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Quest Means Business
Fierce Fighting in Ukraine; President Obama Speaks to Press
Aired August 28, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Serious political risks, geopolitical actions around the world taking their toll on the Dow. It managed to hold its own, just
off around 40 points as trading comes to the end in a slow week.
(GAVEL HITS)
QUEST: Three hits on the gavel on Thursday, it's August the 28th.
Amid talk of Russian invasion in Ukraine, tonight, a former NATO commander tells me the West must stand together. President Obama speaks in this
hour.
A world that's lost its way. The world's richest man gives us his views on the crisis. It's an exclusive interview. You'll hear it soon
And time for a reality check. The chief exec of Air Asia tells me your airline can't do it all.
We have a very busy hour together. I'm Richard Quest, and of course, I mean business.
Good evening. Let me immediately tell you at the start of our broadcast tonight that we'll be bringing you comments from President Barack Obama at
any moment. These are live pictures from the Brady Briefing Room at the White House. We expect the president -- I don't believe we're on a two-
minute warning yet. The moment we do get to that, I will let you know.
The president will have a wide agenda. He may refer to US domestic policy. But almost certainly he will start off talking about what a top Ukrainian
army official is calling a full-scale invasion of his country.
Ukraine now says Russian combat troops have crossed the border to fight alongside the pro-rebel forces. Russia is denying the claims. NATO has,
however, released satellite images, and they show, they say, that the Russian forces battling on Ukrainian territory.
(BEGIN VIDEO CLIP)
NICO TAK, DUTCH BRIGADIER GENERAL: These latest images provide concrete examples of Russian activity inside Ukraine, but they are only the tip of
the iceberg in terms of the overall scope of Russian troop and weapons movements.
(END VIDEO CLIP)
QUEST: Now, if proved, this is a very serious ratcheting up of the crisis. According to US intelligence, as many as a thousand Russian combat troops
armed with heavy weaponry have crossed Ukraine's southern border.
At an emergency meeting of the United Nations Security Council, Russia's ambassador told the United States, don't get involved.
The former NATO supreme allied commander, General George Joulwan is in Washington. General, we'll be with you in just one second, if we may. We
need to find out exactly what the situation is in Ukraine. Our correspondent Diana Magnay is in Mariupol in eastern Ukraine.
Diana, for those who are joining the story this evening and may not be, obviously, as au fait with the details, is there any doubt about Russian
involvement tonight?
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, from what we have heard from the Ukrainian side, it would appear as though Russian are
crossing the border. Russian -- regular Russian troops are crossing the border and joining forces with pro-Russian rebels, and upping the ante and
joining the fight far more than they had been before.
We haven't -- it's not as though we've been to the border and seen quantities of Russian tanks, but from all the evidence, from NATO's
satellite imagery, which shows artillery positions on this side of the border.
And from the anecdotal evidence that the volunteer battalions have given me about how they were routed from the town of Novoazovsk, which is basically
between me, here in Mariupol, and the border, they were routed by what they say are Russian troops with heavy Russian weaponry.
The license plates on the vehicles washed out, and that these men made no bones about the fact that they were Russian. It -- it doesn't really leave
much doubt in any of our minds that, certainly, Russia has stepped up and is pushing more people in at this stage, Richard.
QUEST: And is that because, Diana, the Ukrainian forces were starting to get the upper hand and basically had, until this escalation, had turned the
tide in many places, like Donetsk, Lugansk, had turned the tide towards Ukraine's side, if you like?
MAGNAY: Well, if I'd been talking to you two weeks ago, I would have said. They certainly had made significant inroads against the rebel areas. And
those rebel areas had shrunk a lot around these two cities of Lugansk and Donetsk.
But the last couple of weeks, it's been a sort of stalemate. They don't seem to have really crushed the rebellions in those two towns. Difficult
because of the heavy civilian populations that are still there.
But certainly, if Russians are pushing in down at the southeast of the country, here, they're effectively opening up a new front, which really
does distract the Ukrainian army from their offensive around those two cities, yes, Richard.
QUEST: Diana Magnay, thank you. Do stay close by to your camera. Don't go too far away, because we are expecting the president to speak, and I
want to have you coming back once we've heard what Mr. Obama says.
General, I need to turn to you, now. Former Supreme Allied Commander Europe, former SACEUR, you know this. You know better than pretty anyone
else, sir, the very dangerous escalation that we are facing tonight. So tell me, why is Russia doing this?
GEORGE JOULWAN, GENERAL, FORMER NATO SUPREME ALLIED COMMANDER: I believe it's a Putin attempt, here, to get some sort of credibility for Russia in
what was the old Warsaw Pact, the old Soviet Union. And I think he's trying to regain some of that prestige, if you want to call it that, that
he had before.
