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First Move with Julia Chatterley
Germany Economy Minister: EU to Agree on oil ban soon; Kremlin Says Former Russian Diplomat "Is against us"; Rubenstein: Tech Sell-off might be an Overcorrection; Top EU Official Warns Russia is Weaponizing Food Supply; HKEX to Open Overseas Offices to Draw Foreign Investors; Airbnb Exits China Business as Zero COVID Hits Travel. Aired 9-10a ET
Aired May 24, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome once again to the World Economic Forum here in Davos, Switzerland. I'm Julia Chatterley. And
powerful words here in Davos today on how the Ukraine war is fueling a worsening global food crisis?
European Commission President Ursula Von Der Leyen, saying Russia is "Weaponizing not only energy supplies, but food supplies too". She believes
Europe must begin talks with Russia on getting wheat and other food exports flowing again; to make sure global hunger does not worsen.
Richard Quest spoke with Von Der Leyen just a few moments ago. And she says it remains crucially important in the months ahead to keep Europe focused
on helping Ukraine while also pushing Europe forward to a more sustainable energy future.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: The European population stands very strongly behind Ukraine, and is outraged about this
brutal invasion. And you should not oversee or forget the fact that we have this huge investment package next generation recovery from the pandemic.
This is why Europe is standing strong. And many people in Europe also see this opportunity that getting rid of fossil fuels from Russia is a big
chance to invest heavily in renewable our European Green Deal.
(END VIDEO CLIP)
CHATTERLEY: There's so much work to be done now as the global energy and food crisis take center stage here in Davos, we'll be joined by the Head of
the World Food Programme, David Beasley, later on in the show.
In the meantime, across the world in Tokyo, Ukraine, was also at the forefront of discussions on the final day of President Biden's Asia trip.
He met with the leaders of Quad Nations, India, Australia and Japan, urging them to make more effort to stop Russia's war on Ukraine.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES OF AMERICA: Russia's assault on Ukraine only heightens the importance of those goals. The fundamental
principles of international order, territorial integrity and sovereignty, international law, human rights must always be defended, regardless of
where they're violated in the world. So the Quad has a lot of work ahead of us.
(END VIDEO CLIP)
CHATTERLEY: Kaitlan Collins is in Tokyo for us. Kaitlan, great to have you with us, there's so much we could talk about so many pressing issues for
these leaders to discuss, including, of course, a new Australian Leader. But I think key for me, I look at the statement and I see what appears to
be a veiled warning to nations like China don't try and change the status quo.
I look at the very brief mention of Ukraine, of course, and the elephant in the room is that India is so far has not condemned this war, what progress
was made?
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, that's been a big question for the White House. And they've tried to handle that
delicately when it comes to how India has treated this invasion of Ukraine, because obviously, they have been a lot more hesitant to criticize Putin
for invading Ukraine than other countries have.
They've continued to import oil. They've actually accelerated a lot of their purchases at times. And they haven't even really called it an
invasion or a war. You've seen them stray from that language and so that really has been a huge focus here as it was during President Biden's last
day in Tokyo when he had a one on one meeting with the Indian Prime Minister Modi.
And you saw the readout later on from the White House they say that President Biden condemned this invasion when he was speaking with Modi. If
you look at the Indian readout, they do not mention the invasion. And so it just really speaks to the huge divide that maybe they're not talking about
it publicly as much, but they certainly are aware of it privately.
And so this really has been this moment where you've seen such a change and a meeting like this where typically, you would have these meetings with
these world leaders. We've seen these Quad summits before, this is the first time it's happened ever since as far as this invasion has happened.
And so that's been a big aspect of it askew, so there's a few bugs out here. And that's a big aspect of it as well.
And so, of course, that has really changed the trajectory of all of these conversations that they've been having. And that's been a big factor in to
how President Biden is approaching this differently than he would have six months ago.
CHATTERLEY: Yes, but I guess the important point here as well is that they're actually having them and they're physically together, which makes a
difference. Kaitlan Collins, great to have you with us thank you for that.
Now, one of the most key highlights of the World Economic Forum so far was Ukrainian President Volodymyr Zelenskyy's - address to delegates yesterday
- world leaders to impose the maximum sanctions possible against Moscow, including a complete ban on Russian oil.
Germany's Economy Minister Robert Habeck believes the promised European wide oil embargo can be agreed on soon. He says getting all of Europe on
the same page won't be easy, and we've seen the challenges, but he calls it immoral imperative just take a listen.
[09:05:00]
(BEGIN VIDEOTAPE)
ROBERT HABECK, GERMAN VICE CHANCELLOR: But you have to understand the European history. And of course, there are some countries that Germany
split in between that relied on - that rely more on Russian oil and gas than other countries. So between Portugal, which has no connection with
Russian energy at all, and Hungary, for example --?
CHATTERLEY: That was signing contracts into this--
HABECK: It's a big difference, of course. So we have to consider that not every country has the same demand and the same possibilities to get a ban
on oil. Saying that, of course, there must be a solution at the worst of Europe is that we talk for ages and don't find a solution. But I'm
convinced, and I'm sure that we will find a solution within the next days.
