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First Move with Julia Chatterley
SMIC, Chinese Chipmaker's Stock Falling On Fears Of U.S. Sanctions; Softbank Sinks Amid Claims Japanese Giant Bet Billions Of Dollars On Technology Options; U.K. Government Threatening Another No Deal, This Time On E.U. Trade Talks. Aired 9-10a ET
Aired September 07, 2020 - 09:00 ET
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[09:00:48]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York. I am Julia Chatterley. This is FIRST MOVE and here is your need-to-know.
SMIC smacked. The Chinese chipmaker's stock falling on fears of U.S. sanctions.
Softbank sinks amid claims the Japanese giant bet billions of dollars on technology options.
And Brexit is back. The U.K. government threatening another no-deal, this time on E.U. trade talks.
It's Monday. Let's make a move.
Welcome back to FIRST MOVE. Great to be back with you, and we have a show filled with technologies of the future today, including reimagining a
digital economy.
The world's first Minister of Artificial Intelligence is joining us. He comes from the UAE, and at a time when public trust in technology,
specifically in vaccines, is wavering, to say the least. Someone who says the best way to get COVID-19 herd immunity is literally to pay people to
take the vaccine.
Questions or comments, you can tweet me with those. My Twitter handle is at the bottom of the page as you can see.
In the meantime, it's Labor Day here in the United States, so stocks and bond markets are closed for the long weekend. A welcome respite, perhaps,
after a dramatic stock sell-off late last week, fueled, as I mentioned briefly there by rumors of large-scale buying in the options market. That
had pushed up measure of volatility, the so-called VIX Volatility Index or the fear gauge and pushed up stock prices for some of the biggest tech
names and suddenly everybody got spooked.
Sounds a little bit fishy or a lot fishy? Yes. Well, the so-called NASDAQ whale may have been caught. All the details on that coming right up.
For now though, let me give you a look at what we're seeing in Europe. Market activity always relatively muted on U.S. Holidays, so you have to
bear that in mind when you see some outsized moves, and it seems there's a reason in the U.K. specifically where Sterling is under pressure, spooked
by ultimatums over Brexit, political posturing or a real risk again of the U.K. not achieving a trade deal with the E.U.?
Probably all of the above. We've got the latest on that for you. For now, though, to Asia where the relentless tit-for-tat battle between the U.S.
and China continues. At the core of that once again, China's chip technology, and that's where we begin the drivers.
Shares of China's biggest chipmaker, SMIC plunging more than 20 percent in Hong Kong as the Trump administration considers restrictions on the
company. The move would bar American companies from selling products and technology to the firm, the same sanction as the U.S. imposed on Huawei,
and we all know how that's turned out.
Sherisse Pham is live in Hong Kong with more. Sherisse, you've assured us that it's SMIC, but you can give us the full definition of the company's
name here. What specifically are the authorities looking for here and what might the restrictions look like?
SHERISSE PHAM, CNN BUSINESS REPORTER: Yes, Julia, I can confirm that the acronym is pronounced SMIC, but it does stand for Semiconductor
Manufacturing International Corporation, or SMIC, which is China's largest chipmaker and shares, absolutely plunging in Hong Kong.
Secondary shares in Shanghai also dropping today after reports that the Department of Defense is reportedly by in talks with other U.S. agencies to
add SMIC to the entity list.
This is a U.S. trade black list. It's the same list that Huawei was added to and it has really crippled Huawei's business -- global business -- over
the last year or so.
So what could this mean for SMIC? Investors certainly rattled by the possibilities here, but what it signals, for sure, is that the U.S.-China
tech war continues to escalate, that the two countries are moving even closer to decoupling because Washington is really striking at the heart of
one of china's biggest global tech ambitions, which is to be self- sufficient in the semiconductor industry.
Semiconductors are computer chips and they power everything from computers to smartphones to televisions, to 5G networking equipment.
And so, if SMIC is added to this entity list, it would definitely deal a blow to China's ambitions to become self-sufficient in semiconductor
manufacturing and it could also give some of SMIC's rivals a leg up, the same way that has happened with Huawei's rivals who have also seen a little
bit of a boost after Huawei was added to the entity list and its smart phone business and its 5G network business suffered -- Julia.
CHATTERLEY: Yes, it is fascinating. Jeffries is saying here as much as 50 percent of SMIC's equipment comes from the United States, so it is the U.S.
that would determine their technological progress.
But speaking of rivals here, very quickly, Samsung winning a $6.5 billion 5G Verizon deal. Talk us through this because this is a clear distinction
between rivals Samsung and Huawei here. One's gain is another's loss, or vice-versa.
