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Quest Means Business

U.S. Will Revoke Russia's Favored Nation Trade Status; I.M.F. Chief Say Russian Invasion Will Slow Global Economic Growth; Putin Says Western Sanctions Will Strengthen Russia; Iran Nuclear Talks On Hold Due To External Factors; Russian Bombardment Erupts Around City Of Mykolaiv; E.U. Imposing Fourth Round Of Sanctions Against Russia. 3-4p ET

Aired March 11, 2022 - 15:00:00   ET



ELENI GIOKOS, CNN INTERNATIONAL HOST: A mixed end to a choppy week for stocks. Tech stocks are in the red with one hour left to trade. The Dow is

still squeaking out again. Those are the markets and these are the main events.

A united call for suspending normal trade ties with Russia. The U.S. and G- 7 take action.

President Macron says all options are on the table for future sanctions in the conflict as the conflict continues.

And a war in Ukraine means hunger in Africa. The I.M.F. Chief's dramatic warning on the spillover impacts of the crisis.

Live from Dubai. It's Friday, March 11th. I'm Eleni Giokos in for Richard Quest, and this is QUEST MEANS BUSINESS.

Tonight, the world's richest democracies are taking new steps to undermine Russia's place in the global economy. The UAE says G-7 nations will move to

revoke Russia's most favored nation trade status over its invasion of Ukraine.

The situation in Ukraine is growing more dire. A huge column of Russian tanks north of Kyiv appears to have dispersed around the capital. In Kyiv,

President Volodymyr Zelenskyy said Russia must face stronger sanctions if its shelling campaign continues.

U.S. President Biden said his country will ban imports of Russian vodka and caviar among other measures. He said the free world was coming together to

oppose Russian President Vladimir Putin.


JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: We will not let autocrats and would-be emperors dictate the direction of the world.

Democracies are rising to meet this moment, rallying the world to the side of peace, to the side of security. We're showing our strength, and we will

not falter.


GIOKOS: And this announcement came shortly after Biden and Zelenskyy were on a call. Kaitlan Collins is now at the White House for us.

Kaitlan, every few days, we're seeing more sanctions, the noose around Vladimir Putin being squeezed even further. And now, importantly, in terms

of the most favored nation, taking Russia out of that list is going to have far reaching repercussions for Putin.

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, with every effort that you are seeing the President take, a lot of them are being done

in coordination with Europe and there is a point to that, because they are hoping to squeeze Putin and they think it's more effective and it is not

just the United States doing it, but other nations as well, including the European Union.

And so of course, what this is going to look like for every nation will look different in the United States. This is referred to as the permanent

normal trade relationship that they are seeking to revoke when it comes to Russia. And this is an effort that we should know President Biden cannot

take on his own, it actually requires an act of Congress. But Congress has proved that they are more than willing to do this. They say they could act

on it as soon as next week after President Biden's announcement earlier today.

And what this announcement would do is basically allow countries to raise tariffs on Russian goods and kind of treat them and isolate them as this

basically, a pariah state, that you've seen a similar trade relationships with Cuba with the United States, for example, or North Korea.

And so what was also critical, though, to President Biden's announcement today is that he does expect the European Union to do this as well. And so

of course, it remains to be seen exactly what it looks like for every country, but it is part of this larger effort to try to squeeze Putin, to

try to hurt him economically. Though, there are still big questions about how this is actually deterring him given this invasion is still ongoing and

you are still seeing these attacks on a daily basis on civilians, and military alike indiscriminate killings by the Russian forces in Ukraine.

GIOKOS: Kaitlan Collins, thank you very much for that update.

Now, the World Trade Organization has 164 members and for the most part, they have made normal trade relations permanent with one another. Russia

joined the W.T.O. in 2012.

The U.S. is moving to revoke its most favored nation status with Russia through an act of Congress. The U.S. extends most favored nation status to

every country in the world. That's except for North Korea which isn't a part of the W.T.O., and Cuba which is a part.


Pascal Lamy, former Director of the World Trade Organization joins us now.

Mr. Lamy, great to have you with us. I want to talk about the practicalities of removing Russia from the most favored nation and we know

the U.S. has made this decision, you now have to see the E.U. and other countries taking this decision as well for it to become a lot more -- in

terms of the impact -- impactful against Russia.

