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Ukrainian President: Stalemate Is Not An Option; Russian-Backed Separatists Claim To Control 97 Percent Of Luhansk; Fierce Fighting Rages In Battle For Eastern Ukraine; New World Bank Report Warns of Recession & Stagflation; Controversial New Tour Tees Off Thursday Near London. Aired 2-3a ET

Aired June 08, 2022 - 02:00   ET

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

(COMMERCIAL BREAK)

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Hello and a warm welcome to our viewers joining us from all around the world. You are watching CNN NEWSROOM. I'm Paula Newton. Just ahead for us. Exclusive access from the frontlines of Russia's unprovoked war in Ukraine.

(BEGIN VIDEO CLIP)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: This is what we've been brought to see. Goodness me.

NEWTON (voice over): The slow and bloody battle to take back pummeled territory.

As another migrant caravan forms in Mexico there are real issues to discuss while Latin American and U.S. leaders gather but summit snobs and boycotts have gotten the meeting already off to a rocky start.

Plus, rising prices and weak economic growth of the World Bank's throwing around that scary word stagflation. How we could send many countries right around the world into depression.

(END VIDEO CLIP)

NEWTON: Ukrainian President Volodymyr Zelenskyy says a stalemate with Russia is not an option. He says the war should ultimately end at the negotiating table. But victory also needs to be achieved on the battlefield. Now the situation is looking increasingly grim in Luhansk as Russian-backed separatists leader says 97 percent of the Donbas region has now been "liberated." Some of the heaviest fighting in fact is concentrated in the city of Severodonetsk.

Ukrainian officials say the situation there is consistently difficult in their words, and the fighting never slows. New satellite images meantime also show at least two hospitals have been hit by military strikes in Severodonetsk and another in nearby town. And in some areas now under Russian control and even grimmer picture is emerging. An advisor to the exiled mayor of Mariupol says corpses are piling up around the city. He says Russia is quietly closing it off amid deteriorating sanitary conditions and growing fears of a cholera outbreak. Now as Russia focuses its attention on the battle in the East Ukraine says it's pushing back Russian advances in other areas. CNN's Matthew Chance got access to the front line of Ukraine's efforts to reclaim crucial territory in the South.

(BEGIN VIDEOTAPE)

CHANCE (voice over): This is where the Ukrainian military tells us they're seizing back their lands. But on the battered Southern Front with Russia, the stalemate of trench warfare seems to be setting in. And commanders privately admit advances by either side here are small.

The Russians seem to be running out of ammunition. And they're not as strong as they were. The platoon commander of this forward trench told me. But we need more weapons too he adds if we're to push ahead.

CHANCE (on camera): I speak to Anton here. And he's saying it is -- is very loud at night.

Right. So, in the morning, he's saying it's not so noisy, it's a bit quieter. So, it's interesting because this is the place where the Ukrainian government say there's a big counter offensive that's been underway for some time and they're taking back territory but we've not seen a great deal of evidence of that on the ground. It seems that, you know, both sides dug in here heavily have fought themselves to a standstill. Neither side strong enough to win this war but not weak enough to lose it either.

That's outgoing, is it? Are you sure? You can hear the outgoing artillery shells streaming across opposition here are.

CHANCE (voice over): A Ukrainian military escorts take us to what they say is a recently liberated zone where at least 30 Russians holed up inside this kindergarten were killed. As Moscow focuses its forces on Donbas in the east, Ukrainian officials say conquered areas in the south like this being left exposed.

CHANCE (on camera): All right. Well, they brought it to this very forward location where as you can hear there are still artillery exchanges taking place and this is the remnants of a battle from a couple of weeks ago they say where this Russian position was taken by Ukrainian forces at great cost, both to the Ukrainians and obviously to the Russians as well.

[02:05:05]

CHANCE: All of this debris on the ground is -- we're told Russian equipment and obviously this is the remnants of a Russian -- a Russian armored vehicle of some kind which has been like so many we've seen.

CHANCE (voice over): Totally destroyed in this bitter conflict.

CHANCE (on camera): The Russians thought that they were going to win easily. UNIDENTIFIED MALE: Yes, yes.

CHANCE: But that's not what's happening.

UNIDENTIFIED MALE: Of course. Russian thought a few days finished war in Ukraine. A few days.

