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Quest Means Business
Zelenskyy Urges World Leaders To Unite Against Russia; US And Chinese Officials Pledge To Prevent Conflict; WTO Director-General Calls For Economic Reglobalization; Interview With Croatian Prime Minister Andrej Plenkovic On Post-Euro Price Hikes; Helicopter Crash Kills Ukraine's Interior Minister, 13 Others; Interview With Belgian Prime Minister Alexander De Croo On Threat Of Transatlantic Trade War; China's Reopening Could Bring Record Oil Demand; Profitable Moment. Aired 3-4p ET
Aired January 18, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:23]
RICHARD QUEST, CNN INTERNATIONAL HOST: A horrible day on the markets. The Dow Jones is off very sharply. The reason is something to do with Fed
Governors being speaking. I'll give you the details of that in a moment.
So the market is down and these are the events of the day.
President Zelenskyy to Davos, every death is a result of war.
The Polish Prime Minister to Germany, stop procrastinating and let us send what we need to send.
And the Norwegian Sovereign Fund to the markets. Executive pay is too high.
Live from the World Economic Forum on Wednesday, January the 18th, I'm Richard Quest with my friend, and together of course, we mean business.
Good evening from Davos, and tonight, a powerful moment at the World Economic Forum.
Ukraine's President Zelenskyy led a moment of silence. It was in memory of the 14 people who were killed when a helicopter crashed in Kyiv only hours
before. Among the dead was the Ukraine's Interior Minister.
President Zelenskyy says the crash victims are the casualty of war no matter what actually caused the helicopter to go down. His main reason for
speaking to Davos is to push for more equipment particularly tanks, and President Zelenskyy warned when Russia invaded, the world hesitated, and he
urged don't make the same mistake again.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: Tragedies are outpacing life. The tyranny is outpacing the democracy. Russia needed less than one second to
start the war. The world needed days to react with forced sanctions.
The time the free world uses to think is used by the terrorist state to kill.
The war must not hesitate today and ever.
(END VIDEO CLIP)
QUEST: There was arguably a very good example of what he was talking about today and it concerns tanks. Germany is hesitating on allowing the
Leopard 2 tanks to be supplied to Ukraine. Zelenskyy specifically said tanks were what the country needed.
However, Chancellor Scholz dodged questions on the matter when he spoke at Davos. Indeed, he said his country is providing plenty of military support,
but didn't mention tanks.
(BEGIN VIDEO CLIP)
OLAF SCHOLZ, GERMAN CHANCELLOR: We will continue to do this as long as necessary, and whilst we are doing this and showing that the Ukrainians can
rely on our support for their courageous fight, it is also clear that we will avoid that this is becoming a war between Russia and NATO.
(END VIDEO CLIP)
QUEST: The breach on this issue is best seen when you look at Poland. Poland has been urging allies to send Western-made tanks to Ukraine and
indeed wants to send its own Leopard 2 tanks, but it needs Germany's permission, and so far, Germany, which makes the tanks has refused to do
so.
The Prime Minister, the Polish Prime Minister was as close to undiplomatic as you're ever going to get him to get when he spoke to me earlier.
(BEGIN VIDEO CLIP)
MATEUSZ MORAWIECKI, POLISH PRIME MINISTER: This morning, my condolences for what has happened to a member of Cabinet of President Zelenskyy, but my
mind is occupied with events in Ukraine all the time, because this war is so critically important for the stability of the region.
QUEST: Right. But the issue that you have at the moment is the Leopard tanks, and whether to send them to Ukraine.
MORAWIECKI: Now, we don't have those problems because we were the first who have offered the Leopard tanks, and we are now encouraging and
inspiring others, in particular, the Germans to give their part because we have sent actually 250 tanks, our tanks to Ukraine already. Now the Leopard
tanks is the next round of our support for Ukraine.
[15:05:02]
QUEST: Why didn't you just send them and ask for permission afterwards? You know the old saying, it is better to ask for forgiveness than
permission --
MORAWIECKI: Than for permission. I know this very well, I always use it towards my people with whom I work, because they are encouraged to do you
know, out of box things, but to your point, it is not only about allowing or not allowing permission, not permission, but the critically important
point is, will Germans finally, finally give their part of heavy artillery in particular, heavy and modern tanks?
And this is the major question because 14 tanks on top of 250 is not the game changer, but if France and in particular Germany, and some other
countries gave twenty, thirty tanks each, then it could make a difference for Ukraine.
QUEST: Germany is being particularly slow.
MORAWIECKI: Yes, unfortunately, I can agree to this.
QUEST: . agreeing to this. Do you understand why?
MORAWIECKI: They procrastinate on many different issues related to Ukraine. Unfortunately, I believe that many of German politicians are still
embedded in the previous era.
They actually put all their eggs in one basket called the Russian gas, and this basket is now full of eggs, but not exactly in a good shape. And, and
now we have, they have to reinvent themselves. And this is why probably they are so, you know, hesitating and procrastinating and not supportive
for Ukraine.
