really rather gloomy assessment going forward?
GOPINATH: Well, these are very challenging times, and we are getting hit by crisis on crisis. The pandemic, which is not fully over, and we have now
the war in Ukraine. And importantly, for people around the world, this is a major cost of living crisis for them. And especially in the developing
world, where food makes up close to 40 percent of their consumption basket, the rise in prices that we're seeking has just been felt everywhere.
Gas prices going up, energy prices going up is being felt by households all over the world. So if you look at, for instance, global consumer sentiment,
I mean it is I would describe that as being the depressed state. People are very worried about what is to come, but also having to deal with these
extremely high prices in a very uncertain environment.
ANDERSON: I have to ask, and this is asked with the greatest of respect, because you are, you know, you've been at the IMF for some time and you've
worked for other international organizations and you're clearly extremely good at your job, but I have to ask. You know, in this current climate, are
institutions like your own and indeed central banks fit for purpose? It does feel as if there is a sense that nobody quite knows how to deal with
this current crisis.
GOPINATH: I mean, without a doubt, these are extraordinary times. We haven't seen a pandemic been followed by a war in Europe, and to respond to
these events it's going to be extremely challenging. So there's no doubt about that, but at the same time, we are in a better place in the sense
that the remaining costs of the world, where the labor market has recovered, thanks to the strong policy support that was provided during the
pandemic. And because of that, you know, we're in a somewhat slightly better position.
There's a lot of emphasis on following the data very closely and responding as best possible. But I will agree with you that these are incredibly
challenging times for economies.
ANDERSON: Let me ask you very, very briefly. I mean, a global recession is what's so many people are talking about at this point. Do you think the
world can get away with a soft landing, as opposed to a hard landing, which could skewer so many economies?
GOPINATH: I think there's a tremendous amount of uncertainty. I just listed a bunch of ongoing events which point towards a downgrade in our growth
forecast. But in addition to that, I would say that all the risks seem to be mostly tilted to the downside. We could see a much more financial market
turmoil.
[10:40:02]
We still have to see the consequences of -- there's a gas shutdown coming out of Russia on Europe. That would be very consequential. China, including
its real estate sector, is in a precarious position. So there are many headwinds over here.
I would say that we are looking at a horizon where there are countries in the world, regions of the world, including Europe, that are particularly
vulnerable and could have some courses of negative growth. So it could have technical recessions. Some countries could. But again, these are difficult
times to bring about a very soft landing.
ANDERSON: I was reading your CV ahead of this interview. If anybody has the experience to make decisions at this point, it is you.
It's a pleasure having you on. Thank you very much indeed, for joining us. And I do hope that you get better soon. Really appreciate your time, even
if you're not feeling at your best. Thank you.
We're taking a very short break. Back after this.
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ANDERSON: In basketball, the Golden State Warriors claimed their fourth NBA championship in the last eight seasons. The team beat the Boston Celtics
103-90 in the finals. MVP, of course, the Warriors' Steph Curry, who was brought to tears after the final buzzer.
Amanda Davies is here with the details.
I told you before, I threw to you here that I was going to talk about golf.
AMANDA DAVIES, CNN WORLD SPORT ANCHOR: We're talking golf. I know.
ANDERSON: But you know what, I'm not. I'm just going to ask, because that was (INAUDIBLE), I mean, brilliant.
DAVIES: Well, it is. I wish we can bring out. We've got them coming up on the show. The pictures of the celebrations. You know an American franchise
has had a good day at the office when you see the ski goggles on, the champagne flowing and the locker room celebrations. And that is exactly
what we got from Steph Curry.
ANDERSON: Lovely. That's "WORLD SPORT" after the break. I'm back after this. Do stay with us.
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[10:45:40]
(CNN WORLD SPORT)
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