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Interview with U.S. Treasury Secretary Jack Lew; Venezuela in Crisis; Imagine a World. Aired 2-2:30p ET
Aired May 25, 2016 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTIANE AMANPOUR, CNN HOST (voice-over): Tonight: my exclusive interview with the U.S. Treasury Secretary, Jack Lew, on Trump, trade and
America's troubling inequality gap.
(BEGIN VIDEO CLIP)
JACK LEW, U.S. TREASURY SECRETARY: If we cut ourselves off from the global economy, it will hurt growth, it will hurt jobs. If we engage, we
will grow jobs and grow the economy.
(END VIDEO CLIP)
AMANPOUR (voice-over): Also ahead, the crisis crucifying Caracas.
Can Venezuela stave off catastrophe amid devastating food shortages, crippling power outages and runaway inflation?
The Venezuelan ambassador has his right to reply.
Plus: from political prisoners to national heroines, we mark the release today of release of journalist Khadija Ismayilova from Azerbaijan
and Ukrainian pilot Nadiya Savchenko from Russia.
AMANPOUR: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour in London.
Donald Trump revels in his unorthodox guerrilla campaign for U.S. president. He's also the most polarizing candidate in recent history.
Indeed, violent protests broke out last night again at another one of his rallies, this one in Albuquerque, New Mexico.
Inside, Trump hit back at protesters who disrupted his speech.
(BEGIN VIDEO CLIP)
DONALD TRUMP, REPUBLICAN PRESIDENTIAL CANDIDATE: She really does have bad judgment.
Oh, isn't that nice?
All right, get them out of here. Get them out.
Bring him home to Mom. Go home to Mommy. Go home to Mommy.
AMANPOUR (voice-over): So we're used to that familiar refrain now. New Mexico is close to where Trump promises to build a massive border wall
and where immigration and employment grievances run high among his voters, many believing that his business background will fix the economy for them.
But will it?
Independent economic experts say that his promised tariffs could instead tip America back into recession. The U.S. Treasury Secretary,
Jacob Lew, joins me tonight to discuss the U.S. economy in the face of heated political headwinds.
AMANPOUR: Secretary Lew, welcome to our program.
LEW: Good to be with you, Christiane.
AMANPOUR: I want to start with the general state of the economy. In the United States, unemployment -- good news -- back down to about 5
percent. But the economy grew at apparently its slowest pace in two years during the first two months, three months of this -- of this year.
There's a lot of turbulence; there's a lot of anxiety in the U.S., in E.U., about the economy.
What is your assessment about the state of the U.S. economy and the global economy right now?
LEW: You know, I think the U.S. economy is continuing to move forward in a pretty stable way. We are seeing economic statistics supporting that,
ranging from consumer durables to housing, to the jobs numbers, 14.5 million new jobs since the recovery.
There are a lot of international headwinds. Globally, the economy is soft; we believe that demand is something that needs to be the focus of
attention as we have these international discussions. We have been very clear with our counterparts that you need to use all policy tools to try to
get demand going.
That means using fiscal policy as well as monetary policy and structural reforms.
I think we're seeing signs of that becoming not just a set of commitments but actions. But I really think that the question of anxiety
that's beneath what you ask is a significant one.
Part of it is we've come out of a great recession that was very deep and it left scars and there's a nervousness about the future because of
And part of it is because there are a lot of tail risks in the global economy now. I think we as policymakers have to really try to be clear
that we're using the policy tools that we have to move things in the right direction.
I believe the U.S. is looked at as one of the real bright spots in the global economy right now.
AMANPOUR: Well, let me ask you about the national anxiety and the international anxiety. But it's clearly playing a huge role in the U.S.
presidential election, whether it's amongst Trump voters or Bernie Sanders voters, this sense that, you know, the system is rigged against people and,
as we know, of course, the middle class is no longer --
AMANPOUR: -- the majority in the United States.