QUEST: You need the money from Europe now to help really start paying the bills for the superb and magnificent work that Polish people have been
doing looking after refugees.
MORAWIECKI: Thank you. Thank you.
QUEST: But of course, it can't go on forever and you can't keep paying the bill forever, and you need the EU funds. Will all parts of the Polish
legislative system, Lower House, Upper House, President, will they sign the agreement you reached?
MORAWIECKI: I hope so. My part is to actually organize support in the Lower Chamber, which is the most important Chamber of High Parliament, and
I'm cautiously optimistic with regard to this. Once the President signs this --
QUEST: The President has indicated he may not sign it.
MORAWIECKI: We'll see. It remains to be seen, as they say. It's of course his prerogative, so I won't preempt any decision.
QUEST: It's never easy to ask my next question.
MORAWIECKI: Yes.
QUEST: Prime Minister, you're facing an election this year? And if the polls are to be believed, you're going to lose.
MORAWIECKI: No. My party is absolutely in all the polls on the -- on top of --
QUEST: If the opposition combine, you're out.
MORAWIECKI: The opposition, there are different parties in the opposition. So again, it remains to be seen what will happen out of the
elections probably in October or November of this year?
QUEST: Do you need to change policies? Do you need to change tack? Do you need to do something for the economy to help people because --
MORAWIECKI: Our economy is in a very good shape, actually --
QUEST: You're going to go into a recession like everyone else.
MORAWIECKI: No. No. Who gave you those notes? Probably wrong notes. Last year five percent GDP growth or around this, four and a half to five. This
year, one to two percentage points of growth.
I know Germany is going to go to recession, probably Italy, maybe the United Kingdom, but not Poland.
QUEST: Here is a politician running for reelection.
MORAWIECKI: Absolutely.
QUEST: Prime Minister, you can choose a color.
MORAWIECKI: Blue one.
QUEST: Everyone is going blue. Anyway, come over here to the wall. Because of your unique position, you can have two, if you like, I mean,
because I know where your first one is going to be. We've removed climate crisis, because everybody would have done that. So what's the biggest worry
for you at the moment?
MORAWIECKI: So short term, Ukraine; long term, a better international system, so inequality, tax regimes, and so on.
(END VIDEOTAPE)
QUEST: Throughout the hour, we will be joined by the Prime Ministers of Croatia and Belgium. We will have the head of the WTO who will put me in my
place. She will be with us just after the break.
The EU Commissioner for the Economy will be with us and the CEOs of Norway's Sovereign Wealth Fund and Crescent Petroleum also here. You don't
get that anywhere else, nor do you get anywhere else, Julia Chatterley and she is with me now. What a week.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, "FIRST MOVE": He might not want to either.
QUEST: Right. What are week and a day?
CHATTERLEY: Yes, what a day. Ukraine, once again, President Zelenskyy.
QUEST: Yes.
CHATTERLEY: I think the moment where he said every death is the result of war brought it home, I think for everybody here that we are sharing
condolences over the helicopter crash today.
QUEST: But it still comes down to who is going to provide what and you know this idea of can you send NATO equipment to non-NATO countries?
[15:10:10] CHATTERLEY: That's the big question, actually, and they are intrinsically tied, or at least they are as far as the NATO Secretary-
General, and he made that point. He sort of said to me, you know, that helicopter would not have been in that position had this war not been on
and that was what President Zelenskyy was saying, too.
And it does come down to our -- it comes down to the timing, it comes down to the Germans as you said.
Just listen in to what the NATO Secretary-General had to say to me when I asked him about the further tragic events of the day.
(BEGIN VIDEO CLIP)
JENS STOLTENBERG, NATO SECRETARY-GENERAL: The helicopter crash was a new tragedy in a country, which has suffered so much during this war. And my
condolences, of course, goes to all those who have lost their loved ones, their family members, and friends, and it is yet another example of the
human cost of this war and the importance of supporting Ukraine because that's the fastest way to end the war.
(END VIDEO CLIP)
QUEST: The market is down because of Fed Governor Loretta -- I forgot the last name.
CHATTERLEY: Mester.
QUEST: Thank you. She said that rates would be going, they weren't finished yet. Oh, quelle surprise.
CHATTERLEY: I was going to say, after three, we're going to do a collective headbang one, two, three. Exactly.
We have no reason to believe that they're not done yet, whereas inflation it is coming down. Admittedly, it's nowhere near the two percent target.
What? We're six and a half percent now. If that were the peak, we'd still be complaining and stressed and even if they are ready to quit raising
rates, they're not going to tell us yet, so let's not try and predict what's going on in the markets.
QUEST: An unusual occasion. I'll take that. You choose your color.
CHATTERLEY: Where is my pink one?
QUEST: Oh, stop this.
CHATTERLEY: I asked you this, you know in May and you still didn't have it.
QUEST: She is the only one who is going for red, but there we go. Come on.
CHATTERLEY: That's something. Now, there is the red, hold on. What's the difference between ticks and --
QUEST: Nothing.
CHATTERLEY: And circles?