Very dangerous on his part. But it keeping in character with his KGB background, this is what he's trying to do, lie and say nothing's
happening.
QUEST: But coming so soon after the Minsk summit with Belarus, Kazakhstan, and President Poroshenko of Ukraine, is it -- it seems to be almost
sticking two fingers and everything else up at what was an agreement to try and de-escalate, not escalate back up again.
JOULWAN: I agree. And that's why NATO now has to speak clearly, unambiguous in terms of its actions that are going to take place. They're
already talking about putting more troops into Eastern and Central Europe, which earlier, we did not do because of the Russian concern. They're going
to talk Article 5 again, very strongly. All of this --
QUEST: Article 5 against whom? We are -- wait -- we are in a two-minute warning now for the president, so I might interrupt you, General, but I
know you'll forgive me if your former commander-in-chief comes out. Article 5 against whom? Because Ukraine's not a NATO member.
JOULWAN: Well, we're talking now, Estonia, Latvia, Lithuania, other countries that are threatened, have large Russian populations in them, that
-- and I think a marker has to be put down there. And I would hope, in addition to the deployment of forces, economic and diplomatic action will
be taken immediately.
And the United States should lead that effort in Wales next week when the 28 nations meet for a heads of state summit.
QUEST: General, thank you. I'll ask you if you would be kind enough -- if your duties permit -- not to go too far away. We are waiting the president
of the United States. General, thank you for joining us, giving us some perspective.
There's the White House briefing room. What the president, of course, has to do now, besides any US domestic issues of Ferguson that he might wish to
refer to, Ferguson in Missouri, he's obviously got better GDP number to talk about in the United States. The second quarter, at over 4 percent,
was better than originally.
But I suspect that will all just be stuff in relation to the more serious issue that he needs to address today, and that is what's happening in
Ukraine. The allegation, the fundamental allegation, that the Russian troops have now moved into, or at least a thousand troops, have now crossed
the border and are operating in support of the pro-separatists. The president of the United States.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good afternoon, everybody.
I want to say a few words on a number of topics and take a few questions before the long Labor Day weekend.
First, beginning with the number one thing that most Americans care about, the economy. This morning, we found out that our economy actually grew at
a stronger clip in the second quarter than we had originally thought. Companies are investing. Consumers are spending.
Over the past 4.5 years, our businesses have now created nearly 10 million new jobs. So there are reasons to feel good about the direction we're
headed. But, as everybody knows, there's a lot more that we should be doing to make sure that all Americans benefit from the progress that we
have made. And I'm going to be pushing Congress hard on this when they return next week.
Second, in Iraq, our dedicated pilots and crews continue to carry out the targeted strikes that I authorized to protect Americans there and to
address the humanitarian situation on the ground.
As commander in chief, I will always do what is necessary to protect the American people and defend against evolving threats to our homeland.
Because of our strikes, the terrorists of ISIL are losing arms and equipment. In some areas, Iraqi government and Kurdish forces have begun
to push them back. And we continue to be proud and grateful to our extraordinary personnel serving in this mission.
Now, ISIL poses an immediate threat to the people of Iraq and the people throughout the region. And that's why our military action in Iraq has to
be part of a broader, comprehensive strategy to protect our people and to support our partners who are taking the fight to ISIL.
And that starts with Iraq's leaders building on the progress that they have made so far and forming an inclusive government that will unite their
country and strengthen their security forces to confront ISIL.
Any successful strategy, though, also needs strong regional partners. I'm encouraged so far that countries in the region, countries that don't always
agree on many things, increasingly recognize the primacy of the threat that ISIL poses to all of them. And I have asked Secretary Kerry to travel to
the region to continue to build the coalition that is needed to meet this threat.
As I have said, rooting out a cancer like ISIL will not be quick or easy, but I am confident that we can and we will, working closely with our allies
and our partners.
For our part, I have directed Secretary Hagel and our Joint Chiefs of Staff to prepare a range of options. I will be meeting with my National Security
Council again this evening, as we continue to develop that strategy. And I have been consulting with members of Congress. And I will continue to do
so in the days ahead.
Finally, I just spoke with Chancellor Merkel of Germany on the situation in Ukraine. We agree, if there was ever any doubt, that Russia is responsible
for the violence in Eastern Ukraine. The violence is encouraged by Russia. The separatists are trained by Russia. They are armed by Russia. They are
funded by Russia.
Russia has deliberately and repeatedly violated the sovereignty and territorial integrity of Ukraine. And the new images of Russian forces
inside Ukraine make that plain for the world to see.
This comes as Ukrainian forces are making progress against the separatists. Now, as a result of the actions Russia has already taken and the major
sanctions we have imposed with our European and international partners, Russia is already more isolated than at any time since the end of the Cold
War.
