Return to Transcripts main page
First Move with Julia Chatterley
Spending Cuts Remain a Sticking Point in Talks; IEA: Investment in Solar Power to Outpace Oil for First Time; IEA Releases World Energy Report; China Hits Back Over Microsoft Hacking Claims; Malpass: I Don't Expect a U.S. Default; Tina Turner, Queen of Rock 'N' Roll, Dies at 83. Aired 9-10a ET
Aired May 25, 2023 - 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: A warm welcome to "First Move", an another fast paced hour ahead including U.S. debt dealing talks advancing
at a snail's pace. A deal is needed soon that everyone can embrace. Republican Ron DeSantis enters the U.S. presidential race but it was a
glitchy campaign announcement in a Twitter space.
And we remember music legend Tina Turner, a singer of power and grace and most certainly impossible to replace. And to Wall Street now a mixed art
but the chips aren't down specialty chip maker in video giving the NASDAQ an AI powered boosts those shares set to surge, some 30 percent thanks to
raise guidance and strong chip demand.
Stock investors I think still patiently awaiting a debt deal too. House Speaker McCarthy says both sides were burning the midnight oil overnight
working well into the early hours that at least is a good sign the negotiations continue. Well look at the NASDAQ. They're up some 2.3 percent
bond investors though, not complacent.
I think especially where short term debt is concerned. In some cases, the prices have fallen so far, that when you compare their yields, they're
comparable to risky junk bonds. That's what the markets telling you the bond market at least very concerned short time.
And then come to the rating agencies Fitch warning it could soon cut America's pristine AAA credit rating, citing the political partisanship
that has driven the U.S. to the brink of default. In the words of Tina Turner, it's time for deal negotiators to simply be the best and get the
To Europe now markets today hardly the best stocks lower the German economy officially enters recession slow growth fears in Asia too, with Hong Kong
shares hitting lows for the year, also this hour, two important guests to help make sense of the global economic landscape and the danger that a U.S.
debt default poses to the world.
We'll be hearing from the outgoing World Bank President David Malpass, who's stepping down after more than four years at the helm. And Fatih
Birol, Executive Director of the International Energy Agency, we'll be discussing their latest Market Report.
Now the good news climate spending is surging, but there's always about and but first U.S. House lawmakers are leaving Washington later today for the
Memorial Day weekend, though they're on call if a deal breakthrough comes House Speaker Kevin McCarthy does remain hopeful it seems.
(BEGIN VIDEO CLIP)
REP. KEVIN MCCARTHY (R-CA): I think we've made some progress working down there. So that's very positive.
UNIDENTIFIED MALE: You said this week you need to have a deal this week in order to avoid default.
MCCARTHY: Yes, I still believe we have time to make an agreement and get it done.
(END VIDEO CLIP)
CHATTERLEY: The U.S. is now just seven days away from the dreaded X date where really tough spending choices may have to begin who says we don't
need another hero. Arlette Saenz is live for us in Washington. Arlette, good to have you with us, so the negotiations at least continuing, we
believe until the late if not early hours, which you can call a good sign here. But what hopes particularly if House lawmakers are going to be
leaving for a long weekend.
ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, those negotiations, Julia, are expected to pick back up today as these lawmakers and the White
House are still working towards trying to avert a default in as little as seven days. Now, House Speaker Kevin McCarthy has expressed some optimism
that they will be able to get some type of deal together over the course of the coming week.
But when you take a look at that calendar, they are really facing a significant time crunch. And there have been sources up on the Hill, who
has said that the prospects of getting something passed in time before June 1 could be potentially grim when you look at exactly how much time is
needed to get legislation through Congress and get various members on board with a proposal.
Now, really we have learned that these negotiations as they've been ongoing, one of the key items that remains unresolved is that issue of
spending levels. There have been some areas of an agreement when it comes to clawing back COVID relief funds. But there is also still remained to be
some sticking points when it comes to work requirements and permitting for energy projects.
Now, we will see whether any further developments come over the course of the day. But one thing that's really been interesting as these negotiations
have played out that we've heard a lot from Republicans up on Capitol Hill. House Speaker Kevin McCarthy offering nearly constant updates into where
the negotiation stands.
But the White House for their part has remained incredibly tight lipped around where these discussions and negotiations have been heading. But this
all does come as you saw that warning from Fitch, which said that they've put the U.S. on a negative credit rating watch which could serve as a
potential warning sign for these lawmakers.