In fact, you know, nearly half of U.S. income went to the top or the lower tier in 2014. And that's up from 29 percent in 1970, all to say that
there is this feeling obviously of inequality and that the system doesn't work for us.
How difficult is it to correct that or even to operate as a Treasury Secretary in a populist environment?
LEW: You know, I actually think that this is not just a phenomenon of this year; it's been building up over decades because the trend in income
inequality has been growing.
And I think the great recession deepened the sense of anxiety both because it accelerated some of the income disparity and because it showed
what fragility there is when a crisis hits.
I think that when I look at the responsibilities that I have, I have tools that I can use because of the position, the authorities we have, and
can take action on things like stopping inversions, to some extent.
We put guidance out there that's made it more difficult for companies to move offshore to avoid taxes. I think that's an important tax policy;
it's an important signal that everybody has to be part of the same system and the rules shouldn't be loaded in a way that allows some to avoid
AMANPOUR: Basically Bill Gates, one of the greatest business men, has attacked the brand of protectionism which we see from Trump and Sanders,
saying that the U.S. is the biggest beneficiary by far -- that's a quote -- of globalization.
And he says the U.S. would suffer from any move to hinder international trade.
Is that the case?
And if that is the case, why is that message not getting through to the people who are in such a state of fear and anxiety?
LEW: Look, I believe that the U.S. role in the global economy is part of our fundamental strength as a country, both economically and
I just recently wrote a lengthy article in "Foreign Affairs," making the case for U.S. involvement in the global economy and the institutions
that support the global economy.
I think if you look at the period since World War II, one of the things that has led the United States to have the influence we have in the
world is our leadership in the global economy.
Now the impact on U.S. workers, we know that trade-related jobs pay higher salaries. We know that the markets around the world that are
growing will be less open to the U.S. if we don't have good trade agreements.
We also know that the practices internationally are not going to meet the standards that we think are appropriate in terms of labor standards and
environmental standards unless we have agreements that drive things in the right direction.
In fact, we do, in the Trans-Pacific Partnership agreement, have an agreement that drives standards forward around the world.
Now your question about why that's not -- is not seen that way, obviously, trade is always a difficult issue because it's easy to look at
when things are being sold abroad and it's easy to inflame sensibilities as if that's the only thing happening.
Frankly, we who support trade have to do a better job making the case that I've made. And also we have to pay attention to things like trade
adjustment assistance so that workers who are adversely affected have the support they need to move forward in their own careers.
AMANPOUR: Donald Trump on trade says we are like a third world country. He describes your country, the United States, as being a third
world country on trade, saying that America makes the worst trade deals ever.
How do you, as Secretary of the Treasury, respond to that?
LEW: I'm not going to comment on any specific comments being made in the political season.
But I would say that, if you look at the details of what's in TPP, for example, the Trans-Pacific Partnership, it has high standards in labor
practices, high standards on environmental practices, health standards.
What we would do when we approve TPP, it'll bring the rest of the world up to a higher standard, which we already meet. That means that
we'll be more competitive.
Now if the rest of the world has lower standards, that's bad for all kinds of reasons because it actually matters if, in a global environment,
others are polluting more than they should.
But it also means that their products are cheaper than ours because they're not putting the same controls in.
AMANPOUR: Let me switch to the E.U. referendum that the British nation is involved in. You mentioned TPP.
Well, what about TTIP, which is the Trans-Atlantic Trade and Investment Partnership?
The negotiations between the U.S. and Europe, what impact would a Brexit, in other words --
AMANPOUR: -- if the U.K. were to leave Europe, what impact would that have on that set of trade negotiations?
LEW: Well, we have been negotiating with Europe for quite a number of years. I think that the progress there, we would like to see more progress
there, even in the remaining eight months of this administration.
The U.K. is an important part of Europe. I think Europe is stronger economically and in terms of its geopolitical stability with the U.K. in.
