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Quest Means Business
Messi In Action For Argentina Against The Netherlands; Sen. Sinema Changes Party Affiliation In Blow To Democrats; Sam Bankman-Fried Agrees To Testify Before Congress; Brittney Griner Back In United States; Croatia Stun Brazil On Penalties At 2022 World Cup; China Pushes To Pay For Mideast Oil In Yuan. Aired 3-4p ET
Aired December 09, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:36]
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: It's a slow day on Wall Street with the Dow off fractionally three-tenths of one percent. Let's call it
100 points right now.
Brazilians say goodbye to their World Cup dreams after a surprising defeat by Croatia.
And Sam Bankman-Fried says that he will testify before US lawmakers about the collapse of FTX.
In New York, I'm Rahel Solomon.
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": In Seattle, I'm Richard Quest on assignment.
We have fresh fish. We have Seattle coffee. Oh, and we also have the Port Commissioner to tell us about supply chains and how the economy is moving.
All that on QUEST MEANS BUSINESS tonight.
It is Friday, it's December the 8th.
SOLOMON: Good evening.
Brazil is out of the World Cup. The tournament favorites eliminated by Croatia in a dramatic penalty shootout. Croatia is now off to a semifinal
for the Second World Cup in a row.
Now, there was another game going on right now to determine who else will meet them in the next round. Argentina is up against The Netherlands and it
could be the last time we see one of the game's greats, Lionel Messi an action at a World Cup.
Patrick Snell is following all of the action and joins me from Atlanta.
Look, Patrick, Brazilian hearts breaking all around the world. How did this all go down?
PATRICK SNELL, CNN WORLD SPORT ANCHOR: Oh Rahel, yes. It is why we call it the beautiful game, right? So much emotion, so much drama. Few people
probably would have expected this one.
Brazil heavy favorites not just to win on this day, but win the whole thing, win it for a sixth time. That was meant to be the storyline. The
Croatians though, a population of less than four million, they did not read the script.
This is how it all unfolded on a day of high drama in this one.
All things looked rosy for the Brazilians when superstar Neymar goes in there in extra time. This, after the initial 90 was goalless and Neymar
there with a play equaling 77th gold for his country, an all-time equaling mark.
At this point, now, we didn't know that Croatia had it in them to get back in the game, but they do 117 minutes on the clock, their first shot on gold
by my reckoning and what a moment for Bruno Petkovic there.
It goes to the dreaded penalty shootout. You can see the anguish there on Neymar's face and so, it would prove as Rodrigo, crucially misses there for
Brazil. His effort is saved and then utter despair at the end for Marquinhos, his effort hits the post. This is really, really sad scenes for
the Brazilians there.
But Croatia, wow. Croatia, what a moment for them. Neymar fighting back the tears. We would see -- you can see the tears there streaming down his face
as he gazes upward.
These are the scenes then, as we extend the big picture to Rio de Janeiro a short while ago, they are stunned there -- stunned and crying. This was not
meant to be the day that it all panned out like this for Brazilian football.
They can't believe it, you know. They can't believe it.
But the other side of the coin, these scenes, Rahel, in Zagreb on Friday. We shouldn't be too surprised though. This is a nation that got to the
final of the Russia 2018 tournament four years ago.
Simply put, those Croatian players never know when they are beaten. They have a will and a resolve. They never give up and so it will prove, and
we've been looking at the stats. We've been looking at exactly the mental fortitude that they display when it comes to penalty shootout.
If we can put that graphic up now, I can show you exactly what I mean. They won two shootouts at Russia 2018 on route to getting to the final. And in
this tournament so far, they've won another two. That's four in total across four calendar years. They also beat the English after extra time en
route to getting to that final in Russia four years ago.
But this is a historic moment, and I'll tell you what, food for thought for Brazilian football because now there will be no Argentina-Brazilian
semifinal.
SOLOMON: No, no, no. Tears all around the world, Patrick, whether it's tears of heartbreak or tears of joy depending on what side of the match you
were on.
[15:05:10]
SOLOMON: Look, there is another match happening right now, and all eyes on Messi. How is that going down?
SNELL: Yes, it is just an extraordinary day again. I mean, it's just been a fantastic tournament. Once we dealt with the serious issues of which
there are plenty at this particular World Cup, the football has been very, very entertaining indeed.
And look at this, Argentina are ahead in that match against Louis van Gaal's Netherlands. It was a goal about 10 minutes or so before the
halftime break, and it was brilliant from Lionel Messi, who we now know, Rahel, is most likely playing in his last ever World Cup at the age of 35.
A stunning assist, almost a no-look pass, as they like to say, using American sporting parlance.
He threaded it through the eye of a needle to Manuel Molina, a defender, a defensive player by trade who loves to get forward. He had a stunning
finish and he puts Albiceleste, one nil up, as we speak against Holland at the moment.
SOLOMON: A lot to watch, Patrick. We're going to keep our eye -- one eye on the game, one eye on the actual newscast.