People here at the White House have said that they hope that this will cause lawmakers and the negotiators to realize that they need to reach a
bipartisan consensus before actually having the U.S. credit downgraded. That is something that happened in 2011, when this debt ceiling fight
really was pushed to the brink.
So all eyes will be on these negotiations say these lawmakers are expected to head home after votes this afternoon. They've been warned that they need
to be on hand ready to come back within 24 hours. Once I've received some type of notice if a deal is reached.
Of course, they will still have 72 hours to review any bill that might get written if an agreement is reached. But that is still a big question
whether these two sides will be able to come to some type of agreement to how to avert a default in as little as a week.
CHATTERLEY: Arlette, and you raise a great point I think about the rating agencies, it was not great, but it was OK with the S&P the rating agency
when they knocked the U.S. down to a AA + rating from AAA because the two other big rating agencies still had AAA.
If they lose Fitch due to stupidity in this process, and that could have profound implications for funding costs for the United States and for
people that own U.S. debt. We'll see, Arlette Saenz there for now. Thank you.
SAENZ: Thank you.
CHATTERLEY: Now an unconventional presidential launch marred by two technical glitches Florida Governor Ron DeSantis, entering the Republican
Party presidential fray on Twitter spaces. It's basically like a radio show live on Elon Musk's social media platform, Twitter, and your approach. Yes,
a bit of a challenge. Yes.
(BEGIN VIDEO CLIP)
RON DESANTIS, GOVERNOR OF FLORIDA: It just keeps crashing huh?
ELON MUSK, CHIEF EXECUTIVE OFFICER OF TESLA MOTORS: Yes, I think we've got just a massive number of people online, so its servers are straining
UNIDENTIFIED MALE: All right, sorry about that. We've got so many people here that I think we are kind of melting the servers, which is a good sign.
(END VIDEO CLIP)
CHATTERLEY: And the Biden campaign couldn't resist the opportunity to weigh in posting a fundraising tweet saying this link works. Oliver Darcy joins
us now. Oliver, not the only critic of this process and it wasn't you and it was experimental. But there does seem to be some sort of criticism and
debate over actually how many people watch this.
I'm just looking at the Twitter handle at this moment of the host, David Sachs. And it looks to me like 2.9 million people either tuned in or have
listened to it afterwards. And there were other spaces following along too. How many people do we think actually paid attention to this? And what does
that actually mean on Twitter? Yes,
OLIVER DARCY, CNN SENIOR MEDIA REPORTER: You know I'm not sure we'll ever know, because the data just seems really fuzzy. You said that you had a
figure that showed about 2.9 million people watched or listened to this space. I saw figure when I looked at it and said 5 million, I saw someone
else tweet something that said they had seen 6 million.
So I'm not really sure how reliable these figures are. But the bottom line is not really many people. Ultimately, were listening to this thing live as
it was happening. So you know, when you think about like CNN, I know there have been some comparisons to the town hall.
CNN hosted with Trump, which average 3.3 million viewers, those were people concurrently watching at the same time, whereas this Twitter space, at the
most it buckled under about 600,000 people watching or listening at the same time so a much smaller audience. And ultimately, when it did get
working, I think it had a fraction of that about 200,000 people listening to this Twitter space.
And so I think most people probably did not watch or listen to this live. They're hearing about it after the fact that maybe trying to find the link
to listen to some of the audio. But it's really just unclear how many people are even doing that, given that Twitter's numbers are just so fuzzy.
CHATTERLEY: Yes, it's difficult to compare. I'm looking at another one now that we seem to be running concurrently, Marian Norful and that's the 5.5
million that you mentioned as well. Mick Mulvaney, who served as Trump's Chief of Staff also tweeted about this and he was impressed.
He said, look, DeSantis spent 75 plus minutes on pure policy. Interesting, and that Trump could never do that. So, you know, with these new
technologies and new policies, there's always going to be critics and there's always going to be, I think, a few glitches, fascinating to see
whether they try this again. Oliver we'll see, great to have you with us, thank you.
DARCY: Thank you.
CHATTERLEY: Now to Ukraine, by the Head of Russia's Wagner mercenary group has announced that his forces are finally leaving the City of Bakhmut.
