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Quest Means Business
U.S. And Europe Vow To Reduce Russian Energy Independence; Qatar Won't Divert Gas From Europe In Solidarity; Globalization Suffers Impact Of Russian Invasion; U.S. Demands More Sanctions After N. Korea Missile Launch; Ethiopia Declares Truce With Tigray Forces To Allow Aid In; Manchin Will Vote For Supreme Court Nominee Ketanji Brown Jackson. Aired 4-5p ET
Aired March 25, 2022 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
VICTOR BLACKWELL, CNN HOST: They contributed to a humanitarian efforts that support Ukraine, the total is now more than $6.6 million. If you would like
to find out how you can help and to watch the full salute to the Ukrainian people, go to CNNheroes.com.
"THE LEAD WITH JAKE TAPPER" starts now.
[16:00:16]
PAULA NEWTON, CNN INTERNATIONAL HOST: The Dow staging a late session recovery as we close out the trading week. In fact, in the green. It is the
second week of gains for U.S. stocks as you see it. There are some people wanting to get in on what they think will be a Monday morning rally. Those
are the markets and these are the main events.
President Biden visits Poland with a new plan to wean a Europe off of Russian energy.
The CEO of BlackRock says Russia's invasion of Ukraine spells the end of globalization. ECB chief Christine Lagarde tells CNN she agrees.
And a potential shift in the conflict. A top Russian general says Russia's objectives are now focusing on quote "liberating eastern Ukraine."
Live from CNN Center in Atlanta, it is Friday, March 25th. Glad you're with us. I'm Paul Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.
So a lot of developments just in the last few hours here, the U.S. and the European Union say they will team up to wean the continent -- the entire
continent now -- off of Russian energy and starve the Kremlin of key revenue.
Joe Biden and Ursula von der Leyen announced the new initiative together in Brussels. Mr. Biden then went on to Poland to meet with U.S. troops. He
also met with Polish leaders and aid agencies responding to this incredible refugee crisis, the U.S. has committed $1 billion in humanitarian aid for
Ukraine.
Mr. Biden said he was disappointed he couldn't see the crisis in Ukraine firsthand. He said he wanted to hear from the agencies about what they
needed, and explained to them what he and other Western leaders are doing right now.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: The single most important thing that we can do from the outset, is keep the democracies united in our
opposition, and our effort to curtail the devastation that is occurring at the hands of a man who I quite frankly, think is a war criminal, and I
think we will meet the legal definition of that as well.
(END VIDEO CLIP)
NEWTON: Now, as Kaitlan Collins reports, the President's trip gives him a close look at a region deeply unsettled by the war next door.
(BEGIN VIDEOTAPE)
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice over): In Poland today, President Biden highlighting the human toll of Russia's
invasion of Ukraine.
BIDEN: Those little babies, little children, looking at mothers who -- you don't have to understand the language they speak, you see in her eyes
the pain.
COLLINS (voice over): More than two million people have arrived in Poland since the invasion began displaced by what Biden calls Putin's war of
choice.
BIDEN: It is like something out of a science fiction movie if you turn on the television and see what these towns look like, these cities.
COLLINS (voice over): After pledging a billion dollars in assistance, Biden was praised by Polish President Duda and other officials leading the
humanitarian response.
ANDRZEJ DUDA, PRESIDENT OF THE REPUBLIC OF POLAND (through translator): We do not call them refugees, they are our guests, our brothers, our neighbors
from Ukraine who today are in a very difficult situation where 12 million people have fled their houses by the war.
COLLINS (voice over): The President indicating he wanted to see the war up close, but was ultimately advised against going into Ukraine.
BIDEN: Quite frankly, part of my disappointment is that I can't see it firsthand, like I have in other places. They will not let me.
Understandably, I guess, it crossed the border.
COLLINS (voice over): Earlier, the President also spent time with U.S. troops based in Poland, sent there as a visible deterrent to President
Putin.
BIDEN: We have a hundred thousand American forces here in Europe. We haven't had that in a long, long time, because we are the organizing
principle for the rest of the world.
COLLINS (voice over): Biden was in Rzeszow, the Polish city that has become a hub for getting Western military aid into Ukraine and the anti-aircraft
missiles were seen at the airport.
The Commander-in-Chief sitting down for a slice of pizza with service members, and later sharing personal stories about his late son, Beau.
BIDEN: Proudest thing he ever did was put that uniform on. Like many of you, he didn't have to go either.
There were hundreds and thousands of people like my son, like all of you, so thank you. Thank you. Thank you. Thank you.
(END VIDEOTAPE)
NEWTON: Our thanks to Kaitlan Collins reporting there.
Now, the U.S. says it is helping Europe get more liquefied natural gas from around the world to try and cut its dependency on Russian energy. President
Biden said the move was a necessary response to Vladimir Putin.
[16:05:01]
(BEGIN VIDEO CLIP)
BIDEN: We are coming together to reduce Europe's dependence on Russian energy. Putin has issued Russia's energy resources to coerce and manipulate
its neighbors. That's how he's used it.
He's used the profits to drive his war machine.
