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First Move with Julia Chatterley
EU Chief: Food part of the Kremlin's "Arsenal of Terror"; U.S. Futures Lower, Europe falls Amid Recession Fears; Ukraine Faces Growing Energy Crisis as War Drags on; OECD: China's Zero-COVID Policies have come at a Cost; Hyatt sees Strong Bookings for Summer Season; Taco Bell's new Location Delivers Food from the Sky. Aired 9-10a ET
Aired June 08, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: Hello and welcome to "First Move"! I'm Julia Chatterley in New York. And the battle for Severodonetsk
continues in East Ukraine. One military leader insisted that Ukrainian soldiers would not give up though he acknowledged troops could end up
pulling back to more "Fortified Positions".
The city has been targeted by Russian artillery for weeks, part of a larger Russian push to seize control of the Donbas region. CNN's Salma Abdelaziz
joins us once again from Kyiv. Salma, you were talking to us about this yesterday too I think the bravery in those comments clear but also the
SALMA ABDELAZIZ, CNN REPORTER: Absolutely, and you heard that there's comments that we got from a regional official about pulling back to
fortified positions. Ukrainian officials, of course, saying that the situation on the ground is changing hour by hour that these are street by
street fights that these Ukrainian forces are fighting for every inch of Severodonetsk. They say the city is almost entirely decimated, but still
not under the control of Russian forces.
Now, why this battle over what is essentially now been turned into a wasteland that is if you pull up that map of the frontlines in Ukraine, it
is because Severodonetsk is in the Luhansk region, an area that Russian backed separatist officials say is 97 percent under the control of Russian
forces, again, that is according to Russian backed separatists.
So Severodonetsk would be that final step, that important leap in President Putin's larger goal of taking control of the Luhansk region, and of course,
the greater Donbas region. And these battles that we're discussing here, Julia, I mean, these can drag out.
You're talking about superior Russian artillery striking at a Ukrainian force that is outmanned and outgunned. They are waiting on the one thing
that could potentially turn the tide here, that's Western weapons, but that could be weeks away from receiving those long range weaponry that they
desperately need to be able to hit those Russian artillery positions.
So what you could potentially be looking at and what this regional official here is hinting at about pulling back to fortified positions, is
essentially what Ukrainian officials would say is a strategic withdrawal, a strategic pullback.
President Zelenskyy says that absolutely, these Ukrainian forces are going to continue to try to defend that territory. But you can only imagine with
the pressure that they're under that, you know, things are changing again, moment by moment.
At the same time, I want to point out that it's not just this front, the Donbas front, where Ukrainian forces are facing these tough battles. We're
also seeing increased shelling in the southern front. The City of Mykolayiv, in particular, has been shelled heavily over recent days,
according to Ukrainian officials, that could be an indication of potentially Russian forces trying to open up yet another front or push on
yet another front.
This is a war of attrition Julia, with both sides losing resources, losing night, losing manpower, losing steel, losing steam, rather, it could drag
out with civilians caught in the middle of course, for much longer.
CHATTERLEY: Yes, you make a great point, a war of attrition with consequences not just in this region, of course, but beyond too. Salma,
great to have you with us thank you, Salma Abdelaziz there.
Food, speaking of that has now become part of the Kremlin's "Arsenal of Terror" forceful words from EU Commission Chief Ursula Von Der Leyen,
stressing the need to unblock Ukrainian ports and restore global green exports.
Food corridors are at the core of discussions in Turkey where the nation's Foreign Minister is meeting with his Russian counterpart Sergey Lavrov.
Jomana Karadsheh is in Ankara for us. Jomana, I was just looking at the press conference and some of the comments that were made there and the
Russian Foreign Minister effectively saying we're not to blame here and the ball are in Ukraine's court. So I think that perhaps answers the question
before I ask it, but was any progress made in these talks?
JOMANA KARADSHEH, CNN CORRESPONDENT: No real progress Julia. I mean, there was really no expectation of any sort of a final deal to come out of this,
especially when you consider the Ukrainians were not part of these talks today.
The expectation was that this is really going to lay the groundwork for further negotiations further talks to try and work to establish this
ambitious plan of a sea corridor through the Black Sea to resume exports of Ukrainian agricultural products and grains.
And what we've heard from the Turkish Foreign Minister is that they're hoping in the coming days to try and bring together the Ukrainians, the
Russians, along with Turkey, to look at a possible UN plan to try and create this green corridor.