(BEGIN VIDEO CLIP)
YEVGENY PRIGOZHIN, WAGNER CHIEF: We are withdrawing the units from Bakhmut. It's 5 pm on May 25. By June 1, the main part will be relocated to the rear
camps. We are transferring positions to the military.
(END VIDEO CLIP)
CHATTERLEY: He's also warning Russians could "revolt" if the Kremlin continues to struggle with the war. Fred Pleitgen joins us now.
Fred, and that's the big question now. If those Wagner troops are eventually leaving in the coming days and they're replaced by Russian
troops. It's sort of been perceived now I think this area what's left of this area let's be clear, is a poisoned chalice, if you listen to this work
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I think it certainly has and I think one of the things we have to keep in mind is that
this certainly was one of the toughest battles that I think all of Europe has seen over the past decades and, you know, Bakhmut that area, there's
really not very much left of it.
If we look at some of the aerial footage that we've seen over the past couple of days, the past couple of weeks at city have essentially been
annihilated. So Yevgeny Prigozhin, who of course, in the past couple of days have been claiming that Wagner mercenaries and the Russian forces have
now captured all of Bakhmut which the Ukrainian still dispute.
It really isn't that much of that area left now he did. He was pictured earlier today. And what we just saw in that video walking around Bakhmut
would go into some of the positions of his fighters and telling them that they were going to withdrawal is quite interesting, because one of the
things he said is that they would rest, regroup and then wait for new orders.
So certainly, it seems as though while he might be done with his force in Bakhmut, he certainly does seem to think that he is going to be coming back
to the battlefields of Ukraine. But the big question, of course, on the ground right now, is this real? Is Wagner really withdrawing from that
area, because that certainly would mix things up in one of the toughest battlefields that this war has seen since it basically started?
We were in touch with the Eastern grouping of the Ukrainian forces, Julia, earlier today. And they told us right now, they can't confirm that Wagner
forces really are withdrawing from Bakhmut. However, one of the things they say that they have been seeing is a significant decrease in the amount of
shelling and the amount of tank attacks coming from Russian forces in that area.
So that could be an indication that is really happening that there is indeed some sort of change going on, on the Russian side. Of course, one of
the things that the Ukrainians have said is despite the fact that the Russians are saying they've captured all of Bakhmut the Ukrainians are
saying for them, this is not done.
They are currently mounting a counter attack in Bakhmut; they say that they are pressing the Russians on the flanks on the outskirts of Bakhmut. And
they intend to take that city back. So Yevgeny Prigozhin may or may not be leaving. Certainly the indications are they very well could be hard for the
Ukrainians. This is something that is not done and they say they're going to take that town back from the Russians, Julia.
CHATTERLEY: Fred Pleitgen for now, thank you. Now Germany has slipped into recession after last year's energy price rises took their toll on consumer
spending the country's GDP dropping 0.3 percent in the first three months of the year following 0.5 percent fall at the end of 2022.
Anna Stewart joins us now on this always a bit cautious with growth data because we know its backward looking. The question is what does this say
about hopes for the rest of the year? I know there's some significant cautiousness I think about hopes for any kind of growth this year.
ANNA STEWART, CNN REPORTER: It's been reading the tea leaves. I mean, we had a hint of this just two weeks ago with some data for March that showed
a big drop in industrial output and production, a big drop in retail sales as well. So it didn't come as a huge surprise. It's perhaps more in line
with the IMS projection for the German economy.
Although some economists today actually now thinking perhaps Germany is heading for a slightly deeper recession than many had hoped. Capitol
economics was that further weakness and Commerzbank think German GDP will actually decline by 0.3 percent this year, much deeper than many others
And they are pointing to weakness in manufacturing, all important indicators in that sector are now pointing downwards. Now, the main cause
of all this is actually aside from industry manufacturing, it's really to do with household spending at this stage, and one of the starkest figures I
think we had was the decrease in household spending by 1.2 percent in the first quarter.
And that's across all things less food, less drinks, less spending on clothes, on cars. And this is the impact both of inflation and interest
rates. And it is stark inflation is still above 7 percent in Germany, food inflation is very high, it was over 20 percent earlier in the year, it's
still above 17 percent year on year, it is eroding spending power.
And frankly, people just don't have enough money to spend. And that is going to have, of course, a further impact on manufacturing. Plus, Julia,
big impact on China, we've had data this week suggesting that Germany's exports to China have dropped significantly and compared to the rest of the
block. So that's also, again, pretty poor data looking forwards for the rest of the year.
