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CONNECT THE WORLD

US President Vows to Destroy ISIS; ISIS Oil Empire Setbacks; Obama Pledges Support to Eastern Europe; Roots of Russia`s Rift With West; Rasmussen Outlines NATO`s Plans; Parting Shots: New Perspective on Gaza Devastation; Interview with NATO Secretary-General

Aired September 3, 2014 - 11:00   ET

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BECKY ANDERSON, HOST: Coming together at a time of conflict. The nations of NATO are set to gather in Wales, but there has been a grizzly

prelude to the summit. I`m going to get you the details of an agenda said to be dominated by militants, Moscow and unhappy NATO members.

I`m Becky Anderson. This is Connect the World.

Well at this hour, members of NATO are heading to Wales to tackle two crises threatening their security. At the top of the list, Russia`s

encroachment into Ukraine. The U.S. message to the Kremlin is clear, "stay put." But there`s no question NATO is rethinking its response and its

relationship with Moscow.

Well, at the same time, NATO must confront the threat of militant Islamists in Syria and in Iraq. And the brutal beheading of a second

American by ISIS.

NATO`s response to that will set a course it will follow for years.

Connect the World will be speaking with the NATO secretary-general this hour. Andres Fogh Rasmussen outlines his vision for the future of the

alliance. That is coming up in a little more than 30 minutes from now.

At the summit, the U.S. president is expected to ask for help in combating ISIS. He condemned the group`s beheading of U.S. journalist

Steven Sotloff calling it horrific. And he made clear the U.S. would not stand by and allow the Sunni extremist group to target and kill Americans.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Whatever these murderers think they`ll achieve by killing innocent Americans like Steven,

they have already failed. They`ve failed because like people around the world Americans are repulsed by their barbarism. We will not be

intimidated. Their horrific acts only unite us as a country and stiffen our resolve to take the fight against these terrorists. And those who make

the mistake of harming Americans will learn that we will not forget and that our reach is long and that justice will be served.

(END VIDEO CLIP)

ANDERSON: Well, that is U.S. president in Estonia today. CNN`s Matthew Chance joining us from Tallinn there with more on the U.S.

president`s reaction to ISIS.

And Atika Shubert in London with details on Prime Minister David Cameron`s reaction as well. I`m going to start with you, Matthew, this

evening. In the aftermath of Steven Sotloff`s execution and ahead of the NATO summit, what has Obama been saying about this fight against the

militant group?

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDNET: Well, he`s been making his first comments on it, certainly, because it was only when he was

on his way, or just about to get on his plane, Air Force One, from the United States to Estonia that this grizzly video surfaced of that now

confirmed execution of Steven Sotloff, the second unit, the U.S. journalist to be executed by the Islamic State.

And so when he got here there were all sorts of expectations about what he was going to say, his personal reaction, the reaction of the United

States. He made those comments public at the joint press conference he gave with the Estonian president condemning what he called an horrific act

of violence, saying that the entire country, the entire United States was with the family of the U.S. journalist united in grief.

He also said that the U.S. strategy would be for him to lead the building of a coalition that would tackle the Islamic State, and of course

-- mean that -- and combat it on the ground in the region, to make it no longer a threat to the region. So that was his pledge that he gave here in

Estonia.

What he didn`t give were many specifics on how he was going to get there. So no indication of whether that would mean bombing of ISIS target

strongholds inside Syria or not. See, that`s been a big issue in the United States, the president being accused of not having a strategy when it

comes to Islamic State.

And so not much detail on the general theme painted out here, Becky.

ANDERSON: Yeah, more than just accused. He said it himself, he doesn`t have a strategy at present has left open a window right through the

UN General Assembly sort of mid to late September in which he might devise this strategy with this sort of coalition of the willing.

Did he give us any sense at this point as to a timeframe within which he might be able to satisfy himself that he`s got what he needs to really

get in and attack these militants?

CHANCE: From my understanding of what he said, I mean, he didn`t give specific timeframe, but he spoke more in general terms. You know, he`s

talking about a longer term sort of operation, coalition, a longer-term strategy to make sure that Islamic State is no longer a threat in the

region.

But he was very careful not to reduce this down to specific time frames that he could be held to in the future, Becky.

ANDERSON: All right. Matthew Chance is in Tallinn.

David Cameron, the British prime minister speaking to British lawmakers after sharing what was a security meeting earlier on today. He

spoke in parliament.

Atika, what did he have to say?

