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Quest Means Business
S&P Says Russia Has Defaulted On Its Foreign Debt; Biden Tells Modi Not To Buy More Russian Oil; Russian Ruble Recovers Despite Sanctions; Shanghai Easing COVID Lockdown Despite Record Infections; Shahbaz Sharif Sworn In As Pakistan's New Prime Minister; Russia Targets Rail Stations In Eastern Ukraine. Aired 3-4p ET
Aired April 11, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN INTERNATIONAL HOST: All right, not a good start in the week for stocks. Let's take a look here and see how the Dow is doing, down about
200 points as Treasury yields are rising. The NASDAQ is faring even worse, down one and a half percent.
Those are the markets and these are the main events: Russia has defaulted on its foreign debt. Rating agency S&P makes the call after Moscow tries to
pay creditors in rubles instead of U.S. dollars.
And the U.S. President has a message for India's Prime Minister, increasing imports of Russian oil is not in your best interest.
And Elon Musk says he will not join the Board of Twitter after all.
Coming to you live from New York, it is Monday, April 11th. I'm Zain Asher, in for my colleague, Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, Western sanctions are pushing Russia toward a default on its foreign debt. The rating agency S&P says that Moscow is in
what's called "selective default" for trying to pay bondholders in rubles instead of dollars.
The Russian Finance Minister is vowing legal action and the Kremlin had said beforehand that the default is artificial because its dollars have
been frozen by Western banks. A full default would be the country's first since the Communist Revolution more than a century ago.
Anna Stewart is joining us live now in London. So Moscow is basically saying this is not a real default. They actually do have the money, but
they can only pay in rubles and not in dollars. What is the economic impact, Anna, do you think of this sort of selective default by Russia?
ANNA STEWART, CNN REPORTER: Well, this is interesting, and in many ways, it is symbolic if you consider that, as you said, in terms of foreign health,
sovereign debt, this would be the first sort of default since well, Bolshevik Revolution is over 100 years ago.
In real terms, of course, being called on a default by a credit agency and having a rating further downgraded into junk, that means borrowing costs
will be higher. But of course, if you're already locked out from international markets, due to sanctions, that probably doesn't make a huge
amount of difference.
The Russian Finance Minister in a pro-Kremlin newspaper today said not only are they going to sue over this selection default, but they are also going
to halt bond sales for the rest of the year. So, there's definitely been some fallout there.
ASHER: And who exactly do they plan to sue, Anna?
STEWART: That is a very good question. They didn't get into the legal detail. I have to say they have been forced into this situation. I mean,
even into two weeks ago, the U.S. were allowing them to use frozen assets, over half of all their foreign reserves are frozen.
Currently, they were allowing some of these assets to be used to pay back foreign investors for debt payments. That exemption, no, that was taken
away last week. So Russia has been forced into this position for the very obvious reasons that the escalation of the war on the ground in Ukraine,
and that that will probably be its legal argument, if it comes to that, if it does go through with that.
It is possible there is a legal argument there; it's possible, some of these payments could be delayed. But frankly, right now, credit rating
agencies are calling this a default, their credit rating has been downgraded now for many, many weeks. It's been in junk status for some
So it really wouldn't make a huge amount of difference, perhaps some differences on the international investors that hold this step, though.
ASHER: And the E.U. in the meantime, is working on its sixth round of sanctions against Russia. What has been the economic impact on the ground,
especially in terms of the lives of ordinary Russian citizens?
STEWART: In Russia and Ukraine, what's interesting, you know, Zain. We've had this big report out today from the World Bank, now more in the region,
and it is looking at the impacts that the conflict on the ground in Ukraine has had both in Ukraine in Russia and some of the surrounding economies.
The headline stats, pretty shocking reading for Ukraine, it predicts that their economy will shrink by 45 percent this year, a worst case projection,
should the war actually escalate on the ground, we'll see the economy shrinking by 75 percent, and of course, then you've also got the impact on
the ground in Russia as a result of sanctions as a result of trade disruption. They're looking at a contraction of their economy of 11 percent
this year, that according to the World Bank.
But again, if this situation on the ground were to escalate, they see that potentially going up to 20 percent. So big impact, both on those economies,
all of the surrounding areas, and a real drag actually on global growth around the world.
ASHER: All right, Anna Stewart live for us there. Thank you so much.
The White House says that Joe Biden tried to dissuade India's Prime Minister from increasing its imports of Russian oil. Mr. Biden and Narendra
Modi spoke in a virtual Summit.
A U.S. official said that Biden did not demand that India stop importing Russian oil altogether. The White House Press Secretary Jen Psaki said the
Indian government can make its own decisions.
