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Connect the World
EU to Order 180M Doses of Pfizer Vaccine Adapted to Omicron; British Finance Minister Speaks to CNN; Judge Overturns Purdue Pharma's Opioid Settlement; UK Breaks COVID Case Count Records Two Days in a Row; Kim Jong- Un Advances North Korea's Nuclear Program; Somali Refugee Elected to City Government in Italy. Aired 11a-12p ET
Aired December 17, 2021 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:00]
(COMMERCIAL BREK)
ANNOUNCER: Live from CNN, London. This is "Connect the World".
RICHARD QUEST, CNN HOST, CONNECT THE WORLD: Hello, warm welcome to "Connect the World" I'm Richard Quest in for Becky Anderson. The Omicron variant is
now making up the majority of Corona case virus in Scotland; over 51 percent of cases there are caused by the new strain.
And it's not just Scotland; the whole of the UK is reporting record numbers for a second day. In response to the regions case surge the EU is going to
audit tens of millions of doses of Pfizer vaccine has been adapted for Omicron.
The positive aspect of this variant so far, there are the number of lower number of people going to hospital, South Africa is now saying despite the
record number of cases, hospitalization rates are much lower. However, that's one side of the coin. The other side is an uptick in the number of
children who have been infected.
France is reporting a very high COVID infection rate in children age 6 to 10. Jim Bittermann is in Paris, Salma is in London. Jim, to you first why
this connection to children what do we know about it?
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the authorities here say that they're alarmed by the spread of the Omicron
variant, but also just the regular Delta variant and other forms of the Coronavirus amongst children and how quickly it seems to be spreading.
So they are considering the idea of providing urging people with young children to get them vaccinated from 6 to 10 years old. They're already -
they've already gotten clearance from the medical authorities to do that. It's just a question of whether that will be encouraged even further by the
government.
And there is a health defense council meeting going on right now. It's going to be going on we expect some announcements out of that. Perhaps this
one would be one of the Richard.
QUEST: Salma, there's barely seven eight shopping days left to Christmas. I was in the West End yesterday. In fact, walking into the office today, I
popped into a computer shop just round the corner, which would normally have been thronged. And it was empty.
SALMA ABDELAZIZ, CNN REPORTER: I mean, Richard, you know what it's supposed to be like this time of the year in London. It's supposed to be magical.
We're supposed to be spilling out of the pubs wearing our holiday dresses staying up late at holiday parties. None of that seems to be taking place.
Instead, it feels very much like a self-imposed lockdown.
I think everyone in the city has a case of the holiday blues. I can tell you I know so many friends already who've had positive tests or they've
been near someone who's positive and they've had to pick up their phone mom, dad, I'm not going to be home for Christmas this year. Yet another
year, you're going to spend Christmas without me.
It's really heartbreaking. Richard, it's really hard to deal with tens of thousands of new positive cases, just this week two record breaking days.
It's tough news, Richard.
QUEST: And Jim Bittermann in Paris, the way in which the travel restrictions you were telling me an hour ago about Italy and the
restrictions there. We know that France has pulled up the drawbridge across the channel, basically to non-essential travel or compelling travel, I
think is the phrase they use. It won't be long before there's basically you can't come here you can't go there.
BITTERMANN: Exactly. And there are several countries that have already imposed these kinds of travel restrictions within Europe, like European
travelers, for example, going to Italy, have got to either show proof of vaccination in order to get in or if they don't have proof of vaccination
they may be quarantined for five days when they arrive.
This is new because in fact, up until now, travel has been fairly unrestricted within most of the European countries. One of the things that
have got people alarm here is estimation by the health authorities that by Christmas here, Richard, there could be an occupation of ICU beds up to
4000.
There are currently about 5000 beds available in France and 2800 of them are occupied by COVID patients. And the worry is that by Christmas, it
could be up to 4000 which is getting very close to the limit Richard.
QUEST: Salma - the British Prime Minister Boris Johnson and his party lost an important by election yesterday that they shouldn't have lost. They had
a thumping majority in the tens of thousands. And with Christmas party scandal, there's a trust deficit for the Prime Minister.
ABDELAZIZ: Yes, I never thought I'd be talking to you about North stroke sure. But it's important because it's yet another hit for the Prime
Minister. It's yet another sign that he's just weakening that much more. His power is waning. This was supposed to be a guarantee Dorothy for 200
years an MP has been a conservative in that county now it's changed of course the Lib Dem winning.
[11:05:00]
ABDELAZIZ: And conservatives are blaming the Prime Minister. They're blaming his scandals. They're blaming these Christmas party allegations as
being the reason behind it. I heard one conservative lawmaker saying one more strike in your outboard because remember there was already a strike
earlier this week in parliament when nearly 100 Tory MPs voted against him now a second strike.
