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Quest Means Business
Trump Encourages GOP Brinkmanship In Debt Ceiling Fight; Bank Of England Raises Rates, No Longer Expects UK Recession; US Ambassador Says South Africa Supplied Arms To Russia; Turkish President Faces Major Electoral Challenge; Pakistan's Top Court Orders Release Of Imran Khan; Call To Earth: Bears; The Future Of Cities. Aired 3-4p ET
Aired May 11, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:31]
PAULA NEWTON, CNN INTERNATIONAL HOST: A negative day for the Dow as worries about the US regional banks resurface. Look at that. Done -- almost three-
quarters of a percent by now. The NASDAQ eking out some gains. The S&P, relatively flat. Those are the markets and these are the main events.
Former President Donald Trump urges Republicans to default on the US debt if they don't get an agreement on budget cuts.
The US ambassador accuses South Africa of supplying arms to Russia.
And Italy holds crisis talks, yes, over spiraling pasta prices. That's not the name of the pasta. The co-owner of Rome's famous Roscioli joins me
live.
And live from CNN Center, it is Thursday, May 11th. I'm Paula Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.
And good evening.
Tonight, Donald Trump is urging Republicans not to compromise as the US approaches its debt ceiling. Now, at last night's CNN Townhall. The former
president said a US default, you know what, may not be so bad. Yes. That's what he said.
He also said Democrats will, in his words, cave in the GOP demands for sharp spending cuts. The top Senate Democrat, Chuck Schumer said Trump's
comments make a default more likely.
Now, the CEO of JPMorgan Chase says a default would be, in his words, catastrophic. Jamie Dimon told Bloomberg, the bank is preparing with weekly
war rooms. That doesn't mean that it isn't a concern for Mr. Trump.
He told Kaitlan Collins that the debt ceiling should be used for political leverage.
(BEGIN VIDEO CLIP)
KAITLAN COLLINS, CNN ANCHOR: You once said that using the using the debt ceiling as a negotiating wedge just could not happen.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: Sure. That's when I was president.
COLLINS: So why is it different now that you're out of office?
TRUMP: Because now, I am not president.
[LAUGHTER]
COLLINS: The US defaulting would be massively consequential for everyone in this room, for all of us.
TRUMP: Well, you don't know. It's psychological. It's really psychological more than anything else. And it could be very bad, it could be maybe
nothing, maybe it's -- you have a bad week or a bad day.
(END VIDEO CLIP)
NEWTON: Bad week or a bad day. CNN economics commentator, Catherine Rampell is in Washington. I would have liked to have been in the room when you saw
that, if you saw it live.
You know, you heard Jamie Dimon basically come back at that and say, look, this is going to be nothing short of catastrophic if it happens.
You know, you and I both know, that's an unlikely scenario. And yet, what do you want to tell us about any panic that might ensue in the lead up in
all of this negotiation?
CATHERINE RAMPELL, CNN ECONOMICS AND POLITICS COMMENTATOR: I certainly hope it's an unlikely scenario to be clear. I am getting increasingly worried
that we could go over the cliff. Even if there's a 10 percent chance of going over the cliff, that's too high of a chance.
But basically, a few things would happen -- would likely happen. US Treasury securities are the bedrock of the global financial system. So lots
and lots of other markets are dependent on how people view US Treasuries, are they still seen as safe? Are they still seen as risk free, et cetera?
So you could imagine that if we default on our debt, borrowing costs go up for the United States, but also for US consumers, for US businesses. It
becomes more expensive to get a mortgage, for example.
The stock market likely falls, because any kind of risky asset nobody wants to hold anymore. Among other kinds of consequences, it might be more
difficult for US companies to invest and expand because they can't borrow or if they use treasuries as collateral for other kinds of transactions,
which is quite common, and that collateral is suddenly worth less, you might see a mass selloff because lots of trades basically have to be
closed. It is called a margin call in sort of financial circles.
So the idea would be that you would have a huge sell off across lots of markets, because all of a sudden, anything that is backed by Treasuries is
suspect essentially, and you have this cascading effect and you could ultimately see a number of the sort of the clearinghouses, the financial
infrastructure for lots of different kinds of financial markets have difficulty settling all these transactions, seize up, and then have even
more cascading effects throughout the world.
[15:05:03]
In short, a global financial crisis. Now, there is considerable uncertainty here. We don't know exactly how any of this would play out, we kind of have
a sense of the likely mechanisms, but I think there is no universe in which good things happen.
NEWTON: And I take your point, and certainly you laid out there exactly what could happen. You know what everyone is going to say, Catherine.
They'd say, Catherine, that's not going to happen. Everyone just settle down, this is US politics as usual. It will all get sorted out.
Why are you not in that camp right now? What's making me nervous?
RAMPELL: Again, I'm very hopeful that this resolves itself. We don't go over the cliff, we don't have the global financial crisis, et cetera.
