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IMF Urges Fight Against "Stubborn" Inflation; Fed Rate Rises Hurt Developing Economies; Investors Bet On UK Government Tax U-Turn; January 6 Committee Votes To Subpoena Donald Trump; Bank Of France Governor Defends Decision-Making; Call To Earth. Aired 5-6p ET

Aired October 13, 2022 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[17:00:25]

RICHARD QUEST, CNN HOST: Slightly later than usual, but with a full day to bring to your attention.

And what an extraordinary comeback it was for the markets. You saw 1,400- point swing for the Dow. Look at that. That doesn't really necessarily affect how far down it was in the open, but that trend right through the

day, maybe just off the top of he close. But the best part of 3 percent.

And when you see that market, it begs what happened?

Well, these are the events of the day to bring to your attention.

Inflation is running hot in the U.S. The managing director of the IMF tells me central banks must persist with rate rises.

(BEGIN VIDEO CLIP)

KRISTALINA GEORGIEVA, IMF MANAGING DIRECTOR: Until we see the inflation trickling down.

(END VIDEO CLIP)

QUEST: The prospect of Fed rate rises mounts pressure on developing economies. The finance ministers of Indonesia and Angola are with me

tonight.

And the UK government, another U-turn perhaps on tax cuts. The chancellor is here at the IMF and he says he's not backing down.

Tonight, we are live with the annual meetings of the IMF and World Bank here in Washington, D.C. It is Thursday, October 13th. I'm Richard Quest.

That's a bit later than usual, but still with you because I still mean business.

(MUSIC)

QUEST: Good evening and warm welcome to our coverage from the IMF and World Bank. We're here today and tomorrow, very gloomy day here in

Washington. At least the rain poured down. The rain has now at least stopped, but things are still very overcast.

And on the economic front, a wonderful, live picture for you. And that's pretty much how the economy is looking. Dark clouds or maybe just a

scintilla, that's a hint of light on the horizon. A much sunnier picture on Wall Street. There was a huge market turnout which I told you about.

The Down plunged on the inflation data and then it rolled back later in the day. The consumer prices were up four tenths of a percent on month to

month. Initially, it was a two-year low for the markets.

Rahel is with me.

Rahel, before we do the numbers, the inflation numbers, why did the market turn around so spectacularly today?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, it really was a stunner, right, Richard? It has everyone asking that question. What happened? There

are a few theories floating around. One, perhaps, technical, that the S&P hit a level that prompted some profit taking.

It is harder, however, to find a fundamental reason to explain the type of moves we saw in the market today, as you already pointed out. We did get

some earnings, some good, some bad.

But the main story of the day, of course, was that CPI report. In addition to the 0.4 percent monthly increase, put another way, Richard, that's about

8.2 percent inflation. Still at 40 year highs.

What is perhaps more problematic is where we saw inflation continue to rise. Goods inflation, month over month, was actually zero. Services

inflation, however, was 0.8 percent, which tends to signify that this inflation may be becoming more entrenched, that this inflation may be

starting to become driven not just by the volatile categories like the war, not by volatile categories like energy and food, but perhaps because of the

labor market which, as you know, is historically strong right now at 3.5 percent.

Americans still have jobs, which is obviously a great thing. They are still spending, that's perhaps a great thing. But to the level that is perhaps

accelerating inflation, and that is not a great thing for central bankers like Jay Powell.

QUEST: So, in this scenario, do we -- are we safe to say that inflation has not been tamed in a sense, obviously, the number will come down in the

future. But at the moment, it has not been tamed?

SOLOMON: I think it's too soon to say it's been tamed, right. Perhaps this is a controversial thing to say at this point, but one thing that has been

right about, perhaps, at least more recently, is that inflation was not lowering in a significant way, right? I mean, we had a few reports,

Richard, where, as you know, market watchers started to feel like, well, maybe the peak is behind us.

[17:05:05]

Maybe inflation is really starting to lower in a significant way and we've heard these comments from Jay Powell that they had not been seeing

significant evidence that that was happening. In that way, they were right.

So, it's too soon to, you know, throw up the victory flag. But it's really early in this process. Now you're hearing more support and more consensus

behind another three quarter of a percent rate hike for November, and perhaps even December.

QUEST: Which, of course, would take it to the 1.5 percent needing to get to what many people believe is the rate, the restrictive rate necessary.

