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Ceasefire Failing In Ukraine; President Obama Outlines Counterterrorism Initiatives; Four Years Since Libyan Revolution; And the Winner Is.; Marketplace Middle East

Aired February 19, 2015 - 11:00   ET


JONATHAN MANN, HOST: Hello, I'm Jonathan Mann. We're breaking away from CNN USA's coverage of the president's remarks, but we want to continue

our look at President Barack Obama on the final day of a Washington summit aimed at fighting violent extremism. This was, in fact, his second major

anti-terror address at that summit in just two days.

Thursday, he focused on the U.S. response to extremism at home, declaring the U.S. is not at war with Islam, but with terrorists who, in

his words, pervert the religion.

Today, he shifted focus to the threat extreme ideologies pose to communities around the world.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are here today, because we are united against the scourge of violent extremism and

terrorism. As we speak, ISIL is terrorizing the people of Syria and Iraq and engaging in unspeakable cruelty: the wanton murder of children, the

enslavement and rape of women, threatening religious minorities with genocide, beheading hostages.


MANN: Our Michelle Kosinski joins us now from the White House where the summit is underway.

Michelle, what is the president trying to tell the world? They seem to have an enormous list of very ambitious goals: establish democracy,

fight corruption, make opportunity more available to all people, and women in particular. What is his message here?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: He definitely covered all the bases, right. And he tried to break it down. But each

segment was so lengthy and so complex.

But basically it's a challenge to other nations out there, to the world at large, but especially countries in that region to do more. First

of all, to confront warped ideologies, as he put it, to do more along those lines. That includes internet communications.

He did mention a new effort working with the UAE as sort of digital communications center that they'll try to counter some of the messaging out

there that's so effective in recruiting. But also challenge wealthier countries to do more to support development, education and human rights and

called on countries that are still evolving to build strong structures that are fair across sectarian lines, Jonathan.

MANN: But here in the U.S., the president's effort is already being ridiculed by his political opponents and in the media. The New York Post

front page today showing the president wearing a blindfold literally saying Islamic terror? I just don't see it.

What is the question about his approach from inside the U.S.?

KOSINSKI: Right. Right. I don't think too many people would disagree with the concepts that are being proposed here, to get at the root

of extremism. I think that if this government and other governments around the world were not this, there would be a big clamor to say, hey, we need

to really get this at its root, not to take away from the focus of fighting terror where it's fighting us as well. But that this is a part of it.

Where the criticism has come is the White House over the past couple of weeks not wanting to really ever say that phrase Islamic extremism. And

we understand why. I mean, everybody knows that there are other forms of extremism out there, but I think you get the same level of awkwardness when

you don't say it all in regards to this problem as when -- you know, as if you would be saying it all the time.

So it created this sort of void there, even though all the programs that they're looking at, these local community programs, are all geared

toward Muslim communities in the U.S. That's on a domestic side.

So, that's where all that criticism came from, but we saw the president address that head-on yesterday, some might say finally.

But I think that they really were avoiding that for two reasons. First of all, they don't want to elevate terrorists to the religious leader

level that they would like to be at and that they don't want to portray this as a fight against Islam. Those are two main concepts that are very

good for terrorist recruiting, that the White House has been battling against -- Jonathan.

MANN: While the president is pushing this proposal for global reform, it's (inaudible) oppose many of the things that he supports. There is a

much more, well, immediate problem on the front lines. The Kurds, who are trying to fight ISIS and don't have weapons. The government of Libya

trying to fight ISIS, doesn't have weapons. The government of Egypt that's begging now for an international coalition to go into Libya. A lot of

people are looking at the war that's underway and they're not seeing schools or better opportunities for girls.

So let me ask you, is the president planning to make any -- is he planning to revisit U.S. policy not to arm the groups that are on the front

lines against ISIS and not to engage U.S. soldiers directly on the front lines either.

KOSINSKI: Yeah, that's a great question. And that has been asked of the White House many times over the last couple of weeks. I mean, first of

all the way the White House sees it is these two things are not mutually exclusive. Absolutely, there's this focus on what's going on, you know,

the battles at hand and a military side. But you still have to get at the root causes. And these things are going on concurrently. They're not

mutually exclusive.