And as I said, I understand in order to accept that Hungary, for example, has its own problems to solve, or they have to solve it. But I don't accept
this that they say, OK, give us more time, and then do what nothing. This is unacceptable. So there is a corridor of a solution. And I guess we would
see it working in the next days.
CHATTERLEY: Days or weeks how quickly can we do this?
HABECK: I hope hours actually.
CHATTERLEY: Hours--
HABECK: But it would be days.
CHATTERLEY: One can wish. I think the challenge here. And it goes back to what we've already seen in terms of what you've called a weaponization of
energies, what we've seen from Russia, they've now cut off gas to the Fins. We can argue over why they've chosen to do that the Fin states because they
simply wouldn't pay on Putin's terms. We've seen the poles cut off, but the Bulgarians cut off the gas.
Germany hasn't been and there's confusion over how Germany. German utilities are paying for gas, our German utility is engaging in swaps
between euro currency and the ruble.
HABECK: Well, if we pay the German companies they pay in euros, and then there's a system that Putin vented from my point of view, to save his idea
for the Russian people, and which is approved by the European Commission, this is very important for me, for everything I do, the European Commission
has to give the approval and we have got the approval, then when the money for the gas is swapped over in euros, then there is another conduits called
K-control in the bank, and the bank is transferring the Euros into Ruble from one country to the other.
CHATTERLEY: Who chooses the exchange rates? Could German utilities pay to the Russian --?
HABECK: It's the bank that does it. So from my point of view, it's just face saving for Putin. And I think the European Commission has the same
opinion, because they approved this way. And they use the German most of the German companies; they used old contracts they had from foreign base.
And so therefore, I think this is not, this is not a breach of sanctions. But it's within the sanction system.
CHATTERLEY: You emphasize the point that the EU approved, just because they approved does it make it morally right, particularly those that are saying
you are paying on Putin's terms, it may be Putin face saving, but you're allowing him to save face?
HABECK: Well, actually, the world is more complicated. When I was in the U.S. some weeks ago, this was the days when the U.S. government decided on
a ban on oil. And they said to me, but we don't want you to do the same as we are doing. Because then the world oil price will explode. So we are
doing something and I translate to be on the morally right side. But we want you to do this, we want you to do the same, because then we have a
global problem because the price will skyrocket.
And therefore, I mean, the things have to be done on the ground. It's, of course, this that some countries and Europe with gas belongs to them, or
Germany belongs to them buying gas from Russia, but we can't do without it. It took decades to build up the system. Now we're changing the system
within weeks. This is astonishing - moving - astonishing, fast moving forward. But without the Russian gas, our industry will collapse. Europe
will get into a recession. Definitely it's not a German problem. It's a European problem. If European will collapse, then the world market will
collapse. And then who helps Ukraine?
CHATTERLEY: No one.
HABECK: Europe and Germany can't so the things are sometimes more complicate also, morally speaking.
CHATTERLEY: All actions have consequences, I think is the point that you're making. One more questions on this are you confident that Russia isn't
making money on this that on that exchange between euros and rubles that the German utilities aren't paying a higher price than was?
HABECK: Actually Russia is making a lot of money of course, the energy selling was declining in the last months and weeks, but they have earned a
fortune and all oil companies worldwide have earned a fortune out of it because with lesser - with less selling they have gained more profits.
[09:10:00]
HABECK: So in a way, if you put it like this alone the discussion, let's not say the American ban on oil has helped Putin to earn more money. So,
crazy the word is - which does not mean that we shouldn't do a ban on oil because morally speaking you're right.
I don't like Germany to pay money to Russia to Putin. So we have to move away just because we want it. We asked more citizens of this world we have
to help the Ukraine. But do we have Putin? Well, there you can have second thought, and also the ban on oil, the U.S. has done has not harmed Putin in
any way because the price for the oil went up. And therefore he earned with lesser selling more wages.
(END VIDEOTAPE)
CHATTERLEY: The question of morality came up a number of times. The Economy Minister conceded that next winter is going to be a challenging one for
much of Europe, as it struggles to meet its energy demands with less Russian oil and gas.
But he did say as you heard briefly there recession, not inevitable there are choices. But he struggles with the dilemma of taking a moral stand
against Moscow, while Germans also grapple with rising prices. He believes it's ultimately impossible to stay neutral in the Ukraine war, but he also
believes in pragmatism in the months ahead. And that's going to be paramount. Just listen to this.
(BEGIN VIDEO CLIP)
HABECK: I think there's no problem if you do what you can for the better. If you're waiting for perfection, then you wait for ages and nothing is
going to happen. So sometimes politics is about making the lesser worse decision this sounds like cynical, but it's the way the world moves. And if
you're in politics, it's always two sides of the story. So if you always try to think about it, rationalize it as you said it and take the lesser
worse side, then this is the best way to work yourself out of the problem.