PHAM: Yes, absolutely. Samsung, of course is a South Korean technology giant. South Korea is a long-time ally of the United States. The United
States and the Trump administration would certainly want to see the United States' main carrier network to be so-called clean networks and to carry
chips that the Trump administration deems to be safe.
So namely those would be just coming from three companies. That would be Ericsson, Nokia and of course, Samsung. Now, Verizon already has some
Samsung kit in its network already, so it makes sense for them to also upgrade some of that technology using Samsung kit as well for 5G.
But this is a huge win for Samsung and the combined news of getting this, I believe, it was a $6.6 billion contract from Verizon, plus this reported
sanction against SMIC, all lifting Samsung shares in Seoul. They closed up, I think, 1.6 percent today and Samsung has already benefitted as well
against the technology sanctions against Huawei, because Samsung smart phones are also selling a little bit better in global markets where Huawei
has fallen off.
So like you say, one company's misfortunes definitely could be the fortune for another company, especially if that company is based in a country that
is considered to be a U.S. ally.
CHATTERLEY: Yes, I was going to say, not just companies, countries, too. Sherisse Pham in Hong Kong there for us. Great work. Thank you so much for
that.
Now, just another sign of the ongoing tensions in Mainland China, foreign journalists working for U.S. outlets have been hit by surprise new
restrictions. They've been handed temporary visas lasting around two months instead of the usual year-long ones and the new visas could be revoked at
any time.
David Culver joins us now. David, not just a story you're reporting on, you're directly involved in this story because you're one of those
journalists that now simply has a two-month visa.
DAVID CULVER, CNN CORRESPONDENT: It's a strange place to be reporting on this and dealing with it personally, too, Julia. Yes, no question. I mean,
that's how we watched this unfold. We knew that tensions between the U.S. and China were playing out amongst journalists as well.
As we've seen over the recent months, it has included expulsions, restrictions of visas and now, we're learning of new restrictions being
imposed by the Chinese.
So, what I learned firsthand was, as I went in for my press card renewal, which here allows you then to get a 12-month visa, normally, we were told
directly that we wouldn't be receiving that renewal. Not that they were denying it out right, but it was still in process and instead, they would
give us two months.
They gave us the date November 6th as to when our resident permits or visas would then expire, and that's not just me or CNN, it's several other
organizations, U.S. media outlets, including "Wall Street Journal" and Bloomberg.
Now, what that date signifies is the same date that the Trump administration has given to Chinese nationals working for state media
within the U.S., and now initially back in May, they were given 90 days, then in August, those 90 days up were and they were essentially given
another 90 days, not given a renewal, but essentially said we're going to review this, the U.S., that is, and determine whether or not they would
give those Chinese nationals a new visa.
Well, that still is in process and the Chinese have said that this is essentially their way to match that. They said we know it's you living in
uncertainty, referring to those of us who are journalists here because essentially, if the U.S. decides to kick out those journalists tomorrow in
China, China says they could do the same with us.
So it's wanting to match and equate that same uncertainty on both sides. However, they go on to say, the Chinese, that is, that they believe that
the U.S. is holding Chinese journalists as hostage in order to pressure China.
Of course, the U.S. has a very different take on this, Julia. They look at this not as Chinese journalists impacted, but as Chinese diplomats as one
U.S. official said, because essentially they believe they're working not for journalistic outlets, but propaganda outlets. That's how they label
state media.
So they're looking at this in different ways, which makes it really quite uncertain as to how they're going to come down on this and what that's
going to mean for us.
I mean, ultimately, we look at the impact of reporting here firsthand and you can and I can go back to where we were in January talking about the
outbreak of a then unknown illness, and we were able to track that early on.
And it wasn't just me, but the collective of journalists and my colleagues able to do that by being here on the ground in China. If that were to
change, I think it's really a danger for journalism all around -- Julia.
[09:10:35]
CHATTERLEY: Yes, a danger for journalists, and danger for people, too, for not getting the information that we require, David.
CULVER: Right.
CHATTERLEY: Important the equivalence point that you mentioned though, too, and them saying directly to you it's not about your reporting, this is
simply about what they perceive to be equal treatment of journalists in both countries by the respective governments.
David, great to have you with us. Thank you.
CULVER: That's right. That's what they stressed to us.
CHATTERLEY: Yes. Always so great to have you on. David Culver there. Thank you.
All right, the so-called NASDAQ whale has reportedly been caught. Softbank shares closing down seven percent in Tokyo after the FT and the "Wall
Street Journal" reported it was the Japanese company that had partially driven the relentless recent rally in tech stocks with outsized bets in the
options market.
