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U.S. Federal Reserve Leaves Interest Rates Unchanged; Cuba Delays Planned Fuel Price Hike After Cyberattack; Five More Countries to Join the BRICS Bloc; 16,000+ Sheep, Cattle Stranded Off Western Australia; Baldwin Pleads Not Guilty Again to Manslaughter Charges; Protesters Gather Outside EU Parliament Ahead of Meeting. Aired 2-3a ET

Aired February 01, 2024 - 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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[02:00:25]

ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world and everyone streaming us on CNN Max. I'm Rosemary Church.

Just ahead, turmoil hits the top ranks of Ukraine's military. Sources tell CNN President Zelenskyy is preparing to sack his top general even as his troops face mounting challenges on the front lines.

Israeli Prime Minister Benjamin Netanyahu calls for the end of UNRWA's mission, even as the U.N. warns the agency is the backbone of humanitarian relief in Gaza.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): And I know you don't mean it to be so but you have blood on your hands.

(END VIDEO CLIP)

CHURCH: Sparks fly on Capitol Hill as U.S. lawmakers grill tech CEOs over online safety for kids.

ANNOUNCER: Live from Atlanta, This is CNN NEWSROOM with Rosemarie church.

CHURCH: In the next hour, European Union leaders are expected to start deciding on what some call a make or break issue in Ukraine's war against Russia. They will meet in Brussels to try to unfreeze billions of dollars in aid that's been stalled due to internal E.U. disputes.

That's happening as Russias on the offensive across the front lines and Ukraine needs all the help it can get. A separate U.S. aid package has been stalled in Congress for months and faces an uncertain future.

To make things worse for Ukrainians, the E.U. now says it expects to deliver only about a half of the artillery shells it promised to Kyiv by March. The E.U.'s foreign policy chief says the consequences are already being seen on the battlefield.

(BEGIN VIDEO CLIP)

JOSEP BORRELL, E.U. FOREIGN POLICY CHIEF: Ukraine needs more ammunition. There is a big imbalance on the fire capacity from one side on the other and these gaps has to be filled.

(END VIDEO CLIP)

CHURCH: Meanwhile, a source is telling CNN, President Volodymyr Zelenskyy plans to fire his top military chief General Valery Zaluzhny. Mr. Zelenskyy is reportedly expected to make it official by the end of the week.

Tensions between the two men have reportedly been growing since Ukraine's counter offensive failed last year, and the general later publicly described the war as a stalemate.

One man being considered to replace the army commander is Ukraine spy chief, he stressed the need for more military aid in a wide ranging interview with CNN. Our Fred Pleitgen reports from Kyiv.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): With Ukraine facing a Russian onslaught in many frontline areas, Kyiv says continued U.S. Military aid is more important than ever. Ukraine's military intel chief tells Budanov.

KYRYLO BUDANOV, HEAD OF UKRAINIAN DEFENSE INTELLIGENCE (through translator): Shells are one of the most decisive factors in this war. It's about quantity. Not so much the quality as the quantity. Next, there are assault aircraft. These are aircraft of the type that the United States has, like the A-10 Thunderbolt II and so on. This is what can really help inflict a military defeat.

PLEITGEN (voice-over): But further military aid to Ukraine hangs in the balance, as Democrats accuse former President Trump of derailing a possible compromise. Budanov says he's not concerned about Trump.

BUDANOV (through translator): He is an experienced person. He has fallen many times and gotten back up again, and this is a very serious trait. To say that he and the Republican Party are lovers of the Russian Federation is complete nonsense.

PLEITGEN (voice-over): But the Russians are currently on the offensive. On the front lines, we've seen Kyiv's forces suffering a severe lack of ammunition, struggling to hold the line. Still, Budanov says he believes the tides will turn and Ukraine will attack.

BUDANOV (through translator): In my opinion, the main events on the battlefield will start happening sometime in the spring or early summer. PLEITGEN (voice-over): Vladimir Putin wants Kyrylo Budanov dead. The Ukrainians say Moscow tried to assassinate him at least 10 times. Recently, Budanov's wife and several bodyguards fell ill after what Kyiv says was poisoning by a, quote, heavy metal. But they survived.

The Military Intelligence Directorate is said to behind an increasing number of cross border attacks targeting key infrastructure inside Russia and the occupied territories. While never claiming responsibility, Budanov tells me, Russian can rest assured the war has come to them.