(BEGIN VIDEO CLIP)
JEN PSAKI, WHITE HOUSE PRESS SECRETARY: I think the President conveying, our Deputy National Security Adviser conveying they should take steps. We
encourage them to take steps to diversify. We're here to help and assist in that and also conveying it's not in their interest to increase the import
of Russian oil. I think that speaks for itself.
(END VIDEO CLIP)
ASHER: As Western sanctions bite, Russia is looking for new trade partners to buy its energy. Some countries are willing to step in even amid rising
pressure from the U.S. and its allies.
Clare Sebastian has more.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice over): Less than three weeks before invading Ukraine, Russia's President visited China to attend
the Winter Olympics, and most importantly shore up relations with his biggest trading partner.
In early April, with Western sanctions tightening on Russia, it was Foreign Minister Sergey Lavrov on the travel circuit. This time in India, the
country dependent on Russia for about 60 percent of its military equipment.
SERGEY LAVROV, RUSSIAN FOREIGN MINISTER: We will be ready to supply with any goods which India wants to buy.
MARIO BIKARSKI, ANALYST, ECONOMIST INTELLIGENCE UNIT: What Russia is now trying to do is to find the replacement of these markets that it has now
lost, so to replace investment, to replace businesses, and to replace goods that are traded.
SEBASTIAN (voice over): And Russia has options. This U.N. vote on March 2nd serves as a rough guide. Five countries voting against a resolution urging
Russia to end the offensive in Ukraine. Russia, of course, and Belarus, North Korea, Syria and Eritrea, 35 abstaining, including China and India,
141 countries voted in favor.
SEBASTIAN (on camera): What you're starting to see is that this conflict is splitting the world. This map produced by the Economist Intelligence Unit
sets out what they see is the long-term stance of countries on this war, those that broadly support the West in the very pale orange, those that are
trying to stay neutral like India are in the darker orange here and in red are those that either directly support Moscow or staying close to its
narrative on the war, including China.
So this is not an isolated Russia, but a potential redrawing of the global order when it comes to geopolitics and trade.
SEBASTIAN (voice over): There are signs this could be happening. Pakistan, whose now former Prime Minister was in Moscow the day the war broke out,
struck a deal in March to buy Russian wheat and natural gas and says it's close to an agreement for Russia to build a gas pipeline in that country.
Meanwhile, some Indian refiners have bought Russian oil at a discount according to Reuters. Analysts say this kind of deal making could though
get harder as the conflict goes on.
BIKARSKI: The sanctions regime that is currently in place is constantly expanding, and is also really unclear what the sanctions actually involve
and where the companies will fall on the secondary sanctions and whether something is not sanctioned now could be sanctioned tomorrow.
So there is a lot of uncertainty there and a lot of companies are really, really wary of doing business, doing trade with Russia.
SEBASTIAN (voice over): Despite saying publicly, it opposes sanctions on Russia, China is staying silent on whether it will let Moscow convert its
yuan reserves into dollars or euros, critical for a country facing default.
Brazil whose President visited Moscow in February in which is heavily reliant on Russian fertilizer is set to receive its last shipment at the
end of April according to risk management consultancy, StoneX. It says no more had been scheduled because banks and shipping companies didn't want to
fall foul of sanctions.
Russia facing an 11 percent contraction this year, according to the World Bank is working overtime to keep its remaining markets open, as the risks
for its allies grow.
Clare Sebastian CNN, London.
ASHER: The World Bank says that Russia's economy will take a massive hit from the invasion. It is projecting that sanctions will cut Russia's
economic output this year by more than 11 percent. The war is hitting Ukraine even harder. Its economy is projected to shrink in nearly half.
The bank said the full extent of the contraction will depend on how long the fighting continues.
Adam Posen is the president of the Peterson Institute for International Economics. He joins us live now from Washington, D.C. Adam, thank you so
much for being with us. So what exactly has six weeks of war done to Ukraine's economy?
ADAM POSEN, PRESIDENT, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Zain, it's cannot be overstated. The economy has basically been destroyed.
What you mentioned, the figure of roughly half of this year's income will go away because we're seeing a level of destruction we haven't seen in
Europe in forever.
We have seen it in other instances of Russian aggression like in Syria. We have seen it in other places, but not in Europe. And when you have your
male population pulled into the military, your capital stock being blown up, 10 percent of your population becoming refugees, there's nothing there.
There's just -- it's very sad.
ASHER: And it's not just about Ukraine and also Russia. We're going to get to Russia's economy in just a moment, but it is also the surrounding
nations in Central Asia, in particular -- particularly are going to also take a hit as well.
POSEN: Oh, yes. I mean, Ukraine is not a large economy in peacetime, but it is a very important player among its local region. So the countries in
Eastern Europe that are getting -- and in Central Asia are getting a double whammy. On the one hand, Poland, notably Romania, Bulgaria, are taking in a
lot of refugees, and they're losing mutually beneficial trade with Ukraine.
