Return to Transcripts main page

Quest Means Business

European Unity Tested As E.U. Weighs Russia Oil Sanctions; Polish PM: Some Countries Hiding Behind Hungary On Oil Ban; Tech Shares Fall, Leading Wall Street Sell-off; Finland And Sweden Sending Teams To Turkey Over NATO Bids; NATO: Prepared For Russian Retaliation Over Expansion; War, Inflation Could Spark Global Food Crisis; Low Income Countries Still Lag In Vaccinations. Aired 3-4p ET

Aired May 24, 2022 - 15:00   ET



RICHARD QUEST, CNN BUSINESS ANCHOR: An hour to go before trading comes to an end on Wall Street, and it is another day of sharp falls in the

financial markets, not as sharp as it was, if you look, you see earlier in the day, it was really quite horrible, but that has pulled back somewhat.

Tech is leading the way down, the markets are off.

And the main events of the day of course are the reason why: The E.U. Chief Ursula von der Leyen tells us tonight, division won't prevent Russian oil

ban. She expects to see a deal on sanctions. Within weeks, you'll hear on tonight's program.

Poland's Prime Minister spoke to me today. He told me his plan for escalating the pressure on Russia.


MATEUSZ MORAWIECKI, PRIME MINISTER OF POLAND: The most critical, confiscating oligarchs' money, confiscated Russian Federation assets,

because this is the real pain, which Russia is going to feel and the perpetrator should bear the cost of the war.


QUEST: And the food crisis that the world is about to face. The calls on President Putin to open up or remove the blockade on Ukraine's ports.

Live from Davos, inside, tonight -- I'll explain in a moment. We're live in Davos. It is Tuesday. It is May the 24th, in the warmth, I am Richard

Quest, and yes, I mean business.

Good evening and a warm welcome to Davos.

You may wonder why you're not seeing mountains in green and trees behind me. Well look at these pictures and you'll soon see why. A dreary, terribly

rainy day, in fact, so rainy that it was quite almost impossible to actually stand up in our normal studio.

So instead, we have come to the inside where at least we will stay dry and our guests that we'll be talking to will also be with us.

We're going to be talking tonight, European unity is being put to the test. The E.U. members still have not reached a deal on banning Russian oil,

indeed, far from it.

Tonight's program, you'll hear from Ursula von der Leyen, you'll hear from the Prime Minister of Poland; Brian Moynihan, he is the Bank of America

Chief Executive; Jens Stoltenberg, NATO's Secretary-General.

Later in the program, Ngozi Okonjo-Iweala from the WTO, the Director- General; and if all that wasn't enough, as a potpourri with Leif Johansson, who is the AstraZeneca Chairman.

I promise you, we will get it all in between now and the top of the hour.

We begin though, of course with Russia and Hungary's Prime Minister saying that no oil embargo, it will be discussed at the E.U. Summit next week. He

said since there was no agreement, there was no point in putting it on the agenda, says that would only cause further division.

Counterproductive is how he described it. Viktor Orban, and those standing behind him, major obstacle to the sixth round of sanctions. However, when

she joined me earlier today, the President of the Commission, Ursula von der Leyen, said she did expect a deal. When I pushed her on when, a matter

of weeks.


URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: First of all, I have to say the unity and the determination of the member states was

outstanding. We have unleashed five packages. And you should not forget we are the -- or have been the biggest trading partner of Russia. This is over

now. This is history.

But there were a lot of lines to cut and we cut them. Now, what the oil is concerned, it's true that some landlocked member states really have a

problem. They cannot get the oil via sea, so they need alternative routes via pipelines, they need to update their refiners. We are discussing that

and we're discussing alternative investment and renewables, so it is a question of money, of course; of investment.

But it is also a question of making it feasible for them to immediately get rid of the dependency of Russian oil.

QUEST: The longer this goes on, and rightly or wrongly, the perception of lack of unity on this issue. Is this not exactly where President Putin

says, I've got the Europeans at each other's throats over oil.

VON DER LEYEN: Not at all because what is happening, and this has not so much attention. Member states are working on getting rid of the Russian oil

by active procedures so the Germans for example they used to have 35 percent of their oil was Russian, now it's down to 12 percent.


So if we look at the gas; last year, we imported gas and 40 percent of that was Russian gas. Today, we're already right now down to 26 and our goal is

to get completely rid of the Russian fossil fuels for good.

QUEST: When do you hope to have an agreement on a sixth round? Because the longer it goes on, the perception is that it is very difficult.


QUEST: And it's difficult.

VON DER LEYEN: We're working hard on it right now. It's a matter of weeks, but we really have to find a solution for the investment needs. And

therefore, this is so important, we have to tailor it in a way that we do not have the situation that Putin can take the oil, he doesn't sell to us

and sell it at a higher price on the world market.