Rahel Solomon, thank you.

The prospect of further rate rises without inducing a recession is what's gotten everybody it's on everybody's mind here. How also to factor in the

wild stealing with the war in Ukraine?

For the managing director of the IMF, Kristalina Georgieva, the reality is high inflation, stubbornly high inflation, needs to be met with stubborn

action from central banks.

So, I asked the managing director the number of inflation out of the U.S. today. What did she make of it?

(BEGIN VIDEO CLIP)

KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: We need to continue to fight inflation until we win this fight. And the fact

is going to do exactly that. Why it is necessary? Because if you lose price ability, we undermine growth and we eat at people's well-being.

QUEST: The stubbornness of this inflation is what's worrying.

GEORGIEVA: It is exactly that. Stubborn inflation means stubborn central bank action, until we see the inflation driven down.

QUEST: Your economist on QUEST MEANS BUSINESS talked about the worst is yet to come. How bad will it get?

GEORGIEVA: Well, it depends on us. If we walk this very narrow path in front of us, in which monetary policy doesn't jump and fiscal policy does

not, stay on the way, but suppose the most vulnerable people, we will have a difficult time. There will be pain, but it would be less than if we fall

off the path because of uncoordinated monetary and fiscal policy action.

I, personally, believe that if we act decisively on the monetary policy front, and on the fiscal side, and we act together, there is a coherence of

what countries we can walk this path with.

QUEST: The other big area, of course, is spillover effects. And you can't make an omelet without breaking eggs. And if you are going to have that

decisive monetary policy, there will be problems for emerging and developing countries.

GEORGIEVA: And this is why it's so important that this week here in Washington, we concentrate on the spillovers, and we mobilize the support

emerging market economies, in three ways.

Number one, central banks and advanced economies thinking about the spillover impacts, and then seek instruments to support them like the fed

is doing with extending the supplies to emerging markets.

Number two, to mobilize the IMF and other institutions. We are -- we are there to provide buffers to countries.

Number three, zero in on the really big pain. Debt and food insecurity.

QUEST: This morning, there was sort of some civil protest outside the building by and large, peaceful. But they did stop traffic and it was

noisy. But the call there was canceled the debt.

Now, you and I have talked about this before, at some point, wealthier countries are going to have to consider canceling the debt.

GEORGIEVA: This is what we said last year. When there was a debt services pension initiative, we kicked the can down the road and since then, the

world economy went into an even tougher direction. So, the debt problem is growing. It's not shrinking.

And at some point, that needs to be restructured. In other words, those who have provided those resources need to pay some hit to stabilize the

countries and help themselves by avoiding a debt crisis.

QUEST: Has anyone told those lenders that they will have to cut the debt?

GEORGIEVA: We have been saying that over and over. In technical terms, we are restructuring to bring that sustainability, and we have that

sustainability analysis for all countries that are in this position.

[17:10:02]

Please do what the analysis recommends to be done.

QUEST: Including cut.

GEORGIEVA: Including cut.

QUEST: Finally, we have met several times a year. We are meeting at a particularly dark time, of course, with Ukraine and the war. The balance of

risk at the moment is very much still on the downside. How confident are you?

GEORGIEVA: The biggest risk is that we are moving from a period of time of more stability, low inflation, low interest rates, to a completely

different status of the world economy -- more volatility, less predictability, high interest rates, and this transition we are doing at

the time when the world is less together.

So, what I worry about, can we -- at the wheel to have this pragmatic multilateralism that acts in the benefit of everybody by solving problems

that we can only solve together?

QUEST: To answer your own question, can everybody muster the will?

GEORGIEVA: Of course, we can. And you know what the answer to this is? Yet more women in decision-making roles. Then, there would be peace, and there

would be will to act together.

QUEST: If you think I'm touching that one with a ten-foot pole, you're wrong.

Manager Director, thank you.

GEORGIEVA: Thank you.

QUEST: The managing director of the IMF, get more women in decision-making roles. We agree with that.

Also tonight, we are speaking to a two of them. To finance ministers of Angola and Indonesia, they will be with me live. Also, we've still got more

from the IMF.

(BEGIN VIDEO CLIP)

GEORGIEVA: What we would like to see is that the policies that are put in place are clear, credible, and that the British institutions are satisfied.

