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Intense Battles Raging On Front Lines In Eastern Ukraine; Ukraine Launches Nationwide Anti-Corruption Raids; U.K. Hit Biggest Day Of Walkouts In More Than A Decade; U.S. More To Get Military Base Access In The Philippines; Mass Held At Sydney Cathedral For Divisive Vatican Figure George Pell. Aired 12-1a ET

Aired February 02, 2023 - 00:00   ET

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

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JOHN VAUSE, CNN ANCHOR: Hello everyone, I'm John Vause.

Ahead here on CNN NEWSROOM, CNN reporting in frontline trenches with Ukrainian forces as they hold the line against an escalating Russian offensive.

Walk out Wednesday, half a million workers across the U.K. on strike, demanding pay increases amid a cost of living crisis.

And the pace slows but the hikes keep coming. USAID warns it's not done yet, not even close.

ANNOUNCER: Live from CNN Center, this is CNN NEWSROOM with John Vause.

VAUSE: A search and rescue operation is underway at this hour in eastern Ukraine. Officials say a Russian airstrike on a residential area in the city of Kramatorsk has killed at least three people, wounded 20 others. The missile completely destroyed one apartment building and damage seven others.

President Volodymyr Zelenskyy said such attacks are now a daily reality for Ukraine, the result of "absolute evil on its border".

Meantime, 20 miles to the east, pro-Russian forces claimed to be close to encircling the city of Bakhmut. Ukrainian reports confirm are ongoing heavy fighting and Ukrainian officials believe Russia is now preparing for a maximum escalation of the war within two to three months.

An assessment by Ukrainian Defense Intelligence believes February and March will be "very active". President Zelenskyy is hinting an uptick in activity is already underway.

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VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): A definite increase has been noted in the offensive operations of the occupiers on the front in the east of our country. The situation has become tougher, we have stood firm all this time from February to February. The enemy is trying to achieve at least something now to show that Russia has some chances on the anniversary of the invasion.

(BEGIN VIDEO CLIP)

VAUSE: Right now on the frontlines in parts of eastern Ukraine is literally trench warfare. A grueling back and forth reminiscent of World War II made all the worse by a brutal cold of winter.

CNN's Fred Pleitgen is there.

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FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): All-out winter warfare on the eastern front. We're in a trench with Ukrainian paratroopers. They fire on Russian positions using AKs and a U.S.-supplied Browning heavy machine gun.

They're searching for weak spots in our position, says the commander, call sign Ghost. They want to see if we fight back. If we show strong resistance, though, they don't advance. And this is what strong resistance looks like.

The Russians are only about 400 yards away, hidden in the snow and fog but constantly firing at the entrenched Ukrainians.

The enemy uses all kinds of weapons, Bogdan says, small arms, heavy machine guns, artillery, mortars, rocket launchers and aviation as well.

But so far, the Ukrainians say they haven't lost an inch of territory here.

The Ukrainians say the situation here is reminiscent of some of the worst times in World War II, where they're not only fighting a strong adversary but the elements as well.

The snow, the mud, and the cold make fighting here even tougher. And Ukraine's leadership believes the Russians will soon escalate even more after mobilizing hundreds of thousands of men for a likely spring offensive.

But this gunner who goes by the name "deputy" says the paratroopers are ready. It will be hard, he says, it will be tough, but we will hold because we stand here for our land. If we don't do it, nobody will.

There's a visceral hatred towards Moscow's leaders among these men.

In Russia, they have a terrorist dictatorial regime, Bogdan says. So now the civilized world is fighting against this wild medieval dictatorship.

As we prepare to leave, incoming grenades explode above. This, the men say, is a relatively quiet day. They expect much worse in the months to come. But their motto is, if not us, who else? Fred Pleitgen, CNN, Krasnohorivka, Ukraine.

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VAUSE: Ukraine has upped its anti-corruption campaign with raids across the country. Among those targeted a current and former government officials, as well as former leaders of Ukraine's largest oil producer, all suspected of financial and other crimes.