Give me a sense of how this will actually work.

PASCAL LAMY, FORMER DIRECTOR OF THE WORLD TRADE ORGANIZATION: Well, the way it works is rather simple. Once you remove Russia from this status of most

favored nation, you can raise your tariff against Russian exports the way you want.

So these allows countries to upstart with high tariffs what they import from Russia or to make it much more expensive. Now, this is a pain -- this

is pain for Russia, of course. But this is also paying for those who imported from Russia, and who will now either not import or import at a

more expensive price and given what Russia exports, and we have to realize that Russia exports basically energy, oil, gas, energy intensive products,

steel, aluminum, paper pulp, agriculture, fertilizers, and weapons.

Now, if you look at these various streams of trade with Russia, you realize that if you import energy, you need it. So if you obstruct trade, this will

cost you. If you import agriculture, you need it, so it is going to be more expensive, and so on.

So it's pain short term for everybody.

GIOKOS: Exactly. And that's a double-edged sword of the sanctions, because Russia was, you know, very smart in creating these very important economic

relationships with very strategic countries.

Do you think it was a miscalculation by the Europeans to rely so heavily on Russian oil and gas? And we can say in hindsight now, but it is really

fascinating to see that Europe is now changing its stance saying, we need to become more autonomous.

LAMY: That's absolutely correct. Europe is highly dependent on Russia in one area, which is gas, somehow on oil. And had we Europeans believed 10

years ago that Russia would send a full army to conquer Ukraine, we probably would have seen things differently.

So it is true that now, as a consequence of that, the European Union needs to rethink its energy system. The good news is that they started doing this

in greening their economic mix with more renewables and less fossils. The bad news is that it will still take some time. Hence, the problem, which

they are now discussing, of totally severing the European Union from Russian gas, which, again, will be costly.

Now, at the end of the day, economists will tell you that this is more costly for Russia than for its trade partners. But you're absolutely right,

it is a sort of double sword with one piece, which is very painful for Russia and another piece, which is less painful, but still will be good.

And then of course, long term, if this was to lead to sort of global deglobalization, then the pain will not be just short term, but longer term

and I think this is the real worry behind what's happening in this invasion of Ukraine.

GIOKOS: Yes. That's fascinating, because it is sort of this recalibration of the economic world order, so to speak, where people are going --

countries are going to be like: Well, is it too risky to do business with certain countries?

I want to talk about that. Is China and Russia going to be sort of the new global force? And let's be realistic here, south, south and southeast

cooperation has been happening on the sidelines, where they have been trying to circumvent the use of the U.S. dollar in payment systems or

trying to create a stronger emerging market space.

Are you worried about that emerging as we are starting to see this war playing out, which of course Putin, he is digging in his heels -- he

doesn't want to withdraw anytime soon from the messaging has been giving us?


LAMY: Yes, I think this is -- there is a big risk there. Russia is putting -- is pushing Europe into the arms of the U.S. U.S. and E.U. are

pushing Russia into the arms of China, and at the end of the day is the U.S.-China rivalry that structures this post Ukraine war well, and I think,

as a European, I would not wish this to happen and I think many other continents would not either with this to happen.

But there is a risk, and in a way, this is the narrative which Putin is now pushing. It's a war between Russia and others on the one side and the west

on the other side. I think this is extremely dangerous for the future of world peace.

GIOKOS: Mr. Lamy, before I let you go because we're running out of time, should Russia be removed from the W.T.O.? And I know that there is no exit

strategy, but removing from the I.M.F., removing from the W.T.O. is that sort of how you create an even worse environment for Putin?

LAMY: Well, I think it's -- we are moving into a situation where the Russian economy will be isolated. This is very bad for Russia and this is

bad for the rest of the world.

GIOKOS: All right, Mr. Lamy, thank you very much for your time. Great to have you on. Such a pleasure to get your insights today.

LAMY: Thank you.

GIOKOS: And after the break, the I.M.F. says the whole world could see the impact of the war in Ukraine. The Managing Director had a clear message for

Richard on the violence.

Stay with us.





GIOKOS: The I.M.F. says Russia's invasion of Ukraine will harm the global economy. Its Managing Director said she still expects most countries will

see economic growth, but not Russia.