Patrick Snell in Atlanta, thank you.
In the US meantime, Senate Democrats can no longer count next year on a 51- seat majority. That's after Krysten Sinema of Arizona said that she is registering as an Independent.
Senator Sinema has been known to defy Democratic leaders. She put the brakes to their push for higher corporate taxes, for example, and saved the
tax loophole for wealthy Americans.
Now in an exclusive interview with CNN's Jake Tapper, she said she is leaving the party, but that won't necessarily change much.
(BEGIN VIDEO CLIP)
SEN. KYRSTEN SINEMA (I-AZ): I know some people might be a little bit surprised by this, but actually, I think it makes a lot of sense.
You know, a growing number of Arizonans and people like me just don't feel like we fit neatly into one party's box or the other. And so, like many
across the State in the nation, I've decided to leave that partisan process.
While I intend to maintain my position on my Committees, and keep doing the work that I've been doing for Arizona. So I don't think that things will
change in terms of how I operate or the work that I do in the United States Senate.
(END VIDEO CLIP)
SOLOMON: Now, Sinema's decision will not cost Democrats their control of the Senate. Two Independent senators, Angus King and Bernie Sanders have
long worked with the party.
Still, Sinema's departure adds a bit of uncertainty just days after the Georgia runoff that gave the Democrats a 51-seat margin.
Melanie Zanona is on Capitol Hill.
So Melanie, help us understand practically what this means. What does this change? And what doesn't this change?
MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Well, I would say practically, it doesn't have all that much of an impact for Senate Democrats. That's
because Sinema is keeping her Democratic Committee assignments.
She has also said, she is not going to change the way she votes, and even though she has been a wildcard in some instances, in important instances,
she is a reliable Democratic vote most of that time.
So what that means is that Democrats are going to maintain a mathematical advantage when it comes to both the floor and when it comes to Committees,
and that is really important, because under this split 50/50, Senate GOP has to sign off on subpoenas, they can slow down nominees.
And so really, with Sinema, she is essentially going to be caucusing with Democrats. But it is a big deal symbolically for Sinema to sever ties with
the Democratic Party, and it is especially a big deal politically.
Sinema was likely going to face a nasty primary challenge. She has been under a lot of pressure from the left. Now, this essentially eliminates the
threat of a primary challenge because she's going to be running as an Independent.
And I think right now, the question is for national Democrats. Are they going to line up behind Sinema and risk angering the base who wants to see
a Democratic candidate in Arizona? Or are they going to line up behind the Democratic candidate and potentially risk this messy three-way primary --
we have a Democrat, a Republican, and an Independent.
And so there are a lot of concerns that that could really essentially hand the seat over to Republicans, but those questions will come in due time.
Right now, this conversation is definitely dominating the conversation in Washington.
But we'll see how this plays out in the months and years ahead -- Rahel.
SOLOMON: Well, Melanie, help us understand that a bit more. The timing of this has certainly raised a lot of eyebrows. I mean, why do you think she
made this decision right now? The Dems certainly were on a pretty good stretch there, right? They picked up that Senate seat, they picked up some
Governor races. Why now do you think?
ZANONA: Well, I mean, I think the reason is because on Tuesday, Democrats finally with the special election know that the makeup of the Senate next
year is going to be 51/49. And so it takes the sting a little bit out for Democrats. It gives Sinema more breathing room to make a move like this.
But at the same time, it does take the wind out of the sails for Democrats. They were emerging victorious after this week, but they're saying it's not
going to change much for them, and like I said, practically it probably doesn't, but it is a big deal at least symbolically here in Washington.
SOLOMON: Yes, certainly creating quite the ruckus down there.
Melanie Zanona, great to have you. Thank you.
ZANONA: Thanks.
[15:10:06]
SOLOMON: Sam Bankman-Fried, the founder of FTX says that he will speak to US House lawmakers about its collapse. In a series of tweets, he said that
he will try to explain what led to the crash, which by the way, wiped out billions of dollars. It is unclear, though whether he will go to Capitol
Hill where two different hearings are set for next week.
Lawmakers in both the House and Senate want to know why the crypto exchange went bankrupt, and whether client funds were misused.
Paul La Monica with me now. He is in New York.
So Paul, look, I mean, SBF has spoken quite a bit. He did that event with "The New York Times." Do you think this will be revelatory? I mean, how
much do you think we will actually learn?
PAUL LA MONICA, CNN BUSINESS REPORTER: I'm not a hundred percent sure, Rahel. I mean, I think there are still so many questions, even though he
has been sort of speaking nonstop, be it to media outlets or on Twitter about various aspects of the FTX collapse.
A lot of people are still wondering where is all of this money that is missing? What about those ties between Alameda, the hedge fund and FTX?
There are still so many questions.
We also don't know, Rahel, is he going to actually physically be in Washington? Or is he going to do this remotely from the Bahamas, perhaps?