CHANCE: We can hear it's still going on there.

UNIDENTIFIED MALE: Yes. It's shell and we can hear the flight of shell.

CHANCE: Yes. Months later.

UNIDENTIFIED MALE: Russian, Russian government land have victory in few days. I think we must be ready to a lot more.

CHANCE (voice over): A long artillery war with heavy weapons like this Ukrainian battle tank positioned in tree lines towards an unseen enemy. These firing points quickly become vulnerable. And the troops here need to be mobile.

CHANCE (on camera): OK. We've been brought to this frontline position where they're going to fire on Russian forces a short distance away. It's a secret location. We can only stay for one round we're told after that, there's going to be returned fire and we've got to get out of here. But this is what we've been brought to see. Goodness me. OK, guys, what now? Another one. I thought we had to go after one.

UNIDENTIFIED MALE: Once more again.

CHANCE: One more again.

CHANCE (voice over): Seconds later, another bone shaking round hurtles towards Russian positions.

CHANCE (on camera): OK. We've got to go now. Come on.

CHANCE (voice over): And we quickly leave Ukraine's grinding frontlines behind here.

Matthew Chance, CNN in southern Ukraine.

(END VIDEOTAPE)

NEWTON: CNN is covering new story from every angle. Our Clare Sebastian is standing by for us in London. But first we go to CNN's Salma Abdelaziz. She is live for us in Kyiv. Salma, I mean, we just saw Matthew;s report there. Zelenskyy has been absolutely candid about the fierce fighting in Ukraine. And it's -- what it's costing the country in terms of lives. If we think about what's going on in the East right now, is there any sense that he might actually pull troops back in the east and retreat somewhat? SALMA ABDELAZIZ, CNN REPORTER: The simple answer to that, Paula, if you're listening to President Zelenskyy's rhetoric if you're listening to his nightly addresses, the simple answer to that is absolutely not. Now, practical implications on the ground may mean a strategic retreat for forces particularly when you look at the east. Our Matthew Chance there was on the southern front, but I want to pull up the map to show you where the main flashpoint is.

And that's towards that eastern front right in the center, Severodonetsk where for days now the Ukrainian forces have been in this grinding street to street battle with superior Russian artillery. President Zelenskyy admitting they are outmanned, they are outgunned. But he says Ukrainian defenders are holding their ground. Now, why does this one city matter, Paula? Well, already this one city in the Luhansk region and already Russian-backed separatists claiming that 97 percent of Luhansk.

And again, this is from Russian-backed separatists. 97 percent of that area is now under Russian control. So called liberated in their terms, So Severodonetsk would be a major step towards taking full control of that region and the larger goal, of course, that President Putin has of taking control of the Donbas region. So, these grinding street to street battles, Paula, they can drag out for weeks, for months because you have superior Russian artillery simply pounding these positions.

At the same time the access roads into Severodonetsk where supplies are supposed to come through, those are tenuous at best, you have civilians trapped in the middle over 10,000. people we understand with no clear way out. And while President Zelenskyy has repeatedly said that any victory should be on the battlefield, of course, there is a constant drive by Ukraine's Western allies.

And of course, Ukrainian officials themselves to try to find a peaceful solution, a negotiating solution, a diplomatic solution to this crisis. And to that end, you hear this constant posturing, this constant rhetoric key, among them, of course from French President Emmanuel Macron, who last week made a splash when he spoke to French media and made these comments and I'm paraphrasing here, Paula.

Made these comments essentially saying that the west should provide President Putin with an exit ramp to this conflict without humiliating Russia. Now President Zelenskyy took serious issue with that comment humiliating Russia.

[02:10:04]

ABDELAZIZ: Take a listen to his response yesterday.

(BEGIN VIDEO CLIP)

VOLODYMY ZELENSKYY, PRESIDENT OF UKRAINE: What kind of humiliation are we talking about? I do not even believe that they are humiliating Ukraine. That would be a weak position. No one is humiliating us. They are killing us. So, in response, we are not going to humiliate anyone. We are going to response in kind.

(END VIDEO CLIP)

ABDELAZIZ: What we're looking at Paula is essentially a war of attrition. Neither side as you saw that report from Matthew Chance there really able to gain back territory as sort of kinetic and bloody stalemate, if you will. So, this posturing ahead of any potential peace talks, ahead of any negotiations is very important. And President Zelenskyy making it clear that he wants to come from a position of strength, whether that'd be diplomatically or on the battlefield. Paula?