BUDANOV (through translator): I believe that the plan includes all major critical infrastructure facilities and military infrastructure facilities of the Russian Federation.

[02:05:06]

PLEITGEN (voice-over): With Ukraine's offensive essentially stagnant, the Kremlin is currently feasting on rumors Ukrainian President Volodymyr Zelenskyy is close to firing his top general, Valerii Zaluzhnyi, and possibly installing Budanov as his successor. The spy chief, Koi.

PLEITGEN: Isn't that something that weakens the country if it appears as though the president and his top general are not on the same page?

BUDANOV (through translator): I am also the head of one of the military agencies. I personally have no conflict with anyone.

PLEITGEN: You know, people are talking about you possibly being the new general.

BUDANOV (through translator): If I was appointed yesterday, would we be meeting?

PLEITGEN (voice-over): Fred Pleitgen, CNN, Kyiv.

(END VIDEOTAPE)

CHURCH: Matthew Orr joins me now. He is a Eurasia Analyst at the global risk intelligence company RANE, appreciate you being with us.

MATTHEW ORR, EURASIA ANALYST, RANE: Hi, Rosemary. It's a pleasure to be here.

CHURCH: So, a major military shake up is underway in Ukraine according to CNN sources after President Zelenskyy apparently informed his top general that he's out of a job. It's not yet official, but comes after major tensions between the two men.

General Zaluzhny, he is very popular in the country. So what went wrong? And why is this happening now nearly two years into this war?

ORR: Yes, so I think there's a couple of reasons. I think, for one, they have a long history of kind of disagreements. So, I think that there's still a lot of pent up anger between the

presidential administration, the Zelenskyy administration and the military high command about the Russians. The Russian -- the ground that the Russians gained at the beginning of the war, specifically in southern Ukraine. Then we had the failure of the Ukrainian counter- offensive last year in 2023. And then we had General Zaluzhny last November, basically saying that the war looked like it was reaching a stalemate and that the Ukrainians had very little chance of a major breakthrough.

And so, when all of those things combined together, added on with the fact that the Ukrainians are in a huge internal debate about whether or not to do more demobilization measures, specifically, General Zaluzhny wanted to mobilize several 100,000 more Ukrainians. And President Zelenskyy is reluctant to do that, unless there's a clear plan about exactly how it's going to aid the Ukrainian war effort, more details about how it's going to work, and very importantly, how it's going to be paid for by the Ukrainian government.

And so, basically, those disagreements between them seem to have grown. So, we have kind of a combination of long standing grievances. And these very difficult questions about further mobilization measures.

CHURCH: And if General Zaluzhny is indeed officially fired. How might this impact Ukraine's fight with Russia, given he is so very popular and much revered in the country?

ORR: Yes, I think it's going to be a pretty substantial blow to national unity. What I think -- I mean, whoever replaces General Zaluzhny is going to be faced with the exact same very difficult questions.

And so, while that individual may be able to, you know, have a somewhat better personal relationship with Zelenskyy, that's not really going to solve any of the fundamental questions, but it will hit Ukrainian national unity, and there will likely be protests against that move.

As you noted, General Zaluzhny is the only figure in Ukraine who's very clearly even more popular than Zelenskyy himself. And so, this does, you know, raise all kinds of questions about what it will mean on the home front for the morale of the Ukrainian people. And it doesn't seem to me like it does really any benefits for the Ukrainians there.

CHURCH: Right. And, of course, one of the potential replacements been talked about for the general if he is indeed officially fired, is Ukrainian Intel chief Kyrylo Budanov, who President Putin has apparently tried to assassinate on numerous occasions. But (INAUDIBLE) has a more positive message for President Zelenskyy about the war saying, Russia's offensive is expected to run out of steam by spring 2024. What evidence is there for that assessment?

ORR: Well, you know, I think that there it's -- I don't think that the assessment is necessarily accurate. I think that General Budanov, you know, has made, you know, over the past year or more, you know, some fairly optimistic statements about you know, when the war will end that haven't borne out. And so, I think that that doesn't necessarily, you know, bode well for his chances to get the job.