CHATTERLEY: Yes, when you tie those things together for me, actually, when I saw this data, I'm sort of surprised that we haven't seen or we've seen
so much resiliency actually in the German economy up to now and that it's only now that we're seeing a sort of technical recession called watch this
Anna Stewart, thank you for that. OK, straight ahead. Hey, funding boom for clean energy investments will speak to the Executive Director of the
International Energy Agency on their latest Energy Report. That's next.
CHATTERLEY: Welcome back to "First Move", the global energy crisis has triggered more investment in clean energy technology. According to a new
report by the International Energy Agency, global investment in clean energy is on cause to rise to $1.7 trillion this year.
In fact, investment in solar power is set to exceed oil for the first time ever. This comes as volatile fossil fuel prices have raised worries about
energy security all around the world. And data shows that annual clean energy investment is expected to have risen by 24 percent in fact, between
2021 and 2023.
Now I promised a buck and there is there's still major concern about the unevenness of that growth. The agency pointing out that more than 90
percent of that increase comes from advanced economies and China. What about the rest? Joining us now is Fatih Birol, Executive Director of the
International Energy Agency.
Sir, fantastic to have you on the show, always great to have your wisdom, I have to say there is great news in this. So that my audience understands
for every dollar invested in fossil fuels 1.7 dollars invested in clean technologies. I know it's not enough. But this is a huge improvement.
FATIH BIROL, EXECUTIVE DIRECTOR OF INTERNATIONAL ENERGY AGENCY: Thank you very much, Julia, you are right. In my view, this is a dramatic shift in
terms of the global energy markets. Just to put it out perspective, only five years ago, it was $1 trillion investment for fossil fuels, and 1
trillion for clean energy.
So one to one ratio and after five years today, we see 1 trillion goes still to fossil fuels, and $1.7 trillion go to clean energy. So the gap
between the clean energy and fossil fuel is widening and in favor of clean energy, such as solar, wind, electric cars, and others.
CHATTERLEY: Just remind me of how many trillions that you want to see invested in climate investment by 2030, because you and I have talked about
this every time and this that's important too?
BIROL: Exactly! So if we want to be in line with our international climate goals, in other words, to reach our 1.5 degrees target, this 1.7 need to be
multiplied by a factor of four.
And when we look at the trends in the last few years how it is an evolving, I think it's a good trend. And if this trend continues, and as you also
mentioned in the beginning, if we see that in addition to adverse economies and China, if we see that an emerging countries in Asia, Africa, Latin
America joins this trend, we may still have the chances to reach our international climate goals. Today's news we share shows us that our
climate goals are still alive.
CHATTERLEY: Yes, but to your point, how does some of these poor nations transition without the money, the investment from the private sector in
particular, to be able to unlock the potential that they have to when you're saying that 90 percent of this spending is coming from sort of the
rich nations in China? You were just at the G7 was that discussed?
BIROL: Yes. In fact, this G7 meeting was a bit different than the previous ones. A Japanese Prime Minister Kishida not only invited the G7 leaders,
but he did also invite the Prime Minister Modi of India, Lula of Brazil, Joko Widodo of Indonesia, major emerging countries, and the decision on
energy and climate.
When I addressed the issue of energy and climate change, when I gave the view that a new, clean energy economy is emerging, I was very happy to see
that all the world leaders coming from different countries with different political backgrounds, different economic development levels.
They all agree that the future of energy of the Verge is a clean one. So this was a really exciting and encouraging for me, and I'm sure for others.
CHATTERLEY: So you can feel a sentiment shift as well as the physical investment shift. Now, let's talk about the problems in this report. And
two things stood out to me Fatih, that coal investment this year, on course, to reach nearly six times the levels that we want to see by 2030
and the oil and gas firms.
A lot of these guys talk about transition, they talk about cleaner forms of energy, carbon capture, and yet their investment in these kinds of
technologies, what less than 5 percent of their upstream spending in 2022. There's a big problem with green washing in this sector, surely.
BIROL: Yes, Julia. In terms of coal, in fact, globally, investment in coal related to electricity generation is that decline, except one country,
which is China. China is still investing in the coal power. And the main reason is the security concerns because China hit to severe electricity
They had major blackouts they are investing a lot in coal power, in case they need it. But in general, the global trend is a declining trend. And I
believe China will continue or join this trend very soon. In terms of oil and gas companies, you are completely right.