QUEST: It is not easy, is it?

VON DER LEYEN: No. It has never been easy. All the other five sanctions packages have not been easy neither, because these are big economic

operations that we are doing, but it's worth it.

QUEST: And how aware are you that within Europe, as inflation is high, which is the ECB obviously responsibility, as budgets are strained, that

European citizens might just simply say, war fatigue, let Putin have the Donbas in the eastern part, we need to put our own economic houses in


VON DER LEYEN: On the contrary, the European population stands very strongly behind Ukraine, and is outraged about this brutal invasion.

QUEST: The Polish Prime Minister says he wants the next round of sanctions to include greater confiscation of assets. Is that something you're looking


VON DER LEYEN: Well, as you know, I have proposed that we form a reconstruction platform for Ukraine, the needs of reconstruction, financial

needs are massive. And all of us should pay in also the international financial institution.

And I think, it would be only fair that Russia also pays its share, and therefore, we are now looking into the legal possibilities to also add the

assets that are frozen to this reconstruction effort. It's not trivial. I want to say that immediately. It's not easy on the legal ground, but we're

working on it.

QUEST: So that is something that could be in the next stage, if you will, the use of those assets.

VON DER LEYEN: Well, I support this idea. Now, we have to find the legal pathway to do that.

QUEST: We've tried to understand the E.U.'s position on whether or not the purchase of oil and gas to Russia, under the Russian scheme of rubles is

acceptable to the E.U. or not. What is the E.U. position?

VON DER LEYEN: The E.U. position is very clear, we have contracts with Russia, and we stick to the contracts. And if the contract says you pay in

euros, we pay in euros. If Russia wants something else, it's a unilateral breach of the contract.

QUEST: That sounds fine, except under the new Russian procedure, two accounts, the euro, a dollar account, then the ruble account, is that

acceptable -- not agreeable or approving, but is that acceptable for you to pay in euros, which is then converted into your own ruble account, and then

paid to Gazprombank.

VON DER LEYEN: Very important is that the member states and that's what we advise them to do, that the member states pay their bill in euros on the

Gazprom account, and that they then say, Give a declaration, this is my payment. My payment is now done for the deliveries we have gotten.

Whatever Russia then does is Russia's job, but it is not the responsibility of our companies anymore.

QUEST: There is a disagreement in this because some countries, Poland, for example, says that that scheme is against the sanctions. Hungary is

actually doing that at the moment. So there are those countries that are doing it. Germany is paying using that scheme.

VON DER LEYEN: No, not that I know of, of companies. Very clear is, this is the legal situation and if this is not followed, it might be a breach of

sanctions, and the member states have to follow up, they have to implement the law.


QUEST: That's the President of the European Commission, Ursula von der Leyen. This question of the oil sanctions and the inability to get an

agreement on it. The Polish Prime Minister said it is a contentious issue, but that he was hopeful that there would be an agreement whether it'd be at

the next E.U. Summit or not.

And the Prime Minister said that although Viktor Orban and Hungary might be at the front of it, there were others standing in the way.


MORAWIECKI: Don't forget that Europe is after five packages of harsh sanctions, crushing sanctions where we would have agreed on everything, and

now, the oil embargo, it is a contentious point, I reckon.

QUEST: The earlier sanctions were relatively straightforward vis-a-vis the really difficult one which was oil.


MORAWIECKI: I agree with you. Oil is absolutely difficult. This is why Poland is working towards unity around oil embargo as well.

QUEST: Well, I assume your good friend, Viktor Orban, you've been on the phone to him? And so he picked up --

MORAWIECKI: Absolutely. Well, that's correct. Not only him, let's imagine there are a couple of countries which do not have access to the to the sea

coast of Hungary, the Czech Republic, Slovak Republic, Austria.

So I can imagine that we can have a compromise amongst the 27 countries so that the oil embargo is imposed more quickly, and some bottlenecks for them

can be eliminated with the help of the European budget.

QUEST: Right. So that is a very diplomatic way of saying it is really what the price is. It's what the price to buy Orban's agreement.

MORAWIECKI: You'll say about Prime Minister Orban, I say about a couple of countries, some countries hide behind his back. I reckon, that's correct.

Maybe they are not as vocal as Hungary. But really, there are a couple of countries which do have issues with oil delivery, eliminating bottlenecks.

QUEST: So if we talk about the next stage of sanctions.

MORAWIECKI: The most critical, confiscating oligarchs' money, confiscating Russian Federation assets, because this is the real pain, which Russia is

going to feel, and the perpetrator should bear the cost of the war.