(END VIDEO CLIP)
NEWTON: The White House says it is working to secure 15 billion cubic meters of LNG, that's liquefied natural gas, again, and that's about a
sixth of Germany's annual demand. By volume, it's not quite a tenth of the gas Russia sent to Europe last year.
Europe needs LNG from the U.S. and other countries because its gas pipelines, of course, as you know, connect to Russia right now. Liquefied
natural gas has its own issues. It is energy intensive to produce, which is difficult to square with Europe's aggressive climate agenda. It would take
150 ship loads to deliver the amount pledged by the United States.
Anna Stewart joins us now from London and Anna, that was just one of the challenges at issue, right, is whether this would even be enough and can
the pivot to so-called allied energy really be put in place quickly enough to make a difference?
ANNA STEWART, CNN REPORTER: This isn't enough, not nearly enough to break Europe's reliance on Russia in terms of energy, I think that much is clear.
But this is a significant headline decision. It is ambitious, and there are actually lots of challenges just reaching what was announced today, a plan
to effectively replace Russian LNG, liquefied gas to Europe, with other sources largely from the U.S., but also some Asian nations, we believe as
well.
But as you say, it's not even a tenth of the overall Russian gas that goes to Europe every year, most of that through those pipelines as you saw, and
there are huge challenges if you were to increase LNG, for example, because Europe is already at capacity when it comes to LNG terminals and basic
infrastructure.
Germany, a very good example of a country that doesn't yet have an LNG terminal, they announced a couple of weeks ago, they will be building one,
it'll take two years for that to come online.
Also, Paul are speaking to a U.S. LNG exporter earlier today, it was quite interesting to find out that this raised some eyebrows with some of the
companies there because they wonder, well, which contracts are we now changing? You know, lots of LNG gas coming online this year, but it's all
been promised or contracted to go to other places.
So, a few challenges there, but a significant move. It is a move in the right direction.
NEWTON: Yes, and that difficulty you were just talking about just goes to show how complicated this will be and how everyone needs to be pulling in
the right direction.
Now, even if it is successful, though, Anna, there is always the buyers for Russian energy, right? China, India, and that's just naming two. Is there a
risk that Russia will just merely replace one export market for another in the coming years and continue to fund its repressive regime?
STEWART:I mean, to some extent, yes, and I think we hear a lot from the Russian state and from Gazprom, the energy company about Asia, particularly
China has huge ambitions to export much more energy there. But it is actually really limited in what it can.
LNG, liquefied gas, fine, but it's a much bigger market in terms of natural gas that is piped and pipelines currently that go to China are very
limited. I think, there is only actually one, the capacity on that is very small.
Now, there are huge plans to build incredible new pipelines to China that will take years, it will take huge investment and look at where we're at
with the Russian economy with over half of the foreign reserves frozen, western energy companies have exited investments, they are certainly not
going to be making any new ones. The ruble has crashed.
And of course, Russia is trying to finance a very expensive war, for how long, we really don't know.
And while Europe is reliant on Russia for energy right now, that won't be the case forever, and you've got to remember that Russia is very reliant on
energy for revenues, over a third of its annual budget, and its biggest customer is currently Europe -- Paula.
NEWTON: Yes, and when you have to switch to another customer, a captive audience, and the price for energy for Russia will drop no matter who it
sells it to.
Anna Stewart, thanks so much for going through all of that for us, appreciate it.
Now, Qatar's Energy Minister says his country will keep natural gas flowing to Europe and stand as a sign of solidarity. Saad Sherida Al-Kaabi also
told Becky Anderson that energy and politics really shouldn't mix.
(BEGIN VIDEOTAPE)
SAAD SHERIDA AL-KAABI, QATARI ENERGY MINISTER: We have not agreed a long term agreement with Germany yet, but we're willing to discuss with the
companies that we have been discussing, to put a long term agreement in place potentially, and this is a commercial agreement between commercial
entities.
BECKY ANDERSON, CNN ABU DHABI MANAGING EDITOR: The U.S. is leaning heavily on Europe at present to immediately cut Russian energy imports. Is that
feasible to your mind?
AL-KAABI: I think, you know, replacing Russian supplies of gas, you have to look at the numbers. And when you look at the numbers today, somewhere in
the range of 30 to 40 percent of the total supply of gas comes from Russia. So to actually say that, you know, Europe can replace that gas it's not
practically possible.
[16:10:06]
ANDERSON: Qatar is clearly a great opportunity for Europe, as Europe is leant on heavily by Washington to wean itself off Russian gas. What does
Qatar supply at present?
AL-KAABI: The contracts that we actually supply to Europe are divertible. The majority are divertible whether it's in continental Europe or the U.K.,
and what we have actually committed to the Europeans is that the volumes that are diverted, we are not going to divert.
So we'll keep them during this circumstance to keep them in Europe. Even if there is a financial game for us to divert away, we would not do that and
that is in solidarity with what's going on in Europe.
ANDERSON: By clearly getting involved in supporting, as you describe it, solidarity for Europe in this time of crisis, does that damage your
relations with the Kremlin?