Kristalina Georgieva told Richard Quest: The longer the conflict lasts, the worse things could get, and she spoke about her personal connection to the




GEORGIEVA: I can tell you that nothing qualifies me more that we can, again divide the world and leave hundreds of millions of people potentially

isolated from each other.

My brother is in Kharkiv, in the second largest city in Ukraine. I talk to him every day. What he tells me breaks my heart because this must not


The horror of the war, the way it is destroying in minutes what has been built in decades, but what is uplifting, Richard, is that the spirit of

people is very high.

My brother tells me that the solidarity, people helping each other with medicine, with foods is just so heartwarming.

But to finish, to your question to say that that it is so important that we stop this war, and that we continue to build relations among nations that

are based on common interests for all of us to prosper.

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: The various refinancing and the various -- the fund and the various plans and programs

as a result of pandemic and SDRs means you have good war chests. Pardon the awfulness of the phrase, but you know what I mean, therefore, you are able

to help Ukraine. You're able to deal with the economic reality that they are facing now and in the future.

GEORGIEVA: We definitely had the capacity to help our members. First and foremost, Ukraine, we just approved $1.4 billion emergency financing and

within hours of the approval, the money entered Ukraine's account. We can do more if this is necessary.

We are looking at the neighborhood because the spillover impact is most dramatic for Central Asia, the Caucasus, the Baltic Republics, Moldova,

because of the trade links with Russia, dependence on remittances, and we are ready to step up for members if they need it.

Moldova has already reached out to us. Yes, we can help. Beyond that, we look at the emerging markets that are already on the high level of debt

where growth has not returned to the pre pandemic levels.

Should there be need for us to step up programs? We still have about $750 billion available to lend. And thank God we did had the SDR allocation, the

$650 billion. It is helping many countries now in this tighter environment.

Ukraine got $2.7 billion, so timely, as they face the tremendous pressure support.

QUEST: Is there any talk about suspending Russia's membership of the fund?

GEORGIEVA: Let me first say that we have no economic relations with Russia now. We don't have a program. Our Moscow office is not operational.

When it comes down to membership, it is guided by the Articles of Agreement of the fund, and what constitutes a breach of this Articles of Agreement

and as you know, Richard, it is all in the economic sphere.

What I also can state is that for vast majority of our members, this war is outrageous. It is unjust and unacceptable. So that defines a bit how they

look at the status of Russia.

QUEST: The food question. On QUEST MEANS BUSINESS tonight, I had one of the leading agri experts from Ukraine who was basically saying that, look,

the wheat in the ground this year is just about going to be destroyed. They've got lots from previous years that can -- that they have to find new

distribution plants. But whether it's China or it is other parts of Asia or Europe, we're going to find not only shortages and Africa is going to find

higher costs.

This is -- I mean, economists talk about spillovers and collaterals and things, it's going to be awful, putting it bluntly.


GEORGIEVA: I could not agree more. War in Ukraine means hunger in Africa, and the impact of this war on food prices is going to be quite dramatic.

Take for example, Egypt. Eighty percent of their food imports come from Ukraine, Russia. Imagine this country with food prices jumping and riots on

the street. This is why we are working at the front on a country by country by country level to assess the highest vulnerabilities and then work with

countries to try to avoid a massive suffering of people and damage on the economy's because of that war.


GIOKOS: Russia is fighting back against sanctions with its own measures against Western businesses. The Russian government is limiting access to

Instagram and opened a criminal case against its parent company, Meta. This comes after Meta decided to permit users in some countries to call for

violence against the Russian military in the context of the invasion.

Speaking next to Belarusian President Lukashenko, President Putin said sanctions could make them stronger.


VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): As shown by the experience of recent years in the areas the West has restricted us, we have

gained new competences and restored the old ones, but at a new technological level and it is all working.

In this regard, of course, we have become stronger. You're right, and it's time for the opportunity to strengthen our technological and economic



GIOKOS: Russia also said it could seize assets left behind in the country by Western companies. I spoke to Anna Stewart about that earlier.


ANNA STEWART, CNN REPORTER: The announcement made that they could nationalize certain companies, didn't really come as a surprise in terms of

when you see an economies as isolated as Russia that's introduced capital controls. Of course, you could expect perhaps the sequestering of aircraft

or maybe the energy assets from BP and Shell given they are leaving the country. You could see those being absorbed into the big Russian state

energy machine.