Selina Wang joins me now. Selina, rather you than me. Can you explain what specifically was going on that fueled the tech stock rise and still created
some panic?
SELINA WANG, CNN CORRESPONDENT: Julia, that's exactly right. Softbank here is being called out as the NASDAQ whale that turbo charged this recent
rally on Wall Street driven by massive bets in these tech stocks.
Now, according to "The Financial Times," Softbank purchased roughly $4 billion worth of options tied to the underlying shares it had previously
purchased in Big Tech names such as Microsoft, Netflix and Amazon.
Now at play here are call options. These are bullish contracts that give investors the option to purchase a stock at an agreed-upon price so it
becomes profitable when that share price rises above that fixed level.
It seems so far that the strategy is working since reportedly, Softbank is sitting on some $4 billion worth of trading gains, but Julia, these are
unrealized gains and this is a very risky strategy. If we see this market pullback continue, that could mean big losses for Softbank.
Prior to that sell-off late last week, the S&P and the NASDAQ were pushing up against record highs. Softbank was also up about a third this year, but
now, on Monday plunging more than seven percent as investors react to this new strategy that Softbank is pursuing.
And Julia, according to "The Financial Times," this strategy has been deeply controversial, even within Softbank.
CHATTERLEY: Yes, it's quite fascinating, isn't it? But you know, when I look at this and what they've created in the Vision Fund and this idea that
they were investing in early stage technology, this is Softbank Mark 3 and it's a hedge fund basically. The point where you're investing in options to
try and boost your returns, you're a hedge fund.
WANG: This new strategy push into the options market is new territory. As you say, it really gives the perception that it is increasingly behaving as
a hedge fund taking on these massively risky bets.
Now, founder, Masayoshi Son has been steadily expanding his investment empire. We've seen the conglomerate move away from telecommunications
towards these private tech investments. They've made big bets on companies like WeWork and Uber, but that strategy has suffered majorly as a result of
this global coronavirus pandemic.
And now, we've seen the broader to make bets in the public markets. In August, Softbank announced that it was going to create a new unit dedicated
to public market investments.
Now, they're pushing that even further into the option markets, but it is really making investors uneasy. They're worried that there could be a
dramatic unwind in which Softbank brings the broader market down with them.
CHATTERLEY: Yes, particularly when you're doing options in this apparent size. Selina Wang, great job. Thank you so much for that.
All right, Brexit back in the news with the U.K. and E.U. hurling threats at each other.
British Prime Minister Boris Johnson reportedly planning to pass legislation that would undermine some key aspects of the already agreed
Brexit withdrawal deal.
CNN's Nic Robertson has all the details in London. It comes at a difficult time for the economy as well, Nic and faced with COVID. Are we suggesting
here that the U.K. could exit the E.U. -- or exit the transition arrangement with no deal at all on trade?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The Prime Minister said that as far as the talks go at the moment, and they're going into the
eighth round this week, that if there's nothing agreed by the 15th of October, so five weeks away, that's going to be okay with him.
There's no sense in pushing a timeline further out to get a deal. Let's make the best of it not having a deal. He said that will be okay for the
U.K. because it will effectively leave, he says, on terms similar to those that Australia has at the moment.
That may be stretching people's understanding of what Australia actually has in terms of a deal with the E.U. at the moment, but what the Prime
Minister is proposing here is a full back option that will be put into legislation called the Internal Markets Bill that will be published on
Wednesday, so we don't know precisely what's in it.
But what we understand is that that would undermine some of the agreement that he already has with the European Union, the Brexit deal, the leaving
deal.
[09:15:37]
ROBERTSON: The bit that's called the Northern Irish Protocols which handles goods and trade between Britain and Northern Ireland. Now, obviously it's
all the United Kingdom, but you have GB Mainland and you have Northern Ireland and there's a possibility that the E.U. rightly says and the
Britain rightly accepts that goods that go to Northern Ireland could go across that border into the South of Ireland.
So the agreement was that there would be checks when goods were leaving the U.K., not on everything, not all the time, and there would be Customs
Declarations either way.
So what the Prime Minister is doing now is saying potentially, he is going to throw that out of the window and the specter that that raises is,
therefore, the implication that you may end up with a hard border between Northern Ireland and the Republic of Ireland to the south, which is an open
border right now, which is what everyone wanted to try to avoid, which the Prime Minister says he wants to try to avoid.
He is raising the stakes. Is this him with a negotiating tactic ahead of the talks that begin this week? Is it partly to placate his own party? But
there is big push back from Ireland, from Irish politicians and nationalist politicians in Ireland who are saying this is a dangerous game, we're not
going to stand for it.