(END VIDEO CLIP)
CHATTERLEY: Important context there I think from the German Economy Minister as global leaders face gut wrenching economic, political and
geopolitical decisions on Ukraine and beyond. Now a Russian diplomat with over 20 years' service is quitting an open protest at what he calls
Russia's aggression, aggressive war in Ukraine.
The Kremlin's response, the veteran diplomat is "No longer with us. He is against us". Boris Bonderev announced his resignation on LinkedIn,
describing an environment of increasing corruption and saying the leaders who wage the war "Want only one thing to remain in power forever". Nic
Robertson joins us now Nic, and he was based in Geneva and I know you've, just landed there. What more do we know about this man? Do we know where
his family is? As he openly said in that post on LinkedIn, he knows he's a traitor now or considered a traitor?
NIC ROBERTSON, CNN INTERNATONAL DIPLOMATIC EDITOR: Yes, he knew that his actions yesterday were going to leave them exposed to any potential
retribution from the Kremlin. And their words so far, have not been encouraging as to be expected.
He is not with us. He is against us. He is against the sort of wider political and public sentiment of Russia. That's what Dmitry Peskov,
President Putin's Spokesman said, has been Boris Bonderev has been very critical of both President Putin and the Russian Foreign Minister, Sergey
Lavrov.
President Putin, he accuses him and others he said, who led the country into the war of wanting to live you know, a grand lifestyle in Pompous,
tasteless villas. And if you think about it, these strikes at the very language, or mirrors the language that was used by the Opposition Leader,
Alexei Navalny, shortly after he was in prison about two years ago when he exposed what he said was one of President Putin's very large, ostentatious
palaces in Russia.
The Kremlin denied that of course at the time, but what this diplomat is doing here is landing some very significant diplomatic blows and public
relation blows on the Kremlin is saying, look at what some of these oligarchs who are sailing around the world in their yachts comparable in
cost and size to the Russian Navy. He said these are leaders who will spare no Russian lives who will sacrifice Russian lives for their own aims of
staying in power.
And that, you know, broadly speaking, even for Russians who, you know who are patriotic, they know these stories about President Putin and his
luxurious palaces, they know themselves, how much President Putin cares little for them.
[09:15:00]
ROBERTSON: So there's resonance there. But the notion that he spoke about that this is an aggressive war against Ukraine and against the world and
crimes as well, against the Ukrainians and against Russians.
And Bonderev said the reason these are crimes against Russians, because what President Putin is doing, essentially extinguishes the possibility of
a free and prosperous Russian society going forward. And this is why he's decided to step aside from his position.
And very critical, as I said Sergey Lavrov, the Russian Foreign Minister, saying that he is no longer interested in diplomacy is interested in war
mongering and hatred, and that also is likely to ring some familiarity bells, if you will, with other Russian diplomats.
CHATTERLEY: --potential of personal consequences Nic, great to have you with us, Nic Robertson there thank you. Plenty more to come from the World
Economic Forum and beyond, stay with CNN.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back! U.S. stock market starting the week off strong, careful saying that the rally may be short lived through too. Let me give
you a look at what's taking place. As we can see, here they go. We're down some 1.7 percent on the NASDAQ the stock S&P 500 down some 1 percent. So
what we'll see how it goes.
There are lots of things to discuss here. And I'm happy to say we're joined by the Founder of Carlyle, David Rubenstein, great to have you with us now
everything just went wrong there, as always happens with live TV, which is rotating. But you know that better than most. We were just going to play a
clip of one of your panels yesterday. And I just want to play that now. And then we're going to get you to comment on it. Let's just watch this,
please.
(BEGIN VIDEO CLIP)
DAVID RUBENSTEIN, CO-FOUNDER & CO-CHAIRMAN OF CARLYLE: Over the last 25 years, we've had at least three crises that are worse than this, the bubble
bursts of the early part of this century, the COVID problem and the Great Recession. They were all far worse than where we're faced with right now.
And I think the people responsible for the government and the economies recognize the challenge we have people are on top of it, and I don't think
it's going to be the crisis that we've experienced in the last 25 years in any of those three instances it'll be a mild banana if there's a banana.
(END VIDEO CLIP)
[09:20:00]
CHATTERLEY: Now, there are lots of completely banana things going on in the world at this moment and beyond and people of course too. I suppose we
should give some context on why you were using banana, not our word, of course, which is recession.
RUBENSTEIN: When I worked in the White House for President Carter, his inflation advisor once said that, then we were heading into a recession,
and President Carter called him into the Oval Office and said, I'm running for reelection, don't use the R word. It scares people.
The Inflation Advisor, Fred - what should I say? Carter said, whatever you want, just don't use the R word. So he used the word banana, recognize and
reporters wouldn't put in a headline, Carter's inflation advisor thinks we're heading into a banana.
So I said yesterday that I don't know if we're heading into a banana. But it's obviously a complicated economic situation. And the economy slowed
down a bit in part because of the war in Ukraine, and partly because inflation has been fairly high, even before Ukraine.
CHATTERLEY: I think what my view is, and I hope they'll notice is the difference between your tone and perhaps something like the IMF Chief that
said, you know, this is the sort of biggest threat or challenge that we've faced since the Second World War.