AL-KAABI: I don't think it does. You know, we are an energy supplier. We've been supplying Europe all along. So all the volumes that we are taking to
Europe has been destined for Europe, so we are just saying we're keeping that and not diverting away.
ANDERSON: Let me put it another way, are you choosing a side at this point? Because to date, Qatar hasn't chosen a side in this war?
AL-KAABI: We are not -- you know, from a business perspective, we don't choose sides. We act as a business and we do our business and our gas
business is driven by business, not by politics.
ANDERSON: Do you think the West is doing the right thing in sanctioning Russian energy?
AL-KAABI: Energy part is difficult to deal with. I think the energy should stay out of politics, because it hampers development and it can affect
prices the way it has and has a lot of volatility.
(END VIDEOTAPE)
NEWTON: Thanks to Becky Anderson there, quite an interesting interview. Now the Russian war in Ukraine could have a lasting impact on the world's
economy.
We'll talk about why the CEO of BlackRock thinks it's the end of globalization as we know it.
(COMMERCIAL BREAK)
NEWTON: One of the world's top investors says Russia's invasion of Ukraine has ended globalization as we know it.
BlackRock CEO, Larry Fink told investors that the war and Western sanctions are transforming a global economy already strained by the pandemic.
Christiane Amanpour asked the head of the European Central Bank, Christine Lagarde about Fink's comments.
[16:15:12]
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: I think Larry is probably right to say that at this point in time, globalization as we know
it will not continue. It will take a different form.
I hope we're not going back to, you know, let's do business behind our borders and have nothing to do with each other because a good sensible
globalization, with respect with level playing field, with good trade rules is something that can be extremely helpful, but it is going to be rethought
through and you know, the sort of outsourcing offshoring, without any consideration for friends or foes as long as there was business to be had,
I think that will probably be revisited and it is probably for the better.
On the other issue of sanctions, I would say that some of the sanctions have been extremely efficient. I would think of, you know, the freezing of
assets held by the National Central Bank of Russia has proven to be extremely efficient.
Other sanctions will certainly be elaborated further, but I would add that it's not the people of Russia who have to be sanctioned, it is the regime
of Russia, it's the decision makers of Russia who will have to be really targeted at the most.
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL ANCHOR: So given everything you've just said, what does this mean for the Russian central banker, how
she is trying to figure out how Russia is going to survive this? And we heard President Putin say that, hey, any of you belligerent people out
there talking about Europe, who is sanctioning us, you need to pay for oil and gas with rubles? Obviously, the West said, that is blackmail and we're
not going to do it. But it clearly shows that there is some trouble.
And when you say the end of globalization as we know it, the end of outsourcing, et cetera. What does that mean for China, which is obviously
the big beneficiary of all of that?
LAGARDE: As far as the Central Bank is concerned, I think that the measures that have been taken, particularly relating to the assets have really
clipped the wings of the National Central Bank of Russia at the moment. And I think that the expectations that payments be made in rubles is an attempt
to respond to that paralysis that has been inflicted by the sanction.
Now, what happens next is something for the member states in Europe to decide and for those alleged to be the belligerent. The globalization that,
as we have seen it, as I said, is going to be revisited. And I think that there are quite a few business models around the world, including at
corporate levels, including at country levels that will also be revisited in order to avoid dependency, excessive dependency in order to revisit and
guarantee more security -- security of supply, security of markets -- and we are going to see changes in the making.
(END VIDEO CLIP)
NEWTON: Okay, you already hear Madame Lagarde there say that globalization would take a different form, well, some countries have already taken steps
towards securing their own markets, and economic shocks over recent years have driven wedges between the world's great economies.
Decoupling was set in motion of course, by the pandemic. The supply chain crisis, exposed weaknesses and pushed countries to bring some businesses
back inside their borders, so-called on-shoring.
Now battles over regulation are pushing old allies apart. Meantime, the U.S. and the E.U. are at odds still over tech regulation, although Joe
Biden said that they were going to work more closely on that, but also a fight looms over the O.E.C.D.'s push for a minimum corporate tax.
And of course, now we have the war in Ukraine that is exposing the dangers of Europe's reliance on Russian energy, sanctions on Russia are the newest
force driving economic isolationism.
Bob Zoelick is a former U.S. trade ambassador, and he led the World Bank. He joins me now from McLean, Virginia, and really good to have you weigh in
on this especially the seat at history which you have had in the last few decades.
I mean, this feels like a holistic reevaluation of globalization. It was brought in really by two, right, black swan events. We had first the
pandemic, and now, this war in the heart of Europe. How do you see this reevaluation of the global economy playing out and how long do you think it
will take?
BOB ZOELICK, FORMER U.S. TRADE AMBASSADOR: So good to be with you, Paula. Let me draw a distinction that might be of help.
If you think about COVID, as you've mentioned, or carbon and climate issues, or world food prices, or world energy prices or world capital
markets it's a little hard to come to the conclusion that globalization is past its time.
[16:20:06]
I think the difference is that the governance of globalization has been fragmented and framed. And so if you take Larry Fink's comments, I think he
talked about as we have an experience, and Christine Lagarde made the same point. And I think the issue now going forward is the elements of
globalization are very much with us, and they're going to affect our lives.