He apparently also has only committed to the House Financial Services hearing on Tuesday, still waiting to hear if he's going to appear before
the Senate on Wednesday, which might be a more difficult and contentious hearing, because last I checked, Elizabeth Warren is a member of the Senate
Banking Committee and will probably grill Sam Bankman-Fried pretty mercilessly, as I think most would love to see.
So still more questions than answers, I think.
SOLOMON: Paul, as you know, there has been so much damage, I think, cost to the broader crypto industry because of FTX's collapse. I mean, how much
more damage -- reputationally, do you think this hearing -- these hearings perhaps cause to the broader crypto industry depending on what we learn?
LA MONICA: I'm not a hundred percent sure. It's a great question, Rahel.
I think a lot of it will depend on just how forthcoming SPF really will be, and whether or not he is just contrite and talks about the issues that
brought down FTX? Or does he talk about deeper problems within the crypto world, that would be, I think more damaging to Bitcoin and various crypto
firms like Binance, which, you know, at one point was looking to maybe rescue FTX, and then changed their mind.
I don't get the sense that Sam Bankman-Fried has in his best interest to talk crypto down, because it still seems like he is an evangelist for the
industry, it is just that, you know, he may, let's be honest, may not have really been on the level, and it is going to remain to be seen whether or
not there are any criminal charges that come against him as a result of this collapse of FTX.
SOLOMON: And, Paul, if you might -- I mean, just remind us again. I mean, as you said, it's unclear if he's actually facing any criminal charges, but
there are several investigations that are currently underway.
LA MONICA: Yes. I think he is not out of the woods by any stretch of the imagination, and we have to wait and see what investigators will uncover.
It is premature to say whether or not this was just bad decision making, bad business policies, and maybe bad luck as well to be, you know, at a
period of time where crypto was crashing and FTX was, to their credit, trying to prop up some of the other weaker firms in the industry.
The problem, Rahel, is that we are now finding out that FTX itself was one of the weaker firms in the industry. So, thanks for nothing Sam Bankman-
Fried.
SOLOMON: Look, I think the hearing next week will be very interesting. I think there will actually be even watch parties and people sort of, you
know, getting their popcorn ready to hear how this all goes down.
Paul La Monica, wonderful to have you.
LA MONICA: It is going to be like Lehman Brothers and Enron all over again, yes.
SOLOMON: Oh, boy. Have a great weekend, Paul.
Well, coming up, as we said, Richard Quest is in Seattle and Richard, I hear you got to look at the Pike Place Market. For our viewers around the
world, that's a place famous for throwing fish, and Richard, apparently you got some practice yourself.
QUEST: Yes, yes.
[VIDEO CLIP PLAYS]
SOLOMON: All right, Richard.
QUEST: Yes, as it travels across the country, it even gets cooked into fish fingers.
We'll have those later when they've defrosted.
After the break, we are going to talk fish. We're going to talk economy, and we'll be talking to the Port Commissioner here in Seattle.
Supply chain issues in this vital region for the US and global economy.
QUEST MEANS BUSINESS, we are in Seattle with fish after the break.
(COMMERCIAL BREAK)
[15:17:56]
QUEST: Welcome back to QUEST MEANS BUSINESS.
It's a Friday, and I'm on assignment here in Seattle, which is a perfect place to gauge what is happening in not only the regional economy, but the
economy of the United States.
Seattle is by far the largest city in the Pacific Northwest, in the State of Washington. It's on the Puget Sound.
As luck would have it, as I'm speaking to you, a very loud siren is going to go pass with a suitable fire engine, but we'll keep going, regardless.
The significance of Seattle in this part of the world is its home to some of the largest companies in the world -- Microsoft, Amazon, and of course,
Starbucks.
It is also home to many startups. It has become an incubator city, if you will. People are attracted here, not only for the business, but for the way
of life.
And so you have top executives like Bill Gates and Jeff Bezos, all of whom live here, made their home here, run their foundations from here, and are
giants in the economic life of the region.
The city skyline is defined by this iconic Space Needle, which incidentally, is now gold on the top. That's gold, not burnt orange or
whatever, because that's the color it was when it opened in 1962 for the World's Fair, which was the year I was born.
Seattle is also known for its rainy climate, which is why I'm standing under cover and not in the skyline, and for its strong coffee, which is why
I'm still awake.
Now, one of the most important parts of the downtown area, all choice, and for locals is Pike Place Market. It's a fascinating example of how you can
have a public-private partnership with magnificent project on sale. The oldest continuous market in the country, I believe, and so one has
contradicted me on that yet and there is a local tradition. You just have to do it if you're visiting Seattle, be prepared to throw fish.
[15:20:10]
(BEGIN VIDEOTAPE)
RYAN REESE, CO-OWNER, PIKE PLACE FISH MARKET: Good morning huddles and being together is really where all the magic starts.
(GROUP cheering.)
JAISON SCOTT, CO-OWNER, PIKE PLACE FISH MARKET: When we walk in to this place, we want to have energy, you know, and love.