Last year, global oil and gas industry, international oil companies, national oil companies, they made about 4 trillion U.S. dollars of
revenues, and this is the record high and compared to the average years recent trends two times higher than the average trends in terms of their
So we look what they do with this money. More than half of this money, the cash flow goes to dividends, the share buybacks and debt repayment, less
than half only go to energy investments. And then you look at their how much money they put in the clean energy because we want to look at
As I'm sure you will know, many of the leaders of the oil companies say they want to be a part of the solution. And they are eager to find a
solution to our climate problem. But when we look at the numbers, the amount of investment they put the clean energy is less than 5 percent. So I
think there is a need of calibration here.
Either, they calibrate their investment expenses increase the investment for cleaners you hire or what they say publicly that they are eager to
address the climate issue, they hit a bit toned down, there is a bit of a gap between the what is said and what is done.
CHATTERLEY: Yes, you're being a diplomat, I would say the data doesn't lie, and perhaps CEOs do. But you can leave that in my hands. And something
needs to change there. In those discussions at the G7, as well, the state of sanctions, particularly on the energy sector, and all price caps on
Russia, in particular, something else that I think has come out of my discussions is nuclear power, and provisions for tools and supplies tied to
nuclear power that's been bought from Russia.
Fatih, can you talk to us about the still ongoing, excessive reliance, I think, particularly of Europe, on Russia, and where do you see that headed,
and what that means for prices, as we head towards the winter months, through the summer and into winter?
BIROL: Exactly. So, Julia, in my view, Europe, European governments made a strategic mistake in the last four or five decades, they rely heavily on
Russian energy, the abundant and cheap Russian energy, and in the energy world, there is a magic word called diversification.
You don't put all the eggs in one basket, but Europe made a historical mistake. And there was over reliance on Russia, but again, they made huge
efforts. And as of today, the share of Russian gas, Russian energy in Europe reduced substantially to single digits now, but I hope we learn from
What is happening is that as a result of this shock, energy security shock, European countries and other countries redouble their efforts to look at
the alternatives to natural gas and oil. It is one of the reasons why we see such a big jump in clean energy and nuclear power.
In the past, clean energy was mainly driven by a climate concerns. And now, a government's investors see clean energy is a lasting solution to our
energy security problems. And nuclear power in the context, in addition to solar and wind is making a strong comeback in Europe, in Japan, Korea,
U.S., Canada, everywhere.
And here, of course, importance is once again, it cut the Reliance as much as possible. One single country, one single company, one single trade route
and this is a lesson I think one should learn from the current crisis.
CHATTERLEY: Absolutely. It's heartbreaking that it took war to do it.
BIROL: Yes --
CHATTERLEY: But some positive coming out of this says we are finally seeing at least the path of direction of investment in Climate Technologies,
cleaner Climate Technologies happening. Sir, thank you so much for your time, great to with report.
BIROL: Thank you.
CHATTERLEY: Thank you, the Executive Director of the International Energy Agency there. All right, coming up after the break, Microsoft pointing the
finger at Chinese government backed hackers in a plot disrupts communications between America and its allies. More details -- response,
CHATTERLEY: Welcome back to "First Move"! Into Japan now and a rare instance of deadly gun violence police say three people have been killed.
It happened in Nagano City in Central Japan. The victims include two police officers and a woman. Let's get the latest from Marc Stewart who's in
Tokyo. Mark, good to have you with us! What more do we know about what happened?
MARC STEWART, CNN CORRESPONDENT: Julia, this is a story we've been following for the last five hours or so. As you mentioned, three people are
now dead a woman and two police officers. The exact circumstances of how this unfolded still not very clear.
The two police officers though and the woman we are told were killed and what's been described as an attack that involved a stabbing and a shooting.
In the last few minutes we have also learned the identity of the two police officers. One is a man who was 46 the other is 61.
The other person killed a woman who is believed to be in her 40s or 50s. And that's what we have been able to gather so far. But again, exactly how
this unfolded still not clear, this is believed to have taken place in some kind of residential area.
There are many homes nearby, and that some people were actually evacuated at one point. A storyline that we're following right now is a potential
standoff involving who we presumed to be the gunman in a building nearby. There are some reports that a shot was fired about an hour ago we have
heard that but that is not something that police are able to confirm at this point.