But also, as I know you just covered, there are countries like Egypt, like Brazil, where they are very heavily dependent on Ukrainian and Russian
grain stuffs, fertilizers, oils, and so that's very hard for poor countries to substitute in any short amount of time.
ASHER: And in terms of sanctions, with Russia, as you know, the E.U. is sort of debating trying to put together the sixth round of sanctions
against Russia. We know that their economy is expected to shrink by about 11 percent or so. But what has been the overall economic impact on Russia
of this war since the beginning, since when it started six weeks ago?
POSEN: The overall impact on Russia, is actually, I think less than people realize. It's the flip side of Ukraine. I think the estimates or the
forecasts of an 11 percent reduction in the Russian economy may be a little too large that the reduction would be even less. There are a lot of
anecdotal reports of people in St. Petersburg, in Moscow, in other cities in Russia managing to keep on with life.
And, you know, frankly, the sanctions are big, but they are primarily about exports and oligarchs and exports and oligarchs are only so much of the
Russian economy. I mean, so they're hurting. I mean, this is anywhere from two to four times the size of a genuine recession in U.S. or Europe, but it
is not anything like the devastation we're seeing in Ukraine.
ASHER: But that would of course change if the E.U. decided to make a real move when it comes to energy in terms of banning or putting embargoes on
Russian energy. We know that countries like Lithuania, Latvia, Estonia have all said you know, they're not going to be importing Russian gas anymore.
If the E.U. as a whole, and I know it's tricky, but if they moved towards banning Russian oil, Russian gas and again, it's tricky because a lot of
European economies rely very heavily on Russian energy, what would be the impact then?
POSEN: Then it's much bigger. I mean, sorry to just spell out the obvious, perhaps, Zain, but you know, Germany, Italy, Austria to a lesser degree The
Netherlands and then some of the Baltics, as you mentioned, do import a huge share of Russian natural gas, which was dedicated through the
pipelines that ran through Germany and Poland, and then they import a significant share of Russian oil and the sanctions hit them in three ways.
If the E.U. does embargo these supplies and they have the direct losses of markets, it is much harder for them to sell it elsewhere, particularly the
natural gas, because you need pipelines or something to ship it and shipping it by boat for mostly landlocked Russia is not a very good option.
And thirdly, and this is why the E.U. is to my mind rightly considering upping the sanctions. The embargoed goods would be a major source of hard
money, of dollar and euro exchange that then the Russians can use to buy other things from outside their economy.
So you cut this off, the economic impact on Russia does have three-fold the impact that the previous sanctions have done.
ASHER: All right, Adam Posen live for us there. Thank you so much.
POSEN: Thank you.
ASHER: Not particularly optimistic. That's how the Austrian Chancellor says he feels after visiting Vladimir Putin in Moscow. We will have much more on
that conversation, next.
ASHER: Austria's Chancellor expressed his discouragement after speaking with Vladimir Putin in Moscow. The talks marks Putin's first face-to-face
meeting with a European leader since invading Ukraine.
Chancellor Karl Nehammer told reporters, the 75-minute conversation was in his words, not a friendly visit. However, he also emphasized the necessity
of continuing to attempt peace talks.
(BEGIN VIDEO CLIP)
KARL NEHAMMER, AUSTRIAN CHANCELLOR (through translator): At the moment, I'm not particularly optimistic after my talks with Mr. Putin. The offensive is
being prepared with determination.
We need to confront the Russian President with the facts and how we see the war. So there must not be a vacuum with regard to the consequences of this
(END VIDEO CLIP)
ASHER: Nic Robertson joins us live now with more on the visit. So Karl Nehammer before meeting President Putin said, listen, I plan to tell the
President the truth. I'm going to tell him the exact truth, because obviously he has been surrounded by yes men, according to a lot of people.
Nehammer said he planned to tell him the truth. What exactly did he mean by that?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, he meant that he had just been to Ukraine, had seen what he calls the aftermath of war
crimes, who said that those responsible for the war crimes should be brought to justice. And he said that he told President Putin that he had
seen with his own eye, what he described as, quote, "the immeasurable suffering of the people of Ukraine," following what he described as
Russia's war of aggression in Ukraine.
So this is the language that he said to use with President Putin. So, in a way that sort of punches through the bubble, if you will, of the people
around President Putin, who won't tell him what's really happening on the ground.
But in his own words, the chancellor there, saying he is not -- he doesn't really think that it made a difference. But this was important, important
from a humanitarian point of view to do his best to help establish humanitarian corridors to stop the suffering. He said, He told President
Putin that as long as people were dying in Ukraine, then the sanctions would continue to get tighter on Russia.