SAMUEL SAMSON, CO-OWNER, PIKE PLACE FISH MARKET: Dicky (ph) was the owner's younger brother, he ran this place years ago. And he said, "I want
to be world famous." And that was the goal and a vision, so to say, and it that just happened from there.
REESE: The whole concept of a world famous fish market is pretty bizarre if you think about it.; You've got this little 900-square feet, thousand-
square feet fish market, and people from all over the world come to see us. It's pretty amazing.
(GROUP cheering.)
UNIDENTIFIED MALE: And throw it.
UNIDENTIFIED FEMALE: You've got to throw it face first, not tail first. You want to keep going back farther, does that work with you? Okay.
ANDERSON: MILLER, CO-OWNER, PIKE PLACE FISH MARKET: There is not a lot of businesses or just places you can go in the world where it just feels good
and good energy, safe space. And we invite them into that whether they're buying fish or not. I think that's why they come because you can buy fish
anywhere.
SAMSON: You can sell fish anywhere, too. It's authentic here.
QUEST: This is a business class, in front of you. How to treat your colleagues with respect. They all enjoy being here, along with ensuring
you, do the best for the customers in a small business in limited premises.
And the fascinating thing is, this is Starbucks 50 years ago. This is all those small businesses that have grown and grown and grown out of Seattle.
I love it.
(END VIDEOTAPE)
QUEST: Truly fascinating experience.
Now beyond the fish market, of course, the local economy is dominated and not only by agriculture and fisheries and the like, but more importantly
these days, Microsoft, Amazon, and the major companies like Starbucks.
It has an unemployment rate of some three percent. There are headwinds, particularly in the Pacific Northwest with China being a major trading
partner. Inflation in the area is nine percent.
The city's port is a major employer. It is of course facing reduced imports from China. The airport it grows -- traffic is growing. It's becoming a
hub.
Not only has it been a traditional hub for basically North Asia and even Southeast Asia to an extent, but now Europe is becoming very much part of
Seattle.
Ryan Calkins is with me, the Commission President of the Port of Seattle. Good to have you, sir.
RYAN CALKINS, COMMISSION PRESIDENT, PORT OF SEATTLE: Good evening.
QUEST: So we think of Seattle, we think of Microsoft, we think of Amazon, but the port is a fundamental part. I noticed, for example, grain being
just by -- downtown being loaded onto ships and sent off. The port is significant.
CALKINS: It is. In fact, Seattle wouldn't be here if it weren't for the fact that we're a port city. You know, we're founded here right on the only
river that comes into the city, the Duwamish River.
And as you mentioned, we're really not just the Port of Seattle, but we're the port of a lot of inland grain operators and others.
So in some ways, we think of ourselves as the port of the Dakota, it is the port of Chicago for certain commodities. So yes, we're a very important
part of our economy. Although, we do fly below the radar.
QUEST: You do. Very much so, because for example, we often speak to the Port of Long Beach.
CALKINS: Yes.
QUEST: You know, who also -- how would you divide the coast in the West - - how would you divide the West Coast and Asia between you?
CALKINS: Well, you know, we're the first major port of call if you're coming from Asia. If you think about distance, we're the closest one, so it
is an advantage for the shipping lines to be able to drop some merchandise here that's going to go inland, gets it there a day or two quicker.
Of course, LA Long Beach has a huge endemic market, so they've got a lot of containers just for there, but we're a great place to start off.
QUEST: you are a wonderful example of Pacific Northwest understatement. People in this part of the world, maybe the richest person in the world, or
whatever, their company, but oh, shucks, I'm just here doing my business.
CALKINS: Yes. We like to keep ourselves up here in the upper left corner a little bit secret, maybe.
QUEST: Right, upper left corner. That's the way to think of it.
Now, the other thing about you, how are you finding supply chain issues. Are they easing up?
What I've heard from various local businesses is well, one week, we can get this; on the next week, we can't get that, but we can get something else.
[15:25:10]
CALKINS: Things are a world better than they were a year ago. If you'd been here a year ago, you would have seen ships lined up in the harbor, all
up and down the West Coast. Now, there is no wait to come in.
The rates for to ship a container from China to the West Coast of the United States is 10 percent of what it was a year ago.
QUEST: Wow.
CALKINS: From 20,000 to 2,000, roughly.
QUEST: So splitting out on the inflation front, the oil effect as a result of the war on Ukraine. If we're talking about the China effect, that
is really coming down and abating quite considerably.
CALKINS: It is, and the news this week that China is lifting its COVID restrictions will have a significant impact for us, a positive benefit for
us, too, as, you know, we are the gateway to China for so many businesses, both directions. Our agricultural exports and their commodities imports.
QUEST: Does it feel a bit strange in that sense? I mean, look, I know the history of this.
I mean, Seattle is a new -- basically, a new city, it is only in 1851 or whatever, so things are relatively new. But this relatively, not
provincial, but distanced area is such a key part of global trade.
