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CNN'S AMANPOUR

Father and Daughter Drowned While Crossing Mexican Border; Trump Threatens to Veto House Bill; Rep. Veronica Escobar (D-TX), is Interviewed About U.S-Mexico Border; Ekrem Imamoglu Wins as Mayor of Istanbul; Ekrem Imamoglu, Istanbul Mayor-Elect, is Interviewed About Democracy in Istanbul; Kori Schake, Deputy Director, International Institute for Strategic Studies, is Interviewed About Ekrem Imamoglu and Istanbul. Aired 1-2p ET

Aired June 26, 2019 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

[13:00:00] CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL CORRESPONDENT: Hello, everyone, and welcome to "Amanpour." Here's what's coming up.

The shocking reality of the humanitarian crisis in America's southern border. A father and his infant daughter drowned crossing the Rio Grande.

Texas representative, Veronica Escobar, tells me what Congress is doing to stop this cruelty.

Then, Turkey's president loses the jewel in his political crown. In an exclusive interview, the new mayor of Istanbul tells me why no one can now

stand in the way of Turkish democracy.

Plus, the first female chief economist of the IMF, Gita Gopinath, talks to our Walter Isaacson about the state of the global economy.

Welcome to the program, everyone. I'm Christiane Amanpour in London.

Pictures of the drowned father and his daughter, difficult to look at, are making headlines around the world. Oscar Alberto Martinez and his 23-

month-old daughter, Valera, lie face down in the murky waters of the Rio Grande river, among the reeds and the discarded beer bottles. Their heads

are wrapped in a black t-shirt and her tiny arm is draped around his neck.

It is shocking evidence of the dangerous journey that migrants take to the United States. With the nation's moral conscience in the spotlight, the

House of Representatives has approved $4.5 billion of humanitarian aid to help stem the emergency.

The Senate is considering a rival bill with fewer restrictions on how border agencies can spend the money. And President Trump threatened to

veto the house bill, and he says he strongly opposes the legislation.

(BEGIN VIDEO CLIP)

DONALRD TRUMP, U.S. PRESIDENT: I'm not happy with it because there's no money for protection. It's like we're running hospitals over there now.

(END VIDEO CLIP)

But on Monday, on this program, we heard the horrific details of one Texas facility housing children where there's a lack of food, water and basic

hygiene. Congresswoman, Veronica Escobar, is from the area and she is urging her fellow lawmakers to act with an urgency and dignity befitting

the nation.

(BEGIN VIDEO CLIP)

REP. VERONICA ESCOBAR (D-TX): This is not a description of a developing nation. This is happening today on our watch in the United States of

America to children. It is happening in El Paso, Texas, on our border, our new Ellis Island.

(END VIDEO CLIP)

AMANPOUR: And I've been speaking to the Congresswoman who tells me why it is critical that border agencies receive more funding to help the most

vulnerable migrants who are in desperate need right now.

You know it's very, very hard to look at these pictures of Oscar, the father, and his little daughter washed up like -- I mean, really like trash

on the sides of the Rio Grande. What do you think, A, of the fact this happened in the United States and, I guess, B, the effect that this

terrible tragedy and this terrible evidence will have?

ESCOBAR: Well, number one, it is unfortunately an all too common sight for those that live on the border. We know the realities of the perilous

journey that migrants take with their children, with their family, sometimes all alone. We have frequently tried to educate our colleagues to

let them know that this perilous journey is not something that families or parents would do unless they were so desperate that they felt they had to

run from something.

And so, I hope that these deaths, like all of the deaths that we see consistently at our front door on the U.S.-Mexico border, I hope these two

innocent souls have not died in vain and that this is a wakeup call to the country.

The more hardened our asylum laws are, the more hardened we are as a nation and the more that we look the other way to what is happening, the reality

behind why people flee their country, the reality behind our laws that we need people to wake up in America and to feed into their compassion and

their humanity. And I hope that this very painful photograph is that wakeup call.

AMANPOUR: I wonder if, at all in your mind, it resembles the impact of that tinny little Syrian boy, Alan Kurdi, who washed up on the shores of

the Mediterranean during the terrible 2015 migrant crisis. And that, obviously, sparked a massive global uproar and outrage. Do you feel that

this might have the same impact in the U.S.? [13:05:00]

ESCOBAR: I hope it does. It needs to. You know, we have a global refugee crisis that is happening all around us but we become, I think, numb to what

is happening. But I hope the same compassion that people have felt for refugees across the globe, they will tap into for the refugees at our door.

AMANPOUR: Congresswoman, I would like to play you a little bit of the interview I aired last night with the lawyer, Warren Binford, who had

access to the Clint facility, and I know that's in the region of your congressional district. And she talked of, I mean, truly pitiful or poor

conditions that she found the children were living under. Just have a listen.

(BEGIN VIDEO CLIP)

WARREN BINFORD, PROFESSOR OF LAW, WILLAMETTE UNIVERSITY: We immediately asked the guards to bring us the youngest children, the child mothers and

their infants and the children who had been kept there the longest, and when they walked into the room, Christiane, we were taken aback. They were

dirty, hair was matted, they started crying, they had just a level of hunger that made them, you know, want food from us directly because they

hadn't been given any fruits, any vegetables, any milk for the entire time they were there.