ATIKA SHUBERT, CNN INTERNATIONAL CORREPSONDENT: Well, really Britain is facing two problems now. We have, of course, that video and the

militant in that video to speaking in a distinct British accent, but also a British hostage, it now seams. And so what Britain is looking at is

joining any sort of international coalition that will, in the words of David Cameron, squeeze ISIS in this area, in Syria and Iraq. But also

Britain is looking as to how to deal with extremists in its own country. Remember that some 500 fighters have actually traveled from Britain to

Syria to fight. And so this is something that Britain is particularly concerned about whether or not they will be bringing their violence back

home.

ANDERSON: All right.

Well, lots of you in Tallinn and in London today where both the leaders of Britain and the U.S. have been speaking.

I want to get you to Ukraine where the president says a cease-fire has been reached to end fighting in the country`s east. Petro Poroshenko says

the agreement came in a phone conversation with the Russian president Vladimir Putin.

But Moscow had a different take, saying the two sides agreed only on steps towards a cease-fire.

Well, U.S. President Barack Obama greeting the news with skepticism. Speaking during that visit, we saw him on to Estonia, he said it`s too

early to tell whether the two sides would follow through.

Well, ahead of the NATO meeting, we are reminded in no uncertain terms that the United States and Europe do not view Ukraine in the same light, of

course, as they do alliance members like Estonia as they devise ways to protect their eastern border.

CNN`s Reza Sayah is in Kiev and joins us now live with the latest.

And Reza, frustrating times, then, for non-member Ukraine, particularly after a confused message on this possibility of a cease-fire

from Russia earlier today. What`s going on?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Yeah, Becky, unfortunately I`m not sure if we can clarify all the confusion because the

details of this agreement have not been revealed yet. But let`s explain to you what we know and how we got to this point.

This all started earlier this morning when the Russian news agency Interfax announced that the Russian President Putin and the Petro

Poroshenko, the Ukrainian president, in a phone conversation has agreed to a roadmap with which they`d get out of this conflict.

We waited for reaction and confirmation from Ukraine. We got confirmation that a phone call had taken place. But here in Kiev,

officials took it a bit further saying that the two sides had agreed to a ceasefire. That ceasefire, that term was not in the statement in Moscow,

so we reached out to Moscow for clarification. And that`s when a spokesperson for Vladimir Putin said that Moscow, Mr. Putin, could not

authorize a ceasefire because Russia was not a party to this conflict.

However, Moscow reiterated that they supported this framework for a ceasefire that could happen by Friday when all sides of this conflict meet

again in Belarus.

So some confusion, but perhaps the strongest indication, Becky, that we`re on the path to some sort of breakthrough, some sort of ceasefire.

ANDERSON: Yeah. Yeah, it`s interesting, isn`t it? You can`t get a ceasefire unless Moscow, I guess, admits to an incursion, so you know,

effectively we`re in a kind of stalemate at present, aren`t we, a holding pattern, perhaps, is how we should describe it.

News just coming in, and this may be news to you -- I hope I`m not putting you on the spot, but I just want to get your reaction to this, NATO

just announcing that it will hold multinational exercises in Ukraine. I`m just going to read you what I`ve got here.

"The Ukraine national security and defense council says on Thursday, on September 16 through the 26th that Ukraine will host multinational

exercises, rapid trident 2014 with the U.S., NATO and other nations."

They added that 200 American soldiers are expected to take part and that around 1,000 military servicemen from a myriad of countries will also

be employed in that exercise.

So, when I put it to you as we started talking tonight, that clearly NATO looking to its eastern flank, as it were, and that being the Estonias

and Lithuanias of this world, and his effort to support its members on its eastern borders.

Clearly some effort being made within Ukraine as well. Your thoughts.

SAYAH: Yeah, Becky, this means U.S. troops, American boots will be on the ground here outside of the conflict zone if, indeed, this happens. We

should give you some important context, this is an annual NATO exercise. It takes place here in western Ukraine every year, so that`s not unusual.

It was supposed to take place a couple of months ago. It was postponed, because of the conflict. But now NATO, Kiev, Washington, western capitals

have decided to hold this exercise again during the month of September for about 10 days. Remember, the big concern for Moscow is NATO expansion

towards its border. It could possibly see this as a provocative move. We`ll see how this impacts the political and diplomatic decisions in the

hours and days to come.

ANDERSON: Yeah, I`m going to get us a chessboard and next time we speak I`ll give you why I`ll take black, you can be Russia I`ll be Ukraine

or the other way around, because this really is a -- the moving of these pieces around, you know, and whether we`ll get to checkmate or whether

we`ll consider this a draw, I guess, is a metaphorical way of describing what is going on at present.