Now, these talks Julia, are expected to be very complicated, really technical, they're going to be looking at how they're going to establish
this sea court of what it's going to look like? Who is going to be responsible for the naval escorts for these ships coming in and out the
naval inspections of these ships?
KARADSHEH: But perhaps the biggest obstacle and we heard that, again, today come up in the press conference is the issue of the mines in the Black Sea
around the Ukrainian ports. As you mentioned there, the Russian Foreign Minister blaming Ukraine for this saying that once they remove these mines,
that exports will resume.
And of course, we know that not only Ukraine, but the United States, the EU and others who have blamed Russia for the blockade of Ukrainian ports. So
this is one issue they have to really deal with. And another major issue to tackle Julia is the the Ukrainians want.
And they really want security guarantees saying that, you know, their concern is that Russia would use this to try and attack their Southern
Coast and their ports. Then also another issue, of course, is what the Russians want in return and indications are they want some sort of
sanctions relief, which as you would expect, is going to be highly unlikely considering that Western nations just slapped those sanctions on Russia.
So really not much progress made today, but the Turkish Foreign Minister making clear that his country is going to continue working in this
facilitator mediator role to try and combat what he described as a true global crisis right now.
CHATTERLEY: Yes. I mean, in the World Food Program that you've told us this was a declaration of war on food security, this ongoing blocking of the
ports and the world, the international community needs to come together to address this. Yes, seems like little progress there, we can hope that's all
we have at this moment. Jomana, great to have you with us thank you from Ankara there.
And the issue of global food supplies was part of my conversation with the Secretary General at the OECD here about the challenges that lie ahead in
around 20 minute's time with that conversation.
To Berlin now one person has died several of those were hurt after a car drove into a crowd in a busy shopping area. It happened near the site of
the Christmas market terror attack six years ago. Fred Pleitgen joins us now Fred, what more do we know about what happened here? Who the individual
was that was driving this and perhaps if it was an accident or otherwise many questions?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, a lot of questions and whether or not it was an accident or something else is
certainly something that the authorities say they simply don't know at this point in time; they're still trying to discern that.
However, they are saying more about the alleged driver of this vehicle. They say it's a 29 year old Armenian German man who is actually a resident
in Berlin, it was quite interesting, because we saw that car there that you see right there that in the end ran into a perfume store, really, as you
put it correctly, very close to where that Christmas market attack happened in 2016 in Christmas of that year.
And you can tell that that car has a Berlin registered license plate, and apparently the driver is someone who is resident in Berlin. But again, the
authorities at this point in time, say they simply don't know what exactly was behind what happened there, whether or not it was an accident or
whether or not, there's some other sort of motivation behind it?
But they do know that there was a lot of carnage and that certainly is something that is extremely scary for folks there in Berlin. That area they
say this accident happened with this, this incident happened at around 10.30 local time in the shops there this is one of the most popular
shopping districts in all of Berlin. The shops are open around 10 am so it'd be shortly after shops open; there would have been a lot of people
that were coming right out of a longer weekend in Berlin with some public holidays that were going on.
And apparently the car ran into a group of people then actually went back onto the road, then went back on the sidewalk and ran into that perfume
store that we saw - that we saw earlier that video that car in there and that's obviously where a lot of those people were injured.
Now the police came out just a couple of minutes ago. This is something that we have fresh for you. And apparently the amount of injured who have
life threatening injuries has now been raised to six from five, one person is dead. But again right now the police still try to come to terms as to
what exactly the motivation was?
As you can see there on our video a lot of authorities are on the scene, a lot of police a lot of first responders there was an emergency helicopter
that was on the scene as well as the authorities right now cycling through everything, but they do believe that they have the driver in custody.
Earlier reports were that apparently he was apprehended actually by pedestrians who were standing by and then handed over to authorities,
CHATTERLEY: Yes, and I know the authorities have requested passers-by if they have video or further information to get in touch to so if anybody's
watching and does then they should do that. Fred, thank you for that updates there and we wish all those people well. OK, let me bring you up to
speed now with some of the other stories making headlines around the world. That says it's all British Prime Minister Boris Johnson greeted with both
cheers and boos as he walked in to Parliament earlier.