They were given instant soup, instant oatmeal, frozen burritos. It was -- and it was the same food every day, day after day. They described sleeping

on cold floors, which is why they said they were so tired.

(END VIDEO CLIP)

AMANPOUR: Congresswoman, she also asked for international pressure, which is really, I mean, almost backwards in the way we see politics and pressure

over these humanitarian issues. It's usually the United States that is being called to come to the rescue of other countries. But this American

lawyer, after seeing that on America's shores in Texas, no less, called on international pressure on the United States to do something about this.

And the U.N. Refugee Commission has weighed in.

But tell me -- I mean, this, obviously, is a black mark on the conscience of the United States. But you also subsequently have passed a bill in the

House to deliver humanitarian aid urgently. Tell me about that.

ESCOBAR: Christiane, I do want to emphasize, this is a very dark period in American history and we should be judged by what we allow to happen on our

watch. And you are also right that it seems the reverse is true. Unless the United States or what we ordinarily see as the United States being sort

of the moral, ethical leader across the globe, we are no longer that moral, ethical leader.

And in fact, last night as I was debating this supplemental bill, which my community and those children, the funding is so desperately needed, as I

was explaining in a rebuttal why that bill was important to the children and to save kids' lives, some of my Republican counter parts were laughing

on the House floor as I was delivering those remarks.

It is shocking to the conscience that we are at such a low point in our history and the United States of America and it's going to take Americans

phoning their representatives, getting engaged, tapping into their outrage, but also tapping into their humanity to demand change.

We have funded what we needed to fund on the House side despite the laughter by some of my Republican colleagues. We are imploring that the

Senate pass our bill and hopefully, the president will sign this. Because ultimately, this bill that will land on his desk, if he does not sign it,

if he vetoes it, all of this is on him.

AMANPOUR: So, you heard what the president said and we've aired that. He basically said that, you know, he may very well not pass it and might veto

it. And he's a little upset because he said, "Well, this is all about building hospitals rather than security."

Now, it's very important the way your bills are shaped. Yours has some rules attached. You don't want a humanitarian package to be diverted for

any security or any other issues or any immigration issues. But the Senate, which is dealing with its own issue here, they want to have, you

know, more than $145 million for Department of Defense operating expenses related to the use of the military on the southern border. And you have to

sort of, you know, get a comprise between these two if it's got any hope of surviving.

How do you think that will go? Will billions of dollars, as you want, end up going to relieving the trauma and the appalling conditions for these

children?

ESCOBAR: If all of our colleagues are united on the need for this humanitarian [13:10:00] funding and for the need to ensure that the money

is going exactly where we say it will go, then the house bill, which was carefully crafted by appropriators to ensure the money goes exactly where

it needs to go, then this is the bill that the Senate should pass.

Now believe me, I am all for comprise, I think, on immigration packages and larger budget packages. We all have to be willing to give and take a

little bit. This is different. This is an emergency supplemental. This is a bill to cover the remainder of the fiscal year because they are out of

money.

And so, we've put in safe guards. We asked for safe guards. The appropriators put in the guardrails. If we all want this money to be spent

on humanitarian needs, then no one should object to those guardrails.

AMANPOUR: Now, you have a bit of an emergency ahead of you because on Friday, you go on recess. Congress goes on recess for several weeks.

This, presumably, you're hoping, must be done before Friday.

ESCOBAR: Right. Right. And that's why our hope is that was the urgency for us to vote on it yesterday. Not just a sense of urgency because the

money is so badly needed and we have to address what is happening, but a sense of urgency, as well, to ensure that the Senate gets this in time

before folks go home to work in their district.

You know, if we have to, we'll come back but they have a great bill in front of them. One with guardrails and safe guards that focuses on what we

should be focusing on, which is the safety and the humanity of those children and family.

AMANPOUR: And again, just to reiterate for our viewers, in this one particular center in Clint, Texas, there was a facility that was pretty

much made for 100 adults where there were more than 300 children and then some children were taken away and then some were brought back and who knows

what happened to these children, and it is really, really an emergency.

And yesterday, around the time of all these developments, the acting director of the CBP resigned, tendered his resignation. He, Sanders, said

in part, "Each man will judge their success by their own metrics." And he said, "I leave it to you to determine whether I was successful. I can

unequivocally say that helping support the amazing men and women of CBP has been the most fulfilling and satisfying opportunity of my career." But the

fact of the matter is, right, had a head to roll and he resigned. I mean, it was over this stuff.

ESCOBAR: You know, Christiane, I don't know that the reason for his resignation was what was happening in the Clint station because he had just

come on board about five weeks ago. So, he had not been an opportunity to implement -- you know, in terms of timing, to implement what was found on

the Office of Inspector General report.

So, my suspicion is not that his head rolled because of what happened in Clint. My suspicion is looking at who the president was eager to put in

place that the president was just eager to be, frankly, tougher. And perhaps Mr. Sanders was just too decent of a man.

AMANPOUR: Well, to that point, you're speaking about Mark Morgan, who administrations officials say will take over. Now, he's the current acting

ICE director and we know all about the threats to have ICE round up and deport migrants, that's obviously been postponed, according to the

president. But he did last week push for the raids to do that against undocumented families.

