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First Move with Julia Chatterley

El Salvador becomes First Country to Accept Bitcoin as Currency; Demonstrators Take to the Streets of Brazil on Independence Day; China's Imports and Exports Surged Despite Fears Over COVID. Aired 9-10a ET

Aired September 07, 2021 - 09:00   ET

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

[09:00:17]

MAX FOSTER, CNN INTERNATIONAL ANCHOR: Live from London, I'm Max Foster in for Julia Chatterley. This is FIRST MOVE. Here is what you need to know.

Legal tender, El Salvador becomes the first country to accept Bitcoin as a currency.

Brazil protests. Demonstrators take to the streets on Independence Day.

And trade record. China's imports and exports surged despite fears over COVID.

It is Tuesday. Let's make a move.

Well, U.S. markets set to reopen the business after that Labor Day holiday. Futures are flat over concerns about the delta variant though. Goldman

Sachs has downgraded its U.S. growth forecast cutting the GDP outlook for this year to 5.7 percent down from six percent.

Meanwhile, Bitcoin is down as El Salvador becomes the first nation to adopt the cryptocurrency as legal tender.

Here in Europe, stocks are trading mostly lower ahead of a European Central Bank meeting on Thursday. Shares of Deutsche Telekom are up after it

reached a share swap deal with SoftBank to increase its stake in T-Mobile.

In Asia, stocks mostly closed higher. Japan's Nikkei gained nearly one percent whilst the Shanghai Composite Index rose 1.5 percent. China's

exports unexpectedly jumped last month despite a COVID outbreak that closed coastal ports.

We can get to the drivers now for you though. In a remarkable move, El Salvador has just become the first country in the world to accept Bitcoin

as legal tender. It says the move will give people greater access to banks and their finances, but not everyone is convinced.

Rafael Romo is with us. An extraordinary move -- Rafael.

RAFAEL ROMO, CNN CORRESPONDENT: Indeed, Max, the government of El Salvador has invested $203 million in infrastructure to install ATMs that will be

available around the country where people will be able to exchange Bitcoin for dollars and the other way around.

The Salvadorian National Assembly has also created a fund of $150 million so that there is money readily available if people want to exchange their

Bitcoin and even though the law went into effect today, the reality is that there's a small coastal village in El Salvador that has been using Bitcoin

for several years.

(BEGIN VIDEOTAPE)

ROMO (voice over): On the southwestern coast of El Salvador --

UNIDENTIFIED MALE: El Zonte is kind of a sleepy beach town.

ROMO (voice over): Lies a rocky beach that has been attracting surfers from around the world for decades. It's not the kind of place where you

would find luxury resorts, but the coastal village of about 3,000 has begun a small financial revolution that has the potential of reshaping the world

economy.

For the last several years, an increasing number of people at El Zonte have been using Bitcoin as their main currency for daily transactions.

MICHAEL PETERSON, DIRECTOR, BITCOIN BEACH: You can pay your car insurance or your school tuition, and they can pay in Bitcoin.

ROMO (voice over): Michael Peterson is an American who has been living in El Zonte for eight years. Peterson first traveled here as a surfer in 2004.

Now, he is the director of Bitcoin Beach, a locally led initiative supported by a U.S. based nonprofit organization.

Peterson says the initiative has a dual purpose, developing the community and promoting Bitcoin.

PETERSON: This isn't a business for me, it's just something that loses money for me. Now, I have a business in the U.S. that supports my needs,

but I just have a love for the community here and a real belief that Bitcoin can really impact the life of those that are unbanked and those

that are at the bottom rungs of the economic ladder.

ROMO (voice over): Peterson is not the only one who is betting that Bitcoin will alleviate El Salvador's endemic poverty.

Nayib Bukele, the millennial President of El Salvador successfully advocated for a law making his country the first to adopt the

cryptocurrency as legal tender.

Venezuela launched the cryptocurrency three years ago called Petro that was backed by the country's reserves and natural resources.

ROMO (on camera): The case of El Salvador is unique in that it's the first country to make Bitcoin legal tender. Here in Mexico, for example, the

country's Central Bank issued a warning over the summer saying cryptocurrencies pose inherent risks, and that dealing with them is not

legal under current law.

This means that banks are not allowed to trade or offer any transactions with them.

ROMO (voice over): Some small business owners in El Salvador like this baker who makes a living selling sandwiches on the street, say they like

Bitcoin because it gives them an alternative to make money.

"It truly isn't difficult to deal in Bitcoin at all," he says.

Not far from there. This owner of a tortilla shop says she prefers cold hard cash.

[0:05:10]

ROMO (voice over): "It's something new and we don't have enough information about it," she says. She is not alone.