CHATTERLEY: It was the first time taking questions from lawmakers since surviving a confidence vote on Monday and he defiantly vowed that no one
will stop him from doing his job despite his opponents' intentions.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH PRIME MINISTER: In a long political career so far, I have, of course, picked up, but barely begun. I of course, picked up
political opponents all over. And that is because this government has done some very big and very remarkable things, which they did not necessarily
(END VIDEO CLIP)
CHATTERLEY: U.S. Senators say they're starting to narrow their differences on gun violence legislation. They're considering small changes to current
laws, including strengthening school security and further funding mental health care. The White House says it is optimistic about the talks. It held
a news conference on gun control with Actor Matthew McConaughey, a native of a town that suffered a recent mass shooting.
(BEGIN VIDEO CLIP)
MATTHEW MCCONAUGHEY, ACTOR & UVALDE NATIVE: Can both sides rise above? Can both sides see beyond the political problem at hand and admit that we have
a life preservation problem on our hands.
(END VIDEO CLIP)
CHATTERLEY: And President Biden is heading West today to host leaders from across the Western hemisphere at the Summit of the Americas in Los Angeles
the attention there now on a growing list of leaders who have chosen not to attend rather than those who weren't invited as Kaitlan Collins reports.
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice over): A presidential summit off to a rocky start before it's even underway.
KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: The President is looking forward to leaving tomorrow to head to the summit.
COLLINS (voice over): President Biden set to host the Summit of the Americas in Los Angeles and convene the leaders of North Central and South
America, but several have declined his invitation.
ANDRES MANUEL LOPEZ OBRADOR, MEXICAN PRESIDENT: There cannot be a summit of the Americas as the entire American continent countries do not participate.
COLLINS (voice over): Mexican President Andres Manuel Lopez Obrador says he's boycotting after his authoritarian counterparts in Cuba, Nicaragua and
Venezuela weren't invited.
OBRADOR: Though I believe in the need to change the policy that has been in place for century's exclusion, the desire to dominate.
COLLINS (voice over): Now, the summit that's supposed to focus on tackling immigration and reestablishing U.S. leadership is becoming more about the
guest list as the White House defended invitations.
JEAN-PIERRE: While the interim government was not invited to participate in the main summit, they are welcomed to participate in all three stakeholder
COLLINS (voice over): White House aides also pressed to explain where Biden draws the line as he refuses to extend invitations to those dictators,
while also planning a trip to oil rich Saudi Arabia, which he wants vowed to make a pariah for the murder of journalist Jamal Khashoggi.
UNIDENTIFIED FEMALE: Does he still seek to make Saudi Arabia a pariah state
JEAN-PIERRE: As President he believes that if there is any, any way to get peace, he feels like he should take that he should take that direction. The
President considers Saudi Arabia and important partner on a host of regional and global strategies.
COLLINS (voice over): Democratic lawmakers arguing that Biden's hand was forced by Russia's invasion of Ukraine.
SEN. CHRIS COONS (D-DE): The Saudis are the sole country that has a significant amount of quickly readily deliverable oil and gas that can help
address this. This is the sort of compromise that makes politics painful.
COLLINS: In the end when it comes to the Summit of the Americas the White House says 23 Heads of State will be attending with several other nations
sending deputies in their place. One leader that the President will be coming face to face with for the first time is the President of Brazil.
They will be meeting during the summit while the President is in Los Angeles. Kaitlan Collins, CNN, the White House.
CHATTERLEY: OK, coming up on "First Move" the Ukrainian war, China's COVID lock downs and rising pricing pressures all weighing on the global economy.
The Head of the OECD gives his assessment next. Plus I'm a consumer get me out of here the CEO of Hyatt discusses the recent travel explosion and what
may still be holding us back next.
CHATTERLEY: Welcome back to "First Move"! A weaker Wednesday on top for U.S. stocks so admittedly anything's possible as Tuesday's late morning
bounce proves we ended up higher in fact in that yesterday's session, Europe, as you can see turning lower too.
Recession fears and the threat of stagflation aka slowing growth and higher prices continues to permeate both conversations and forecasts. The World
Bank yesterday warning that some countries will have trouble avoiding recession. And the OECD out today with its warning about what's needed to
offset the slowdown the OECD Secretary General is on the show later today's that conversation coming up.
Meanwhile, concerns about the recession risk in the United States also heightened by the Atlantic Federal Reserve. Their latest snapshot shows the
economy weakening even over just the past few weeks. And it's now grown by less than 1 percent because that follows a negative for GDP read for the
first quarter, contributing to that of course, oil's relentless rise, and that's going to be a deciding recessionary factor.