NEWTON: Yes. And President Zelenskyy making it clear there is much to lose, as long as that stalemate continues. Clare, you now we are hearing again from Russia about so called humanitarian corridors. This time for food, right? What could that look like? And certainly leaders like President Erdogan in Turkey will be looking for guarantees after we heard so many, about so many humanitarian gestures from Russia, we'll all remember the siege of Mariupol. Those humanitarian just gesture, so many of them didn't materialize.

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, well, that Russia clearly has a patchy track record when it comes to keeping any kind of promises for any kind of humanitarian corridors or assistance in this conflict. I think clearly the problem here when it comes to the issue of grain exports is a lack of trust on both sides. Right now. The Ukrainian foreign ministry says that maximum effort is underway to try to open a humanitarian corridor to get grain exports out.

But they say they need really strong security guarantees to make this happen because they are worried that Russia which of course has a big naval presence in the Black Sea right now and the Sea of Azov would use those humanitarian corridors to attack Ukraine. Russia for its part has denied that it would do that. It says that it is now the Ministry of Defense said this week it has created the conditions for two humanitarian C corridors.

One in the Sea of Azov and one in the Black Sea. But it is blaming Ukraine for the situation with these grain exports, saying that Ukraine needs to demine the coastal waters in order to make these sea corridors safe. So, clearly a lack of trust on both side sides. A Russian Foreign Minister Sergey Lavrov is in Turkey today. A big portion of the talks that he's holding is set to focus on the issue of grain exports and how to unlock them.

But of course, not helping trust, Paula is the fact that we have seen evidence that Russia is stealing grain exports from Ukraine trying to sell them for their own profit. Also not helping (INAUDIBLE) is the fact that over the weekend, Russia -- a Russian missile strike was said to have hit a very large grain storage facility in the Ukrainian city of Mykolaiv. That was condemned by the E.U.

So like talks are happening, Ukraine says that it is still trying to export some of its grain to the global markets by road, by river by rail, but nowhere near as much as it would be able to export by sea. Paula.

NEWTON: Yes. No, in fact, Western allies doing all they can to move that grain but still a lot hanging on those talks in Turkey at the moment. Salma Abdelaziz for us in Kyiv and Clare Sebastian in London. Thank you to both.

Now, U.S. President Joe Biden meantime will travel to Los Angeles in the hours ahead where leaders from the western hemisphere are gathering for the Summit of the Americas hosted by the United States. Now talks are set to focus on immigration, economy and climate change. But the agenda is being overshadowed by the Biden administration's decision to exclude Cuba, Nicaragua and Venezuela.

And the boycott by other leaders that follow that decision. Now Venezuelan President Nicolas Maduro traveled to Turkey Tuesday for a two-day visit. He blasted the U.S. decision calling it discrimination. CNN's Patrick Oppmann has more now from the Cuban capitol, Havana.

PATRICK OPPMANN, CNN HAVANA-BASED CORRESPONDENT: The Summit of the Americas in Los Angeles is just getting underway. But already, this meeting of regional leaders has already been overshadowed by the issue of who has been invited, who has not been invited, and which leaders from the region have chosen to boycott the summit after the Biden administration at the last moment said that Cuba, Nicaragua and Venezuela would not be included on the invite list because those countries are dictatorships according to U.S. officials.

Mexican president Andres Manuel Lopez Obrador followed through on his threat to boycott the summit saying that all the countries from the region should be invited and then instead of his attending, he would send a high level delegation of Mexican officials. He is not the only leader to decide not to attend the summit. The president Honduras, also a leftist leader has said that she will not attend because of the exclusion of Cuba, Nicaragua and Venezuela.

[02:15:07]

OPPMANN: And then there are other countries or right-leaning countries like El Salvador and like Guatemala, the leaders are saying that U.S. interference in their internal affairs has led them to decide not to attend. This is really a blow for the Biden administration, since those countries in particular are necessary to bring migration, the illegal migration under control. All the same, the Biden administration says that even with the attendance, not of the presidents' but of foreign ministers, they believe they can hammer out a deal -- deals that will help with issues like illegal migration that comes if it can come.