On the other hand, I think that there is definitely a chance that he will replace Zaluzhny, because what I think that the Ukrainians have to do to really do more damage to Russia to its entire war effort to its economy, to basically those support of the war within Russia, is they are going to have to do more strikes inside -- deep inside Russian territory, and that's something that General Budanov is actually kind of an expert. And that's basically one of the areas of Ukrainians war -- of the Ukrainian's war effort that he's been a leader and a specialist on.

[02:10:16]

So, in that light, that appointment would make some sense.

CHURCH: So, what more should we know about Budanov? And would he be the right man for the job if indeed he is the replacement?

ORR: Yes, I mean, it's certainly a good question, I think that you can make -- you can certainly make the argument that he's a good candidate. And I think that yes, the primary reason would be, you know, his knowledge of the Russians, of how the Russian war effort works, and really a broader strategic vision for how to achieve that.

On the other hand, right, his background is from the Special Forces and he's not necessarily a you know, an army general like General Zaluzhny or somebody with a lot of, you know, intimate understandings of the -- of the -- of the broader structures related to Ukraine's own recruitments and their procurement of weapons and so on and so forth.

So, potentially, other Ukrainian generals who are not from the intelligence agency, but are maybe you know, working more intimately everyday with Ukrainian army might be better candidates.

CHURCH: Matthew Orr, thank you so much for your analysis. Appreciate it.

ORR: Thank you.

CHURCH: About 400 former POWs are headed home after a major prisoner exchange between Russia and Ukraine. Both countries say around 200 troops from each side were released on Wednesday, President Zelenskyy says about half of the released Ukrainians took part in the battle for the city of Mariupol in the early days of the war, they held off Russian troops for weeks during a brutal siege of a local steel plant before surrendering. But their fight became a symbol of Ukrainian resistance against Russia's invasion.

It's been more than a week since a Russian military plane crashed in the Belgorod region near the Ukrainian border. And now, Russian President Vladimir Putin is calling for an international investigation and claiming the plane was shot down by U.S. made missiles. Take a listen. (BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): We asked to send international experts to conduct this analysis, to assess the existing physical evidence that the plane was shot down by the Patriot system from a specific place and at a specific time. I've already said at 11:10 a.m., two launches were made from the territory controlled by the Ukrainian authorities. We asked for international experts to come.

(END VIDEO CLIP)

CHURCH: He claims two U.S. Patriot missiles were launched from Ukraine and caused the plane to crash. Ukraine for its part has persistently said it will not use missiles donated by Western allies beyond its own borders, and Kyiv has not taken responsibility for the incident.

Moscow claims the crash killed 65 Ukrainian prisoners of war, who was said to be exchanged in a prisoner swap. Ukraine says there's no evidence any POWs were on board. And CNN is not able to independently verify claims by either side.

The U.N.'s key aid agency in Gaza is facing a crisis that threatens its very existence. The Israeli Prime Minister Benjamin Netanyahu is now calling for an end to UNRWA. He is also specifically accusing UNRWA officials of being complicit in the October 7th Hamas attack against Israel.

His comments come as Sweden joins a growing list of countries that have suspended funding to the agency after Israel's claimed that 13 staffers were involved in the massacre. U.N. Secretary General Antonio Guterres says the U.N. acted immediately to terminate the staffers and if UNRWA is shut down, the humanitarian situation in Gaza will become desperate.

(BEGIN VIDEO CLIP)

ANTONIO GUTERRES, U.N. SECURITY-GENERAL: I underscore the importance of keeping always vital work going to meet the dire needs of civilians in Gaza and to ensure its contiguity of services to Palestine Refugees. UNRWA is the backbone of all humanitarian response in Gaza.

(END VIDEO CLIP)

CHURCH: The World Health Organization's director general is echoing that sentiment saying the decision by major donors to pause funding for the aid group will, "have catastrophic consequences for the people of Gaza".

But the U.S. which is a leading donor for U.N. -- for UNRWA says before it resumes funding, there has to be a swift and credible review of the aid agency and it will have to undergo fundamental changes to prevent such an incident from happening again.

Well, meantime, the Palestine Red Crescent Society says the situation around Al-Amal Hospital in Khan Yunis remains precarious and the sounds of explosions and gunfire can be heard regularly from the hospital.

[02:15:14]

The PRC says this video was taken on Tuesday and the day after entering the complex, Israeli forces are still there, and snipers are on the roofs of the houses surrounding the hospital.

