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Pontiff Visits DRC As The Nation Grapples With Violence; Pakistan's Economy On The Brink; U.S. To Get More Military Base Access In The Philippines; At Least Three Killed In Kramatorsk Missile Strike. Aired 2-3a ET

Aired February 02, 2023 - 02:00   ET

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

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[02:00:29]

ROSEMARY CHURCH, CNN INTERNATIONAL ANCHOR: Hello and welcome to our viewers joining us from all around the world. I'm Rosemary Church. Just ahead here on CNN NEWSROOM.

PROTESTERS: No education pass.

CHURCH: Half a million workers across the U.K. filled the streets demanding better pay and working conditions as inflation spikes.

Major damage after a missile attack hits a residential area in Kramatorsk, Ukraine. We will bring you the latest on the search and rescue operation.

And later Pope Francis calls on armed groups to lay down their weapons during an open air mass in the Democratic Republic of Congo.

ANNOUNCER: Live from CNN Center. This is CNN NEWSROOM with Rosemary Church.

CHURCH: And thanks for joining us. Well, Europe central bank is expected to raise interest rates by half a percentage point when it meets in the coming hours. Now this comes after new data show the challenges facing the eurozone economy. Consumer prices continue to rise and 8-1/2 percent annual rate in January. But that's slower than December and the rate has eased off for three straight months now.

But core inflation which looks at a narrower set of data showed the core price growth holding steady at 5.2 percent annual rate. Meanwhile, Europe's economy grew faster than the U.S. last year. Ryan Patel is Senior Fellow with the Drucker School of Management, explains the reality behind the numbers.

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RYAN PATEL, SENIOR FELLOW, DRUCKER SCHOOL OF MANAGEMENT: Energy crisis something that they 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 that those are not normal numbers.

(END VIDEO CLIP)

CHURCH: Meanwhile, the U.K. is likely to be the only major economy to fall into recession this year according to the International Monetary Fund. And massive strikes are certainly not helping the slowdown. The latest walkouts caused major transportation headaches and forced many students to miss school. CNN's Nada Bashir has details.

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NADA BASHIR, CNN INTERNATIONAL 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.

BASHIR (on camera): 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.

BASHIR (voice over): 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 warns 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, PRIME MINISTER OF BRITAIN: 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 schoolchildren.

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 no time off. It ruins the quality -- it ruins the quality of our education.

BASHIR: The government is now also facing protests against its controversial plans. Free new law which mandated minimum service levels in the public sector during strikes. Unions have dubbed it the anti-strike bill.

[02:05:09]

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?

PROTESTERS: Ten percent.

UNIDENTIFIED FEMALE: When do we want it?

PROTESTERS: Now.

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

Nada Bashir, CNN, London.

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CHURCH: I want to talk more about this so-called anti-strike bill with Kevin Rowan. He is the head of public services for the Trades Union Congress which represents 48 unions and organized dozens of rallies across the U.K. Thank you so much for being with us.

KEVIN ROWAN, HEAD OF PUBLIC SERVICES, TRADES UNION CONGRESS: Thank you for having me.

CHURCH: So, these walkouts were the biggest in more than a decade with more strife expected in the days ahead. And while teachers, civil servants and others are certainly hurting as a result of high inflation, this industrial action will take a toll on the U.K. slowing economy. And so now the government's pushing for this anti-strike bill. Legislation, essentially, that restricts strikes in key industries. So, tell us what will be the likely impact of this?

ROWAN: Well, in our view, the minimum service levels bill is effectively a ban on strike action, which, obviously is the wrong approach from the government. And as you've heard, condemned by many organizations. We think they -- that the better response to the industrial action has taken place is to recognize why that industrial action is taking place. Iin fact, that so any workers are enjoying -- enduring a really difficult cost of living.

Crisis at the minute, many of our public service workers have had below inflation pay rises for 15 years. Every year getting worse and worse off. So, rather than, if you like -- try to burn and silence the voice that those workers are expressing through this industrial action, look how much how you get around the table, recognize the pressures that they're under and negotiate a fair solution.

cc Of course, the government has said it won't do that. So, if the government refuses to give pay increases and the workers in turn continue to strike, what's the solution to that deadlock? Who blinks first in this instance?