Goldman Sachs now warning that crude will average around $140 a barrel later this summer, some 14 percent higher than where it is now. They also
say oil needs to rise to $160 a barrel before firms are incentivized to get out there and pump more, and motorists are finally forced to drive less and
it brings that supply demand imbalance more into line.
Oil currently higher by around 1 percent with both Brent and U.S. Crude now topping as you can see there $120 a barrel it's an additional challenge for
Ukraine, of course, with President Zelenskyy warning this winter will be worst the country has faced in decades.
He announced that the country will hold all coal and gas exports as it battles to shore up domestic supplies. President Zelenskyy met with the
largest state owned energy companies this week to discuss plans for what happens when the cold weather returns.
And one of the companies that will be instrumental in that effort is DTEK Ukraine's largest private energy firm. It provides 20 percent of Ukraine's
electricity needs it's also the country's biggest employer with more than 60,000 workers.
And DTEK CEO Maxim Timchenko joins us now from Kyiv. Maxim Great to have you on the show we appreciate your time! Just tell me how bad it might get
this winter for Ukrainians? Do they have to expect power cuts rationing as a matter of course?
MAXIM TIMCHENKO, CEO DTEK: Good morning, Julia, thank you. Thank you for your interest in speaking with us. More than 100 days Ukrainians fighting
for Ukraine, fighting for democracy our freedom and fighting for energy security of European countries.
So we already demonstrated that in such a difficult situation we maintain stability of our energy system. And also we connect it to European energy
system. Moreover, we offer - export of electricity from Ukraine to support our neighbors. So for the next week, the season it won't be easy, but we
demonstrated so high level of unity Ukrainian people Ukrainian business everybody involved in energy security of our country.
TIMCHENKO: So today, our company is a major coal producer in the country. And we managed to produce as much coal as it was before the war and the
same, the same story with the gas production. So today, we had all these activities together with state owned companies with our Ministry of Energy.
And I'm sure that for the rest, six to eight months, we will do everything possible so that we avoid any blackouts in your industry.
CHATTERLEY: I mean that's an incredible feat, given what the country is going through. For consumers at the same time, the President said, look,
gas and electricity prices won't change. I know you as a company as well have been providing free electricity to critical infrastructure like law
enforcement, hospitals, and military facilities. How much of the energy that you're providing is actually being paid for? Can you afford this?
TIMCHENKO: We had great difficult situation in the beginning of the war when collection rate was about 30 percent today, today's program, and we
collect about 80-85 percent, for electricity and gas supply. Yes, it was decision taken corporate level that until the war is over, we provide
electricity for free for some consumers, as you just mentioned, and we will keep doing that.
It's not easy but I think this is our contribution to our victory. And that bill will keep providing this electricity for free. But in general, as I
said, situation is improving in terms of payments. And then we try to do everything possible to improve financial situation for the coal sector.
That's why export of electricity out of Ukraine to European countries extremely important to support financial stability of our energy system.
And basically, as I already said, unity is the key for us to be strong. So we work very closely with our government, with our partners and our
colleagues in the energy sector and I feel quite confident.
CHATTERLEY: I want to talk to you about the future and the provision, perhaps of electricity to other European nations, because that goes back to
the financing and the future and rebuilding in Ukraine too.
But just to your point about the coal production that you're managing to create, and what you're providing, at this moment, just how much of your
operations have been impaired over the past few months and just talk to me about sort of repairing those in recovery and rebuilding.
TIMCHENKO: So I would use the world build a new Ukraine rather than rebuilding. So and basically, this is what we discussed with our
international partners right now. So our position is that Ukraine should play much more important role in energy security of European and European
And today, we have enormous opportunities to develop renewable energy. Basically, our company, being the major coal producer, two years ago
announced that by 2040, we will be climate neutral. And we already became the largest renewable producer in the country. And this is a good example
for other companies that we should go from fossil fuel to renewable and Ukraine can be one of the major suppliers of green energy to European
So we brought it to the public initiative Coal 30 by 2030, meaning to have 30 gigawatts of renewable energy Ukraine, most of these will be supplied to
our European colleagues, as well as producing green hydrogen was supplied to European Union.