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ZELENSKYY (through translator): Today is a fruitful day for our country, a fruitful day in confronting those who are trying to weaken Ukraine. Even at this moment, we will not allow anyone to weaken our state.

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VAUSE: Well, this comes just two days before a meeting on Ukraine's application to join the E.U. European leaders say cracking down on corruption is a key part of that process.

More now from CNN's Scott McLean.

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SCOTT MCLEAN, CNN CORRESPONDENT (on camera): Well, Ukraine has long held the reputation as one of the most corrupt countries in Europe. President Zelenskyy was elected in part on a promise to do something about it.

Last month, a number of high level officials either resigned or were fired over corruption allegations. And last night, Zelenskyy promised new reforms were coming to make his country more effective and transparent.

Just hours later, the majority leader in Parliament announced a brand new crackdown which included searches of the state tax service dismissal of the entire management team of the customs agency, and notices of suspicion being served to defense ministry officials.

One of the raids was on the head of the key tax authority accused of a scheme to effectively look the other way on about $1.2 billion in unpaid taxes.

Officials say that searches of his property and office turned up cash totaling about $175,000, plus luxury cars and watches. CNN has reached out for comment.

Scott McLean, CNN, London.

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VAUSE: Israeli airstrikes targeted central Gaza early Thursday morning. Palestinian news agency Wafa reports F-16 warplanes launched at least five missiles causing a fire and damage to nearby homes.

The Israeli Defense forces said in a tweet the strike strikes were in response to rockets launched from Gaza. The idea of claiming its fighter jet struck a chemical and weapons manufacturing site operated by Hamas.

This comes as the U.S. continues to call for de escalation of violence.

Britain has seen its biggest strike in more than a decade after hundreds of thousands of teachers, railway staff and other civil servants skipped work on Wednesday causing major disruptions.

They're angry, salaries have not kept up with rapid inflation in the high cost of living. The government is so far refusing to grant big pay increases while pushing a bill that workers call an attack on the right to strike.

CNN's Nada Bashir has the story.

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NADA BASHIR, CNN REPORTER (voice over): It's the biggest day of industrial action that Britain has seen in over a decade.

An estimated half a million public sector workers striking across the country, including teachers, transport workers, and civil servants.

With thousands of schools forced to close, most train lines at a standstill, and government services severely disrupted.

Well, here in central London, thousands of public sector workers have marched on Whitehall, the center of government to demand better pay and better working conditions.

Trade Unions say the public sector is in a crisis. And this has only been exacerbated by record high inflation and a deepening cost of living crisis.

The strikes come amid an ongoing standoff between the government and trade unions. Despite past walkouts and increasing pressure, the National Education union says negotiations with the government have stalled and warned that schools are now facing a recruitment and retention crisis.

MARY BOUSTED, GENERAL SECRETARY, NATIONAL EDUCATION UNION: That's a toxic combination of overwork and underpay. So, teachers are saying very reluctantly, none of the people behind me wants to be on strike today. But they are saying very reluctantly that enough is enough, and that things have to change.

BASHIR: The government maintains the door for negotiations is always open. And when it comes to the education sector, Prime Minister Rishi Sunak has criticized those taking strike action.

RISHI SUNAK, BRITISH PRIME MINISTER: I am clear that our children's education is precious, and they deserve to be in school today being taught and actually the party opposite would do well to say that the strikes are wrong and we should be backing our school children.

BASHIR: But here in London, some students have joined the march in solidarity with their teachers.

UNIDENTIFIED FEMALE: It's as simple as staffs working conditions are our learning conditions. So, you know, when our staff is overworked, underpaid, stressed out, have small time off, it ruins the quality of -- it ruins the quality of our education.

BASHIR: The government is now also facing protests against its controversial plans for a new law, which would mandate minimum service levels in the public sector during strikes.

Unions have dubbed it the anti-strike bill. While Amnesty International has described the proposal as alarming, warning it could further erode human rights in the U.K.

UNIDENTIFIED FEMALE: What do we want?

UNIDENTIFIED MALE: 10 percent.

UNIDENTIFIED FEMALE: When do we want it?

UNIDENTIFIED MALE: Now.