ROWAN: Well, the only solution is a negotiated settlement. I mean, the strength of feeling from the workers yesterday to the support of the public yesterday and in previous disputes shows how serious and frustrated those workers feel about the experiences that they're currently enduring. The cost-of-living crisis is real. You know, they are genuinely desperate to try and get a better pay deal at work.

And the government can make different choices. So, the ball is very much in the government's cards. They can resolve this issue quickly if they -- if they choose to. Instead of trying to be, you know, the tough guy in the negotiation and trying to be the kind of hard cop and make life more difficult for Trade Unions. Market for working people. We all want the government to come to the table with -- in good faith to try and find a good solution. And I think the general public want them to do that.

CHURCH: And Britain's Prime Minister Rishi Sunak is condemning the teachers strike specifically saying children deserve to be taught. And he says, teachers have already seen significant wage increases. But the unions, the teachers too disagree. Who's right on this issue? And what are some possible ways to get teachers back into the classrooms?

ROWAN: Well, certainly teachers have enjoyed below inflation pay rises, as soon as all public sector workers heal from the table now is five percent when we've got inflation at over 10 percent as your -- as you're reporting earlier. So, teachers are certainly feeling the pinch. But it's not just about teachers paying. Funding in schools has gone down year on year, it is a fact that everybody who is a parent, as children in school is asked by their school on a regular basis to pay for books, to pay for station rate, to pay for school trips and everything else.

So, there is a real funding crisis in our schools, which is already damaged in kid's education and that's why the teachers are striking. So, you know, there's a lot of spin around this. The reality is that the public and parents are behind the teachers strike because they all want to see a better quality education service in our country.

CHURCH: And just very quickly, if that anti-strike bill gets passed, what will it mean if people are still getting out on the streets? What will be the consequences?

ROWAN: Well, one of the worst aspects of this bill is that, you know, workers take strike action lawfully can be dismissed if they don't go to work.

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So, we're seeing a government here in the U.K. which is about to sack nurses and sack teachers and sack ambulance workers for simply taking action to get fair, fair. It's an outrageous piece of legislation. One that I think the government will be condemned for worldwide.

CHURCH: Kevin Rowan, thank you so much for joining us live from London. Appreciate it. Well, the U.S. Federal Reserve isn't exactly claiming victory over inflation yet, but its latest move is a clear sign and things are moving in the right direction. The central bank raised interest rates by a quarter of a point on Wednesday. Many consider that a more traditional increase after five straight larger hikes.

Policy makers acknowledge inflation is easing somewhat but remains elevated. And they indicated more interest rate hikes may be on the way.

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JEROME POWELL, U.S. FEDERAL RESERVE CHAIR: But that's not grounds for complacency. Although inflation has moderated recently, it remains too high. The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched.

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CHURCH: And the rate hike is mean too slow inflation by keeping spending in check. Americans can expect higher borrowing costs for home loans, credit cards, auto loans and student loans. More now from CNN Matt Egan.

MATT EGAN, CNN REPORTER: The Fed's warn inflation isn't over. But strategy is shifting. This 25-basis point rate increase from the Fed is the smallest since last March when this fight against inflation began. The Fed is still trying to slow the economy down to cool off inflation. But it's gone from slamming the brakes in the economy to just tapping the brakes. And that is an important shift because it lowers the risk that the Fed ends up causing an accident.

Either in financial markets or the real economy or both. And the Fed is changing its tune on inflation a bit. The Fed statement acknowledged that inflation has eased and during the press conference, Fed Chair Jerome Powell, he declared that the disinflationary process has begun. He also sort of shrugged off the January boom in financial markets, even though soaring stock prices actually makes the job of the Fed to get inflation down that much harder.

Now, markets seem to like the power that sets the say with stocks rallying during the press conference. But no, I would note that Powell did not mince words when it comes to inflation. He said it's "Very premature to declare victory" or think that we've really got this. And listen to this clip from Powell.