Capital is fleeing. Investors are increasingly staying out. Its economy is in decline. And this ongoing Russian incursion into Ukraine will only
bring more costs and consequences for Russia.
Next week, I will be in Europe to coordinate with our closest allies and partners. In Estonia, I will reaffirm our unwavering commitment to the
defense of our NATO allies. At the NATO summit in the United Kingdom, we will focus on the additional steps we can take to ensure the alliance
remains prepared for any challenge.
Our meeting of the NATO-Ukraine Commission will be another opportunity for our alliance to continue our partnership with Ukraine. And I look forward
to reaffirming the unwavering commitment of the United States to Ukraine and its people when I welcome President Poroshenko to the White House next
month.
So, with that, I'm going to take a few questions.
And I'm going to start with somebody who I guess is now a big cheese. He's moved on. But I understand this is going to be his last chance to ask me a
question in the press room.
So, I want to congratulate Chuck Todd and give him first dibs.
CHUCK TODD, NBC NEWS POLITICAL DIRECTOR: I'm glad you said in the press room.
(LAUGHTER)
TODD: Let me start with Syria.
The decision that you have to make between -- first of all, is it a if or when situation about going after ISIL in Syria? Can you defeat ISIL or
ISIS without going after them in Syria? And then how do you prioritize? You have said that Assad has lost legitimacy to lead. Defeating ISIS could
help Assad keep power? Talk about how you prioritize those two pieces of your foreign policy.
OBAMA: Well, first of all, I want to make sure everybody's clear on what we're doing now, because it is limited.
Our focus right now is to protect American personnel on the ground in Iraq, to protect our embassy, to protect our consulates, to make sure that
critical infrastructure that could adversely affect our personnel is protected.
Where we see an opportunity that allows us, with very modest risk, to help the humanitarian situation there, as we did in Sinjar Mountain, we will
take those opportunities, after having consulted with Congress.
But our core priority right now is just to make sure that our folks are safe and to do an effective assessment of Iraqi and Kurdish capabilities.
As I said, I think, in the last press conference, in order for us to be successful, you got to have an Iraqi government that is unified and
inclusive. So we are continuing to push them to get that job done.
As soon as we have an Iraqi government in place, the likelihood of the Iraqi security forces being more effective in taking the fight to ISIL
significantly increases.
And the options that I'm asking for from the joint chiefs focuses primarily on making sure that ISIL is not overrunning Iraq.
What is true, though, is that the violence that's been taking place in Syria has obviously given ISIL a safe haven there in ungoverned spaces.
And in order for us to degrade ISIL over the long term, we're going to have to build a regional strategy. Now, we're not going to do that alone.
We're going to have to do that with other partners. And particularly, Sunni partners, because part of the goal here is to make sure that Sunnis,
both in Syria and in Iraq, feel as if they've got an investment in a government that actually functions. A government that can protect them. A
government that makes sure that their families are safe from the barbaric acts that we've seen in ISIl. And right now, those structures are not in
place. And that's why the issue with respect to Syria is not simply a military issue. It's also a political issue. It's also an issue that
involves all the Sunni states in the region and Sunni leadership recognizing this cancer that has developed is one that they have to be just
as invested in defeating as we are.
And so, you know, to cut to the chase in terms of what may be your specific concerns, Chuck, my priority at this point is to make sure that the gains
that ISIl made in Iraq are rolled back and that Iraq has the opportunity to govern itself effectively and secure itself.
But when we look at a broader strategy that is consistent with what I said at West Point, that's consistent with what I said at the National Defense
College, clearly ISIL has come to represent the very worst elements in the region that we have to deal with collectively. And that's going to be a
long-term project. It's going to require us to stabilize Syria in some fashion. And stabilizing Syria in some fashion means that we've got to get
moderate Sunnis who are able to govern and offer, you know, a real alternative and competition to what ISIL's been doing in some of these
spaces.
Now, last point with respect to Assad. It's not just my opinion. I think it would be international opinion that Assad's lost legitimacy in terms of
dropping barrel bombs on innocent families and killing tens of thousands of people.
And right now what we're seeing is the areas that ISIL is occupying are not controlled by Assad anyway. And frankly, Assad doesn't seem to have the
capability or reach to get into those areas. So, you know, I don't think this is a situation where we have to choose between Assad or the kinds of
people who carry on the incredible violence that we've been seeing there. We will continue to support a moderate opposition inside of Syria in part
because we have to give people inside of Syria a choice other than ISIL or Assad. And I don't see any scenario in which Assad somehow is able to
bring peace and stability to a region that is majority Sunni and has not so far, you know, shown any willingness to share power with them or in any
kind of significant way deal with the long-standing grievances that they have there.