I think that just because it's been resolved before, that's not necessarily a safe precedent to apply to the current situation, for a number of
reasons, including that the Republican Party, the party that's holding the debt limit hostage right now, it is the same party in theory, that has held
it hostage in 2011, but the composition of the party has changed a lot.
It has gotten much fringier. There are more people who maybe are not so worried about defaulting on our debt, or maybe even a few of them are maybe
even excited about the economic catastrophe that could result.
I think that's not the mainstream in either party, but I think that there are more members who are either indifferent to these consequences or might
even seek them out.
Remember, also that McCarthy has a very thin margin in the House. So there are very few votes he can afford to lose. The party has already sort of
made clear that if he tries to make a deal with Democrats, that he will lose his speakership, so the political dynamics are different this time
around.
Biden has also drawn a red line in the sand and said, look, we're not going to negotiate over the full faith and credit of the United States. You want
to talk about budgets, we can talk about budgets, but we're not going to hold a gun to the head of the global economy, which I think is, you know,
in general, a rational way of looking at the situation if you assume that Republicans won't pull the trigger.
And I just don't know, you know, I've increasingly been hearing about some kind of gimmicky off ramps that might be used, things that some of which
came up in 2011 and were widely dismissed and have been dismissed this time around as well. Things like, well, couldn't Biden just mint a trillion
dollar coin and just add that to the money supply and be done with it or invoke the 14th Amendment? Those carry considerable legal ambiguity. So,
it's not clear that that would solve the situation we've got.
NEWTON: You are certainly not resting assured over the next few weeks. That's for sure. Catherine, we will have to leave it there for now, but we
will continue this conversation. Appreciate it.
Now, the Bank of England no longer expects the UK to enter a recession this year, but admits its fight against inflation is proving difficult. Now, the
Central Bank raised rates by 25 basis points to 4.5 percent.
That happened today, Governor Andrew Bailey promising to stay the course on inflation, which remained eye-watering really, 10 percent -- above 10
percent in fact in March. It is falling more slowly than anyone had hoped, mainly because of persistently high food prices.
Clare Sebastian has been following all of this from London. Really good to see you, Clare.
And you know, okay, the Bank of England admitted it got it wrong, all say the term by a city mile, but this new forecast, what do they say is
actually driving growth? And as you reminded me, that growth is tepid, right?
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes. I think we've been hearing the governor, Andrew Bailey say it himself, this is not a strong forecast, it's
just less weak. So even though this was the biggest upgrade, they say, in the Bank of England's history, we're going from a contraction expected of
half a percent to growth of 0.25 percent this year, not exactly time to be popping the champagne corks, Paula, but they do also say that they expect
growth next year, which was set to also contract in the previous forecast by three-quarters of a percent, and the following year, also three-quarters
of a percent.
For context, three-quarters of a percent is less than half of the growth rates we were seeing pre-pandemic, which frankly, were also nothing really
to ride home about.
In fact -- but in fact, what's driving the upgrade energy prices is the big one, the wholesale energy prices are much, much lower now than they were,
certainly at their peak last year. In fact, they are about a tenth of their peak last year, so that is helping a lot.
There are fiscal areas as well where the government is helping, for example, extending the help that we're giving households with energy.
Demand is holding up slightly better than expected. Consumer confidence, the governor said is also at its highest level in over a year although,
still he made the point, not high.
So there are a few factors trickling in, global factors as well. The impact from the lifting of China's Zero-COVID Policy was a little more muted than
expected, so just a few small things contributing to this upward forecast that the governor and his colleagues continuing to take quite a lot of flak
having to defend themselves, saying these were other areas outside of their controls for the fact that they got it so wrong before.
[15:10:20]
NEWTON: Now, I don't have to remind you or anyone in Britain, including you, who likely will be at the shop after you've done this live hit looking
at food prices, right? It's one of the reasons that inflation still remains so high. What more did the bank say about that?
SEBASTIAN: Yes, so obviously, inflation is their biggest problem at 10.1 percent. It is starkly different from for example, even the Euro area,
which is at seven percent, the US at 4.9 percent.
They were asked specifically about this, and look, it matters because energy prices are coming down for everyone. So why the lag here in the UK?
And the deputy governor actually explicitly blamed the way the regulator here sets this price cap that suppliers can charge household. That means
that they sort of bake in this lag into the system.
They also talked about how energy is used in the food supply chain that that has kept prices persistently high, but food prices almost 20 percent
inflation in March, Paula, so even if they do have like the rest of inflation by the end of the year, prices are not coming down, they are just
growing less quickly, so this is really serious for UK households.
As for inflation in general and what that means for interest rates, well, they didn't actually steer on future interest rates at this meeting.
Clearly, they're admitting that they're having trouble forecasting in this climate, but they did leave the door open if inflation stays persistently
high.
NEWTON: Yes, you really have to feel for people on fixed incomes because in what the Bank of England said, there was absolutely no relief even though
they did change that growth forecast.