CHATTERLEY: Yes, political posturing, laying the ground for a compromise at home later on. Who knows, Nic? But some kind of agreement has to be reached
and so far, it's been pretty much deadlocked.
Nic Robertson, thank you for explaining, in London there for us. Thank you.
All right, these are the stories making headlines around the world. The U.S. Veterans Affairs Secretary denying reports that President Trump made
disparaging remarks about American troops killed in combat.
Robert Wilkie also told CNN that the President's previous comments belittling prisoners of war was just politics. The President has been on
defense since the Thursday report by "The Atlantic" alleged he referred to fallen soldiers as "losers and suckers," quote.
Wildfires have burned more than 800,000 hectares of California, more than any other year on record. State officials are predicting more fires in the
coming months if conditions persist.
Relentless heat is also not helping. Temperatures have reached 43 degrees Celsius in some parts of California on Sunday.
Typhoon Haishen is lashing South Korea with heavy rain and high winds as it moves up the peninsula. The storm made landfall early Monday after carving
a trail of damage in Southwestern Japan. Four people there are missing. It's the second major storm to hit the region in less than a week. Wow.
Look at those winds.
All right, still to come here on FIRST MOVE, a world first, the UAE, the only country in the world to have a Minister for Artificial Intelligence.
The Minister will be joining us after the break to explain.
And a spoonful of sugar makes the medicine go down, but could bribing people to take a COVID-19 vaccine be the key to herd immunity? We'll speak
to an expert who says it's the only way. Stay with us. We're back after this.
(COMMERCIAL BREAK)
[09:21:35]
CHATTERLEY: Welcome back to FIRST MOVE. From Amazon's Alexa to facial recognition on your phone, you need only look around to see how artificial
intelligence is changing our world.
Well now, PricewaterhouseCoopers has put a number on just how much it is changing things. The consultancy says AI will boost the global economy by
14 percent by 2030.
The United Arab Emirates seems to be a pioneer in this new economy. It's the only country in the world to have appointed a specific minister in the
government for artificial intelligence, and I am very excited to say, joining us now, His Excellency, Omar bin Sultan Al Olama, Minister of State
for Artificial Intelligence, Digital Economy and Remote Work Applications of the United Arab Emirates.
Minister, fantastic to have you on the show once again. Thank you for joining us. I don't think there's ever been a more important time to look
at the digital economy, to look at how COVID-19 is changing and putting pressure on traditional industry versus the rise of the digital economy.
Explain what your role involves today and how you see it progressing.
OMAR BIN SULTAN AL OLAMA, MINISTER OF STATE FOR ARTIFICIAL INTELLIGENCE, DIGITAL ECONOMY AND REMOTE WORK APPLICATIONS, UNITED ARAB EMIRATES: Thank
you, Julia. It's an absolute pleasure being with you, and as like you said, the world is changing and it really does not take much for us to understand
how different the world is today pre-COVID to what it used to be -- sorry, how different the world is today, post-COVID to how it used to be pre-
COVID.
The world right now is a world that we are in need of technology to actually to connect, to work, for us to be productive and as well to
transact. In the past, we had the choice of using technology or using traditional means, but we're seeing now that the shift is becoming
universal and the shift that's also, I think for us to go back to business as usual.
The UAE, our government believes that we need to be proactive rather than reactive and if we do work properly on planning and deploying technology in
a way that is responsible, we will have a better future created for generations to come.
So since my appointment in 2017, we have a model which has built for us a possibility for an artificial intelligence nation. We focused the first two
years in improving the capabilities that we have in the UAE, creating training programs, allowing people in the UAE to understand what artificial
intelligence is and be a part of its revolution.
So we created programs, for example, we call the AI Summer Camp to teach kids from different classes, and as well as university to code artificial
intelligence, to work with the technology that we enable.
We also understand that the biggest challenge that we have in government is something that we call ignorance in the decision making process.
If a decision maker is supposed to make a decision on deploying AI, without understanding the challenges and the opportunities and the ethical
applications of the technology, they might actually make the wrong decision.
So we also created the program to take a key decision maker from every single government entity and train him or her with the University of Oxford
in the U.K. to understand AI algorithms, to be able to audit them and to also look at how to rightly deploy these technologies.
The next step right now is to actually uplift the ecosystem, so we're working a lot on democratizing computer power and AI systems and
infrastructure for staffers in the UAE, for the government and for individuals, as well as researchers, mainly.
And we're thinking that this is going to actually improve our digital economy.
[09:25:13]
AL OLAMA: From a digital economy perspective, there's a lot of jobs that are going to be created because of the digital economy.
CHATTERLEY: Right.