QUEST: This is what President Zelenskyy said yesterday. Take the assets and use it to help reconstruct.

MORAWIECKI: Absolutely. This is what I'm saying for last three months. While all the sanctions are important but if we really want the sanctions

to be painful for the aggressor. For the war criminals, we should seize -- we should seize the assets of the Russian Federation.

QUEST: Prime Minister, isn't that something that's easy to say and difficult to do either for legal reasons, ownership reasons. We've seen it

with the yachts, for goodness sake, we can't work out who owns them.

MORAWIECKI: These are war criminals, the oligarchs. So if a war criminal is using some of his assets, according to Polish law, and as far as I know,

many other legislative -- legislations in other jurisdictions, you are able to seize those assets.

QUEST: There is a view that the longer this war goes on, then it really becomes the price upon which people allow Russia to claim a victory of some

sort or another -- to you know, after the spring, when you've got inflation and you've got hardships at home.

MORAWIECKI: Richard, Putin and the Kremlin have time. The totalitarian regimes are much more patient than democracies. This is why you and me, we

have to work to make the public opinion aware of what is happening in Ukraine really, because we could think like sometimes historians say that,

you know, there was this appeasement of Hitler, and Hitler did not stop.

And some people would have hoped that Hitler would be stopping. He had not stopped with Austria, Czechoslovakia, and Poland. He took France and one

country after another. With Putin, it is the same. Everybody should be aware of this.

QUEST: But do you fear war fatigue that eventually, people start to say, bring it to an end? If he wants Donbas give him Donbas.

MORAWIECKI: And I wish them, for all the ordinary people in our countries not to get tired with this war because I see the fatigue. You're right, we

have to also give them some, you know, some "medicine" in inverted commas to ease the pain.

Inflation is very high in the States, in Germany, and in Poland, in many other countries. So we are doing everything possible to lower the

inflationary pressures, and at the same time for those who are most vulnerable to give some money and help them to go through this difficult



QUEST: Poland's Prime Minister talking to me earlier today on the issue of sanctions and the necessity of what comes next.

After the break, I'll tell you what comes next. The Bank of America Chief Executive who says the Fed needs to continue raising interest rates to

reach equilibrium and lowering inflation will not be easy.

You will hear him, after the break.




QUEST: Stocks are resuming the selloff and the tech is heavily down. You saw the numbers at the beginning of the program. Look at the triple stack

and you can see that the NASDAQ is the one that's been clobbered the most. It's down nearly three percent.

And if you look at Snap shares, well, it is the worst day ever, down 40 percent after profit warning. So Snap down -- bearing in mind that stock

was at 70-odd dollars a share, but 43 percent down. Meta is also off sharply. Alphabet is down, so they're all down very sharply.

Rahel Solomon is in New York. We're getting to prices of stocks. I mean, 12 bucks for a stock that was over 70 bucks in terms of Snap.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Richard, right. In fact, as of last September, Snap was about -- it was up closer to about 76 to 80 bucks

as you pointed out. It has been quite a freefall. And Richard, as you know, it doesn't take much in this environment to make investors jittery and this

time was no different. It didn't take much.

It took literally one sentence in this regulatory filing from Snap yesterday after the market closed, saying that, look, "The macroeconomic

environment has deteriorated further and faster than anticipated."

Richard, this is from just a month ago saying compared to a month ago that they felt the need to put out this warning, and so you're starting to see

some of the other social names get hit as well.

I want to pull up some names for you like Facebook and Meta. You can see those shares are down about 8.3 percent. Pinterest down 25 percent. Twitter

down about six percent. And why Richard? Well, because if you are you believe snap at its face value, which we have no reason not to that these

macro conditions are worsening. Well, other assets of businesses are also going to get hit as well.

And so you can argue, Richard, I know that the outlook is quite dreary there in Davos in terms of the weather, but it's feeling quite dreary as

well here in the equity markets.

QUEST: Right. But Rahel, I'm interested in that too. And that Twitter price that you were just showing, which is a good $20.00 lower than Elon

Musk was prepared to buy. Quite a weather this now gives him the perfect opportunity. I wonder if there is a clause in the deal that lets him get

out of this because clearly he is not going to pay -- he would rather pay his billion dollar breakup fee than $40 odd billion for Twitter at 20 bucks

a share more.

SOLOMON: Well, you know, what's interesting, Twitter's Investor Day is actually tomorrow. And so it should be very interesting. I think the

earnings call or the call begins around 1:00 PM Eastern, so I certainly will be listening to it.

But yes, to your point, I think Dan Ives, a Wedbush analyst yesterday put out a tweet saying that the odds of him walking away now are about 60

percent, so the odds are growing that Elon Musk walks away from this.