Clare Sebastian, thanks so much. Good to see you.
Now, the US Ambassador to South Africa is accusing the country of supplying arms to Russia. That's according to local media. Now, the ambassador told
reporters the US believes weapons and ammunition were loaded onto a Russian vessel named Lady R. That ship was seen docked at Simon's Town Naval Base
near Cape Town in December.
Now the allegations ratchet up pressure on President Cyril Ramaphosa over his ties to the Kremlin, and of course, his position on the invasion of
Ukraine.
Senior international correspondent, David McKenzie joins us now from Johannesburg. You have been following certainly the South African policy in
this conflict for some time. Is there any concrete proof here and given the accusations, what is at stake?
I mean, as you reminded me, it's quite interesting the way this came out publicly, and that these accusations are -- you know, came out at all.
DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: It's very unusual for an ambassador of the US to South Africa to make these kind of very direct,
very serious allegations, Paula, you're right.
And the fact that the ambassador said that he is confident, in fact, he said, "I'd stake my life on it," that they have evidence that there were
weapons and arms put on this cargo vessel that had this very mysterious arrival in South Africa in December. At the time, we were all wondering,
what was this all about.
It was to a naval base in Simon's Town, and usually cargo vessels go to the civilian port, just on the other side of the peninsula to Cape Town harbor.
So already, there were some questions being asked then and opposition MPs said they had evidence that there was goods taken off and placed back on or
placed on the vessel in the dead of night.
And now this official, very senior diplomat here in South Africa, of the US government, basically accusing South Africa of arming the Russians on a
vessel that was targeted by sanctions by the US Treasury. So it is a serious allegation.
Now, there haven't been any evidence and actually I just was speaking to the president's spokesperson here in South Africa and I asked him, but why
have they said that they are instituting an inquiry in this matter if it happened in South Africa's own port, surely they knew what happened. And he
said that: "US intelligence services said they had evidence that they would only provide to a credible investigation.
And more of the earlier statement, they said there was an agreement that an investigation will be allowed to run its course, and the US intelligence
service would provide whatever evidence they had in their possession.
It is disappointing that the US ambassador had to go public like this, a public posture. So I'm sure there will be more of this story coming out,
but you do feel and sense in those comments on camera by the US ambassador, his frustration at the US relationship with South Africa when it comes to
the issue of Russian invasion of Ukraine.
And you did say there is a neutrality of South Africa, but there is at least circumstantial evidence the US would say that they are taking sides
in this conflict, not remaining neutral -- Paula.
NEWTON: David McKenzie for us, thanks for those details. Appreciate it.
Coming up for us, it is a tale of two cities in the US regional banking sector today. Western Alliance shares recovered after an early fall,
PacWest, we see there, not so much.
(COMMERCIAL BREAK)
[15:17:51]
NEWTON: PacWest is losing deposits amid concerns over its future. Now, the company shares are down more than 20 percent. Gosh, just hammered there. It
said deposits were down 9.5 percent last week and the majority of the outflows were after the regional bank said it is exploring strategic
options -- I wonder what that means.
Shares in another regional bank though, Western Alliance fell early in the day. It later recovered when it put out a statement saying its deposits
were indeed stable.
Matt Egan joins me now with more. I mean, to PacWest first, how grave is the situation? And is this a matter of contagion? Or are we dealing with
problems specific to PacWest?
MATT EGAN, CNN REPORTER: Well, Paula, I don't know. It could be both. I mean, the contagion comes from the fact that people are concerned about the
health of the US banking system and in some ways the world banking system.
But obviously not all banks are the same, right? So some of this is specific to the issues that Silicon Valley Bank and First Republic,
Signature Bank have, which is that there's a large chunk of uninsured deposits.
Now, what they're saying -- PacWest is saying that really sort of set off this latest round of concern is that yes, they lost almost 10 percent of
their deposits in the span of a week. That is a lot.
It is also something that came after the bank said that yes, they're exploring strategic options, which is code for, you know, they're looking
for some help. But we should note that PacWest says that they still have $15 billion of readily available liquidity, that's cash and equivalents
that they could use to meet any sort of deposit needs that they have as far as outflows go.
I do think it's important that we separate PacWest from Western Alliance because Western Alliance came out with a statement of their own, and they
actually said that they have $49.4 billion of deposits as of this past Tuesday. That is up by almost $2 billion from the end of March and up by
$600 million from May 2nd. So they're trying to say that things over there at Western Alliance are very stable.
[15:20:00]
NEWTON: Yes, and that's what I find interesting. If you look at the tale of these two banks, it is kind of where we are with the opinions, right?
I know that some people are saying that look, this crisis is essentially over a few bumps to come, but nothing to worry about. Others are worried
that look, we haven't seen the worst of it yet.
I mean, do we agree with Jamie Dimon that look, this is likely over.