What perhaps we didn't expect was to see a list of 59 companies we can bring it up for you here, and this is from Russian state media, and it

includes quite a few companies that you wouldn't expect to see like Apple, IKEA. You'll see McDonald's on there, Porsche.

Now, of course, you could open an Apple store back up after it is closed, if you're willing to pay its employees, you could sell all of the existing

stock. But what do you do then? Russia cannot make an iPhone, for example.

And given all the export controls, it will struggle even to get semiconductors into the country to make any kind of smartphone or


So it's a great example of the challenges logistically that we're looking at, and I guess added to that, looking at all those companies, is Russia

really ready and able to pay the wages of tens of thousands or hundreds of thousands of people? But it does present an interesting idea release as

this -- Eleni.

GIOKOS: Absolutely. I'm sure the thinking behind it is that the employees will be able to continue doing business. But again, it comes down to the

raw materials.

Aviation is one standout industry, which I think is going to be fascinating to see how that plays out.

Give me a sense of what's going on with those factories and industrial capacity in the aviation sector.

STEWART: Yes. When we look at sectors, I think aviation is really key actually, particularly to Russia, which is vast, the biggest land mass of a

country in the world. It really relies on the aviation sector. This is one that has been battered by sanctions from all sorts of different directions.

So first of all, you look at the fact that Russian airlines are banned from the air space of sort of the U.S., Europe, the U.K., multiple destinations

that it can no longer fly to.

Then you look at the export bans. So the U.S., the E.U., and the U.K. have also issued export bans on all sorts of components and technology actually

that support the aviation sector.

Then there's the corporates -- Boeing, Airbus -- they are refusing to service any planes or give any spare parts to their planes in Russia to

help any Russian airlines and the fact that most commercial planes in Russia are leased, over 80 percent, and the leasing companies want those

planes back.

That is where we will see I think this nationalization really take place. I suspect those planes will be sequestered by Russia, but can they keep in

the air without any kind of maintenance? Without any kind of parts there? Updated technology? That is really going to hurt that sector -- Eleni.



GIOKOS: All right, that was Anna Stewart for us, and after the break, the war in Ukraine is destroying critical infrastructure.

I'll speak to the former Ukrainian Finance Minister on what it means for the country.


GIOKOS: Hello, I'm Eleni Giokos, and coming up on the next half hour of QUEST MEANS BUSINESS.

Europe says it wants to end its dependence on Russian energy within the next five years. We'll be live in Paris after the Leaders' Summit.

And Nigerian students once trapped in Ukraine tell us about the harrowing escape. Now, they've returned home.

Before that, these are the headlines on CNN this hour.

U.S. President Joe Biden says Russia will pay a severe price if it uses chemical weapons in Ukraine. The White House has recently warned that such

weapons could be used in the conflict, citing what it calls Russia's long and well-documented track record.

Nine million people in the Chinese city of Changchun will be going into a strict lockdown after scores of COVID cases were confirmed there. Chinese

health authorities reported 1,100 COVID cases across the country on Friday. That's the highest number of daily infections since the Wuhan outbreak in


Two doses of the Pfizer biotech vaccine is 31 percent effective against the omicron variant in children aged five to 11. That's according to the

American C.D.C., about half of the omicron infections recorded in the study were asymptomatic.

The Queen will not attend a Commonwealth service at Westminster Abbey on Monday. Buckingham Palace says Prince Charles will go in her place and

that's the Queen will continue with other engagements later in the week.

She recently resumed in-person events after being diagnosed with COVID.


Nuclear talks with Iran on hold because of what negotiators call external factors. The European Union's foreign policy chief says the final text for

the deal is essentially ready and on the table. However, Russia, which is part of the talks has recently made new demands relating to US sanctions on


All right. We're just getting news of heavy Russian shelling around the southern Ukrainian city of Mykolaiv. Videos online show fires in the area.

And originally officials says on social media that there is active fighting north of the city. The same official calls the bombardment "indiscriminate

shooting at civilian targets," including a cafe and apartment block. We'll bring you more details on this as we get them.

All right. The E.U. is imposing a fourth round of sanctions on Russia over the Ukraine invasion. The news came out of today's emergency E.U. summit in

Versailles, the bloc is taking action to deny Russia most-favored nation trading status, and banning the export of luxury goods. Among other things.