CALKINS: It really is, and I think --
QUEST: And the airport is growing as well for things like high value added exports.
CALKINS: It is. Yes, yes, absolutely.
Both our cargo and passenger traffic, the airport is growing. We're doing our darndest to make sure we can keep up with that demand, but I see the
trend being that the global economy has really shifted to the Pacific Rim, and Seattle is in a great position to take advantage of that.
QUEST: One final thought, one of the people I was talking to here described Seattle, when it comes to tourism, described it as a third go. So
your first time to come to the United States, your visit New York, Los Angeles, whatever. The next time you might do, Chicago, Dallas, or Atlanta,
the third go, you go to places like Seattle and Houston. You're going to challenge that.
CALKINS: I would take exception. I would say, you ought to start here. It really is one of the most beautiful parts of the country. We have mountains
and beaches.
You can get from an hour, you can be in all sorts of different climates, whether it's ecotourism or you want to catch a cruise to Alaska, or you
just want an urbane city experience. Seattle is a world class city.
QUEST: And I'm grateful, sir, that you've come out today.
CALKINS: Thank you for coming to visit us, too.
QUEST: On this cold. You see, we have this rule on the program that whatever my guest has done, I tend to follow.
So he is used to this weather. If he takes his coat off --
CALKINS: Oh you're shivering. It is cold today.
QUEST: Absolutely. Well, I take my coat off.
Thank you, sir. I'm very grateful to you for coming here.
CALKINS: Thank you, Richard. Thank you for having us.
QUEST: As we continue, we talk about strengthening ties, it'll be next -- strengthening ties in the Middle East. Talking about China. This time,
President Xi Jinping is in Saudi Arabia, where he is pushing Gulf nations to accept the yuan, the Chinese currency for oil sales.
We'll have that story next.
QUEST MEANS BUSINESS live from New York and Seattle.
(COMMERCIAL BREAK)
[15:30:54]
SOLOMON: Welcome back. I'm Rahel Solomon and there is more QUEST MEANS BUSINESS in a moment. When the company known as the Amazon of Africa is
hoping to study the ship after ousting its founders. I will speak to Jumia's new CEO.
And a view like no other. Richard Quest takes in Seattle's iconic skyline from a floating hot tub. Yes, hot tub. For that, this is CNN and on this
network. The news always comes first.
U.S. basketball star Brittney Griner is back home. A state department official told CNN she landed in Texas earlier today after her release from
Russian custody in a high-profile prisoner exchange. Griner was then taken to an Army Medical Center for a routine evaluation. Now in return for
Griner in the U.S., the U.S. sent back Russian arms dealer Victor Bout. The Kremlin says that the exchange is not a sign of improvement in U.S.-Russia
relations.
U.N. human rights chief Volker Turk now says the situation in Ukraine is a "human rights emergency." He added that almost 18 million people are in
need of humanitarian assistance as Russia attacks the country civilian infrastructure. Ukrainian officials say nearly a dozen settlements in the
East have been shelled just today.
Add to sports, the World Cup quarterfinals now underway in Qatar. Croatia, the runner up at the last tournament beating world number one Brazil and a
penalty shootout. Leonel Messi and Argentina are playing the Netherlands right now. Argentina leads, one-zero.
China's Xi Jinping is in Saudi Arabia pushing for Gulf leaders to sell it oil in exchange for Yuan instead of U.S. dollars. The move could dent the
dollars dominance in world trade. China is the world's top oil importer, Saudi Arabia's its biggest trading partner. With Xi's visit, the two
countries have pledged to work closer together on global issues. Steve Tsang is the director of the China Institute at Soas University of London.
He joins me from Nottingham, England. Steve, wonderful to have you. Thank you.
So, what is your top line reaction to this meeting? I mean, it's certainly been remarkable how differently she has been welcomed and received compared
to President Biden's visit.
STEVE TSANG, DIRECTOR, SOAS CHINA INSTITUTE: I think you're absolutely right. That is the real issue here more than any of these specific deals.
Xi Jinping is in Saudi Arabia to forge a strategic partnership with Saudi Arabia, even though officially not at the expense of the United States, but
clearly would be at the expense of the United States.
SOLOMON: So, you have said that she cannot be deterred militarily. So then, how best to operate with China, how best to relate with China, do you think
strategically?
TSANG: Well, I think we do need to engage with China. Diplomacy is needed the most when one is dealing with non-friends. Friends or friends diplomacy
is a luxury is nice to have. But for people who may want to do your harm, you need to engage with them and use the leverage you have to get them to
go in the direction that you want them to go. So over Taiwan, it will have to be economic determinist. One of the military deterrence against Xi
Jinping?
SOLOMON: And what does that look like economic deterrence? I mean, help me understand with some specifics, perhaps what that actually looks like.
TSANG: Well, economic deterrence against Xi Jinping over Taiwan will have to be something that he himself understands because his advisers will not
tell him that what deterrence the Americans could do. So, you will have to be a closing economic relationship, that's the very threat.