(END VIDEO CLIP)

QUEST: Clear and credible, that's the closest the IMF will ever say that the UK is getting mad in his policy. We will talk about it with the IMF

managing director after the break.

(COMMERCIAL BREAK)

QUEST : The annual meetings of the IMF World Bank here in Washington -- most of the major meetings, the G20, the International Monetary Finance

Committee, the steering group, if you will.

[17:15:05]

That's where all that takes place. And, you know, you stand outside today, the walk past you sometimes. Sometimes, they stop. Sometimes, they don't.

It will comes as little surprise today that Kwasi Kwarteng or Andrew Bailey, governor of the Bank of England, did not stop for very long as they

went in and about their business. The big rumor today is that the trust government is about to do a massive U-turn when they present their mini

budget. So far, there is no confirmation of that but since downing street did not dive against it, that seems to be the prevailing view.

You can look at the markets, pound was up sharply today, as a result of this potential rumor, up 2 percent. And on the question of the chancellor's

own future in a broad interview, he denied changing a plants and says he is not going anywhere.

(BEGIN VIDEO CLIP)

KWASI KWARTENG, BRITISH CHANCELLOR OF THE EXCHEQUER: Look, there was some turbulence. I -- frankly, we'll have to accept that --

(CROSSTALK)

KWARTENG: -- after the minute (ph).

INTERVIEWER: OK.

KWARTENG: But where I am sitting here talking about the global challenges, everybody is focused on inflation, everybody is affected by potential

interest rate rise, everybody is infected by the energy spikes, which has been exacerbated by Putin's illegal war in Ukraine. So, everybody across

the global financial community.

INTERVIEWER: So, you will be chancellor, and Liz Truss will be prime minister, this time next month.

KWARTENG: Absolutely, 100 percent. I'm not going to go anywhere.

(END VIDEO CLIP)

QUEST: We have heard those sorts of things before.

The IMF says don't prolong the pain. They're not talking about politics, the talking about economics. There was a meeting -- I was giving good money

to see what was said during that meeting when the IMF managing director met the governor on the left and the chancellor on the right. Not for the first

time, the IMF basically already called the policy large and untargeted. Given elevated pressures, we do not recommend large, we do not recommend.

And the IMF's chief economist compared it to a car with two drivers steering in different directions and warned it won't end well. Whilst the

managing director extended that comparison, she said today that it was like stepping on the gas and the brakes at the same time.

I talked to Kristalina Georgieva about the UK's policy.

(BEGIN VIDEO CLIP)

GEORGIEVA: Our message to all members is all the same: when the monetary policy has to step on the brakes, please don't get fiscal policies to step

on the accelerator. This will be a very bad ride. So, we will like to see countries thinking of the seriousness of the situation and acting

responsibly.

QUEST: Has the -- I realize it's politically pejorative, but has the U- turns done so far satisfied you? The removal of -- the cancelling of the reduction hike tax, the OBR, the bringing forward -- is that enough, or do

you still want more?

GEORGIEVA: What people want to see is the policies that are put in place are clear, credible and that's the British institutions are satisfied. The

Office for British Responsibility is brought early in the process, and that is confidence among the British public that we are on the right track.

(END VIDEO CLIP)

QUEST: Clare Sebastian is with me.

Clare, here, they are pretty much agog. Privately, they'll say one thing, publicly, something else. But policymakers of all stripes are agog. So,

tell me about this rumor of a larger U-turn.

CLARE SEBASTIAN, CORRESPONDENT: Yeah, Richard, this is something now that we are seeing. The markets are pricing in. We're seeing rumors of this

swirling around parliament, and it seems that when Kwasi Kwarteng returns from Washington, if he doesn't do something, that will lead to further

chaos.

It's interesting what you saw today, they came down a little bit on the rumor earlier today of a U-turn, and then it came up again when they had a

chancellor say, no, we're sticking to our plan. And then they came down suggesting they did not really believe him, they think it will happen

anyway.

I think now is a critical moment because the Bank of England is getting out of the market tomorrow. Andrew Bailey has made it very clear that he does

not intend to continue with these emergency measures to support, the bond market to support pension funds. So, after that, if this does not come

down, it is up to the government to try to do what Kristalina Georgieva has said they have to do to communicate clearly and to try to win back

confidence from the market, because this is not about funded tax cuts, it's about the credibility of the government itself.