EGAN: You know, I don't know, Paula. I think it's hard to say it's over because there have been these false starts before, right? We thought that
that $30 billion lifeline of deposits from JPMorgan and other banks was going to -- aimed to First Republic was going to sort of end things and
then maybe Jamie Dimon's rescue of First Republic more recently was going to end things, and it hasn't yet.
I think that what happens in terms of interest rate hikes from the Federal Reserve is going to say a lot in terms of whether this is over, what
happens to the real economy in terms of concerns about a real severe slowdown or even a recession, because all of that could add even more
stress.
But I think these comparisons with 2008 are off. I talked to the top federal consumer watchdog in the United States today, Rohit Chopra, he
leads the Consumer Financial Protection Bureau, and he told me: "We're not in 2008." He said, "2008, we saw really hundreds of institutions that could
have failed, but didn't because of a really direct taxpayer funded bailout. This is very different," he says.
So yes, we are seeing some stress in the banking system. We are seeing some bank failures, but that doesn't mean it's necessarily, you know, a total
financial meltdown like we saw back in 2008.
NEWTON: Yes, my reaction to that is thank goodness. At the same time, you know, still a lot of turmoil there and you wake up every day with a new
headline about those banks, and we'll continue to keep track of it.
Matt Egan for us, appreciate it.
Now trouble at Disney's streaming services overshadowing the company's relatively strong quarter. Its shares are down nearly nine percent --
that's a lot -- since yesterday's earnings call. When you think about it, it said that Disney+ lost four million subscribers.
Still losses for the unit narrowed. The company raised the price of Disney+ in the US and Canada, and now, Julia Chatterley spoke with senior media
analyst, Tim Nollen from Macquarie. He told her how Disney can get more subscribers.
(BEGIN VIDEO CLIP)
TIM NOLLEN, SENIOR MEDIA ANALYST, MACQUARIE: I think Disney has a lot of options. I think subscriber numbers can increase again, a lot of it depends
on the content slate. I mean, you'll have things like you know, the "Avatar 2" film hitting the Disney+ streaming service in a matter of months, and so
that alone can help boost subscribers. More content coming out.
They are being smarter about their content investments after doing what, you know all of their competitors did over the last several years, which is
just create tons and tons of content to attract subscribers.
Now the focus shifts more toward generating a profit. They've been pretty firm in stating they will get to break even in the direct-to-consumer
business by the end of fiscal '24. So it's about six quarters from now.
They've got a big cost savings plan going on. They actually indicated last night, they may exceed their five and a half billion dollars' worth of cost
savings.
And the advertising tier, I think is very important for Disney. We don't have a lot of detail on it yet, but it is using smarter data, using
automated ad buying processes. It allows Disney to generate a lot more advertising revenue on that subscriber base.
So for Disney plus subscribers, you can get an advertising tier, which is probably going to stay at a lower price, certainly relative to the ad free
price, which is going to go up, I think they indicated quite a bit more into the back half of this year and the next year.
So there are ways that they can you know, manipulate their subscribers to sign on to the right types of services, generate the right types of
advertising revenue.
I think there is upside for Disney over time, but the next quarter still, next quarters in not so great.
(END VIDEO CLIP)
NEWTON: Okay, Italy's government convened crisis talks, I kid you not, in Rome today to investigate surging prices for the country's national dish.
Pasta was 17.5 percent more expensive in March compared to a year earlier. And you thought it was heavy in carbs, that's more than doubled Italy's
CPI, which stands at 8.1 percent.
And the surge is happening despite and this is interesting here, despite the price of wheat, the main ingredient falling in recent months.
Mattia Moliterni is the co-owner and general manager of Roscioli and he joins me now from Roma, so good to see you and have your input on this
story.
I mean, how much have you noticed the price rise and how would you say it's affecting not just your business, but your patrons?
MATTIA MOLITERNI, GENERAL MANAGER AND CO-OWNER, ROSCIOLI: Hi, Paula. Good evening.
Actually, pasta has definitely increased. But of course, for us, it is a very important ingredient, so we are struggling, even if actually,
everything has increased in Italy.
[15:25:13]
Let's say immediately after COVID, we were greatly affected by the increase of the -- in logistic expenses, then progressively in the raw materials.
And lastly, with the war in Ukraine, there was an impressive increase in the cost of energy, and consequently raw material. So pasta increased
again.
I have the -- I mean, I have the feeling that it is a mixture of, I don't know, maybe inflection plus speculation. I don't know, just the feeling
that probably, for sure, Italy, in terms of energy -- for us energy is a problem for sure.
But at the same time, the prices of the raw materials increased a lot, and I mean, not that easy to handle.
NEWTON: Yes, and you put your -- you know, you named it, right, speculation. I know Italians are a very shrewd people, and they're going to
be they're asking why if the price of wheat is down am I still paying more for pasta?
I mean, is there a suspicion that there's something wrong in the system here? And what are you hearing from people? I mean, how angry and how upset
are they about this?