QUESTION: Do you need Congress's approval to go into Syria?
OBAMA: You know, I have consulted with Congress throughout this process. I am confident that as commander in chief I have the authorities to engage
in the acts that we are conducting currently. As our strategy develops, we will continue to consult with Congress, and I do think that it'll be
important for Congress to weigh in and we're -- that our consultations with Congress continue to develop so that the American people are part of the
debate.
But I don't want to put the cart before the horse. We don't have a strategy yet. I think what I've seen in some of the news reports suggests
that folks are getting a little further ahead of where we're at than we currently are. And I think that's not just my assessment, but the
assessment of our military, as well. We need to make sure that we've got clear plans, that we're developing them. At that point, I will consult
with Congress and make sure that their voices are heard.
But there's no point in me asking for action on the part of Congress before I know exactly what it is that is going to be required for us to get the
job done.
Colleen McCain Nelson?
QUESTION: Thank you, Mr. President.
OBAMA: There you are.
QUESTION: Do you consider today's escalation in Ukraine an invasion? And when you talk about additional costs to Russia, are you ready at this point
to impose broader economic sanctions? Or are you considering other responses that go beyond sanctions?
OBAMA: I consider the actions that we've seen in the last week a continuation of what's been taking place for months now. As I said in my
opening statement, there is no doubt that this is not a homegrown, indigenous uprising in eastern Ukraine. The separatists are backed,
trained, armed, financed by Russia.
Throughout this process, we've seen deep Russian involvement in everything that they've done. I think in part because of the progress that you had
seen by the Ukrainians around Donetsk and Luhansk, Russia determined that it had to be a little more overt in what it had already been doing, but
it's not really a shift.
What we have seen, though, is that President Putin and Russia have repeatedly passed by potential off-ramps to resolve this diplomatically.
And so, in our consultations with the -- our European allies and partners, my expectation is, is that we will take additional steps, primarily because
we have not seen any meaningful action on the part of Russia to actually try to resolve this in diplomatic fashion.
And, you know, I think that the sanctions that we've already applied have been effective. Our intelligence shows that the Russians know they've been
effective, even though it may not appear on Russian television. And I think there are ways for us to deepen or expand the scope of some of that
work.
But, ultimately, I think what's important to recognize is the degree to which Russian decision-making is isolating Russia. You know, they're doing
this to themselves. And what I've been encouraged by is the degree to which our European partners recognize, even though they are bearing a cost
in implementing these sanctions, they understand that a broader principle is at stake. And so I look forward to, you know, the consultations that
we'll have when I see them next week.
OK. Zeigner (ph)?
QUESTION: Thank you, Mr. President.
OBAMA: There you are.
QUESTION: Last year, you said that you believe our democracy is stronger when the president acts with the support of Congress.
OBAMA: Yes.
QUESTION: Do you remember your response to Chuck's question, you said you don't have to -- you don't have the strategy at the -- you'll reconsider
that going forward.
But why didn't you go to Congress before this current round of strikes in Iraq (inaudible) not believe that that's the case anymore, what you said
last year? And throughout your career, you've also said that -- you've raised concerns with the expansion of powers that the executive. Are you
concerned that your recent actions unilaterally had maybe kind of (inaudible) against that?
OBAMA: No. And here's why.
It is not just part of my responsibility, but it is a sacred duty for me as commander in chief to protect the American people. And that requires me to
act fast based on information I receive if an embassy of ours or a consulate of ours is being threatened.
The decisions I made were based on very concrete assessments about the possibility that our -- that Erbil might be overrun in the Kurdish region
and that our consulate could be in danger. And I can't afford to wait in order to make sure that those folks are protected.
But throughout this process, we've consulted closely with Congress and the feedback I've gotten from Congress is is that we're doing the right thing.
Now as we go forward, as I've described to Chuck, and look at a broader regional strategy with an international coalition and partners to
systematically degrade ISIL's capacity to engage in the terrible violence and disruptions that they've been engaging in, not just in Syria, not just
in Iraq but potentially elsewhere if we don't nip this at the bud, then those consultations with Congress for something that is longer term I think
become more relevant.
And, you know, it is my intention that Congress has to have some buy-in as representatives of the American people. And, by the way, the American
people need to hear what that strategy is.
But, as I said to Chuck, I don't want to put the cart before the horse. And in some of the media reports, the suggestion seems to have been that,
you know, we're about to go full scale on an elaborate strategy for defeating ISIL. And the suggestion, I guess, has been that we'll start
moving forward imminently, and somehow Congress, still out of town, is going to be left in the dark.
That's not what's going to happen. We are going to continue to focus on protecting the American people. We're going to continue, where we can, to
engage in the sort of humanitarian acts that saved so many folks who were trapped on a mountain.