AL OLAMA: There's also this notion that if we actually improve the digital economy, new jobs are going to be created and new industries are going to
be created and we're not going to just cannibalize from our traditional economy.
CHATTERLEY: I mean, that is the big fear here and this is talked about all over the world, when you see the rise of the digital economy, particularly
things like artificial intelligence and automation: jobs will be lost, jobs will also be created, but there's a skills gap between what's lost and
what's created.
Is that also what you're trying to do? Prevent that skills gap widening or even appearing at all?
AL OLAMA: Absolutely. The first thing we need to understand is there isn't a finite number of jobs. There's always new jobs being created and that
gives some sort of reassurance that people will find something to do.
But then there's another thing, which this is the role of government. We need to think about deploying AI in a way that does not just look gimmicky
or it is fun, but also provides value and has the least number of jobs lost.
So we have an equation in the UAE when we look at deploying AI in government. The delta is first, how much impact this deployment of AI is
going to have? The second is how many jobs are going to be lost or gained? And then third is how much money is going to be saved that can be
reinvested in reskilling and retooling people?
There is this important factor that we need to unroll which is governments exist to serve the people. Governments exist to provide better livelihoods
for them and we also exist to ensure that the future is better, not just to deploy technologies for the sake of deployment.
CHATTERLEY: Yes, and this is another critical component here as well.
I just wonder, because I read that amid the outbreak of COVID-19, you had the entire government working remotely, clearly in certain industries
working remotely is possible, in other industries, it's not.
I just wonder how you see that evolving -- the ability to work from home and that flexibility in the future, and particularly given I was in Dubai
late last year and we were talking about smart cities and cities of the future.
How do you think more flexible working going forward will perhaps change the way that we were initially thinking about smart cities over the coming
years?
AL OLAMA: So I think, Julia, the first thing is the new secret of attracting talent, of creating a more competitive economy is actually
quality of life.
Remote work is great, but remote work without actually compensating for talent to stay in your company is going to make the talent migrate to other
countries and operate from there and work remotely in your country.
What we are looking at is improving quality of life through our policies and programs as well. We do believe that because the UAE is situated in a
very unique region, we have over two million people within a four-hour vicinity of the UAE.
We also have cutting-edge infrastructure and we have a very young population, so 65 percent of people in our region are under the age of 35.
What that means is that we can become a hub of talent. We can become the place where talent from around the region and the world actually migrates
to work from the UAE, where we have good quality of life, where we have cutting-edge infrastructure and in general, the UAE is very accessible. You
can access any market and you can also travel to anywhere on Earth, post- COVID, hopefully, and you'll be able to get the best of both worlds. That's what we are investing big on.
We also want to ensure that more family cohesion. There's a lot more happiness and there's a lot more impact on the livelihood of the individual
that goes beyond just measuring productivity.
Productivity is important, we need to look at ways to measure productivity to help people improve and to understand how they can be better.
But instead of just looking at how you can come to the office and be in the office and lose the time in the commute, how can we deliver more? How can
we do more? But at the same time make people happier and give them more flexibility in their lives.
CHATTERLEY: Yes, it's fascinating to hear you speak at a time when many countries around the world are focusing more on domestic policies and
domestic talent. The UAE remains as open as ever.
Your Excellency, Minister, I'm going to leave it there. We've had some difficulties with interference with your shot, so I just want to apologize
for that, too. We will get you back soon because I've only scratched the surface of the conversations and the questions I have for you.
But for now, I want to say thank you. The Minister for the United Arab Emirates there. Great to have you with us.
All right, still ahead, Big Pharma makes a big promise. A report says, three top brands will always put safety first when it comes to a COVID
vaccine. More details next.
(COMMERCIAL BREAK)
[09:33:20]
CHATTERLEY: Welcome back to FIRST MOVE. It's Labor Day here in the United States, so Wall Street is closed for the long weekend, but that doesn't
mean there isn't plenty of business news to bring you, including three U.S. pharma giants reportedly want to allay any fears the public might have over
a new COVID vaccine.
According to the Wall Street Journal, Pfizer, Moderna, along with Johnson & Johnson are making a joint pledge not to seek approval for their vaccines
until they have been proven safe and effective.
A CNN poll recently suggested 40 percent of Americans wouldn't even want to get vaccinated even if the vaccine were free.
Our next guest believes people should be paid to take the vaccine. Robert Litan is nonresident senior fellow at Brookings and he joins us now.
Robert, fantastic to have you on the show.
You're simply saying we need to incentivize people with a cash payment, effectively, to make them take the vaccine?