Hundreds of Salvadorians recently took to the streets to send an unequivocal message about cryptocurrencies. "They're trying to change the

whole country into a casino where those who can afford it, like the Bukele family can get in and play," he said, "El Salvador is not a casino."

Back in El Zonte, Peterson says people shouldn't see Bitcoin as a threat, but an opportunity.

PETERSON: I think they get it backwards. This is what Bitcoin actually fixes. Bitcoin will bring these opportunities to young people, so they

don't feel like they have to go to the United States in order to feed their family, they can develop a successful business here.

This deters people from entering the gangs because a big reason people enter the gangs is because they feel like there isn't other opportunities

for them.

ROMO (voice over): He warns, though that adopting Bitcoin doesn't mean that El Salvador's problems like poverty and gang violence are going to

disappear overnight. But he hopes it will empower those at the bottom of the economic ladder in the smallest country in Central America.

(END VIDEOTAPE)

ROMO (on camera): And Max, as part of this launch, the government plans to install as many as 200 ATMs around the country to exchange Bitcoin for

dollars and vice versa.

This morning, President Bukele informed they had to temporarily disconnect the app to exchange Bitcoin for dollars due to what he described as a

relatively simple problem. The government of El Salvador acquired 400 Bitcoins equivalent to just over $20 million.

Max, back to you.

FOSTER: Yes, it's fascinating. Thank you so much, Rafael. Keep across that one. See how it works out.

Meanwhile, in the same region, Brazil's Independence Day is being marked by a series of planned rallies for and against President Bolsonaro. He is

expected to lead demonstrations against the country's voting system in front of the Supreme Court.

Isa Soares is following that for us, and this is really a demonstration to show that despite his approval rating, he does still have that hardcore

support, doesn't he?

ISA SOARES, CNN CORRESPONDENT: Spot on. Hi, Max. Yes, I think what we'll see will be very large crowds, despite the fact that his base is dwindling,

that his approval ratings, Max is down to 20 percent according to one poll, but we're already seeing large crowds turning out in Brasilia, and then

we're expecting for anti-Bolsonaro protests later on in Sao Paulo, too.

Expect large crowds, but what you see from the anti -- from the pro- Bolsonaro camp will be really his base trying to push his message. Bolsonaro's message has been the same throughout, Max, which is, you know,

the narrative questioning Brazil's electoral system, questioning Brazil's Supreme Court, questioning Brazil's as well as Congress.

And the reason that they are pushing for this, and they're against these institutions is because President Bolsonaro has been saying time and time

again that basically he wants electoral votes -- electronic votes to be supplemented by paper ballots.

Now, that has gone to court and that's been voted in Congress, it did not pass. And so now what you're hearing from Bolsonaro, Max, is this rhetoric

that really he is trying to attack the Supreme Court judges, two of them in particular, because there are two probes ongoing against Bolsonaro.

One, according -- one against really, these allegations of really fraud, that is completely unsubstantiated when it comes to the electoral system,

and the other is a probe into fake news and the fake news propaganda that has been propagated according to this probe, by Bolsonaro, and Bolsonaro's

son.

So, that is the pro-Bolsonaro camp.

On the anti-Bolsonaro camp, I also expect to see large protests today. And Max, really what you would expect is what we've seen throughout the year in

Brazil, and that is, people just had enough. You know coronavirus has claimed more than 580,000 lives. They blame Bolsonaro for not getting a

grip and a handle on the crisis.

And then on top of that, you've got a crippling economy, inflation is soaring, unemployment is so high. One economist said to me, Max today, that

is the new lost decade of Brazil. Forget the 1980s, this is the real thing -- Max.

FOSTER: And something that will impact the wider world particularly is this battle that they've got with the social media companies as well, so

Bolsonaro trying to stop media companies taking misinformation down, just clarify what's happening here.

SOARES: Yes, so basically, he is trying to project power once again. And his -- the new bill that he has introduced the last 24 hours, it is a bill

that he says, he argues for its full freedom of expression. But what this bill does, it stops media giants from really removing accounts and removing

content.

So at the moment, the likes of YouTube, Facebook and Twitter, if they see anything that is fake news, that is misleading, they remove these accounts

and they block these comments.

[09:10:14]

SOARES: What this bill basically do, it will stop them from fact checking. That's the reality. So once again, Bolsonaro trying to control the message.

The only way, according to this law, that the likes of YouTube, Facebook, and Twitter can stop this, Max -- I'm going to quote here is, " ... if they

provide cause and motivation," according to this bill for removing them.

Of course, the reason that he is doing this, that Bolsonaro is pushing for this, Max, is that in July, YouTube removed more than 15 false videos that

they say are linked to Bolsonaro. This is according to CNN Brazil, and then, we've also seen last year, Facebook really complying with an order by

the Supreme Court in Brazil to block accounts tied to the Bolsonaro allies.