Look if MPs start worrying about holding their own seats, winning elections, keeping their positions of power, that's when they could start
to turn on the prime minister. And that's when you can start to see the potential of a no confidence vote Richard.
QUEST: Right. We will leave that there but before you go Salam do reassure me, that's a real Christmas tree you've got? You haven't been sneaking in
some fake Christmas tree. While no one was looking that has got real pine needles that will be difficult to brush up.
ABDELAZIZ: As a kid who did not grow up with Christmas, I insist as an adult on real Christmas tree nothing less Richard.
QUEST: Salma who is in London, quite right. Jim Bittermann who is in Paris we'll talk about Jim's Christmas decorations on another occasion. But to
you both thank you. As we continue now COVID-19 is surging, and the impact in the sports world is also considerable obviously as the holiday gets ever
closer.
In the United States, a growing number of American football players will miss games this week after testing positive for the virus in Montreal last
night as seen all too reminiscent of a year ago, a hockey game that was played in an empty arena. Here in England - the Premier League's announced
four more postponements on Thursday. And that takes the total to nine.
The business world also impacted. There's a clear wet in the financial markets, very grim day. London was up but on other - of its own I suspect.
The NASDAQ is up but the S&P is, as you can see, they're all over the place on global - global COVID concerns.
Here in the United Kingdom the government isn't mandating any closures. As Salma was saying businesses are being forced temporarily shut down because
of bookings and cancellations. And again, the holiday sector is feeling the pinch. Anna is with me how bad is it?
ANNA STEWART, CNN REPORTER: Pretty bad. You speak to hospitality, they're looking at bookings that just in the last 10 days been canceled up to 30
percent and expect that to get worse. So the big concern for businesses now is what is the government going to do?
Yes, they haven't imposed a lockdown. But where are all the people? People aren't shopping? People aren't going to restaurants? Lots of people are
canceling their plans. That's because there has been guidance from the government to work from home if you can, but also to limit your social
contacts.
QUEST: Right. Stay with me, don't go.
STEWART: I won't run.
QUEST: Don't run. I want you to listen to the interview that I did with the Chancellor of the Exchequer, Rishi Sunak, and yesterday because of this - I
asked him but bearing in mind what you've just said, I asked the chancellor, whether or not the British government would introduce more
measures Anna is here to listen and give us some thoughts afterwards. Have a listen to the interview with the UK Finance Minister?
(BEGIN VIDEOTAPE)
RISHI SUNAK, BRITISH FINANCE MINISTER: Well, I think it's important to recognize as the prime minister said earlier today that the situation is
very different to what we've done and encountered before that the government is not telling people to cancel things. It's not closing down
businesses.
But what we are saying is that there are easy and effective things we can all do to protect ourselves, for example, wearing masks, ensuring good
ventilation, and most importantly right now going and getting your booster because that is the best protection we have.
QUEST: And in terms of being in California, whatever the intention of the trip, it's now being derided back home. Do you wish you hadn't gone?
SUNAK: No, this is a long plan trip where I'm meeting with dozens of industry leaders and investors from the technology space to talk to them
about bringing investment and jobs and new products and services to the UK.
For example, I just met with a company that's morning that's trialing a new blood test for early cancer screening with the NHS. But of course, I
understand the concerns of businesses at the moment, given everything that's going on. That's why I've been in touch with hospitality industry
leaders today.
My team are hosting roundtables and talking to them, and it's why I've curtailed my trip. And I will be leaving earlier tonight. And I'll be back
in the UK tomorrow.
QUEST: On this issue of more support for particularly bearing in mind. Let's take for example France, which is basically a locked off the UK as
you'll be aware with new COVID restrictions. I understand you're an element of wait and see. But I guess I'm pushing you to say you are prepared to do
more, if necessary.
SUNAK: I'll say I think as we've demonstrated throughout this crisis, the government has always stood ready and willing to support the country as
required I think our track record on that is very good.
[11:10:00]
SUNAK: And the thing that we are most focused on now is for everyone to go and get their booster. We're in the midst of an unprecedented drive to get
boosters to as many people as possible, because that is our best possible protection against Omicron. And that's why there is an enormous national
effort. And I would urge everyone to go and do that.
QUEST: Can you understand, though listening to businesses, listening to that date, that they sort of feel left out on their own a bit. They're
feeling like overnight, mass cancellations at a time of the busiest time of the year, and then looking for further help.
SUNAK: I understand the concerns of the hospitality industry. And of course, that's why we have supported the industry continuously throughout
the pandemic. And what I'd say to everyone in the industry is there is support in place at the moment that can help, for example, this year, all
the way through to next spring, people are paying only around a quarter of their normal business rates bill.
So that's an enormous boost to cash flow. Secondly, the hospitality industry is still benefiting from a lower rate of VAT all the way through
to next spring as well. And thirdly, we have cash that we have provided to local councils, about a quarter of a billion pounds is still available, and
that can be distributed to companies as required.