It's important to point out that gun violence in Japan is very rare. If we look at history in 2022 last year, there were four gun related deaths. One
of those cases involves the assassination of Former Japanese Prime Minister Shinzo Abe who was assassinated using some type of homemade weapon that the
gunman used as a homemade device.
Many of the other cases in majority of those other cases were gang related, if you will. And finally as far as gun ownership in Japan, handgun
ownership is very rare. But in this area of Nagano it is known for its outdoors. It is known for its wildlife, it's a big hunting area.
So it is not uncommon for people there to own rifles, hunting rifles, if you will. But the requirements, the background checks, the selection of all
of it is very strict. And that's something that is very unique for Japan. Julia, we'll be following the story all belong here on CNN, if we hear any
more developments will certainly pass them along to you.
CHATTERLEY: Absolutely. And we'll be back with you when we do, Marc Stewart, thank you for that. Now a collective disinformation campaign
"Beijing has responded to Microsoft's claims that Chinese government backed hackers are targeting critical infrastructure in the United States".
According to Microsoft, their hackers aim is to disrupt communications between the United States and its allies in Asia in the event of a future
U.S. China crisis. Some security agencies are also concerned that China could apply the same formula worldwide as Kristie Lu Stout reports.
KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): It's called "Volt Typhoon" a state sponsor a Chinese hacking group that's been spying on U.S.
critical infrastructure. In a report out on Wednesday, Microsoft says that the group is out to disrupt critical communications between the U.S. and
Asia in the event of a crisis.
According to Microsoft Volta Typhoon has been active since mid-2021, and has targeted critical infrastructure in parts of the U.S. including the
territory of Guam. Guam is home district strategic U.S. military bases and as a major communications hub between the U.S. and Asia.
Sectors targeted by the group include construction, education, government, information technology, manufacturing, maritime, telecommunications,
transport, and utility. And Microsoft published details of the code online so users can find and remove it, but also added that "Detecting and
mitigating this attack could be challenging".
Well, China has slammed the report. In an email the Spokesperson for the Chinese Embassy in Washington D.C. says this, "The allegation by the U.S.
side that the Chinese government is supporting hacking is completely distorting the truth".
And at a MOFA briefing today Spokesperson mounting said this "This is a collective disinformation campaign of the five eyes coalition countries by
the U.S. for geopolitical purposes. The report comes as tensions simmer between the U.S. and China over a raft of issues including Taiwan, access
to technology and territorial disputes in the Pacific, Kristie Lu Stout, CNN, and Hong Kong.
CHATTERLEY: Coming up on "First Move", David Malpass bids farewell to the World Bank presiding over one of the most turbulent times in human history.
He joins us next.
CHATTERLEY: Workers at the World Bank turned out in force to say goodbye to their President David Malpass. He's stepping down after more than four
years presiding over the international partnership to reduce poverty and increase growth. The World Bank Group isn't the bank in the traditional
sense it's one of the world's largest funding sources for developing countries and beyond.
The Malpass era has been defined by the group's response to four -- global crises COVID vaccine financing and social protection to 1 billion people
more than $23 billion worth of financial support to Ukraine, direct help to nearly 300 million people facing a food security crisis and delivering $32
billion worth of climate financing.
That's a record spent, and perhaps a response to questions about his climate leadership, something he also clarified on our show, just to be
clear. But he's also now warning that the World Bank Group can and does help with these kinds of problems, it can't solve them and more support is
And here and in his departing op-ed for "The Wall Street Journal", Malpass said the global economy faces numerous obstacles, including rising interest
rates, too much borrowing unsustainable debt in poorer nations, and persistent slow growth in wealthier ones.
These challenges call for a fundamental shift in policy. And the baton for that is now being passed on. And I'm pleased to say David Malpass joins us
now, David, fantastic to have you on the show. Thank you so much for joining us. An extraordinary and unprecedented four plus years, I think you
certainly didn't have a quiet time. I know you're proud of your people. What's your strongest takeaway?
DAVID MALPASS, PRESIDENT, WORLD BANK GROUP: Hi, Julia, the takeaway is the need for intensity and keeping the vision on good outcomes for people in
developing countries. It's not about the system. It's not about governments, it's about people. And that means poverty.