So this initiative we want to bring to channel discussion basically in the beginning of July to the conference in Ghana, about recovery of Ukrainian
economy where all this will be discussed. But I'm very much confident that Ukraine will play the most important roles in future energy security
landscape of European Union, where I believe everybody learned a lot--
CHATTERLEY: There's so much in that. There's the diversification away from Russian energy angle, there's the transition perhaps to cleaner energy,
there's the ability for Ukraine one day perhaps to provide electricity and energy to other EU nations.
As we've mentioned, you know, I've spoken to private investors who are looking at Ukraine in saying one that they want to help but also that
there's a business opportunity perhaps two whether it's not rebuilding, building future infrastructure electricity grids whatever it is.
CHATTERLEY: Would you welcome foreign competition support but also competition to ensure that you have the most efficient infrastructure
energy infrastructure in the country in the future?
TIMCHENKO: Of course, when we talk about such numbers of 30 gigawatts means huge investments up to 40 billion euros not only in production capacities
in power generation, but also in the green infrastructure transport capacities, better storage, all this newest technology can be brought to
And we basically build in coalition of private business and major companies in energy sector and with this discussion; we are looking for private
capital supported by a government institution through political risk insurance. This is what basically we need but there is a very high level of
interest from private businesses to invest and to build up.
CHATTERLEY: Yes, much to deal with in the short term and the longer term sir. We wish you well you and your family thank you for your time and thank
you for what you're doing for the people. Maxim Timchenko, thank you sir, the CEO of Ukrainian energy firm DTEK. We're back after this stay with us.
CHATTERLEY: Smiling faces there up in New York Stock Exchange. Welcome back to "First Move". Markets are open on Wall Street this Wednesday and we are
seeing a bit of a pullback as expected as you can see there a quarter of a percent for the DOW after a come from behind rally Tuesday investors
concerned of course amid new warnings on the health of the global economy.
The latest cautious comments coming from the OECD today more on that in just a moment. In the meantime, India's Central Bank today is raising a key
interest rate by half a percentage point as it battles the higher inflation pressuring global consumers.
There are positive sessions more broadly across the Asia session the NIKKEI rallying 1 percent on news that the Japanese economy did not contract as
much as first thought in the first quarter the HANG SENG up more than 2 percent beaten down Chinese tech stocks.
The big winners once again on signs that China is easing its regulatory crackdown on those big tech names Alibaba today soaring more than 10
percent and a charged up session for Chinese vehicle conglomerate BYD too shares higher after a company executives said the firm will supply
batteries to Tesla's soon, saying "We are now good friends with Elon Musk".
BYD also has a friend in Warren Buffett who is a backup. Firms involved in anything electric of course receiving increased investor interest amid all
is relentless rise, which is helping fuel global inflation. And the world is paying the price for Russia's war in Ukraine that's the message from the
Organization for Economic Cooperation and Development as they sharply downgraded its global growth forecasts for the year.
It now expects growth of just 3 percent down from the 4.5 percent it made in its December forecast. The OECD Secretary General Mathias Cormann says
Russia's war will continue to push inflation higher and challenge global food supply listen in.
MATHIAS CORMANN, THE OECD SECRETARY GENERAL: Well, Russia's war of aggression is certainly imposing a very heavy price on the global economy.
I mean, earlier this year, the economy was recovering - earlier this year, economic growth was returning to normal. And then the recovery from COVID
had been relatively strong and rapid.
Yes, it was uneven. And there were also still some downside risks remaining with the pandemic. But you know, the Russian war of aggression against
Ukraine is causing a significant supply shock and is having a significant negative effect on growth, and it is pushing up inflation higher and for
CHATTERLEY: On the forefront of the war in Ukraine, of course, beyond what Ukraine suffering it, those most leveraged to Russian oil. And we've seen
astronomical price rises around the world. But you particularly pinpoint the challenges that Europe is facing too, as they struggle to diversify
You've even warned about possible energy shortages, too. It's clearly a problem for Europe, how high is recession risk in your mind there? And the
risk is that weakening growth in Europe obviously poses a huge problem for the rest of the world too?
CORMANN: Well, we're not projecting a recession. We are projecting a significant downward revision to growth, including in Europe. Indeed, the
cost of the oil embargo, on its own comes, I mean, reduces economic growth by about half a percent in 2023.
And indeed pushes up inflation by you know in itself. But that is assuming that there is no supply response from other oil producing countries. I
mean, OPEC countries and others could substitute the supply of Russian oil, if they so choose and certainly, we would very much urge them to do so.