Interesting, all right, thank you for that.

Still to come, as world leaders ahead to Wales for this NATO summit, I`m going to speak to the alliances secretary-general about NATO`s plans

for the future and its next steps in these what are very trying times.

Also ahead, the U.S. president speaking out against Russian aggression. And says NATO will defend its allies. But is the alliance

ready, willing and able to do that job? A live report form Wales is coming up.

(COMMERCIAL BREAK)

ANDERSON: You`re with CNN. This is Connect the World with me, Becky Anderson.

Well, Russia`s military moves in Ukraine have forced NATO back to its original mission, that being to defend its members from feared aggression

by the former Soviet Union. But that mission may be overwhelming for an alliance short on commitment and indeed short of funds, it has to be said.

As Nic Robertson reports, NATO may have to reassess its overall mission to meet the demands of today`s conflicts.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: Russian troops and weapons inside Ukraine are forcing a makeover at NATO.

JAAP DE HOOP SCHEFFER, FRM. NATO SECRETARY-GENERAL: NATO is forced by Vladimir Putin, his land grabbing, his violation of international law -- in

many ways, NATO is brought back to its core.

ROBERTSON: Its core, face down the threat from the east, Ukraine not even a NATO member.

UNIDENTIFIED MALE: The problem NATO has is it`s not fully ready to be able to protect its own members, the kind of military preparedness, the

basing, the forces, the exercises are paltry compared to the kind of steps the Russians are taking.

ROBERTSON: Why so? Simply put, money, who pays, and mindset.

UNIDENTIFIED MALE: We`re in this sort of cozy mentality that the Cold War is gone, we can focus just on domestic investment.

ROBERTSON: A quarter century since the Berlin Wall came down, and with it the Cold War logic that bulked up Europe`s armies. Most NATO

nations aren`t spending enough on defense.

SCHEFFER: NATO has a target of 2 percent of gross domestic product defense spending. With a few good exceptions, almost no NATO ally complies

with that ambition.

ROBERTSON: The solution: get real, respond to Putin`s aggression.

ADMIRAL JAMES STAVRIDIS, (RET.) FRM. NATO SUPREME ALLIED COMMANDER: The capacity is there. It`s a matter of regearing and doing these

rotational deployment into bases in the east.

ROBERTSON: This, and more, among the headlines expected at the NATO summit in Wales this week. Eight readiness action plan, a mental as well

as physical recalibration. Money will also be up for discussion, a push for increased defense spending and what the money should be spent on.

UNIDENTIFIED MALE: More important than the amount spent, is where it`s spent. Not enough has been spent on new equipment, moderanized

capabilities -- surveillance, precision, munitions, aircraft, defenses.

SCHEFFER: We`ll have to exercise much more frequently. We`ll have to bring forces on the ground in Poland and in the Baltic region to show

Vladimir Putin that NATO means serious business.

ROBERTSON: Reality is even with the mind and money reset, experts agree wrestling all of Ukraine back from Putin`s grip is a very long shot.

(END VIDEOTAPE)

ANDERSON: Well, Nic Robertson joining me now from Wales.

And Nic, just hearing from the U.S. president earlier on today. He said cough up, Europe. I think only four of the NATO members actually do

fulfill that defense budget requirement. And that`s something I`m going to put Anders Fogh Rasmussen, the secretary-general when I speak to him in

about 20 minutes time.

But listen, I guess this begs the question is NATO fit for purpose?

ROBERTSON: And certainly the assessment at the moment is for what the purpose it needs to focus on right now, no it isn`t. It isn`t able to get

troops up to the sort of eastern borders quickly enough. And it doesn`t have the pre-positioned equipment that is looking to pre-position up there.

And it doesn`t have this stance that sends a message to President Putin what you`re doing on our eastern borders is not OK. You`re violating

international sovereignty. And that`s just not OK.

So, no, the short answer is it isn`t.

Of course, the rhetoric from here over the next couple of days will be it will be in the future. I guess the key question is how fast and how

seriously will Putin take it?

ANDERSON: Yeah, with problems on its eastern borders and to its southern flank with Libya and clearly with the story roiling in Syria and

Iraq with ISIS as well, I mean, how much time does it have?

TIME magazine asking today how tough should the alliance get with Russia? And it is a very good question, isn`t it, NIc? How do alliance

members balance the defense of its members without getting into a dangerous standoff with Moscow?

ROERTSON: Yeah, well it`s getting pretty much to the sort of the edge of the divide here. You`ve seen the ratcheting up of economic sanctions,

which has really been all about putting the pressure on Putin, putting the pressure on his so-called cronies, before escalating to a sort of broader,

more institutional sectoral sanctions.