And admittedly, there's a lot going on food crisis, energy crisis, sort of a lack of certainty about where we're headed, and you mentioned the war.
But why are you on a relative basis so calm? Because you have a unique sense of what's going on in the world with businesses all over the world?
Is it just not as bad as perhaps - clear?
RUBENSTEIN: Maybe it's because I'm so old, I've lived through so many crises that don't get as excited as I used to get.
CHATTERLEY: Not that.
RUBENSTEIN: The IMF Chief is a very talented person. And I agree with her on so many things. I think what she was really referring to is, the war in
Ukraine is a tragedy, the likes of which we really haven't seen in 50 years or something like that, at least since the Holocaust. And that's what I
think she was referring to.
The economy is troubled because of that, in part, I think a lot of her concern was relating to the war. But I do agree that the economy does have
some challenges around the world, in part because inflation is higher than we'd like it to be. Growth is slowing down in China and in Europe, in part
because of the war, in part because of supply chain issues and related things and interest rates are going up and it always declines growth.
CHATTERLEY: But you think if in three worst crises, even just in the last in the last 25 years
RUBENSTEIN: Well, in the last 25 years, I think the market had a gigantic crisis in 1999 and 2000, the tech bubble burst. And then we also had COVID
as a big crisis as well, and then the great recession.
So I think those three things were much bigger economic challenges. And I think we have today though, it's a very serious economic problem. I want to
make light of it. But I don't think today, we are yet at the point where we're having a recession, where we're having a great recession.
CHATTERLEY: So do you think that if we bring it back to stock markets, and what we've seen in terms of a broader correction, it's not just about
stocks, it's far more broader than that? Have we overreact - things always overreact, they undershoot, they overshoot?
RUBENSTEIN: Markets always overreact on the upside and overreact on the downside. So if you're going to be paying attention to the stock market
every day, you can, you know, lose your sanity. So I'd say that you have to recognize that markets get overexcited, let's say on the up and downside.
Right now I think the markets probably overcorrected on the tech side on the upside, because the tech prices were so high, they may have
overcorrected a bit. There might be a good time to buy some things to the bottom now, because I don't think we're going to go much lower in some of
these tech companies.
CHATTERLEY: We're going to speak to the Chief of the World Food Programme later. I mean, he's talking about a potential global crisis in terms of
food, you mentioned the cost of living crisis, with inflation going higher. We've got central banks, perhaps grappling with how they tackle that, and
even the way that they tackle that causes pain, particularly for the poorest in the world. I can understand some of the fear, hysteria concern
about tackling these problems.
RUBENSTEIN: Well, remember, when we've had great financial crises before the Great Depression, the Great Recession, you've had the central banks
that didn't have a lot of capacity, and you had banks that didn't have a lot of capacity. Now, the banks have a fair amount of capacity. And the
central banks have a fair amount of liquidity. So I'm not that worried about that problem.
CHATTERLEY: And so where do we go from here?
RUBENSTEIN: Well, of course, if I knew I would be a lot.
CHATTERLEY: OK, good.
RUBENSTEIN: But nobody really knows. But I do think that we are in a situation where we have to be very cautious. The Federal Reserve is very
cautious. And I don't think we're going to know where we're going to head whether we're going to go into a banana or something close to banana for
quite a while, but we shouldn't obsess over it.
Remember, we've had bananas lots of times, and we'll have them again in the future. I think we should worry more about the human rights problems we now
have in Ukraine, that's a much greater concern for a lot of people around the world.
I think in Davos now, more people are worried about Ukraine, I think, than anybody would have expected a year or so ago, or before the war started.
And now Ukraine is the central issue people are talking about here. The economy is the second most important issue and people are concerned about
it. But everything is through the prism of Ukraine.
CHATTERLEY: Do you think people get fatigued with Ukraine?
RUBENSTEIN: Well, not the people who were living there and not the people who are suffering from it and people who have relatives there, they're not
fatigued by it.
[09:25:00]
RUBENSTEIN: Clearly that so is putting a lot of attention to it but I think it deserves attention if we had more attention on the Holocaust maybe we
wouldn't have so many people killed so I do think it's a deserve the attention it's getting.
CHATTERLEY: Yes, on the press in particular I have to keep focusing on it. You know, one of the things that you've been asked about a lot, and I think
it plays to the volatility that we've seen and the market losses is, is crypto.
And you can tell me what your view is on this. I mean, because in the guard coming into this, that it's worthless, and it's not worth this there is
some value, it could go lower, I guess the argument. What do you make of it in general, as a sector, and then we can talk about perhaps, what it means
from here on out, particularly from what we've seen in terms of sanctions.
RUBENSTEIN: What clearly there's been too much speculation in crypto? A lot of people jumped into it, not knowing what they're really getting into. But
I don't think it's going to go away. There's too much interest in it politically, from younger people, and from people around the world.