In terms of U.S. policy, what we keep haring is that the strategy isn't going to change. Of course, the White House has plenty of critics

who say what is the strategy? Either show us a strategy, or if you think that is a strategy, then we need a better one. So that's the criticism.

The White House says you know there's no big change in strategy, but they are looking at what can be done regionally.

They keep emphasizing that, yes, the fight has to be local with local groups. It's clear that these groups need a lot more help. And it's also

clear it's going to take a very, very long time.

What we're waiting to see is if there is some stepped up effort in the near future. But it's kind of hard to see what that would be, because

there are so many risks really any way you look at it, Jonathan.

MANN: Michelle Kosinski at the White House, thanks very much.

We're going to stay on this story addressing the global terror threat. We'll gauge Middle Eastern reaction to President Obama's speech with live

reports from Iraq and Egypt. Near Irbil, Kurdish Peshmerga forces are on the frontlines fighting ISIS. We'll get the latest from our correspondent

on the ground there.

And we'll take a closer look at the threat from ISIS in Libya where Egypt launched airstrikes earlier this week. What can be done to stop the

chaos four years after the fall of Moammar Gadhafi?

All that and more coming up this hour.


MANN: Welcome back. You're watching CNN. And this is Connect the World. I'm Jonathan Mann.

A plea from President Obama about the need to come together to combat the growing threat extremists pose to the world. For Middle East reaction

to the speech we're joined now by CNN's Ben Wedeman in Irbil, Iraq and Ian Lee in Cairo.

Ben, I wonder if I could start with you. And I'm just wondering if in your listening to the speech, you heard what I heard, it just seemed like a

very long list of necessary reforms. The fight against terrorism has to create economic opportunity. It has to establish democracy. It has to

fight corruption. It has to make a place for women in the 21st Century world. It has to establish freedom of religion.

It was a very long list. I'm wondering if listening to it any of it is going to strike you as something that's going to resonate as new and

important and achievable in your part of the world.

BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: Well, Jonathan, I think actually it will resonate. But these are things that everybody here knows


It was a long speech with lots of details, lots of suggestions of what should be done. And most people wouldn't argue with them. And the fact of

the matter is in this age of attention deficit disorder President Obama was trying to give a complicated explanation as to why we are where we are now.

For decades, during the Cold War, for instance, the United States and the Soviet Union were very good at providing sticks to their various regimes,

their client regimes in the region, but there's been very little in the way of carrots as far as ordinary people are concerned.

I spent many years in Egypt during the regime of Hosni Mubarak. You heard endless tales of young people who would go to college, could not find

jobs, encountered corruption on a daily basis, and lost hope. And, you know, terrorism is very much center stage in the west at the moment, but

let's not forget there have been struggles between terrorists and regimes in the Middle East going back decades.

And the terrorism did not come out of a vacuum, it came out of political oppression, corruption, the lack of economic opportunities. So

in a sense, President Obama to many people in the Middle East is saying what they already know. The problem is, they don't know how to achieve it

given that many of the people in this region live under regimes that are very good with the stick and don't provide much in the way of carrots --


MANN: Now you say there is a lot of history to this. There is a lot of history, but there's a fight in the headlines, there's a fight right


I want to ask you about the latest you know about ISIS testing the front lines of Kurdish defenses not far from where you are, near Irbil.

WEDEMAN: Yes. This happened overnight on Tuesday when ISIS launched a major assault on Kurdish positions. They were repulsed. We understand

that there have been more airstrikes today hitting various ISIS targets. And this is the ongoing story. The Kurds have 1,000 long kilometer front

with ISIS. They would like more assistance from the west, specifically the United States, because in terms of weaponry they simply don't have anything

that is equal to the weaponry provided by the United States to the Iraqi army that ISIS was able to capture from the Iraqi army as it collapsed

during the battle for Mosul last June -- Jonathan.

MANN: Ben Wedeman in Irbil, thanks very much.

Now to Ian Lee in Cairo. We already heard from Ben about his observations about life in Egypt. But how do you think this is going to

resonate there?

WEDEMAN: Well, Jonathan, the United States and Egypt are on the same page when it comes to the threat of ISIS. Both see it as a real problem

for this region, both believe that it needs to be confronted.