That means job, skilling. I just spoke this morning at the Youth Summit that we're having at the World Bank this morning, or today, and the youth
unemployment is this giant problem, you need skills, and that's what gets you to growth. So just across the board, the need for intensity and focus
on growth and on you know, eye on the ball is how do we get good outcomes for people?
CHATTERLEY: I love the fact that you could have answered that by talking about your workforce at the World Bank, your record at the World Bank, but
you're still hundred percent committed to addressing all the challenges and the meetings that you had this morning. So we'll circle back on that. And
we will focus at least on -- go on.
MALPASS: The things come -- records come and go.
CHATTERLEY: I know the challenges don't.
MALPASS: The thing is overarching I think for hundred years, I hope the World Bank will be focused on the end result. So how many conferences with
youth get to more jobs and better skilling? So that's the focus.
CHATTERLEY: Yes, you don't have to apologize, sir. I get where you're going. And the challenges persist. And you're not sugarcoating them. And
this op-ed, I think challenges us all to ask better questions about finding better fixes.
We'll talk about the sort of medium longer term and the concerns that you have about weaker growth. And as we've discussed many times, over
indebtedness and an inability for many of these nations to move to do the things they need to do to help their people.
But I do want to talk short term, about the U.S. debt ceiling negotiations. You've been through these back in the 1980s yourselves where you had to
worry about the spending limits and increase the debt ceiling. David, what do you think of what's going on today? I think for most people looking at
this, it's utter lunacy.
MALPASS: A difficulty is the law it, the debt limit law is not well positioned. It says if you don't raise the debt, you're going to default,
well, that's not really a viable choice. So I've advocated at some point, people take a deep breath, and rewrite the law. So that what it does is
actually gives a limit on spending before you spend the money.
I've been pleased to see, you know, the House of Representatives passed a bill to increase the debt limit. So at least there's one thing on the
table, and then they've engaged in the negotiations, this is what happens almost every few years, they go into this cycle.
So I'm hopeful that they can get to an agreement that will raise the debt limit, all we're talking about is paying for money that's already been
spent, and then also find a way to have more restraint on spending going forward. That's the age old question.
CHATTERLEY: Yes. And that sort of leads us on to the next discussion. But just very quickly, can I ask if the World Bank is making any preparations
because you have great responsibilities all around the world? For a potential default and what kind of repercussions that might bring? Do you
have some kind of war room working on it, for example?
MALPASS: I don't expect a default and as far as the issuance of the bank there -- they look at technical steps working with Wall Street and the
whole community. So there's not a special war room or no expectation of a default.
CHATTERLEY: Good to know. Let's talk about reduced spending though because that is one of the measures that you have talked about and you say needs to
be done in advanced economies simply because higher interest rates high debt levels is sucking money away from investment money I'm talking about
from poor nations that need it to address their own social issues to address climate.
It's one of the strongest takeaways, I think, from our discussions sort of some form of debt suspension, or we hope, debt forgiveness for these
nations going forward. How optimistic are you that we're going to see that in the next couple of years, because you've driven the negotiations on
MALPASS: I've been working on this a long time, I think there needs to be more transparency about the debt, there needs to be reconciliation, you
know, there's not even a clear understanding of how much debt for a country and so when it goes into a difficult situation, the starting point is to
have creditors claim that there is debt and then reconcile that.
So there's a lot of work that goes into actually getting to a restructuring. So I guess I have to say I'm optimistic that there will be
some, but meaning a few countries that successfully restructure, but the key takeaway is the wait for the countries, the years that go by working on
it, are really costly.
So for the world, what I would like to see is a better process that there's more certainty on that there will be an outcome, it will reduce the net
present value of the debt using a standard -- a single discount rate, not gains in terms of the financial engineering, and actually gets it done.
That means the creditors need to reach agreement and there needs to actually be that the paperwork that restructures the debt, and it's got to
be done right now. The world system is one by one, and it hasn't been happening.
CHATTERLEY: And China will be at that table David, I'm always going to ask you this question?
MALPASS: That's fine. Yes. In fact, even right now, there's a meeting going on Zambia, and China's at the table and others that as we speak, but the
key thing is for them to actually agree on a debt treatment, and then do the paperwork to get to it.
CHATTERLEY: Yes. And we will continue to watch that too, as I know, you will, as you say, you're not getting distracted in the slightest. But I am
going to push you, David, your proudest moment over the last four and a half years? And do you have any regrets?