BASHIR: With further strikes planned, pressure on the government is only growing and disruptions to everyday life are set to become a more frequent occurrence for a population already grappling with a deepening financial crisis.

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Nada Bashir, CNN, London.

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VAUSE: With us now from Los Angeles CNN European Affairs commentator, Dominic Thomas. Good to see you again, Dominic.

So, right now, both the government and the unions, they're both digging in, like on the teacher's demands for a pay increase.

For example, first we'll hear from the Prime Minister, and then the general secretary or the Education Unit union, here they are.

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SUNAK: When it comes to teachers, we've actually given teachers the highest pay rise in 30 years, includes a nine percent pay rise for newly qualified teachers and record investment in their training and development.

BOUSTED: There has been over the last 12 years really catastrophic long term decline in their pay, teachers have lost 13 percent of that period. That's in real terms, a huge amount to lose.

(END VIDEO CLIP)

VAUSE: You know, both statements can be true at the same time, but the point here is that both sides are taking this hard line because they seem to believe public support is on their side, and one of them is going to be wrong. And that's the formula for an extended standoff an ongoing industrial action. So, what will break the deadlock here?

DOMINIC THOMAS, CNN EUROPEAN AFFAIRS COMMENTATOR (on camera): That's a great question, John. I mean, in some ways, I wish I knew the answer. I think what could break the deadlock here is that the government's position is a weaker one. We know that they're on their fifth Prime Minister since 2010. And with a general election looming, and unless they can address these issues and the underlying issues that have to do with the cost of living crisis and rising inflation, ultimately, their position is weakened.

What we are seeing is that these strikes and that the empathy and sympathy for them is escalating. In some ways, the government has gone down a rather unquestionable path, which is to try and stigmatize and strikers who are already struggling, or shame them in the -- in the public eye. And I don't think they're winning that particular debate.

And we see throughout the month of February, a more labor action is planned, and some of it are getting to a kind of historically, an unprecedented level.

And so, the standoff will go on until the government breaks and addresses these issues. And if they don't, we're going to go down another road of historical precedent, which was all the way back to say 1979 when the Labour government was brought down under these kinds of circumstances, and paved the way for Margaret Thatcher. And so, I think that position is a vulnerable one at this moment.

VAUSE: And what we're seeing is industrial action across almost every sector of the economy. But essentially, the demands are the same. They just want increase wages to cope with this record high inflation, which then gets to this question of why we're seeing this sort of piecemeal approach if you like from the government, this refusal to get directly involved in negotiations by the prime minister and his cabinet.

So, isn't there an argument to be made that this is a general problem with an umbrella issue, which is directly in the government's wheelhouse?

THOMAS: I think it is, John, the problem is that when we say the government, you know, who is it really that we're talking about? We know that these divisions over the past decade or so in the Conservative Party are along many lines, they can't even agree on how to go about addressing the particular issue.

You have one group of Conservative MPs that are interested in further tax cuts for the wealthy, and for businesses, whereas another group is, first of all, clearly aware of the optics.

In other words, what would it look like to make and provide tax cuts to the wealthier sectors of society, while at the same time arguing that the inflationary aspect has to be tackled first and foremost, and instead of talking and tackling those kinds of issues, they're going down the road of first of all, not wanting to circular provide further support for public spending. They know that that's not popular with any of their members, and as I said, to go about stigmatizing the strikers and trying to turn public opinion against them.

The problem is there's a rising number of people that are siding with those experiencing these working conditions and grievances in society. And those are the very individuals that will eventually go to the polls to decide the fabric of the next government in the U.K., John.

VAUSE: The government has actually proposed what many calling an anti- strike law. Amnesty International said the legislation ignores key safeguards that protect workers' rights under international law. It gives ministers sweeping powers to impose minimum service levels after whatever consultations they see fit, rather than require them to negotiate alongside unions and employers, subject to third-party arbitration where agreement cannot be reached.

Amnesty goes on to claim the law (PH) does not confirmed international labor standards. So, instead of direct negotiations, instead of trying to find some compromise, what the conservative governments seem to be heading down a road of direct confrontation.