And my immediate priority is to make sure that that money gets out the door to those who need it as quickly as possible.
QUEST: Now let's talk about the wider economy. The Bank of England raised rates, it - winter was coming. It came sooner than perhaps some people have
thought but it was there anyway. If you had been I know you're going to tell me that about the MPC is independent, but I'll go for it anyway.
If you had been on the MPC as a voting member, would you have gone with - and held off for a few more months?
SUNAK: Well, in - common with many other countries around the world, the UK is of course experiencing a period of higher inflation as we grapple with
many of the same global supply chain challenges as other nations. Now responsibility for monetary policy is of course that at the independent
central bank, it wouldn't be appropriate for me to comment on that.
But what I'd say is people should be reassured that the Bank of England's track record in managing inflation is very good. And also, we in the
government are also supporting families with a cost of living through the winter, most recently cutting taxes for millions of the lowest paid, which
will put an extra 1000 pounds in the pockets of those people over the next 12 months.
(END VIDEOTAPE)
QUEST: We can look at this as Anna is here still with me. We're going to look at this in various ways. We can look at it from there economically;
you know the situation is not good and politically were arguably even worse.
STEWART: Politically, this is the government under pressure from all sides, but particularly for the Conservative Party for Boris Johnson, as Salma was
mentioning for that by election that they've lost, but also for where she's seen that. He was in California when business groups are saying we need
help. What's coming next?
And so far, nothing but when you see that the chancellor is back in the UK, he is speaking to business leaders. They're hoping for action more than
worse. He said there that they haven't told people to cancel things. They haven't closed down businesses. But the real impact here is we're living in
some sort of de facto lockdown.
QUEST: Oh, look - I shall be sharing these pictures tonight on Christmas business. My journey in today - I took the tube and got off a mortgage and
there's no one there. And as I say I was in - up the road they're looking at computers, there's no one there.
STEWART: If you want to go to the opera this weekend, if you want to go to the ballet tickets have been handed back if you want to eat at the Ritz,
you can Richard, normally at this time of year everything is fully booked. London is emptying.
And that is a real big problem for companies, some of whom makes a third of their revenue for the year just around this festive season.
QUEST: We shall ignore the fact that we now know how Anna Stewart spends her time at the ballet, the opera and at the Ritz?
STEWART: I will invite you next time Richard.
QUEST: I'm not sure I like the opera. But look, I guess what I really am failing to fully appreciate in this country at the moment is, is just
Nicola Sturgeon says that the Omicron is now the dominant virus or variant. But we don't know where it goes from here.
STEWART: And this is the tricky part for economists for the Bank of England and for the government because what does this mean in terms of the economic
outlook? Because is this going to have a peak very soon? Will it result in hospitalizations? Will it result in further restrictions and less consumer
confidence after Christmas?
Remember that a lot of people are staying away but only for the next two weeks because they don't want to be in isolation for Christmas not least as
last Christmas was practically cancelled. So you can't really see beyond the next few weeks. So until we have more information it is pretty hard to
predict.
QUEST: And it's important to emphasize we're talking about what's happening here in the UK, but this can extrapolate to every other country.
STEWART: Salma said it is the canary in the coal mine and she is right. The UK is a fantastic example of what is to come for other countries.
[11:15:00]
QUEST: Good to see you.
STEWART: Nice to see you.
QUEST: --at the Opera or the ballet --
STEWART: --or the Ritz.
QUEST: --or the Ritz. I'll take you for lunch at the Ritz how about that deal?
STEWART: Deal? Well, we can't now.
QUEST: We can't. Yes, keep distance keep the distance not to wage. Alright, as we continue on "Connect the World" tonight Becky's probably wishing she
hadn't left it in my hands. Rising inflation, tumbling stocks and a collapse of the currency it's Turkey that's in the grip of an economic
crisis.
A landmark ruling in the U.S. opioid epidemic, a judge has overturned a settlement that protected the owners of Purdue Pharma and their fortune,
the author of a book that explores the family behind OxyContin.
(COMMERCIAL BREAK)
QUEST: Now U.S. federal judge has overturned Purdue Pharma's $4 billion opioid settlement. It was a deal to paid all outstanding lawsuits against
the bankrupt OxyContin maker. It gave its owners members of the Sackler family protection against civil litigation. The company has said it will
appeal against the ruling rejecting those terms.
To be clear the Sackler Family has never been charged criminally. And CNN's reached out to them for comment on this latest development. Patrick Radden
Keefe is with me, Staff Writer for "The New Yorker" Magazine and Author of the book "Empire of Pain".
The judge - the appeal judge - the federal judge overturning it and eyebrows were raised at this settlement, because it was a one and done all
in settlement. And basically the judges said you can't do it. It's not constitutional. The bankruptcy rules don't allow it.