President Obama did mention that Egypt is battling ISIS in the northern Sinai. He also mentioned those 21 Christians that were beheaded

by ISIS in Libya. But they do differ when it comes to what should be done.

Egypt has criticized Washington for not providing the weapons that they need to fight ISIS. Some of those weapons have been delayed in

delivery, because Washington believes that Egypt -- or punishing Egypt, rather, for what they say are human rights violations.

So, there has been a cooling of relations there.

But when you look at the situation in Libya, Egypt wants a more hands on approach. They're calling for arms to go to the Libyan national army,

the internationally recognized government that in the east they want a naval blockade to prevent weapons from going to other militias around the

country that are in control of this government. Egypt really wants to back this government in the eastern part of the country.

And the United States, though, is looking for a diplomatic solution. They think that you get all these political parties together in Libya. And

it is complicated, it is not going to be easy. And it is a long shot to get a unity government out of all of it. They believe that's the best way,

that's the best way to solve this problem and combat ISIS and finally kick them out of the country, Jonathan.

MANN: It's intriguing, the president's remarks were almost the agenda of the Arab Spring. You're in Cairo, you're talking about events in Libya.

Both Egypt and Libya had very different experiences of the Arab Spring, but it hasn't really worked out for either nation. And I don't know that the

leaders in either nation are really looking back at that as a helpful chapter of their history.

LEE: Well, there's always storms during the spring. And Egypt and Libya are definitely gone through their fair share. Libya is really going

through a lot of issues right now.

Here in Egypt, they're hoping that -- what their political plan is right now will continue. They're planning for elections next month, for

the new parliament. But there has been a lot of criticism and how the government has been doing it: political opposition to the president, to his

plan, has been quashed. Different groups, different political parties say they're not going to participate in this upcoming election, because they

don't believe it's going to be free and fair and they don't believe what the plan -- the path that the president has laid out.

You do have a lot of conflicting views on that in Egypt. The president still has a lot of support from people who believe he did the

right thing by ousting Egypt's first democratically elected President Mohamed Morsy who comes from the Muslim Brotherhood last -- or in 2013. So

a lot of people still support him.

But you do have this divide here in Egypt still among the people who do support the Muslim Brotherhood or who don't believe that the President

el-Sisi is choosing the right path. So it has proven difficult here as well, Jonathan.

MANN: Ian Lee, live in Cairo. Thanks very much.

Live from CNN Center, this is Connect the World. Coming up, the Ukrainian battleground Debaltseve was sealed off for weeks. Now the battle

is decided and our cameras and crew have gone inside. We're live in eastern Ukraine next.

We are also getting close to the biggest night in Hollywood, a very different kind of battleground. The Oscar set for Sunday, the final

touches are being touched up. We get a sneak peek in about 20 minutes from now.


MANN: Welcome back. You're watching CNN. This is Connect the World. I'm Jonathan Mann. Good to have you with us.

Russia is rejecting a proposal from Kiev to bring UN peacekeepers into eastern Ukraine. Russian officials say that was not part of the current

ceasefire agreement and it could undermine the fragile peace deal.

The Ukrainian government suggested the deployment of peacekeepers after its military withdrew from the town of Debaltseve. The fighting

there has gone on unabated, even after the ceasefire went into effect on Sunday.

You can see the weapons are still on the move.

Debaltseve is now in the hands of pro-Russia rebels. Geographically, it is a significant area. It lies directly between the two separatist held

areas of Luhansk and Donetsk.

We're covering the story from all angles. CNN's Nick Paton Walsh is one of the first journalists into Debaltseve and he'll be joining us in a


But first Erin McLaughlin is in Moscow following efforts to, well, keep the ceasefire going. She joins us now.

Erin, I want to ask you, first of all about this proposal for UN peacekeepers. Russia has come out against it. Does that mean it's a dead

letter, or could it conceivably advance. Do you think it's a possibility?


Well, if this proposal is put to the UN security council, I think a Russian veto is a foregone conclusion. Today, we heard from Russia's

ambassador to the United Nations basically come out strongly against the proposal.

He says that Russia is now questioning Kiev's commitment to the Minsk agreement.

So, you know, there you have it so to speak.