Well, we`ve kind of moved into the sectoral sanctions that will have a bigger, broader impact in Russia and the sort of military stance now. You

know, we`ve heard today from -- from U.S. officials saying that really the United States is crossing the rubicon with Russian right now. There`s no

going back at the moment in the short-term on the relationship. And that`s really where we`re at at the moment. The chances of sort of walking this

back, that`s going to have to happen over a period of time.

But as you`ll find the NATO members, European nations saying, that`s a position President Putin has put himself in. And it`s up to him to

extricate himself and Russia from this.

But, yes, the rubicon is being crossed here at the moment, Becky.

ANDERSON: All right, Nic Robertson is in Newport in Wales. He`ll be there through this meeting. As things develop, we will come to you live on

CNN. Of course, (inaudible) for that. Thank you, Nic.

Live from Abu Dhabi, this is Connect the World with me, Becky Anderson. I`m going to have all your world news headlines, plus this live

interview with a NATO secretary-general in just a few minutes.

First, though, we are off to Tanzania. Sit back, we`re going to meet a woman revamping traditional African fashion. That is straight after this

short break. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

UNIDENTIFEID FEMALE: Hi, everybody. My name is Kemi Kalekawe (ph). I am the owner of Nalede Lifestyle (ph) store, Caribu (ph) as we say in

Tanzania. Welcome.

LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT: Located in the heart of Tanzania`s largest city, Dar es Salaam, Nelede Lifestyle (ph)

specializes in both fashion and household items.

UNIDENTIFIED FEMALE: I cater mostly for women. I do jewelry, dresses as well as candles, which have all got an influence of African fabrics.

LAKHANI: Kemi Kalekawe (ph) grew up in Botswana and named her business Nelede (ph), which means start in Botswanan. She chose the name

to reflect the unique approach she has taken with her store, which opened six months ago.

UNIDENTIFIED FEMALE: I would say that my brand is Africa revamped.

LAKHANI: Kalekawe (ph) uses indigenous Tanzanian fabrics, like the kanga and kitenge.

UNIDENTIFIED FEMALE: This is one of my favorite pieces. And I love it, because it`s flowy. And it uses just a little bit of kitenge, which

makes it subtle.

Sometimes I see a fabric and it just speaks to me. And so I take that and then I go home and I start thinking what I can do to bring out its

beauty.

These sandals are one of my best sellers. And I think it`s because they`re comfortable. I feel like they`re very comfortable and they come in

so many different colors.

LAKHANI: Kalekawe (ph) initially studied marketing in England, but she soon realized she wanted to pursue her passion -- design.

UNIDENTIFIED FEMALE: I went an learned interior design in Kenya. And the school that I was going to also had fashion design in there. So from

there I ended up wanting to find ways of promoting fashion designers.

LAKHANI: Nalede Lifestyle`s (ph) central location has attracted a steady clientele. And true to her beginnings, Kalekawe (ph) promotes other

entrepreneurs.

UNIDENTIFIED FEMAEL: I chose to include other designers just because there isn`t particularly a space where designers can showcase their work.

It`s expensive to open your own store.

LAKHANI: But to achieve this success, Kalekawe (ph) has had to overcome obstacles.

UNIDENTIFIED FEMALE: First of all, just getting the funding. And then I had to find a place that was close to my customers. But the places

are usually really expensive.

I shopped around for different places where I could kind of share with somebody who already had an existing space. I had to do a lot of

convincing. When I finally got the space that I`m in now, and then advertising and just getting people to know that I`m here.

It`s lucky that I`m right by the road. I put mannequins outside with my dresses, like guys, look, look, look, there`s dresses in here, you`ve

got to come in.

I am so fortunate that I am actually doing what I love to do.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ANDERSON: You`re watching CONNECT THE WORLD with me, Becky Anderson. The top stories for you this hour here on CNN.

The White House says the ISIS video showing the beheading of an American journalist is authentic. US president Barack Obama has condemned

the horrific killing of journalist Steven Sotloff, seen here. At this week`s NATO summit in Wales, Mr. Obama plans to ask for help to fight ISIS.

British prime minister David Cameron has also condemned the group. On its latest video, the militants threatened to kill a British hostage. Mr.

Cameron says Britons will never be cowed by what he calls "barbaric killers."

Ukraine`s president says he clinched a cease-fire deal earlier with Russia, but Moscow says it can`t agree to a cease-fire because it`s not

involved in the conflict. Both say they agree on steps that could lead to a truce.