But Richard, one point that I want to point out is that that $1 billion breakup fee. Look, I've spoken to M&A lawyers about that and they tell me,

you can't just throw up your hands and walk away even paying the $1 billion breakup fee. He made a legal and personal commitment to see this deal

through with his reasonable best efforts.

And so I don't even know if it's as simple as just walking away with a $1 billion breakup fee. But to your point, yes, Twitter trading $20.00 below

that $54.20 share price is looking more unlikely.

QUEST: Rahel, thank you. I know the only people who make some serious money out of this, it won't be the investors, it will be the lawyers,

because that's where this deal is going to end up.

Rahel Solomon, in New York, thank you.

The Bank of America's chief executive told me today, the Fed must tame inflation. And at the same time, he said, there needs to be a recognition

that the measures taken by governments around the world during the pandemic, in his words, pretty amazing.

So now, prices are overheating. Inflation is too high, interest rates need to go up to cool the economy by slowing it down.


BRIAN MOYNIHAN, CHIEF EXECUTIVE, BANK OF AMERICA: The Fed has to get ahead of inflation. So that's going to happen.

When you do that, you slow down the economy. So our basic assumption is it moves from above trend to sort of below trend growth, and then the Fed will

settle it and then it will come back to trend if they got it right.

Now, the good news is, they are bringing inflation down. For the last 15 years, we've been talking about, "Can we get inflation up enough?" So it's

this wild thing that people are like, do you remember for 15 years, we had issues of deflation that were on our table? So --

QUEST: But do you consider beating inflation to be the most the most important thing?

MOYNIHAN: I think they've got to get the equilibrium back. The amount of stimulus that came in January of March last year on top of the stimulus is

our debt. Look, the fiscal side of the United States administration, President and administrations past and current, the Congress endorsing it,

and the Fed all came together, and basically made the pandemic recession disappear in a year.

That's pretty amazing.


MOYNIHAN: Now the problem is, it kept going. So our customers' accounts are multiples of where they were before the pandemic.

QUEST: But are you seeing through customers yet economic hardship? Are you are you seeing -- because eventually, loans will go sour.

MOYNIHAN: Every quarter we do a stress test to check on employment and stuff like that. So we assume the worst, but here is the fact.

Delinquencies, charge offs, 15 basis points level; 16, whatever, it was last quarter. Those are, yes, it was 40 basis points in '19, before the

pandemic, and we thought that was all-time lows. So it's come down a lot. It'll go back up to those levels.

But, you know, that's a normalizing not of the underlying risk because it actually was low. It just brings it back to pre-pandemic. So the economy is

as big as it was, unemployment is very low. The wage growth in our customers that you can see coming through the direct deposits, eight

percent up year-over-year. They are spending 10 percent more in May. So that's all good equity in one way, and it also makes the Fed's job tougher.

QUEST: That's the point.

MOYNIHAN: Yes. Because it is a double-sided trick.

QUEST: Because now the question is, how committed is the Fed to doing this? And how -- so let's say you get to neutral or three percent or

whatever on rates, and inflation is stubborn, we are still at four to five percent. Do you keep going because the integrity of the Fed is at risk?

MOYNIHAN: It's not integrity, it's getting the economy back in balance. That stimulus -- people still -- are still fueling people's behavior and

price rises. Now, the real wildcard in this thing has been lately, you know, obviously, the horrible humanitarian situation in Ukraine and the war

and invasion.

But before that, we had the problem of the shortages of supply chain, and the Fed can't really address the fact that the pandemic is slowing down

movement of goods and shortages and the parts to make a thing. So you've got 90 percent of manufacturing that's just sitting there.

So people started hoarding, and that sort of eases the supply chain. Now, it's back in the thing, and so, this will even out and they bet it would

even out and it didn't. And that's where inflation got ahead of them a little bit. They're going to -- they're out on the case, but this is the

way I try to put it for you.

If you think about mid-2019, unemployment was higher, at about the same level as now. The economy, the same size, the Fed was two and a half

percent short, why wouldn't they be back there?

QUEST: The situation, this is at Davos that seems to be more serious with more issues of greater complexity than I can recall. Would you agree?

MOYNIHAN: I agree, because -- well, I haven't been around for all the Davos and so I am not sure. Historically, I don't think there was a war in

Europe going on in any of the priors, so that that adds a complexity in a seriousness when you had, you know, President Zelenskyy addressing the

crowd, the absence of certain constituents and stuff.

So you've got the inflation risk, you got that. You've got the supply chain risk. You've got COVID still as a thing and you know -- but at the end of

the day, we're here working on problems and trying to figure out practical solutions.