QUEST: These are just sort of emphasizing. The ticks are the ones that count.
CHATTERLEY: I want to circle. Also why is climate crisis up there? Is that not one of my choices?
QUEST: She has clearly not been watching the program this week or she would know the answer to that question.
NGOZI OKONJU-IWEALA, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: I knew the answer, Julia.
QUEST: So that happens -- that's the Director-General of the World Trade Organization.
CHATTERLEY: She is going to put you in your place.
OKONJU-IWEALA: Because it matters to everyone.
QUEST: It matters to everybody.
CHATTERLEY: Because everyone would tick that.
QUEST: Exactly.
CHATTERLEY: Because it is the right thing to say. Okay, okay. You know I am a worrier. I am a worrier.
QUEST: So you're going to choose.
CHATTERLEY: Okay.
QUEST: We haven't got all night.
CHATTERLEY: Okay. Okay, so I am going to circle.
OKONJU-IWEALA: Uh-oh.
QUEST: Oh, too clever by half. So clever by half.
CHATTERLEY: Wait, I am also circling "worry" because I do worry about worry and stress, too, and anxiety, particularly young children, which
should be on there as well. Did I win?
QUEST: No, you did not. You just ruined the board.
CHATTERLEY: I did that. I may as well.
QUEST: Yes, you did. Listen, this is your last -- this is your last bit with us here because you're not here tomorrow night because -- so thank you
very much.
CHATTERLEY: Thank you, Richard.
QUEST: Very kind. Always a pleasure. Thank you very much.
CHATTERLEY: Thank you. I am leaving now.
QUEST: Davos' theme is cooperation in a fragmented world and no one understands that challenge better than my next guest. Joining me will Ngozi
Iweala from the WTO. She'll put me in my place.
(COMMERCIAL BREAK)
[15:15:50]
(BEGIN VIDEO CLIP)
KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: We see labor markets in the United States, in Europe holding, consumers
spending, and a chance for the Chinese economy to bottom out.
If all this holds, we might see a progress in bottoming out of growth towards the end of the year. But let's remember, while inflation is
trending down, it is still way, way above the target of two percent, and therefore interest rates will remain still tight throwing some cold water
of the world economy.
(END VIDEO CLIP)
QUEST: The IMF's head, Kristalina Georgieva with the economic outlook speaking to Julia Chatterley. I knew Julia would manage to get back in
somehow.
As we continue tonight, the US Treasury Secretary Janet Yellen has vowed to prevent competition from China from turning into conflict. She was talking
to Chinese counterpart, Liu He in Zurich. It was the highest ranking meeting between the two countries since the Presidents met in November.
China says trade with the US has broken records last year reaching $760 billion.
Trade -- Ngozi Okonju-Iweala is the Director-General of the World Trade Organization, with me now.
Thank you. As always, lovely to see you as always.
OKONJU-IWEALA: Thank you, Richard.
QUEST: And so the trade element, we'll deal with China and the US in a second, but the trade element and the role it is playing in the recovery,
when we also know countries are being very protectionist at the same time.
OKONJU-IWEALA: Well, look, you can't recover without trade. We have forecast, actually, that the trade growth will fall from about 3.5 percent
last year to one percent this year. So, it's not very good news.
But, there is a lot of uncertainty around that forecast, and if we have a soft landing from the monetary tightening that we are going through, and if
the war in Ukraine should end, there is a big upside and we could see trade grow at about 4.6 percent., so.
QUEST: Those are very big if's.
OKONJU-IWEALA: Yes, but we should not lose sight of the possibility of an upside.
QUEST: So what's your role in encouraging that upside?
OKONJU-IWEALA: Well, you know, our role is to make sure that we don't allow this talk about fragmentation and deglobalization to really take hold,
because if we do, then there is not going to be any upside.
The cost to the world economy are enormous, and then trade will instead of contributing to growth will actually detract from it.
QUEST: Yesterday, I was doing a panel with aid experts and they all said one of the things they really want when it comes to aid and supply chains
and the problems is if you like, a carve out, a special set of rules for aid that's being transported, that makes it easier, quicker, cheaper, et
cetera et cetera.
Why can you not organize that?
OKONJU-IWEALA: We actually have an agreement that all our members have signed called the Trade Facilitation Agreement that came into being in
2017. That sweeps away a lot of the bureaucracy and procedures around --
QUEST: Not enough.
OKONJU-IWEALA: Well, when members implement it, what we need urge is implemented Trade Facilitation Agreement, and then we don't need anything
special for aid.
I also want to tell you that --
QUEST: But you can't get that Trade Facilitation implemented, whereas you might be able to get everybody to agree to do something for aid.
OKONJU-IWEALA: Well, we actually did agree in June to something specific for humanitarian aid for the World Food Programme. All our members agreed
that they will not put any restrictions on the way of humanitarian food purchases, so we have done something positive. But the larger picture is to
get this Trade Facilitation Agreement implemented.
[15:20:06]
QUEST: Everybody wants trade, everybody sort of wants some form of bilateral trade, China, the US, for example, but the impediments are more
political than economic now, aren't they? It's how much ground people are prepared to give?