THOMAS: They are, John, and there are once again historic precedents to this, we can go back to the -- to the Thatcher years where there were different rules and regulations imposed that had to do with simply gathering in public places to try and not just curb striking but any form of kind of protest and activism.

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So, we see strikes here, that we also see protests and demonstrations that are similar in some ways in scale to the context in France and the concern for both governments, whether it be the French government, or the -- or the U.K. government here is not just a question of striking, but the ways in which it is mobilizing an opposition and weakening the power and the government in power.

And part of the problem here too, is that in many ways, this conservative government and administration has spent more time on internal struggles and leadership challenges than really thinking about legislation and going down the road of further oppression, rules, regulations, and punishing those that are articulating in the public space. That dissatisfaction with this government is only going to mobilize that opposition and further weaken Rishi Sunak. And the big question then will be is whether Sunak can even withstand this in his party as they move towards a general election, or whether he will be yet another fall guy in the Conservative Party.

VAUSE: Well, that's always on the cards, isn't it? They like changing leaders quite often. They've done that a lot recently. Dominic, good to have you with us. Thank you so much, sir.

THOMAS: Thank you.

VAUSE: Well, he rose to the highest levels of the Catholic Church and now he's been laid to rest. We'll have a live report on the trouble legacy of the late Cardinal George Pell, you're watching CNN.

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VAUSE: North Korea is warning joint military drills by South Korea and the U.S. will "ignite an all-out showdown." The North Korean foreign ministry claims the United States reckless and confrontational maneuvers have created an extreme red line on the Korean Peninsula. The warning comes a day after the U.S. Defense Secretary and South Korean Defense Minister agreed to expand this year's combined military drills.

U.S. will soon get access to form more military bases in the Philippines, part of an effort to ramp up cooperation between the two countries. Now, it comes as the U.S. defense chief is visiting Manila.

CNN's Paula Hancocks following details for us. She joins us now live from Seoul. So, what's the significance of all of this?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (on camera): Well, John, we've known for some time now that the U.S. had been seeking more access to some of the Philippine's bases for strategic reasons. And this appears that it has now been announced. It comes as the U.S. Defense Secretary is in the country. He has been meeting with his counterpart also with the President Ferdinand Marcos Jr.

And in a statement, they have said that they will designate three new agreed locations, which are Philippine bases, but will allow U.S. participation on them.

Now, to put this into context, this is all part of what's called the EDCA. That's the Enhanced Defense Cooperation Agreement. This was agreement between the two militaries back in 2014, which means that at certain locations, U.S. troops are allowed to rotate in and out of those particular bases, they're also able to build infrastructure for both militaries to be able to use, they already have five bases that they have been working with but these four extra could give them an extra edge.

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Now, what we have heard from the statement itself is that they will allow more rapid support for humanitarian and climate related disasters in Philippines. But this is really the key bit and respond to other shared challenges.

Now, that is widely thought to be a veiled reference to China and China's expansion plans and an effect in the South China Sea.

So, what this potentially does, and of course, we don't know at this point, which four bases will actually be part of this agreement. But this gives the U.S. more access to this key area in the region.

Now, of course, there are bases to the north of the Philippines on the Northern Luzon Island, which are just 200 miles or 320 kilometers south of Taiwan, that would be a strategically key for the United States. We don't know if those are involved.

There are some that face out on to the South China Sea where we've seen a militarization of -- from China from Beijing over recent years, and certainly some of those smaller islands being militarized by China, which concerns many in the region.

So really, what this appears to be doing at this point is giving the U.S. military more strategic access, should they need it in the future and the fact that they have said in the statement, it is to respond to other shared challenges shows that there is an eye on China as they are looking to do this.

Now, it is key to find out exactly which bases they will be, as that will tell us a little more about what exactly they're hoping to get from this kind of access.

We should be hearing from the defense secretary in just about 10 minutes or so. And we're hoping to get a few more details then, John.

VAUSE: As soon as we get them, I'm sure you'll bring them to us. Paula, thank you. Paula Hancocks live in Seoul.