PATRICK RADDEN KEEFE, AUTHOR, "EMPIRE OF PAIN": Yes, the peculiarity of this bankruptcy was that you had a company Purdue Pharma, which is a
privately held company owned by the Sackler Family, which produced OxyContin got in a great deal of legal trouble of thousands of law suits
and ends up in bankruptcy.
But the reason it was in bankruptcy is that the Sackler Family had taken $10 billion out of the company before pushing it into bankruptcy. And so
you had this kind of strange situation in which the company is bankrupt, but the family's sitting on the sidelines with this $10 billion they've
taken out.
What happened in the bankruptcy court was that the judge said I'm going to release the family from any future civil liability. And an appeals court
judge has looked at that now and said, I mean, rather, it's the district court in New York, a judge overseeing that has looked at it and said, no,
no, that doesn't make any sense.
They didn't declare bankruptcy themselves, so they shouldn't be released from any future liability by this bankruptcy judge.
QUEST: The interesting part is what was claimed in this agreement is that it got money to those who needed it. It reimbursed states for the money
that they had spent, and in a sense, it puts a line underneath it.
[11:20:00]
QUEST: --in this agreement is that it got money to those who needed it. It reimbursed states for the money that they had spent and in a sense that it
puts a line underneath it, but he agreed at the cost perhaps, of releasing the family, the Sackler family from liability. And when you take that away,
are we not just back to a morass of litigation for the foreseeable future?
KEEFE: Well, that's the interesting question. I mean, you know, there is a number here, which is around four and a half billion dollars, which is what
the Sackler family agreed to pay in order to help remediate the opioid crisis.
To one way of looking at things that is a large amount of money to another way of looking at things, it's really not. I mean, the cost of the opioid
crisis is in the trillions of dollars, the Sacklers will be walking away with vastly more money.
And so there are many people who are very unsatisfied with that and essentially thought that if they're going to pay a price, in order to be
able to just put this in their rearview mirror and walk away from all this litigation that the family is going to have to pay more.
I should say they have appealed; it is not clear at all, how the appeals court will rule on this ruling from yesterday. So it could be that this,
this bankruptcy deal does end up going through.
But right now, this is a real review from the judge who has looked at this agreement and found it wanting.
QUEST: I mean, to some extent, whatever the culpability of the family of the Sackler family, one can't blame them for sort of trying to do in the
sense, you know, if you're, if you're in the situation that they are in, or we're in, you do the best deal that you possibly can.
And that, arguably, was this particular deal. Is your criticism or your view here that the deal was wrong? Or that there's been an error in law or
that it should have been handled differently, do you think?
KEEFE: Well, I think there's two different points, and it's probably helpful to disaggregate them. One is a kind of narrow legal question,
right, which is, should a bankruptcy judge be in a position to issue a Get Out of Jail Free card effectively to people who have not declared
bankruptcy before that judge.
Is not an authority that a bankruptcy judge can have where you have half of the states in the United States suing this family? And a federal bankruptcy
judge says, no, no, I'm sorry, those lawsuits can't go forward. I've made a deal with this family, even though they never declared bankruptcy before
me.
So that's a narrow legal question. And the judge yesterday said, no, actually, that shouldn't be legal under U.S. law. And it was controversial
and somewhat exotic in the first place, that that was the idea in the settlement.
I think there's a bigger question here, though, which is a moral question, which is that this is a family that owned a company which produced and
marketed a drug in a deceptive way, a company that I think most people would agree has behaved very badly.
They've pled guilty twice if federal criminal charges, they helped precipitate a public health crisis that has killed more than half a million
people, the family made billions and billions of dollars during that time. So there's a broader question, which is, what is accountability? What does
accountability look like?
And most observers, including I should say, the original bankruptcy judge who signed off on this deal have indicated that from an accountability
point of view, most people found it pretty unsatisfying. The idea that the Sacklers would pay four and a half billion dollars, you released from any
future liability and essentially get to walk off into the sunset.
QUEST: The interesting aspect of that is because, as you'll hear in a moment, when I read the Sackler statement, they've not faced any criminal
charges. No member of the family has been convicted of a crime fractions relating to Purdue Pharma nor do they admit wrongdoing.
Because there are no if you like criminal proceedings, or nor have that been against the family, then the only avenue for I would say, recompense
retribution, whatever but whatever you want to say, would be through a civil claim, which is what this agreement stopped.
KEEFE: That's right. I mean, I should say that there have not been criminal charges filed against the family. That's not to say that there might not be
in the future. And in fact, that bankruptcy judge was not in a position to foreclose future criminal charges.
I should also say that some members of the family made an agreement to deal with civil charges by the federal government against them, not against the
company. They didn't acknowledge any wrongdoing. But they did pay about $200 million in order to address those. So yes, I think you're quite right.