Not a moment too soon because there continues to be a surge of illegal migration on the U.S.-Mexico border. Patrick Oppmann, CNN Havana.

NEWTON: From Los Angeles, Benjamin Gedan is the Acting Director of the Latin America program at the Woodrow Wilson International Center for Scholars. He's also the former South America Director for the National Security Council staff in the Obama White House. And it's good to get you to weigh in here on what I will put plainly and bluntly is a bit of a mess. The region already felt neglected.

And yet now, I mean, just let's take the migration issue alone, this summit should have been about rebuilding relationships, not tearing them down.

BENJAMIN GEDAN, ACTING DIRECTOR, WILSON CENTER'S LATIN AMERICAN PROGRAM: Look, the run up to the summit has been absolutely chaotic. The region is in desperate need of U.S. support and all kinds of international aid. And instead, we spent months thinking about who would be invited to the summit who would attend rather than the agenda for the gathering.

NEWTON: And yet, it's turned into so much more especially because Mexico really escalated this entire thing. AMLO in particular, is taking that hard line. He's even suggesting subtly, perhaps, that he might weaponize migration flows in order to get what he wants from the United States. Do you see this as opportunistic by a country like Mexico or really indicative of a much larger problem for the region?

GEDAN: I think the stance frankly, is absolutely confusing. I mean, just like the United States depends on Mexico for support for migration. Both countries are interdependent when it comes to security. And when it comes to their economies, it makes all the sense in the world to get along and to cooperate. And in the run up to the summit, the Mexicans have been really obstructionist.

NEWTON: And not just obstructionist, as I said, they been as blunt as they can be that they are going to cause problems for the United States and that they were quite miffed about who wasn't invited to the summit. And I do want to turn to the diplomatic issues here. Our critics write about the Biden administration being hypocritical. I mean, the White House has said they are planning a trip to Saudi Arabia next month, right?

The president is actually visiting that country and its leader, is he not as the leader of Saudi Arabia and B.S. not defined as dictator?

GEDAN: Look, no country in the world can afford to be completely consistent when it comes to the defense of democracy or human rights. But in the past, Latin America has been different, right? The western hemisphere has made a joint commitment only to permit Democratic government. And all the countries in the region minus Cuba signed the Inter American Democratic Charter.

This historic agreement in 2001 and at various times in the region's history, they've said Democratic government is the only system permitted. So this wasn't invented by the United States. I think, really what we've seen is the region has drifted away from those principles.

NEWTON: And in drifting away from those principles. It's also drifted away from the United States. I mean, U.S. policy in the Americas some say lacks commitment. What will that cost the continent, though, in years to come not just in terms of economic development, but we also have the elephants literally and figuratively, in the room, the environment is a huge issue that again, needs to be addressed sooner rather than later in the hemisphere.

GEDAN: There's a lot to gain from better cooperation in the hemisphere. There's enormous amounts of copper and lithium, the so- called strategic minerals that are needed for the energy transition the United States and the world. The region could be a destination for supply chains for manufacturers that don't want to be so dependent on dictatorships or countries really, geographically distant from the major market, which is the United States.

So I think better collaboration would benefit all the actors in this hemisphere. And yet, you're absolutely correct. Countries are really drifting apart.

NEWTON: Yes, OK. But I hate to be the person who wants to point a finger of blame. But I do want to point a finger of blame here. When people are saying why the -- their governments can't cooperate in the region, who is to blame here? I know you're going to tell me there's enough blame to go around. But doesn't the United States have an obligation here to really step up and make sure that these issues are handled? They -- this is their near abroad, they need to take care of it.

GEDAN: Look, I'd say two things. It's a difficult assignment. There's a lot of ideological divisions. In Latin America right now there's poor corrupt leadership in many countries. Countries drifting toward authoritarian models.

[02:20:06]

GEDAN: On the other hand, you're right. I think the United States has tried to assert leadership without really putting in the resources that are necessary. And you can't really do that anymore because there's another international actor in Latin America, that's offering multibillion dollar investments in all sorts of critical infrastructure.

NEWTON: Yes. And you are talking about China. And again, this is the United States is -- the United States attempt, obviously, to try and mitigate the influence of China in the region. OK. We will wait to see what does come out of these meetings for the people that are attending. Benjamin Gedan, thanks so much. Appreciate it.