More than a million people attended Pope Francis' mass in Kinshasa on the second day of his landmark trip to the Democratic Republic of Congo. They lined the streets to catch a glimpse of the pontiff who is on the first people (PH) visit the country since 1985. Comes as the nation grapples with violence and a refugee crisis. The Pope urge those involved in fighting to lay down their arms.

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POPE FRANCIS: And may it be a good time for all of you in this country who call yourselves Christians but engage in violence. The Lord is telling you, lay down your arms, and embrace mercy.

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VAUSE: The Holy Father also met with victims of violence and empathize with him saying your fear, your tears are mighty as your pain is my pain.

On Friday, the Pope heads to neighboring South Sudan also dealing with conflict and hunger.

One of those controversial figures in the Catholic Church was laid to rest Thursday. The funeral mass for Cardinal George Pell ended a short time ago in Sydney. He died three weeks ago in Rome, aged 81.

While the faithful fills St. Mary's Cathedral many of Pell's detractors protested outside. Pell became notorious in 2018 as the highest ranking Vatican official to be convicted of child sexual abuse. He always denied the accusations, spent 13 months in prison before his conviction was overturned in 2020.

CNN's Anna Coren carry the story for us live from Hong Kong. Yes, I guess this was quite a mixed day for many people, those who are the supporters and those who were the detractors coming face to face in many ways.

ANNA COREN, CNN CORRESPONDENT (on camera): Yes, absolutely, John. Cardinal Pell was a polarizing figure. Some people admired him, other people despised him, reviled him.

The reason being, is that many felt that as the head Catholic, that he did nothing to stop the child sex abuse within the Catholic Church by pedophile priests. He could have acted, he did not, that is their number one grievance.

I think what was really interesting today, John at St. Mary's Cathedral, were the absentees, notable absentees like the Australian Prime Minister Anthony Albanese, he was not there. Nor was the New South Wales Premier Dominic Perrottet. You know, this funeral is held in his state, he was not there. Former Prime Ministers John Howard, Tony Abbott, they were in attendance. Tony Abbott spoke of Pell as being the greatest Catholic that Australia has ever produced and the greatest man that he had ever known.

The Pope sent a message paying tribute to Pell for his service. And you mentioned you know, what was happening outside, there are about a thousand parishioners who couldn't get into St. Mary's Cathedral watching the service on giant screens across the road, separated by police were hundreds of protesters. They unfold that giant rainbow flag, walk past St. Mary's Cathedral. People were chanting slogans go to hell, George Pell, holding up signs George Pell did not protect our children.

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There is so much angst and animosity towards this man. Let's have a listen now to one of the protesters who organized the march.

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UNIDENTIFIED MALE: The politicians, the judges, people from the political establishment that are attending the funeral service today. We want to send a message that we're going to fight against everything the Catholic Church and Pell stood for and continue to fight until there's full equality in this country.

(END VIDEO CLIP)

COREN: Now, George Pell, he rose very quickly through the ranks of the Catholic Church. He was Archbishop of Melbourne and Sydney, became a cardinal, was then sent to Rome where he was number three at the Vatican. That all came to an abrupt end in 2017 when he was charged with child sex abuse and molesting two acquire boys, he returned to Australia to face those charges.

He was found guilty by a jury in 2018. He spent as you said 13 months in prison. The High Court of Australia quashed that conviction and he was free.

Now, John, his supporters will say that he was exonerated, that he was innocent of those crimes. However, the activists you know, who support that the survivors and the victims of child sex abuse say that George Pell his inaction meant that countless children in Australia were abused by pedophile priests in Australia, John.

VAUSE: And that was borne out of the unredacted versions of the government reports, the investigations into Pell. So, that is undisputable at this point, he did nothing for those priests.

But Anna, thank you for being with us. Anna Coren live for us in Hong Kong.

Still ahead, while the U.S. Fed eases back on rate hikes, the central bank not declaring victory over inflation, at least not just yet.

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VAUSE: Welcome back, everyone. I'm John Vause, you're watching CNN NEWSROOM.