And an American missionary doctor working in Liberia has been infected with Ebola. His organization says the doctor was not treating Ebola

patients and it`s not known how he contracted the disease. The director of the US Centers for Disease Control and Prevention warns the outbreak is

spiraling out of control.

President Barack Obama says the US will, and I quote him, "degrade and destroy ISIS" after the Sunni extremist group beheaded a second American

journalist. The militants say it was revenge for US airstrikes in Iraq. But the US president says he`s not intimidated by the group`s threats and

says he is looking to form a regional alliance to take on ISIS.

Well, as he does that, let`s discuss what`s going on on the ground as we speak. CNN`s Anna Coren joining us now from Erbil in northern Iraq,

where we have seen evidence of these more than 100 airstrikes over the past couple of weeks. Are they ongoing at this point?

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Yes, they certainly are ongoing, Becky, 124 to date, according to US Central Command. The focus,

obviously, has been Mosul Dam, around that particular area. Yes, the Peshmerga, the Kurdish forces, managed to take back control of the dam at

the beginning of last week, but it`s the surrounding areas, it`s the towns, it`s the villages, on these open plains where ISIS is still digging in.

And obviously, those US airstrikes taking out the enemy position, taking out the artillery, those convoys of vehicles that have been allowed

to operate very openly and freely across much of Iraq, a third of Iraq.

Now, those airstrikes stopping the way that they maneuver on the ground. So, containing them but not defeating them. As I mentioned, they

are digging in. We got reports, Becky, of them laying explosives with dead bodies and dead animals, booby-trapping these and buildings, obviously

causing problems for the Peshmerga, certainly up here in northern Iraq, slowing down their advance.

ANDERSON: Anna Coren on the ground for you. Well, ISIS -- thank you -- are currently a very well-funded terror organization, as we`ve been

discussing over the past few weeks. And that is thanks to extortion and the black market sale of oil from captured Iraqi fields.

But the last month, it has to be said, has not been so good for the group`s expansion plans when it comes to energy. Our emerging markets

editor, John Defterios, explains.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): ISIS popped up on the global radar in June with its attack on Mosul.

(GUNFIRE)

DEFTERIOS: And in the span of just two months, has created its own black market for Iraqi crude.

THEODORE KARASIK, INSTITUTE FOR NEAR EAST AND GULF MILITARY ANALYSIS: The scale is actually sizable in the sense that they`re able to export up

to $3 million a day of oil.

DEFTERIOS (on camera): Now, this may be a small sum by global oil standards, but if left unchecked, ISIS could earn more than $1 billion a

year from its oil operations in Iraq. It made that charge June 10th into Mosul. It now has four oil facilities in Mosul.

And if you go down to Kirkuk, which has big deposits, but they have smaller operations, it has a total of 80,000 barrels of capacity per day.

DEFTERIOS (voice-over): What ISIS lacks is refining capacity, unable to wrestle control of the strategic Baiji refinery south of Mosul. Energy

strategists say ISIS is selling Iraqi crude at $25 to $60 a barrel, a deep discount on the global benchmark of $100 a barrel.

ROBIN MILLS, MIDDLE EAST ENERGY ANALYST: In Northern Iraq, of course, people have been stealing and smuggling oil and tapping oil from pipelines

for years in small volumes. So, there`s already that kind of infrastructure and those middlemen who know how to trade this stuff.

(MEN CHANTING)

DEFTERIOS: Islamic militants plied their energy trade in eastern Syria, seizing oil and gas assets for the past few years. In early June,

under the banner of ISIS, they took control of Syria`s biggest field in the Deir ez-Zor province.

Opposition Turkish parliamentarian Mehmet Ali Aediboglu, based in the country`s south, bordering Syria, claims $800 million worth of oil that

ISIS obtained is being sold in Turkey.

With US military intervention, strategists say the Kurds have kept ISIS out of Kirkuk`s super oil field, capping for now the group`s newfound

wealth.

(END VIDEOTAPE)

ANDERSON: Well, we know that ISIS has challenges when it comes to expansion goals, not least because these airstrikes have been fairly

effective in knocking some areas and some of these militants out. Our emerging markets editor, John Defterios, joining me now to discuss that.

And we`ve been talking about the sustainability of this ISIS financial model, now, for some time, particularly when it comes to these airstrikes

blowing a hole in the business model. But oil not their only source of income, of course.

DEFTERIOS: Right.

ANDERSON: Witness the beheading, the execution of a second US journalist. There would have been extortion and ransom at stake there and,

indeed, they`ve been making money out of stolen artifacts. But it`s these airstrikes that have helped, certainly, today. We don`t know how

sustainable those are going to be, though, do we?