GEDAN: My pleasure.

NEWTON: Still to come for us. Question time for Boris Johnson and the first chance to see how members of Parliament will treat the badly damaged prime minister since Monday's confidence vote.

And coming up. U.S. lawmakers are trying to find common ground on gun control and other safety measures in the wake of recent mass shootings. After Matthew McConaughey is adding his voice to those calling for change on behalf of his hometown of Uvalde, Texas.

(BEGIN VIDEO CLIP)

MATTHEW MCCONAUGHEY, AMERICAN ACTOR: We start right now, by voting to pass policies that can keep us from having as many Columbine, Sandy Hooks, Parklands, Las Vegases, Buffaloes and Uvaldes from here on.

(END VIDEO CLIP) (COMMERCIAL BREAK)

NEWTON: After Matthew McConaughey seen here visiting his hometown of Uvalde, Texas in the wake of last month's mass shooting at Robb Elementary. He spent most of the past week with families of the victims there. You see him there as well with his wife on Tuesday. The actor raised his voice with other angry and grieving Americans to call for gun reform. In a passionate and at times very emotional speech, he showed pictures, artwork and belongings from some of the victims.

He said their stories need to be told and action is needed to honor the lives of the 19 children and two teachers killed so tragically in his hometown.

(BEGIN VIDEOTAPE)

MCCONAUGHEY: Now Alithia, her dream was to go to art school in Paris and one day share her art with the world. Ryan and Jessica were eager to share Alithia's art with us. And said we can share it that somehow maybe that would make at Alithia a smile in heaven.

Maite wore green high-top Converse with a heart she had hand-drawn on the right toe because they represented her love of nature.

Camila has got these shoes. Can you show these shoes, please?

Wore these every day. Green Converse with a heart on the right toe. These are the same green Converse on her feet that turned out to be the only clear evidence that could identify her after the shooting. How about that?

[02:25:02]

MCCONAUGHEY: Then there was the fairytale love story of a teacher named Irma and her husband, Joe. What a great family this was.

Irma was a teacher, who, her family said, went above and beyond, and just couldn't say no to any kind of teaching. Joe had been commuting to and from work 70 miles away in Del Rio for years.

Together, they were the glue of the family. Both worked overtime to support their four kids. Irma even worked every summer when school was out. The money she had made two summers ago paid to -- paid to paint the front of the house. The money she made last summer paid to paint the sides of the house. This summer's work was going to pay to paint the back of the house.

Because Irma was one of the teachers who was gunned down in the classroom, Joe, her husband, literally died of heartache the very next day when he had a heart attack.

They never got to paint the back of the house, they never got to retire, and they never got to get that food truck together.

(END VIDEOTAPE) NEWTON: Now one of the survivors of the mass shooting in Uvalde, Texas is sharing his harrowing ordeal. Arnulfo Reyes is a fourth grade teacher. He was shot by the gunman. All 11 of his students from his classroom were killed in the shooting. He says he felt abandoned in that moment by police. He tells ABC News, no amount of school training or drills could have prepared him for what happened that day.

(BEGIN VIDEO CLIP)

ARNULFO REYES, TEACHER AT ROBB ELEMENTARY: Nothing sets you ready, get ready for this. We trained our kids to sit under the table. And that's what I thought of, you know, at the time that we set them up just be like ducks. You can give us all the training you want. But it's as when laws have to change it will never change on as they changed the laws.

(END VIDEO CLIP)

NEWTON: Right into that and the U.S. House of Representatives observed a moment of silence on Tuesday for the victims the Uvalde School shooting. House is set to debate gun legislation over the next couple of days. Now one measure would raise the age to buy semi-automatic weapons from 18 to 21. A reminder the shooter was just 18 years old. Another proposal will focus on what's called Red Flag laws which allow family members to request federal authorities to temporarily take away guns from those considered to be a threat to themselves or others.

And in the U.S. Senate, a small bipartisan group is beginning to see a potential deal take shape on that gun reform. Now it's unlikely to be what everyone -- what many people would like and just a fraction of the package that Democrats want. But they will compromise they say to try and get Republicans on board.

Now, meantime, we are expecting fireworks in the British Parliament as Boris Johnson will face lawmakers questions in the coming hours. The prime minister's outlining his domestic priorities in an effort to move on from a closer than expected confidence vote the damaged his leadership. CNN's Phil Black reports now from 10 Downing Street.