Well, here's the good news, chairman of the U.S. Federal Reserve says inflation is starting to ease. Here's the not so good news, the Fed will continue to raise interest rates to keep prices in check.

The Fed announced a quarter of a point hike on Wednesday comes amid positive economic signs including wage growth, falling prices on consumer goods and a drop in energy costs.

The quarter point hike is the smallest in months, the Fed raised rates by three quarters of a point four times in less than a year. But policymakers now suggests more increases may still be on the way.

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JEROME POWELL, U.S. FEDERAL RESERVE CHAIR: So we've raised rates 4 and a half percentage points. And we're talking about a couple of more rate hikes to get to that level we think is appropriately restrictive. And why do we think that's probably necessary? We think because inflation is still running very hot.

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VAUSE: To Los Angeles now. Ryan Patel, senior fellow at the Drucker School of Management at Claremont Graduate University.

Good for you being with us, Ryan. Good to see you.

RYAN PATEL, SENIOR FELLOW, DRUCKER SCHOOL OF MANAGEMENT, CLAREMONT GRADUATE UNIVERSITY: Likewise, John.

VAUSE: OK. Jerome Powell made it clear high interest rates will be around for some time, and here's why. Here he is.

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POWELL: It's very difficult to manage the risk of doing too little and finding out in 6 or 12 months that we actually were close but didn't get the job done. Inflation springs back, and we have to go back in. And now, you really do worry about expectations getting unanchored and that kind of thing. This is a very difficult risk to manage.

(END VIDEO CLIP)

VAUSE: So just trying to translate there. So even when inflation may seem to be under control, might even be falling, don't expect interest rate cuts at any time, which seems to beg the question: what about the risk of doing too much?

PATEL: Well, one, let me translate the first thing he just said. We don't want to do what we did a couple of years ago and do nothing. We need to do a little bit more so that way, we can catch up and not play behind. That's the translation of what he said.

And to answer your question, John, yes, I think that fear of what they did before, they would rather risk -- the word "risk" came up in this conversation -- to do more than to do less.

You're right. It's something that they have to pay attention to. Right now, we've seen three months -- a three-month rate of data showing that it's easing up. Going to, I think, six months of data is going to be really interesting to see where that -- how big of those interest rates will be at.

And mind you, he continued to say, wants to be the target of 2 percent. So it gives them the blanket to do more and then do less.

VAUSE: Here's the thing, though. The risk of not doing enough, is essentially, what? That you have to put interest rates back up, and there's the possibility of tipping the economy into recession? The risk of doing too much seems to be you will tip the economy into a recession. Yes?

PATEL: Yes, no. And again, they've been criticized for doing nothing, so this is kind of like, if you've seen over the last year -- John, you and I have been talking about this -- their foot is on the pedal. They are not letting up on this, and I think that's the balance they're hoping.

Which is the unemployment rate hasn't gone the way that they wanted to by increasing, and that's what they're worried about here. This is where the risk of continuing to push on the interest rates could cause. And so they are seeing or not relaxing it, but they're liking what they are seeing from the data for the last few months, last three months. VAUSE: And of course, the $64 million question, if you like: how long

is exactly "some time" for this sort of restrictive higher interest rate regime?

PATEL: That's a great point. You know, last year, if you would have told me, I think it would have been gone into the end of the year. And they say multitude of factors. I keep hoping, best-case scenario, we get to the summer, and it will be really clear where the next rate hike's going to be, because it is starting to slow down inflation. And we're starting to see better signs.

But it's unclear right now what they're trying to do, if it's going to come up quicker or not.

VAUSE: Meantime, in Europe, seemingly out of nowhere, Europe's economy grew faster than the U.S. last year. Its markets are outperforming, too. And the margins here are not small. Is this the beginning of a long-term trend, and if so, why?

PATEL: Oh, you stop it, John? Come on. You're going to put the headline, going Europe oversaw China and the U.S. in 2022.

VAUSE: Yes.

PATEL: I mean, listen, I'm glad that Europe is doing -- doing better. Mind you, that China wasn't really reopened all last year. The U.S. tech stocks got hammered in revenues, leading to a lot of layoffs.