He clearly is seething with anger, and he is trying to control the message, of course, as his base is dwindling and as really a mood in the country is

changing dramatically ahead of that election next year in Brazil -- Max.

FOSTER: Okay, Isa, thank you.

China doing more trade now, it seems than the rest of the world -- with the rest of the world than ever before. That's despite a global shipping crisis

and a resurgence of COVID. Exports and imports both soared to record levels in August.

Steven Jiang joins me now. How reliable are these numbers then? It does look very positive.

STEVEN JIANG, CNN SENIOR BUREAU PRODUCER: Well, Max, that's always a question about our Chinese official data. But you know, these numbers does

say -- are spectacular -- export surging more than 25 percent, import more than 33 percent well above analyst's expectations, so leading some to say

this points to the resilience of the Chinese economy, easing some fears about this economy, the world's second largest maybe stalling.

But when you break down these numbers, though, you both see the reason behind this, but also indications that this economy may not be out of the

woods just yet, because analysts say this surge was likely to result of boosted orders from American and European retailers ahead of the yearend

shopping season.

So literally, Christmas came early for Chinese exporters. And when you look at the top three export items, that seem to fit the bill as well --

electronics, high tech products, as well as clothing. And this is probably right. This has offset any potential impact from poor disruptions in this

country.

Remember, last month, Ningbo, the country's second busiest container port that usually handles some 78,000 containers on a daily basis had to shut

down a terminal when a dock worker tested positive. That caused a lot of worries and concerns. But now, it seems these measures were relatively

targeted, and it didn't last very long.

Another factor that may have benefited Chinese exporters was diverted orders from their rivals, especially in Southeast Asia, where they have

been dealing with a new wave of outbreaks as well. But this advantage obviously could ease once these countries have contained their outbreaks

and the boosted orders for yearend shopping obviously will not last forever, either.

And not to mention for many countries around the world, they are still dealing with outbreaks involving the delta or potentially other new

variants as well. So that's why even the Commerce Ministry here has warned exporters about slower growth for the rest of the year.

But still these data obviously providing support for a slowing domestic economy. Remember, the authorities here had to take some drastic measures

when they had to deal with their biggest outbreak in the year, closing down cities and suspending trade and travel. So effects from these measures may

still be trickling down to the economy in the months ahead, not to mention the continued supply bottlenecks and the tighter credit conditions.

And on top of these, Max, is something we've been discussing for weeks. That is this broad regulatory crackdown that has wiped out trillions of

dollars in market value for China's economy. So, still a lot of uncertainties and challenges for the economy ahead -- Max.

FOSTER: Okay, Steven, thank you very much indeed.

We're going to go around the world now, see what's making headlines.

In Afghanistan, the Taliban used forced to break up protests on the streets. They fired shots into the air. Reports say they detained women and

journalists at the scene.

It happened as U.S. officials held talks in Qatar about Afghanistan. The U.S. Secretary of State says Washington is speaking with the Taliban about

carrying out more evacuations.

CNN's Sam Kiley in Doha where the talks are being held. Some progress appears to be made. There are reports that they are using land borders to

get some Americans out.

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: A very limited number of Americans actually, Max, about four. No, not about four, exactly four --

a mother and three children crossing according to the State Department after a 13-hour wait at the border before they were allowed to cross by

Afghan officials.

State Department not revealing where that border is because they say they may be using that route again in the past whilst negotiations to reopen

airports in Kabul and in Mazar-i-Sharif in the north of the country are ongoing.

[09:15:14]

KILEY: Also Secretary Blinken there, at that same conference -- press conference saying, knocking down allegations from Republicans that the

Taliban was somehow involved in holding Americans in particular hostage, preventing them to fly out of Mazar-i-Sharif suggesting indeed that the

problem probably lay in terms of American bureaucracy because there isn't any American presence on the ground to process people.

But all of this happening at a time when of course, there are huge numbers of Afghans desperate to get out of the country. But Max, also large numbers

of women and their supporters protesting through the streets of Kabul, on a very long protest with several hundred people present that was relatively

peaceful indeed, seem to be being escorted to some degree or policed to some degree fairly efficiently by the Taliban, and then turning pretty

nasty when they got close to the Presidential Palace where then the Taliban, or perhaps Palace Guards began firing in the air arresting

journalists confiscating their equipment.

A number of journalists have now tweeted that they have been released. But this is exactly the sort of thing that is really testing for the Taliban.

It is one thing to have their population trying to leave, it is another one being a fractious population on the ground.

This is at least the fourth significant demonstration conducted by women and supporters of equal rights for women in Kabul and elsewhere in

Afghanistan. All of them have been somewhat suppressed by the Taliban. Previous demonstrations using teargas and Tasers, this one using live fire

but into the air.