So how do the different countries figure out how to cooperate or use these elements as part of their strategies as with sanction?
NEWTON: Yes, and that involves, obviously, a heavy dose of geopolitics, but also will put strains on things like supply chains and pricing.
I want to drill down a bit now, though, given your breakdown to remind everyone you were the U.S. negotiator, right, on that German reunification.
This was really a quite a tremor, an earthquake that hit through Europe when the wall came down.
How does that history for you inform what you're seeing now? And if we could focus in on the economy, although so many political implications as
well.
ZOELICK: Yes, it's an interesting comparison. I've thought about this, too, Paula. The circumstances are very different. But what is the same is that
in 1989 and 1990, it was like you had a puzzle that you broke it apart and threw the pieces in the air, and the question was, how would you reassemble
them?
And frankly, it required some flexibility and adaptability, but also with President Bush 41, George H.W. Bush, a certain pragmatism. You'll recall
that, while he was pushing, for example, German unification; NATO, he was careful not to quote, "dance on the Berlin Wall" in dealing with Gorbachev.
And so I think we're now at a similar point where the war against Ukraine has unleashed new tools, as Christine Lagarde was saying in terms of
sanctions, and they are beyond governmental.
So you're now seeing companies doing basically self-sanctioning, because of their customers or their employees. But another piece that's often missed
with some of the Western discussion is look at the abstaining countries, some of them whether in the Middle East, or India, or some of them across
Latin America and Asia, how do they sort of fit into this system?
So whether it's security, economics, or politics, or the challenges not only dealing with the war with Ukraine, but sort of what comes out of it?
NEWTON: Yes, and in terms of countries that are trying to stay on the sidelines of this, we go to China now. You know, this is really arguably
the superpower that started this whole conversation about decoupling, right?
Now, you think it is possible for China to push Putin into a peace to deal? But will they?
ZOELICK: As of now, today, I think it would be a low probability. My point is that, you know, this is still depending on the battleground, and so for
all the talk with people like me and others, the determination is going to be through the fog of war and what happens on the ground.
But there may come a point where if Putin sort of feels that he is stalled, the Ukrainians are going after his supply lines, what is the one country
you can imagine that might quietly approach Putin and say, it is time to reach a settlement? And China is the only one you can think of. You can
think of other potential mediators.
I think as of now, I think the Xi-Putin relationship makes that unlikely. Xi does not want Putin to be losing, but depending on events on the ground,
China could play a constructive role, and that is what I think you see being pressed by the United States, and particularly by Europe, because Xi
frankly, thinks that the U.S. will not accept his rise.
You can see this in his comment with President Biden saying those that tie the knots have to untie it. But Europe might surprise itself, it might have
some serious influence on Xi because China doesn't want to lose Europe, too.
NEWTON: Right. That would be obviously enormous in terms of the kinds of markets it wants for its exports.
I'm going to pose a tough question to you here. But you know, when you think back to all you know, your seat at the negotiating table in the 90s,
and everything that happened there, what do you wish we would have known now about globalization in particular, and how it has impacted the world?
You know, that many blame it for income inequality and others, though, conversely, say it has lifted millions out of poverty.
ZOELICK: You have to help people adjust. I think the key factor whether it is the United States or Europe or sort of developing countries, you've got
these forces of globalization we talked about right now.
And so in the coming months, you're going to have to pay attention to the food prices and the effect that has on not only hunger, but on seeds and
fertilizer. We've talked about some of the effects of the energy prices, how this goes back through inflation.
And so the challenge is for national governments that are still the ones that are going to be calling the shots and have to deal with their politics
at home, how do they manage to keep support at home for an engaged international system and that brings us right back to where we started
because the question is, if the rules for digital or data or for security are breaking down, those are going to have to be put together in some form
because the factors of globalization are not going away.
[16:25:13]
NEWTON: ... time left here, but just kind of getting down to kitchen table politics. There are a lot of people no matter what their financial
situation who feel very insecure now about everything that is going on. Would you tell them basically, buckle up. It's going to be a rough ride for
a few years.
ZOELICK: I would caution them to that, but as a political method, you have to help people. If you just scare them or just tell them the tough times
are ahead, I think that that's not likely to be as successful.
But so for President Biden, for example, this is going to be an interesting choice. You could see it in his State of the Union, where he pulled people
together with Ukraine, but then he kind of went back to his old agenda.
There is a chance now, kind of reframe some of his policies about security at home safe streets, the importance of our democracy with a role in the
world, helping people with COVID, helping people with hunger, but also, frankly, strengthening the military.
So that will be the challenge of Democratic leadership, most of all, for President Biden because the U.S. remains the leading country.
NEWTON: Understood, and we will leave it there for now. Bob Zoelick, a lot of food for thought going into the weekend. Appreciate it.
Now, a fierce Ukrainian resistance -- is it forcing Moscow to rethink its military objectives. We'll have a live report from Kyiv. That's after the
break.