OKONJU-IWEALA: Well, you know, there is, as you said, there is a lot of geopolitical tension around trade, but we shouldn't over emphasize it.
The actual volumes of trade, let's say, between China and the US are quite high, as you noted, and between China and the EU, in spite of all the talk.
And I just want to repeat what I said about fragmentation and decoupling. Let's be very careful. As I always say, talk is cheap, let's not make it a
reality because of the costs to the global economy.
QUEST: But the price of the hotel rooms here in Davos, I wouldn't say, talk is cheap. Have a pen.
OKONJU-IWEALA: Thank you.
QUEST: Which color?
OKONJU-IWEALA: Blue.
QUEST: Of course, of course, blue. Come over here, which at the moment is the biggest single problem that you're worried about? Global recession,
inflation, energy, Ukraine.
OKONJU-IWEALA: It's Ukraine. So, I tick here. And also polarization and inequality, I have to tick two.
QUEST: Of course, I'm not going to disagree with you, but can I have the top of the pen back, thank you.
OKONJU-IWEALA: Sure.
QUEST: Thank you very much. Lovely to see you.
OKONJU-IWEALA: Lovely to see you.
QUEST: Thank you very much for taking time tonight to talk to us.
OKONJU-IWEALA: Take care. Thank you.
QUEST: Staying with the world of economics, the EU's Economic Commissioner has told me he now expects a shallow contraction, that could
be a posh word for a recession.
It is a big change in tone for the bloc, which expected full blown catastrophe only six months ago.
Paolo Gentiloni reminded me that Europe is bearing the brunt of an economic pain from the war in Ukraine.
(BEGIN VIDEOTAPE)
PAOLO GENTILONI, EUROPEAN UNION'S ECONOMIC COMMISSIONER: I think we should all be aware of the fact that the consequences of this war are not the same
in all the advanced economies.
I mean, of course, the problem is shared by Europe, US, Canada, Japan, et cetera, but this crisis is bringing economic consequences much more
seriously for Europe, and so public opinion is supporting Ukraine, but also with problems.
QUEST: A core question, what long-term effects do you see?
GENTILONI: Well, I think this was very useful to strengthen our unity. And at the moment, I don't see any risk of undermining this unity in support to
Ukraine. This is good.
For the energy prices, well, they are now at the pre-war level in Europe, again, but make no mistake, they are still and they will stay for some year
higher than, for example in the US. So this is a competitive disadvantage for business in Europe.
QUEST: The way in which the funds have been used both with Hungary and with Poland. Now, in Poland's case, it's working its way through. Hungary
still has to reach a full agreement. Do you see satisfaction coming there?
GENTILONI: I think that it was unprecedented, and overall good, because we, as the European Commission, we have been giving recommendations to these
countries for years and years and years, but with relative success.
Now that you have money attached to your recommendation, which is the money that we decided for next generation EU, these recommendations are much more
successful.
QUEST: You're being very polite in the way you're putting it. You had the carrot before, and then you went with the stick.
GENTILONI: Or both maybe.
QUEST: Come to the worry board.
GENTILONI: Yes.
QUEST: Now, which for you at the moment is the single most biggest worry. Where are you going to put your tick?
GENTILONI: In this one. Ukraine, but more than for energy crisis that overall we are managing, but in itself, the war is a threat for us. If the
war continues, if the war goes on, the pressure on our institution, and the pressure of the Ukrainian people will be very, very strong. So we have to
support the Ukrainians and try to win this war.
(END VIDEOTAPE)
QUEST: Microsoft is the latest major tech company that's announcing layoffs. Microsoft said it's going to let 10,000 employees go and it's
bracing itself for economic headwinds.
Microsoft's chief executive was speaking at Davos this morning when Satya Nadella said the company would have to make better use of its resources.
[20:25:10]
(BEGIN VIDEO CLIP)
SATYA NADELLA, CEO, MICROSOFT: During the pandemic, there was rapid acceleration, I think we are going to go through a phase today where there
is going to be some amount of normalization of the demand.
Quite frankly, we in the tech industry will also have to get efficient, right? It's not about everyone else doing more with less, we will have to
do more with less.
(END VIDEO CLIP)
QUEST: Norway's Sovereign Wealth Fund holds a stake in Microsoft, and it is only one of 9,000 companies that the Fund invests in. It is massive, far
reaching, worth more than a trillion dollars, and it owns -- ready for this -- 1.4 percent of all the world's listed equities, that rises to over two
and a half percent if you're just restrict it to Europe.
Its chief executive, Nicolai Tangen spoke to me about why he came to Davos.
(BEGIN VIDEOTAPE)
NICOLAI TANGEN, CEO, NORGES BANK INVESTMENT MANAGEMENT: Well, we are in Davos because we got a clear message. We think that the Executive Boards
need to sharpen up. We don't think boards do enough on the climate side, only 17 percent of companies that we are invested in actually have a clear
climate plan.