QUEST: But, Clare, the thing I come back to is, how do they get out of this? One of the things we're going from the panel, including Mark Carney

(ph). One of the things he says is that the lessons of the UK crisis is that the markets will punish those who don't maintain prudent economic

policies and yet the British government, if this rumor is true, seem to be content to let this thing play out.

SEBASTIAN: I don't think there are any good options at this stage, Richard. The U-turn is politically very dicey for Liz Truss and Kwasi

Kwarteng, and doing nothing is extremely difficult for the economy. There are many as well, Richard, who don't think they should wait as long as the

31st, so many people buying and selling houses in this climate might want clarity a little sooner.

This is a tweet today from the former chancellor George Osborne. He said, given the pain being caused to the real economy by the financial

turbulence, it's not clear why it's in -- anyone's interest to weigh 18 more days before the inevitable you turn on the mini budget. Real world

impact, according to the property website Zoopla, buy demand down 26 percent year on year in the first ten days of October.

QUEST: Clare Sebastian in London, Clare, thank you.

One of the great beauties to coming to the IMF and World Bank is that it brings together the top economic minds. We saw them today on a panel that I

was pleased to moderate from Mohamed El-Erian, to Mark Carney, to the managing director, to the president of the Euro Group, to the finance

minister of Nigeria. When we look at what is happening at the moment, it's an issue of the UK, developing nations and spillovers.

(BEGIN VIDEO CLIP)

MARK CARNEY, U.N. ENVOY ON CLIMATE CHANGE AND FINANCE: The first is that all of us, all of us is operating in a different risk environment. Mistakes

will be punished, and that is true for any country. That's the first thing.

The second is yes in the environment, institutions matte -- the transparency, the guidelines, the restrictions that come with institutions

help guide monetary and fiscal policies. Nearly, the numbers need to add up, and that goes back to the second point and the first point. And then

the next point is that because we are in a world where we have had a series of supply hits and will have more, you need a cohesive growth strategy. A

growth strategy has to be comprehensive, and not just because I am in the presence of the managing director of the group, it has to be inclusive.

Look, we have been through the financial crisis. We went through COVID. We're going through a series of shocks, now inflation, all the shocks hit

at least will often hurt us, so a credible strategy is an inclusive growth strategy, not just an issue of fairness. It's actually an issue of

credibility.

QUEST: Right. We'll come back to the UK in a moment. I want to turn to Nigeria with the honorable minister.

And, Minister, just listening to what the former governor was saying, the markets, the financial world will punish, thank you, your words. And is

Nigeria about to be punished for its high debt level, do you think, that will require you to restructure it?

ZAINAB AHMED, NIGERIAN MINISTER OF FINANCE: Well, we are actually feeling the pressures. The market cost is too high for us so we cannot even explore

the markets in the near future. And also because inflation is going up and is going to stay up for longer, our debt service obligation and foreign

currency are increasing. And what we decided to do is not to wait for it to happen. We have to start looking at how do we better manage our

liabilities?

For example, our domestic by abilities will be able to shift loans from short term loans to medium and long term loans. We have to do the same

thing for our international borrowings as well. Bilateral loans, that can be a somewhat of a concession of loss, that period should be stressed to

give more fiscal room.

(END VIDEO CLIP)

QUEST: Welcome back, there we have the debate and discussion which will continue to rumble on though the question only the UK's policy but also

whether or not higher interest rate, how high and what is broad-based support, what is targeted support here at the IMF and World Bank.

We have lots more to come on the question of Europe. You will hear from the governor of the Bank de France.

[17:25:02]

We'll also have the Angolan finance minister and the Indonesian finance minister. It is a difficult time here at the IMF.

(COMMERCIAL BREAK)

QUEST: QUEST MEANS BUSINESS tonight from Washington, D.C.

The January 6 congressional committee has voted to subpoena Donald Trump. The committee says it wants to hear directly from the former president

after they presented evidence that Trump knew he had lost the 2020 election puts the pursuit efforts to overturn it. The committee chair says Donald

Trump must be held accountable.

(BEGIN VIDEO CLIP)

REP. BENNIE THOMPSON (D-MS): We have left no doubt, none, that Donald Trump led an effort to up and American democracy that directly resulted in

the violence of January six. He tried to take away the voice of American people and choosing their president and replace the will of the voters with

his will to remain in power. He is the one person at the center of the story of what happened on January 6.