We are going to work politically and diplomatically with folks in the region. And we're going to cobble together the kind of coalition that we
need for a long-term strategy as soon as we are able to fit together the military, political and economic components of that strategy. There will
be a military aspect to that. And it's going to be important for Congress to know what that is, in part because it may cost some money.
OK?
I'll take -- I'll just take a couple more.
Yeah?
(CROSSTALK)
QUESTION: Do you regret not moving on ISIS earlier? There is some report indicating that most of the weapons, the U.S. weapons that they have, they
got it or they acquired it after the (inaudible).
And also the president, the Iraqi president, said today that the Iraqi forces are in no position to stand up to ISIS.
What makes you think that forming a new government will change the situation?
OBAMA: Well, once ISIL got into Mosul, that posed a big problem because there's no doubt that they were able to capture some weapons and resources
that they've then used to finance additional operations. And at that stage, we immediately contacted the Iraqi government.
Keep in mind, we have been in communications with the Iraqi government for more than a year, indicating that we saw significant problems in the Sunni
areas. Prime Minister Maliki was not as responsive, perhaps, as we would've liked to some of the underlying political grievances that existed
at the time.
There is no doubt that in order for Iraq -- Iraq's security forces to be successful, they're going to need help. They're going to need help from
us. They're going to need help from our international partners.
They're going to need additional training. They're going to need additional equipment. And we are going to be prepared to offer that
support.
There may be a role for an international coalition providing additional air support for their operations. But the reason it's so important that an
Iraqi government be in place is this is not simply a military problem. The problem we have had consistently is a Sunni population that feels alienated
from Baghdad and does not feel invested in what's happening and does not feel as if anybody is looking out for them.
If we can get a government in place that provides Sunnis some hope that a national government serves their interests, if they can regain some
confidence and trust that it will follow through on commitments that were made way back in 2006, in 2007, in 2008 and earlier about how you arrive
at, for example, you know, de- Baathification laws and give people opportunities so they're not locked out of government positions.
If those things are followed through on and we are able to combine it with a sound military strategy, then I think we can be successful. If we can't,
then the idea that the United States or any outside power would perpetually defeat ISIS I think is unrealistic. As I've said before -- I think I said
it in the previous press conference -- our military is the best in the world. We -- we can rout ISIS on the ground and keep a lid on things
temporarily. But then as soon as we leave, the same problems come back again.
So we've got to -- we've got to make sure that Iraqis understand in the end they're going to be responsible for their own security. And part of that is
going to be the capacity for them to make compromises. It also means that states in the region stop being ambivalent about these extremist groups.
The truth is that we've had state actors who at times have thought that the way to advance their interests is, "Well, financing some of these groups as
proxies is not such a bad strategy."
And part of our message to the entire region is: This should be a wake-up call to Sunni, to Shia, to everybody that a group like ISIS is beyond the
pale; that they have no vision or ideology beyond violence and chaos and the slaughter of innocent people. And as a consequence, we've got to all
join together -- even if we have differences on a range of political issues -- to make sure that they're rooted out.
OK. Last question.
(CROSSTALK)
OBAMA: Last question. Right here.
QUESTION: Mr. President, despite all of the actions the West has taken to get Russia to pull back from Ukraine, Russia seems intent on taking one
step after another -- convoys, transports of arms. At what point do sanctions no longer work? Would you envisage the possibility of a
necessity of military action to get Russia to pull back from Ukraine?
OBAMA: We are not taking military action to solve the Ukrainian problem. What we're doing is to mobilize the international community to apply
pressure on Russia. But I think it is very important to recognize that a military solution to this problem is not going to be forthcoming.
Now, the fact that Russia has taken these actions in violation of the sovereignty and territorial integrity of the Ukrainians has resulted, I
believe, in a weakening of Russia, not a strengthening of Russia. That may not be apparent immediately, but I think it will become increasingly
apparent.
What it's also done is isolated Russia from its trading partners, its commercial partners, international business in ways that I think are going
to be very difficult to recover from. And we will continue to stand firm with our allies and partners that what is happening is wrong, that there is
a solution that allows Ukraine and Russia to live peacefully. But it is not in the cards for us to see a military confrontation between Russia and
the United States in this region.
Keep in mind, however, that I'm about to go to a NATO conference. Ukraine is not a member of NATO, but a number of those states that are close by
are. And we take our Article 5 commitments to defend each other very seriously, and that includes the smallest NATO member, as well as the
largest NATO member.
And so part of the reason I think this NATO meeting is going to be so important is to refocus attention on the critical function that NATO plays
to make sure that every country is contributing in order to deliver on the promise of our Article 5 assurances. Part of the reason I'll be going to
Estonia is to let the Estonians know that we mean what we say with respect to our treaty obligations.