A lot more people arrested here, testing constantly this Taliban pledge to be more moderate and to observe human rights, a pledge that they feel

they've had to have made in their case because they believe or claim that they are moderating, of course. These are the demands being made of the

international community in return for the trade and aid that the Taliban want to go -- want in the future -- Max.

FOSTER: Okay, Sam in Doha. Thank you.

Brazilian football legend Pele says he has had surgery to remove a tumor. Doctors say the 80-year-old is recovering at a hospital in Sao Paolo. In

social media posts, Pele said he is feeling well and is optimistic.

We get more details now from CNN's Patrick Snell.

(BEGIN VIDEOTAPE)

PATRICK SNELL, CNN WORLD SPORT: Well, we can tell you that doctors in Sao Paolo treating Brazilian football legend, Pele, widely regarded as one of

the best players of all time say the 80-year-old is recovering while in hospital after undergoing surgery to remove a tumor from his colon on

Saturday.

Now, news of the three-time World Cup winner's operation, following Pele's denial of reports that he had fainted last week when he said that he was in

good health and receiving routine examinations.

In a statement, the South American great medical team revealing that during cardiovascular and laboratory tests, a suspicious lesion in his right colon

have been found, which was discovered to be a tumor.

Pele, who is Brazil's all-time leading goal scorer taking to social media on Monday. "My friends, thank you very much for the kind messages. I thank

God for feeling very well, and for allowing Doctor Fabio and Doctor Miguel to take care of my health. Fortunately, I'm used to celebrating great

victories alongside you. I will face this match with a smile on my face, a lot of optimism and joy for living surrounded by the love of my family and

friends."

Well last year, there were fears over Pele's health, but he dismissed reports he was suffering from depression during his recovery from hip

surgery. Pele burst onto the international stage as a 17-year-old at the 1958 World Cup, scoring twice in the final as the Brazilians beat

tournament host, Sweden, five-two, Brazil's first World Cup title.

And in the year 2000, he was named by FIFA, football's world governing body as its player of the century, an honor he shared with Argentinian icon,

Diego Maradona.

(END VIDEOTAPE)

FOSTER: Now in Australia, rescue workers have found the three-year-old boy who had been missing for three days. He was recovered safely from the

Australian bush on Monday and reunited with his family. The boy is reportedly autistic and nonverbal.

His father told journalists he had ant bites and diaper rash, but otherwise, he's okay. Good news.

Let's hear more from Ivan Watson.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: The dramatic moment when police aircraft spot a missing child after a frightening three-day man

hunt.

UNIDENTIFIED MALE: I've got the boy. Stand by.

WATSON: Three-year-old Anthony "AJ" Elfalak spotted sitting on a riverbank in the Australian bush drinking water. He went missing off his family's

property around noon on Friday and wasn't found until three days later. Hundreds of emergency volunteers joined the search.

Little AJ is reportedly autistic and nonverbal. He apparently survived three near freezing nights in the plunging temperatures of the Australian

winter. His exhausted mother says her boy is now home, warm and sleeping off the ordeal.

[09:20:21]

KELLY ELFALAK, AJ'S MOTHER: Oh, I can't explain it. I'm so blessed. I'm so happy that he is with us. He is safe and well and healthy. That's all that

matters.

WATSON: Anthony's father tells journalists his son had diaper rash and suffered ant bites, but is otherwise okay.

In the statement, the family thanked everyone who helped with the rescue adding, quote: "AJ is fine. Hold your kids close."

Ivan Watson, CNN, Hong Kong.

(END VIDEOTAPE)

FOSTER: There's some advice.

Still to coming up on FIRST MOVE, the United Nations says it wants to stay in Afghanistan to deliver aid, but won't be able to do that without any

funding.

And Brazil braces for pro-Bolsonaro protests as critics warn he may attempt to coup in the world's third largest democracy.

(COMMERCIAL BREAK)

FOSTER: Welcome back to FIRST MOVE. U.S. futures remain flat as markets get ready to reopen after a three-day weekend. Goldman Sachs has cut its

growth forecasts for the U.S. on concerns about the delta variant and shrinking support from the Federal government. The bank now expects the

U.S. economy to grow 5.7 percent this year.

Joining me now, John Petrides, Portfolio Manager at Tocqueville Asset Management. Thanks for joining us.

One of the concerns here being that the benefits of being scaled back have been scaled back, haven't they? Some of the benefits that covered people

during the pandemic, and that's not necessarily going to transfer into a reduction in those available jobs.

JOHN PETRIDES, PORTFOLIO MANAGER, TOCQUEVILLE ASSET MANAGEMENT: Yes, I think, you know, interesting to your question is this upcoming Wednesday is

the Jolts Report which shows the number of job openings for businesses in the United States, and right now, the expectations are something like 9.9

million jobs are open.