We are here to also say more about executive pay. We think executive pay is too high, and we think also Boards do not a good enough job on the
diversity at the Board level.
QUEST: What do you want them to do on climate diversity that they're not doing at the moment? Because every company that comes my way, has an entire
raft of policies and documents and what they are up to.
TANGEN: Well, the problem is that they haven't, right? Because as I said, only 17 percent of companies have a clear climate strategy. That's not very
much.
We also think that executive pay is too high. You know, in 2021, executive pay up 15 percent -- fifteen percent in a year, where there is a living
crisis, we just don't think that makes a lot of sense.
QUEST: It's worse in the US than elsewhere?
TANGEN: Yes.
QUEST: What are you seeing at the moment when you look at markets? We've had very difficult six months -- nine months, and people say it is going to
be trading sideways for the rest of the year.
TANGEN: Well, I think we have much more difficult outcomes than we've had historically. So normally, when I go into a year, I think it's very clear
which direction it has, this year, I think it could either go well, or it could also go really badly.
And I think the reason why it could go badly would be if the kind of the kickoff again in China spurs inflation in Europe and in America. If that
happens and we get a reacceleration of inflation, really bad for markets.
QUEST: Now you've been nuts on China, but of course, you have the exogenous possibility from Russia, something coming out of there, something
coming out from the Ukraine crisis, which could also push up energy prices. I see that as a double negative, if you will, in a sense for yourself,
because that will only have one effect, but it could also have a bad effect for companies that you've invested in.
TANGEN: Well, you can have a lot of surprising elements there. You could have geopolitical events in many places, and it is always the unexpected,
which takes us by surprise.
QUEST: If we take a look at interest rates and how they've risen dramatically. I mean, any of us who have been doing this for a few years,
you normally see they sort of, they go up like that in a tightening cycle. This has gone like straight up.
TANGEN: Yes.
QUEST: Do you see that? Do you see further rate rises to come? And do you see, or are we close to the peak?
TANGEN: Well, I normally don't say too much about inflation, but there is a risk, that inflation will be more difficult to get down than what is
generally expected. There is a clear risk for that.
There is a risk that it will be impacted by what's going on in China. And so they just could be difficult to get down.
QUEST: Come over to the worry wall. Right? What are you most worried about at the moment? What gives you greatest -- well, that's obviously the
threat to democracy.
TANGEN: Well, you know, I think the biggest -- well, these are all worries, I think the biggest surprise, which would be good for the economy, but bad
for markets will be if the Chinese reopening cause really, really strong inflation. That will be a negative.
QUEST: As China reopened, it's almost a certainty that there was going to be some form of exporting of inflation simply because the demand for
energy, the demand for labor, everything is going to start happening.
TANGEN: Absolutely. So you know, the Chinese have spent -- have not spent money for a long time. That means spending time, you know, unfortunately in
the living rooms, there is a lot of pent up potential spending to come.
(END VIDEOTAPE)
QUEST: And there are no shortage of worries here in Davos, as you can see the worry board. We will count them all up and give you an idea of
where we stand and the snow is really bucketing it down now, it's going to go on for some hours, but we haven't had that much.
So the worries of the world and the Prime Minister of Croatia is with me, and after the break, we'll hear what's on your mind, sir.
ANDREJ PLENKOVIC, CROATIA PRIME MINISTER: Good to see you.
[15:30:10]
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Prices in Croatia have skyrocketed after the country switched to the euro at the start of the year. Now part of the Eurozone, the government
is blaming traders, saying they rounded up prices in the new currency.
Officials found that 40 percent of businesses had unjustifiably raised prices. Traders in turn are saying it is the inflationary environment
behind it. Croatia has one of the highest inflation rates in the Eurozone.
With me now is Andrej Plenkovic, the prime minister of Croatia.
This inflation, when you joined the Eurozone, was entirely predictable. It happens every time.
Why didn't you stop it?
PLENKOVIC: Well, the inflation is first of all caused by the Russian aggression on Ukraine. It's caused because the energy crisis, because of
the food crisis, because of the inflationary pressures which are global.
We should have got (INAUDIBLE) in Croatia as well. We just had a date our statistical office that for 2022, the inflation is 10.8 percent, which is
lower than most of the countries from Central and Eastern Europe who are in the E.U. but not in the Eurozone.
QUEST: So when the Polish prime minister says, well, we are not joining the euro because look at what happened in Croatia.
PLENKOVIC: I know Mateusz very well. He is a good friend and Poland and Croatia are very friendly countries. But I don't it should -- this
government to fall and wants to join Europe. They don't want to join anyway and I wouldn't say the prices have skyrocketed.
Some of the economic operators unjustifiably raised their prices. But I think it will come down. We called them to put them back on the 31st of
December. And we have measures in order to make some serious incentives to actually do so.
[15:35:00]
QUEST: The -- it's an interesting question, whether it will be a full scale recession in the Eurozone. The economics commissioner called it a
contraction. So there's going to be a slowdown and it is going to continue.
How prepared are you for that?