(END VIDEO CLIP)

QUEST: CNN's Manu Raju is with me.

Before we get into the politics of it, as best you can on the legal and constitutional, he's no longer president. Is he obliged to attend and

follow the subpoena?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDEN: Yeah, he is a private citizen now, and he will have to listen to the duly authorize subpoena from

the United States Congress. He has to abide by that.

But don't expect him to simply come up here, and come to Capitol Hill. That is certainly not Donald Trump style. He will fight this, and he will make -

- most likely his attorneys will probably make a noble, legal argument about why in their view, it is illegal, it is unconstitutional to go after

a former president. So expect that to happen.

We've already seen some Trump allies trying to fight these matters in court. Mark Meadows has tried to do that. Steve Bannon, as well as Peter

Navarro, they have had not much success in the court route to fight the subpoenas.

But Donald Trump will try to do that, try to drag it out and then hope Republicans take power in the House. Expect this not to end anytime soon.

QUEST: We also heard today from the Supreme Court, who refused to allow Donald Trump to intervene in the Mar-a-Lago DOJ case directly.

I am wondering, is this January 6 proceedings, is it picking up steam or is it running out of fuel?

RAJU: Well, this is one in several investigations into the former president. You mentioned the Mar-a-Lago investigation, that is one that has

real teeth and potential liability, criminal exposure for the former president.

This investigation on Capitol Hill is running out of time. They are expected to wrap up the investigation by the end of the year, issue a

report about everything they found. But what they found has been significant, having interviewed more than thousands of witnesses, getting

scores and scores of never before seen documents.

That will help serve the basis and actually add fuel to a separate investigation by the Justice Department, a criminal investigation into

January 6 in which they are exploring a whole host of issues, including Donald Trump's role.

It's unclear what they will do in that separate probe. Potentially, some believe it could end ultimately in criminal exposure for the former

president as well, potentially lean on some of the findings from the January 6 committee here on Capitol Hill.

So for those who are eager for Donald Trump to potentially face some charges, Democrats in particular, they could see that if the Justice

Department goes that route in the months ahead. So while this committee could be done with its work, Donald Trump is not done with the

investigations that are closing in. Richard.

QUEST: Manu Raju, thank you, on Capitol Hill for us tonight. Appreciate it, thank you.

To return to the economic situation, the -- French growth is expected to slow as the war in Ukraine continues to take its toll. But the governor of

the Bank of France is not necessarily seeing a recession on the horizon. Paris, however, is switching off lights earlier on the Eiffel Tower, along

with other measures to conserve energy.

Now the governor of the Bank of France came to me and I asked him about the situation that, even though he does not see a recession, the economic

environment is extremely difficult. And I wondered, perhaps the most difficult he has ever seen.

(BEGIN VIDEOTAPE)

VILLEROY DE GALHAU, GOVERNOR, BANK OF FRANCE: It is among the most difficult times. I am old enough to already live through the '70s and the

two oil shocks. And there are similarities but we have additionally a war.

I was active in the great financial crisis. I was active two years ago in COVID. The key is succession and accelerated succession of shocks is

unprecedented.

QUEST: Is the bank forecasting a recession?

DE GALHAU: No, not as a central scenario. If I look at the economic growth, this is interesting, it has been more resilient this year in Europe

than expected.

If I look at the last IMF figures, this year, 2022, Europe should have a 3.0 percent growth. It's almost double to the U.S. figures, which is a bit

surprising and not well-known.

Next year, the IMF expects, as we do, a slightly positive growth both in the euro area and in the U.S. But we cannot exclude the recession, which

should be, in this case, limited and temporary.

QUEST: If you look at the way that the ECB, of which you are a member and a member of the governing council, I have heard from southern European

countries that they worry that policies being set, perhaps rightly, because they are the largest, for countries like France, Germany, the larger

economies in the north and it could -- we could end up being too restrictive.

DE GALHAU: No, I don't think so.

Could I say something about the European decision-making process?

I am aware that Europe is complex; 27 members, 19 in the governing council, so especially, seeing from outside, you see how do you decide what is the

influence of country, A, B or C. But if you look at the end, this is a making process is efficient.