So, the curiosity is going to be if that number starts coming down. To be honest with you, I don't think I've ever focused on the jobs -- the Jolts

Report my entire life, but because the uniqueness of this time in history in this time of the year where kids are going back to school, unemployment

benefits are rolling off, you have a strong consumer, which should have an uptick in holiday season sales, which should force retailers to hire more

people to cover that demand.

So it's going to be interesting to see what happens on that front.

[09:25:13]

FOSTER: So in terms of forecasts, we were talking about Goldman Sachs there. Do you share the same view on that? I mean, how are you able to make

forecasts right now with so much uncertainty?

PETRIDES: Yes, clearly, I think there is some weakening in demand, particularly on the leisure side because of the COVID delta variant. But

again, you know, if what we're hearing is true that you know that more booster shots will come, you know, children under the age of 12 will

hopefully get vaccinated or the ability for those kids to get vaccinated, starting this winter, and we start getting -- cutting off further variants

of COVID to develop.

This too, should be transitory in terms of the economic impact, and it should lead to, again, continued spending in 2022 as we hope to find some

sense of normalcy.

FOSTER: And take us through these issues with companies getting staff effectively. It is very confusing to a lot of people when there's high

unemployment as well. There is some unemployment, obviously, on one level, and then there's these available jobs and that is making things even more

difficult for companies. This is a difficult cycle we're entering into.

PETRIDES: I think the big economic data point that viewers and investors should be focusing on is during the monthly jobs report, it's not

necessarily the headline number of jobs gained, it is really more about the wage inflationary growth.

And although the headline data that we saw last week for the August jobs number was well below expectations, it was only like 235,000 new jobs

added, wage growth grew. And that's very important, because that's what the Fed is focusing on from -- in my opinion, one of their main data points

from an inflationary standpoint.

Because as wages grow up, that's one of the strongest pass-throughs of inflationary forces from an economic standpoint. And that's going to be key

as the Fed smooths out its definition of inflation as being transitory versus structural.

So focus more on wage growth more than anything else.

FOSTER: And how is the U.S. economy likely to be affected by global growth rates as well, because each country is handling the pandemic in a different

way?

PETRIDES: Yes, I think when it comes to the global economy, there's sort of two barometers. One is, you know, whatever happens -- and usually, it

goes by, if the United States sneezes, the rest of the world catches a cold.

But now, because China has evolved into the second largest economy in the world, it is when China sneezes, the rest of the world -- ex the United

States catches a cold. So, I think in terms of the global economy, the focus is going to be on China.

China does have some economic structural issues because its population is aging. Clearly, the regulatory issues on China is a big deal in terms of

foreign investment into China, and there is clearly confusion going on with the current policies that have happened, particularly over the last year or

so from a regulatory standpoint. So, I think more of the focus is on what happens to China.

Global growth in the U.S., that would, you know, if there's a slowdown in the global economy, the biggest industry that probably is impacted is the

energy space because a slower global economy leads to less demand for oil.

We know that the U.S. cranks out a lot of supply now for oil, higher supply that would lead to and lower demand leads to lower oil prices. So, that's

the one sector and one industry that I think could be impacted the most from a slower global growth environment.

FOSTER: John Petrides, thank you very much. Appreciate your time.

PETRIDES: Thanks for having me on.

FOSTER: You are watching FIRST MOVE. The market open is just ahead. So, we'll see how things are playing out today at least.

(COMMERCIAL BREAK)

[09:32:13]

FOSTER: Welcome back to FIRST MOVE. U.S. stocks are up and running on the first trading day of the week after the long Labor Day weekend.

Stocks opening flat after Friday's much weaker than expected jobs report. Shares of online dating firm Match Group is soaring following an

announcement that the stock will be added to the S&P 500 index later this month. And Spotify is on the rise after a key bank raised its ratings on

the stock, and jd.com also gaining after the Chinese e-commerce giant appointed a new President.

But Bitcoin is down even as El Salvador becomes the first country to adopt the cryptocurrency as legal tender.

Now, it's one week since the U.S. and its allies completed their military withdrawal from Afghanistan. The United Nations says that moment marks the

start of the humanitarian catastrophe. It warns that upcoming droughts, food shortages, and the suspension of aid money will devastate Afghanistan.

The U.N. plans to stay to deliver badly needed supplies, but says that means there's an urgent need for new funds.

Joining me is Isabelle Moussard Carlsen, She is the Director of the United Nations Office for the Coordination of Humanitarian Affairs in Afghanistan.

Thanks for joining us.

In terms of your access to the country, are you in there? Are you able to get teams in there at the moment?

ISABELLE MOUSSARD CARLSEN, DIRECTOR OF THE UNITED NATIONS OFFICE FOR THE COORDINATION OF HUMANITARIAN AFFAIRS IN AFGHANISTAN: Yes, good morning.