[15:35:05]
That's the breaking of the economic relationship could potentially cause the Chinese economy to get into a tailspin. That could potentially lead to
uprisings or protests in the streets in China that could threaten Xi Jinping's hones to power. He can understand that. And we have seen how he
react to the COVID -- zero-COVID policy, potentially leading to protests, and he would step back. So, there is somebody who does have a pragmatic
streak to his with this approach.
SOLOMON: Well, that's an interesting point, Steve, because there have been a lot of questions I think about ultimately, what led to the relaxing of
COVID policies that we're seeing now. Was it more of the economic elements as you alluded to or was it the political unrest and the public unrest? I
mean, what do you think?
TSANG: Well, the economic issue is something that the technocrats in China knew about and it wasn't new. They realized that the zero-COVID policy
could not be sustained. But they could not say it to Xi Jinping. So, we have Xi Jinping being very gung-ho about zero-COVID policy at the 20th
Party Congress a bit over a month ago. And then with the protests, and in the protests, people were shouting that Xi Jinping and the Communist Party
needs to step down.
Now that I think trigger Xi Jinping thinking that the protests could potentially spread and therefore, he must act and respond. And he responded
in a three-prong approach. He suppressed the protests. He used the digital technologies to deter others from protesting, and he removed the most
egregious issues that the zero-COVID policy brought about the public protest.
SOLOMON: Well, I mean, it certainly has been fascinating to watch. I think now, all eyes turn to what the recovery looks like in China. And we will
wait to see. Steve Tsang at the China Institute of Soas University of London. Wonderful to have you. Thank you.
Well, it's been a rocky road for Africa's first tech unicorn, but Jumia is now trying to reverse their luck on their stock price by restructuring. We
have the new acting CEO coming up next.
(COMMERCIAL BREAK)
[15:40:08]
SOLOMON: Africa's first tech Unicorn went public on the New York Stock Exchange three years ago. Since then, its shares are down more than 80
percent. Jimmy is often described as Africa's Amazon. The E-commerce company specializes in logistics and payments. Now as part of a
restructuring, its cofounders were ousted last month. The company says it's cutting unprofitable parts of the business and will scale back on
marketing.
Francis Dufay is the acting CEO of Jumia and he joins me from the Ivory Coast. Francis, welcome. Thanks for being on the program tonight.
FRANCIS DUFAY, ACTING CEO, JUMIA GROUP: Thank you (INAUDIBLE) I'm very -- I'm verry happy to be on the show. Thank you very much.
SOLOMON: So, let's start at the top. I mean, where do you cut back on investments without sacrificing growth?
DUFAY: Oh, there are many ways to do the right things without using too much money. And we deeply believe that we're in a position where promote
the learning we have across Africa in the 11 markets where we operate. We know that we can both -- I mean, at the same time, improve the
profitability trajectory and improve the fundamentals of the business and be in the right position to capture the opportunity of E-commerce in
Africa.
So, this is totally feasible. And so, we're pretty confident in the plan. We are working very actively on savings. So, we getting enough cost. We've
been pretty aggressive on Janay for example, across the board. We have pretty deep restructuring happening in our headquarters in Dubai. But on
the other hand, we also putting in place the right actions, refocusing on some basics. We focus in on the projects that bring most value.
Cutting down -- I mean, trimming a few branches that are not worth the effort. So, we're in a position to be the head chef and then on top for the
business. So, for example, we double -- doubling down on supply and reinvesting a lot in the relationship with suppliers. As we believe that
this is one thing that could enable us to spend much less is marketing. That's just one example. But (INAUDIBLE) both at the same time.
SOLOMON: How is inflation factoring into business? I mean, how was inflation hurting business?
DUFAY: Oh, so it's definitely hurting business. I mean, what's hurting business? I mean, I wouldn't hurting but we navigating a tough
macroeconomic context. It's not -- I mean, it's no wonder the world knows about. But particularly in emerging markets in Africa, currency
fluctuation, devaluation has led to inflation. But more specifically to us, it's led to a lot of governments trying to protect their own currencies
which in the end, let's lead to a lot of supply restrictions, for example, which inevitably is hurting retail consumption.
And well, basically what we have to offer on the Web site. So, it's making it -- it's making our lives more difficult if I can put it this way. But in
the long run, it's not a game changer. I mean, we still have to focus on the same things which is getting the right logistics, the right service,
the right supply for customers. And I mean, we've been through cycles in the past, right? We know how to navigate that kind of tough economic
environment. It's tough in the short term, but we know -- we know what to do in that (INAUDIBLE)
SOLOMON: You know, as we said, the stock has been badly hit. There has been a lot of sort of internal reshuffling. How best do you convince investors
that there is now stability at the top ranks of the company when there has been so much turmoil?