But clearly, in this, the Ukrainian president is questioning whether or not the Minsk agreement is enough to ensure the ceasefire. And he's

pointing to the situation that unfolded in Debaltseve as a prime example.

You know, Russia seemed to want Debaltseve for the separatists. And then the separatists took Debaltseve despite the ceasefire.

So, at this point it's unclear whether or not a peacekeeping force would have changed the equation in any way, but I think what this does in

some ways illustrates is just the fundamental lack of trust that exists between Kiev and Moscow.

And then the question of course then becomes if these two sides distrust each other, how can they move ahead and implement what is a very

complicated agreement, Jonathan.

MANN: It's not just those two sides, the French and the Germans have been very active. And there have been phone calls between the leaders of

Russia, Ukraine, France and Germany. It would seem every day, or practically every day, a lot of coordination and diplomacy surrounding a

ceasefire that seems to be failing.

What can you tell us about that?

MCLAUGHLIN: That's right. There was another phone call that occurred today between the so-called Normandy four, the leaders of Ukraine, Russia,

Germany and France. In that phone call, they reaffirmed their commitment to the Minsk agreement, the strength of which has been in question post


They also talked about next steps. They talked about the importance of the beginning of the withdrawal of heavy weaponry, something that should

have begun on Sunday. And yet we're hearing from the OSCE today saying they're seeing the movement of weapons around eastern Ukraine, but they

have yet to see the withdrawal.

They also talked about the importance of that prisoner exchange. And they also talked about the importance of monitoring the situation as well,

the important role that the OSCE is supposed to be playing on the ground there. And yet the OSCE today saying that they were actually denied access

to Debaltseve.

So, I think with this Minsk agreement there are plenty of question marks as to its implementation and that is going to require a lot more

diplomacy going forward -- Jonathan.

MANN: Erin, I'm going to ask you to stay with us. Nick Paton Walsh was in Debaltseve today. And he joins us now.

Nick, tell us about that town. It suddenly made its way into the headlines. What's it like to be there? Is the fighting even over?

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: No, there's still shelling around it. So we heard gunfire, in fact, and one shell flew over

our head.

I should point out in case you hear the noises behind me, we are for the first time in days since the ceasefire came into play hearing intense

shelling around the separatist stronghold of Donetsk, that may explain the noise you're hearing, hardly a ceasefire frankly.

And the question now is when do the presidents who negotiated that deal finally recognize it is frankly on the ground here dead in the water.

But let's go back to Debaltseve, where we were today. Remarkable scenes of destruction, barely a house there escaped. We went to the town

hall where we had seen two weeks earlier people sheltering in what was then a Ukrainian held town down in the basement, elderly ladies we spoke to then

who were still there two weeks later had not even left the ruins where they were, terrified, unable to say, frankly, where they could go.

They don't believe they have homes left.

Swift move by separatists who very publicly ship in food to those remaining inside the town. Those people there obviously with new owners

frankly of Debaltseve now, referring to their anger at the Ukrainian troops, they said, and pointing to their large numbers and saying how

anybody could claim there were no civilians inside that town.

Lots of damaged Ukrainian armor on the way in. A lot of Ukrainian weapons being, frankly, gathered and distributed amongst the separatist

militants, too. Barely a street without some sign of intense destruction upon it.

And as I say the continued sound of shelling in the distance behind that -- often quite close to the town as well.

Some small arms fire, as I say, there seems to be some Ukrainian resistance to the northeast of that particular town, but by and large it

was actually remarkably eerily quiet to see people emerging often for the first time from weeks from underground walking around trying to collect

food and take stock of quite what devastation had been wrought on their town, Jonathan.

MANN: I want to ask you not about Debaltseve, but circle back to your first remarks, which are really crucial, which is about the ceasefire.

Debaltseve, you say, they're still firing around you. In Donetsk, they're still firing. There were other areas under contention, Mariupol in the

area around there. Overall, I don't know what your vantage point is, or how good your information is, but is the ceasefire simply a failure at this


WALSH: It's really hard to understand quite why that word is still in use. It's frankly because I believe those brought in to observe it and the

four presidents who put their names to it, or four leaders who put their names to it, haven't actually stood up and said, OK, fine, this hasn't


When the ceasefire came in, it was quieter behind me in Donetsk. The shelling here definitely stopped for a number of days. But Debaltseve was

in everyone's mind, quote, the exception.