Absolutely. I'm in Kabul and I have been in Kabul for several months. Our teams are in Afghanistan as well and we are able to work and have been

working since the beginning of the year, but also throughout the last couple of weeks.

FOSTER: So when you talk about a shortage of funds, because there's so much uncertainty, with the relationships between governments and the

Taliban, presumably, it's difficult getting funds right now, because it is difficult to get transparency through all of those projects.

CARLSEN: Well, humanitarian funding is always available to be able to respond to a crisis. Obviously, today, the humanitarian plan is only funded

at 40 percent, and we already see quite a lot of increase in terms of the needs.

In the first part of the year, the first six months of the year, we were able to serve eight million people. We have been able to do that with a lot

of different partners, especially NGO partners, and all these humanitarian actors are still on the ground and will still require a serious increase of

funding for the end of the year to be able to respond to the needs.

And to able to do that, there will be a quite important fundraising meeting on the 13th of September and there will be quite a call for appeal for

Afghanistan during this meeting.

[09:35:10]

FOSTER: What sort of numbers you're talking about here? What sort of money do you need to come out of that meeting?

CARLSEN: We need 1.3 billion to be able to respond to 16 million people and that was the plan for the year for 2021. And obviously, you know,

you've mentioned the catastrophe, the humanitarian catastrophe that we're facing after 40 years of war.

We're facing chronic poverty, a very severe drought, the second drought in four years, a looming economic crisis, so a lot of different aggravating

factor. And obviously, we've gone through months of conflict as well, which has impacted Afghan people very seriously and we have different types of

impact.

But we've seen a lot of displacement. We're talking over 600,000 people displaced just this year. But overall in the country, we have more than

five million people who've been displaced the previous years as well. And some of these people have been displaced several times and have been on the

move. So very, very dire situations.

FOSTER: You're caught in the middle to some extent, aren't you here? Because there's obviously a big political debate going on about how

governments recognize the Taliban and whether or not there should be sanctions there. All of that does ultimately affect your work because if

there are sanctions against the Taliban, then it's going to be more difficult for you to get funding into the country, am I right?

CARLSEN: Well, it is essential that humanitarians can continue working and be alongside the Afghan people who are suffering those dire situations. And

I really want to point out that as humanitarians, we're still able to work.

We, for example, yesterday, we had a plane carrying 53 metric tons of medicine and supplies that landed in Mazar and that's only the first flight

of three other flights coming in in coordination with the W.F.P.

We've also been able to have safe water provided for UNICEF to 166,000 people in areas affected by drought. We have a lot of our partners that are

continuing to provide aid to displaced people in in different location and in Kabul, and they would have been able to receive food and non-food items

to be able to respond to their immediate needs.

And so what's really important to understand that is as humanitarian, based on our principles, we can continue working.

FOSTER: And so getting the support, you also needs security support from the Taliban in order to continue working, you need to be coordinating with

them. And at the moment, you've got that support, presumably because they're supporting the majority of your work.

CARLSEN: Well, as humanitarians, we negotiate access based on our principle and this is what is allowing us to work in all sorts of context

in the world where access to the most vulnerable is key and as humanitarians, we want to be able to respond and be alongside those very

affected populations.

FOSTER: Okay, Isabelle Moussard Carlsen, thank you very much for joining us from the United Nations, the head of the Office for the Coordination of

Humanitarian Affairs in Afghanistan.

Now after the break, the man they call the Trump of the Tropics faces a tough election next year. Now, Brazil's President Bolsonaro is turning to

Trump's playbook, an inner circle for help.

(COMMERCIAL BREAK)

[09:41:35]

FOSTER: Returning to Brazil, where, as we've been hearing, its Independence Day is being marked with demonstrations for and against

President Bolsonaro. As the President heads towards a tough election next year, he is getting help from some very familiar faces as Isa Soares

reports.

(BEGIN VIDEOTAPE)

SOARES (voice over): Splashed across the big screen, Brazil's conservatives look to the American right for inspiration.

DONALD TRUMP, JR., SON OF DONALD TRUMP: Do you go the path of socialism? Or do you remain steadfast and strong for freedom?

SOARES (voice over): The Conservative Political Action Conference, CPAC, an American import is hoping to revive Jair Bolsonaro's dwindling base as

the embattled President faces sliding approval ratings, a weakening economy, and public outrage over his handling of the pandemic, which has

claimed over 580,000 lives.

Luiz Philippe De Orleans e Braganca, a lawmaker and Bolsonaro supporter, tells us why the President is seeking a second term in office.

LUIZ PHILIPPE DE ORLEANS E BRAGANCA, BRAZILIAN LAWMAKER: He believes that there's a risk that the radical left will take over Brazil, and that there

is a risk of a totalitarian regime to take place in Brazil, and I believe in that, too.