So I'm optimistic about what we're seeing on the environmental front. I'm optimist coursing on the metrics front. I mean, there are a lot of things

I'm optimistic about at this Davos.


QUEST: On that optimism, do you think the difficulty of maintaining an environmental agenda when there are these other issues. How are you

managing to do it within Bank of America?

MOYNIHAN: Well, so what has happened since the last time we were here in person, in Bank of America and allied companies is the private sector has

taken the field was forced. So net zero commitments by companies in their supply chains, net zero commitments and how they run their operations

causes a series of activities that creates the purchase power creates it, business models creates that, so that's going on.

And then I've worked with on the Sustainable Markets Initiative with His Royal Highness Prince Charles and a hundred CEOs met in London six weeks

ago, and we talked about -- four weeks ago and we talked about all the work we are doing together.

So the private sector from COP -- before COP 26 through COP 26 now have committed is now serious. You can't change that. Oil prices go up and down

between now and 2050. My guess is, it will go up and down a lot here and there.

But Richard, you can't change this basic commitment by these companies to move their operations to a different place.

QUEST: For you, is this the biggest single issue? I mean, non-financial issue.

MOYNIHAN: They are all bigger issues. And so, I believe there is a business -- I believe there's a transition project. I believe it has

address transition. I believe the oil companies have to change. I believe that new energy companies have to -- everyone has to work together.

So it's a business thing that we can solve and the private sector has to solve it because we have the money, the dollars, the energy, the

innovation. The public sector has to work with us, and the advocates and stuff have to see us making movement on behalf of society.


QUEST: That's the Chief Executive of Bank of America.

QUEST MEANS BUSINESS, we are at Davos of course, at the World Economic Forum, middle of the year. The weather is dreadful outside, which is why

I'm inside and after the break, you're going to hear a warning from NATO.


JENS STOLTENBERG, NATO GENERAL SECRETARY: If we accept that Russia once again can use violence and achieve their aims by the use of military force,

then the world becomes more dangerous also for our countries for NATO allies.


QUEST: The man who has the task to get Finland and Sweden into NATO, after the break.





QUEST: Hello, I'm Richard Quest in Davos, a very busy program. We are bringing you the top names of decision-makers. After the news headlines,

you're going to hear from NATO's secretary general, Jens Stoltenberg. He will be telling us about how NATO can soothe Turkey's concerns to allow the

exception of Finland and Sweden.

Also The WTO director general will be with us. We will be talking food security. On that issue, leaders are sounding the alarm. Developed and

developing countries will all be suffering. We will only get to those after I've updated you with the news headlines. This is CNN. On this network, the

news always comes first.


A Ukrainian official says there's been a grim discovery in Mariupol. The adviser to the city's mayor says 200 bodies were found in the rubble of a

high rise building. It is now under full Russian control. It's been the scene of some of the worst suffering of the war, which is now in its fourth


Japan says it's complained to both China and Russia for flying bombers close to its borders. China says the two were flying in joint exercises

over the Sea of Japan. This took place while Biden was meeting with allies in Tokyo.

At least 10 people have been killed in a building collapse in southwestern Iran. Some 50 people might still be trapped under the rubble. A 10 story

building gave way on Monday, in the city of Abadan. Authorities are investigating. The local mayor, other people related to the construction,

have been arrested, according to local reports.

An Iraqi citizen in the U.S. has been charged with aiding and abetting a plot to kill former president George W. Bush. According to court documents,

they say he allegedly traveled to Dallas, Texas, to conduct reconnaissance of Mr. Bush's home. The (INAUDIBLE) suggest the former president was never

in any danger.


Turkey is to meet leaders from Finland and Sweden to try and assuage their concerns over Turkey's objections to NATO accession. President Erdogan says

both of those countries harbor terrorists.

The talks set for Wednesday, where they will address Turkey's concerns. The head of NATO earlier today told me that he is confident they will be able

to reach a solution. He says there is broad support for Sweden and Finland joining NATO.


JENS STOLTENBERG, NATO SECRETARY GENERAL: Well, I spoke with Erdogan on Saturday. And he expressed Turkish concerns. As we have also seen publicly.

And when an ally is concerned, we do as we always do in NATO, we sit down. We look for a solution. Normally, we find a solution. I'm confident we will

find that also in this case.

We need to recognize that Turkey is an important ally. No other ally (INAUDIBLE) and Turkey and they are key in the fight both against ISIS in

Iraq and Syria but also addressing Russia and the Black Sea.

QUEST: So to be clear, you are confident that the Turkish concerns will be sorted and that Finland and Sweden will join?