So, it was a very clear message, a very stark message. But again, this is one that was important for him to deliver, important from the international
community's point of view that President Putin should hear it, but not one that really seems to be changing President Putin's course in it.
But I think the importance for the Austrian Chancellor here was that he came with the moral authority of having witnessed the aftermath of the war
crimes and be able to say that within days.
He was in Bucha on Saturday; Monday visiting President Putin. That gives him as a leader, a lot of clout going into that meeting, even if it didn't
land the impact that he would like it to have had.
ASHER: Do we know what President Zelenskyy of Ukraine thought about this meeting?
ROBERTSON: He thought that it was useful from a humanitarian perspective that the Austrians were doing it. There was concern that this might be used
by the Kremlin to their advantage to spin it that they were sort of, you know, getting to meet with European Union -- with European Union leaders
that this would be something that the Kremlin could use to their advantage.
ROBERTSON: But it seems that the Austrian Chancellor really held this meeting and held it in such a way without cameras, that there wasn't the
opportunity for the Kremlin to spin it in this way.
So, you know, from that perspective, this doesn't give the Kremlin the opportunity to, you know, to get political capital, which was a concern it
seems to the Ukrainians, but in terms of trying to, you know, go in with moral authority and have a better humanitarian outcome than the current
situation tried to establish those humanitarian corridors that President Zelenskyy felt was worthwhile. That's what he said publicly.
ASHER: All right, Nic Robertson live for us there. Thank you so much. President Putin's former chief economic adviser says the energy embargoes
are crucial to stopping Russia's war machine. Andrei Illarionov told the BBC a full embargo on Russian oil and gas could end the invasion within a
couple of months. He also said, a change of government in Russia is inevitable sooner or later.
Joining us live now is Angela Stent, Senior Fellow at the Brookings Institution, and she is also the author of "Putin's World: Russia against
the West and with the Rest." All right, Angela, thank you so much for being with us.
Are sanctions the right way -- are sanctions the right response in terms of getting Putin to change course here.
ANGELA STENT, SENIOR FELLOW, BROOKINGS INSTITUTION: Well, the sanctions aren't going to get him to change course, we know that. But Russia had to
be punished for what it's done. If there were no sanctions, the Russians would think they could get away with all of this with impunity.
And since President Biden made it clear that there would be no NATO troops directly confronting Russians in Ukraine, sanctions really were the only
option and these are very far reaching and tough sanctions. They have already affected the Russian economy, they will affect it even more in the
future, particularly the export controls, all of the banking sanctions.
And of course, the last piece of that would be a total embargo on Europeans purchasing Russian hydrocarbons, that hasn't come yet, and I think that
will still take some time to come up.
But at least, you know, the Russian economy, and Russian society will suffer from all of that, and they will have to pay for the horrors that
they've unleashed in Ukraine.
ASHER: The I.M.F. is predicting that Russia's economy was shrink by roughly 11 percent or so this year. But my last guest actually said that the impact
could actually be much smaller than that. Obviously, nobody has a crystal ball here. But he didn't believe that it was -- that the impact would be as
great as other people from the I.M.F. necessarily think so.
If that's the case, then how should the next round of sanctions, the sixth round of sanctions be tailored and targeted in order to inflict maximum
STENT: Well, I think that the only thing left really are the energy sanctions. I mean, if you're pumping billions and billions into the Russian
economy all the time, that helps fuel paying for the war. If they didn't have that money, they couldn't expend it on their military like that. They
would have to come from somewhere else.
So those really are, you know, those are the last remaining big sanctions, practically everything else has been sanctioned.
ASHER: So how likely is it, especially countries, like for example, Germany that rely very heavily on Russian energy, how likely is it that you know,
they're going to agree to a much larger sanctions, especially when it comes to embargoes on Russian oil and gas?
STENT: Well, so far, they haven't done that. I think agreed to not purchase Russian coal, but they are dependent still on Russian natural gas and oil,
and the German Chancellor Scholz has said, you know, this isn't the time to do it.
He is being pressed to do so by his Green Foreign Minister, and the Vice Chancellor, who is also from the Green Party. So, I think it'll take some
time to do that. I wouldn't expect that anytime soon.
ASHER: So there has been sanctions, as you know, against -- you just touched on it -- Russian coal, for example, that's been embargoed by the
E.U. There has also been sanctions against Russian oligarchs, sanctions against Russian banks.
I mean, energy aside, is any of that having a large scale impact, do you think?
STENT: Well, it's not having an impact on the policies so far, as I said, but it certainly is having an impact on the Russian economy, on ordinary
people's ability to buy things. The shelves are already quite empty in a large number of places.