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POWELL: It's very difficult to manage the risk of doing too little, and finding out in six or 12 months that we actually were close but didn't get the job done. Inflation springs back when 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.

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EGAN: Powell went on to say that he's not really that worried about the Fed going too far, because the Fed has tools to deal with that. At the end of the day, the Fed sounds more encouraged about the inflation situation. And they are slowing the pace of rate hikes. The Fed is not done here. But it does feel as though we are much closer to the end of this rate hiking campaign than the beginning.

I'm Matt Egan, CNN at the Federal Reserve.

CHURCH: And still ahead this hour. We'll take a closer look at how soaring inflation is impacting Pakistan's economy and why a delegation from the International Monetary Fund is in the country right now.

Ukrainian President Volodymyr Zelenskyy is condemning a deadly Russian strike in the eastern city of Kramatorsk saying his country is bordering "absolute evil." At least three people were killed, 20 others wounded when a missile slammed into a residential area. The Donetsk Region Police say at least eight apartment buildings were damaged and one of them completely destroyed.

More than 100 police officers were said to be at the site where a search and rescue operation was ongoing.

And CNN's Scott McLean is following developments for us. He joins us live from London. Good morning to you, Scott. So, what more are you learning about this attack in Kramatorsk?

SCOTT MCLEAN, CNN CORRESPONDENT: Yes, Rosemary. Good morning. You can see from those pictures that there is not a heck of a lot left of that apartment building and you see fire crews on top of the rubble trying to desperately remove debris to try to get to anyone who may potentially be trapped underneath. And we've just gotten word from the Regional Governor that they believe that there may be at least two people still underneath of the rubble. And look, timeless critical here.

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This happened about 12 hours ago and if you imagine someone is actually still under the rubble, they would very likely be injured, they'd be dealing with the smoke and the gas associated with the actual missile strike. Not to mention the fact that temperatures right now in Kramatorsk overnight are below freezing. And so, time here is really essential because it would be very difficult for someone to survive for an extended period of time.

President Zelenskyy says that this is part of daily life in his country and he's not wrong. This is all too familiar. You will remember that last month, a anti-ship missile hit a -- an apartment building in Dnipro, killing at least 40. And in this case, this latest strike in Kramatorsk, officials believe that the type of missile was an Iskandar. That's the same type of missile that they believe also hit a train station last April at a time when thousands of people were lining up a train stations desperately trying to get out of the country. In that case, at least 50 people were killed. And President Zelenskyy says that things will only get tougher from here. Ukrainian intelligence officials say that they've seen evidence over the Black Sea of different Russian activities that suggest that this maximum escalation campaign, this spring offensive is coming in the next two or three months.

CHURCH: And Scott, President Zelenskyy is also focusing on getting rid of corruption in the government. How is he doing that?

MCLEAN: Yes. So, this is not the first time his government has cracked down on corruption during this war and it surely will not be the last last night. He said that he is willing to fire as many top officials as is necessary. So, this latest crackdown includes searches of the state tax service, the dismissal of the entire management team of the customs agency and notices of suspicion being served to defense ministry officials.

It all -- it also includes a raid on the home and office of the head of the Kyiv tax authority accused of a scheme to essentially look the other way on about $1.2 billion in unpaid taxes. And these searches, you can see from the pictures there, turned up the equivalent of about $175,000 dollars plus luxury watches, luxury cars. Another search or notices of suspicion, excuse me, we're also served on former officials of two of Ukraine's largest oil companies.

Again, accused of a scheme to evade taxes and the amount of about a billion dollars and, Rosemary, the list goes on.

CHURCH: All right. Scott McLean joining us live from London. Many thanks. Well, for those Ukrainian forces on the frontlines in the east, the intense battles have been constant with brutal winter conditions now making the fight more difficult.

CNN's Fred Pleitgen us a firsthand look at what they're facing.

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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 a A.K.s and a U.S.-supplied Browning heavy machine gun.

They're searching for weak spots in our positions, says the commander. Callsign ghost. They want to see if we fight back. 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 Ukrainian.

The enemy uses all kinds of weapons Bogdan (ph) says. Small harms, heavy machine guns, artillery, mortars, rocket launchers and aviation as well.