ROBERT LITAN, NONRESIDENT SENIOR FELLOW, BROOKINGS INSTITUTION: That's right, and thank you, Julia, for having me on. The reason I suggested that
really as a Plan B is that Plan A, which is sort of public encouragement, may not work precisely because of the statistic that you just cited.
CNN says 40 percent of people have reservations about taking the vaccine. Actually, there's another poll that was out last week, "USA Today" that
indicated that only 33 percent would be willing to take the vaccine.
And so given all of that public hesitancy, we're going to need not only a broad public education effort, we're also going to need Dr. Fauci in
particular to bless the vaccine, because I think a lot of it -- there's a lot of skepticism right now about the F.D.A., and so I think people want
that additional assurance from Dr. Fauci.
[09:35:10]
LITAN: We'll probably need widespread assurance from the medical community that the vaccine is safe and effective. But even with all of that and with
public service announcements, et cetera, we may not get to the point where we have what's called herd immunity and that's the point where essentially
enough people have immunity that the virus starts to die down.
And I've done some calculations, very, very simple math based on Dr. Michael Osterholm, a leading infectious disease specialist who has appeared
on this show, and he suggested that we need at least 60 percent of the population to be immune, but no vaccine is going to be perfect.
So if you optimistically assume that a vaccine is only 75 percent effective, which is probably, as I said, optimistic, that means that 80
percent of the population is going to have to take the vaccine for us to get to herd immunity and we don't have normal, which means a life without
facemasks, a life without social distancing unless we get to that 80 percent level or something like it.
And given those reservations we talked about at the beginning, we're a long way from that goal, and that's why I ended up suggesting as a Plan B,
paying people to actually take a vaccine.
CHATTERLEY: It makes perfect sense. Let's talk through it then because you're saying $1,000.00 per person that takes the vaccine, but that you
don't get the money up front. You get a small piece of it simply because you want to encourage people to talk to their friends, talk to their
family, talk to their neighbors, and encourage them to take it, too.
And then once we reach that herd immunity level, you get the final chunk of the money. You're trying to incentivize people to get as many people to do
this and encourage others to do it as possible.
LITAN: You've summarized it perfectly. I want to be clear to the audience, the thousand dollars I gave was illustrative. It's my seat of the pants
judgment about what I think it will take to convert some of those people who are on a fence and may have reservations, but if you give them the
thousand dollars and with a family of four, that's $4,000.00.
To be given this much money, it may flip them and you can get up to that level of 80 percent, but only, as you said, if the money is put out in
tranches, so that you have an initial payment and then the last payment is contingent on the entire population reaching whatever national goal you
want to set.
CHATTERLEY: It's interesting. I'm just doing the math on how much this would cost. Let's say -- what -- $250 billion if you're going to get
everybody taking this vaccine. There will be people that look at this and say, hang on a second, isn't it actually just cheaper to use therapeutics?
If we managed COVID-19 better, let the people who want to take the vaccine take it, manage those that don't better and actually you don't have to
spend all of that money and try and incentivize people to take it. What's your view on that?
LITAN: Okay, well, that's a good question. We've had advances in therapeutics. We've had three of them so far and it's brought the mortality
rate down somewhat, but the COVID virus still seems to be at least five to six times more lethal than a seasonal flu, down from about ten times
initially.
And we can hope for more advances in therapeutics, but what if you don't get that? That's the whole reason we need the vaccine. In the absence of
really a quantum leap in therapeutics, we don't get life back to normal and we're not going to force people to take the vaccine.
I mean, Dr. Fauci has been clear about that and I think, we would almost have a political revolution if you try to force people.
So we're back to really paying people, and if it takes $250 billion or $265 billion to get back to normal that's a small price given the trillions of
dollars we've already paid for people to ease the economic pain of the crisis, and also we've got trillions of dollars of lost economic output
that we're going to miss if we don't get back to normal.
And so, if you add all of those trillions on the one side and ask people are they willing to basically accept a national increase in the debt of
$265 billion, I think our average person out there watching, whether they're a parent or they're at university or a Main Street business or Big
Business, they're going to say that's a bargain, for $265 billion, we can get our life back.
CHATTERLEY: Yes, I mean, you make a great comparison there with the stimulus payments and the ongoing that will be needed to support the
economy if we carry on like this.
I have about 30 seconds, but very quickly, have you had any official feedback on the view here? Is this something that the government is
considering?
LITAN: I've had no official feedback. I've had some good feedback on social media. I think the point of this interview is hopefully someone is going to
pay attention and make sure that Sanjay Gupta pays attention so he maybe he talks about it on one of his shows. I watch him all the time.
But seriously, this is an idea that has to get into the public domain. It's a Plan B, as I said, but it may have to be Plan A.