MOLITERNI: I mean, customers are affected by the soaring cost of living. I mean, of course, we -- I mean, being in the center of Rome as a restaurant,
we can -- we have a mix of Italians and tourist and Italy probably remain for many tourists an affordable place to visit.
But talking about Italians, the situation is different. And so for sure, in terms of even income from the Italian audience, something changed.
NEWTON: Yes. For sure. How important is pasta to people in general, in that when they see the price of that go up, how does it affect them?
MOLITERNI: It's very important. And on a typical Italian menu, of course, the price of the pasta from the perspective of an Italian, I mean, it is
something that is very easy to get. If you put a higher price on a dish of pasta, it's something that immediately people see, and, even -- I mean,
will complain about.
I mean, this is the main problem, and for us, from our perspective, put our prices in particular, talking about our traditional dishes is not that
easy.
So, it is something that -- I mean, our reaction can be double the price of a dish that is so important for our culture and for our people.
NEWTON: Yes, there is only so long that can last. And I have to ask you, well, you run a restaurant. For people, like if you're talking about
pensioners, for instance, this must be something that really gets to them, right? Pasta is supposed to be something everyone can afford, even at a
restaurant on any day of the week.
MOLITERNI: Exactly, exactly. It is like that. I mean, our habit is to eat pasta every day and we are not tired of pasta. So when we book a
restaurant, most of the times, we eat pasta.
Probably, I mean, thanks to our traditional recipe, most of the times are coming from tradition that is -- I mean, it is an easy dish, so I mean, the
other ingredients are not that expensive. So in terms of pasta, probably it's easier to avoid to higher the price compared with a steak or something
like that, or another raw material.
NEWTON: Now, I don't have a lot of time left, but I know what my nonna would have said, my grandmother if she saw the price of pasta that high --
what are people in your family saying? Do they want the government to do something about it?
MOLITERNI: I think so. I think so. As I told you, it is something that is not just related with the price of the pasta, but the pasta is the first
thing that you see.
So I mean, it is something that is very easy to get for everyone and mean, for sure, we need help. And even because in terms of gross sales in 2023,
we are way back to the normal, but in terms of margin, everything changes from restaurant owners to I mean, other people out there, I mean, for
everyone in Italy.
NEWTON: Well, we will see if the government can come up with a solution.
In the meantime, Mattia, thank you so much for giving a glimpse into the issues there and buonasera ci vediamo.
MOLITERNI: You're welcome. Thank you very much.
NEWTON: Ciao.
MOLITERNI: Bye.
NEWTON: Now Turkey's president, Recep Tayyip Erdogan is facing his toughest re-election campaign after more than two decades in power. The country goes
to the polls on Sunday and Erdogan's main opponent received a crucial boost today. We will explain after the break.
[15:30:10]
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(COMMERCIAL BREAK)
(MUSIC PLAYING)
NEWTON (voice-over): Hello, I'm Paula Newton and there's more QUEST MEANS BUSINESS in a moment when we'll analyze how a last-minute twist in
Turkiye's election race could spell trouble for President Erdogan.
And half empty office buildings are prompting architects and city planners to rethink how we design urban spaces. You will want to hear about this. I
will speak to one of them.
But before that, these are the headlines this hour.
(MUSIC PLAYING)
NEWTON (voice-over): Mexico's president says his country is working with the United States to prevent chaos along their border with a COVID era rule
ends tonight. Now U.S. officials have use the public health restriction known, of course, as Title 42, to swiftly turn away migrants. Both
countries are bracing for an immigration surge, now that it is lapsing.
German police have arrested a man suspecting of setting off an explosion at a high rise apartment building. The blast (INAUDIBLE) 12 Police officers
and firefighters who were responding to the distress call. Authorities say special forces stormed the suspect's apartment and found a dead woman's
body inside.
Islamic Jihad says Israeli airstrikes Thursday killed a commander of its rocket unit. Violence between Israel and Gaza has escalated in recent days.
Israel's Defense Forces says at least 500 rockets have been fired from Gaza toward Israel.
After more than a year of pleading for long-range munitions, Ukraine has just received multiple Storm Shadow cruise missiles from the U.K. It will
greatly increase Kyiv's capability to strike Russian held territory in Eastern Ukraine, pardon me. The delivery comes ahead of the country's long
expected counteroffensive against Russian forces.
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[15:35:00]
NEWTON: So just days to go before Turkiye's election, Recep Tayyip Erdogan's campaign got an unwelcome surprise. One of his three challengers,
Muharrem Ince, suddenly withdrew from the race. Many of his supporters are expected to back Erdogan's main opponent, Kemal Kilicdaroglu.
A new poll from (INAUDIBLE) Research and Consultancy puts his, in fact, his opposition leader in the league. If he can end Erdogan's 21 year reign, it
would have major implications for Turkiye's political system, the economy and, of course, the wider region. Jomana Karadsheh reports.