And right now, because of what's happened to the Russian Oligarchs, a lot of people are saying, wait a second, maybe somebody will come along and
take my assets away. So I want to have something that people can't take away. The government doesn't know what I have, rightly or wrongly, I think
that's a perspective that a lot of people around the world have.
And also younger people like the enjoyment of it. It's like gambling for them. And gambling has attracted people, some people find buying crypto
attractive, that doesn't mean it's a good thing to do. You shouldn't put too much your net worth into this area.
CHATTERLEY: Rightly or wrongly, do you think, in what we've seen with the financial sanctions on Russia, that in some way, the potency, the power of
the U.S. dollar has been laid back in a way it's been weaponized, and for countries around the world that are less friendly with the United States
perhaps don't agree all the time with the United States?
Do you think crypto in some form for them, offers some degree of autonomy from the traditional financial system and diversification because I've
certainly have conversations in different nations or with officials in different nations that say we're looking at it in a different light now.
RUBENSTEIN: Remember, all currencies eventually get devalued a bit, because inflation eventually will devalue a currency a fair bit, and probably a
U.S. dollar will go down over the next 15 or 20 years by some amount of money that's fairly predictable, based on the past.
So I think people younger generation, people say, well, you guys, my generation have devalued the dollar by borrowing too much and by not
worrying about deficit spending, and so forth. So maybe I'll have something that isn't quite as dependent on government decisions to spend too much
money.
There may be some of that. But I do think that younger people have a different perspective. And I think when you ignore what younger people are
doing, it's a mistake. The great technology developments we've had in the last 25 years were spawned to some extent by young people inventing things
and by younger people than them actually going ahead and using them.
So when smartphones came out, personal computers came out. When shopping for the Internet came out who was leading the charge, it was a younger
people. So when the younger people have something they're interested in, I think people my generation shouldn't ignore it. That that's not to say, you
should put all your money in crypto, and I'm not recommending that. But you should recognize that it's not something that is going to go away, I think
the genie is out of the bottle.
CHATTERLEY: You mentioned something earlier that you'd be a lot happier if you could almost see round corners. But you don't build a business the size
of the business that you have, and wealth, whatever it is, without being able, in some degree to predict or to see round corners, or to be very
lucky, maybe a little bit of everything.
RUBENSTEIN: Well, a lot of luck.
CHATTERLEY: Yes. Where are the blind spots today that do worry you?
RUBENSTEIN: I worry about the U.S. debt. We right now have $31 trillion of debt. And I think other governments have a lot of debt at some point that's
going to be paid off in higher interest bearing debt than we've had the last couple years, the deficits as well as the debt is also very high. I
also worried about the growing income inequality.
What COVID has done is its taken people that don't have education, that don't have jobs that are very good jobs, and children that don't have
internet access, they look falling further behind. So a lot of people have fallen into a gap now that they're not going to escape from for some time,
and COVID is still with us.
Remember, in the United States, about 40 percent of the people haven't been vaccinated, and there are new strains coming all the time. And so we're
going to live with this for a couple years at least. And as a result, people who are hurt by COVID, who don't have the kind of jobs that enabled
them to keep working this way, are falling further and further behind. The income inequality problem is a bigger problem than it's been in many, many
years in United States.
CHATTERLEY: Yes, this was actually not talked about that enough here. There's a lot to deal with David, you reminded me when you came on that you
were our first ever guest on the show. So thank you.
RUBENSTEIN: Well, congratulations on your success. OK.
CHATTERLEY: Thank you. Great to chat to you, sir thank you. OK, we're going to take a break. Up next, they were leaders warned that Russia is wielding
hunger as a weapon. We'll speak to the Head of the U.N.'s Food Programme David Beasley stay with us.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to Davos, Switzerland! The World Economic Forum has made the food crisis one of its top agenda items. And the message seems
to be getting across. Ursula Von Der Leyen accusing Russia of wielding green and hunger as a weapon and the Polish President warning of a refugee
crisis unless Ukraine's food exports resume.
One of the most passionate responses has been from David Beasley Head of the World Food Programme; he joined me on a panel and warned this is a
crisis for everyone.
(BEGIN VIDEO CLIP)
DAVID BEASLEY, EXCUTIVE DIRECTOR, U.N. WORLD FOOD PROGRAMMEME: Over the next 10 to 12 months, we probably will have a significant as we are having
a pricing problem but because of the fertilizer issues that we're facing.
The lack of production not just in Ukraine, but in North America, South America, Africa, Asia, because of droughts and many other factors. We very
well could have a food availability problem that's not going to impact just the poorest of the poor it is going to impact everybody.
(END VIDEO CLIP)
CHATTERLEY: Joining us now David Beasley Executive Director of the UN World Food Programme. David, great to have you with us! You are everywhere in
Davos. Everyone's talking about your message. And it is about the short term it's about addressing the issues that we face today in Ukraine and
Russia and beyond.
But I think also vital the trajectory that we're on if we don't take action on many things, the science the access to food today and beyond.
BEASLEY: You know, before Ukraine, we had a global crisis that was percolating and moving forward, and just when you think it can't get any
worse, ban. The breadbasket of the world has been turned into the bread low - bread land in the world, a nation that feeds 400 million people and you
pull that food off the market.