DEFTERIOS: Well, there`s two sides to this. Number one, there`s a couple of big gains in August against ISIS, and that as they charge into

Kirkuk trying to get that super field of 600,000 barrels. They`ve lost a couple of smaller field as well, and burned them on the way out, and they

tried to take control of the Baiji refinery, and they don`t have control of it.

The airstrikes are a game changer that`s pushed them back. The arms going to the Peshmerga and to the Iraqi forces also a game changer. But

the security people I speak to regionally are suggesting ISIS has a very long term game.

So, unless this coalition is built -- you had the reporting from both Nic and Anna suggesting the discussions are moving ahead on the coalition.

Unless they have a long term game plan against ISIS, it`s going to be very hard to keep them out of these highly secure areas and the oil fields.

ANDERSON: And unless they get involved and try and knock out some of these traders who are ultimately doing some of the bidding and the buying,

as it were, for ISIS. It feels like the region is turning a blind eye to those who are trading this oil on the black market. What do we know?

DEFTERIOS: I like the way you say that, because that`s been the case for the last 15 years. You can go back to the 1990s and Saddam Hussein and

the oil for food program and a lot of that oil that was leaking out through this black market.

What has changed -- and I`m not sure if it`s the reporting that we`re doing on this or the debate coming because of the money that ISIS is making

-- Masoud Barzani, the president of the Kurdish regional government, in the last week has suggested those supporting ISIS in oil trading are now an

enemy of the Kurdish government and an enemy of the Iraqi state --

(CROSSTALK)

ANDERSON: Exactly.

DEFTERIOS -- saying we should take the same sort of challenges against the traders as we are against ISIS right now --

ANDERSON: An enemy of the state.

DEFTERIOS: -- so the leaking -- yes, that the leaking out --

ANDERSON: Fascinating.

DEFTERIOS: -- that`s been taking place and the ability for ISIS to tap that market has to stop, or we`re not going to defeat ISIS.

ANDERSON: Listen, I`m -- I have to say, John was one of the first to flush out this black market of oil greasing the palms --

DEFTERIOS: Yes.

ANDERSON: -- of this militant group, and Turkey, a NATO member -- and let`s consider, this is just ahead of this massive meeting of alliance

members coming up in Wales this weekend -- Turkey will be represented there well.

Turkey, one of the trio of countries that, it has to be said, is allowing, as it were, or certainly we`ve seen evidence of, this trio of

countries, Iraq, Syria, and Turkey, who are -- we`ve seen them on the oil black market oil map, let me put it that way.

DEFTERIOS: As distributors.

ANDERSON: What is the government doing about it?

DEFTERIOS: Well, this is a very sensitive subject going ahead of the Newport, Wales, NATO summit. And I`ll tell you why it is so sensitive.

That oil`s being funneled through to Ceyhan in the southeastern corner of Turkey. This is Kurdish territory.

As you know, President Erdogan, now, has built up relations with the Kurds. Is he going to want to crack down on the Kurds and suggest you

can`t have that oil in the future? The other very sensitive issue for him on the security front, he has 49 hostages in Mosul right now, so he`s

indicated to NATO he`s not going to join a coalition.

And his relations within NATO are strained because of Egypt, Syria, an the good ties he used to have with Israel and his backing of Hamas, which

has strained relations within NATO. Not an easy summit for him, but if he can send a signal, yes, I will do my part to shut down that pipeline or

that flow of oil going to the southeast, that`s going to be his contribution to this fight against ISIS.

ANDERSON: He will be there at this point. Certainly, he`s on the list of attendees. You and I were having a look earlier on --

DEFTERIOS: Yes.

ANDERSON: -- with his new prime minister and, indeed, his foreign minister.

DEFTERIOS: What`s interesting, it`s overdue for a reset with relations between the European Union, the United States, and Turkey. Watch

the language carefully an what he says on the coalition front.

ANDERSON: Lot`s of strings to this NATO meeting.

DEFTERIOS: Yes.

ANDERSON: We`ll be watching them all. John --

DEFTERIOS: Thanks.

ANDERSON: -- always a pleasure, thank you. Go online to read more of John`s source about ISIS and its oil assets. Visit cnn.com to find out how

gains against the militants are compromising their ability offload their supplies.

That`s a really important part of this story, whether they have a sustainable business model going forward is discussed by John and analyzed

in that piece online. It`s good stuff, cnn.com/business.