French President Emmanuel Macron said that nothing is taboo as far as sanctions against Russia are concerned.


EMMANUEL MACRON, FRENCH PRESIDENT: And we're willing to adopt other sanctions and all options are on the table. The point of our discussion is

to order this to prepare ourselves to the sanctions if they were able to call a halt to the attack and the aggression and could prepare us also for

the consequences in the coming weeks and months.


GIOKOS: The E.U. also says it plans to end its reliance on Russian gas and oil and coal by the year 2027. Just five years from now. CNN's Melissa Bell

joins us from Paris. Melissa, really interesting to hear Macron say that, you know, everything is on the table when it comes to sanctions. But oil

and gas can only be weaned out of Europe by 2027. We're talking about five years from now, but they're doing what they can with the tools that are

currently available.

MELISSA BELL, CNN PARIS CORRESPONDENT: That's right, Eleni. And they are very pleased Europeans that they've managed to enact and enforce these

rounds of sanctions, round after round without latest round announce tonight by Ursula von der Leyen, the commission president. That will take

effect from satay targeting those luxury goods, trying to find ways to avoid Russia using cryptocurrencies to bypass the rounds of sanctions that

have been enforced before.

Now just on the question of energy supplies, you're quite right. That is really what would hurt Russia hence the U.S. ban, hence the United

Kingdom's announcement, as well of a ban that will come into effect soon. For the European Union that is much harder, partly because as a bloc, it

depends so heavily on those supplies. Partly also, because amongst itself within member states, there are such differences in terms of dependency on

Russian gas.

So, a weaning off of those gas supplies. That's what they decided on these last couple of days at their summit in Versailles. But they also make the

point that, look, at previous rounds of sanctions have already impacted Russia's oil industry since things like refining technologies fall under

the sanctions already enacted. Basically, the European Union believes that it can take a small hitch when it comes to energy supplies in the short

term, but that it cannot for the time being enforced that total ban.

So, hence, its desire to move towards it. But clearly a determination at this stage to sound tough when it comes to Russia. The G7 will meet next

week in the shape of its interior ministers and justice ministers to look at further sanctions that the G7 might take to further tighten the noose

around Moscow's neck and make it harder for Moscow to show their determination. But the Europeans also gathered today at Versailles really

at pains to reach an arm out to Ukraine to show their solidarity.

Explaining that there's 2-1/2 million refugees that have already flooded across the border, will be open with open arms and allowed to stay and give

them the help that they needed. But also, that that accession, the question of Ukrainian accession through European Union is something that they're

looking at. They do not believe they can fast track it. There are procedures that are enshrined in European treaties that have been signed

over the course of the last few decades.

But they did come out with this statement overnight saying, look, we believe that Ukraine firmly belongs within the European family and that

they believe is a strong signal to Kiev, that they believe that at some point Ukraine will be able to join.

GIOKOS: Yes. And it's quite interesting because when they were pressed on that whether they're going to try and expedite Ukraine's membership, they

said we're sending a clear message to Ukraine. We even played the Ukraine National Anthem.


Should we be reading between the lines here in terms of what their next, you know, proposal is going to be? Because, you know, they're saying should

Putin, you know, become a lot more aggressive which it seems we're seeing on the ground militarily, that's playing out at the moment. They plan to

become a lot more aggressive in terms of retaliation.

BELL: I mean, certainly in that -- in those words you heard from Emmanuel Macron. That was very much the tone of what he said over the course of last

couple of days and a number of other European leaders as well. That determination to be tough. Now, it's important to note, Eleni, that the

French still do hold out some hope for diplomacy. Not a great deal. Emmanuel Macron said yesterday, he didn't believe that it would lead to

anything in the next few days or in the immediate future.

And yet another phone call is planned for tomorrow between Vladimir Putin, Olaf Scholz, the German chancellor, and Emmanuel Macron. The idea being

that continuing the dialogue is better than no dialogue at all. So, Emmanuel Macron, determined to continue down that track. But again, you're

quite right, that determined message going out to Moscow that they will not back down, that Europe will continue to stand shoulder to shoulder with

Ukraine and do what it can.