You are compounding exacerbating what we're already high commodity pricing, fuel pricing, shipping cost and my gosh, we're now talking about 325
million people not going to bed hungry, marching to starvation.
And out of that 49 million in 43 countries are knocking on families door and what that means if we don't reach that 49 million, you will have
famine, you will have destabilization of nations and you will have mass migration. The conditions now are much worse than the average spring of
2007, eight and nine.
CHATTERLEY: I mean hungry societies break down. I think that was one of the messages and it doesn't matter where you are in the world this is a long
way from a lot of people that are here in Davos but its coming.
[09:35:00]
CHATTERLEY: I think that's the message too. This situation is going to widen and widen if we don't take action today.
BEASLEY: You know already because of the increase in demand of the problem of the number of beneficiaries that are in need of great help. We are
already cutting 50 percent rations, in some places, zero rations for millions of people around the world.
What do you think they're going to do? I mean, what would any mom and dad do? I mean, they're going to flee. They're going to leave. They go
destabilize. In the Arab spring of 2007, 2008 and 2009, you had over 48 nations that had political unrest, riots and protests.
We've already seen what's happened in Indonesia, Pakistan, Peru, and Sri Lanka? What happened in Chad, Burkina Faso, and Mali, that's just a sign of
the things to come? So we're going to have a food pricing problem over the next 12 months. But after that, on top of that will be a food availability
problem if we don't address these issues right now.
CHATTERELY: So much in there as well. And as you've said, and I think that resonated with, certainly with our audience where you said, look, I'm
effectively stealing food from the hungry to give to the starving.
And those are the kinds of decisions that you're making on a daily basis, and you're on the frontline of the crisis. And actually, the World Food
Programme should be the last line of defense and not the first person that's called upon in order to tackle some of these challenges.
But they're also critical questions that we have to ask about sanctions. We have President Zelenskyy, making another impassioned plea for maximum
sanctions and tough conversations that you and I have had with big companies that provide fertilizer, and they're being lambasted for
continuing to work with Russia.
And there are no easy solutions here. But I want you to explain to us what happens if we don't have access to Russian fertilizer, if we don't get
access to Russian green to never mind opening the ports in Ukraine.
BEASLEY: You know we'll let the politicians make the political decisions.
CHATTERLEY: Despite--
BEASLEY: What we try to say is, please understand when you make decisions, there are consequences and make certain that you don't do more harm to
yourself than to the country you're trying to sanction.
So, for example, we know we can't produce the food we need to feed the world without fertilizers. In Russia, Belarus, this region produces 40
percent of the base product for fertilizer. So the world is got to figure that out.
Because right now we've got droughts around the world, we got fertilizer, pricing, this out of roof - out of the roof, because of fuel, and then the
lack of availability of fertilizers. So we got to deal with that issue very, very strategically, because all of these things are coming together
for a perfect storm.
And you know, what breaks your heart is that there's $430 trillion of wealth on planet Earth today. And when we're asked, when we don't have
enough money, or the access we need, we have to choose which child eats or doesn't eat. Which child lives or which shall not that no child in the
world should go to bed hungry, much less die, because the lack of access to food.
CHATTERELY: You certainly have to keep the politics out some of these decisions, and we can but I think we do have to go to the heart of it when
we talk about pleading, the pleading that you've done to Russia to the world to say.
Look, we have to open these ports, we have to get food out we need food corridors, and we're hearing it now from politicians too. We can talk about
what Putin is trying to achieve here what his legacy is or isn't.
But I think one of the most powerful messages that you gave me on that panel, too, was saying, you know, Putin needs to understand that this
point, and the world needs to be saying that perhaps what Putin's legacy is going to be if we're not very careful at this moment beyond the
humanitarian crisis in Ukraine is global famine. How about that for a legacy?
BEASLEY: No, you know that I think the last thing any leader on planet Earth wants to be seen as the leader that created famines around the world.
And if we don't get those ports open, it literally is a declaration of war on global food security.
So I would like to think that if Mr. Putin has any heart at all, he was like, I get it. I understand it. Let's open up those ports so that children
around the world don't starve to death. I'm begging and pleading, please, let's open up these ports, regardless of the abuse about Ukraine, or at
least have some heart for the rest of the world.
CHATTERELY: Yes, even if he hasn't got a heart again, we come back to what his CV and what his legacy looks like? And if it - even if it's that you
have to appeal to we're trying to do it. Do you think we're finally connecting the dots? We can't address issues like climate change without
addressing issues like food security of our food systems around the world contribute to what a third of greenhouse gases, nature.
We saw, the beauty of our nature revealed as a result of COVID the damage that we're doing in terms of biodiversity, contributing to those kinds of
risks. Are we finally connecting the dots that if you address one crisis, you actually address others too and actually, we can work together more
efficiently.
BEASLEY: You know where the tragedy come a treasure of opportunity to do some great things and the world is facing truly a food security crisis
immediately and long term. And if we're struggling now with a world population to feed 7.7 billion what do you thing going happen we got 10, 12
or 13 billion on top of climate impact that we know is going to be resonating around the world?