[17:35:00]

DE GALHAU: We took monetary decisions in our last meetings by unanimity or consensus. And these were bold and strong decisions. We stopped QE; we

increased rates

If you look at what we did in COVID, foreign governance (ph), they decided; Russian sanctions, they decided. Now we have to sort this energy crisis and

take circular decisions. But believe me, it will come.

QUEST: How much further and faster -- the phrase is higher for longer.

How much more monetary timing do you think will be necessary in Europe?

DE GALHAU: Too early to tell. The only thing I will say very clearly here is that we are committed -- and this is our forecast -- we are committed to

bring inflation back to 2 percent within the next two or three years. And believe me, we will deliver.

QUEST: Your speech at Columbia (ph) talked about coordination and you, in a somewhat complicated sentence, you basically said that you could not

necessarily say that it was working very well.

Would you like to see greater coordination, particularly when it comes to currency?

DE GALHAU: First, I apologize if my sentences (ph) are a bit complicated. Sometimes, it belongs to central banking. But on substance, I believe we

are coordinated at present. And this is what I said because we have the same price stability objective.

By the way, we all have the same inflation target, 2 percent. What is very important is that we have an in-depth dialogue, avoiding surprises and

having material (ph) predictability.

QUEST: You mentioned that you have been around a year or two. Like myself, so you remember the Louvre in the plaza.

Does the developed economies, the G7, does there need to be coordinated action on the dollar?

DE GALHAU: No, there need to be, as we said, coordinated monetary policy, focusing price -- targeting price stability in each iteration (ph). It's

working this way. All monetary policies, if you except Japan, which is a specific case, go in the same direction. And the exchange rate reacts to

this move, to see the economic prospects.

But --

(CROSSTALK)

QUEST: On the question of intervention --

(CROSSTALK)

DE GALHAU: -- monetary policy (INAUDIBLE) objective. It's not a question of (INAUDIBLE).

(END VIDEOTAPE)

QUEST: That is the Banc de France governor, clearing up the question about what he means and what is the policy on coordinated activity. Collaborative

versus coordinated seems to be the phrase that people are using at the moment.

Indonesia is hosting the G20. It promises to be a lively event when it takes place next month. The Indonesian finance minister will be with me

after the break. We'll talk about coordinated economic policies and, of course, we have "Call To Earth." It's all ahead. This is QUEST MEANS

BUSINESS.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

[17:40:00]

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QUEST: We only mean to tell you the elephant in the room is the largest mammal. And as natural habitat becomes more scarce, so brushes with humans

and elephants are becoming ever more frequent, usually to the disadvantage of the humans.

Which is why on today's "Call to Earth," we are looking at an organization in Africa that is trying to alleviate the worst effects of human-elephant

conflict.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voice-over): If you take a trip to the northwest of Namibia, an arid region of the southern Africa,

where sandy deserts and rocky mountains dominate the landscape, you may come across an unexpected sight.

These desert adapted elephants are actually African Savannah elephants that have developed distinct skills to help them live here. They are only one of

two desert dwelling populations in the world.

In this part of the country, there are 22 elephants from three different herds that roam freely. This according to Herman Kasaona, an elephant

guardian, who works with the conservation and volunteer project, Elephant- Human Relations Aid.

HERMAN KASAONA, PEACE COORDINATOR AND OTJIMBOYO CONSERVANCY ELEPHANT GUARD (voice-over): The elephant can smell water a little bit far deeper under

the ground. And also so clever and smart. That is how the elephant know how to survive in the desert area.

WEIR (voice-over): As a keystone species, elephants' actions, movement and feeding habits are central to maintaining diverse and healthy ecosystems.

But for a period of more than 30 years, they were absent from this landscape, forced out by political conflict, poaching and expanding human

settlements.

Then, in the late 1990s, they began to return. And in an area where water is a precious resource, issues often arise but there is help.

KASAONA (voice-over): We make a peace between the government being and the elephants. So we try to solve to this conflict between the two. So you see

hardly any difference (ph) (INAUDIBLE) elephant.

WEIR (voice-over): Known as PEACE coordinators, an acronym that stands for People, Elephants Amicably Coexisting, it is the job of Herman and fellow

Guardian Taiwin Garoeb to mitigate any conflict that may arise. And they have a number of ways to go about this tall task, starting with access to

water.

KASAONA (voice-over): We built a small dam for the elephants away from the community village. We try to protect the community with that point, for the

elephant not to damage their water tank.