And although accession and an eventual candidacy of Ukraine to the European Union could take yours. And bear in mind that this was at the start of

everything back in 2013, 2014, the Maidan revolution. It was all about Ukraine joining Europe. This is really what irks -- what will have irked

Vladimir Putin and continues to get under his nose. So, those signals are also one to Vladimir Putin. That is something the Europeans are after.

It will take time. In the meantime, you can expect Europe to be doing a lot more in terms of extending its hand to a country that believes is already a

part of its family, Eleni.

GIOKOS: Melissa Bell, thank you so much. Good to see you. Now, Europe is ramping up economic pressure on Russia. But is it enough? President

Zelenskyy's economic adviser Oleg Ustenko tell CNN that Russia's oil industry must be targeted as well.


OLEG USTENKO, ECONOMIC ADVISOR TO PRESIDENT VOLODYMY ZELENSKYY: Really, we need to cut off Putin and his regime from these bloody money. So, we are

waiting that the same one is going to be implemented in Europe as well. So, secondary sanctions are absolutely needed. This is a must.


GIOKOS: Former Ukrainian Finance Minister Natalie Jaresko joins me now to discuss the war's economic impacts on both Russia and Ukraine. Thank you so

much for joining us. Good to have you on the show. And hearing, you know, the calls from within Zelenskyy's government, no fly zones, put a ban on

oil and gas sales in Europe. It's helping fund Putin's war. Seeing just the sheer urgency that's coming out of Ukraine, I'm sure you can relate to

that. Do you think the West has done enough?

NATALIE JARESKO, FORMER UKRAINIAN FINANCE MINISTER: No, absolutely not. Our steps or measures are too timid. They're too slow. They're too selective.

People are dying, and people are fighting for the very existence of the country each day. We need to be able to do more and do more quickly.

GIOKOS: And we have to talk about the loss of lives because of course, the consequences are dire. But at the same time, you've seen livelihoods been

wiped away. So, things that people have been working for their entire lives have literally disappeared over the past two weeks. And we've seen the

refugee crisis, you know, really becoming very problematic. What do you think the economic toll is going to be on Ukraine?

Because at some point, we have to talk about rebuilding. And it's -- that takes years.

JARESKO: Right. I think the most important thing right now is to stop the war, it's hard to make an estimate when things are being bombed constantly.

So, when I woke up this morning, two additional airports in the western part of the country had been bombed incrementally. So, the last estimate I

saw was that we would have a fall of approximately 50 percent of GDP. I don't know that that is accurate anymore.

Because with each day, more and more of Ukraine becomes unable to function with bombs and missiles raining overhead, I've seen estimates of about 100

and -- to $200 billion of damage. But that's before taking into account what you just announced in Mykolaiv which is a major port city in the south

part of the country. So, you know, the loss has continued to build up, which is one of the reasons why we need to stop the war now and increase

the sanctions, the breadth of the sanctions, in particular, on state-owned banks, state-owned energy companies, state-owned commodity companies.

And we need to stop financing and fueling the war that's raining down on that economy. We're going to have to rebuild it later. You're absolutely

right. The world is going to have to create the new Marshall Plan for Ukraine. And it's going to require hundreds and hundreds of billions of

dollars and every day ends up costing more. So, there are the lives. There's the economy, there's the livelihoods. This is just extraordinary,



GIOKOS: It is, absolutely. I mean, I want to talk about, you know, your experience in 2014 where you literally had to, you know, guide Ukraine out

of losing 20 percent of its GDP when Crimea was annexed. You were able to create around a four -- $40 billion buffer in terms of balance of payments.

And that's easy to tap into now. And now you're seeing Ukraine tapping into domestic financing. And also, the IMF has extended a hand.

What do you think Ukraine is going to need to get through, you know, the next weeks and months?

JARESKO: So, I think that you're looking at tens and tens of billions just for short-term sustainability right now. And I think that, you know, if we

had a $40 billion gap at that time, when we had seven percent of the territory under Russian occupation in the East and in Crimea, then how do

we measure an economy that's almost at a full dead stop? If you think about it, we're about to head into spring planting season.

And the entire agricultural sector will not be able to function. So, we're talking about a cessation of activity across all of the country, not to

mention the incremental costs of the humanitarian costs within the country and the military costs. So, I don't -- I haven't seen a figure lately to

talk about what that budget deficit is. But I'm guessing that we're talking 10, $20 billion just for the next few months.