And this is actually what he said to "Fox News" earlier this year.

(BEGIN VIDEO CLIP)

TRUMP: I been to the detention facilities where I walked up to these individuals that are so-called minors, 17 or under. And I've looked at

them and I've looked at their eyes, Tucker, and I said, "That is a soon-to- be MS-13 gang member. It's unequivocal.

(END VIDEO CLIP)

AMANPOUR: Whoa. I mean, I could see your reaction as you listen to that. So-called minors and all gang members.

ESCOBAR: Right. This view of migrants, this view of the poor, this view of people arriving at our front door, this view of children is deeply

troubling to me. And I want to meet with the incoming CBP commissioner. I need to have a relationship with that individual because of the presence in

my community and their power in my community. But I am very, very troubled by those comments.

You know, I want to say something very clearly, Christiane. Yes, the number of people arriving at our front door is a significant number. It's

an increase. It has been a challenge on law enforcement, on communities like mine, on the migrants themselves and on all of the agencies that have

not been [13:15:00] really equipped to deal with this challenge.

But it became a crisis in the way that the trump administration chose to look at and deal with these individuals. We have two different sets of

folks. We've got the folks who are possibly here to do us harm with criminal records, who have a record of committing crimes in their past and

then we have another group of folks, families, children, women, fathers, individuals who are fleeing, running for their lives, seeking a better

life. We cannot lump them both together. We cannot view them as equivalents. They are different. But we -- our government is treating

them the same way as though every person is a criminal. And that's why that view of a child is so pervasive, unfortunately, in the Trump

administration.

AMANPOUR: Look, Congresswoman, you and your parties in charge of the House of Representatives, tonight and tomorrow night there will be an opportunity

for Democrats running for president to speak on the issue and tell the American people what they are going to do to stop this. What do you expect

to hear about this immigration problem and the conflation of a very urgent, clear and present danger to children?

ESCOBAR: I hope that I hear from everyone who is running for the highest office in the land that we have to reconnect with the compassion and

humanity that built this country. We are a nation of immigrants. This is unfortunately one of the most deeply politicized issues I have ever seen

and it's been this way for decades. But this is the worst that it's ever been.

And it's going to be up also, frankly, Christiane, to -- it's going to be up to Republicans to put the president in check in order for us to

reconnect with our humanity. We, on the House side, have a subject matter expert, an extraordinary physician, Dr. Jauld Wis (ph), who has a bill

about the way to adequately and humanely deal with children and vulnerable populations in our care. That bill will get a hearing on the judiciary

committee, which I am very fortune to serve on.

That's going to come before us in July. I'm sure we're going to get it out of the House. Every single person should rally around that legislation.

The president should sign it immediately because that's not a Republican issue or a Democratic issue, that's a humanitarian issue.

AMANPOUR: On that note, Congresswoman Veronica Escobar of Texas, thank you so much for joining us tonight.

ESCOBAR: Thank you.

AMANPOUR: Now, President Trump is often included in the strong man era of global leadership, alongside names such as Putin and President Erdogan of

Turkey. Erdogan was a modernizing, democratizing leader at first before descanting into increasingly authoritarian ways, from purging dozens of

thousands of civil servants and judges after a failed coup in 2016 to cracking down on the country's free press. Turkey's economy has since

spiraled.

But now, Istanbul has triggered a political earthquake. Voting in favor of the opposition party in a rerun election for mayor of the city. It was

David versus Goliath. It was the first time in 25 years that Erdogan's party will not control the city.

The new Mayor Ekrem Imamoglu framed his campaign as a fight for democracy, and he tells me that he is not about to confront Erdogan head-on, but he is

warning that democracy can no longer be stolen from the people.

Mayor Imamoglu, welcome to the program.

EKREM IMAMOGLU, ISTANBUL MAYOR-ELECT (THROUGH TRANSLATOR): Thank you for having me.

AMANPOUR: It is an incredible situation. You won in the first round with a small fraction, a small percentage -- then the vote was challenged and

you had to run again, and you won by a huge margin in the second round. Do you think even more people came out because they were angry that your first

win was annulled?

IMAMOGLU (THROUGH TRANSLATOR): Before March 31st, the first election we were presented with circumstances that gave us difficulties and promoting

ourselves. Subsequent to March 31, perhaps all those difficulties, negativities -- we've had the opportunity to reach everyone, every color,

every political personality living in Istanbul, and tell them about our approach to democracy and our vision as a whole.

Although we have not been able to level the conditions, we were able to raise our conditions a bit. In my opinion, the people of Istanbul were

able to cast their vote more freely. I do not believe that it can be described solely as an angry reaction.

It was way more than that, in my view what had an affect on Istanbul was their belief in democracy, and the continuity of democracy. The people of

Istanbul demonstrated the legitimacy of the election, and the election [13:20:00] was protected. No one will be able to interfere with elections

to such an extent again.

AMANPOUR: Mr. Mayor, you keep talking about democracy and that is why so many people around the world are interested in this result. Even though

you are the Mayor of Istanbul, democracy many would say is being compromised over the last many years -- you have many journalists in jail,

many civil servants in jail, many judges.