The aid group also says that even though the hospital's stock of fuel and medical equipment is low, the Israeli Defense Forces are prohibiting anyone from going out to the street even to retrieve the body of a Red Crescent employee who was killed outside the hospital door.

CNN cannot independently confirm these claims and has reached out to the IDF for comment.

Journalist Elliott Gotkine is following developments. He joins us live from London. Good morning to you, Elliot. So, what is the latest on UNRWA and Prime Minister Netanyahu has called for its mission to end?

ELLIOTT GOTKINE, JOURNALIST: Rosemary, to borrow a phrase from the U.N. Secretary General Antonio Guterres, Israel's antipathy to the U.N. broadly and UNRWA in particular isn't taking place in a vacuum. Israel and the United Nations have had a pretty touchy relationship for decades with the notable exception of the resolutions that brought Israel -- modern day Israel into being in 1947 and 1949. It reaches Nadera (PH) in 75 with a resolution equating Zionism with racism, something that wasn't repealed for 16 years.

And Israel will also point to other areas that it says show that the U.N. is against it, that is biased against it, such as the only country for which there is a standing item on the agenda of the U.N. Human Rights Council being against Israel.

When it comes to UNRWA in particular, Israel has always not necessarily had it in for the organization, but has always been unhappy with it because it says that UNRWA perpetuates the Israeli Palestinian conflict by conferring refugee status not just on those Palestinians that were displaced, when Israel was created in 1948, but also all of their descendants, keeping these or assisting these Palestinians in refugee camps, and holding out the promise that one day they may be able to return to their former homes in Israel, something that Israel says is never going to happen.

And so, what these allegations that Israel has presented to the U.N. and to the U.S. and others, which it says show that about a dozen staffers of UNRWA were complicit in the Hamas led massacre of October the seventh.

I suppose this gives Israel something of a smoking gun with which to say to the United Nations, to the U.S. and others that UNRWA simply isn't fit for purpose.

And so, we had Prime Minister Benjamin Netanyahu yesterday saying for the first time, that UNRWA should be disbanded, saying that I think it's time the international community and the U.N. itself understand that UNRWA under his mission has to end.

The problem for Israel, of course, is that there isn't necessarily anyone that can step into the breach. And we've heard from the U.N. Secretary General for Humanitarian Affairs, Martin Griffiths, saying that those people in the Gaza Strip, most of whom are now displaced and reliant on humanitarian aid for food, medicine, shelter, and the like. He says that UNRWA, they are completely dependent upon UNRWA.

And I suppose the problem from a humanitarian perspective is if it cannot continue its operations after the end of this month, as it says will happen if it doesn't find the financing the money to plug the gap that has now been created by the U.S. and others suspending its financing, then who or what will step into the breach.

And that's not just a concern from a humanitarian perspective, but also from Israel's perspective. It certainly doesn't want to take responsibility for two million Palestinians in the Gaza Strip if they're no longer able to receive humanitarian aid.

And so, I suppose it could be a case, Rosemary, almost of Israel, needing to be careful what it wishes for, because if UNRWA isn't there, it's not clear, it's not obvious what organization or who will be able to step into the breach to provide that much needed humanitarian aid to most of Gaza's two million Palestinians, Rosemary.

CHURCH: Our thanks to Elliott Gotkine for that live report from London.

Well, as the U.S. prepares its response to the drone attack on American troops. Iran is issuing a stern warning saying any threats made by the U.S. will not go unanswered.

That word from the chief of the Islamic Revolutionary Guard, just one day after U.S. President Joe Biden said he had made a decision on how to respond to the drone strike that killed three U.S. soldiers and injured dozens more. Iran pointed to the, "Words of American officials and the announcement Wednesday without elaborating further."

(BEGIN VIDEO CLIP)

GEN. HOSSEIN SALAMI, CHIEF COMMANDER, ISLAMIC REVOLUTIONARY GUARD CORPS (through translator): The common chapter between the U.S. and Iran is that we know each other, you know that we do not leave any threats unanswered. While we are not looking for war, we are not afraid of war, and we do not run away from it.

(END VIDEO CLIP)

[02:20:06]

CHURCH: The warning from Iran comes as the U.S. announces who it believes was behind that drone attack on a U.S. base in Jordan. CNN's Oren Liebermann has details from the Pentagon.