We don't have those treaty obligations with Ukraine. We do, however, stand shoulder to shoulder with them, and we're doing not just a lot of work
diplomatically, but also financially, in order to make sure that they have the best chance at dealing with what is admittedly a very difficult
situation.
QUESTION: How about sending arms to the Ukrainians?
(CROSSTALK)
OBAMA: OK. Thank you very much, everybody. Thank you, guys. Thank you.
(CROSSTALK)
QUESTION: ... immigration?
QUESTION: Immigration?
QUESTION: How (OFF-MIKE) decision-making (OFF-MIKE) impacted your decision on immigration (OFF-MIKE)
OBAMA: Well, let me just say this. I've been very clear about the fact that our immigration system is broken and needs to be fixed. And my
preference continues to be that Congress act. I don't think anybody thinks that Congress is going to act in the short term, but hope springs eternal
that after the midterm elections they may act.
In the meantime, what I've asked Jeh Johnson to do is to look at what kinds of executive authorities we have in order to make the system work better.
And, you know, we've had a lot of stakeholder discussions. That set of proposals is being worked up. And the one thing that I think has happened
was the issue with unaccompanied children that got so much attention a couple of months back. And, you know, part of the reason that was
important was not because that represented a huge unprecedented surge in overall immigration at the border. But I do think that it changed the
perception of the American people about what's happening at the borders. And so, one of the things we've had -- have had to do is to work through
systematically to make sure that that specific problem, in a fairly defined area of the border -- that we're starting to deal with that in a serious
way. And the good news is, we've started to make some progress.
You know, what we've seen so far is that throughout the summer, the -- the number of apprehensions have been decreasing. Maybe that's
counterintuitive, but that's a good thing, because that means that fewer folks are coming across.
The number of apprehensions in August are down from July, and they're actually lower than they were August of last year. Apprehensions in July
were half of what they were in June. So, we're seeing a significant downward trend in terms of these unaccompanied children. And what that, I
think, allows us to do is to make sure that those kids are being taken care of properly with due process. At the same time, it's allowed us to then
engage in a broader conversation about what we need to do to get more resources down at the border.
It would have been helped along if Congress had voted for the supplemental that I asked for. They did not. That means that we've got to make some
administrative choices and executive choices about, for example, getting more immigration judges down there. So that has kept us busy.
But it has not stopped the process of looking more broadly about how do we get a smart immigration system in place while we're waiting for Congress to
act.
And it continues to be my belief that, if I can't see the congressional action, that I need to do at least what I can in order to make the system
work better.
But you know, some of these things do affect time lines and we're just going to be working through as systematically as possible in order to get
this done. But have no doubt: in the absence of congressional action, I'm going to do what I can to make sure the system works better.
QUESTION: Did you announce -- ?
OBAMA: All right.
QUEST: There he is. The president does now leave the briefing room -- a wide-ranging news conference particularly dominated by two areas of course
- Ukraine and the Russian involvement in the fighting in Eastern Ukraine, and ISIS and the measures now being taken.
Just very briefly let me recap. On Ukraine, the President said he'd spoken to Angela Merkel. They've agreed Russia's responsible for the violence.
It's encouraged it, it's trained the armies, it's financed, it's armed them. He says Russia's more isolated. And then he specifically referred
to next week's NATO meeting in Wales where he said that NATO members will be reaffirming their commitment to the so-called Article 5. You'll be
familiar -- that means an attack against one NATO member is an attack against all. He talks about going to Estonia. The Baltic country's very
much concerned what they're seeing with Russia and reaffirming the United States treaty obligations to countries like that.
Where we talk about ISIS, he says the first priority is to see that the gains are rolled back and then he said that the broader strategy is to deal
with a long-term collective response. What he called `cobble together a coalition,' which will no doubt have military aspects.
On Russia, there'll be additional steps he says, but the sanctions are being effective. Let's take a break. When we come back in a moment, we'll
consider more of what President Obama's just said on what's very difficult times geopolitically.
(COMMERCIAL)
QUEST: The president of the United States talking just a few moments ago, particularly reaffirming NATO's commitment to the security of all NATO
members as regards Russia's incursion into Ukraine, saying he and Angela Merkel both blaming Russia for funding, for financing, for arming and for
training the separatists that are now doing battle in Eastern Ukraine.
On ISIS, saying that the world needs to come together, there needs to be a coalition and initially they need to roll back the gains that ISIS has made
in Syria and in Iraq. Where it comes to Syria, he says it is not a choice between Assad and ISIS. That is not the case in which the decision has to
have been made. We'll move on while we consider more of what the President has just said.