DUFAY: Well, I think we just have to --
(CROSSTALK)
DUFAY: We just have to deliver on the numbers to be very honest. We -- I mean, I personally am, the management team is convinced, we're all
convinced that Jumia is extremely relevant in Africa. It's a real business, we're going to prove that it's a profitable business. And we believe that
it's perfectly feasible. The thing is, we're working across 11 markets. And we have facts, we have proof of concepts across markets, that we can have
great economics, we can grow.
And above all, we're relevant to customers. We solving, we solving problems, solving real problems, and we really improving lives across
Africa. We see that happening. I understand that the market may have been disappointed with our past results and the pace of progress towards
profitability. But we are very confident that we have the plan to make it happen way faster.
SOLOMON: And for instance, I know that you are based in the Ivory Coast. But, you know, as you say you're trying to solve problems in Africa. I
mean, how do you continue to solve those problems in Africa when a lot of the top executives are not in Africa? Right? I mean, as you said,
headquarters are in Dubai. I mean, is that part of the vision moving forward to bring some more of the company back into the continent?
DUFAY: Absolutely, absolutely. You're spot on. I mean, as you said, I'm based in Abidjan. South -- western Africa in Ivory Coast. I'm an -- I'm a -
- I'm an Ivory national, by the way. And I deeply believe that if you want to do business in Africa, and like in any emerging market, actually, you
have to live there. You have to know the context, you have to know your supplier, know your customers. I mean we solving issues that are so much
different from the problem.
[15:45:02]
I mean, from the issue that our customers may be having in the U.S. or in - - or in Asia. So, we have to be there, we have to be underground. And that's pretty much what's happening. We -- as we speak, we are in the
process of relocating most of our leadership, if not all of it, towards African countries from Dubai to make sure that we -- I mean, we're one
team, we're all connected with suppliers and customers in our country. So, this is exactly what's happening at the moment.
SOLOMON: Francis Dufay, great to have you today. Good luck.
DUFAY: Thank you very much.
SOLOMON: Well, a major challenge to economic development in Africa is the widespread shortage of energy. This was a big talking point when industry
leaders gathered for Africa energy week in South Africa and discuss the goal of eradicating poverty by 2030. Connecting Africa's Eleni Giokos sat
down with the Southern Africa CEO of Energy Giant B.P. Taelo Mojapelo.
(BEGIN VIDEOTAPE)
ELENI GIOKOS, CNN CORRESPONDENT: We're gathered for energy week. And I think, you know, listening to the opening statements, everyone is talking
about the energy deficit on the continent. That's 600 million Africans don't have access to stable and reliable, safe electricity. How are you
viewing this dilemma?
TAELO MOJAPELO, CHIEF EXECUTIVE OFFICER, BP SOUTHERN AFRICA: It's quite clear that Africa has an energy deficit. Now, if you look at the energy
sources that we have, we've got abundant -- an abundance of various energy sources. Currently, our largest energy source at the moment is coal. And as
we know, coal from a carbon emissions perspective is, you know, quite high. We also have access to an abundance of solar and abundance of wind energy,
as well as nuclear.
And, you know, now we do see the emergence of LNG gas, which we do see as a transition gas.
GIOKOS: I want to talk about LNG, how quickly can we transition away from things that we've become very accustomed to i.e. coal?
MOJAPELO: LNG is imminent, it is here.
GIOKOS: Yes.
MOJAPELO: And, you know, there is a lot of work and a lot of -- a lot of projects that are on the go on LNG, and particularly if you look at Africa
and Mauritania and Senegal, for example, B.P., we have got projects that we have, there is some work as well on the Horn of Africa along in Egypt as
well, there is some work around gas. And if you look at the southern basin as well, there are many companies that are actually exploring, making sure
that they put in the right resources to explore for LNG because it's an important transition gas.
GIOKOS: Do you believe that Africa can help solve some of the world's global energy issues and deficits just by de facto our production capacity
which we are yet to fulfill, but we have this potential?
MOJAPELO: Absolutely. If you look at the current crisis now that's playing out in Europe, it presents a perfect opportunity for Africa to be a major
player in the gas industry. And not only in the gas, but also in the oil industry. But as you know, we've been speaking about gas as a transition
energy source. And we believe that, you know, the African continent is well placed to participate and we need to just create an enabling environment
for corporates to be able to participate.
(END VIDEO CLIP)
SOLOMON: And we are heading back to Seattle after the break with a little treat for you as we sail towards the weekend.
(BEGIN VIDEO CLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: oh, toasting. Toasting.
(END VIDEO CLIP)
SOLOMON: That is right. That would be Richard Quest in a hot tub sailing Seattle's Lake Union, showing you one of the best ways to take in the
city's iconic Skyline. Do not touch the remote, you do not want to miss this. We will be right back.
(COMMERCIAL BREAK)
[15:51:31]
SOLOMON: And Richard is back with us. And Richard, let's give this one more try because earlier in the show, we saw you get a crash course in fish
tossing by staff at Seattle's Pike Place Market. So, let's put your skills to the test because I've got a fish here. Let's see if you can catch it all
the way from New York. Get ready three, two, one.