PHIL BLACK, CNN CORRESPONDENT: Boris Johnson and his supporters are trying very hard to be positive about all this. Johnson has said the outcome of the no confidence vote is a good result. His allies have used words like decisive, clear, comfortable even handsome when talking about the fact that he secured the support of 59 percent of sitting conservative M.P.s.

Johnson told his cabinet during a meeting here in Downing Street on Tuesday that he should now be allowed to get on with the job of fixing the problems that he says are important to the British people. He says a line should be drawn. But he can't be confident that this is all behind him. And that's because 41 percent of conservative M.P.s voted to try and eject him from his home and office here on Downing Street.

That figure was not enough to force him out. But it is more than enough to expose a deep rift within the Conservative Party to show very clearly how much his authority has already diminished. As it stands, Johnson can't be challenged with a no-confidence vote like this for another year. So say the rules of the parliamentary Conservative Party but those rules can be changed. Johnson has some big challenges in the near future.

An ongoing investigation into whether he lied to Parliament over parties that were held here in Downing Street during lockdown and two imminent by elections that have now taken on great importance as instruments to try and determine and get some insight into Johnson's popularity and indeed his electability among British voters. Phil Black, CNN, London.

(END VIDEOTAPE)

NEWTON: Ahead for us, the World Bank warns a recession will be hard to avoid for many countries, thanks to something called stagflation. What's creating the perfect storm of economic problems? I'll ask an expert after the break.

(COMMERCIAL BREAK)

NEWTON: A stark warning from the World Bank, many countries will soon find it hard to avoid a recession. Now, they're the latest group to sound the alarm on a potential global economic downturn. So much so the World Bank slashed its economic growth estimate from just over 4% to less than 3%. Bank blames the pandemic, supply chain issues, and Russia's invasion of Ukraine for their forecast. And it's being made worse by stagflation. They say a combination of rising inflation and stagnating economic growth and high unemployment. The bank's president says its impact will be felt worldwide.

(BEGIN VIDEO CLIP)

DAVID MALPASS, PRESIDENT, WORLD BANK: I think many countries will see a recession in this cycle, it has to do with the raw materials, energy prices, fertilizer, food all up. And that that is a big part of people's budget. If you think of households around the world, they're really feeling the strain.

(END VIDEO CLIP)

NEWTON: Megan Greene is a global economist and Senior Fellow at the Harvard Kennedy School and she joins us now from Boston.

Good to have you weigh in on this on what was an absolutely bleak forecast from the World Bank. You know, it wasn't just about the fact that there wasn't going to be the growth that people had expected. But it was the real possibility, even probability of stagflation. And remember, that's that combination of high inflation and high unemployment. How damaging would a period like that be for livelihoods, and I mean, globally now?

MEGAN GREENE, GLOBAL ECONOMIST: Yeah. So the real specter of stagflation stems from the 1970s in the U.S. when we had incredibly high inflation and incredibly low growth and so unemployment was driven higher. People's standards of living really fell. And so that's what people think of automatically when you say stagflation. And so the fact that David Malpass, the president of the World Bank said that, you know, warned that the world was actually facing likely stagflation and many countries might go into recession. That's really worrisome because central banks of course are stuck trying to figure out whether they're going to lean against inflation and tighten policy or whether they're going to support growth and keep policy really loose.

[02:35:12]

And, you know, if they choose one, it's at the expense of the other. And so they're really stuck in a tight spot. There's no easy policy fix for stagflation. I think certain economies are more likely to be in stagnation than others, Europe will certainly be hit much harder by the Russian invasion of Ukraine and the supply chain issues stemming from that. So I think Europe is more likely to be in stagflation than the U.S., for example, we're actually consumers and businesses are flush with cash because of the stimulus measures. So I don't think it's as much a risk for the U.S. as it is for some other developed economies.

NEWTON: Yeah. And then there's the issue of the developing economies, like I say that they have livelihoods that were getting better and are now at risk. I mean, you know, one of these innocuous lines that you read from the World Bank report is that for the remainder of this decade, their forecasts are being downgraded, and that it will not average what had been achieved in the past decade.