(COMMERCIAL BREAK)
NEWTON: Hello, I'm Paul Newton. There is more QUEST MEANS BUSINESS in a moment when we will be back on the ground live in Ukraine where Russian
military are signaling a major shift in strategy and I'll be speaking to a Ukrainian tech CEO whose company was forced to flee the country when Russia
invaded.
Before that though, these are the headlines this hour.
The U.S. wants the U.N. Security Council to deliver a unified condemnation of North Korea's latest missile tests. Kim Jong-un's regime fired an
intercontinental ballistic missile on Thursday that appears to have gone higher and farther than any of its previous launches.
[16:30:14]
The Security Council to deliver a unified condemnation of North Korea's latest missile tests. Kim Jong-un's regime fired and intercontinental
ballistic missile on Thursday that appears to have gone higher and farther than any of its previous launches.
Ethiopia's government has declared a truce with Tigray's rebel forces to allow humanitarian aid into the disputed northern province. Now the U.N.
says a more than 90 percent of the region's 5-1/2 Tigrayans need food and other assistance.
U.S. Senator Joe Manchin says he plans to vote for Supreme Court nominee Ketanji Brown Jackson, a move that all but guarantees her confirmation.
Manchin is a moderate Democrat and key swing vote in the Senate. Senate Democrats hope to confirm President Biden's nominee by early next month.
U.S. Supreme Court Justice Clarence Thomas has now been released from Washington, D.C. hospital. He was admitted one week ago with flu-like
symptoms. His wife is now under scrutiny by lawmakers investigating last year's riot at the U.S. Capitol. Text messages reveal she urged a top aide
to then-President Trump to fight to overturn the 2020 election.
Top Russian general says the country's armed forces are ready to focus on in his words liberating Ukraine's eastern Donbas region. Now the
announcement seems to suggest that Moscow is rethinking its military strategy elsewhere in Ukraine as it runs into fierce resistance. The U.S.
defense official says Russian ground forces have actually stopped advancing towards Kiev and are now defend -- in their defensive positions.
Officials in Mariupol, meantime, believe about 300 people were killed last week by a Russian airstrike on a crowded theater. That's where people were
taking shelter and up to 1300 people were thought to have taken refuge inside that theater. You see the video there the aftermath, the lack of
essential services and Mariupol has made it difficult to get full details. The city council says it estimates -- its estimates were based on
eyewitness accounts.
CNN has been unable to independently verify the number of people killed, rescued or wounded. Fred Pleitgen and joins me now on the ground in Kiev.
Good to see you, Fred. There's been significant battlefield updates, especially when it comes to as we were saying that nascent counter
offensive by the Ukrainians but also as we were just learning the torment of civilians at this point in time.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, you're absolutely right, Paula. And certainly, on the battlefield here has been
very active around the Kiev region where the Ukrainians are now saying that they're making big headway in the Northwest or towards the northwest of
Kiev, and also towards the east as well. In the northwest, they say they're not control about 80 percent of that suburb Irpin.
However, they also say that they're still being shelled by Russian forces. So obviously, a lot is still contested there. And to the east, they taken
over a small town that's about 35 miles outside of the Ukrainian capital of Kiev. And the Ukrainians are saying they want to try and make some more
headway there. That of course, you know, give some respect to the residents here of Kiev.
Certainly, I can see that the mood on the ground is a little more relaxed than it was over the past couple of days, last couple of weeks. However,
this is very much still a city on a war footing. And we do hear sirens going off very frequently here in the city, and also the air defenses being
activated, as well. And then of course, you have that awful new information that you were just talking about in Mariupol where the local municipal
council there now saying that they've confirmed that around 300 people were killed in that attack.
And, you know, initially when we were reporting about that, this is about nine days ago that this happened. The initial reports were that the shelter
that's underneath that building had held out to despite the fact that it was bombed. Now turns out that the most of the people who died -- this
again is according to that municipal council there in Mariupol were apparently on the upper floor of that theater and more towards the back of
that building.
You look at some of the images that we've seen from that building after that attack, it certainly seems that the back of that building was very
much flattened by that strike that hit there. Also, of course, one of the things that we see on those images as well as just, you know, as those
people are trying to get out after that strike took place, the amount of women and children who are among that crowd.
And, you know, some devastating numbers with the authorities now saying they believe 300 people were killed. They are saying they believe 600 did
survive the attack. Nevertheless, of course, a horrific incident. One of the things that we always need to point out when we talk about that
incident is that there are satellite images clearly showing that the word children in Russian language was there in big letters, both in front of the
building and behind the building. Very clear for any pilot to see who was flying over there, any Russian
pilot.
NEWTON: Yes. We're showing those pictures again, Fred and again, chilling. We were just showing the of the aftermath there as well.
[16:35:02]
I mean, Fred, now could you please lay out for me and reminder that the beginning of this military campaign, you were with the Russian military in
Russia? What do you make of what this Russian general is saying now and how could it change things in the coming weeks?
PLEITGEN: Well, I think it certainly seems that the Russians might be -- might be moving the goalposts. I mean, it's quite interesting for them to
now say that the reason why they surrounded a lot of the cities here in Ukraine was that they were trying to, first of all, destroy Ukraine's
military infrastructure, and then also stop the Ukrainian forces from regrouping and possibly moving their forces towards the Donbas region,
which now the Russians seem to say, it is a sort of main area there towards the east and the south east of Ukraine that they want to capture and that
they want to hold.