Now Debaltseve has been taken conclusively by the separatists. Shelling still continues around it. Shelling has picked up here very

intensely in the direction of Donetsk airport today, a lot of gunfire and shelling heard around there.

And I think people are going to have to ask themselves if this is being called a truce, then quite what does that say about diplomacy? What

future does diplomacy have in settling this conflict?

And you have to ask yourself, too, about the ambitions of separatist militants here -- remarkably confident, strident in taking Debaltseve, and

they have many other targets in mind. They want to take all of Donetsk region. Many of those we speak to on the ground are clear about that.

That's not clear if that's the goal of their leadership, but a real sense here of momentum building in the conflict rather than the Minsk agreements

somehow slowing it down -- Jonathan.

MANN: And the Minsk agreement was calling for more than just an immediate ceasefire. It wanted the shooting to stop. It wanted heavy

weapons to be moved back. It was calling for constitutional reform in Ukraine, voted by Ukrainian lawmakers, and amnesty for the fighters on the

rebel side, really, really unpalatable choices for Ukrainian leaders. If they can't even stop shooting, it sounds like the rest of the agreement

doesn't really have much of a chance.

WALSH: Not at this point one will stop shooting. We haven't got past that yet, so points two, three, four, five and six and seven, the long

sequence of events you can frankly forget about those for now.

I think the question has to be we've seen this violence continuing. Is there a desire amongst both sides for a continued negotiated settlement?

Are the separatists who have the military upper hand here, is fair to say, are they looking for some sort of broader political settlement? Or is this

simply about territory? Is this about the momentum on the battlefield?

If it is the latter, we're in for some bloody days ahead.

And Ukraine's military has sadly was shown for them in Debaltseve are simply too poorly equipped to be able to resist the separatists. They are

backed quite clearly by something other than their own personal finances. You can see the weaponry. You can see the discipline. You can see the

firepower at their disposal. Ukraine and NATO say that can only come from one place, and that's the Russian military, although they of course deny

that -- Jonathan.

MANN: Nick Paton Walsh in Donetsk. Erin McLaughlin in Moscow, thanks very much.

The latest world news headlines just ahead. Plus, a failing state with a failing economy, an in depth look at how Libya fell into chaos.

That's coming ahead in five minutes.


MANN: This is CONNECT THE WORLD, the top stories this hour, U.S. President Barack Obama calling on the world to unite in the fight against

violent extremism in his second address at a Washington anti-terror summit. Mr. Obama said the notion that the West is at war with Islam is, in his

words, "an ugly lie."

He urged Muslim leaders to push back against ideologies that fuel extremism.

Weeks of fighting have left the Ukrainian town of Debaltseve largely destroyed. The crucial railway hub is now in the control of pro-Russian

rebels, but our Nick Paton Walsh says there is still fighting in the area. Ukraine is calling for un peacekeepers to enforce the current cease-fire;

Russia is rejecting that plan.

Greece has formally request a six-month extension to its bailout program. Eurozone ministers are to meet in Brussels tomorrow to consider

the request. But it's already gotten a chilly reception from Germany. Greece faces an end-of-the-month deadline to get a new bailout deal in


Libya's foreign minister has called on the U.N. Security Council to lift an arms embargo on his country so that it can better fight militants.

Egypt supports the idea but went a step further calling for a naval blockade to prevent weapons from reaching militant groups in Libya.

This week, in fact, marks four years since the start of the revolution that ousted Libyan leader Moammar Gadhafi. But there has been no end to

the political turmoil there. Kyung Lah has more now on the power vacuum that's given rise to militias and terror groups.

We warn you first: her report contains graphic images.


KYUNG LAH, CNN CORRESPONDENT (voice-over): The images released by ISIS tell a chilly story. The man driving this car earlier poses and

smiles in pictures we won't show you. He's wearing a suicide vest. He drives away, then this picture.

ISIS claims the man was one of its fighters who attacked a Libyan checkpoint in Benghazi. CNN cannot verify the validity of the ISIS claim,

but the propaganda message is clear: ISIS claims it is moving further into Libya, also symbolized by the mass execution of Egyptian Christians on

Libya's shores, a dark turn for the country when just four years ago, jubilation as the Arab Spring sweeps across Libya in 2011.