[09:40:00]
BEASLEY: And so we've got to take advantage of this moment to bring everyone together. And you and I talked about this in my opinion the media
sort of neglected the food security for several years.
But now, everybody, because the media has given it the attention I think it deserves. And now the leaders are like, wow, we didn't realize it was so
bad. So thank you for helping us alarm the world. Because I do believe I'm an optimist. In spite of all this, we've got solutions, and we can get it
done.
CHATTERLEY: Yes, there have to be global solutions too. I mean, China, we can learn lessons from how China's tackling this as well for their own
country. So it's complicated as the geopolitics is on this thing in particular that we have to work together globally?
BEASLEY: Well, we do. I mean, as I've told my leaders in Europe, I said, your problem is not just to the east of you, if you neglect to the south of
you, you're going to have mass migration coming from the Middle East coming from Africa.
And I can tell you, we feed 130 million people on any given day, people don't want to leave home. But if they don't have any degree of peace, or
food security for their children, they will do it any mom and dad would do.
And so let's make sure we look at this comprehensively because if we do it, right, and if we don't do it, right, yes, you will have famine, mass
migration, and destabilization. And I can tell you from experience, and this is not rhetoric. It'll cost you 1000 times more than it will be to
feed a child in Chad, in - in Jordan, in Syria for 25 cents a day.
CHATTERLEY: Than a refugee in a country like Germany, for example.
BEASLEY: $70 a day.
CHATTERLEY: I know. And that's the key too. Look smart, beyond anything else. We can do this. We've got to be focused, David, and you are certainly
thank you for all the work you're doing.
BEASLEY: No, thank you.
CHATTERLEY: We appreciate you. David Beasley, Executive Director of the UN World Food Programme there. OK, coming up a bridge between China and global
capital markets and beyond how the Hong Kong stock exchange is encouraging more international investment? That's the mission here in Davos. We'll talk
about it next. Thank you.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back once again to the World Economic Forum here in Davos! And last time delegates gathered here in 2020 China was a major
attendee COVID was hardly mentioned. To be fair, it was mentioned in the middle of the week and all things changed.
[09:45:00]
CHATTERLEY: But this time around the Chinese are barely represented as COVID concerns limit travel. The highest ranking official here is the
Climate Change Special Envoy, who attended a forum with his us counterpart John Kerry earlier today.
One person that came here working to attract international investors, is the Head of Hong Kong Exchanges and Clearing he plans to open new offices
in the U.S. and Europe saying Hong Kong continues to connect China with the world.
Joining us now is Nicolas Aguzin. He's the CEO of Hong Kong Exchanges and Clearing, great to have you on the show! What a battle? I have to say, you
have set yourself a challenge. Talk to me about opening offices and what you hoped to achieve?
NICOLAS AGUZIN, CEO, HOND KONG EXCHANGES AND CLEARING: Well, I mean, its part of our purpose, our purpose is to make sure that we're connecting east
and west, that we can capture the flows between east and west to create more prosperity for all.
So part of that is making sure that we're close to our clients. It's, especially with COVID, it's been really hard to operate without being able
to move around. So one of the key things that we want to do is to make sure we're closer to our clients.
And to that end, we plan to open offices in the U.S. and open offices in Europe as well, just to be close to investors. If we attract more investors
will attract more capital will attract more companies that want to list in a venue.
CHATTERLEY: If we talk about the market cap of international companies right now, on the Hong Kong Stock Exchange, we were just discussing it off
air 5 percent?
AGUZIN: Somewhere around there. Yes.
CHATTERLEY: How high can you get that?
AGUZIN: Well, I mean, right now, we have about 200 companies out of 2500. I mean, what we want to do is to increase it as much as possible.
CHATTERLEY: I mean that's in an ideal world. But you're - the proposition here is actually never been tougher. You can do you can defend that. But
you're actually agreeing with me. And I think you're right to agree.
What's the advantage for some of these international companies, particularly at this moment, whether it's the geopolitics that the
regulation, the uncertainty I sort of seen - ambition but I'm confused.
AGUZIN: I'll give you one example.
CHATTERLEY: Please.
AGUZIN: OK. So biotech, for example, we started a new chapter around biotech companies, to allow companies with no revenues, to raise capital to
discover all these great drugs that we're seeing and all that.
In this period 95 companies decided to list in Hong Kong, raising over 200 billion Hong Kong dollars, which allowed Hong Kong to become the second
largest fundraising hub in the world. So what happens?
You have like researchers you have all types of analysts that are becoming that they know how to analyze biotech companies. And they say, I want to be
listed next to companies that are similar to me, I want to do this. Now, we--
CHATTERLEY: But they could do that in the West too?
AGUZIN: Well, that's why but this is the second in the world. And if you think about a place where you can capture all the flows from East and from
West, isn't that the best in the world that you can have, like the flows from both places because right now 43 percent of our investors are
international investors.