Some are accused of partaking in the coup, but others are just being thrown in to jail because of opposition to the ruling Erdogan party. Can your

victory change any of that? Can you bring back at least some democracy in to the -- the public domain?

IMAMOGLU (THROUGH TRANSLATOR): That was its biggest contribution, as well as our election this has turned in to a valuable test. At the same time

the Istanbul election and the test of democracy serve to refresh the hopes of generation Z.

I witness and feel that mostly in the youth -- the illegal, unlawful, undemocratic period subsequent to March 31st, and the fact that it was

corrected by the citizens -- the people themselves in my view, is an exemplary one for the rest of the world. June 23rd was an important test

and the result was a success.

AMANPOUR: Just explain to me about your campaign, because you've written about it and it's a very unusual campaign. Instead of mass big rallies,

and access to state media, you did a much more -- in the west we say retail politics. You talked to hundreds of thousands of citizens, what was your

campaign exactly?

IMAMOGLU (THROUGH TRANSLATOR): It was an organic campaign, it was completely true. It was based on making physical contact and forming

dialogue with the people. That is because the channels of communication in Turkey are rather closed to the opposition.

I was able to appear on the state television channel only once and that was three days before the second election on June 23rd. That was the situation

we faced as the opposition. In complete contrast, the other candidate had every means to communicate as he wished. That meant we had no choice but

to cover distances, districts, streets. That meant working 17 to 18 hours a day -- a six month long, panting campaign.

We formed dialogues, and achieved access. I believe we ran an extraordinary digital campaign too. The one-to-one campaigning model is

thousands of years old, we achieved that here in the 21st Century both physically in the streets, and also in digital platforms and over social

media.

We used a political nonpartisan language. We reached out to all political parties, not just to the Republican people's party and their ally the Good

Party. We promised that we would be completely transparent and we would include everyone in the process.

AMANPOUR: Mr. Mayor, your slogan was "Everything will be fine," and that's a pretty hopeful slogan, it's very different for Turkey. But I wonder

whether you are concerned that actually things might not be so fine, and President Erdogan who suffered a massive humiliation by this loss, having

forced to rerun, having seen you win by even more than you won the first time round, whether he will try to interfere with what you want to do?

Whether he will try to subvert your plans? What do you expect from President Erdogan going forward now?

IMAMOGLU (THROUGH TRANSLATOR): June 23rd showed us that no one -- no individual or power can stand in the way of the will of the people. No

politician has the luxury to ignore that fact. They are going to see it. In my speech on the night of the election, when I declared that I'd won the

election, I also declared that I had opened all doors wide and that I wanted to provide services jointly.

I made the call to the Mr. President, the head of the state to that end. I made the same call to other politicians as well. Serving a city cannot be

restricted to a political party or certain politics, that process ended with the end of the election process.

The needs and expectations of the citizens then take priority. This is what democracies require too, I promised that I would implement that

promise without fault. I then also said the following, "Whoever decides not to serve the people and prioritizes their political future instead, I

would make it known and unveil it using transparency." That is not a threat, it is how things should be.

There is an extraordinary sense of longing for democracy here, and a mass of people who take ownership of it. Therefore, if Mr. Erdogan -- he was

elected one year ago, he has more than four years ahead of him. We have just been elected, and we have five years ahead of us.

Turning this process in to a race for serving the people would leave more positive notes in the memories of the people. Opting for the opposite

would have a negative effect on the political futures of the people.

My expectation is that Mr. Erdogan will respond positively to our call.

[13:25:00] AMANPOUR: Well look -- I see you extending a hand of peace and good will to President Erdogan. But he has also said in the past -- and

remember of course he was famously Mayor of Istanbul that whoever wins Istanbul, wins Turkey. He considers this position vital.

You will now have access to all the city records, and there have been many allegations of cronyism and corruption within the Erdogan regime. Should

he fear that the new Mayor, you, will launch investigations in to alleged corruption, cronyism -- which of course he's denied all these years?

IMAMOGLU (THROUGH TRANSLATOR): I would first like to express my approach to politics, more than my or my party's victory in Istanbul what I have in

my mind is the victory of Turkey. Victory by a country must be more valuable than victory by an individual or a party.

Right now I'm talking about plans to make Turkey win, extending the hand for peace would be to the benefit of the country -- I will persist on that.

On the other hand, I will never extend my hand for peace in a secret room behind doors. I will do it in front of the public. I want people to see

which hand is being extended and which hand is being rejected in the most transparent way.

AMANPOUR: So just last, do you plan to investigate the allegations against him?

IMAMOGLU (THROUGH TRANSLATOR): That of course, is not my responsibility -- not my job. That is the judicial process, but any troubling situation in

Istanbul, and I would not of course know if such issues would relate to Mr. Erdogan as an individual or not, and I would not want to think that they

would be.

But I am the Mayor of Istanbul, and any negativity that is present in Istanbul, any transaction countered to the benefit of the people will most

certainly be investigated and scrutinized. We are going to subject the corporate structure of the greater Istanbul municipality, and a financial

organization of all of its companies to the scrutiny of auditing companies with international expertise.