SOARES (voice over): With an election in Brazil looming large, this relationship with the Trump inner circle has strengthened over the years.

And in the Bolsonaro family, the likes of former Trump campaign manager, Steve Bannon.

STEVE BANNON, FORMER TRUMP CHIEF STRATEGIST: He is the third son of the Trump of the Tropics, President Jair Bolsonaro of Brazil.

SOARES (voice over): With Eduardo Bolsonaro making an appearance at the My Pillow CEO's event.

BANNON: Bolsonaro will win unless it is stolen by, guess what? The machine.

MIKE LINDELL, CEO, MY PILLOW: The machines.

SOARES (voice over): Taking his cue from the Trump playbook, Bolsonaro has been sowing doubt on the integrity of Brazil's entire electronic voting

system calling for printed ballots to supplement electronically cast votes.

And threatening not to hand over the presidency next year if there is suspicion of fraud.

JAIR BOLSONARO, BRAZILIAN PRESIDENT (through translator): I have three alternatives for the future, being arrested, being killed or victory.

SOARES (voice over): As the calls for his impeachment grow louder, Bolsonaro continues to fight for political survival using the Armed Forces

to project power with a military parade recently in front of the Presidential Palace, enough to rattle some of Brazil's political

dissidents.

AMELINHA TELES, ACTIVIST (through translator): This is an authoritarian gesture. It is a dictatorial gesture. So this leaves me very worried. Yes,

very worried.

SOARES (voice over): A former member of Brazil's Communist Party, Amelinha Teles says she was a victim of torture during the country's brutal military

dictatorship, which lasted 21 years.

TELES (through translator): I lived through persecution, I lived through torture and was constantly threatened, me and my family. But we also had

the joy of seeing the resistance, the people's fight on the streets.

SOARES (on camera): Is Brazil's democracy at risk, Amelinha?

TELES (through translator): Absolutely, absolutely, unfortunately. We cannot let go of the past and think that what went on, went on and it is

over. It's not true. The past is very much in the present.

[09:45:10]

SOARES (voice over): Cautionary words from those who carry the scars of those dark days and who fear that Brazil's past might just be about to

repeat itself.

Isa Soares, CNN.

(END VIDEOTAPE)

FOSTER: Listening to that, my next guest, Christopher Sabatini, Senior Fellow for Latin America at Chatham House here in London. Thanks for

joining us. How concerned are you about Brazil?

CHRISTOPHER SABATINI, SENIOR FELLOW, LATIN AMERICA AT CHATHAM HOUSE: Thanks, Max. I'm very concerned. I mean, we're seeing the rallies today.

We'll see how those play out. But it's obviously a symptomatic of a deeper set of polarization.

Bolsonaro is very unpopular right now. He is about 25 percent popular approval ratings, more than half are his disapproval ratings. But, you

know, the truth is, is that he is clearly trying to stoke division, trying to engage in a real sort of vilification of his enemies, and trying to

curry favor among the military to be able to consolidate his power.

That's very troubling, maybe not just even today, and let's hope there's no violence today. But there is that possibility. But in the long term, in

terms of he has criticized the Supreme Court, he's called one of the Supreme Court justices, the mother of a whore. He is the son of a whore,

rather.

He is really quite a nasty individual who is really trying to just sully all political institutions as a way of creating distrust to consolidate his

own power.

FOSTER: But he -- I mean, these not so subtle suggestions of a coup, you know, these references going back to the 1964 coup. They are there, if you

look in his language, is that right?

SABATINI: That's absolutely right. He is referring to the demonstrations today as a cleansing. That's not coincidental. In 1964, the coup, the

military took power. They refer to it as Operation Cleansing and it was -- the idea was to cleanse the country of leftists, and they unseated a

President who was deemed to have leftist tendencies and had a communist plan and that's very much as you indicated in the story just before this.

That's very much of the rhetoric they're using now, that they are basically the guardians of all that is good and proper in Brazil, protecting it

against communism and tyranny.

FOSTER: So with Donald Trump, Jr, apparently advising Bolsonaro, also Steve Bannon, what does that tell us about the strategy going forward, do

you think?

SABATINI: Well, Max, you said this earlier. This is basically their playbook. This is the Trump playbook through and through, very much they've

studied the January 6th insurrection in the United States and the seizure of the Capitol building, and they're trying to really learn from it in this

particular instance, and Steve Bannon is met with the son of Bolsonaro, President Bolsonaro, and in fact, he was also by the way under

investigation for corruption, and trying to basically sow enough doubt within the minds of his supporters, and using social media and rhetoric to

be able to basically tear down democratic institutions.