STOLTENBERG: I am confident that we will find a solution. We need the agreement by the third ally. So we have some work to do. But we are in

close contact with Stockholm, with Helsinki and with Ankara and the aim and I am confident will find a solution.

QUEST: What do you think Russia's response will be?

I know it's not your job to get into the mind of President Putin. But it is your job to work out the possible scenarios.

So what do you think they are going to do?

STOLTENBERG: I think they will protest. We are prepared for hybrid and cyberattacks. We have seen that there are a of couple gas and electricity

supplies and that kind of stuff. But any serious armed attack is highly unlikely, partly because, of course, when Finland and Sweden become

members, then we have Article 5.

And NATO allies have stepped up their presence in the Baltic region, also to broad security assurances, in the meantime.

QUEST: So those assurances, they are individual, they're bilateral, et cetera.


When do you think, realistically, when do you think that Sweden and Finland, assuming Finland goes along with it, will be able to come into the

protection of Article 5?

How long, a year, 18 months?

STOLTENBERG: First we need to sign the accession protocol. I hope that can happen quite soon. Then we need the ratification of all the parliaments.

That will take some months. And I can't speak on behalf of all 30 parliaments. But what I can say is that many allies have expressed a strong

will to do that as quickly as possible.

QUEST: Is Ukraine prevailing militarily?

STOLTENBERG: Ukraine can win this war. And Ukraine has demonstrated much more strength, confidence in fighting, than many Russian forces. And most

experts expect it and they are receiving an enormous amount of military support from NATO allies and other countries.

But wars are unpredictable. Therefore, we should always be careful about predicting. Our task is to support Ukraine in upholding the right to self-


QUEST: Do you see a potential -- and I guess I'm asking you this, not just as NATO secretary general but also as a former politician, who is well

aware of the political realities.

Can you see a scenario where Ukraine wants to push further but the people, other governments facing inflation, public unrest, people saying, no, we've

got to get out of this war. But there's a difference in the definition what's constitutes success.

War fatigue.

STOLTENBERG: But I think war fatigue -- I mean, Ukraine is suffering the most. They are losing people every day. They are on the front line every


So I would realize that we have problems and challenges in our countries, not being directly involved in the war. But we need to support Ukraine, not

least because this is about principles.

If we accept that Russia, once again, can use violence and achieve its aims by the use of military force, then the world becomes more dangerous also

for our countries, for NATO allies.


QUEST: The NATO secretary general.

The big issue, one that perhaps isn't being spoken about enough, is the question of food insecurity, the crisis that we are now going to face.

Coming up after the break, the director general of the World Trade Organization. QUEST MEANS BUSINESS is live from Davos.





QUEST: The war may be getting the headlines in the military aspects of it but the food insecurity and the issues of hunger and possibly famine and

death are the subjects that people are talking about here at Davos. War, inflation, climate change, they are all creating the perfect storm.

If you ask the executive director of the U.N. World Food Programme, millions of people are going to be affected now as a result of food



DAVID BEASLEY, EXECUTIVE DIRECTOR, WFP: Just when you think it can't get any worse, bam, the bread basket of the world is then turning into the

longest breadline of the world. A nation that feeds 400 million people and you pull that food off the market, you are compounding what were already

high commodity prices, fuel pricing, shipping costs.

And, my gosh, we are now talking about 325 million people not going to bed hungry, marching to starvation. And out of that, 49 million in 43 countries

are knocking on famine's door.

What that means, if we don't reach that 49 million, you will have famine, you have destabilization of nations and you will have mass migration. The

conditions now are much worse than the Arab Spring of 2007-9.


QUEST: So the E.U. is accusing Russia of using hunger as blackmail because Russia has blocked the major ports. And those -- that grain and storage

can't leave Ukraine, which, of course, will cause huge problems when the next crop gets put into the ground; 60 to 70 percent of it has been


Ukraine exports around 500 million tons of wheat per month, not it's between 200,000 and 1 million. The effect of this could be dire. Joining me

to discuss it is Ngozi Okonjo-Iweala.

Good to see you, director general.


QUEST: This issue of food instability, obviously its core is Ukraine but it is also the supply chain issues.

Who is going to be most affected?

OKONJO-IWEALA: Well, it is really a serious problem. I think first and foremost the Ukrainians in a way but then the world's poor people and poor

countries. You know that these countries, a lot of them depend on importing wheat and other grains and food supplies from the Black Sea region.

So with this kind of difficulty we have now, the poor people who will suffer the most are poor people in poor countries.

QUEST: How bad do you think it is going to be?

OKONJO-IWEALA: It is really bad, Richard. Right now, if we are not able to evacuate this 25 million or so tons of grain in Ukraine and we have another

25 million that may come from the harvest, this will be a huge problem for the world.