We will continue having the special relationship between the U.S. and the U.K., whatever decision the voters of the U.K. make.
But we think it's clearly a strong economic and national security interest to keep U.K. in Europe.
Now we will continue working on trade negotiations with Europe either way. As the president said when he was in the United Kingdom a few weeks
ago, any separate conversation with the U.K. would have to come behind that.
So I think it would be a better thing if we could have an agreement with all of Europe. A lot of issues to work through but we continue to be
committed to making progress.
AMANPOUR: Mr. Secretary, can I turn to Puerto Rico?
A massive debt crisis there, which is causing all sorts of harm to the people. You and President Obama have been pushing for a resolution to
Do you believe that it will get out of Congress and be signed -- beyond the president's table, to sign by the target date of July 1st?
LEW: You know, Christiane, I have been clear that it is not a crisis of the future; it is a crisis of the present.
I was in Puerto Rico the week before last. And what I saw was not acceptable in the United States of America. I was in a hospital, where the
neonatal unit could not order the drugs they need on an orderly basis to do dialysis to premature babies.
They had to do cash on delivery daily to make sure they had what they need to keep these tiny babies alive.
That's not how we do things in the United States. Puerto Rico is in a situation where they need to restructure their debt and they need to have
an oversight authority that makes sure they stay on a solid fiscal path.
I'm encouraged that there's a bipartisan agreement in the House to move forward with legislation that would do this. But it hasn't passed yet
and it has to be protected. It can't be loaded up with things that make it impossible to pass or unacceptable.
The president's committed to this; I'm committed to this. We've worked closely with Speaker Ryan, who is committed to it.
I think that this is an issue of immediate urgency because in July, Puerto Rico will have another $2 billion of bond payments due. If this
legislation doesn't pass, there will be a chaotic unwinding that will just mean just pain for the people of Puerto Rico.
And I should remind you and your viewers that the people of Puerto Rico are American citizens. It's 3.5 million American citizens who'll be
plunged into chaos if this bill does not pass. And this bill is the only opportunity to fix the problem.
AMANPOUR: Well, we hope for their sake that it does pass.
Secretary of the Treasury, Jacob Lew, thank you very much indeed for joining me today.
LEW: Good to be with you, Christiane.
AMANPOUR: And, of course, we also talked China. And you can hear that part of my interview next week when the secretary visits Beijing.
Now about Puerto Rico, one of America's biggest stars is the rapper, Lin-Manuel Miranda, who is himself Puerto Rican and he belted out this cry
(BEGIN VIDEO CLIP)
LIN-MANUEL MIRANDA, RAPPER: To recap: Three-point-five million American civilians are on the hook for billions Vulture funds are circling and lobbying for payouts There's nothing left to tax or cut, we're stuck, we need a way out Allow them to restructure, there's no structure for what happens If you let this crisis play out, when May is less than a day out? It's nonpartisan.
(END VIDEO CLIP)
AMANPOUR: And after a break, we follow the money all the way to Venezuela. Tonight, the government's say on the rising demand to recall
AMANPOUR: Welcome back to the program.
Now last night we brought you the tragedy of Venezuela's worsening political and economic crisis, a state that's teetering on the verge of
failure and the opposition's call for a referendum to fire their president.
Tonight, we bring you the government's response.
But first, the reality for Venezuelans, living day-to-day on government rations and forced to buy food on the black market, as our Paula
PAULA NEWTON, CNN CORRESPONDENT (voice-over): La cola, the line. This is how Venezuelans spend most of their time now, in line not for
luxuries but basics: your next meal, soap for your next load of laundry, diapers for your baby's next nappy change.
"And with a 2-year old, lining up, having to put up with this," she tells me, "we have no milk, we have no diapers, nothing. This is
impossible," she pleads.
She says she left her home at 4 am, like many here, waiting for government rations that are dwindling, ravaged by hyperinflation,
government mismanagement and an oil crisis.