This is, you know, very much in the idea of Steve Bannon's plans of sort of right-wing populist demagogues taking over and, you know, they very much

see this as an experiment in how to retain power and to bring Trump back in the United States as well.

FOSTER: They are very different countries, of course, so it's difficult to channel the same sort of feeling, particularly when Trump had a higher

approval rating in his country than Bolsonaro seems to have right now.

SABATINI: Yes, and Bolsonaro obviously has completely mishandled the COVID crisis, more than 600,000 Brazilians have died as a result of the pandemic.

He is also under investigation for corruption.

So there's a whole train of things that are behind him and as he said in that statement that you also showed earlier, he is declaring that the

options for him are going to be jail, death, or victory and he says the jail is not an option.

So the effort, too is to paint him very much as Trump did, as a martyr to the Deep State, as a martyr to his enemies, and stoking the sense of

distrust within his popular base. And the popular base, by the way, you mentioned the rise of CPAC. The NRA is also very active in Brazil, as are

evangelicals.

One of his core constituencies, is the small percent that support him are evangelicals and the rest are, a lot of gun-toting people in particular in

the north of Brazil, what they call in Brazil, the bibles, beef, and bullets constituency, and that's really his core constituency.

FOSTER: And when he talks about martyrdom, I mean, he's literally talking literally about martyrdom, isn't he, when he referred to, you know, the

options ahead of him being prison, death or victory. He is suggesting if he doesn't win this, he could die and that would evoke support, presumably in

that constituency you described?

SABATINI: Yes, and there is precedent for this. There was a former President, Getulio Vargas who committed suicide. So, you know, he is very

much trying to -- Getulio Vargas also had somewhat fascist leanings himself. So he is very much trying to conjure up this idea that he himself

is a savior and a martyr for all that that he likes to believe is good and righteous in Brazil.

[09:50:18]

FOSTER: Okay, Christopher Sabatini, appreciate your insight there from Chatham House. Thank you very much indeed.

Next on FIRST MOVE, a tale of two telecom companies. What a new deal between Japan's SoftBank and Germany's Deutsche Telekom really means for

the industry.

(COMMERCIAL BREAK)

FOSTER: Welcome back. Shares in Japan's SoftBank have ended the day nearly 10 percent higher after it struck a $7 billion share swap deal with

Germany's Deutsche Telekom. Anna Stewart here to explain what it all means in very simple terms -- Anna.

ANNA STEWART, CNN REPORTER: Well, we're nearing the end of the show. This is the perfect lighthearted fun story, an equity share swap deal.

It is complicated, but if you really boil it down to the main part, it's frankly just the German company Deutsche Telekom, wanting greater ownership

and greater control of T-Mobile U.S., which is its most profitable unit by far.

In order for that to happen SoftBank, the Japanese company are selling a big stake in T-Mobile U.S., and in return, they are getting shares, newly

created shares in Deutsche Telekom. At the same time, the German company is selling off T-Mobile, the Netherlands for over $6 billion. They will use

some of that cash to finance buying even more shares of T-Mobile U.S.

So, at the end of all this, analysts expect the German company will own, I think between 48 and 49 percent of T-Mobile U.S., so inching just ever

closer to having direct control of the company -- Max.

FOSTER: Deutsche Telekom, you know, very keen on the U.S. market. How does SoftBank play into that then?

STEWART: I know, it's interesting. They're exiting this market. Well, they're calling it a win-win-win. And it's interesting because SoftBank

really wanted to be a big player when it came to U.S. telecoms. That is why they bought Sprint all the way back in 2013. That was when it was the third

biggest player and it wanted to merge it with T-Mobile U.S.

Now that took years, lots of regulatory challenges and in that time, actually, Sprint's performance under SoftBank really plummeted to the point

that it became the number four player. When the merger finally happened, it was very much T-Mobile being the lead player there, and at the same time,

remember that SoftBank over those years has become a big investor in all sorts of companies, whether we're talking about Alibaba or Uber, or WeWork

or Wirecard.

Not all of those investments, of course, have been particularly good, and that is perhaps why in the last quarter, we saw profits for SoftBank down

nearly 40 percent. So, this could be a bit of a rebalance of their portfolio. And look at the share price today, investors are welcoming it.

It is nearly up 10 percent -- Max.

FOSTER: There you are, some good news for investors in that particular stock. Thank you, Anna.

Let's have a look at the wider market and see how they're doing in early trade, particularly in the United States.

[09:55:10]

FOSTER: As you can see, the Dow Jones is down half a percent. The NASDAQ also down ever so slightly though, and S&P 500, a bit wider down a third of

one percent. But it's early days as I say after that long weekend in the United States. We'll see how that plays out and Richard will be back later

with the update on that.

That's it for this show. Thank you for watching.

"Connect the World" with Becky, up next.

(COMMERCIAL BREAK)

[10:00:00]

END