(BEGIN VIDEOTAPE) OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: The White House has now formally assigned blame for the drone attack on Sunday that killed three U.S. service members and wounded dozens more. They say they hold the Islamic resistance in Iraq responsible for that attack. That's not a specific group, but rather it is an umbrella of groups that are Iran backed, funded, armed and trained to some extent, and they say that group is responsible for the attack.

That group is also worth noting includes Kataib Hezbollah that is the most powerful Iranian proxy in Iraq. The U.S. has said they have their fingerprints on this Sunday drone attack.

It's also worth noting that on Tuesday, Kataib Hezbollah put out a statement saying they will cease their operations against U.S. forces in Iraq so as not to embarrass the government of Iraq. Asked about that statement, the Pentagon said actions speak louder than words. Putting in more than 160 attacks on US forces in the region, including a number of attacks after that deadly drone attack on Sunday.

It is this to which the U.S. is responding. The White House says it could be a multi-phased response. Meaning, not just targeting one specific group or one specific area, but something that we could see play out over waves, perhaps, even a number of days as the U.S. has made clear its response will be forceful.

When it carries it out in terms of timing or targets, the U.S. that is the Pentagon, the White House will only say the U.S. will respond in a manner time and place of its choosing.

Oren Liebermann, CNN in the Pentagon.

(END VIDEOTAPE)

CHURCH: According to U.S. Central Command American forces have carried out a new round of airstrikes in Yemen, this time against 10 Houthi drones and a drone control station. This is the latest in a series of attacks meant to destroy the weapons of the Iran backed rebel group before they can be launched at shipping lanes.

The strikes follow a close call in the Red Sea. We're told a Houthi missile came within a mile of a U.S. destroyer, the USS Gravely before it was shut down. That's the closest any Houthi attack has ever come to a U.S. warship.

Still to come, Washington lawmakers tear into social media executives calling for more protections for children online. Their response just ahead.

Plus, it's hard enough to make a living in Cuba now at astronomical fuel prices. What Cubans are saying about their hopes for their economic future, that's still to come.

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CHURCH: Welcome back, everyone. Top social media executives endured searing criticism on Capitol Hill Wednesday over concerns for children's online safety. The heads of X, TikTok, Snap, Meta and Discord testified about efforts to block material that hurts young people's mental health or exposes them to sexual exploitation.

[02:25:17]

One lawmaker called for justice and compensation for the families of teens who died as a result of online content. Some of them filled the room during the hearing adding to the tension, it was clear there was an urgency from lawmakers to address the issues. Here's what Minnesota Senator Amy Klobuchar had to say.

(BEGIN VIDEO CLIP)

SEN. AMY KLOBUCHAR (D-MN): When a Boeing plane lost a door in midflight several weeks ago, nobody questioned the decision to ground a fleet of over 700 planes. So, why aren't we taking the same type of decisive action on the danger of these platforms when we know these kids are dying?

(END VIDEO CLIP)

CHURCH: CNN's Tom Foreman has more details on the Senate hearing.

GRAHAM: But you have blood on your hands.

SEN. JOSH HAWLEY (R-MO): Your product is killing people. Will you set up a victim's compensation fund with your money? The money you made on these families sitting behind you? Yes or no?

TOM FOREMAN, CNN CORRESPONDENT (voice over): Mark Zuckerberg, founder of Facebook, whose company owns Instagram pushed into apologizing to families who say they were harmed by online content, some waving pictures of children who died or killed themselves.

It was an astonishing moment, yet the billionaire head of Meta dug in anyway.

MARK ZUCKERBERG, CEO, META: And this is why we invested so much and we are going to continue doing industry-leading efforts to make sure that no one has to go through the types of things that your families have had to suffer.

SEN. SHELDON WHITEHOUSE (D-RI): Your platforms really suck at policing themselves.

FOREMAN (voice over): Against a torrent of accusations from the Senate committee about enabling sexual exploitation, election meddling, fake news, drug abuse, and child endangerment, the heads of five tech giants tried to push back.

JASON CITRON, CEO, DISCORD: We very much believe that this content is disgusting.

LINDA YACCARINO, CEO, X: X will be active and a part of this solution.

FOREMAN (voice over): But the fury kept coming in a rare show of unity between Democrats.

KLOBUCHAR: One-third of fentanyl cases investigated over five months had direct ties to social media.

FOREMAN (voice over): And Republicans.