And raising capital on the sovereign market is practically impossible. Yes, you can do it locally, to some extent in the banking sector. But that won't

be enough.

GIOKOS: You know, we heard the IMF M.D. Kristalina Georgieva talking about the devastation that is going to occur for many markets that were importing

grain from Ukraine. But also realistically, Russia and Ukraine accounted for 30 percent of the world's grain production, which is kind of scary to

think what the repercussions are going to be. Give me a sense on what you understand in terms of what's happening on the ground on what farmers are

doing, as you're saying, spring is coming up. Its planting season and what that would mean for you?

JARESKO: From what I understand people are not out and not planting. And so, you're talking about a -- if anything gets planted in the next couple

of months, it'll be minor. And it -- whatever it will be will be for internal domestic consumption as a first priority, of course. So, I think

this is going to have huge effect on the grain markets. Remember, Ukraine is number one in sunflower oil production in the world.

It's number four in corn. It's number two overall in grains. So that's rapeseed barley, rye, wheat. This is -- this is something that's going to

affect in particular Africa, Middle East, and to some extent, China are major, major purchasers of grains and oils from Ukraine.

GIOKOS: When you hear that E.U. leaders say they're going to wean themselves off oil and gas, Russian oil and gas by 2027. That's five years

from now, what goes through your mind?

JARESKO: Well, I'm glad that decided that finally, I wish they had decided that eight years ago when the war began in 2014. And we all explained over

and over why, for example, Nord Stream 2 should not be put in place. Why Europe should not make itself more reliant on oil and gas from Russia. I

believe that they still need to do this more quickly. But if they're going to continue, then we need to be creative.

Then we need to put in place something like the Iraqi oil for food program where if they're going to continue to purchase oil and gas at a bare

minimum, that money, those proceeds should not be going to fuel this war, to finance this war. Those monies should be set aside and go into

humanitarian efforts for Ukraine.

GIOKOS: Thank you very much, Natalie Jaresko. Great to have you on the show. Much appreciate it.

Coming up. Ukraine is fighting a war against Russia on the ground. Observers say there's an information war as well.



GIOKOS: False flags and propaganda. Kremlin observers say disinformation warfare has long been a weapon wielded by Moscow. And Russia's invasion of

Ukraine is the biggest war of the modern information era.

The U.S. and the Ukrainian presidents are hitting back. They're blasting discredited Kremlin claims that chemical weapons are being developed in

Kiev. CNN's Katie Polglase takes a closer look at Russia's false narrative.


KATIE POLGLASE, CNN INVESTIGATIVE RESEARCHER (voice over): The foreboding music, biohazard warnings. This Russian-state media footage from 2015

claims to show America running facilities in Ukraine and Georgia that cause deadly outbreaks of disease and killed local livestock.

(on camera): This story is false, but that has not stopped it continuing to circulate, evolving from biological hazards to biological weapons, and

becoming a key part of Russia's disinformation campaign justifying the invasion of Ukraine.

(voice over): The claims were debunked several years ago when in 2020, the United States issued a statement to "set the record straight." Explaining

the facilities are in fact for vaccine development, and to report outbreaks caused by dangerous pathogens before they pose security or stability

threats. But this week, the story was back.

MARIA ZAKHAROVA, SPOKESPERSON, RUSSIAN MINISTRY OF FOREIGN AFFAIRS (through translator): We are confirming the facts that were unveiled during the

special military operation in Ukraine that indicates an emergency cleanup of military biological programs by the Kiev regime. They were carried out

by Kiev and financed by the United States of America.

POLGLASE: Multiple times the Russian Foreign Ministry has resurfaced to the debunked story. On Tuesday, it was mentioned by a Russian ally.

ZHAO LIJIAN, SPOKESPERSON, CHINESE MINISTRY OF FOREIGN AFFAIRS (through translator): It is reported that those biolabs do a large number of

dangerous viruses. During Russia's military operation, it was found that the U.S. is using those facilities to conduct biological militarization


(on camera): So, alongside these official statements, it's been repeatedly shared across social media, from Facebook, to Twitter to Telegram. And CNN

has been be tracking its spread. And you can see here, it's being posted in Canada, Australia, Germany. And this tweet as one example, you can see it's

been retweeted over 500 times already.

(voice over): The theory is now attracted the attention of figures and platforms with significant followings in the United States.