That certainly doesn't appear to be what they were doing towards the beginning of this conflict. Just to lay that out, they made a pretty quick
rush to try and get into Kiev, they had a convoy that was stopped as it was trying to get into the capital of Kiev, and was very close to trying to get
to Kiev, that was stopped by Ukrainian forces. And then they still tried to make sort of a pincer move on both sides of the Ukrainian capital, and try
to move in that way.
So, to now say that they never wanted to take any of these Ukrainian cities. You know, it certainly sounds a little bit strange from what we've
been seeing here in this over the past couple of weeks. And then also, you mentioned very correctly that I was on with the Russian forces in Belgorod,
which is right across from Kharkiv, that's the Russian side of that border. And, you know, they were shooting some pretty heavy artillery and shelling
that city and clearly trying to get into that city as well.
And now apparently, they're saying they never wanted to take that city at all, instead of concentrating on other parts of the country. So, possibly
the Russians may be moving the goalposts there from what they originally envisioned, and now clearly saying that what they really want to do is take
the extended part of the Donbas area, certainly sounds a bit different than what they were saying before.
And of course, what we have to keep in mind in all of that, Paula, is that they lost a lot of military hardware, they apparently lost a lot of
soldiers on the way as well. And of course, a lot of Ukrainian troops, and also Ukrainian civilians were killed and harmed in the process as well. So,
to now say that that was sort of a smoke and mirror move on their part is something that certainly does appear to be on the face of it's debatable,
Paula.
NEWTON: Yes. And at the same time, we still have information that perhaps the Russians are trying to regroup and we'll see where that goes in the
next few weeks. Fred, really appreciate the update from you on the ground. Our Fred Pleitgen live for us in Kiev.
Now, the unprecedent sanctions on Vladimir Putin and his super rich cronies, it didn't go far enough for one Ukrainian nautical engineer. He
decided to target a tangible symbol of the oligarch's wealth. CNN Senior Investigative Correspondent Drew Griffin has our story.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT (voice over): Taras Ostapchuk, a 55-year-old nautical engineer says he spent the past 10 years
serving on the Lady Anastasia, an aging luxury yacht sailing the Mediterranean.
We had a crew of nine people, including a chef and a waiter.
He says the current owner and only user is Alexander Mikheev. A sanctioned Putin-connected oligarch and the CEO of a major Russian state-run company
that rakes in tens of billions of dollars selling munitions, everything from weapons to ammo, to aircraft. Yacht engineer Ostapchuk went from
cruising an oligarch luxury to a bunker in Ukraine.
Our interview just began stopped by an alert of an incoming Russian attack.
TARAS OSTAPCHUK, FORMER CHIEF ENGINEER, LADY ANASTASIA: OK. So, see you next time. Bye-bye.
GRIFFIN: His life changed in late February when the yacht was docked in Spain and Russia invaded his home country.
Welcome back. Thank you.
OSTAPCHUK: Nice to meet you again.
GRIFFIN: So good to see you, my friend.
OSTAPCHUK: Safe once again. Ostapchuk explained he was spurred to action when he saw this image of a Russian military strike in an apartment
building in his hometown of Kiev.
OSTAPCHUK: My war started.
GRIFFIN: At that moment, he knew he had to do something to retaliate. Sink the Lady Anastasia with.
OSTAPCHUK (through translator): Water began to fill up the engine room and the crew space. After that, there were three crew members left on board. I
announced that the boat was sinking and that they should leave the ship. I did this on my own.
GRIFFIN: The other crew members also Ukrainian didn't want to risk their own jobs he said. Instead, they sounded the alarm called authorities. He
was arrested and the Anastasia staved, although damaged. In court, Ostapchuk denied nothing. Instead declaring he would return to Ukraine
where he picked up arms and joined the military.
OSTAPCHUK: Now a war has begun, a total war between Russia and Ukraine and you have to choose either you are with Ukraine or not. You have to choose,
will there be Ukraine or will you have a job?
[16:40:09]
I made a choice. I don't need a job if I don't have Ukraine.
GRIFFIN: Back in Spain, Spain's Ministry of Transport has agreed to the provisional detention of the yacht Lady Anastasia while it confirms its
real ownership, and determines if it falls under European Union sanctions and can be seized. It's one of a long list of suspected Russian oligarch
yachts now frozen in European ports in an effort to apply pressure on Putin through his inner circle of oligarchs to stop this war.
Taras Ostapchuk says others working for oligarchs around the world should expose them and their assets. His effort to make the profiteers of Vladimir
Putin's regime pay for what they are doing.
OSTAPCHUK: I think what I did is absolutely 100 percent correct. I tried to sink the boat as a political protest of Russian aggression. Because its
owner is connected to the production of Russian weapons. They should be held responsible because they, who, with their behavior, with their
lifestyle, but their unquenchable greed. They precisely led to this. In order to distract the people from the real plunder of Russia by these
rulers, they arranged diversionary wars with other countries that are innocent.