Right now sort of civil avenues would be the only way to go. Go ahead.
QUEST: Just to jump in funding. Just to recap, I mean, after paying all this money, this family is still fabulously wealthy with untold resources
across many jurisdictions.
KEEFE: Well, they haven't paid the money yet, first of all, and second, when I say $4.5 billion dollars, they stipulated that they would pay that
out over nine years. Now they have an $11 billion fortune.
So if you look at the returns on their fortune, it's possible for them to pay that amount of money over nine years and probably not even touch their
principal. They can pay it and be richer when they're done paying than they were when they started.
[11:25:00]
QUEST: Good to speak to you Sir. I'm grateful to you for that. It's a fascinating case that has caused much misery around the world. Now, let me
just update on this. Last November Purdue pharma pleaded guilty to three felony offenses.
The Sackler family does not currently face any criminal charges. And no member of the family has been convicted of a crime that actions related to
Purdue pharma, nor do they admit wrongdoing in August during bankruptcy proceedings.
The former company President Richard Sackler said he believes his family and the OxyContin manufacturer bear no responsibility for the opioid
crisis. Omicron is sweeping Scotland; the epidemiologist will be joining us.
The fast moving variant implications on healthcare systems and the Turkish Lira is in big trouble. And it's not surprising when you do what the
government did in your move interest rates down the people in Turkey living through soaring inflation. - is with us after the break.
(COMMERCIAL BREAK)
QUEST: COVID cases are rising across Europe and Omicron is now the dominant virus variant in Scotland. Officials there say it accounts for 51 percent
of cases. And that means it's outpacing Delta.
Germany's similarly bracing for a fifth wave of Omicron infections. The Health Minister is predicting a massive challenge for the healthcare
system. France high COVID infection rates particularly in children as we're talking about earlier between six and 10 and the health officials reported
more than 300 cases.
[11:30:00]
Dr. Liam Smeeth is joining me via Skype. He is the Director of the London School of Hygiene and Tropical Medicine. Your latest model suggests the UK
could see more people admitted to hospital with Omicron then other previous, if the no control.
So Doctor, look, I get it that we don't know a lot. I understand that, but if we go through the things that we do know and without, without lapsing
into speculation, which we wouldn't wish to do too much.
We know from the Prime Minister and what Chris Whitty has said that numbers in the UK are going to go through the roof; raw nominal numbers are going
to rise dramatically. We know that it's not perhaps as for those who are boosted, it's not as bad. But even so higher numbers will mean greater
pressure on healthcare systems. Can we say that?
DR. LIAM SMEETH, DIR. LONDON SCHOOL OF HYGIENE& TROPICAL MEDICINE: Yes, I think we can definitely say both of those things. It's currently spreading
very quickly, really, from London outwards now reaching the roll, the rest of the UK, cases arising rapidly, we have the highest case numbers ever in
across the UK.
And while as yet that has not translated fully into high levels of hospital admission, we're pretty certain those will be coming, even if it is indeed
milder, and that remain speculative. But even if it's mild at the rapid spread, and a very high absolute numbers mean, there will be a lot of
hospital admissions.
QUEST: So from your reading and you've read extensively across the latest research from South Africa and the like, here I am. I'm 59. I've been
double vaccinated earlier this year, I've had COVID last year, and I had the booster by about six weeks ago, what is my risk?
DR. SMEETH: Well, you've done everything right in getting the booster and we know by six weeks, the full protection of that vaccine will have kicked
in, which is great for you. You are still at risk both of picking up the virus and of course passing it on to because you've had the three vaccines,
you will be personally quite well protected with we hope and think from severe disease.
And that's clearly important for you personally, and important for any health system, because it's the severe disease that hurts individuals and
hurts health systems. So you should be quite well protected. But you will still be able to contract the virus, you may develop a mild illness and a
bit more-- most importantly, you may well be able to pass it on.
QUEST: Now I'm lucky in the sense of I you know that the privilege of those of us who live in the advanced economies with medical care.
But if Omicron starts to as it is really spread in developing economies, where the population is unvaccinated are largely and vaccinated is the
severity of that, again, the numbers are going to be much more huge. And that will create a problem.
DR. SMEETH: Potentially, yes. And I know it's frustrating for everyone for me to stand here and say we don't know for certain what will happen. But
you're right, we should be deeply concerned about lower income settings, particularly those areas that have struggled to obtain vaccines and roll
vaccines out.
We really don't know in an unvaccinated population, particularly in older, more vulnerable people the full effects of Omicron whether it is indeed
mild, because the populations that have been affected so far have largely been previously vaccinated or have been younger.
QUEST: So taking all of this together, and again, it's unreal. Well, I guess what I'm trying to get to from you now is, is really your gut
feeling. When you look at it, and you see the numbers, are you sort of we're on the edge here. It may not be last year, the British prime minister
was right. We have vaccines; we have all sorts of things. But are you now seriously worried?