Live from Abu Dhabi, you`re watching CONNECT THE WORLD with me, Becky Anderson, 39 minutes past 7:00 here with one day to go before this summit

in Wales. So, we`re going to speak to the alliance`s secretary-general about NATO`s plans and what to expect in the weeks ahead.

Also, Libya in chaos, and that`s where Russia`s troubles with NATO may have started when Washington and Moscow couldn`t see eye to eye back in --

what was it, 2011? We`ll have a detailed report on that, up next.

(COMMERCIAL BREAK)

ANDERSON: Well, the US president, Barack Obama, pledged NATO support with Eastern European members amid what he called Russian aggression in

Ukraine. During a stop in Estonia, Mr. Obama called on NATO member states to meet their defense spending targets of 2 percent of their GDP.

Ukraine says NATO will hold multinational military exercises there later this month. Those have happened before, it`s nothing new. But it is

a difficult time, and the rhetoric heating up. The growing rift between Moscow and NATO has centered on the crisis in Ukraine, but that is not the

only source of tension.

(BEGIN VIDEOTAPE)

ANDERSON (voice-over): The most talked-about country at this week`s NATO summit won`t be among those doing the talking. When the 28-member

nations of the North Atlantic Treaty Organization convene in Wales on Thursday, Russia is set to dominate.

More than two decades after the end of the Cold War, there`s a new rift growing between Moscow and the West. Russia`s annexation of Crimea

and the ongoing crisis in Ukraine are right now front and center.

But the supply of weapons to Syria hasn`t helped either. But if you ask Vladimir Putin to put his finger on the moment the cracks started to

form, he`ll cite another crisis country, and that is Libya.

(EMERGENCY SIRENS)

(GUNFIRE)

ANDERSON: The Russian president insists that when the Kremlin agreed to a no-fly zone over the volatile nation in 2011, it did so on purely

humanitarian grounds. He says the subsequent operation to oust Libyan leader Moammar Gadhafi, was not part of the agreed plan and was carried out

in Western interests.

Then-Russian president, Dmitri Medvedev, made his feelings known at the time in support of Gadhafi.

DMITRI MEDVEDEV, FORMER PRESIDENT OF RUSSIA (through translator): Libya is a very complicated country with various tribes and clans. Moammar

Gadhafi has been balancing the benefit of all parties in keeping Libya developing as a unified country.

ANDERSON: While Libya descends into renewed chaos, with militia battling for control and other nations in the region prepared to fight for

their own interests, Mr. Putin may be hoping to have the last laugh.

Sanctions on Russia have squeezed oil and gas supply to the West, and the Kremlin knows that ongoing turmoil elsewhere could limit Europe`s

options. This year, the G8 became the G7 when Russia`s membership was suspended, and NATO may be sending equally chilly vibes in Russia`s

direction.

But the Libyan incursion has taught the West that Putin will not tolerate feeling betrayed.

(GUNFIRE)

ANDERSON: And where Syria and Ukraine are concerned, he doesn`t appear to be tolerating what he perceives as double standards.

(END VIDEOTAPE)

ANDERSON: Well, NATO certainly, then, has a lot on its plate. NATO secretary-general Anders Fogh Rasmussen joining me now from Newport in

Wales to discuss the alliance`s priorities at this week`s summit.

And ahead of this summit, you have already announced the creation of this rapid response force, sir. You said that NATO cannot afford to be

naive. But can it afford to be provocative? Because that is exactly how Russia reads that announcement.

ANDERS FOGH RASMUSSEN, SECRETARY-GENERAL OF NATO: It`s not provocative to defend our allies. We take purely defensive measures in

accordance with our international commitments, and we have an obligation to ensure effective defense and protection of our allies.

ANDERSON: It`s pretty provocative to have announced just in the past hour or so that you`ll be conducting multi-nation exercises. I know these

have happened before in Western Ukraine. But given the circumstances, I put it to you again -- your actions appear to be pretty provocative.

RASMUSSEN: It`s not provocative to defend our allies. And it`s not provocative to develop a partnership with countries in Europe, including

Ukraine. We do have a partnership with Ukraine, and we adhere to the principle that each and every nation has the right to decide its security

policy, including its alliance affiliation itself.

ANDERSON: I want to get a sense of what the US president, Mr. Obama, has said about the strength of NATO ahead of this meeting. He said this

just a few hours ago. Have a listen, sir.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And that means every ally. In this alliance, there are no old members or new members, no junior

partners or senior partners. They`re just allies, pure and simple. And we will defend the territorial integrity of every single ally.