CHATTERLEY: And there's no ballast. I think that's part of the challenge here because you've got huge nations like China struggling with the zero
COVID policies and slowing growth there too. Talk to me about your forecast for China specifically in that region?
CORMANN: Well, I mean, it's China's zero COVID policies certainly have come under cost. And I've increased the level of volatility and led to a
reduction in economic activity in China. And because China is such an important part of global value chains I mean, that has that flow on
implications for the global economy.
I mean, what we do hope is that with the emergence of an indigenous RNA vaccine in China, that's the level of vaccination coverage and treatment
options. You know, as a result of COVID will help to improve the outlook there. And that, of course, will be good for people in China, but it'll
also be good for the global economic outlook.
CHATTERLEY: I mean the hope for the global economy too it seems when you're talking about slowing growth and the challenges in Europe, the slowing
growth and COVID challenges in China.
CHATTERLEY: The hope is that the United States can remain relatively strong and provide some support. At the same time, you're also saying, look,
central banks that have the capacity to respond, particularly when higher prices are caused by over buoyant demand. And you pinpoint the United
States the Central Banks have to act. How worried are you that the United States struggles to find that balance?
CORMANN: Well, in the United States, I mean, the Federal Reserve has been acting. And I mean, they've been making their intentions very clear, there
certainly was a need to, you know, obviously, increase the official cache right in order to deal with the inflation challenge there.
But of course, having the inflation challenge is now very much global. I mean, this time last year, the inflation story was different in different
parts of the world. They were different drivers of inflation in different parts of the world.
And but now with the war, Russia's aggression in Ukraine, inflation is becoming more widespread and core inflation is now increasing everywhere
and Central Banks around the world certainly will need to take the appropriate steps and indeed, they are.
CHATTERELY: When we're talking about energy prices, in particular, and one of the policy prescriptions that you've suggested are a windfall tax. On
some of the energy companies like the United Kingdom has done. I spoke to the head of the American Petroleum Institute, the Oil and Gas Sector
Representative this week. And he said its terrible economics a terrible idea.
It was tried in the United States in the 1970s and actually, prices went up and, and consumers therefore paid the price production went down. What do
you make of that response?
CORMANN: Well, we're not suggesting or supporting ongoing, sustained increases in taxation, but there are clearly temporary windfalls profits as
a result of what is happening to energy prices, in the context of specifically that we're facing right now.
And there are windfall profit has been made at the same time as the low income and vulnerable households are being particularly hard hit. And so at
a time when governments around the world are dealing with severely constrained budgets as a result of significant fiscal measures throughout
There is a further need to provide fiscal support well targeted in temporary fiscal support to those low income households that are
particularly hard hit by higher energy prices. And I would have thought that there is a capacity to align the temporary opportunity to increase
revenue with the temporary exposure to higher expenditures.
And so, you know, given the constraints that governments around the world face in terms of their budgets and their balance sheets, and you know, I
would have thought that that is something that governments quite appropriately should consider.
CHATTERLEY: So the message to the government is, don't get bullied by the oil and gas sector and the messages to the big players in the oil and gas
sector, don't be greedy?
CORMANN: Well, assess the circumstance that we're facing, when there are windfall profits that are caused by a temporary circumstance, there is a
temporary challenge at the low income end that requires a fiscal response, that there is a capacity to align the tool.
CHATTERLEY: I would agree with you. The knock on effects of this - it's not just about energy prices it's also about food prices, which combined have
the most dramatic effect on those least able to afford it and those that spend the greatest proportion of their household income on these items.
What your report also shows is that export barriers, restrictions are raising. And we've seen in the past, that these, these things make it
worse, far worse, perhaps than it might have been?
CORMANN: Well, this is a very important point. I mean, the first point that I would like to make here is that in 2021, 22, so that is in the period
from my last year to June this year, the level of reproduction globally has actually increased.
So there is not actually any objective reason for prices to rise the way they have. But of course, there have been significant changes in the
composition of exports with some large export countries, like Ukraine, you know, facing constraints in terms of their capacity to export.
So there's a change in the composition of trade, but overall, across the world, production volumes have weighed actually higher. So what we really
need to ensure is that markets remain open and that to the extent that there are supply barriers, logistical barriers, we removed them.
I mean we need to ensure that products can get efficiently to the places where they're required.