DR. SMEETH: Yes, I'm sad to say I am pretty seriously worried both for high income countries such as the UK where I think there's a very real threat,
that the size of the outbreak will be such that their health systems get overwhelmed and that that in itself is at a terrifying prospect.
And as you say, around the world, we know just how in fact, in fact, this is where it is. And it really could hit those low income settings very,
very hard indeed with such low resilience and health systems.
QUEST: And this is relevant to all countries. If you want to spend Christmas with loved ones family or friends and you want to make it on
Christmas Eve Christmas Day. Would you suggest caution now?
DR. SMEETH: I'd certainly suggest some caution I would do everything people can to get that third vaccine whenever it's available on wherever it's
available to them, carry on testing themselves. And yet appropriate caution, I'm afraid is the message of the day.
[11:35:00]
QUEST: Good to have you with us. I'm very grateful that you've come along tonight and taught us. Thank you. I wish you a good Christmas.
DR. SMEETH: Thank you.
QUEST: Now, the Turkish Lira is continuing to slump to new lows, the dollars up against the lira today it's going right after the central bank
cut interest rates for the fourth month in row inflation at an annual rate of 21 percent.
Central bankers should be raising a rate at least that's the orthodoxy. The Turkish president champions the unorthodox opinion that rate cuts are the
solution. Now, look, obviously I come to this from Quest means business.
And we know that there is an absolute relationship between asset values because of the premium of a higher interest rate. So when your rates get
cut, the currency will suffer. And essentially, it's hard. Stocks are sharply down trading was suspended.
It's a toll on what people are working. Mohamed El-Erian is the Chief Economic Adviser of Allianz described as disorderly depreciation is with me
now from Cambridge. And now - it is bizarre.
I mean, we've got we have got orthodox Central Bank's raising rates in the UK, tinkering with tightening in the U.S. fiddling with tightening
preludes. But lowering rates in Turkey make any form of economic sense in any realm that you understand.
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: So first, for Turkey, there are all conditions under which cutting interest rates can promote a
better economic outcome.
But Turkey is not in that world. Right now, what Turkey is in the midst of is a self-inflicted currency crisis that today, we started seeing what's
called contagion, which means a bad thing happens here, and it contaminates other things.
So this is a currency crisis that if Turkey is not careful, will develop into full scale economic crisis, with lots of livelihoods being hurt.
QUEST: The president, central banker, the treasury that don't seem to care, I mean, in sense of there seems to be some other hasn't yet unknown policy
that's being pursued here.
EL-ERIAN: Yes, and it's a puzzle to people, because not only is the economics clear on this, but the evidence on the ground is pretty
convincing. This currency has lost half its value. That's means high inflation that means purchasing power of the Turkish people is being
eroded. And in addition to that, we are seeing disorderly volatility today alone, Richard today alone, the currency traded in a 10 percent band that
is enormous. And that in itself causes damage.
So people are scratching their heads as to what will it take until Turkey realizes that it needs to stabilize its foreign exchange markets.
QUEST: I need to talk about the more orthodox central banks. The Bank of England raised rates a smidgen against the Omicron variant, the markets are
absolutely the U.S. markets are having been buoyant, are now going through a tear what's going on in the U.S. markets?
EL-ERIAN: So a lot is going on in the U.S. market and our different interpretation, I'll give you my interpretation. The U.S. market is
realizing that inflation is going to be higher and more consistent than many expected, including the Fed.
The U.S. market, in my opinion, is worrying that the Fed is about to make a policy mistake by going too slowly, initially, in easing his foot off the
monetary accelerator and then having to slam on the brakes next year.
So they're starting to worry about not just high inflation, but also growth in the future. Now you see that very clearly in the bond market, and you're
starting to see it in the currency market in the stock market.
QUEST: Do you believe that J. Powell's - I mean, I listened to his statement. I listened to the press conference. He's basically saying, you
know, we think there is time on our side. Do you think there is time on their side?
EL-ERIAN: No, you know, I've been arguing for a long time that inflation is not transitory. Chair Powell finally retired that word a few weeks ago, it
took way too long. And in the meantime we lost that huge window where they could have started taking action without hurting the economy. Now that
window still exists, Richard, but it's very narrow.
[11:40:00]
EL-ERIAN: And I don't think they're going fast enough. And I worry that that window is going to close on them. Just think of what we just heard on
Omicron. That also has an impact. So they should have moved earlier. Late is better than never. But they have to move faster now, because they are so
late.
QUEST: Do you think that there is something very nasty waiting to happen in the markets?
EL-ERIAN: I hope not. But there is something potentially nasty that could happen to the economy, and therefore can happen to the market. And it's a
word that you don't like hearing called stagflation. The growth - inflation goes up.