Inflation, some of the same things, of course, that the West is suffering from the sanctions. So it's having an economic impact and it is impacting
those oligarchs who are sanctioned, too, but of course, they're not going to have any impact on the Kremlin's decision making.
Those decisions are made by President Putin and a very small group of people around him and even you know, as we've just heard with the Austrian
Chancellor going there, yes, he gave him a piece of his mind and told him what he'd seen.
But you know, Putin isn't necessarily going to believe any of that. So he is pretty much insulated in what he is doing from the realities of the
ASHER: So these sanctions are not necessarily causing Vladimir Putin to change course, but they are having an impact on the Russian people and
causing the Russian people to suffer.
By the way, many of whom do not support this war, many of whom do not support Vladimir Putin, whether they openly admit it or not. Is there a
better way? I mean, obviously, you talk about the fact that the options are limited, of course. I mean, they're not going to put boots on the ground.
Ukraine isn't a member of NATO, but just given that it is not having the desired impact of ending the war, and it is causing ordinary people to
suffer, many of them again, do not necessarily support him. Is there a better way to go about this?
STENT: Well, I'm afraid I don't agree with the assessment that many of them don't support him. You know, the latest independent poll by the Levada
Organization shows an 83 percent support for Putin, and an overwhelming support for the war.
A lot of people who didn't support it, a few hundred thousand have left Russia, but there are far more people who support this war than I think we
want to believe and it is partly because they're being told that this is a war against Nazis, just as World War Two was. And so Ukrainians are
dehumanized by calling them Nazis, and others of them believe that this is a war against the United States. In fact, that's what Sergey Lavrov, the
Foreign Minister said today, and they definitely support that.
So unfortunately, we would like to think that a large number of people don't support the war, but indeed, many of them do. The only better way
would have been if they'd been -- you know, if you wanted to end this quicker, would have been, first of all, to supply some of the weaponry that
the Ukrainians are still asking for, and have not has not been supplied to them, the fighter jets and things like that, or not to have taken off the
table a NATO response to this, and I understand why it was taken off the table, because clearly they, you know, the NATO countries don't want to get
into a direct conflict with Russia.
But if it believes that it can get away with all these -- the humanitarian crisis it's caused, and all of these atrocities against civilians, it's
going to continue doing it.
ASHER: All right, Angela Stent, live for us there, thank you so much.
STENT: Thank you.
ASHER: Vladimir Putin has appointed a new General to oversee Russian war operations in Ukraine. We'll talk about a man known as the Butcher of Syria
and the consequences of his appointment, next.
ASHER: Hello, everyone. I'm Zain Asher. There's more QUEST MEANS BUSINESS in a moment when we'll discuss Elon Musk's decision not to join Twitter's
board days after taking a major stake in a social media giant.
And France's far right is closer to power than ever, thanks to a strong showing in Sunday's first round of elections. Before that, though, these
are the headlines this hour.
Ukrainian President Zelenskyy says that Russian troops have killed tens of thousands of people in the besieged southern port city of Mariupol. In a
virtual speech to South Korea's parliament, he accused Russia of destroying the city in a brutal attempt to capture it and he said Ukraine needs those
military support to defend itself.
China's financial hub of Shanghai has begun easing its COVID-19 lockdown in some areas despite reporting record infections. Residents have pressured
the government to relax the rules after struggling to get food and medical care. Recent outbreaks have also been identified in dozens of other Chinese
provinces and municipalities.
It's also a new political era in Pakistan. Former opposition leadership Shehbaz Sharif has been sworn in as interim prime minister. He's pledging
to increase pensions and hike the minimum wage. Parliament elected him after Imran Khan was ousted in a vote of no confidence.
The war in Ukraine appears to be entering a new phase. The pivot comes as Putin appoints a new commander over his army, General Alexander Dvornikov.
He was also the commander of Russia's military in Syria. Russian forces are expected to shift their attention east where Ukrainian officials are
warning a major Russian attack is set to take place.
Many Ukrainians are attempting to flee the escalating conflict and Russian forces seem to be taking advantage. Another rail station was targeted in
eastern Ukraine. No casualties have been reported. But cars, trucks and parallel lines were damaged. This comes just days after a devastating
attack on a train station and the Kramatorsk that left dozens dead. Ben Wedeman is in Kramatorsk for us.
So Ben, what more can you tell us about this latest attack on a train station?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, this train station that other train station attack took place overnight. Ukrainian
officials didn't specify the location, they said that several locomotives were damaged, power lines and tracks as well. No injuries in that case. But
of course, this city, the few residents left are really reeling from last Friday's a missile strike on the railway station here to the point where
many people are choosing not to go by the rail system after what happened here last Friday.