And when countries impose export restrictions I mean what that really does is one it reduces the incentive for their local farmers to produce more as
they can't sell it at the best possible price into the global market.
CORMANN: And that sort of further constrains global supply. But even more so it makes the problem in the rest of the world even worse, because the
supply pressure there becomes higher, then prices will increase by more. So export restrictions are the worst possible response to this challenge.
Countries around the world really need to stick together and work to keep global markets open.
CHATTERLEY: Yes, we have to avoid this to your point. And we've done this in the past, and we should know better, as hard as it is. The World Bank
this week said as a result of what we're seeing, and it goes back to everything we've discussed for many countries, recession will be hard to
avoid. Would you agree with that statement?
CORMANN: Well, we are not forecasting recession over the forecast period for 2022, 23, as our central scenario, but we do readily concede that there
are significant downside risks. And, you know, obviously, the risks are very much tilted to the downside.
But from where we sit now, we are projecting global growth of 3 percent this year, which is one and a half percent less than what we predicted
about six months ago. And we're predicting global growth of 2.8 percent next year.
Most countries around the world have just come out of four quarters of strong growth all throughout 2021. I mean, the recovery from COVID was
stronger and faster than had been anticipated when the pandemic first hit. And yes, inflation is elevated across most parts of the world. But we do
expect those inflationary pressures to start easing as commodity and supply pressures ease and indeed as monetary policy measures start to take effect.
CHATTERLEY: I would like to turn that in the World Bank, I think this week, which was interesting. There's more "First Move" after the break, stay with
CHATTERLEY: Welcome back to "First Move" and get me out of here in a nice way. Travel demand is roaring back despite pricing pressures and growth
concerns. Hyatt is seeing demand explode with, "Very strong" bookings through this summer. Revenue is currently up nearly 100 percent in the
Caribbean and Latin America compared with 2019.
CHATTERLEY: But of course, there are challenges too, recent flight cancellations and delays are fueling some anxieties among travelers as well
as those in the hotel industry. Let's get some perspective from the President and CEO of Hyatt Hotels Mark Hoplamazian joins us now, Mark,
fantastic to have you on the show.
Clearly, there are plenty of challenges. We've got some CEO's in the world talking about economic hurricanes but what's clear, I think, from your
numbers is that people just want to get back out there and travel and see people?
MARK HOPLAMAZIAN, PRESIDENT AND CEO, HYATT HOTELS: There's no question that true, the human urge to travel and to reconnect with loved ones, or if
you're in a business to convene your colleagues to reconnect in terms of their culture and the connectivity of the human relationships that drive
businesses across the board. That's exactly what's going on.
CHATTERLEY: Interesting you mentioned businesses there too, because it's not just about tourism. And I think we've all been focused on what kind of
recovery we see in business travel. I read that you've got where around two thirds of a percent recovered based on 2019 levels for business travel, can
you give us some more perspective and how much more recovery, bearing in mind we can do a lot of these conversations digitally too do you think we
HOPLAMAZIAN: Right, so I'll give you some perspective on this. The first of all, you're right, leisure travel was the driver of the recovery. But
business travel is now clearly recovering. And we track two different types of business travel. One is meetings and convening's the other is individual
The meetings business in the United States is more than 90 percent recovered at this point relative to 2019 levels, with very significant
bookings, for this year and into next year. The individual business travel is about two thirds recovered but I would just point out for a moment that
the line between convening's and meetings and individual business travel is getting blurred.
There are quite a few C-Suite executives with whom I speak that say, you know, I'm not doing the day trip between New York and San Francisco much.
But as a team, we've done West Coast tours.
We've done a tour together in the south. We did an East Coast tour. So there are some use cases that are actually new and the reason they're doing
it is that way is because they're able to really focus in given markets with given customers.
So I think the being able to track these two distinctly and comparing them to 2019 is going to be a little challenging. But that's about where the
recoveries are in those two respective areas.
CHATTERLEY: Yes, but you make a great point. The whole definition of what it looks like now has completely changed. And that's part of what we've
seen through the last two years. How sustainable do you think all of this is?
I mean, again, we keep talking about a cost of living crisis in parts of the world. We've got ongoing zero COVID policy challenges in China. Just
can you characterize how likely it is that you can maintain the kind of strength and recovery that you're seeing and for how long?