QUEST: I was talking about stagflation with your six months ago. We've got it in the UK. Nobody wants to admit it. But look at the UK, the Bank of
England says inflation will be 6 percent growth is virtually zero by in Q4, even if you get 1 percent of growth a half a percent. De facto you've got
stagflation.
EL-ERIAN: Right. And why is it that no one wants to admit it for two reasons. One is we don't have good policies to deal with stagflation. And
two is the marketplace hate stagflation because you get hit on both sides. So people are like talking about it.
I view it as a risk, not the baseline. I have to stress. It's a risk. But it's a risk that's growing in importance.
QUEST: Yes, but it's the same sort of risk that deflation was after the great financial crisis. It's sort of the specter hovered around. And it
hovered around with sufficient force, that it did impact economic activity.
EL-ERIAN: And we are seeing behaviors change. It will be a tragedy, Richard, if we repeat the mistake coming out of the global financial
crisis, which is we win the war. The war then was against the global depression, the war today is against COVID.
But we end up of not establishing the peace of high inclusive and sustainable growth. And I worry that if we're not careful, once again, we
will win the war, but failed to establish the peace and then and then we lose more resilience for the future. So this is a critical time policy
wise.
QUEST: Excellent to talk to you about, I promise you before the - we will talk more cheerfully. I promise you, we will, but good to have you with us
tonight. North Korea's leader is marking his own anniversary, Kim Jong earned as a decade of iron fisted rule. Now you really have to say how much
we are.
(COMMERCIAL BREAK)
[11:45:00]
QUEST: It is 10 years since the death of the North Korean leader Kim Jong Il, his son and the current leaders Kim Jong-Un and today observed the
anniversary it was a solemn ceremony in Pyongyang.
Like his father, Mr. Kim has ruled North Korea with an iron fist. But he's also inherited his father's problems, which includes a struggling economy,
which is further isolated by sanctions and now the pandemic.
Kim Jong Un's nuclear program is getting the attention of the world of worry. But he's also made big diplomatic waves by meeting with leaders of
China and the U.S. Paula Hancock's the decade in power on what could be ahead.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN CORRESPONDENT (voice over): October 2010, Kim Jong Un was introduced to the world as North Korea's heir apparent a warning to
expect another dynastic succession of the Kim family. The following year in December, Kim Jong Il died and his son took control.
JOSEPH YUN, FORMER U.S. SPECIAL REPRESENTATIVE FOR NORTH KOREA: I was in State Department when we heard Kim Jong Il had died, his father died and we
thought goodness is this? Essentially what 25 year old is taking over 26 year old taking over and you saw him kind of looking bewildered as he
walked by the horse. HANCOCKS (voice over): Speculation of instability or an opening up by a leader briefly educated in the West soon died down once purchase began as
Kim consolidated power.
YUN: We saw him you know, essentially having his uncle who was almost like a reagent being executed, someone rarely executed. And then of course few
years later, his older half-brother being killed assassinated in an airport in Kuala Lumpur.
HANCOCKS (voice over): Kim Jong-Un oversaw more nuclear and missile tests than his father and grandfather combined over the past 10 year's intense
development and launches making North Korea far more than just a regional threat.
ANKIT PANDA, SR. FELLOW, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Many of the developments that we saw North Korea complete during Kim Jong Un's
tenure so far were initiated by his father and his grandfather. So there is a story here that involves all three Kim's.
But certainly Kim Jong Un will be remembered in North Korea for crossing the most important threshold, which includes bringing the United States
into range with ICBMs.
HANCOCKS (voice over): Intercontinental ballistic missiles, a new version paraded just last year. In January of this year, at the eighth party
congress, Kim Jong Un announced his weapons agenda. Hypersonic missiles submarine launched ballistic missiles among them testing this year reported
to be from that very wish list.
PANDA: If I were in North Korea, I would focus on doing one thing or two things or three things and doing those well. But what we see in North Korea
is really more than 10 around 15 potential nuclear delivery systems under development. It's really remarkable.
HANCOCKS (voice over): Tense exchanges between Kim and then U.S. President Donald Trump brought the potential are closer to military confrontation
than it had been in years. Both sides blinked and more than a year of unprecedented diplomacy and shoot, Kim achieving what his predecessors
could not meet a sitting U.S. president.
UNIDENTIFIED MALE: He appeared quite confident talking with Trump, one on one as a leader to leader. And also you saw him doing things that you don't
normally expect a communist dictator to do which is he was walking around that Marina area, kind of waving at people and taking selfies.
HANCOCKS (voice over): Three meetings with former President Trump five with China's leader Xi Jinping and three with South Korean President Moon Jae-
In. Kim Jong Un is well established on the international stage.