WEIR (voice-over): Since 2003, the organization has built more than 230 protective walls with help from over 3,500 volunteers. But water is not the

only resource of concern.

TAIWIN GAROEB, ELEPHANT GUARD: The elephants broke into their garden of Fiona Hamsis (ph). They eat some papaws, some tomatoes. They destroy the

garden.

WEIR (voice-over): Part of Taiwin's job is to be a first responder to these types of incidents.

GAROEB (voice-over): (Speaking foreign language).

I have to go check (INAUDIBLE) so (INAUDIBLE) I have to start building the fence up again.

After I'm done building up the fence, I have to put on chili bombs (ph). It's an oil open engine cart (ph). So they don't like the smell. Like they

can smell it from 50 meters. So they won't come near the fence anymore.

WEIR (voice-over): Through an established series of workshops, trainings and development programs, education is also key to the group's efforts. All

of it designed to promote the conservation of Namibia's desert adapted elephants and uplift local communities.

[17:45:00]

KASAONA (voice-over): Female elephant and a male elephant.

GAROEB (voice-over): I want the people, especially my common people, to (INAUDIBLE) the elephants, that elephants can understand us if we know how

to talk with them. We have to protect them for our next generations.

(END VIDEOTAPE)

QUEST: Magnificent, once you've see an elephant in the wild, you never forget it. Let me know what you're doing to help protect the environment,

#CallToEarth. QUEST MEANS BUSINESS.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: The plight of developing and emerging markets, as rates go higher, is becoming ever more perilous. You heard tonight, the Nigerian finance

minister, saying they are getting ahead of it. They're trying to restructure their debt on voluntary terms.

Angola has also taken on huge extra debt burdens during the pandemic. The Angolan finance minister is with me now.

Vera Daves de Sousa, minister, thank you.

Are you expecting to have to restructure or reformulate the debt burden?

Debt that you took on during the pandemic, particularly foreign currency debts at higher interest rates are now unsustainable.

VERA DAVES DE SOUSA, ANGOLAN FINANCE MINISTER: We already did our hard work during the pandemic and after the pandemic, talking with our main

partners and creditors.

And we managed to, during sometime, have some breathing space to face the challenges. And what we are doing now is a proactive asset management,

liability management, where we are, in some cases, laying back such short term debt and putting more time on the debt we are issuing in the local

market.

QUEST: Because the plans you put in place for the pandemic that have gotten much worse as a result of these higher interest rates, are you

finding yourself effectively locked out of markets and will have to turn to the international organizations?

DE SOUSA: The simple stances help us to deal with this because now we are seeing our GDP growing. We are seeing a much strong (INAUDIBLE) that help

us with the date denominated (ph) in dollars and we are also seeing the oil price coming up.

[17:50:00]

DE SOUSA: These three factors together help us to navigate and manage more, in a more civil (ph) way, the process of buying back and going to the

market, seeking more lower costs.

QUEST: This question of greater, I'm looking at the numbers for your economic growth this year and next. They look good numbers but the reality,

of course, is that you should be going faster. Your country normally grows faster.

Is the return or increase of oil and gas, does this post promise to be helpful to you, particularly, of course, as Europe requires more and you

have it and can provide it?

DE SOUSA: We are working to at least stabilize oil production and we also have big projects that will come on gas. But we are putting a lot of effort

and energy on the demand oil sector.

I agree; business, especially tourism will be our focus for the next years.

QUEST: What do you need now?

What is the one thing that you need most, besides breathing space?

(LAUGHTER)

DE SOUSA: Knowledge, knowledge. We need to put a lot of efforts for capacity building, energy to education, to help our people. Being part of

the process of building the country, so money is not enough. We need the people being educated, well educated, with capacity to push together with

us the process of making the country grow.

QUEST: I was looking online at Angola's position in relation to Transparency International. You have done over the last five years an

impressive job --

DE SOUSA: Thank you.

QUEST: -- of coming up. But you're still way down there. You're still --

(CROSSTALK)

QUEST: -- so what is going to be the key that unlocks that, whether it be the corruption, whether it be the difficulty, the bureaucracy?

I know you are committed to it.

But what is your ability to do it?

DE SOUSA: We are working in so many fronts. We -- the oil sector we are doing an ATI at the fiscal sector (ph). We are disclosing term of the

contracts that we have on the debts. For the fiscal figures, we have disclosed in our projections for the long to medium term. We have

dramatization (ph), we are publishing the numbers, the revenues that we are getting from the exits (ph) that we are selling. Everything is at our

website.