(BEGIN VIDEOTAPE)
JOMANA KARADSHEH, CNN CORRESPONDENT (voice-over): A sea of supporters rally around their leader and never has Recep Tayyip Erdogan needed them
more.
It's a razor thin race, the toughest he's ever faced. And this is the man who may end his 20 year grip on power.
Kemal Kilicdaroglu often addressing people in these videos from his modest kitchen. The soft spoken and calm former civil servant is everything
Erdogan is not.
UNIDENTIFIED FEMALE: I can't imagine two men who would be as close as different as these two. The campaigns are different, too. Erdogan is
promising to make Turkiye great again and really rolling out these big weapons systems, Turkiye's homegrown defense industry and all of that.
And Kilicdaroglu is pledging to be a uniter and with a real focus on diversity.
KARADSHEH (voice-over): Kilicdaroglu siege peace (ph) Turkiye's main opposition party. It's never won a presidential election against Erdogan
but this time he's the candidate of a united opposition. A diverse six party coalition of secularists, conservatives, defectors from the ruling AK
Party and nationalists backed by Kurds.
UNIDENTIFIED MALE: This is an exceptional moment where finally we have a Turkish opposition that is able to move beyond the limitations of identity
politics, which always works to the benefit of President Erdogan, because you can count on the largest bloc awards in the Turkish culture war
sensitivities.
And now they are fragmenting it with a much more inclusive agenda and a vision for the future.
KARADSHEH (voice-over): With campaign videos promising, quote, "spring will come again," Kilicdaroglu and his coalition are promising to reverse
years of one-man rule, with a return to a parliamentary system, from a presidential one they say has eroded freedoms, hollowed out government
institutions and plunged Turkiye into deep economic trouble.
KARADSHEH: For many, this goes beyond campaign promises. It's about moving away from divisive rhetoric. It's about softening positions and a call for
unity in this bitterly polarized country.
KARADSHEH (voice-over): The 74-year-old stunt Turks with this video that has been viewed more than 100 million times, a call for setting differences
aside and for the first time speaking openly about his Alevi identity, a long persecuted minority sect.
KEMAL KILICDAROGLU, TURKISH PRESIDENTIAL CANDIDATE (through translator): We will no longer talk about identities. We will talk about achievements.
We will no longer talk about divisions and differences; we will speak of our commonality and our common dreams.
Will you join this campaign for this change?
UNIDENTIFIED FEMALE: He's not asking Turks to pick him as the leader. He's asking Turkish citizens to pick a team that will lead Turkiye in to
democracy and economic transition.
I think there's an overwhelming desire for change in society. That you can see with young people, women. What we don't know is whether they think this
is the time and Kilicdaroglu is the guy.
KARADSHEH (voice-over): And on Sunday, Turks will decide whether they are ready for change, if they are ready to end the era of Recep Tayyip Erdogan
-- Jomana Karadsheh, CNN, Turkiye.
(END VIDEOTAPE)
NEWTON: One quick programming note, be sure to watch CNN's special live coverage of the 2023 Turkiye elections, hosted by Becky Anderson. That is
this Sunday, 7 pm in London, 9 pm Istanbul, right here on CNN. Incredibly consequential elections there in Turkiye.
Now Pakistan's supreme court has ordered the immediate release of Imran Khan after ruling his arrest on corruption charges on Tuesday was illegal.
But the former prime minister will not be allowed to return home. CNN's Sophia Saifi has more.
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SOPHIA SAIFI, CNN PRODUCER: It's been a tumultuous couple of days here in Pakistan and, on Thursday night, we are seeing that Imran Khan has been
released by the supreme court, the supreme court announced this afternoon that Imran Khan's arrest was illegal but the release is a bit complicated.
He has not been allowed to go back to his residence.
[15:40:00]
SAIFI: He still is staying at the police compound, where he was being kept yesterday and the day before. The Pakistan chief justice of the supreme
court has come out and said that this is for security reasons.
Imran Khan is going to appear before the Islamabad high court on Friday, which is a lower court here in this country. Pakistan's information
minister, even before their ruling by the supreme court, had come out and said that the court is favoring Imran Khan and that by allowing Khan to be
released, they will be allowing Pakistan to burn.
There has been many days of protests, of violent protests in the country. The Pakistan government had called the military, provincial governments
have also called in the military. There are troops all over the capital, as well as other major cities, off the country.
We are waiting to see whether there will be any further protests. When Khan was in court, his party, the PTI, had called for calm and peace and for no
gathering. But we are hoping that that happens and that stays over the night and stays, also on Friday, because Friday, as you know, is the day of
afternoon prayers, where people gather.
It is a half-day, people have a holiday afternoon. So there is fear of potential protests, potential clashes not with the police but with the
military. And we are just going to have to wait and see how this plays out in an incredibly fraught time here in the country -- Sophia Saifi, CNN,
Islamabad.
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NEWTON: Coming up for us, we visit the majestic Great Bear Rainforest, where indigenous communities are winning the fight to protect their
territory's natural splendor. You will want to see this report.