NEWTON: These types of lines are popping up all over Caracas. People here are looking for flour and pasta. Some were here this morning; they
were told the store had absolutely nothing. And that's the kind of scavenger hunt that's happening throughout Venezuela, people just trying to
find the basics can't find them.
NEWTON (voice-over): We're not allowed to shoot inside but outside people tell us they line up for hours and still get nothing.
"We are hungry, we have needs, we have no food. Look at this line, mothers who are hungry, we need food, medicine. We can't find anything.
"What's finishing us off?
Hunger," she says.
Police are in control here, herding people and making sure they're shopping on their government-allotted two days a week. The only way around
this, buying from a bachaquero, a black market middleman.
We followed one customer on a shopping trip as covert as any drug deal. But he's buying food.
NEWTON: And this is what goes on here. Black markets have opened up in so many neighborhoods. People just can't get the essentials; salt,
sugar, the basics, which they have to try and find on the black market.
NEWTON (voice-over): Products are marked up at more than twice their fair value than on supermarket shelves. It's also illegal, another reason
neither buyer nor seller wish to be identified.
Few can afford it, though, so Venezuelans walk the line, spending much of their lives now in la cola, the queue, already one of the most detested
and humiliating rituals in this country's history -- Paula Newton, CNN, Caracas.
AMANPOUR: Truly a dramatic development in what should be one of the world's richest countries with the biggest oil reserves. And joining me
for an exclusive interview from Washington is Bernardo Alvarez Herrera. He is Venezuela's ambassador to the Organization of American States.
AMANPOUR: Ambassador, welcome to the program. I mean, sir, you cannot look at what our reporter found there, people having to trade on the
black market for diapers, as if they were doing drug deals.
You cannot look at figures, 481 percent inflation, according to IMF projections. And all these absolute catastrophic figures and not conclude
that Venezuela is an economically failing state.
Do you agree with that?
BERNARDO ALVAREZ HERRERA, VENEZUELA'S AMBASSADOR TO THE ORGANIZATION OF AMERICAN STATES: No. Not at all.
Let's go for example to some figures. Venezuela has been able, for example, to honor the external debt. From the past 18 months, we were able
to pay more than $30 billion in external debt.
We still -- what we have is a problem of our national income drop by almost 60-65 percent. And it has been a very difficult situation and a big
adjustment. And we have been trying to do the adjustment in a way that not the classical IMF recipe but trying to get a way that is less brutal to
AMANPOUR: But, Mr. Ambassador.
HERRERA: We are doing this --
AMANPOUR: -- I don't mean to interrupt you but you say less brutal. I mean, those are pretty awful pictures to see, of ordinary people, who
simply stand in line all day.
I mean, that's the kind of stuff you see from totally failed states like Zimbabwe or others that have collapsed and imploded.
HERRERA: But this is not the same. For example, this is a program of direct -- or direct providing of food to more than 7 million people that,
every two weeks, they receive all they need, the most food people in Venezuela.
Of course there are problems of availability of products.
HERRERA: And one of the things is we have kept prices low to people in order to help them in this situation.
But the situation is going to be evolving. Prices of oil are getting better. We are dealing -- we are making some deal with important partners
of Venezuela and situations should improve in the next few months.
AMANPOUR: All right.
HERRERA: We are not there now, and there is a big -- a difficult situation, but there is a lot of things that the government is doing right
now to try to control and try to move ahead on this situation.
AMANPOUR: Well, as you know, many are incredibly worried. Everybody who looks from the outside -- and obviously the people inside are suffering
You know that there have been nearly 2 million signatures in your country for a recall referendum.
Can I just play a sound bite on this referendum by the head of the organization you're ambassador to, the head of the OAS, who told me this
(BEGIN VIDEO CLIP)
LUIS ALMAGRO, SECRETARY GENERAL, ORGANIZATION OF AMERICAN STATES: What we say is that this record, referendum record, is not -- it doesn't
belong to Maduro. It doesn't belong to Capriles. It belongs to the people of Venezuela. This decision is very important, to make it happen, to make
this referendum happen.