GRIFFIN: Is there any message that you would like the people of the United States to know right now?
OSTAPCHUK: (INAUDIBLE) send guns to Ukraine, please. We must stop it. This war. We must win.
GRIFFIN: Taros Ostapchuk says he has no doubt that the military equipment made by the Russian defense firm linked to his boss is right now being used
to kill civilians in Ukraine. It is why he did what he did. As for the yacht and its likely owner, we received a cynical response from that
Russian defense firm, saying it does not comment on the personal lives of its employees or their property. Drew Griffin, CNN, Atlanta.
NEWTON: So, a tech firm that fled Ukraine is taking action against Russia by boycotting a big chunk of its customer base, and raising money to fend
off invaders. The CEO joins me right after the break.
(COMMERCIAL BREAK)
NEWTON: Ukrainian tech company that got out of the country just before the war has raised millions now in cryptocurrency to help defend it.
[16:45:03]
The digital marketplace Dmarket is now taking another big step. It's cutting off for Russian and Belarusian customers even though those nations
represent about a third of its customer base. Dmarket CEO Vlad Panchenko joins me now. And it's good to have you on. This is clearly a moment of
crisis for your company, to say the least, can you give me a sense on how you've been coping and significantly, if you still have employees in
Ukraine and how you're supporting them?
I know you went to great lengths to get some employees out before the invasion started.
VLAD PANCHENKO, CHIEF EXECUTIVE OFFICER, DMARKET: Hi, Paula. Thank you for having me. That is true. Couple of weeks, two weeks, actually, before they
were started, we charge the plane. And we offered all the employees with the families, cats, dogs, husbands, wives, everyone to get out of the
country for one month. I had a guest that we have like 20 percent chance of (INAUDIBLE)
So, I was in Ukraine in 2014. And I know how quickly it could go, like, dramatically down. So that was probably one of the best decisions I made in
my life. 95 percent of the companies right now in safe in Montenegro. But some of our employees are right now and my friends as well, right now
defending Kiev with arms right now. So, it is what it is. We did cut, defrost all the accounts like on the day two, after the war began.
Because I don't understand how we can do business with the country, which is actually bombing innocent people in, for example, Mariupol. And what is
-- what was interesting is that maybe a couple of days after that, I've seen the video in TikTok of the guy who was actually in the Russian army,
invading Ukraine and shooting and like regular TikToks of him. And when I scrolled down, like a week or two ago, he was playing games.
Those games were items from which are being traded on DMarket back home. So, I believe that was one of the best of decisions we made. And we
inspired lots of the companies afterwards to do the same.
NEWTON: Yes. That example you just gave us is just absolutely chilling. Again, it looks medieval in terms of the attack we've seen and yet very
much these are, you know, situations still rooted in the digital world. And I want to point out your decision, right? Two weeks beforehand. That was at
a time when President Zelenskyy himself was saying, don't panic, everything is going to be fine.
So, I take the, you know, the point that you were quite prescient about this. Your whole approach, though, right now is dual track, right? You're
trying to help where you can on the humanitarian level, but you've also taken, you know, significant hits to try and cut this business from Russia
and Belarus. I mean, how do you propose to go forward now as a company?
PANCHENKO: Well, we have what we have now right now and hence. So, like, we have over 100 employees in Montenegro. We're working hard with the product,
but all their families, they get there together and they're volunteering and helping. What started with the first couple of weeks was just helping
to evacuate the rest of the families. We're now helping lots of other families from Kharkiv, from Kiev.
For example, the family of my wife was caught up in Mariupol for two weeks and for 11 days, we couldn't even like, get a call with them, we couldn't
contact them. And that was crazy situation. And I don't want to scare anyone who's listening or watching it. But after 11 days, when they got out
from Mariupol, the stories they told, it's not even medieval. It's nothing you would imagine could happen in a city like a peaceful city on a sea
where one day people are sitting on a bar, like drinking beer and watching Netflix and calling Uber to go home.
And the next day, it just burned to the ground.
NEWTON: Well, I'm just shuttering just listening to you. And we just had French President Emmanuel Macron confirm that as far as he knows, there are
still 150,000 people still left in cities like Mariupol. I want to ask you what might make a difference in this conflict. Maybe, you know, we've been
talking about boycotts of Russian energy. But what about a full-scale tech boycott or other things?
Do you think this is possible? And do you think it would have a major impact on Russia?
PANCHENKO: The major impact in Russia would have the full trade embargo. This is what I believe in. But we're not yet there. But again, where we
were two weeks ago, and where we are now with the help of the west, with the help of the U.S. and Europe. It's a -- it's never seen and heard
before. So, I'm grateful for that. We're moving forwards but lots of the companies are moving away from Russia.
And that's also helping us a lot. It's just loaned help today or in a week or in a month, but in the year to come it will help a lot. Unfortunately,
you've all that pressure would have been pressed in 2014.
[16:50:01]
Nothing like today would happen but I hope that what we as Ukrainians are doing right now is saving actually the rest of the world from the
consequences in the next 10 or 20 years.