The European market, which is the good, right, they actually supported the stimulus package. It's done well. They kept the low interest rate. They were faster, tech companies performed better. So there's all these things.

So I don't want to bust the bubble. However, the energy crisis is something that they've still got to face. The inflation is still very high. You know, this year, 2022, as many have said, it was a weird year. Even the European central president stated that it was just weird for them and those are not normal numbers.

So again, I'm breathing because it's great as a headline, but I want everyone listening to this that the realistic, don't expect the European market to continue to outgrow these two markets but to be a value play in the future.

VAUSE: OK, one of the reasons for the record-high inflation in the U.S. and why these interest rates are so high has been the surging cost of energy.

That's bad news for a lot of people, but for -- it's good news for oil giants like Exxon, which this week posted record profits of $56 billion for 2022. That's a huge amount. Chevron also had market profit, as well.

And they used those record profits not to increase output and lower prices, in theory, I guess, but rather announce a share buyback, which brought this response from the White House: "The latest earnings reports make clear that oil companies have

everything they need to increase production, but they're instead choosing to plow those profits into padding the pockets of executives and shareholders." Those evil executives and shareholders.

This is complicated, right? Because explain why this is not exactly a good argument, or is a good argument for a windfall tax on these huge profits by energy companies, at a time when prices are being driven up by external factors. Nothing that these companies are actually doing, but external factors like the war in Ukraine?

[00:35:16]

PATEL: So there's two things here. One is if you just place a tax just to place a tax, it doesn't solve the problem of what you're trying to do.

So the White House has to pick something that they want to achieve and place a tax to achieve that so it changes the behavior.

What is -- what is interesting here with Exxon, if you recall a year and a half ago, Exxon had a proxy fight where it was the small battle, engine No. 1 fund, got Black Hawk (ph), Vanguard, and State Street. They got three board seats to care -- and to focus Exxon, to force them to commit to carbon neutrality and to force the renewable resources. I know you -- I can't see you, but I know you're probably rolling your eyes, John. To adopt less fueling (ph) strategy going forward.

And that hasn't occurred completely yet. So this is not something that cannot be ignored. This is a very bad look for Exxon, because it's something that they've got to put a mandate going forward.

So it is very complicated because there is all these aspects and investments -- where are they going, how are they giving back. And even Chevron in this industry had -- was it $27 billion, as well? So this can't continue to go on, John, is my point.

My point is these money investments have to be and solve questions. Just placing a tax and saying, "Hey, you're bad; we are good." It just needs to come together to be able to solve something.

VAUSE: OK. "You're bad, we're good," I like that. We're done.

Ryan, thank you. How did you know I was rolling my eyes?

PATEL: Yes.

VAUSE: Ron Patel there. Appreciate it.

A delegation from the International Monetary Fund is in Pakistan right now as soaring inflation and the impacts of climate change have left the country's economy in freefall.

CNN's Sophia Saifi is in Islamabad. She joins us now, live with the report. So this is a real problem for Pakistan. Like many other countries, it's struggling with a fall in foreign reserves to pay for an increased cost of energy and that kind of stuff. And now, they're essentially out of cash. What are they to do?

SOPHIA SAIFI, CNN INTERNATIONAL CORRESPONDENT: I mean, John, "struggling" is the right word here for Pakistan. They're about -- I mean, according to data released by the country's state bank last week, there's just about $3.7 billion left in Pakistan's foreign exchanges there. And that's, according to experts, just enough for about three weeks of imports. It's quite a dire situation here.

We're being told that Pakistan isn't going to default, but there are lots of records being broken here at the moment. Pakistan's currency, the rupee, fell dramatically against the USD just earlier last week. You know, it's the worst that it's fallen in about 20 years.

There is a huge cost-of-living crisis. I mean, I'm in Islamabad, which is one of the wealthiest cities of this country, but I went out and spoke to a few people on the streets -- bakers, people, you know, who are trying to make a living here, you know, just normal jobs, and this is what they had to say.