We'll meet the world's richest man. Now he says the Russian economy has failed to adapt to the 21st century. Carlos Slim spoke exclusively to
CNN's Nick Parker who joined him in Mexico City.
(BEGIN VIDEOCLIP)
CARLOS SLIM, CHAIRMAN, GRUPO CARSO: I think that in all these crisis is a big ingredient of - all societies that are not clear what should be done in
the new one. If they were thinking with modernity, the countries are not important to have territorial controls. That's past of the agricultural
society - to conquer other countries, to conquer other territories. Now maybe the first industrial pact -- but for a modern society is the conquer
of technology, the conquer of markets, the economical conquer, to have the better allocated people. That's what make the countries be superior - to
have better condition for his people.
NICK PARKER, CONTRIBUTOR, CNN.COM INTERNATIONAL: What do you think are the greatest threats to global growth?
SLIM: So we are looking that the big problems in Europe is unemployment, especially for young people - that is crazy -- and the lack of demand of
the - of goods -- and you make it also paradoxical that making (inaudible) to great wealth and the production of goods are cheaper and better, and you
have not the demand because still this problem, no. Part of creating the importance of employment is to reorganize the way that people work - that
we need to retire older because we are in better shape -
PARKER: Seventy-five.
SLIM: -- I think 75. Because if we were to live 90 -- the people that is growing now is live 90. Seventy-five but working maybe three days - 11
hours or 12 hours. So you have four days to train, to learn. To -- if you want to enjoy more of your family, quality of your life, well you can take
two jobs or you can take training and learning to have a better job in your four days.
PARKER: But looking at the world globally, are there areas that you're positive about that you would like to invest in or you would encourage
other people to invest in?
SLIM: Personally, well in Latin America it look that we are $10,000 per capita, maybe $12,000 if you put - purchasing power -- can be $12,000 to
$15,000. I think we are moving to create a big middle class. A better, higher income middle class more (inaudible) socially integrated, etc., I
think that we could move to break the barrier of under-developing Latin America. I think that it is near. If you look, Chile is already the one
more advanced, but you have Brazil, Argentina, Colombia, Mexico, Peru, Panama, Uruguay. Many of our countries are already there. And then we can
grow 4 or 5 percent ten years.
PARKER: I just wanted to ask you generally about Mexico. In the wake of the reform agenda of the president, you had to lose a bit of market share.
But I just wondered overall do you think the reforms have helped to encourage investment?
SLIM: I think maybe - well by sure in the energetic, the energetic by sure. Because it's happening the energetic, no? Telecommunication has
been up in always. Not always, but besides '97. But I think that what we need is to put more projects available for investors. Let's say we have in
the infrastructures sector, we have to do a lot of ports just to say which are the ports and work on that, a lot of highways. This government
announced it has big, big interest to draw of investment. I think it is very important. There is a lot of money at lower rates in long term (ph).
I think it is the biggest power that all the countries have that this monetary policy - a fiscal policy - of the developed countries and the
Western world because the economic situation they have is bad -- it's a great opportunity for us to finance our needs and our investments in long-
term, in good conditions and make it feasible to do everything that we want to do.
(END VIDEOCLIP)
QUEST: Exclusive interview with the world's richest man, that is Carlos Slim. When we come back, the business program that brings you the
president of the United States, the world's richest man, and after the break, you'll hear from Asia's number one chief exec when it comes to low-
cost carriers - Tony Fernandes of AirAsia on "Quest Means Business." (RINGS BELL).
(COMMERCIAL)
QUEST: The earnings for two national flag carriers revealing the horrendous climate for doing business in the aviation industry. First of
all, Malaysia Airlines saw a nearly $98 million loss in the second quarter and of course cuts earnings forecasts. You'll be well aware of why. The
airline is planning to go private. The National Sovereignty Fund which has 70 percent is proposing to take Malaysia into private ownership. There
will be a restructuring report tomorrow. Malaysia Airlines' problems are well known and the reasons are clear cut.
When we talk about Australia and Qantas, the Australian airlines saw the biggest loss ever at $2.6 billion. Alan Joyce, the chief exec admitted
the airline's moved to a very rocky period. Speak merely - he spoke - he suggested brighter times are ahead though for Australia's ailing carrier.
Now, Qantas plans to reorganize, it's going to make it more attractive for foreign investment, and the international businesses to be split off so the
airline - the flying kangaroo - can protect and focus on profitable domestic business.
Both these airlines - Malaysia and Qantas - have suffered at the hands of our next guest - in the nicest possible way. He's Tony Fernandes, the
chief executive of AirAsia, recently honored as a Malaysian icon by the country's prime minister. Tony told me the industry is facing a
particularly difficult time.