MALPASS: Proudest moment, I think, is the quickness of the response to the crises. I'm also proud that we've and happy that we've been able to put the
macro issues on the table, as you look over the next 20 years or 40 years for the world.
It's really important that there be a better balance within global growth, that gets more jobs created and more broadly, included in jobs. That means
strong growth in median income for people around the world, that hasn't been happening.
And I think there needs to be a real rethink of fiscal and monetary policy in the advanced economies. And then in the developing countries, that to an
extent know how countries get to growth, they just it's an implementation problem.
That means they have to have currencies that actually work that allow people to exchange through a money system, a payment system that works,
there has to be some fiscal and monetary policy cohesion within their program. And then very importantly, the regulatory policies and micro
economic policies that enable job creation.
The World Bank is working with private sectors around the world and I think this will be an important push for the future is to work with the countries
on what exact changes are needed in the regulatory structure that invites more capital inflow from their own citizens and the rest of the world.
CHATTERLEY: I know the answer to my next question, because you're already telling me in the way that you're responding to all -- to questions. Are
you going to take a holiday? Are you going to take some time off? And can you give us in on what you're going to do next? And I can tell the answer
already is going to be no. There's no time.
MALPASS: I'm full of energy.
CHATTERLEY: I can see.
MALPASS: We've really wanted to have a strong transition at the World Bank. So I'm happy that's going on to my successor in the bank itself is
energized so that's good. And then I'll be looking both in the private sector for companies and for ways that people can engage in these global
problems, but also you no profit.
I didn't have used that word, but that's a very positive important word for developing countries as well. There has to be enough profit made within the
economy to pay taxes to create education and to move forward to reinvest in business so I want to be part of that as well.
CHATTERLEY: Yes, I can see a quick line on AJ confident that he's going to take the baton swiftly and run with it?
MALPASS: Yes, of course. So we've gotten along well, and it's a big organization. And there's lots of choices for the new leader, and I'm
looking forward to helping wherever I can in setting up the transition, and then I'll be doing other things in the World Bank's an important part of
the global architecture.
CHATTERLEY: I'm sure. David -- such a holiday please as well. You've earned it. David Malpass, thank you so much. Great to chat to you and we'll speak
MALPASS: Thank you.
CHATTERLEY: All right after the break, remember a trial blazer, trendsetter and icon well we take a look back on the reign of the Queen of Rock 'N'
Roll Tina Turner.
CHATTERLEY: Welcome back to "First Move". A quick look at Wall Street as the stock market gets warmed up today and we are and have opened we'll call
that mixed investors of course awaiting the latest developments in the talks to avert a U.S. debt default word from the House Speaker McCarthy is
that negotiators worked well past midnight helping the mood.
It also shows negotiators are truly engaged before next week's Treasury deadline but are they engaged enough? The NASDAQ the big winner in the
meantime driven by a sizable rally in chipmaker Nvidia, call it Nvidia Nirvana shares currently up more than 23 percent. The company raising its
guidance as demand for its artificial intelligence chips soars.
And fans around the world are in mourning for the loss of an iconic voice. She was a showstopper, a survivor an icon and too many precisely what she's
singing simply the best.
Throughout her decade long career and what a legacy she won 12 Grammys sold over hundred million records and were inducted into the Rock 'N' Roll Hall
of Fame twice. Tina's family said the singer died peacefully at her home in Switzerland on Tuesday after a long illness. Here's a look back at her
remarkable life in her own words.
(BEGIN VIDEO CLIP)
TINA TURNER, SWISS SINGER: I just did what I wanted to do and what I felt like doing. That's my style. I take great songs and turn them into Rock 'N'
Roll songs on stage. My performances and energy on stage -- the crowd the music or the whole atmosphere gets me going. It took a long time to get to
I had had a lot of violence, houses burn cars shot into the lowest that you can think of in terms of violence that I felt that getting it out would be
not suppressing it anymore letting the world really know.
Well, I think you're asking me, if I had a word of advice to the up-comers right? I think I can say that they plan to make a life of their career.
They have to be patient and have a very strong tenacity and endurance because the business is attractive, but very hard.
UNIDENTIFIED FEMALE: I can't think of anything else I want to do because it's all done now.
(END VIDEO CLIP)
CHATTERLEY: The queen of Rock 'N' Roll. And that's it for the show. "Connect the World" is up next. I'll see you tomorrow.