GREENE: Yeah, so average growth will likely be lower over the next 10 years. And it was in the past 10 years. For developing economies, which you highlight, I think the prospects are very worrisome, because a lot of these economies were over leveraged before the pandemic hit, then they had to borrow a lot in order to pay for their pandemic response. And so now they're trying to retrench and get their fiscal house in order. And at the same time, they're being hit by high energy and food costs, as a result in part of the Russian invasion of Ukraine. And so, you know, the Fed is tightening rates. So, rates are going up globally, the dollar is getting stronger, which makes it harder to service dollar denominated debt for a lot of emerging markets. This all creates kind of a perfect storm that could cause a lot of debt distress across emerging markets. And so that is a concern that we might see countries start to default or need, debt restructurings. I think the IMF and the World Bank are going to be pretty busy over the next couple of years.

NEWTON: Indeed, and as you're mentioning that we had heard from so many officials that these disruptions to the supply chains might be temporary. In fact, it seems that this is a fundamental problem. And that there's something broken about the global economy about supply chains, you already mentioned increasing sovereign debt. Is it time for central bankers and governments to get more creative here? Is there something wrong about the toolbox that they're using right now that may not cut it?

GREENE: Well, so unfortunately, central banks can't do anything about supply side problems. So it can't do anything about China's zero COVID policy, which cause factories to shut down. Central banks can't do anything about the Russian invasion of Ukraine pushing food and energy prices up. They just don't have any tools about supply side problems. It's government's fiscal authorities who can step in and try to mitigate some of the price implications of those supply chain snarls. I'm not sure that, you know, there's something structurally wrong with how we're set up. And that's why we're facing these problems. I do think it is a series of shocks that have been really bad luck. I do think one lesson though, that companies are learning is that global supply chains, while very efficient aren't particularly resilient and so they're starting to come up with a supply chain plus model where they have their global supply chains but then they also have contingency plans for when the shocks happen because as we're learning they happen often problem and probably will continue to going forward.

NEWTON: Yeah, that might sound like an easy chore. I've been speaking to people in industry and it is so complicated but as you are right to point out they're at it right now and they certainly hope to make them much more resilient in at least if not the months to come the years to come. Megan Greene for us, I really appreciate it.

Now, still to come for us here on Newsroom, Brazilian officials expand search for a missing British journalist and an indigenous researcher, we will have the latest.

(COMMERCIAL BREAK)

[02:41:17]

NEWTON: And the U.S. advisors to the Food and Drug Administration are recommending the emergency use also -- emergency use authorization of a fourth COVID-19 vaccine. Now, if the full FDA gives Novavax, the green light, it would be administered as a two dose shot for people 18 and older. Now, Novavax is a protein based vaccine. And that's different from Pfizer, Moderna and J&J.

We should say it's already authorized in the E.U., U.K., Canada, South Korea and several other countries. Now, according to the U.S. Centers for Disease Control, there are now more than 1000 confirmed cases of monkey pox across 29 countries. The CDC has issued an alert level two advisory for travelers, calling on them to quote practice enhanced precautions but says the risk to the general public remains low.

Two brother brothers who were among South Africa's most wanted have been arrested in the United Arab Emirates and are awaiting extradition back to South Africa. Now, Atul and Rajesh Gupta are accused of massive corruption fraud and money laundering during former South Africa President -- South African President Jacob Zuma's administration. The Gupta brothers have repeatedly denied the allegations but fled to the UAE when Zuma resigned in 2018.

Now, to search for a British journalist and a Brazilian Indigenous Affairs Specialist who are missing in the Amazon. Brazilian authorities are expanding the search for the two men after several indigenous groups expressed frustration over the slow response to their disappearance. Now, they say the two men were supposed to take a two hour trip to the Amazon jungle Sunday morning. But they never arrived, the missing journalist sister made an emotional plea to authorities to help find her brother.

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SIAN PHILLIPS, MISSING JOURNALIST'S SISTER: He loves the country and cares deeply about the Amazon and the people there. We knew it was a dangerous place, but don't really believe it's possible to safeguard the nature and the livelihood of the indigenous people. We're really worried about him and urged the authorities in Brazil to do all they can to search the roots he was following.

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NEWTON: Even more troubling here, the two men had reportedly received death threats before their disappearance.

And I want to thank you all for joining us. I'm Paula Newton, the world sport is next. I will be back though at the top of the hour with more news.

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