PLENKOVIC: Well, I think we are more than prepared. Croatia in '22 will have growth in GDP around 6 percent, with inflation 10.8. The strategic
achievement of joining is the only country ever Eurozone and Schengen area, with a lot of financial assistance from the European Union in the next
couple years.
Then, with a rather vibrating economy, especially in tourist sector and export and construction. So from that point of view, we have enough fiscal
capacity to sustain the slowing down of the economy, which was announced globally.
(CROSSTALK)
QUEST: There are starting to become, between Kosovo and Serbia, agitation. I will keep it as neutral as that, between -- and now, of course, your
country was borne out of the Balkan Wars.
How concerned should we be that there are bellicosity and noise coming from these countries at the moment?
PLENKOVIC: You said you -- we came out of the former Yugoslavia. But now we are among the 15 countries which are in NATO, E.U. Schengen and the
Eurozone, a very big achievement in 30 years.
When it comes to the Serbia-Kosovo relations, I actually met the Kosovo prime minister this afternoon. I will meet the Serbian president tomorrow.
I am meeting the mediator this afternoon.
What we want is calming of tensions, normalization and sorting out these noises, which you have just evoked, over the past couple of weeks. But we
do not fear the instability. I think the international community is committed to have a calm development of the situation in southeast Europe
and especially the nations with Serbia and Kosovo.
You gave a very good example of all the international organizations. And in many ways, you are the poster child for reintegration, in a sense. But one
thing I always feel about, is when I look at the tourism industry there, you suffer the problem of being too popular.
PLENKOVIC: We became even more popular with the national football team winning the bronze medal now in Qatar after the silver in Russia, in 2018.
So Croatia had a fantastic tourist season. We are the country that has --
(CROSSTALK)
QUEST: -- how do you deal with too many?
PLENKOVIC: I don't think we are there yet. We have a new strategy of developing tourism, which is called the sustainable tourism. And I think
there will be a lot of investments in Croatia now, with Schengen can easily receive people without any hassles at the border, no papers.
And if everybody moves freely, as of the 26th of March, flying from Schengen area as a domestic flight to Croatia, it's an invitation.
QUEST: And one that I have accepted in the past and paid for, by the way, myself --
(CROSSTALK)
PLENKOVIC: You should come again.
QUEST: And pay for it myself, before (INAUDIBLE) chimes in on this.
Choose your color.
PLENKOVIC: Blue.
(CROSSTALK)
QUEST: I don't know why I don't just throw the rest of them away.
PLENKOVIC: It's a party color.
QUEST: Right. Come in, have a look, over to the board.
Where are you going to go on the board?
PLENKOVIC: OK. Can I pick two at least?
QUEST: I'm not going to say no to a prime minister.
PLENKOVIC: Very good.
(CROSSTALK)
PLENKOVIC: Then the first one is Ukraine energy crisis, because that's where everything comes from. And the second one is global recession and
inflation.
QUEST: And also (INAUDIBLE), that leads to that.
PLENKOVIC: Exactly.
QUEST: And then of course, that will eventually lead to that.
PLENKOVIC: Right They are all serious worries and concerns. So interlinked.
QUEST: I'm very glad that you came to us tonight, sir. Thank you very much.
(CROSSTALK)
PLENKOVIC: -- all the best.
QUEST: Ukraine's president says a deadly helicopter crash in Kyiv is a consequence of the war. We'll have the latest on that crash.
And you're going to hear from Belgium's prime minister. When he came today, he said he's more committed to Ukraine than ever. It's QUEST MEANS BUSINESS
in Davos.
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[15:40:00]
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QUEST: Ukraine's interior minister and five other ministry officials are among the 14 people who were killed in the helicopter crash that took place
on the outskirts of Kyiv; dozens of people have been hurt when the helicopter crashed into a kindergarten. CNN's Fred Pleitgen reports.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Widespread destruction after the helicopter for Ukraine's interior minister
crashed near Kyiv, an eyewitness describing the scene to me.
"I saw a helicopter that was flying toward the kindergarten," he says. "It landed almost vertically. I saw an explosion. I came down to help clear the
debris."
He also shot this video of the immediate aftermath.
PLEITGEN: The chopper crashed at the foot of this residential building. As you can see, there are lots of parts strewn around everywhere. It
completely burned out, killing everyone inside and several people on the ground.
PLEITGEN (voice-over): Among the dead, Ukraine's interior minister, Denis Monastyrsky; his deputy, Yevhen Yenin; and state secretary, Yuriy
Lubkovych.
The deputy minister's wife in tears as she reached the scene. Especially tragic, a child was also among several people killed on the ground, as the
aircraft hit a kindergarten, just as parents were dropping their kids off. Two boys describe how they tried to help.
"Here, they passed injured children over the fence," this boy says. "Mostly they had bruises and scratches. Holm (ph) put bandages on them, wrote down
their names and surnames and found the parents."
The chopper, a Eurocopter Super Puma, Ukrainian authorities have launched an investigation into the possible causes of the crash.