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

PLEITGEN (on camera): The Ukrainian 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.

PLEITGEN (voice over): 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 it 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 made evil dictatorship.

As we prepare to leave, incoming grenades explode above. And 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?

[02:20:05]

Fred Pleitgen, CNN, Kivsharivka, Ukraine.

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CHURCH: Russiam opposition leader Alexei Navalny is no longer allowed to have any human contact in prison. That is, according to his daughter who spoke to CNN after his transfer to an even harsher solitary confinement. Navalny is serving a nine-year sentence on fraud charges which are widely seen as trumped up. This is what his daughter told CNN's Anderson Cooper.

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DASHA NAVALNAYA, DAUGHTER OF ALEXEI NAVALNY: There are no calls, no visits, no human conditions, he is allowed to write 35 minutes per day with a pen and paper, he's allowed to have two books. These actions are clearly an open strategy to destroy my father's physical health and maybe mental too. By all means, and the reason why I called Putin now is because there's absolutely no way the colony will take these drastic measures without having a nudge from the Moscow government.

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CHURCH: His lawyers saying it only will be kept in the new solitary confinement for up to six months.

Israeli warplanes bombed 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 Israel Defense Forces said in a tweet the strike is in response to a rocket launched from Gaza. The IDF claims its fighter jets struck a chemical and weapons manufacturing site belonging to Hamas. This comes as the U.S. is calling for a deescalation of violence in the region.

Well, he rose to the highest levels of the Vatican and provoked a strong backlash among many Catholics. Just ahead, we'll take a closer look at the troubled legacy of Cardinal George Pell as he's laid to rest.

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CHURCH: Welcome back, everyone. Well one of the most controversial figures and the Catholic Church was laid to rest on Thursday.

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CHURCH: The funeral mass for Cardinal George Pell was held earlier in Sydney, Australia where he was once Archbishop. Hell died three weeks ago in Rome at age 81. While the faithful St. Mary's Cathedral many of Pell's detractors protested outside. Several people were detained. Pell became notorious and 2018 as the highest-ranking Vatican official to be convicted of child sexual abuse.

Pell always denied the accusations against him. He spent 13 months in prison soon before his conviction was overturned in 2020.

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And CNN's Anna Coren is covering this for us from Hong Kong. Good to see you, Anna. So, some high-profile politicians and others chose not to attend Cardinal Pell's funeral. Talk to us about that and of course how the day played out.

ANNA COREN, CNN CORRESPONDENT: Yes, Rosemary. There were some interesting noticeable absentees from this funeral at St. Mary's Cathedral in Sydney. Most notably the Australian Prime Minister Anthony Albanese, as well as the New South Wales premier Dominic Perrottet, Sydney, New South Wales. This is his state. He is a devout Catholic. It's very interesting that he is not there.

But it really goes to show the division within the community when it comes to George Pell, the highest-ranking Catholic in Australia. You mentioned he was Archbishop of Melbourne and Sydney, he went on to be a cardinal, he moved to the Vatican. He was the Vatican's number three in charge of the Treasury. And obviously that all came to an end when he returned to Australia to face child sex abuse charges.

I'll speak about that a little bit later. But as this funeral was taking place today in Sydney, you had about 1000 mourners outside watching procession, you know, on the big screen, but across the road in Hyde Park were hundreds of protesters separated from the mourners by police chanting slogans like George Pell Go to Hell holding slogans. They marched a giant rainbow flag past the cathedral, you know, to show their objection to what was happening and really what George Pell stood for. Why don't we listen now to some of those protesters. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Basically, just to show solidarity with the victims and the survivors of what's happened through the Catholic Church but particularly George Pell.

UNIDENTIFIED MALE: He was a pedophile facilitator and he couldn't be looked at in any other way. That's how we should be remembered. A man that thought, you know, hurting children and abusing children was OK.

(END VIDEO CLIP)

COREN: Now, George Pell himself was convicted of child sex abuse charges. Those charges, that conviction I should say, Rosemary, was overturned by the High Court of Australia. But what those protesters are referring to is the neglect, the inaction by George Pell at the systemic child sex abuse within the Australian Catholic Church. And let me mention the Royal Commission into Institutional Responses to Child abuse in Australia.