You got to work on your catching skills, Richard. Your broadcasting skills are down pat. You got to work on your catching skills.
QUEST: I could actually catch the real thing but you sent me some fish fingers to shows when they're traveling -- when they travel across the
country. Let's talk about the other big industry. You've got here in the Pacific Northwest, you have agriculture, you've got Boeing, you've got
Amazon. And then you've got that other Starbucks. Starbucks comes from Seattle 1971. Now worldwide. But Starbucks created an industry here in
Seattle, that's now being borne by gourmet coffee shops across the city.
And those coffee shops, those like Cone and Steiner. It is a small coffee shop, and a small grocery store with big ambitions and great ideas. And I
spoke to the owner Dani about how she was handling very difficult economic times.
(BEGIN VIDEOTAPE)
DANI CONE, FOUNDER AND CEO, CONE AND STEINER: It's better than last year, I'll say that. But we got a waste to go.
QUEST: And you were hit by inflation.
CONE: And then there's inflation. And still supply chain issues.
QUEST: (INAUDIBLE)
CONE: I -- it's all of these things. So yes, this year -- I mean, I am very grateful to say 2022 will end up better than 2021. Across the board, it's
been better. But especially in this location where the main bread and butter of our business in this neighborhood was previously a daytime
population. And that all offices around us, not exclusively, but primarily. 75, 80 percent of our business was daytime population.
The residential component or events would kind of fill in evenings and weekends. Gravy on top. With the pandemic, obviously, the area cleared out.
Even more so in downtown, which is why we close that store. So now as people are coming back to work, hybrid, great. There are still more people
around but nothing like before. So, it's still a new landscape there. And then your point on the inflation, so we're hit with still below normal
volume, increased prices, supply chain issues that still affect that not as much as before, but still exist.
QUEST: So give me an example of something you can't get on the supply chain issues or does --
(CROSSTALK)
CONE: Chain is every week. That's what we -- that's the killer too. It's like, well, should we order up because last week we didn't get in the
pasta? Well, next thing you know, oh, now they've got a glut of it. So now you're fine. You don't -- you shouldn't water up. It's like, you're not
quite sure. Each week when we get some of the big deliveries. It's like oh, surprise, you know, it's -- we'll find out when it lands on our floor.
QUEST: Really?
CONE: Yes. What came in, what didn't, you know. And that's -- you know there's so many steps before us and I get that.
[15:55:04]
But here at our step what it looks like to our customers of course is like, oh crap. I needed that thing and they're out of it. You know, and that's
disappointment.
QUEST: Your ability to pass on the inflation. And now of course, inflation becomes systemic because you're a caring employer. So, you recognize the
need to compensate the staff but that's a challenge in itself along with benefits and everything else. But the ability to pass on inflation is
limited.
CONE: Yes. I think so. I mean, there's some because I think as we know, too as consumers, we see prices go up in anything we buy during the day too,
right? So OK, there's some expected but even knowing that, there's still only so much you're going to pay for a bag of potato chips. There's a
threshold like even if I could totally show you the books and justify -- I don't know some super high price, there's -- you just -- you just can't get
there.
QUEST: When --
(END VIDEOTAPE)
QUEST: The coffee culture of Seattle. This is a place where extraordinary I would dare to say eccentric things can be done. I have done many things in
my career. I have never set sail in a hot tub on the water. Have a watch.
(BEGIN VIDEO CLIP)
QUEST: Oh, toasting. Toasting. Gas off (INAUDIBLE) nowhere. Beautiful. Look at the skyline, I've done some fairly eccentric things in my time, but this
is way (INAUDIBLE) here I am on the water skyline in here. Brilliant.
(END VIDEO CLIP)
QUEST: And Rahel, I was asking them you know, well, surely you kind of feel going at it, because you get five or six people and then (INAUDIBLE) oh no,
you have people going out for parties with a bottle of wine or whatever. And all I thought was hang on, wine, water, hot tub, tub by fire. What
could possibly go wrong?
SOLOMON: What could possibly go wrong? And here, I was wondering, Richard, was this actually a tourist attraction that people can take advantage of or
if this was a Richard Quest Special. Apparently, it's a tourist attraction.
QUEST: It is not only a tourist attraction, it is an exceptionally popular tourist attraction in summer, but not in the middle of winter. Or when it's
very cold. I was one of the only people doing it.
SOLOMON: I see.
QUEST: Rahel, thank you for holding the (INAUDIBLE) in New York. I will be back with you next week. But before then I'll have a profitable moment
after the break.
(COMMERCIAL BREAK)
[16:00:30]
QUEST: In a sentence, Seattle is what you can do when you want to do it. And that's QUEST MEANS BUSINESS for tonight. Rahel is New York. I'm Richard
Quest in Seattle. I'll be back in New York on Monday. Until then, whatever you're up to in the hours ahead, I hope it's profitable. See you on Monday
in New York.
END