This was our promise to the people, and we are going to fulfill it as soon as we return to the office. Istanbul is an international city and we want

it to have ties with Europe and the rest of the world, which is very important for us.

I do not think this is related to Mr. Erdogan as an individual. They may relate to his party, or to the administrators of his party. How the

process would progress is a matter for the judiciary, not my personal responsibility, of course.

AMANPOUR: Mayor Ekrem Imamoglu, thank you so much indeed for joining me.

IMAMOGLU (THROUGH TRANSLATOR): And I thank you, do continue to follow Turkey and its democracy. No doubt, everything will be fine.

AMANPOUR: And that's your slogan -- thank you very much.

And Turkey is, of course, a major NATO and U.S. ally. And a shift in the country's domestic policies could have a significant impact on foreign

policy in the region. Kori Schake is deputy director general of the International Institute for Strategic Studies here in London and she's

joining me now.

Welcome back to the program.

KORI SCHAKE, DEPUTY DIRECTOR, INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES: It's a great pleasure.

AMANPOUR: I mean, you can see he's very friendly man and knows how to throw around a slogan and, again, said everything is fine. I mean, he's

got the touch.

SCHAKE: Yes. And I thought it was extraordinarily positive that he's not focusing on settling scores, that he's emphasizing what his job is, not the

judiciary's job, which is not only good for the people of Istanbul but also likely to diminish the prospects that President Erdogan will try to seek

revenge for losing Istanbul.

AMANPOUR: I mean, just before we get to what ripple effect this could have, I mean, what do you -- what impact do you think it will have on

President Erdogan, the fact he publicly called for this election to be rerun, he dismissed Imamoglu's first victory and delivered him a victory

massively bigger in the second round?

SCHAKE: There's no way around the fact it's an enormous political defeat for President Erdogan and the first one that he's experienced in his time

in power. Having started out as mayor of Istanbul and then become prime minister and then that the constitution changed to give the president the

powers that he has been exercising.

I really thought it was important you emphasize the repressive nature of Turkey under President Erdogan and that they have the highest number of

journalists in prison of any country in the world. I think that's a good metric for just how authoritarian Turkey has become.

AMANPOUR: So, then the next question, obviously is, what can the mayor do in the face of a president who runs most of the policies, as you say, to

constitutional changes to make that happen despite how important Istanbul is and that he has the -- really the people behind him? I mean, could it

be the earthquake some are saying it is?

SCHAKE: A big reason why President Erdogan is still in power is the weak and divisive nature of the opposition. And so the new mayor of Istanbul,

as we just saw, he's so hopeful. He's so dedicated.

If he's able to govern that way, he can rebuild the strength of the opposition party. And that would discipline President Erdogan enormously.

AMANPOUR: See, that's interesting. He did reach out, as he said, to all the opposition parties and he got, you know, not a coalition but he got

everybody sort of on board. It seems to be.

What about the impact on authoritarianism? And not just in Turkey but as an example of potentially a backlash in grassroots politics against what

we've been seeing on the populism that some say Erdogan himself, you know, embodied ever since 2016, at least.

SCHAKE: Yes. I hope it's a sign that cracking down and the drift towards authoritarianism, that freedom house, and other good NGOs have marked for

us all over the last several years is being pushed back. I mean, between the election in Istanbul and the protests in Hong Kong, it's been a good

few weeks for people demanding that their government respond to their desires.

AMANPOUR: It's really fascinating, actually. But now, let's talk about the impact on the United States, on NATO, in the region. Presumably,

President Erdogan will maybe try at least, in the beginning, to shift more exclusively towards foreign policy.

How does this mayoral vote, affect, impact Turkish relations with the U.S.?

SCHAKE: I agree with your judgment. I think it's likely to make him try and be more active on foreign and defense policy because that's a space

where he can continue to show his control over politics and Turkey.

And Turkey has a lot of problems on its plate right now. Syria, they had been opposed to Bashar al Assad remaining in power and Bashar al Assad

remains in power.

They had been supporters of the Muslim Brotherhood and Egypt. Mohamed Morsi died in captivity last week. They have taken the side in the dispute

amongst the Gulf States, even sent troops to Qatar.

And then in the difficulties of their relationship with the United States, President Erdogan seems to get along very well with President Trump. In

fact, they seem to have very similar reflexes.

And yet Turkey's purchase of the A400 -- excuse me, the s400 Russian air defense system has caused the American Defense Department to exclude them

from the m35 program.

AMANPOUR: Well, let's just talk about that because there's a lot of acronyms and missiles and aircraft that you're talking about. Why does

this matter right now?

Obviously, President Trump and President Erdogan presumably they're going to meet at the upcoming G20 Summit and President Trump has threatened

sanctions if Turkey goes ahead and buy missile system from Russia? Why is Turkey even doing that? It's a NATO ally.

SCHAKE: The Russian s400 air defense system is a pretty good system. We're anxious about what it can -- the way it can endanger American fighter

planes. And NATO has an integrated air defense system.

So we can't fold the Russian system into the NATO system without comprising all of the intelligence information. So comprising the defensive

capabilities and offensive capabilities of the F-35 fighter and other fighters.

Turkey has already bought the S400 system. They'll begin to be delivered in July.