QUEST: Are we talking about death and starvation?


OKONJO-IWEALA: Definitely. There will be hunger in a lot of countries.

QUEST: What do you want people to do, what is the answer?

If you can't get the stuff out and Russia's blockading the ports and you can't take it through the West, what is the answer?

OKONJO-IWEALA: Well, the answer is to try harder to see if we can get a solution through the Black Sea, that is number one, to create safe quarters

through which the food can go through.

The other answer is that those who have additional stuffs should put them on the international market so that prices can come down. So both in the

short term, in the longer term is to see if countries can be more resilient in producing their own food.

QUEST: As we look, again related to food insecurity but a bigger issue in terms of as the WTO, we are also seeing tremendous supply chain, container


We are seeing food inflation. That is going to hit people from poverty in the developed world as well, would you agree?

OKONJO-IWEALA: Yes, I think the supply chain issues are definitely serious. I think there are a number of factors. There is the war, the

primary -- one of the causes. But we also have the lockdown in Shanghai and the continuation of the impact of COVID. So all of these factors are coming

together for a perfect storm, really, in terms of supply chains.

QUEST: How bad -- you were here at Davos and there is a new seriousness and a greater seriousness. (INAUDIBLE).



QUEST: Not enough.

OKONJO-IWEALA: Not enough, maybe.

QUEST: Not enough.

Can you feel a difference here this time?

OKONJO-IWEALA: Well, the difference, yes, I can, actually, I can feel some anxiety.


It is mixed with the fact that people are seeing each other physically for two years. And that does make a big difference.

QUEST: I'm see you for the first time.

OKONJO-IWEALA: Exactly. People were happy to see -- tremendous anxiety about all the crises that the world is going through. It is a perfect storm

of crises, health crises from the pandemic, the climate change crises that has gone international, security crisis.

QUEST: But do you believe the crises are now so many and have such depth and gravity that it is overwhelming us?

OKONJO-IWEALA: It is certainly -- I don't know about overwhelming yet. But it is certainly causing a lot of anxiety and uncertainty because it is not

as clear how to solve these crises. Of course, if the war stopped, that would help tremendously, that I can say. And if we -- the lockdown in

Shanghai stopped, that would also help.

QUEST: On a lighter note, if I may, you've been coming here -- because the weather is so bad, snow or spring, would you prefer Davos in the winter or

the summer?

OKONJO-IWEALA: Definitely winter.

QUEST: Really?



QUEST: I'm surprised. I thought you would've gone for spring.

OKONJO-IWEALA: No, I think -- we are so used to Davos in winter now. I know what clothes to bring, the boots, the coat, this time I was not

prepared; it is warm in the afternoon, very cool in the evening.

QUEST: Good to see you, wonderful to see you.

As we continue tonight on QUEST MEANS BUSINESS, the head of AstraZeneca, vaccinations still very much an issue. The pandemic has not gone away. We

will discuss it after the break.




QUEST: The pandemic is not over and the issue of vaccine inequality persists wherever you look. In many places in the world, only 16 percent of

the population have received at least one dose. And still many millions, of course, haven't received any other.

It is the worst in the lower income industries. AstraZeneca, the vaccine still plays a key role. It is easier to store and transport, it is cheaper

than (INAUDIBLE). It is widely used in Ghana but it has taken numerous regulatory knocks even though it does works very effectively. Leif

Johansson is the chairman of AstraZeneca and joins me now.


Good to see you sir.


QUEST: I suppose when one has heard the problems, how it is not recommended for this or that, one gets the impression that show it is not being made

anymore and no one is taking it. That's not true.

JOHANSSON: That's certainly not true. We have made by today 2.9 billion doses. So the world's second largest producer of vaccines. We delivered

that to 183 countries, all those approved. And we have done that with two- thirds of that volume going to low and middle income countries, so certainly alive and kicking.

QUEST: But the perception is that the lower income countries are taking the vaccine and maybe have not received the same full approval as



QUEST: The problems of blood clots and the like.

JOHANSSON: Well, the side effect is always difficult. And they are very rare. So always difficult to put numbers on those. That's the role of the

regulators. We are approved fully in Europe. Again, just yesterday, we were approved for boosting, even as a mix of different vaccines.

QUEST: Where are you taking it next?

What to do next?

It's one of the portfolio that you have of pharmaceuticals.

How significant is it to you as a company?

Secondly, where next?

JOHANSSON: As of today, you can say it's not a very significant business. The oncology, respiratory disease, cardiovascular, et cetera, are much

bigger. But we are trying to grow it.