[09:40:03]
CHATTERLEY: Yes, that's why I wanted to get you on the show the moment I read this. It certainly struck a chord. Robert, fantastic to have you with
us. We'll get you back and we will discuss it again and hopefully we'll have a bit more official feedback on the prospects here as well.
Robert Litan there, nonresident Senior Fellow at the Brookings Institution. Sir, thank you for coming and joining us.
All right, coming up next on FIRST MOVE, the fight against counterfeit products. How one startup is deploying its technology to help people in
Africa and beyond in that battle, next.
(COMMERCIAL BREAK)
[09:43:39]
CHATTERLEY: welcome back to first move. In the battle against fake products, U.S.-based company, Sproxil uses mobile authentication technology
to help consumers detect counterfeit products in all kinds of industries, from things like medicine, to agriculture and beverages.
Our next guest founded the company in 2009 to tackle the problem of counterfeit medication in Africa. The continent accounted for 42 percent of
all cases of fake or substandard medication reported to the World Health Organization between 2013 and 2017. What a battle.
Joining us now, founder and CEO of Sproxil, Ashifi Gogo. Sir, brilliant to have you on the show. Thank you so much for joining us.
That's a huge challenge. As I mentioned, not just about medication, but about other industries, too. Just start by explaining how your technology
works.
ASHIFI GOGO, FOUNDER AND CEO, SPROXIL: Sure. Great. Thanks for having me. At Sproxil, we connect consumers with genuine product manufacturers by
placing a unique code on each product that rolls off the factory line that a consumer can use a cell phone to verify and make sure what they pull off
the shelf and buy actually came from the manufacturer as indicated on the packaging.
[09:45:01]
GOGO: And so by using the serialization and vast network approval devices, we are able to connect brands and consumers directly to make sure that
consumers are not ripped off when they walk into the pharmacy or other retail points.
CHATTERLEY: Wow. So you're working directly with the manufacturer. I'm assuming the manufacturer effectively pays for the ability to produce this
code, to have it scanned and for their own products to be identified as real.
GOGO: That is correct. And under some cases in some countries where they have regulated products, like heavily regulated products like
pharmaceuticals, the governments may step in and decide to make consumer- facing authentication a requirement for selling products in that market.
So a good example is Nigeria, where in 2008, 84 infants died from teething syrup that was tainted with chemicals found in antifreeze. They've been
battling counterfeit products for a long time and when we launched in Nigeria in 2010, the government eventually made it compulsory that for all
antimalarial sold in that country, they need to have a consumer-facing verification solution so that consumers can have some confidence in the
products that they are buying.
CHATTERLEY: Yes, I mean, the health risks here are clear whether we're talking about medicines or beverages, for example, alcoholic drinks.
Because I know now that you're working with some of the biggest beverage makers -- alcoholic beverage makers in the world now to try and improve
preventing fake products being sold under their brand names as well.
GOGO: Yes, it's a really interesting challenge, because in some of the African countries, the risk around counterfeit pharmaceuticals are
generally known because unfortunately, the side effects make the headlines.
But for counterfeit liquor, it's not generally known that there's a big problem. So it makes it hard for brands to elect to take the lead on that
messaging for fear of damage to the brand that they have built over decades. And so we've developed other ways of implementing anti-
counterfeiting programs without necessarily harping on the counterfeiting message.
So by using consumer rewards programs and similar approaches, we're able to implement anti-counterfeiting solutions for the beverage industry, titans
like Diageo that we service or Bacardi, without having to center the messaging on the counterfeiting risks.
And the consumer gets the benefit and the brand is able to move forward with the program as well.
CHATTERLEY: Yes, you make a great point as well that in certain cases, perhaps consumers are okay taking a substitute or a cheaper version of a
product. It's not necessarily about a counterfeit product, you have to incentivize them to buy the real thing here.
Are you profitable as a company? Talk to me about what it's been like because you were initially born in Ghana. You came to the United States and
you were educated here. How challenging has it been over the last ten years to build this company and gain recognition?
GOGO: It's been quite an exciting ride. We are profitable. We're self- sustaining. We have very interesting plans to grow. And the face of the company has changed significantly.
When we started off, we had most of our staff here in the U.S. solving problems that are domestic to people in different time zones, and we went,
wait a minute, you know, what if we could find people that are local to the problem and work with them to take this on.
And today, we have our workforce which is much larger overseas than it is here in the U.S., because we've been able to team up and find brilliant
people locally who are moving in the front lines, so deeper into the territory of counterfeiters in those markets.