(END VIDEO CLIP)
AMANPOUR: Do you think, Mr. Ambassador, that the national electoral college will allow this to happen, this referendum?
HERRERA: Yes. The thing is, if we call referendum, Christiane, is a complex, a very sensible issue because you are recalling the mandate of
somebody who was elected by the people. So -- and you have to -- there is a process of doing that. You have to activate that process and you have to
follow certain rules.
Because otherwise, it will be like political retaliation. In a certain moment because you think that you have the vote, then you want to
get the recall referendum right away.
There is a process and the process is going on. Of course, the referendum could be -- could take place this year or next year. If that --
they have to follow the whole process of activation of the --
HERRERA: -- we're not denying that. By the way, we have, during the tenure of President Nicolas Maduro, we had to have 12 recall referendums,
including one presidential recall referendum that we won. So we have proved that we -- this is an instrument that has been used in Venezuela.
But we have to follow the procedure and I think it's very irresponsible for Mr. Maduro to not to consider, not to look at the
procedure in Venezuela in the Venezuelan constitution and law to activate the referendum. It's not that we don't want to activate the referendum.
It's that you have to follow a procedure.
AMANPOUR: All right. Mr. Ambassador, the thing is that most people looking in believe that it's either a democratic process, such as a recall
referendum, which is being led by the main opposition leader, who is doing this democratically, or it's an explosion into the streets.
Which one would Venezuela prefer?
HERRERA: Neither of these, neither of these two. I mean, the recall referendum is there. A recall referendum is not in the constitution, in
the sense that there is not a scheduled recall referendum. This is a process that have to be activated.
And as I said to you, we are moving. We are moving ahead. We are trying; we know that the -- we recognize the (INAUDIBLE) of the situation.
We're taking a lot of measures.
And you know Venezuelans, the Venezuela is going to move ahead in this situation. So it is not like a challenge between either the referendum or
the collapse of the catastrophes. This is not -- this is how they want to present it. But it's not like that.
AMANPOUR: Well, we will obviously keep an eye on it.
Mr. Ambassador, thank you very much for joining us from Washington tonight.
HERRERA: Thank you very much.
AMANPOUR: And coming up, good news. Next, we imagine a world where crying freedom actually works. Two women, one a journalist, one a pilot,
released from unjust jail sentences. We'll be right back.
AMANPOUR: And finally tonight, imagine a world of vindication, first for Ukrainian pilot Nadiya Savchenko, free at last after almost two years
behind bars on trumped-up charges in Russia.
The pilot who became a symbol of Ukrainian defiance made a triumphant return home after she was traded for two Russian prisoners. Savchenko made
an impassioned speech to the crowd. She was remembering those who cannot come home yet.
(BEGIN VIDEO CLIP)
NADIYA SAVCHENKO, UKRAINIAN PILOT (through translator): The first thing I want to say is I am free. I would like to apologize to all mothers
whose children could not come back. But I am still alive. I would also like to apologize to those mothers whose children are detained. But I am
(END VIDEO CLIP)
AMANPOUR: And she's not the only woman celebrating her freedom today. Over in Azerbaijan, the investigative journalist, Khadija Ismayilova, is
also free from jail, also on trumped-up charges. After heavy lobbying and intense pressure, her sentence has been suspended.
She was detained last September. She was accused of tax evasion and embezzlement after she unearthed corruption linked to the president's
family. UNESCO and countless press freedom organizations campaigned for her release. And now finally this trail-blazing journalist can continue to
speak truth to power.
That is it for our program tonight. REMNICK: e, you can listen to our podcast whenever you like, see us online at amanpour.com and follow me on
Facebook and Twitter. Thank you for watching and goodbye from London.