(END VIDEO CLIP)

ANDERSON: I want to read to you, sir, a quote from the Estonian president, who was with the president earlier on today in Tallinn. And

this quote suggests that NATO isn`t as strong an alliance as you or Mr. Obama might wish. "We should not have NATO with two-tier countries, with

NATO permanent basis and without. This is a wrong signal to send to the potential aggressor."

The Estonian president did go on today to call on NATO for, for example, permanent basis in its country, that being on the borders, of

course, of the aggressor, Russia, as far as the Baltic states are concerned. Will it get permanent basis? Is it something that you would be

up for discussing at this meeting?

RASMUSSEN: First of all, let me stress there is no such thing as first and second class members. All NATO members are equal. And we will

take steps to reinforce our collective defense, and you will see more visible NATO presence in the East.

We will create this spearhead force that can be deployed at very short notice, and to be able to receive such reinforcements, we will preposition

equipment, supplies. We`ll prepare infrastructure, and in other ways, prepare for rapid reinforcement. So, you will see more visible NATO

presence in the East.

ANDERSON: I was asking, and with respect, whether that would be a permanent presence, as the Estonian president had asked. Can you answer

that question?

RASMUSSEN: Yes, but we will be able to reinforce rapidly if needed, and to that end, we will need to have equipment in place, supplies in

place, prepare the necessary infrastructure, bases, air fields, et cetera.

ANDERSON: All right.

RASMUSSEN: And that will give a more visible NATO presence in the East. We will also enhance the number and the scope of military exercises.

ANDERSON: You and I, sir, have been talking over the years, and I can`t remember a more difficult time for NATO, and I`m sure for you in the

job that you are doing. Let me, if you`ll forgive me, challenge you on another matter here.

Only four out of 27 NATO members currently meet the stated target of spending of at least 2 percent of GDP on defense, and this is something the

US president has brought up. He`s asked Europe to stump up today. Estonia spends 2 percent, Greece spends 2.3, the UK 2.4, and the US spends 4.4.

But Luxembourg spends only 0.4 percent. These are your own figures. I know that budgets will be in play this weekend. I talked to a lot of

experts, sir, and they say that NATO is simply not fit for purpose at present. Is it?

RASMUSSEN: Yes, indeed, we are fit for purpose. But I agree that we will need increased defense investments in the coming years, and I hope at

this summit, we will reach a common commitment to gradually increase defense investments in the coming years.

Over the last five years, Russia has increased its defense spending by 50 percent while on average, NATO allies have decreased defense spending by

20 percent. And this is simply not sustainable.

Russia`s illegal actions in Ukraine are a wake-up call, and it`s time now to turn the corner, stop the cuts, and gradually increase defense

investments.

ANDERSON: Problems on your eastern front. On NATO`s southern flank, you have the crisis in Libya, and then there is, of course, Iraq and Syria.

Would you sympathize with countries who might just decide to go it alone outside of the alliance going forward?

RASMUSSEN: I welcome that individual allies have taken steps to help Iraq start the advance of the so-called Islamic State, a terrorist group.

I welcome that the US has taken military action. I welcome that other allies have contributed in different ways.

I think the international community has an obligation to stop the advance of the so-called Islamic State.

ANDERSON: With that, we`re going to leave it there, and we thank you very much. It is a pleasure. I know you`re a very busy man, thank you

very much, indeed, for making the time to speak to us here on CONNECT THE WORLD with me, Becky Anderson.

RASMUSSEN: You`re welcome.

ANDERSON: Coming up after this short break on CONNECT THE WORLD, we are familiar with the destruction in Gaza caused by Israeli airstrikes. Up

next, a new perspective of the devastation that I`m pretty sure you`ll never have seen before. Stay with us.

(COMMERCIAL BREAK)

ANDERSON: Well, as NATO members meet to come up with ways to avoid, let`s hope, more bloodshed in Ukraine and other conflict zones, we get a

look at what total devastation -- total devastation -- looks like after the bombs fall.

After the latest cease-fire in Gaza, new drone footage that we`ve got into CNN gives us a stark look at the aftermath of Israeli strikes.

(VIDEO CLIP)

ANDERSON: The team at CONNECT THE WORLD wants to hear from you, it`s your show, of course. Go to facebook.com/CNNconnect, have your say. You

can, as you know, always tweet me @BeckyCNN. That is @BeckyCNN, and I promise you, I read everything, and it makes me think, and I consider your

thoughts. Which is good. Instagram, Becky CNN.

That was CONNECT THE WORLD with me, Becky Anderson. Thank you for watching. Your news headlines follow this short break, stay with us.

(COMMERCIAL BREAK)

END