So, it's been really exciting. We are still humbled by the nature of the impact that we have. You know, over 2.6 billion products, individual
product units, there is Sproxil's technology worldwide. Over 26 million people have benefitted from our work in just a short span of 10 years.
So it's been terrific and we're looking forward to even greater days ahead.
CHATTERLEY: Yes, there's nothing humbling about that. Fantastic to chat to you. Fantastic product as well and really great to watch it work. Come back
and talk to us soon, because again, not enough time always and plenty more questions for you.
Ashifi Gogo, the CEO of Sproxil. Great to have you on the show. Thank you.
GOGO: Thank you.
CHATTERLEY: All right, as the global economic recovery increasingly at risk and how may it be helped? We'll hear the thoughts from some of the world's
top CEOs, next.
(COMMERCIAL BREAK)
[09:51:41]
CHATTERLEY: Welcome back to FIRST MOVE. As talks over additional U.S. stimulus or financial aid drag on, the global economic recovery from the
coronavirus pandemic could take longer than expected.
CNN's John Defterios has been speaking to some high profile CEO's about their take on the situation and wishes for the coming months. John now
joins us.
John, some top CEOs indeed and some real concerns, I think, voiced.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Indeed, for that, Julia. And the near-term challenge of course is trying to get this package
done in the United States first, right, by September 30th and there's a huge gap between the White House and House Democrats of about a trillion
dollars. So they may have to go to a Plan B just to get something done by the end of the month on unemployment benefits, for example.
But the medium term, what surprised me about this roundtable is that all four that were there were suggesting that we have to look at budget cuts
already, much higher taxes and a debt burden that will kind of hover over the next generation of youth for years to come, Julia.
This is the Global Manufacturing and Industrialization Summit. Listen to the CEO of Honeywell and the others around the table. Pretty blunt
language.
(BEGIN VIDEO CLIP)
DARIUS ADAMCZYK, CEO, HONEYWELL: The bad news is that now we have an even bigger debt crisis, and frankly, that's been a problem before this crisis
even started. And now governments around the world are going to have to figure out a way to pay for this. And I think that's the part that a lot of
countries, a lot of businesses, have maybe taken not taken into the calculus, and I think that you're going to have to do that two ways. One is
through revenue generation.
KHALDOON AL MUBARAK, GROUP CEO, MUBADALA INVESTMENT COMPANY: I think we have to take that into consideration as we talk about a second wave and
third wave, you have to put it in the context, yes, it's going to happen, but also, I think there's going to be big progress and there has been big
progress when it comes to treatment and therapeutics and there is a line of sight when it comes to vaccines.
And then I would put on top of that that economies and governments have handled well so far, to a large extent, on the stimulus and the
intervention side, but that has a cost and the cost will catch up soon.
JEAN-PASCAL TRICOIRE, CEO, SCHNEIDER ELECTRIC: The governments have stepped up to the plate and trumped out the big crisis. My biggest concern today is
for the youth because all the productive measures have been rightly so to protect the characteristics of the elders in our societies, but at the same
time people who are getting punished or don't manage to get the drug potentially are the youngsters. They are the future.
JOE KAESER, CEO, SIEMENS: It is crucially important that we not only have billions and trillions of government money and stimulus, but also that this
money is going to be invested into the future and not into backward oriented industries.
They are not going to tie anyway if we are not mindful about the future today, we actually -- you know, for much of the future which we can design
entirely is truly important.
(END VIDEOTAPE)
DEFTERIOS: Joe Kaeser of Siemens rounding that, Julia. It is interesting, he was saying look, we have to be careful which industries actually get the
benefits going forward and this is a company that has what -- nearly 200,000 employees.
And if you look, it is fascinating how much money has been piled in. I hadn't seen the numbers for the last month or so, so if you take the top
five, all over 10 percent of GDP put into stimulus, we're looking at over $11 trillion.
The top three, the United States at 13 percent, then you have Canada at 15 percent of GDP and then Japan rising to 20 percent of GDP.
[09:55:20]
DEFTERIOS: But I think the sober notes from the global CEOs is this can't go on forever and even Steven Mnuchin over the weekend on the weekend shows
in the United States was suggesting, Julia that we can get something done until September 30th and roll that over and then come December, it's
somebody else's responsibility in a new presidential season, whether it's Donald Trump or Joe Biden. That's how delicate the subject is about piling
on more debt going forward.
CHATTERLEY: Yes, even those that can borrow at incredibly cheap levels are saying this can't be the answer forever. John Defterios, great to have you
with us. Great panel there, thank you so much.
DEFTERIOS: Thank you.
CHATTERLEY: All right, that's it for the show. I'm Julia Chatterley. You've been watching FIRST MOVE. Stay safe and we'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