WEDEMAN (voice over): The air raid siren rings out over a scene of carnage passed. In Kramatorsk railway station a ripped shoe, a discarded hat. A
cane left behind. They came to the station with only what they could carry. Hoping to reach safer ground, but nearly 60 never left. Lives cut short by
a missile on it someone scrawled in Russian for the children. 4000 people were here waiting for a train west when the strike happened. The massacre
accelerating the exodus.
WEDEMAN (on camera): Most of the residents of Kramatorsk have left the city having been urged to do so by local authorities as this part of the
country, the entirety of eastern Ukraine, braces for what could be a massive Russian offensive.
WEDEMAN (voice over): At the city's bus station Nikolay, a volunteer, has been helping with the evacuation. For him news of the pullback of Russian
forces around the capital Kyiv was bittersweet.
NIKOLAY, VOLUNTEER: When I heard about Kyiv, since I live Kyiv, I was happy, you know, but then I realized a couple of seconds later they move in
to Donbas all their forces. I'm a little bit -- I'm not -- I can't say that I'm scared but I'm worrying about my people, about people, both mothers and
WEDEMAN (voice over): Some are heading west, others north to the town of Slavyansk, where trains still run. Oksana (ph) and a friend and their
children are bound for Lviv in the far west.
There's a lot of bombing here says Oksana, I'm afraid for the children. The children thankfully still children. A handful of adult relatives stay
behind. Far more aware of the danger ahead.
WEDEMAN: And not many people have actually stayed behind. In fact, in this city right now, there's barely any light here, more than two-thirds of the
population have left. All I can hear in the distance is dogs barking. The mayor told us today that really the only people left are the elderly, who
have lived in their homes their whole lives and don't want to be re -- want to be moved to the far west of the country to a faith uncertain. Zain?
ASHER: And Ben, of course comes at a time when the country's preparing for a major offensive in the eastern part of the country in the Donbas region.
What more can you tell us about Russia's strategy here?
WEDEMAN: Well, we haven't actually seen this strategy yet. But they have certain advantages. This supply lines are shorter, its territory, they'd --
sort of huge, open expanses, which are favorable to the sort of heavy armor assaults that the Russians were famous for it in World War II. So, it's
going to be a somewhat different situation in the areas of North Central Ukraine around Kyiv.
And elsewhere, the troops of the Ukrainian army could take advantage and we're basically conducting guerrilla warfare. The terrain here is not as
favorable. It's not as populated so they can't take advantage of their familiarity with the local terrain. Urban warfare won't be as easy in this
part of the country. So, the Russians is believed will have some advantages over the Ukrainians.
But many military analysts have pointed out that many of the battle groups of the Russian army were mauled in the battle around Kyiv and north in the
sort of the north central region of the country. And they may take a while to be reconstituted and be made the battle ready again. Zain?
ASHER: Ben Wedeman live for us there. That thank you so much. Still to come here on QUEST MEANS BUSINESS. Musk's U-turn. Tesla's CEO does not want a
seat on Twitter's board after all.
ASHER: Investors seem unfazed by Elon Musk's surprise decision not to join Twitter's board of directors. Twitter shares are about two percent higher
after Musk's reversal this weekend. It's not the first time it has the CEO has made a hasty U-turn. He said he takes Tesla private at $420 a share, he
didn't. He sent a submarine to rescue kids who was stuck in a Thai cave. It didn't. And it did though, enroll him in a defamation case.
Vivian Schiller was Twitter's global chair of news. She's now the executive director of Aspen Digital. Vivian, thank you so much for being with us. So,
just walk us through what you think Elon Musk is up to. Why do you think he chose not to join the board after all?
VIVIAN SCHILLER, FORMER GLOBAL CHAIR OF NEWS, TWITTER: Thank you. I mean, does anybody ever really know what Elon Musk is up to? Or knows what he's
up to half of the time. But I have to say, after sort of a momentary -- momentarily being startled, my two reactions were sort of that, you know,
of course, make sense, another change, and also a little bit of alarm to be perfectly honest.
You know, if -- when you're a director of a public company, there are certain limitations on you. And I wonder if it just took Musk a couple of
days to realize that he -- if he actually has a fiduciary responsibility to the company, as a member of its board of directors, that's going to put
certain constraints on what he can and can't do. And now as the largest shareholder, he's really largely unrestrained.
ASHER: And there's also been some talk, rumors, if you will, that, you know, that his sort of reversal is -- could be because there could be a
hostile takeover, brewing. I mean, what do you -- what do you think of those rumors?
SCHILLER: Well, I mean, we have no idea. We'll know soon enough. But like I said, I think the fact that he is now not going to have those constraints,
not be shackled by what it means to be a director, while he loses that sort of direct influence on the company as a director, what he gains is the
ability to continue doing what he does best, which is, you know, drop a lot of bombs, you know, usually on Twitter, in this case about Twitter.