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NEWTON: Now for thousands of years, indigenous peoples have cared for the ecosystems they live in and depend on, relying on generations of knowledge
to sustainably manage their territories.
Today, on Call to Earth, we are headed to a majestic place in the middle of Canada's West Coast, where the power of native sustainability is on full
display.
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BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voice-over): Behold the Great Bear Rainforest, stretching for 250 miles of beautiful solitude along the
coast of British Columbia.
As part of the largest intact coastal temperate rainforest in the world, it is a wilderness the size of Ireland and home to one of the most
extraordinary creatures on the planet.
[15:45:00]
DOUGLAS NEASLOSS, CHIEF COUNCILLOR, KITASOO/XAI'XAIS FIRST NATION (voice- over): The spirit bear is something that is really unique. When you get up here, white bear coming out of the dark rain forest, it just looks really
magical. And so, we want to protect that.
WEIR (voice-over): Spirit bears are actually a sub species of black bear. But, due to a double recessive gene, are not black at all. But this rare
species is just one piece of a vital wilderness.
NEASLOSS (voice-over): The Great Bear Rainforest is extremely special. I mean, I think it's probably one of the most biodiverse places on the
planet. We still get wild things, like bears, wolves and an abundance of salmon and a bunch of different sea life. You still have old growth
forests. And so we want to keep it like that.
WEIR (voice-over): In the heart of this remote expanse is the town of Klemtu, home to a community of the Kitasoo/Xai'xais First Nation, who lived
and thrived in this region for thousands of years.
NEASLOSS (voice-over): This river is very close to the community. We get three species of salmon that come up this river and this is their spawning
ground.
WEIR (voice-over): According to a recent report published by the Kitasoo/Xai'xais, this rich ecosystem suffered from 100 years of
unsustainable extraction of fish, wildlife and forest from outside interests.
NEASLOSS (voice-over): So right now, we're just getting ready to enter (INAUDIBLE) Bay, (INAUDIBLE) probably the most important area.
WEIR (voice-over): In June of 2022, they announced the creation of a marine protected area to preserve the herring stocks that are so vital to
both wildlife and the community.
NEASLOSS (voice-over): (INAUDIBLE) Bay was declared by the military chiefs (ph) and supported by the community and it was launched. So the rest of the
world knows about it. We've engaged provincial governments, federal governments, we've engaged stakeholders, letting everyone know it's closed
(ph).
We've left the document open to collaborate.
WEIR (voice-over): But the push to reverse a century's worth degradation actually started more than two decades ago. In 2000, they released their
own land and resource protection and management plan, aimed at building an economy based on conservation and nonextractive activities, like
ecotourism.
NEASLOSS (voice-over): I think indigenous knowledge is super important and I think it needs to be integrated, whether it's wildlife management,
fisheries management, ocean management. You know, I think right now, we are in a new era of collaboration. We are in this era of reconciliation.
Then how do you -- how do we work together?
How do indigenous people and non-indigenous people work together?
WEIR (voice-over): Neighboring First Nations first came together in 2012, to issue a ban on trophy hunting of bears. And five years later, thanks to
indigenous led research and analysis, the British Columbian government banned the hunting of grizzly bears across the entire province.
NEASLOSS (voice-over): That was huge but we knew we weren't quite finished yet.
WEIR (voice-over): In July of 2022, just a month after the marine protected area was announced, the government agreed to put a stop to black
bear hunting as well. And First Nation leaders say they've now managed to protect half of their territory.
NEASLOSS (voice-over): We've been working with different levels of government, different levels of stakeholders. It's been a lot of
negotiation, a lot of debates, a lot of science, a lot of collaboration.
And I would say that 2022 is probably the first time that we're able to see some significant progress on some of these isles (ph). We have a belief
that, if you take care of the land, the land will take care of you. So that's ingrained in all of our work here.
Doesn't matter if it's tourism, if it's an economic development, we want to make sure that we are looking at long term sustainable industries. And we
want to make sure that we have a place that the world can enjoy.
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NEWTON (voice-over): Stunning, isn't it?
Let us know what you are doing to answer the call with the #CalltoEarth.
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NEWTON: Just in to CNN, Elon Musk announced that he's found a new CEO for Twitter. He did not share the name but said she will start in six weeks.
Mr. Musk has said he is looking to find a new CEO and that he will transition to being executive chair and chief technology officer.
OK, you are looking right now at live pictures from Manhattan. There you go. Not a bad day there. Some of the world's tallest office towers. You see
them there. And part of that iconic skyline, even though it is the middle of the workday, right?
And think about it, a lot of those buildings right now are half empty. The real estate firm JLL says about 75 million square feet of office space is
vacant in New York. That's about 16 percent of what is available. The reports say the number in London is 28 million square feet or about 8
percent vacant.
And in Hong Kong, its nearly 7 million square feet, which comes out to about 10 percent vacant. Now one architect says it's now time to rethink
how cities work. Carlo Ratti says we are at the dawn of what he calls a playground city, where pleasure takes priority over productivity.