CHATTERLEY: Which is a statistic actually, that's surprising. I'm glad you mentioned, because I was going to mention it too. And my conversation and
my response to that would be, yes, except if we look at the situation in Hong Kong, specifically.
And certainly the conversations I have with business leaders is that they sort of say to themselves now and whether they're dealing with their people
or their corresponding outside and the West is that they, they sort of consider themselves part of mainland China now they have to.
And so for a company that's looking at the situation in Hong Kong now, and we've discussed in the past, or at least with you're - the Former CEO, it
was like this is a great place to be in it is the conduit between the West and East, except everything changed.
Give me the strongest argument beyond being by the security, the safety, whatever it is, give me the strongest argument. And why hasn't things
materially changed on that point, specifically?
AGUZIN: Despite the trifecta of problems that occurred over the last couple of years, since we've been here with COVID, with all the geopolitics with
the unrest and all that volume in Hong Kong, between 19 which was about $87 billion per day.
Last year, it was 167. So you can see what happened in this period. Now what is happening, people are still interested, this is a very large part
of the world, people still want to participate in the market.
And the reality is Hong Kong has free flow of currency. I mean, it's a Hong Kong dollar, you want to transfer capital in and out of the country, and
you can do that free flow of information. You have institutions that have been there for decades.
You have people from all over the world. I mean, I come from Argentina, you see people from like, Europe, U.S. Asia, from a lot of places. So it's a
great, you know, place with strong international regulatory environment, very transparent.
It's been defined as the freest economy in the world since 1996, including this year. It's a third including this year by Fraser Institute in Canada.
So it's the third most important IFC in the world, according to global financial index, I mean survey. So it is an incredibly exciting
environment.
[09:50:00]
AGUZIN: Now, of course, certain things have changed. But I would say that from the commercial side, you still have common law, which is a law that
everyone is used to working. You have institutions that have been there for a long time, you have a talent that it's really hard to put in place.
CHATTERLEY: And I disagree with that. That's, you know, what I was going to ask you about the biggest opportunity in the short term being perhaps de-
listings in the United States and those companies going back. I'm out of time and I know what's going to happen if I asked you that I'm going to get
really told off. Let's reconvene, please.
AGUZIN: Yes, absolutely.
CHATTERELY: We can talk any time about this because it's vitally important. Great to have you with us thank you.
AGUZIN: Thank you Julia.
CHATTERLEY: Nicolas Aguzin the CEO of Hong Kong Exchanges and Clearing there. Now as the Hong Kong Exchanges work to convince the world that China
is open for business Airbnb checks out we are live in Beijing with the context next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back! Airbnb checking out of China we need - a source tells CNN it will start shutting down all listings in the country this
summer as the governments strict zero COVID strategy takes its toll.
We're told that Airbnb Beijing office will remain open to support customers in China booking to travel abroad. Selina Wang joins us now. Selina, you
know better than most the challenges of getting in and out of China. Whether this is a business decision due to regulation due to competition
the toll wants a gain of zero COVID a huge blow.
SELINA WANG, CNN CORRESPONDENT: And sources telling us Julia those operations for Airbnb in China it just became too costly and complex to
operate after two years of these lockdowns in China with no end in sight.
Dozens of cities in China still under some form of lockdown that is having a critically difficult impact on the economy a huge social and economic
cost this zero COVID policy is taking in China and it's damaging virtually every industry every business in China.
American companies included from Apple to Starbucks to General Electric to Amazon, all saying that zero COVID has been squeezing their earnings and
Airbnb not immune to that. But they are not completely halting their business.
They are going to be shutting down its China listings. It's also going to stop its offered experiences in China but it is going to keep an office
here in Beijing with hundreds of employees and that is going to be focused on the outbound travel market.
Now back in 2016, when Airbnb launched in China that was seen as such a big growth opportunity for this company. It was an exciting moment because
China historically is the world's biggest market for outbound tourism, Chinese tourists.
They travel a lot and they spend a lot but obviously that has been decimated during the pandemic. I went through that - its residents to go
abroad and if they even managed to snag one of those extremely limited flights going in and out of China they face harsh quarantines coming back
in.
[09:55:00]
WANG: So that has really slammed Airbnb but beyond all of COVID in the pandemic, Airbnb was having a rough time in China already for the past few
years. Sources tell us that stay in China for Airbnb only accounted for 1 percent of its revenue.
It was facing very stiff competition in China from other domestic players. And also Julia, this is a big deal because Airbnb was one of the last few
remaining American internet companies in China. And with this move with this exit, it shows that increasing divide between China and America's
internet Julia.
CHATTERLEY: And that's the crucial point too. As always Selina a great job in explaining the context here I think vitally important Selina Wang great
to have you with us. And that's it for today's show from the World Economic Forum in Davos.
If you've missed any of our interviews today, they will be on my Twitter and Instagram pages shortly you can search for @juliachatterleycnn. In the
meantime, "Connect the World" with Becky Anderson is up next. I'll see you tomorrow stay with CNN.
(COMMERCIAL BREAK)
[10:00:00]
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