Now, it found that Pell personally knew of pedophile priests sexually abusing children as early as the 1970s and failed to act now. This is what these -- those monitors, those protesters I should say those Australians remember of George Pell.

CHURCH: All right. Our thanks to Anna Coren. Appreciate it.

And still to come. Pope Francis meets with victims of violence and calls for an end to the fighting in the Democratic Republic of Congo. Details of his visit just ahead.

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CHURCH: Pope Francis is beginning day three of his visit to the Democratic Republic of Congo, where he is expected to meet with young people in Kinshasa. This is the first visit by a pope since 1985. And comes as the nation grapples with violence and refugee crisis. CNN's Delia Gallagher has more.

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DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: Pope Francis's second day in the Democratic Republic of Congo saw the full range of emotions from joy to sorrow. Beginning in the morning when over 1 million people gathered in an airfield in Kinshasa, singing and dancing to welcome the pope for an open-air mass. And Francis directly challenged those people who call themselves Christian, he said, but who commit violence with words that have become something of a refrain during this trip. He told them lay down your arms and embrace mercy.

In the afternoon and a decided change of tone, Pope Francis met with some of the victims of that violence from the Eastern DRC. This is an area where rebel groups have for years been engaged in conflict. Pope heard harrowing stories from young people who have witnessed murder, decapitation, have been repeatedly raped. After they spoke, the Pope said we have no words, we can only weep in silence, but he also called out those responsible for orchestrating the violence in the Eastern DRC saying, enough, stop getting rich off of resources stained with blood. Even in the East, Francis said, peace is possible. Delia Gallagher, CNN, Kinshasa.

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CHURCH: Joining me now is Matthew Bunson, the Executive Editor of EWTN News, a Global Catholic Network. Appreciate you being with us.

MATTHEW BUNSON, EXECUTIVE EDITOR, EWTN NEWS: Good to be with you.

CHURCH: So, Pope Francis sent a blunt message to the world to stop choking Africa as he began his visit to the Democratic Republic of Congo, where more than a million people attended his mass in Kinshasa. On the second day of his trip, the pope also condemned what he called the poison of greed. So, what is he specifically referring to, and is the world listening to that message?

BUNSON: This is his fifth trip to Africa. He has visited 10 countries, and all certainly, this trip is included to the Congo and also South Sudan. And the one of the hearts of his message is hands off Africa, as he put it, the idea of Africa being viewed, especially by the West, by what he calls, ideological colonists, as nothing more than a mind to be stripped and a fertile territory to be plundered. He is very concerned about the impact of strip mining of the devastation of natural resources and the impact that it's having on poverty in the country, and the lack of development there. So, he's trying to highlight I think those concerns in Africa, and at the same time, also calling for peace in Africa, in what has been a bitterly in war-torn country in Congo.

CHURCH: So, what does Pope Francis hope to achieve on his six-day trip to the DRC, and South Sudan? Two nations where Catholics make up about half of the population, and where there is an abundance of natural resources and yet a high level of poverty.

BUNSON: That's right, it is that very high level of poverty, in the midst of the abundance of natural resources that Pope Francis is really trying to point the world to understand the importance of the dignity of the human person in these countries, but he's also calling for peace. We have seen the devastation of civil war in Congo, we've seen a similar strife in South Sudan. He spent some time, for example, listening to the harrowing stories of the victims of violence, and bloodshed, and rape, and murder, in whole parts of Congo, especially in the eastern regions.

So, I think he's trying to push for peace in the country, unity in the country, and what has, I think, about 250 dialects, different languages. But above all, I think he's very concerned about the interference in the development of Congo and its ultimate prosperity or lack of it, as a result of direct interference by certainly Western economic interests, and those who seek to make trouble in the country from surrounding countries, as well as those who would seek religious strife in the country as well. [02:35:19]

CHURCH: And Pope Francis has referred two countries across Africa as forgotten places. And that's exactly why he's returned there many times, to shine a light on the multitude of challenges there. So, what has he achieved on past visits that gives him hope that he can make some sort of progress this time around?