HOPLAMAZIAN: I do believe it's sustainable. For Hyatt at least we serve a high end customer base. We don't participate in the midscale or economy
segments of the industry we're really in primarily and in select service. But also luxury, leisure and lifestyle represent 40 percent of our total
portfolio around the globe. And that customer base has the means to continue to travel.
And they will there's they've prioritized getting on the road and getting back together with family and friends and taking a holiday for their own
well-being. There are a lot of self-care trips that are being planned.
We have a brand behind wellbeing brand called "Mirror Ball", which is if I look at their performance, year-to-date, and its enormous level of demand.
Because people really are seeking out a way to take care of themselves and to reconnect with them with either a loved one or just be by them. So I see
The second thing I would say is that the same urges that we see the pent up demand that has a human and emotional dimension in personal travel is true
in business as well. There's a tremendous level of fulfillment that people feel when they get back together.
I'm here in New York City attending a large hospitality conference. And there are over 1500 in person and attendees. And that in the sense of, of
regaining a sense of community has been really meaningful to a lot of people.
CHATTERLEY: Yes, it's fascinating, isn't it? Because even if you go back six months, I think a lot of people would have looked at that and said, oh,
am I attending some kind of super spreader event? And the decision today is look just get me back with people and have the conversation.
CHATTERELY: I mentioned it in the introduction, this - I guess, underlying challenge that we've seen in many industries but particularly in the travel
industry, rehiring, it's creating challenges with certain flights with perhaps time for check in and some delays, even cancellations beyond.
Mark, how much of a challenge is this? Or are people to earlier point just saying, look, I'll deal with it? I just want to go on holiday or do the
travel that I intend to do?
HOPLAMAZIAN: Yes. I would say, there are some challenges. One challenge if you're sitting in the United States and looking for inbound, international
travelers, which is a very valuable segment of travelers into our market, we're down 50 percent, from where we were before COVID.
And so that's a significant issue. And one of the reasons that are the case is because the testing requirements into the U.S. remain cumbersome and
difficult. And there's - it introduces some stress, additional stress and in the in the process of travel.
I would say that as to airlines, it's true that there have been some disruptions in terms of service and also cancellations. That some of that
has to do with personnel availability, and some of it has to do with other fleet management issues.
But we've been fortunate, I think, and we last year, we acquired an all- inclusive luxury all-inclusive brand management of business called "Apple Leisure Group" and we operate 100 resorts, about 60 percent of them in the
Americas and 40 percent Europe.
But we also run a large tour operations business and deal with airlines. So we're intimately engaged with airlines about their planning. And we've been
able to actually work through with them being able to have enough capacity into places like Cancun in Mexico or in Punta Cana in the Dominican
So, it's been - we've been able to actually have enough airlifts for people who are looking to get to the Mexico and the Caribbean for that. But you're
right, that it remains an issue. And then in our business, we continue to be working very hard overtime to try to hire enough people.
We're about 10 or so percent below where we would like to be in terms of total staffing, so several, several thousand open positions at the moment
in the United States. But we've changed our processes. We made it faster and easier, reduce the friction. We've made more flexible schedules for our
housekeepers and others to try to attract more people.
CHATTERLEY: To make it easier?
CHATTERLEY: It's an ongoing challenge. Mark, great to chat to you I have to wrap this up there.
HOPLAMAZIAN: Thank you.
CHATTERLEY: Great to have you on and we'll speak again soon. Thank you, the President and CEO of Hyatt there. We're back after this.
CHATTERLEY: Welcome back! Can a glimpse of what could be the future of drive thru fast food delivery from the sky? Taco Bell opened the first of
its kind concept restaurant called "Taco Bell Defy" in a suburb of Minneapolis.
CHATTERLEY: It has four lanes and the kitchen is on top of a two story building. Each lane has a specific focus. One is for customers who use the
"Taco Bell App" another one is for delivery drivers, and the others are for traditional drive up for drive through orders.
(BEGIN VIDEO CLIP)
JARRETT PERSONS, BORDER FOODS REGIONAL MANAGER: Once the order is assigned to the lane, we just verify the customer's name. We lift up the top of the
lift, put the food in, and push the two buttons and it is on its way.
(END VIDEO CLIP)
CHATTERLEY: Taco Bell says the design is a response to the way fast food orders have changed since the pandemic began. That's it for the show. If
you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for @jchatterleycnn. "Connect the World"
with Becky Anderson is up next. And I'll see you tomorrow.