HAWLEY: Thirty-seven percent of teenage girls between 13 and 15 were exposed to unwanted nudity in a week on Instagram. You knew about it, who did you fire?

ZUCKERBERG: Senator, this is why we're building all --

HAWLEY: Who did you fire?

ZUCKERBERG: I'm not going to answer that.

FOREMAN (voice over): There was plenty of heat to go around as the tech bosses were scorched with claims their products promote anxiety, depression, and violence, especially among young people.

SEN. MARSHA BLACKBURN (R-TN): Children are not your priority. Children are your product.

FOREMAN (voice over): But no one was hit harder than Zuckerberg, whose attempts at defense at times were literally laughed at.

ZUCKERBERG: My understanding is that we don't allow sexually explicit content on the service for people of any age.

SEN. MIKE LEE (R-UT): How is that going?

ZUCKERBERG: You know, our --

SEN. CHRIS COONS (D-DE): Is there any one of you willing to say now that you support this bill?

FOREMAN (voice over): Many of the lawmakers are intent on overturning a longstanding federal law that immunizes those companies from lawsuits over user generated content and putting tough regulations in place.

KLOBUCHAR: It's time to actually pass them, and the reason they haven't passed is because of the power of your company. So let's be really, really clear about that.

FOREMAN (voice over): And while the tech bosses say they're happy to work on safeguards, skepticism ran rampant.

GRAHAM: Nothing will change until the courtroom door is open to victims of social media.

(END VIDEOTAPE)

FOREMAN (on camera): Sometimes in hearings like this, lawmakers seem like they just don't understand how tech really works. But they do understand human suffering. They know the political power of that, and they know how to count votes as one of them noted today, and big tech could be on the wrong side of the next one. And facing regulations like never before.

Tom Foreman, CNN, Washington,

CHURCH: And now to a different type of high tech threat, this time involving the Chinese hackers who target critical U.S. infrastructure.

On Wednesday, the FBI director told a U.S. House committee that hackers are waiting for their moment to destroy or degrade facilities like American pipelines, water treatment plants and the electrical grid.

(BEGIN VIDEO CLIP)

CHRISTOPHER WRAY, DIRECTOR, FBI: China's hackers are positioning on American infrastructure in preparation to wreak havoc and cause real world harm to American citizens and communities if and when China decides the time has come to strike.

(END VIDEO CLIP)

CHURCH: The Chinese government has previously denied allegations of state sponsored hacking.

Owning a car is a dream for most Cubans, but imagine spending more than your monthly income just to fuel it. Ahead, we will explain why Cubans are facing exactly that and why it's impacting everything else. Back in just a moment.

[02:30:00]

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CHURCH: The U.S. Federal Reserve is leaving interest rates right where they are for the time being, analysts did not expect the Central Bank to announce a carted (ph) Wednesday's meeting with rates at a 23-year high. Inflation in the U.S. continues to ease and many were hoping for a signal that a cut would come in March. But Fed Chair Jerome Powell says the economy has yet to achieve a soft landing.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIR: I am encouraged and we're encouraged by the progress, but we are not declaring victory at all at this point. We think we have ways to go.

(END VIDEO CLIP)

CHURCH: Stocks tumbled after the Fed announcement with the Dow losing more than 300 points, the S&P 500 was off more than 1.5 percent, the Nasdaq lost more than 2 percent.

Cuban officials say they are delaying their plan to increase the cost of fuel after a virus infected government computers. That 500 percent price hike had been scheduled to take effect on Thursday. But now, Cubans have a brief reprieve. Patrick Oppmann explains why fuel prices are going to skyrocket and how it is going to affect those people already struggling.

(BEGIN VIDEOTAPE)

PATRICK OPPMANN, CNN CORRESPONDENT (voice-over): Even before the sun comes up, people line up for hours in Havana to pump gas. The Cuban government owns every gas station on this island and says it will raise prices at the pump more than an eye-watering 500 percent. News of the massive hike triggered a run on fuel before the increase takes place, which is expected to further batter an already failing economy.

You don't need to have three neurons, one is enough to know this will be a disaster, he tells me. To fill up a car with 40 liters, it will cost 6,000 pesos. Most people don't earn that much in a month.

For decades, Cuba received oil donations from political allies in Venezuela and Russia, which are then sold its citizens at rock-bottom prices.