Rebel seeking to oust decades-long dictator Moammar Gadhafi lead a civil war, the dictator clinging to power begins a bloody battle with his

own people. An international coalition responds with military support of the rebels and airstrikes.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Col. Gadhafi needs to step down from power and leave. That is good for his country. It is good

for his people.

LAH (voice-over): The rebels defeat Gadhafi. He is murdered in the very street he once controlled.

Cameras from around the world capture the celebration. That was then.

JOSH LOCKMAN, USC: I think it's safe to say that the Arab Spring is dead.

LAH: So essentially we left and there's a shell.

LOCKMAN: We left and there's a shell.

LAH (voice-over): A power vacuum without the dictator, Libya dissolved into chaos, political infighting and sectarian violence, ripe

breeding ground for ISIS.

LOCKMAN: As in Syria and Iraq, ISIS has successfully taken advantage of harboring itself in either failed states or states on the way to

failure. ISIS has manipulated that situation to its advantage.

LAH (voice-over): With cheers (INAUDIBLE) Libya but beyond its borders -- Kyung Lah, CNN, Los Angeles.


MANN: Libya is oil-rich. It has a small population and for years it was prime for foreign investment. But Libya's economy has been hit hard by

the continuing unrest. The declining security situation has impacted the oil industry above all, the major source of revenue for the country. Most

multinational companies have already pulled out. John Defterios has this look.


JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Libya's been an open, festering wound for the past four years. The killing of 21 Egyptian

Christians by ISIS a stark reminder that inaction in this lawless state has spread beyond its porous borders, impacting neighboring states like Egypt.

SALEM AL ISMAILY, CHAIRMAN, ITHRAA: If you have instability in Egypt, you cannot maintain the stability of the region. So it's extremely

important to contain in Libya before it spreads into other places.

DEFTERIOS (voice-over): ISIS meanwhile is spreading terror into Libya's oil sector. Here are pictures posted by Libya's national oil

company, showing damage to two key oil facilities there -- and it's having the desired impact.

Over the past month alone, daily output has fallen to just 200,000 barrels a day, down sharply from the start of the year and is now only an

eighth of its pre-uprising level of 1.6 million barrels a day. There are worries, strategists suggest, that ISIS may try to repeat what it has done

in Syria and Iraq and take control of Libya's oil reserves, the biggest on the African continent and the 9th largest in the world.

The state-run oil company is asking the ministry of defense for protection; if not, it may be forced to shutter all production. That

damage sparked a mini-rally in energy markets after tumbling from $115 in June of last year down to below $50; prices spiked back above $60 this week

with ample supplies from North America, Russia and the Gulf states, the market ignored the potential security threat that had underpinned prices

for the last four years.

TREVOR MCFARLANE, CEO, EMIR: There was a level of complacency that places like Iraq and places like Libya could actually go on. And we saw

that for quite some time with supply and output out of these markets. They weren't so much impacted. You look at what's happening now in Libya and

their oil industry is in serious trouble.

DEFTERIOS: And something else to think about: Libya's less than 1,000 kilometers across the Mediterranean from Italy and there are real

concerns that ISIS can utilize its new base as a beachhead into Europe -- John Defterios, CNN, Abu Dhabi.


MANN: For a time, many Libyans had hoped to leave their country's isolation behind to join the West, to join the international economy. It

didn't work out that way.

Do you have any thoughts on the situation in Libya today? We'd love to hear from you. You can find us on Facebook at

Have your say. You can find us as well on Twitter. We're @cnnconnect.

It's almost time for some moments of silence when everyone waits to hear the name of the winner of an Academy Award. Each name hidden in an

envelope; even the person holding it doesn't know who it's going to be.

As the final touches are being made for Oscar night on Sunday, we have a look at how the big reveals are engineered.



NEIL CURRY, CNN CORRESPONDENT (voice-over): This may be the world's most famous envelope. But wouldn't you like to know the name inside?

This man knows just about all there is to know about the envelope but even he doesn't have the answer.