YURII IHNAT, UKRAINIAN AIR FORCE (through translator): Various factors, radio communications and the technical condition of the helicopter needs to
be examined. This will take at least several weeks.
PLEITGEN (voice-over): Denis Monastyrsky was one of Ukraine's most important officials. We traveled with him to the Chernobyl nuclear plant
shortly after Russian forces withdrew from there. Monastyrsky frequently visited the front lines to help boost morale.
DENIS MONASTYRSKY, UKRAINIAN FOREIGN MINISTER (through translator): They have such a strong fighting spirit and are ready for any scenario. We heard
the shells exploding but no one is afraid as everyone is ready.
PLEITGEN (voice-over): Ukrainian forces are currently facing a major Russian onslaught in the eastern part of the country near Bakhmut and
Soledar.
And dozens were killed when a massive Russian missile hit a residential building in Dnipro. And now, Ukraine is also mourning the loss of more than
a dozen people, including some of the country's top officials -- Fred Pleitgen, CNN, Brovary, Ukraine.
(END VIDEOTAPE)
QUEST: The prime minister of Belgium is doubling down on his government's support for Ukraine. I asked Alexander De Croo whether the E.U.'s
solidarity would fracture when it comes to peace talks between Ukraine and Russia.
(BEGIN VIDEOTAPE)
ALEXANDER DE CROO, BELGIAN PRIME MINISTER: It's not going to happen. I think it is quite clear that as European Union and as NATO --
[15:45:00]
-- we have been more united than anyone could've imagined and definitely more than what Vladimir Putin imagined. I mean, we were more determined
than ever to make Ukraine win that war and to provide them the support to be able to do that.
QUEST: And yet, Germany won't let the tanks from Poland go. And Turkiye and NATO is still being difficult with Finland and Sweden. And Hungary is
playing for everything it can get, simply not to oppose.
DE CROO: I can understand you are digging for like elements where you could be, where you could say, well, you know, we are not 100 percent.
There but the global picture is a tremendous support for Ukraine on the battlefield.
Thousands, hundreds of thousands of Ukrainians that are being helped throughout Europe, refugees. I mean, the global picture is one of almost
unlimited support to Ukraine.
QUEST: Well, it just shows the difficulty of people with jobs like yourselves. On the one hand, you've got this coalition but, on the other
hand, I can see a sort of a nasty argument coming with the United States over their green agenda and the support being given, which, in Europe, you
see as being unfair.
DE CROO: Well, first reaction, we are happy that the United States is pulling its weight in the sustainability agenda. So overall, we have been
calling for this for years. So in general, we are happy that they moved on our side of the table. That's point one.
Point two, yes, if you look at the scheme itself, of course, the scope of the scheme is quite broad and the timeframe of the scheme is quite long.
And so, what we want to avoid is that we end up in a war, a subsidy war, between the United States and Europe.
QUEST: Is that it for tax, though?
They've done a scheme which Europe might not particularly -- you welcome it but you don't particularly welcome the details. So we will do the same.
DE CROO: No, we are not going to do the same. But you know, the moment where both sides of the Atlantic make clear that clean energy, renewable,
making our industry more renewable, when both of us pull in the same direction, no one can beat it. And that is good for the world.
QUEST: It is the Belgian authorities that are leading the way in the prosecution of the alleged corruption within the parliament.
DE CROO: Yes.
QUEST: How deep do you think this goes?
How much of a sewer is waiting to be exposed?
DE CROO: Well, what has been exposed already is quite a sewer. And I think that the Belgian security services are doing now what the European
Parliament should have been done over the last years. They haven't done that.
And you know, European Parliament is an important democratic institution. They have a lot of responsibility, a lot of power. But with power and
responsibility goes prudence. And they haven't shown the prudence.
QUEST: But let's assume a country is involved in bribing or in corruption with European Parliament members.
Does the E.U. need to take measures?
DE CROO: Well, to be bribed, you need to be too. There is someone being bribed, as well. And that should be our first focus. The first focus is,
have the European Parliament with strict rules and transparency that make it clear what is happening. What we see happening there is unacceptable.
QUEST: What color would you like?
DE CROO: I'll take. Blue
QUEST: Blue is a color.
DE CROO: It is the color of my political party.
QUEST: Well, that's as good enough reason as any.
All right, tell me what you are going to go for and why?
DE CROO: Well, definitely Ukraine and the energy crisis because that, the war needs to stop and the energy crisis, we are coping with that.
Definitely not COVID. I don't think it is high on the agenda.
I think the democracies part is an important one. And I would take that one because we see that democracies are being put under tremendous pressure. We
need to do more effort in defending our democracies.
(END VIDEOTAPE)
QUEST: That is the Belgian prime minister.
Plenty more to come. China's reopening as you saw earlier could lift oil demand to record highs. With me, the CEO of the Middle East's largest
(INAUDIBLE) oil company and we'll put oil to rights.
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[15:50:00]
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QUEST: China's reopening could push global oil demand this year to a record high. The IEA expects demand to surge by nearly 2 million barrels a
day. Half of that going to China.