BUNSON: Yes, we saw his visit to the Central African Republic a few years back, where he very dramatically opened the doors of the cathedral there in its capital. And bringing the attention of the world to the plight of poverty, the plight again of those stripped natural resources. He had a similar message in Madagascar, and Mozambique, where those abundance of resources again, being plundered. In terms of the results, we can see in different places such as the Central African Republic and elsewhere in Africa, some success in shining that light, but also really bringing a memory for the people there to have hope that, yes, it is possible to have reconciliation, it is possible to have peace, starting with what Pope Francis calls within those countries, the importance of forgiveness, and that peace and reconciliation that certainly the people of the Congo desperately want.

CHURCH: And of course, that message of the poison of greed from the Pope has also pointed to leaders there in Africa. Do you believe that that message was received loud and clear, and that anything will be done as a consequence?

BUNSON: Yes, I think that is one of the tougher aspects that Pope Francis always faces when he goes to different countries that are facing political strife, social strife, and economic strife. Is he being heard by the authorities there? I think his message to them is very similar to the one that he's given to the rest of the world. A hands-off Africa, work for the good of your people, work for the common good, which is an important aspect to Catholic social teaching, and respect the dignity of those who are called to serve.

CHURCH: Matthew Bunson, thank you so much, for joining us. Appreciate it.

BUNSON: Good to be with you.

CHURCH: And still ahead. Pakistan is on the financial brink with the cost of living soaring, and businesses struggling to stay open. We'll have a live report from Islamabad.

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CHURCH: Welcome back, everyone. A delegation from the International Monetary Fund is in Pakistan right now as sore inflation and the impact of climate change have left the country's economy in freefall. CNN's Sophia Saifi joins us now live from Islamabad. So, Sophia, how desperate is the economic situation in Pakistan? And what will the IMF likely do in terms of a bailout for the country?

[02:40:19] SOPHIA SAIFI, CNN PRODUCER: Rosemary, it's an extreme situation right now, the Pakistan's economy is struggling. The cost of living crisis is dramatically impacting the lives of ordinary people in this country. I went out and spoke to a few of them, people who are tradesmen, greengrocers, customers. Let's have a listen.

(BEGIN VIDEO CLIP)

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.

(END VIDEO CLIP)

SAIFI: The people of this country are not being impacted not just by the economic crisis, there's a political crisis, there is a militancy issue in this country. There's only about $3.75 billion left in Pakistan's Foreign Exchange Reserves, that's just enough for about three weeks of imports. Pakistan's talks with the IMF have been stalled since last November, they're finally here. We've had three finance ministers in the past year alone with different economic policies. They finally agreed. Ishaq Dar is the current finance minister, has made changes to his -- to his policies to appease the IMF. And hopefully, those funds will soon come in.

There's a bit of optimism here that the IMF talks which end towards the beginning of next week will be positive. But keeping that in mind, we're also being told by economic -- economists and by analysts that going to the IMF again and again for Pakistan is merely just a band- aid. There are bigger structural issues that need to be addressed when it comes to Pakistan's economy and cannot be pinpointed to one government alone. This is a mess that's been a long time coming. And we're not finding solutions quick enough in this country, and the people themselves are suffering. Rosemary?

CHURCH: Sophia Saifi, many thanks for that live report. Appreciate it. Well, Australia is replacing the portrait of Queen Elizabeth on its $5.00 note, not with King Charles, but rather a new design to honor the culture, and history of the first Australians. The Reserve Bank of Australia says it will first consult with indigenous groups for their input.

Well, the U.S will get access to four more military bases in the Philippines, part of an effort to increase cooperation between the two countries. The announcement came as the U.S. defense chief visited Manila, where he met with the country's president and foreign secretary. Both countries say expanded military cooperation will allow them to respond to quote, shared challenges seemingly in reference to China's growing influence in the Pacific region. And thank you so much for joining us. I'm Rosemary Church. I'll be back in 15 minutes with more CNN NEWSROOM. "WORLD SPORT" is coming up next.

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