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IMRAN ULLAH YOUSAFZAI, BAKER (through translator): You look at everything -- flour, gas cylinders, electricity. The rates of everything have shot up. Because of that, our earnings have come down. It's become very difficult to keep surviving like this.

SYED JAMSHED BUKHARI, DRIVER (through translator): Since onions became expensive, I've stopped buying them. I've left them. But this is not just stopping at onions. Anything we buy to eat, if we bought one kilo, we buy a quarter of that now. This is the story of every home, not just mine. It's so hard to survive right now.

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SAIFI: These are people whose lives have been made difficult not just by the economic crisis. I mean, you have to realize that Pakistan has been going through a very difficult political crisis. There is the fear of militancy.

And in this environment, you have the IMF visiting. The IMF was actually supposed to complete its review of the current program with Pakistan back in November. That's been delayed by two months.

Ever since the current government came in, we've had two different finance ministers. At the start of last year, there was a separate finance minister with the previous government. And each minister has had a different economic policy.

And with that, I mean, we have a situation, along with the fact that there were -- there were catastrophic floods, historic floods, which have decimated huge parts of the agricultural sector. So the World Bank is saying we've got about $15 billion that Pakistan has lost because of these floods that happened in the summer last year.

So a lot of issues plaguing Pakistan, and the solutions are simply not coming up soon enough -- John.

VAUSE: Yes, the cruel fact of climate change: it has the biggest impact on those who can afford it the least and are least responsible for it.

Sophie, thanks so much for being with us there, live in Islamabad.

With that, we'll take a short break. When we come back, it's like a luxury brand has caught the measles. Lots of dots, everywhere. All part of Louis Vuitton's latest ad campaign. Details in a moment.

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VAUSE: Larger-than-life mannequins, human-looking robots and lots of dots. See what happens when luxury brand Louis Vuitton collides with a world-famous Japanese artist. CNN's Kristie Lu Stout has the story.

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KRISTIE LU STOUT, CNN INTERNATIONAL ANCHOR/CORRESPONDENT (voice-over): In a world where people are bombarded by ads on TV, social media and a billboards, a building decorated in polka dots by a world-renowned artist is hard to ignore.

PRIYANKA BAGOLIA, TOURIST: I stopped by, and it did catch my eye, you know? And I usually -- like, I was just admiring the buildings and stuff. But I look at that, I was like, Huh, that's very interesting.

STOUT: The flagship store of luxury brand Louis Vuitton in Paris getting a fresh coat of whimsy as part of its collaboration with Japanese artist Yayoi Kusama.

It's part of a promotion for a new collection from the French label, featuring Kusama's signature polka dots on its bags, shoes, clothing and other accessories.

Kusama is considered to be one of the world's most famous contemporary artists, sometimes called the Princess of Polka Dots. And at 93, she's been creating arts for decades: from sculpture, to painting and even infinity rooms.

This is her second collaboration with Louis Vuitton, the first, more than a decade ago, when she explained a constant theme in her work: eternity.

YAYOI KUSAMA, ARTIST (through translator): I believe the moon is a polka dot, the sun is a polka dot, and the universe is polka dots. STOUT (voice-over): What's also universal is the eye-catching

marketing campaign. Harrod's in London has caught the bug, along with Tokyo, which is one of many stories featuring a lifelike robot of the artist.

New York's Fifth Avenue, a photo stop for visitors captivated by the colorful swatches.

HOLLY PHELEN, TOURIST: I think it's great marketing, and I think it -- I think it just changes the brand for Louis. You know, it brings it to a different level.

STOUT (voice-over): The collection is a hit with some celebrities, but polka dots aren't for everyone. One loyal Louis fan says she's sticking with the tried and true.

THAIS FERRAZ, TOURIST: I admire and I love this collab but, actually, I love so much the classic model of the brand.

STOUT (voice-over): New look or old, it's a cheery way to brighten up a city block and perhaps channel some of Kusama's vibe to try to keep a classic brand timeless.

Kristie Lu Stout, CNN.

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VAUSE: I'm John Vause. Thank you for watching. WORLD SPORT starts after the break. I'll be back here in 16 minutes. See you then.

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