NEWTON: Vlad, we will continue to stay in touch with you and wish you all the best as you continue to try and help really what is an absolutely
catastrophic humanitarian situation at this point. Vlad Panchenko, thanks so much.
PANCHENKO: Thank you so much for the support and good luck to you as well.
NEWTON: Coming up here on Quest Means Business. Richard Quest gets an inside look at the changes underway at Saudi airlines. His exclusive
interview with a company CEO after the break.
(COMMERCIAL BREAK)
NEWTON: Saudi Arabia's flag carrier is adjusting to what it hopes will be the future of air travel coming out of this pandemic. Richard Quest
recently got an inside look at the company in an exclusive interview with Saudia chief executive, Ibrahim Koshy. Take a listen.
(BEGIN VIDEOTAPE)
IBRAHIM KOSHY, CHIEF EXECUTIVE OFFICER, SAUDIA: The domestic market is quite strong. But we're also seeing increased demand on certain
international routes, some seasonal leisure travel internationally is opening up quite well. And we're seeing the demand there. We're also seeing
out of our new Jeddah hub. We're beginning to see traffic, you know, people actually connecting, you know, point to point.
So, there are increased flows. And, you know, we're quite happy with where we are on target.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Pre-COVID, you had how many passengers?
KOSHY: Thirty-five million. Thirty-five million passengers in 2019.
QUEST: Now that 35 million passengers. It's a lot, but it really breaks down quite simply, doesn't it?
KOSHY: It's O and D traffic, religious traffic and there was no real -- let's say leisure vacation travel, visitors coming into Saudi Arabia. It's
changing and it's changing quite rapidly. You know, just in line with what's happening in the kingdom, there's a lot of change and the travel
segmentations is changing quite rapidly as well.
QUEST: So, you have to change the airline?
KOSHY: Very much so.
QUEST: Tell me what you're doing.
KOSHY: So, when we look at what's happening at Saudi right now, it's rebuilding the product because if we're keeping -- we're trying to say that
we are the wings of the vision 2030. There's large numbers of targeted. We're rebuilding the product, the onboard service, the in-flight
entertainment, and the in-flight connectivity which is still in process but I think we're going to be Very proud of the in-flight connectivity which is
coming on board.
[16:55:03]
But more importantly the network, the network is changing. We finally have -- let's say an airport, the Jeddah hub which is our main operational base,
where we can do good connectivity throughout all of the 28 cities in the kingdom that we currently serve. And new international destinations. Where
we've opened up 10 international destinations just now over this past quarter.
QUEST: So, what's the plan with this sort of product?
KOSHY: So, we have some longer range, let's say medium to longer range sectors that were flying to Europe. This is a perfect product for the ones
where we can't justify wide body to be flown on it. So, it's a sleeper seat. It has the latest in-flight entertainment, Panasonic. You can control
it from an app. So, it's touchless, if you'd like that. And at the same time, very comfortable product right here. Yes.
QUEST: So, what do you want to be? You are different to Qatar, and the UAE, which has no domestic network. It is pure sixth freedom. And out. Everybody
connects over the hub.
KOSHY: Yes.
QUEST: But you have a large domestic potential, as well as hub and spoke. So, where's your focus?
KOSHY: The focus on this one is we want to be generally served the authentic product. We're not trying to be a connector or super connector
type airline. We want to serve the OMD, the domestic market in Saudi Arabia. We're trying to bring -- be the enabler for the vision of the 2030.
Bringing people to the Kingdom of Saudi Arabia, those that are planning to visit the new resorts that are out here, the vacation travelers, leisure
travelers.
The target is for 35 million religious travelers by 2030. So, the 100 million visitors that's targeted by 2030. It's a -- it's a driving force
but we're also connecting, but it's not the main drive. We're not -- we're not trying to be super connector.
QUEST: So, now let's talk about the new airline.
KOSHY: Yes.
QUEST: Nobody really knows much about it, except it's going to be state owned. It's going to be full service.
KOSHY: Yes.
QUEST: And it's going to aim to help take up the capacity. But is it going to be a competitor to you?
KOSHY: First, before getting right into that. Saudia is one of the airlines in the kingdom right now. And there's rapid growth for Saudia. The growth
that's taking place in Saudi Arabia really requires additional capacity. Now, whether that's served through Saudia or under a different product, as
a new full-service carrier out of Riyadh, I think that decisions been made and they will complement the market. he growth is there and it does
substantiate another airline at this time.
QUEST: The most difficult question perhaps is how do you prevent Saudia becoming an also-ran, if there's this new airline, even with all this
growth?
KOSHY: Saudia is an airline with 75 years of history. I don't think we're going to be competing with anybody out of the Jeddah hub. That's our main
operational hub. That's where the religious traffic comes in. That's where the leisure traffic will continue to come in. That's going to be a hub for
connecting traffic. I mean, we have very ambitious growth plans just for Jeddah. And that's where our focus is at this time.
(END VIDEOTAPE)
NEWTON: Now, trading has closed for the day. We'll give you the final numbers when we come back.
(COMMERCIAL BREAK)
END