He says hybrid work is here to stay, so we must make our cities worth exploring. Carlo Ratti joins me now.
Thanks so much for being with us. This is really interesting to so many of us. And I was struck by you writing that, look, if you look at New York,
right?
It's undergoing a metamorphosis, from a city dedicated to productivity, to one built around pleasure.
What are the consequences of that?
Because it's not just New York, right?
CARLO RATTI, PROFESSOR OF URBAN TECHNOLOGIES, MIT: Well, thank you, thank, you Paula. (INAUDIBLE) on the one hand, we got (INAUDIBLE) kind of 50
percent occupancy of what it was before COVID.
But at the same time, where do we want to meet?
We need to meet. We've done a lot of research (INAUDIBLE) and if we don't meet, our social networks suffer a lot. And so what's happening, we believe
-- and this is a piece of research we've been doing together with Ed Blazer (ph), who's a colleague and a professor at Harvard.
Really what's happening is actually we are finding a new way to meet. And (INAUDIBLE) in the office, in the cubicle. We don't want to spend too much
time there. But as you find new ways to meet in the city, that's what we started calling the playground city.
NEWTON: And when we talk about the playground city, is there anything that comes to mind for you?
Not a whole city but even places in cities that would be what it looks like?
What it would look like?
RATTI: Well, I think, you know, some of the images you showed and some images we are seeing, especially in this kind of beautiful spring days in
New York, again, is doing work, is meeting other people, is kind of strengthening our social network but in different ways.
It's about meeting, again, in cafes but using the city as a (INAUDIBLE) parlor (ph) and finding new ways to me, not necessarily in the old cubicle.
NEWTON: And to make this happen, it's not just going to be good faith or the fact that we want to see friends. You are saying that there need to be
practical things put in place. I will name one of them and that's the end of what you call single-use zoning.
What is that and what do cities need to do?
RATTI: You know, that's one important thing. The thing about zoning is it determines what type of uses you got in different parts of the city,
especially single-use zoning, you've got one single use. And what we've seen, especially after COVID, is that uses are getting more and more mixed.
You know, we work from home. We are blurring the boundaries between the old kind of zoning. And the third thing, actually, if you move some of those
constraints, the city will --
[15:55:00]
RATTI: -- adapt much faster to this kind of new condition. So the city will believe, with a city very lively, it's not -- it's certainly not that,
it's just changing its skin.
NEWTON: Interesting, so in some of the skyscrapers that we're looking at now and remember, people in cities and towns really all over the world post
pandemic can relate to this.
So you see a building that's maybe completely empty, half empty. In terms of converting it, many people have said that, look, this is a tough ask
because those commercial buildings that we are looking at are not made the way most of us want to live.
And your solution actually kind of almost looks like communal living, in a way. Explain.
RATTI: Yes, well, you know, first of all, you want to look at a lot of programming (INAUDIBLE). I think the other thing -- the other thing you
have to remember is still you know, we are still using a lot of our office, this 50 percent, in other cities it might be 70 percent, you know; outside
of the United States, 80 percent.
So somehow, you know, it's not that we need to convert everything. But if we can convert the towers, well, it depends on your psychiatry. You're
right; some of the technologies from the '60s and '70s with very big floor plans would be more difficult.
We might have different types of programming. But it's also very successful examples of office towers having been converted. Think about the Chicago
Tribune Tower in Chicago.
NEWTON: And I don't have a lot of time left but a lot of people say that, look, some of these cities need to be places where people desperate for
housing can actually go.
Have you engaged with cities and towns that have this front of mind?
It can't just be for rich people.
RATTI: Yes, absolutely, and that's a very important question. That's related to affordability, how affordable a city is. But somehow, what's
happening, this kind of transformation and maybe some of the conversion of the existing commercial real estate could really make our cities more
affordable.
But the important thing and, again, we've been looking at that with a lot of research, analyzing the MIT Campus, you know, a lot of the big data,
showing social networks on the MIT Campus, is we need to meet in physical space.
Maybe not in the old office tower, the physical space is very important. It's actually the way we sustain and enrich our social networks.
NEWTON: Yes, I'm so glad you say that because, when you say social networks, you do not mean the ones, you know, online. You mean the real
ones that we can touch, feel and see. A fascinating conversation and we will continue to see how our cities adapt. Appreciate it.
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NEWTON (voice-over): Now there are just moments left to the close on Wall Street. I will have the closing numbers when I come back.
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NEWTON: All right, just a few moments left in the trading day. The Dow has been lower all day. Investors are keeping an eye on regional banks and, as
we noted, Pacwest Bancorp had a nearly 10 percent drop in deposits just last week. And we are waiting for that closing bell.
I am Paula Newton for QUEST MEANS BUSINESS and there you have it, "THE LEAD WITH JAKE TAPPER" starts now.
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