At the NATO defense minister's meeting in Brussels today, there was another dust-up between the U.S. defense secretary -- acting defense secretary and

his Turkish counterpart over this. The United States has started excluding Turkish pilots from the training program for the F-35. This is a really

serious problem.

AMANPOUR: And what could the impact be? I mean I want to get to Iran in a second.

But very quickly, since Turkey knows that, why would it go and gum up the works by buying a Russian system? It knows that it can't integrate it and

it's a NATO ally.

And what impact would it have excluding Turkey from this vital training programs and NATO missions?

SCHAKE: Yes. I think that my guess is that initially, it started off as a way to leverage the United States to provide cheaper, better systems to

Turkey. And things picked up momentum and then honor got involved and it's a big mess.

AMANPOUR: Like my back's in the corner, you're not going to tell me what to do and it is a big mess. Do you think the [13:35:00] Iran situation is

a big mess?

We've had back and forth threats. We've had the activity in the Persian Gulf. We've had the president who was going to launch something and then

standing back.

We've had outbursts from Iran, from both the President Hassan Rouhani in response to new American sanctions and, in fact, from the leader, the

supreme leader Ayatollah Khamenei who also was personally sanctioned by the U.S. He said today in a tweet, "If you surrender to them, the United

States, you are done." Where is this headed?

SCHAKE: Well, we are certainly seeing a ratcheting up of tensions between the U.S. and Iran. And also, a much higher likelihood of an incident like

the shoot down of the drone spinning out of control.

President Trump's policy is wildly inconsistent. And maximum pressure campaign that would lead toward the use of military enforcement that the

president backed away from at the last minute.

It makes it very difficult to manage a crisis if your adversary doesn't know, doesn't have a sense of what your reactions are going to be. It

makes it harder for allies to be able to coordinate their policy with your policy. So we're seeing a lot of mixed messages out of the Trump

administration.

AMANPOUR: And President Trump said the following about his intentions. This is his latest.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're at a very strong position. If we have something should happen, we're in a very strong

position. It wouldn't last very long. I can tell you that. It would not last very long.

And I'm not talking boots on the ground. I'm not talking we're going to send a million soldiers. I'm just saying if something would happen, it

wouldn't last very long.

(END VIDEO CLIP)

AMANPOUR: I mean, your reaction to that and also can Turkey talk to the U.S. about this? Can it be a mediator since Turkey gets on very well with

Iran?

SCHAKE: I doubt Turkey can mediate this given the amount of tension there is in the U.S.-Turkish relationship right now. And the Trump

administration, you know, they pointed a gun at Iran's head then declined to pull the trigger.

So it's a very unstable situation in part because the Iranians are taking advantage and doing a lot of dangerous things and the Trump administration

isn't reacting effectively.

AMANPOUR: What do you think it should do?

SCHAKE: I think it shouldn't threaten to use force if the president is actually not going to do it. We've now seen this in North Korea. We've

also seen it in Iran.

It makes very difficult to deter countries when the president sets up policies that require the use of force and then backs away. I think he

should actually build policies that don't require the use of force if he's not willing to go there.

AMANPOUR: Kori Schake, thank you so much indeed.

Now, one of the big reasons for President Erdogan's defeat, as we discussed, is Turkey's economic crisis. And we turn now to a conversation

about the state of the global economy.

Harvard professor Gita Gopinath is the first female chief economist at the International Monetary Fund. Gita talked the sense with our Walter

Isaacson as well as her personal journey growing up in India.

WALTER ISAACSON, CONTRIBUTOR: Welcome to the show. We're honored to have you.

GITA GOPINATH, CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: Thank you for having me on the show. It's a pleasure.

ISAACSON: The IMF in its latest quarterly report that you do, lowered the expected growth rate for the global economy from about 3.5 percent to 3.3

percent. What is it that lowered it? What are you worried about?

GOPINATH: Global growth in the second half of 2018 weakened across the globe. And that weakness was a combination of factors. It's had to do

with the trade tensions.

But it also had something to do with the normalization of interest rates in the U.S. with the Fed raising interest rates. And then there were one-off

issues in certain countries.

And all of that weakened growth and that kind of spilled over into 2019. So that's what lead us to downgrade the forecast for 2019 to 3.3 percent.

ISAACSON: How bad is the problem of trade?

GOPINATH: It is one of our biggest risks to the global outlook. And we are very concerned about it.

This has implications not just for U.S. and China but globally for the world economy because it affects business sentiment. And we've seen

investment slowing and we, in fact, our projections for trade right now look quite weak.

ISAACSON: And is that because of -- partly because of the Trump tariffs on China?

GOPINATH: The tensions are an issue. Absolutely. The tariffs that were imposed in 2018, the escalation that we've seen right now, the uncertainty

of what is going to happen around the G20 meetings at the end of the month. All of that is weighing on the outlook.

[13:40:00] When President Trump imposes tariffs, he said China would be paying for it. You studied it now and seen what's happened. Who ended up

paying those tariffs?

GOPINATH: So if you look at the prices of those goods on which tariffs were imposed coming in from China, the prices excluding tariffs coming from

China hadn't changed much. What that tells you is that almost all the tariff revenue that has been collected is being born by the U.S. importers.