And, you know, whether he's going to continue to collect shares beyond the 14.9 percent that he would have been limited to and really try to take over
the company entirely, remains anybody's guess. But even if he doesn't do that, he can certainly cause a lot of problems for the company which should
be a concern to anyone who is -- has -- who is concerned about expression on Twitter and the vital role that I believe that it plays in global public
It's interesting, you talk about sort of the bombs that he's dropped on Twitter and about Twitter. I want to show our audience a tweet that Musk
made some time ago. Just asking, Is Twitter dying? This came about a year or so ago, he posted a tweet on Twitter, listing the top accounts and the
fact that they tweet very rarely and post very little content asking, is Twitter dying? Why would he want to buy a high stake in a company that he
thinks is dying?
SCHILLER: Well, obviously, Twitter is very important to him. I mean, it's, you know, he's a -- he's a very rich kid with a -- with a box of toys. And
this is one of his favorite toys. So why not want to -- why not seek to own it or control it. But I have to say Twitter cannot be measured in the usual
ways. I mean, certainly to the street it's measured in all the usual ways. Don't get me wrong, but it's its place in the world shouldn't be measured
by the usual metrics for platforms like, you know, daily or monthly active users and certain kinds of growth metrics.
Even, you know, even the tweet that you displayed that showed how some of the most follow people on Twitter don't tweet that much belies its outsized
influence on global discourse because of the kinds of people who are onto Twitter were paying attention to the conversation on Twitter and how the
media amplifies those messages on Twitter.
SCHILLER: I mean, just look at -- look at Donald Trump So, you know, again, the -- perhaps to the street, I can understand why it feels like some kind
of, you know, shake up or turnover might be necessary. But too many of us and too many people around the world who rely on Twitter, it's very
ASHER: You mentioned the sort of outsized role in global discourse, you point to President Trump, nobody's denying that, but you just touched on
this. Does Twitter, in fact, need some kind of a shakeup? And is Elon Musk the person to do it?
SCHILLER: No. It might (INAUDIBLE) Elon Musk if not. No. Let me make very clear. His past statements about -- his feelings about the balance between
expression and harm, at least to me, I find troubling and some of his more outlandish recommendations, you know, maybe he's just, you know, throwing
spaghetti, proverbial spaghetti against the wall, but I find some of them very, very concerning.
I'm just not sure that's the kind of certainly you need innovative, bold leadership. I don't know that we need reckless leadership, particularly
with like I said, a platform that I think is so vital to, you know, fragile democracies around the world.
ASHER: Vivian Schiller, thank you so much for being with us. Sure.
SCHILLER: Thank you for having me.
ASHER: Of course, you're very welcome. Up next. France's far right advances. Marine Le Pen is heading into a runoff election with President
ASHER: France is far-right edged one step closer today to power on Sunday. Marine Le Pen finished second in the first round of the election. She will
now face President Macron in a runoff election on April 24th. It's a vote being fought on pocketbook issues. Le Pen is channeling public anger and
protest movements like the (INAUDIBLE) the rising cost of living has also become a hot topic as well.
Macron has struggled to enact major economic reforms as well. Jim Bittermann joins us live now from Paris. So Jim, these two candidates have
very, very different views of what the future of France should look like. Walk us through it.
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, as -- I guess, you'd have to take a look at the domestic view and the international
BITTERMANN: Mr. Macron was of course has stressed all along especially recently with Ukraine situation, has stressed his stature as a -- an
international statesman. He's tried to negotiate the peace to the -- to the Ukraine situation, hasn't quite worked out the way he liked. But he was out
there, the French kind of admire people and admire presidents who stand tall in the world. So, that's kind of part of his appeal.
It's one of the reasons why he got a bump when he was negotiating at the beginning of the Ukraine war. That kind of faded during the campaigns.
Whereas Marine Le Pen is been basically campaigning on the idea that Mr. Macron's economics have been a failure. Macron was out today, stressing and
areas of France where Marine Le Pen did very well. Stressing the fact that unemployment under his five years in power has in fact, never been any
And basically his employment records been pretty good. And the employment - - unemployment has dropped from the first concern of French five years ago to not even in the top 10 right now. So in some ways, his economic reforms
have work. One thing that he's kept advocating and that is the retirement plans which are changed here. So, that the retirement age be increased. And
that's something that does not go down very well.
And I think we're seeing some pushback on that. It'll be interesting to see. And these two weeks that are coming up here, leading up to the final
round, how much he's going to emphasize that. And meanwhile, Marine Le Pen has been emphasizing the she's for the French people, she's out with the
people. That sort of thing. So, it is going to be fought basically on economics versus international stature of France that could very well be
the grounds on which being thought. Zain?