And I think where it takes us is actually going into prophylactics and treatment. We have a product called Evusheld that we give to

immunocompromised people. That instead of the vaccine making antibodies in your own body for you, we actually inject into the bodies, thereby we can

do that and make sure that people are immunocompromised for different reasons or not. That's a very quickly going business.

QUEST: Right. Now that takes us into the whole question of health care costs because this immunogenic treatment is very expensive. This

personalized medicine, personalized pharma is more expensive than -- can you see a way that becomes cheaper?

More affordable?

JOHANSSON: Absolutely. I think it actually is quite affordable. One of the lessons we have really learned is that you need to be preventive and very

early in detection. If you are that, even though the individual drug might seem costly, that actually prevents a lots of cost coming into the system;

97 percent of all health care costs is actually when people present ill; 3 percent is for prevention and early prediction.

That is clearly wrong. And we could make that switch and make a much better system.

QUEST: Monkeypox, we are talking about now. There is this feeling, is this the next?

There are vaccines, treatments for it.

Is it your understanding that this is a serious concern that most of us need to be worried about?

JOHANSSON: I think with any infectious disease, we should be worried. We should have the regulatory look at what is happening. In this case, my

understanding is that there are vaccines available and that they are very effective. So I don't think this is a really big one from what we know

today. But it needs to be monitored.

QUEST: Finally, before we take you to the board, what do you think we have learned from the pandemic?

What have you learned in terms of the preparation necessary?

Because we do know, these black swans come from everywhere. Arguably there are more black swans than whites at the moment.

But what have we learned?

And what lessons do we take?

JOHANSSON: I think the real lessons that we have learned, having been participating on the vaccine campaigns in these 183 countries, is that the

world looks very different depending where you are.

So you can actually, like we do here, set up a global framework. But you need to be able to execute in all of the countries. And that translates

into using local resources and using the right health care systems, helping out with that without executing locally.

QUEST: Your first Davos war was in the early '90s



QUEST: So you are well used to this.

Where would you prefer Davos to be held?

In January with the snow?

Or in spring, with the sunshine?

JOHANSSON: You know, I am Swedish. I'm very comfortable in the snow. So I will be here.

QUEST: There we go. Thank you very much, sir. Thank you for doing this. Much appreciated.

There were many other people we spoke to.


Ursula van der Leyen, all the other people who came up on to the chart and put their various things here.

So the question is, what did they say?


QUEST: You've been here when it's been snowing.

STOLTENBERG: Mostly. This is the first time during the spring.

QUEST: Exactly, secretary general, so come over here.

Which would you prefer?

Your country, you are used to snow.

STOLTENBERG: It's beautiful in the springtime. But actually I like Davos more in the wintertime because this is a winter resort, with the mountains,

with the ski slopes. Therefore, I choose the winter.

QUEST: Given a choice, because everybody is talking about this, would you prefer Davos in the snow or the spring?

URSULA VAN DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: I am very clearly here on this side, voila.


QUEST: Are you a Davos in the snow?

UNIDENTIFIED MALE: No, not at all. This. One this is me.

UNIDENTIFIED MALE: I'm going to be this one because I don't like carrying umbrellas.


QUEST: There you are. We will continue to show more and more as the day goes on. In a moment I will have a full one for you after the break.




QUEST: Tonight's "Profitable Moment," so the Polish prime minister's proposal that Russian assets should be used to pay for the reconstruction,

the very reconstruction that Volodymyr Zelenskyy talked about yesterday, is one that finds great favor.

Ursula van der Leyen made it clear that this is something she would look forward to. And she's putting forward some proposals. But she also said on

our program tonight that the legal difficulties are enormous.


Because these assets are often hidden behind shell companies. They go through numerous jurisdictions. They are deliberately set up. Just think

about how difficult it has been to find the yachts and the planes and the houses.

Now you start to try to do the same things with things like companies or large tracts of land or other forms of investment, bonds, shares and the

like. It is not easy and it will create a legal minefield.

And to those of you say, well, just take them anyway. Just take them anyway. If they have done nothing wrong, the courts will sort it out

afterwards. That is not the answer because we can't be seen to do something that others wouldn't do. We have to be beyond that, follow the rule of law.

This is why this very good idea with such great simplicity will turn into a legal and regulatory minefield. Now that is not a reason not to do it. It

just means that there needs to be political will, which it looks like is growing. And there needs to be an impetus, a way forward, which is what

maybe the Polish prime minister has started.

We will watch and see. And so, that is our program for tonight, indoors, where it is warm. Hopefully we will be back outdoors where it is cold. That

is QUEST MEANS BUSINESS for tonight. I'm Richard Quest at Davos. Whatever you are up to you in the hours ahead, I hope it's profitable. I will see

you tomorrow.