ISAACSON: In other words, U.S. companies are paying the price for those tariffs?

GOPINATH: The U.S. companies that continue to buy from China are paying the price of those tariffs.

ISAACSON: We talk about the problems of trade and how lowering trade will be bad for the global economy. But those of us, I'll put myself in the

category and I guess you in the category who have been long-time believers in free trade, part of the Davos Aspen Consensus.

Were we a little bit wrong about the effects of trade? And did it hurt some people more than others?

GOPINATH: The expectation was that trade like you just said would be good for the global economy. We were always aware that there would be

distribution consequences, that there will be some who will be left behind who would not gain from trade.

The assumption was that domestic policies would be used to mitigate the concerns associated with that. And I think where we were wrong was in our

expectations of how well that would work.

And the bottom line is that it didn't work very well. And so that's what we're living through right now.

ISAACSON: And by that, you mean that it led to an increase in wealth inequality?

GOPINATH: It's -- I mean wealth inequality has come around for many reasons. But you're certainly seeing certain communities in certain parts

of the world where people have lost their jobs, their livelihoods.

The expectation was always that these people would move, that they would move to where the jobs exist. And I think what has surprised many is that

that hasn't happened.

You don't see much mobility. And so there's now the view that while maybe policies have to be about improving the communities itself where these

people live.

ISAACSON: Let me go personal for a moment. You grew up in India, in a very distinguished family, right, and very well educated. What did you

learn from your mother and father that you're applying to your work today?

GOPINATH: That's a great question. For my father, it was all about hard work. I think those are the two words I heard from him all my life, that

hard work. And not in the sense of it being painful hard work but joyous hard work is very important.

From my mother, it was humility and realizing that there are some things you can do and some things you can't do. So I think those were the two

aspects of my growing up that I remember.

ISAACSON: Tell me your path from growing up in India to becoming a distinguished professor in the economics department at Harvard and now to

the IMF. How did that path work?

GOPINATH: Oh, it happened with a lot of hiccups, with absolutely no clear sense of where I was going. So I cannot claim to say that I wanted to be

an economist.

When you grow up in India, you know, the assumption is that you will become a doctor or an engineer, not an economist. So it's a bit -- it was all

kinds of stumbling and then I finally got here.

But I did enjoy most of the time what I did. And it was with a lot of support from my family, from my wonderful husband, and my son. And so,

yes, I think it was a mix of things that got me to where I am.

ISAACSON: And tell me what your academic specialties were that got you to become a professor at Harvard.

GOPINATH: I specialized in international finance and international trade. So those were the two big areas. And within those, I worked a lot on

currencies.

For instance, most recently, I did work on the international role of the dollar and how it dominates the trade and the financial system. I do work

on capital flows, on sovereign debt, many of these issues.

ISAACSON: As an expert on debt, do you worry about the American debt, the U.S. deficit and how it might grow and how that can affect the world

economy?

GOPINATH: In our assessments, the U.S. debt is on an unsustainable path to an important degree because there are all these liabilities related to

pensions and health care that are coming out in the future. And that's going to add to the deficit in the future and that's going to add to the

debt in the future.

So that is from a more medium to long-term perspective, that is certainly an issue. [13:45:00] And we recently put out our surveillance note on the

U.S. where we mentioned that, we flagged that.

ISAACSON: And what does that mean when you say you put out a surveillance note and exactly what did you say?

GOPINATH: One of the three things that the fund does is to monitor countries. It's part of the mandate just to figure out to come out with a

report on how countries are doing, the health of their economies, the appropriateness of their policies.

And so we had one come out for the U.S. recently where we did say, the U.S. economy was quite strong, growing at around 2.6 percent. Obviously,

plenty of jobs being created.

But at the same time, it certainly is the case that there are all these payments and liabilities are coming with the future and the fiscal

situation, we need to pay attention to that too.

ISAACSON: Do you think that the accumulating debt in the United States could lead to a setback soon?

GOPINATH: Soon, I don't see that. In the near term, there is a very large global appetite for what we call safe assets and U.S. Treasuries are one of

the safest in the world, which is why that the U.S. capital can borrow at incredibly low rates.

So in the near term, no. But this is more of a medium to a long-term concern.

ISAACSON: So this period of global growth of the economies that we've been in for more than a decade, it seems, how vulnerable is it? I mean could

something happen that could really cause the next recession globally?

GOPINATH: We described the situation right now as being what we call a delicate moment. And while we project that there will be a recovery

towards the end of this year into 2020, we describe that as precarious.

And I believe that is still very true. One of the big factors is trade.

So a lot is going to depend upon what happens on the trade front with trade tensions, what happens at the end of this month, around the G20 between the

U.S. and China. That is going to be, in my opinion, one critical factor for the global economy.

ISAACSON: So you say it's precarious. What could happen? I mean could there be a real global slowdown in the next two or three years?

GOPINATH: Absolutely. Yes, in the next two or three years of horizon, if these -- if the trade tensions don't deescalate, if Brexit ends up with

being no deal, all of which can change financial market sentiments dramatically.

And we're living in a world with very high levels of debt. Both in the private sector and the public sector. So there's a sudden escalation in

costs.