ASHER: And for the candidates that have been eliminated already, where will their support land?
BITTERMANN: Well, that's a good question. And in fact, Macron today, said he's going to go into unite, he hopes in a conference. Some of those people
that have been defeated, there were -- there were 12 candidates at the beginning, there are two now in the final -- for the final round. And those
other 10 candidates are going to try to bring them together both right and left to see if they can find some common ground.
Of course, common ground behind Macron. Question is whether he'll be able to do that. There was some indication that some of the candidates have
already said that they believe their voters should support Macron. One major candidate came in third place, said that he was -- believes that his
supporters should vote for anybody but Le Pen. But he didn't say vote for Macron, which, you know, does that mean they should abstain or does that
They vote for Macron. So, it's going to be an interesting couple of weeks here because both sides Marine Le Pen and Macron are dragging, trying to
find a way towards victory trying to find enough votes from either side of the political aisle to be victorious on the 24th of April. Zain?
ASHER: Now, we'll watch what happens. But it's important to note that there was indeed some voter apathy in the first round with about 70 percent
turnout. We'll see what happens in the second round. All right. Jim Bittermann live for us there. Thank you so much.
China's zero-COVID policy has residents of Shanghai literally shouting from their homes.
(BEGIN VIDEO CLIP)
ASHER (voice over): Public anger is boiling over people are screaming for food and basic medical supplies after weeks of a very, very strict
(END VIDEO CLIP)
ASHER: China is struggling to get Shanghai's soaring COVID cases under control with cases there rising to levels never seen before in China.
Officials are now promising to ease the lockdown measures in some areas of Shanghai. The daily new case count in Shanghai went from double digits to
more than 26,000 in a month. CNN's David Culver is in Shanghai.
DAVID CULVER, CNN INTERNATIONAL CORRESPONDENT: If you thought Wuhan 2020 was bad? Welcome to Shanghai 2022. This has been like no other lockdown and
in the country's cosmopolitan and affluent financial hub of all places. The door behind me, it's my exit out to the alleyway and last night I heard
taping of my door along with the doors of my neighbors. They were placing a paper seal to keep it closed.
Now some buildings with positive cases going to step further. Locking shut from the outside using a bicycle lock or padlocks. The biggest issue here
though, has been food shortages. It's really difficult to source food with stores closed and delivery drivers also locked down like us. So, neighbors
are now coming together trying and source directly from suppliers were buying in bulk essentially.
CULVER: There have been for some a few government handouts, not enough. It's led to residence under lockdown demanding supplies as food shortages
worsened here. Some shouting we are starving. We are starving. Mind you. This is Shanghai. A sitting leader choked up at a news conference over the
weekend apologizing to the city's more than 25 million residents for failing to meet expectations.
And she promised improvements. One thing to keep in mind is Beijing is now in charge. China's zero COVID policy is a directive straight from the top.
President Xi Jinping wants the virus stomped out. So, there's this military mobilization essentially that's underway to make more than 100 makeshift
hospitals, they're going to have the capacity to hold more than 160,000 people. Sounds really impressive.
State media certainly portraying it as such. They're also considering it to be a very orderly, sterile environment. But the reality from folks on the
ground, people we've spoken with shows cramped and unsanitary conditions. So, how does this all end and went? Well, officials on Monday announced
plans to begin lifting lockdowns on certain neighborhoods, but not nearly enough to bring this city back to life anytime soon.
ASHER: That was David Culver reporting there. All right. There are just moments left to trade on Wall Street. We'll have the final numbers and the
closing bell right after this.
ASHER: There are just moments left to trade on Wall Street. It's a late session sell off. The U.S. markets, the Dow is at a session low down some
400 points. Fears of a Fed rate hikes are keeping investors on edge. The NASDAQ down more than two percent, 10-year U.S. Treasury yields hit a
three-year high. Investors are awaiting a key U.S. inflation report on Tuesday. Analysts expect the data to show at the highest inflation since
Let's take a look at the Dow components. Tech stocks are among the biggest losers. Apple, Cisco and Microsoft all down over 2-1/2 percent. Oil is down
shortly. U.S. crude hit its lowest level since the Ukraine war began. The sell off was sparked by concerns about demand from China in particular.
Shanghai and several other cities are grappling with COVID lockdowns. You saw that David Culver report just a moment ago.
U.S. crude is now hovering just over $94.00 a barrel. All right. That is QUEST MEANS BUSINESS. I'm Zain Asher in New York. The closing bell is
ringing on Wall Street as you can hear. "THE LEAD" with Jake Tapper starts --