QUEST: But today, for example, the Nigeria minister says there needs to be greater trade, free trade. There needs to be more initiatives. I've heard

this before in Africa.

(LAUGHTER)

QUEST: I've heard it before and it never happens. Everybody talks about it but protectionism comes in and not only does protectionism come in, it

probably will get worse as a result of everybody protecting their home markets. This must really frustrate you.

DE SOUSA: Yes, but we need to be quite sure that we will move faster if we open ourselves to --

(CROSSTALK)

QUEST: Oh I don't doubt it, how do you do it?

DE SOUSA: First, with infrastructures. We need roads to (INAUDIBLE), things to interconnect our countries. We need to make sure that modern

mobility is not an issue. Just to make it easy to flow the people in capital. Without that, it will remain only words.

QUEST: The managing director, finally, the managing director said to me today in our interview, she said what was most needed was more women in

decision-making roles. Now Africa has a very enviable record these days of people like yourself moving into decision-making roles. But there needs to

be more of, them.

Do you agree?

(LAUGHTER)

DE SOUSA: Well, I am always a good exception. Our vice president is a woman, our speaker of the parliament is a woman. I am the minister of

finance, I am a woman. And we have much more in Angola. So I hope and I am happy to say that we are the exception.

QUEST: Good to see you, Minister, thank you so much for talking for us. Thank you very much indeed.

The finance minister from Angola. As we continue tonight, well, tomorrow night, you will hear from Paschal Donohoe, who is the Eurogroup president.

He's also the Irish finance minister, the perfect voice to hear tomorrow. Here's a teaser and a taste of his views on inflation in Europe.

(BEGIN VIDEO CLIP)

PASCHAL DONOHOE, EUROGROUP PRESIDENT AND IRISH FINANCE MINISTER: We are not yet seeing the kind of inflation (INAUDIBLE) in the euro area that we

are seeing in America.

But that being said, you are correct; budgetary policy in the time ahead for the euro area will need to be more calibrated, will need to reflect the

fact that inflation is higher for longer.

What we did in recent weeks with the Eurogroup is that we made a commitment to doing that by 2023, by making clear that broadbased fiscal support is no

longer appropriate with the inflationary risk that you just referred to.

(END VIDEO CLIP)

QUEST: You will hear more from the minister on tomorrow's program.

[17:35:00]

QUEST: Before we have a break and a "Profitable Moment," let me show you how everything ended on Wall Street. What a day. Bizarre perhaps like so

much. We had the Dow which was down and then heavily down. And then roared back over 30,000, a 1,400 point range on the day.

The Nasdaq similarly up. Yet all of this on the same day that there was an awful -- not awful but at least disappointing U.S. inflation numbers, which

begs the question, what was going on in the market that they went up on such a frolic of their own?

Look at the Dow 30 and you see bank stocks ahead of earnings. I am guessing that there are also higher interest rates, which is well for them.

(INAUDIBLE) that put them in a good mood and everyone else, in fact, not day's end, in recent days, we had too many days where everyone is in the

green. We will take a "Profitable Moment" after the break.

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(COMMERCIAL BREAK)

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QUEST: (AUDIO GAP) IMF and World Bank.

Whenever you come to an event like this, there is what people will say formally and then there is what the officials and others will tell you

behind the scenes.

And I have never seen a greater example of it than the current fracas and fiasco over U.K. fiscal policy. The decision by the Truss administration to

bring in unfunded, untargeted, general broadbased spending, officially, everybody is very polite about it.

The managing director of the fund said today that she wants cohesive, coherent policies that are sustainable.

Other people will say that they want a coordinated response, that monetary and fiscal policy must not be (INAUDIBLE).

The reality, privately, officials here will tell you absolute barking mad what the U.K. is trying to do, not only in the policy but then trying to

justify it, as the business secretary tried to do the other day by saying it's all to do with international markets, nothing to do with a new

government.

Here they will tell you quite clearly, openly and without any shadow of a doubt that this is all about the U.K.'s policy and the U.K.'s policy alone.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest at the IMF and World Bank in Washington. Whatever you're up to in the hours ahead, I

hope it's profitable. I'll see you tomorrow.

END