DUYEON KIM, SR. FELLOW, CENTER FOR A NEW AMERICAN SECURITY: I think he's really tried hard and pretty much succeeded in trying to be perceived as
this normal leader of a normal country. And not really putting his stamp his mark on old policies.
HANCOCKS (voice over): His pledge to revive the economy however remains elusive. International sanctions and closed borders due to the COVID 19
pandemic have crippled the country already considered one of the worlds poorest.
The U.N. said this year around 40 percent of the nation's suffered food insecurity before the pandemic and that has only increased. Adverse weather
and bad harvests pushed Kim Jong Un to admit this year "the people's food situation is now getting intense".
CHEONG SEONG-CHANG, SENIOR FELLOW, SEJONG INSTITUTE: The biggest difficulty North Korea is facing now is that even North Korea doesn't know how long
this isolated situation will last.
HANCOCKS (voice over): Kim Jong Un's health has kept experts and intelligence agencies guessing South Korea's National Intelligence Service
told lawmakers Kim has lost some 20 kilos 44 pounds that appears healthy.
Photos over the span of recent months show a significant change assumed health scares earlier in the rain sparked fevered speculation of who might
succeed him that has now come down.
[11:50:00]
YUN: Now I see him there beyond 10 years 20, 30, 40 years. And assuming his health holds up.
HANCOCKS (voice over): 10 years into his rule sole spy agency says it believes Kim is beginning his own brand of self-idealization, removing the
photos of his predecessors from a key meeting and starting a new concept called Kim Jong Un ism.
KIM: Our people first our nation first self-reliance, really trying to differentiate himself from his father and grandfathers.
HANCOCKS (voice over): And metaphorical coming of age, his predecessors introduced their own isms at a certain point assigned Kim Jong Un is just
starting to stamp his style on the country, he inherited. Paula Hancocks, CNN, Seoul.
(END VIDEOTAPE)
QUEST: It is "Connect the World". I am Richard Quest in for Becky. As we continue tonight, he made the treacherous journey from Somalia across the
desert in a sea in search of a new life. Now waves into the adopted country of Italy, inspiring other migrants with his story of success.
(COMMERCIAL BREAK)
QUEST: So as we mark International Migrants Day tomorrow, which is December the 18th, allow us to reflect on the plight of the hundreds of millions of
migrants around the world. The scores of refugees who fled across the Mediterranean only face dangers at sea.
They always have a difficulty adjusting and of course, being accepted in your countries. Now Ben Wedeman reports. One migrant is using his role in
local government to help others.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN CORRESPONDENT (voice over): Today, Abdullahi Ahmed walks with corridors of power, local power as an elected member of Turin City
Council. This 33 year old - Somali has come a long way since 2008 when he stepped ashore in Italy after a perilous seven month journey across desert
and sea.
I arrived here when I was 19 years old; he says without a family I didn't know Italian. I didn't know anyone here. Under the gaze of the ones high
and mighty in the - Turin City Council, Abdullahi insists migrants shouldn't shy away from public life.
I've always believed you can't be a foreigner forever, he tells me. You have to become a well-informed active citizen working for the future of
your city and society.
[11:55:00]
WEDEMAN (voice over): Abdullahi wasted no time, he became fluent in Italian founded an NGO to help raise awareness about the challenges facing migrants
wrote an award winning book about his experience helped his siblings complete their higher education back in Somalia and ran for local office.
Not bad for one Stranger in a Strange Land. In recent decades, Italy's migrant population has grown dramatically changing along the way what it
means to be Italian. Something to Pakistan born community activist Adnan Malik-Sher and friend of Abdullahi knows only too well.
ADNAN MALIK-SHER, PAKISTAN-BORN COMMUNITY ACTIVIST: One Italian shouldn't be like black or one Italian should be like brown, one Italian should be
white? Why not?
WEDEMAN (voice over): Tunisian born Baker may save voted for Abdullahi in the last local election. Now we're going to give you something to do, he
tells Abdullahi. 32 years in Italy Hamid - sees the presence of a migrant and local government as a step forward.
Now maybe our voices will be heard Hamid tells me in the past we weren't heard at all. Finally, new Italians are starting to raise their voices are
being heard. Ben Wedeman, CNN, Turin, Northern Italy.
(END VIDEOTAPE)
QUEST: For where you go a huge network of privately runs spying firms is snooping on influential people around the world. Well, source says
Facebook's parent Meta and the University of Toronto, is not by government instead matter in the UoT says seven surveillance for higher groups from
China to Israel, spyware and fake social media accounts keeping an eye on politicians, journalists and dissidents in more than 100 countries.
Matters as it took down hundreds of fake Facebook and Instagram accounts notified about 50,000 people who have been targeted. I can save you the
effort to send me an email and I'll tell you what you want to know about me. And that is our program for tonight "Connect the World". "One World"
with Zain Asher is next.
(COMMERCIAL BREAK)
[12:00:00]
END