And the total demand peaking at 101 million barrels a day. Selling some of that will be Crescent Petroleum, the largest private oil company in the
Middle East. Majid Jafar is the chief executive and with me now.
We were just commenting. Energy is center front here at Davos.
MAJID JAFAR, CEO, CRESCENT PETROLEUM: Yes, so I've been coming for 10. Years I have never seen so many energy sessions unattended by policymakers,
leaders from other sectors.
It is clearly recognized we had a global, the first global energy crisis. And you say 2 million barrels. There's only 2 million barrels of spare
capacity in the world today.
So if aviation kicks back off and China opens up, we could really have shortages. I think we have realized that starving supply while demand keeps
going up wasn't the right way to go. And we actually need investment on all forms of energy.
QUEST: So there is an acceptance and I'm hearing it. Now regrettable though it may be, that the policies of investors, of pressure from
activists, not to invest in fossil development, is actually now working against us.
JAFAR: So we certainly need the investment in renewables. We need to treble the investment in renewables by the end of the decade. But we do
also need gas for power to replace coal and diesel in the Middle East to enable renewables.
That is how the U.K. did and that is how the U.S. did. It and we still need oil even if we electrify cars for making things and for heavy
transportation.
QUEST: Why are we all so suspicious though, that, aah, there they go. The oil producers, they are using this as a good excuse to keep their revenues
coming in.
JAFAR: Well, the revenues are higher because of the price spike and that is because of the chronic underinvestment; $300 billion of underinvestment
estimated annually.
The energy trilemma, you've got to get all three legs of the stool. We are actually failing on all three, which is availability, affordability and
sustainability. We failed on the first two and, as a result, the developing world is burning more coal and so emissions are rising, which is bad for
the planet as well.
QUEST: For countries like the Gulf, the countries in the Gulf, this is a huge budgetary benefit. I was talking to the economy minister of Qatar
yesterday, who has an $8 billion surplus on the budget.
JAFAR: So the IMF estimates $1.3 trillion more than budgeted for oil exporters in the region over the next four years.
Having said, that we as an industry do need to improve how we produce and also the consumer needs to improve how they consume the product. We in our
company are 85 percent gas. We reduced our emissions to almost zero and offset the remainder in 2021 to achieve net zero.
But the gas we produce by displacing diesel avoid 5 million tons of CO2 a year. That's more than all the (INAUDIBLE) on the planet.
QUEST: Choose your color.
JAFAR: I will choose green.
QUEST: (INAUDIBLE).
[15:55:00]
JAFAR: And I think definitely the energy crisis, the Ukraine war, some of these other ones have been factored in at least markets and are more
predictable. The war is obviously unpredictable. But the underinvestment is actually what is driving the energy crisis, not just the war. And I fear
that hasn't been appreciated enough.
QUEST: And do you fear that we are going to see much higher prices before the summer?
JAFAR: Quite possible if this underinvestment pattern doesn't change. I am starting to hear that it might and I am hopeful.
QUEST: Good to see you, sir.
JAFAR: And you
QUEST: Thank you very much indeed.
JAFAR: Thank you.
QUEST: Now tomorrow is our final day here at Davos. And we have saved some of the best for last.
The Bank of America's chief, Brian Moynihan; the CEOs of Allianz, Standard Chartered and S&P and the head of Interpol will be here as well. The
mastermind of the world's economic (INAUDIBLE). A look through the markets before I go to "Profitable Moment."
The Dow is off sharply for the second straight day. It's actually falling quite sharply in the last 20 minutes. And I expect that may continue for
the -- well, we've only got five minutes before the closing bell. Before we get there we will have a closing bell. I'll have a "Profitable Moment"
after the break. QUEST MEANS BUSINESS.
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QUEST: Tonight's "Profitable Moment": it was an extremely serious day here in Davos. The moment when President Zelenskyy asked for a minute's
silence and the room rose.
And the fact of the war in Europe, which is now coming up to a year long, simply is overshadowing what everybody is talking about. Europe is bearing
the brunt in a way that it never expected to. And, of course, Ukraine is bearing the ultimate brunt.
But if you look at the spillover effects and the wider issues then it is in Europe that people are talking.
There has been good fortune, if one can say, that in that the weather has been warmer than in previous years. Therefore, oil stocks are full. There
will not be blackouts and cutoffs this winter.
But that is cold comfort because everybody is expecting that things will continue throughout the year. And it is not a question just now of what
happens in 2023 but '24 as well.
On the worry wall, we talked about the Ukraine oil prices and energy. But you have to see it in the picture of one leads to the other.
So if Ukraine and energy is a massive issue here, then it feeds into inflation, it feeds into a difficulty of recession and it creates more
difficulties at the European level. I only go through all of this to try to show you the pieces of the jigsaw eventually do fit together. And when they
do, the picture is not always pleasant.
But I am still here. And that is QUEST MEANS BUSINESS for this Wednesday night. I am Richard Quest in Davos. Whatever you are up to in the hours
ahead, I hope it's profitable. I'll be back tomorrow.
END