[02:35:00]

OPPMANN (voice-over): But as a communist-run island weathers the worst economic crisis in decades, Cuban officials say subsidies on gas are a luxury the government can no longer afford.

We are a country without fuel, he says, and we sell fuel at perhaps the cheapest prices in the region, some of the cheapest in the world. But when we raise the price of fuel, it is going to increase the cost of some services and the price of things. Already as fuel supplies dwindle, people wait for hours to hitchhike, and more and more commuters returned to riding bicycles. Others pushed to get onto the ever-scarcer public transportation.

With out-of-control inflation and the gas price hike, Cubans who only earn the equivalent of a few dollars a day may find themselves unable to afford a ride. Some Cubans say as transportation becomes more and more expensive here, it could actually cost more to get to and from work each day in the salary they bring home. An increase in fuel prices will also make it more expensive to transport food from the countryside to cities, a potentially precarious situation says this man who sells fruit and vegetables from a small cart.

Look, how we are right now, he says. People are being impacted. If it increases 1 percent more, people will go crazy in the streets. Cuba's socialist government has long said it protects the most vulnerable here. But a stagnant centralized economy, stalled reforms and increased U.S. sanctions are forcing more and more into extreme poverty. The government has warned additional price hikes and cuts in services are in store, many hope to be gone by the time that happens.

Lines outside foreign embassies grew longer by the day as more Cubans tried to immigrate before the island's economy hits rock-bottom.

Patrick Oppmann, CNN, Havana.

(END VIDEOTAPE)

CHURCH: South Africa's foreign minister says five more countries are joining the BRICS bloc. The current economic alliance includes Brazil, Russia, India, China, and South Africa. And now, Egypt, Ethiopia, Iran, Saudi Arabia, and The United Arab Emirates will become members Argentina declined an invitation to join. The group of emerging market economies will bring together the world's biggest oil exporter, Saudi Arabia, and the biggest importer, China. Some are expecting the expanded bloc two gradually shift to currencies other than the U.S. dollar to conduct trade. The BRICS countries have also discussed a possible common currency.

Still to come, Margot Robbie opens up about her recent Oscar snub for Best Actress, how the Barbie producer and star is moving forward, when we return.

(COMMERCIAL BREAK)

[02:40:00]

CHURCH: Right now, more than 14,000 sheep and 2,000 cattle are stranded in a ship off the coast of Western Australia in the middle of a heat wave. 15 days into its trip to the Middle East, the ship had to divert from the Red Sea because of Houthi attacks in the region. Now, it is backward started near Australia. A veterinarian and a cattle expert are on board the ship to make sure the animals are healthy and safe. And Australian authorities are organizing a quarantine for the animals, if they return to shore. Exporters are now weighing whether they should send the ship back out, this time, going around Africa.

Well, for the second time, actor Alec Baldwin has formally entered a not guilty plea to charges of involuntary manslaughter. This is in connection with the fatal shooting in 2021 on the set of the movie "Rust" in New Mexico. Similar charges against the 65-year-old star and producer were dropped last year. As part of the conditions of his release, Baldwin may not possess any firearms or drink alcohol, and must avoid contact with anyone who could testify in the case. If convicted, Baldwin could face up to 18 months in prison and a $5,000 fine. Cinematographer Halyna Hutchins died after a gun Baldwin was holding was fired on the set.

Well, if actor Margot Robbie thinks she was snubbed by not getting a nomination for Best Actress at the upcoming Academy Awards, she's not saying so. Many fans thought that she was guaranteed for a nod for playing Barbie in last year's blockbuster film, which was made by Warner Brothers, part of CNN's parent company. But Robbie told Hollywood trade publication Deadline, "There's no way to feel sad when you know you're this blessed."

She says the film's crew wanted to make something that they would shift culture, and she's proud of the movies impact. Barbie got Oscar nominations, including Best Picture with Robbie as she's recognized as a producer. Film maker Greta Gerwig also missed out on a nod for Best Director for the hit film.

And you're looking at live pictures now out of Brussels were farmers and demonstrators have gathered to protest ahead of today's EU leaders meeting. The farmers say they're not being paid enough and face unfair competition from abroad. They're hoping to press leaders to take action to address their concerns, and we will have a live report with more coming up next hour.

I'm Rosemary Church. "World Sport" is next, and I will be back in 15 minutes with more "CNN Newsroom". Do stick around.

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