That can then trigger a financial tightening of the world economy, which will be costly for the world economy. So many of these features, you know,

can create -- can have a dampening effect on growth in the future.

ISAACSON: Has there been a significant increase in wealth inequality over the past 20 or 30 years? And if so, how dangerous is that to free market

and capitalist economies?

GOPINATH: There has been an increase in wealth inequality. And clearly, we need to respond to that particular -- to that fact.

The question is why has that happened? It varies across countries. Explanation varies across countries.

For instance, if you look at in the U.S., in the matter especially of income inequality, waging inequality, it makes a huge difference which firm

you work for.

So if you do the exact same job for a top one percent firm, you get paid a whole lot more than elsewhere. So that's one factor.

So the question is why is that the case? Why a convergence across firms?

Then there is the issue of corporate market power that is a reason that one needs to look into about has there been too much concentration in certain

firms that's exercising market power? That's another issue.

There is some evidence that there has been an increase in market power. So certainly, we need to be more vigilant about competition policy. We need

to be more vigilant about free entry into industries.

All of those factors have to -- are important to maintain the market system that exists right now.

ISAACSON: Am I hearing you say that perhaps Facebook, Amazon, Google, and a lot of big tech companies have gotten so big that they have concentrated

market power and that globally we need to find ways to increase competition?

GOPINATH: We certainly need to find ways to increase competition. We put out a report in April that said that there was a significant increase in

market power.

Now, some of that is basically the return that you earn because you put in a lot of investment upfront. [13:55:00] But there is also part of it that

feels like more of an excess return which seems like less of a competition.

And so while at this point, it is still quantitatively not such a big issue. We expect that it could be going forward. So it is important for

us to be very vigilant on this front.

ISAACSON: What policies to address wealth inequality and income inequality should and could countries implement that would be useful as opposed to

unintended consequences?

GOPINATH: There are a combination of things and there's no one prescription fits all. But for some countries, it could be a more

distributive taxes. For certain others, it has to be better skilling programs.

You need more ways of encouraging mobility to jobs in regions where -- places where jobs exist. So there are multiple factors that have to be

done.

It has to be making sure that the sufficient competition and not build up of high market power. There needs to make -- we need to make sure that

everybody pays their fair share of taxes. So all of these factors will matter.

ISAACSON: Do you think that automation and more broadly artificial intelligence and machine learning will end up decreasing the number of jobs

in the future?

GOPINATH: We've had technological improvements over the decades. And every time there's been a big new technology, people have been concerned

about whether there would be enough jobs.

And what we've always seen is that the world economy has grown. There's been more jobs.

And right now, we're living where many parts of the world are closer for employment -- I mean unemployment rate in the U.S. is one of the lowest

it's been in a long time. So that's not necessary. That's not where the world has to end up.

But at the same time, what that requires also is preparing to make sure that people are ready for that world when there's much more automation.

ISAACSON: Your colleague at Harvard, Larry Summers, when confronted with that notion that every time we've had a technological advance, we end up

with more jobs and not fewer. He Says he's now in the camp of this time, it's different. Do you feel that this time it may be different? The

threat of artificial intelligence and automation on the overall number of jobs?

GOPINATH: I think it's impossible to say at this point. I think what we can say right now is that there is nothing in the data that we see that

suggests a big shift is significant enough to say, well, this is now a huge problem.

I mean there are suggestions of it that with all the technological improvements that are happening already showing up in jobs, that's not the

case. Now, going forward, whether it might happen, it's possible. But I'm not -- I don't necessarily feel sure that this time is that different.

ISAACSON: What keeps you up at night?

GOPINATH: Following what is happening in the world from a minute-to-minute basis and all of these fronts that I just mentioned, figuring out what is

happening with policy. I think policy uncertainty is probably the number one factor that's weighing on growth in the world economy.

ISAACSON: And by policy uncertainty, do you mean things like erratic trade and tariff announcements coming out of the White House?

GOPINATH: Nope. Business, jobs, investment, all of that relies on functioning in a certain predictable environment. Usually when it's rules-

based.

And the uncertainty that we've seen recently with the unpredictability about what is going to happen with trade, with the unpredictability on

Brexit, I mean these are factors that will keep pretty much everybody up awake at night.

ISAACSON: And do you think it's the role of the IMF to focus on things like financial inclusion and inequality? Or is it mainly to focus on

growth and economic stability?

GOPINATH: We've come to realize that the two are very closely related. So issues of inequality are macro-critical. They have an implication for

growth today.

The issues of the climate that were previously thought of as being way out there and now something within the horizon of the fund is clearly not the

case anymore. We're seeing far more natural disasters.

We have financial institutions that could be very susceptible to these kinds of risks. So we think of those things being closely related.

ISAACSON: Thank you so much for being with us.

GOPINATH: Thank you.

ISAACSON: It's fascinating. Thank you.

GOPINATH: Thank you so much.

AMANPOUR: And some of those issues are likely and most probably be going on to the table during the debates among for Democratic presidential

candidates. And we will have a lot more on their first debate in our program tomorrow.

But that is it for us for now. Remember, you can listen to our podcast at any time and see us online at amanpour.com. And you can follow me on

Instagram and Twitter.

Thanks for watching and goodbye from London.

END