UNIDENTIFIED MALE: Go into Ukraine and take out the biolabs.

POLGLASE: Such as the conspiracy theorists (INAUDIBLE) Peters and has been featured on the far-right platform InfoWars.

UNIDENTIFIED MALE: U.S. bioweapons labs in Ukraine.

POLGLASE: And so, Russia's false narrative on American biolabs in Ukraine continues to spread. Katie Polglase, CNN, London.


GIOKOS: And coming up. Discrimination at the Ukrainian borders. CNN speaks to two Nigerian students about their harrowing journey to safety. That's

coming up next.



GIOKOS: More than two million people have fled Ukraine since Russia's brutal and unprovoked invasion began. But many foreigners have reported

discrimination as they try to cross the nation's borders. CNN's Zayn Asha spoke with two Nigerian students about their chaotic escape from the war-

torn country.


ADETOMIWA ADENIYI, MEDICAL STUDENT, TERNOPIL UNIVERSITY: When my feet were hurting, I could barely walk. But I kept pushing every second.

AMAMCHIM STEVE-AJUFO, 17-YEAR-OLD STUDYING UKRAINE: Like I just lost like - - I'm not -- I'm not going to be able to cross this.

ZAIN ASHER, CNN BRITISH NIGERIAN NEWS ANCHOR (voice over): Born in Nigeria, 24-year-old Adetomiwa Adeniyi and 17-year-old Amamchim Steve-Ajufo were

both studying medicine and Ukraine when Russia's invasion began. Their lives in danger. Each led to the (INAUDIBLE) crossing on the Ukrainian-

Romanian border. They say what they experienced there was both unfamiliar and traumatic.

ADENIYI: Initially, there were several lines of -- I think the best way to say it's three lines in which there was one simile for the Ukrainians, one

for the Indians, and then the Africans were also set aside. I wondered why it should be like that, we're all trying to get out.

I accidentally -- actually was an accident on my part, went to the Ukrainian side. Instantly, they told me to go to my site,

ASHER: Do you think that there was a level of bias or a level of discrimination based on skin color as to who was being treated better at

the border? Who was being, you know, getting preferential treatment in terms of admittance?

ADENIYI: If you were Ukrainian, for instance, or maybe another nationality, but you were whites, it's almost as though you do a fast track to the front

of the gates.

ASHER: Growing up in Nigeria, growing up in an all-black country, having never experienced any racism ever before. Did you understand what was

happening? Why you are being set aside?

STEVE-AJUFO: I cried twice. I cried when I was in front and the -- what officials kept screaming go back, go back. I was just so tired and I was

exhausted and I cried.


STEVE-AJUFO: I cried a whole lot because I was cold and I did not understand what was going on. I wanted to give up several times, but I kept

reminding myself with my mom.

ASHER: Eventually, Adetomiwa and Amamchim managed to pass into neighboring Romania. Once they arrived in the capital, Bucharest, they flew back to

Nigeria, a place that had been their home for some time.

Have -- has it fully sunk in that you may not at least anytime soon get to go back to Ukraine?

STEVE-AJUFO: I refuse to believe it. It breaks my heart. Every time I think about it. Every time I see news that somewhere else has been bombed, or

someone else has died. I'm angry that my home was snatched from me. That's one. And second, I've been traumatized.

ADENIYI: It is my home. I would say almost spent six years there. We don't know -- we don't know what's next.


GIOKOS: Harrowing stories. Now the trading week is almost over on Wall Street and we'll have the final numbers and the closing bell when we



GIOKOS: Just a couple of minutes left of trade on Wall Street. Let's check in on how it's doing. The Dow has sunk in the last hour of trading after

getting to a session high of more than 200 points. As you can see, it's down at point-seven percent right now as ongoing concerns about inflation

and the war in Europe weighed on markets and we're seeing stocks falling to session lows.

All the major averages are sliding deeper into the red as they head towards the close. The S&P 500 NASDAQ also in the red. The U.S. announced it would

move to revoke Russia's most favored nation status as the some -- as some of the world's largest economies took to further isolate Russia. Oil had

its worst week since late November as well. And that's QUEST MEANS BUSINESS. I'm Eleni Giokos in Dubai. And the closing bell is ringing as

usual (ph). "THE LEAD" with Jake Tapper starts now.