(BEGIN VIDEOCLIP)
TONY FERNANDES, CEO, AIRASIA: I think there are many airlines in that sort of position which the reality has to sink in that the world has changed. I
think - I've always said from a very, very long time ago, that airlines have to decide whether they're premium or low cost. I think those who try
to do both are going to get very, very badly unstuck (ph). Are they predominantly a short-haul airline? Or are they predominantly a long-haul
airline? I think those sort of questions have to be addressed.
Now, there's a massive market for airlines in the premium space as there are for five-star hotels, etc. So, but you have to cut your cloth
accordingly. If the market is 10 million passengers, then you should have planes for 10 million passengers and a cost structure that's related. Not
everyone wants to fly a low-cost carrier, people are willing to pay more. So I think by airlines trying to do everything, they've destroyed their
revenue model and they've had a cost structure to serve passengers in business and first class. So I think it's really - there're many airlines
in my part of the world and I daresay many airlines around the world. It's time for a reality check and move along with other businesses. In the
hotel business, are you a 3-star hotel? Are you a 5-star hotel --
QUEST: Right.
FERNANDES: -- etcetera? And I think that's what you're going to start seeing with Malaysian Airlines and some of the other airlines in that
position.
QUEST: Last night on the program, I had the marketing director - the new marketing director - from Ryanair, which of course Ryanair and easyJet are
now fiddling with the model, adding business plus - flexible seats - I'm sorry - flexible bookings, seats at the front, a little bit of extra this,
that or the other - for the business traveler. Do you see that as a way forward? I mean, I know you have certain niche opportunities in this area.
FERNANDES: Yes, I mean, I found it quite amusing today when I opened the newspaper and I saw a Ryanair ad saying business plus. A lot of my Irish
friends who've been involved in AirAsia kind of laughed at us when we started looking at adding value. I think what we're doing is slightly
different. We're a low-cost airline. But if you want to pay for a little bit more to have a little bit more flexibility, we allow that. It's the
same as having food - if you want to pay for food, we'll charge you, if you want to have flexibility of changing your ticket, we'll charge you a
slightly higher ticket. I don't think there's anything wrong with it, it doesn't spoil our model. We're just giving people the choice and I think
it's a wise move from low-cost carriers.
Now, the trick is not to become a full product in business class - that's not what we're trying to do. But in AirAsia's case, we're trying to give
people a little bit more flexibility -- short-haul business passengers, smart haul - short haul - small/medium enterprises - they like the little
bit more flexibility we're giving to them, and I suspect that's what Ryanair's doing.
QUEST: On the wider issue, Tony, the industry overall is now looking at two big questions. The first is the tracking of aircraft and insuring that
a plane can never get lost again. The second is this very vexed question of how much security information needs to be shared so that airlines fly
safely over conflict zones. You don't fly to those deep conflict zones, but there's always the potential in your part of the world for a conflict
zone to erupt, isn't there?
FERNANDES: Yes, absolutely. I mean, I think the more information , the more openness - I mean, unfortunately from disasters we become smarter and
we learn and we apply better technology and better information around the place. But whatever can be done to share information across airlines and
to make it safer, then that should be encouraged and I would fully support and endorse that.
QUEST: Now let's talk about you. You've just been - you were given an award - an Malaysian icon. And as you tweeted, you know Mom and Dad smile.
You never thought you'd be an icon.
FERNANDES: No, I mean, I never thought I'd be any of the things, and I laughed because I don't bring my parents out with us anymore, but I'm not
sure my father thought I'd amount to anything - least of all an icon. So, that was one for him. But nice award to get. But I'm still the same old
simple Tony getting doused in ice by TV guys.
(END VIDEOCLIP)
QUEST: (CHUCKLE). There'll be more "Quest Means Business" after this break.
(COMMERCIAL)
QUEST: Just before we get to the top of the hour, allow me tonight to recap on the events that you've heard. President Obama in the briefing
room had a wide-ranging speech and statement on both Syria, Iraq and ISIS and also on how he viewed the latest developments with Ukraine where now
more than 1,000 Russian troops are believed to be supporting pro-separatist rebels.
The President said that there would probably have to take additional steps against Russia, and this is what he had to say on sanctions.
(BEGIN VIDEOCLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: And, you know, I think that the sanctions that we've already applied have been effective.
Our intelligence shows that the Russians know they've been effected even though it may not appear on Russian television and I think there are ways
for us to deepen or expand the scope of some of that work.
(END VIDEOCLIP)
QUEST: President Obama on the question of Syria, Iraq and ISIS. The President said the gains that ISIS has made would have to be rolled back
and he called for a broader strategy which will be discussed in NATO. You're up to date, and that's "Quest Means Business." I'm Richard Quest.
Now, Wolf Blitzer and "The Situation Room," live on CNN.
END