UNIDENTIFIED MALE (voice-over): This is held by 24 percenters with 24 categories of winners. But it's seen by a billion people around the world.

So -- and it captures that pin-dropping moment that everybody is silent when they announce "And the Oscar goes to."

And they open up the envelope.

We design it and engineer it in a way to make it fumble-proof and dummy-proof for the presenter so that they don't fumble when they're trying

to take out the card. So we wax the sides of the cards; we make sure it's thick enough so it comes out easily.

CURRY (voice-over): So what's it like for nominees awaiting the opening of the envelope?

(INAUDIBLE) John Madden knows better than most. Winner of seven Academy (INAUDIBLE) his film "Shakespeare in Love" was nominated 13 times,

winning in seven categories.

JOHN MADDEN, FILM DIRECTOR: Well, it's sort of outside-your-skin stuff, you know, outside-your-body stuff in a sense only because you're

very aware that that's one of those worldwide events when there are things pointing at that, where you could quite believe that all the pointers and

all the tea leaves were saying that it wouldn't go that way. So it's extraordinary when it won.

CURRY (voice-over): That night Judi Dench's name was in the envelope marked "Best Actress in a Supporting Role" when it was opened by Robin


JUDI DENCH, ACTOR (voice-over): I can remember (INAUDIBLE) absolutely no expectations of (INAUDIBLE). I was just with my husband, Michael, and

he nudged me. And he said, "Jude, I think you've won it." I don't know how I got up there. I can remember Robin Williams curtseying to me.



And I don't remember much else. I had no speech prepared and I have no idea what I said. But I didn't thank my mother, my husband, my children

and the cat, which everybody seems to do now.

CURRY (voice-over): If, as expected, the name J.K. Simmons emerges from the Best Supporting Actor envelope this year, like Judi Dench, he'll

have no speech prepared.

J.K. SIMMONS, ACTOR: Just go up there and blather on for forever how long it is we're allowed to blather on. I haven't even asked.

I know they've already warned us, if I'm up there getting an Oscar in a couple of weeks that, by God, have 45 seconds and then you'd better get


CURRY (voice-over): The envelopes were introduced 75 years ago. Here are Oscar secrets (INAUDIBLE) winners' names before the ceremony. Part of

the big night approaches, how about an exclusive sneak peek of the name on the card -- just between us?

Really? Again? Oh, well, there's always next year -- Neil Curry, CNN.


MANN: We're turning for a moment now to one of our top stories. Until this week few of us had ever heard of a place called Debaltseve. Now

that small town in Eastern Ukraine has become a focus of bitter fighting between Ukrainian military and pro-Russian troops. All this is a cease-

fire was meant to be in place. CNN's Nick Paton Walsh was in the once- bustling town, which has now become a ghost town. He speaks to civilians caught in the violence and examines why Debaltseve has been so critical to

the conflict. You'll find it all at

We also have Nick live coming up at the "IDESK" with Robyn Curnow in about 15 minutes' time, right after "Marketplace Middle East" I'm Jonathan

Mann. You've been watching CONNECT THE WORLD. Thanks for joining us.


IBRAHIM MAHLAB, EGYPTIAN PRIME MINISTER (voice-over): In our (INAUDIBLE), it has visit (ph) and believe me we are going to (INAUDIBLE).

DEFTERIOS (voice-over): A determined Egyptian prime minister on combating terrorism, regional stability and economic recovery.

This week on "Marketplace Middle East," we put Egypt under the spotlight.

Egypt, the most populous country in the Middle East, has faced political and economic upheaval for four years. Hosni Mubarak, the man who

ran the country with an iron grip for three decades, was swept out of power in February 2011.

After just a year-long stint as president, Mohammed Morsi suffered the same fate.

A high level of uncertainty and continued unrest undermined economic growth by scaring off tourists and stifling investment. Between 2011 and

2014, the economy struggled to grow 2 percent, less than half the rate prior to the uprisings.

This performance put a strain on the country's budget deficit and unemployment. Both remain in the double digits. But Abdel Fattah el-Sisi,

a career military man turned president, hopes 2015 will be a turning point for Egypt. He released three Al Jazeera journalists who were jailed for

over a year. And the government is promising fair and safe parliamentary elections at the end of March.

Economically he slashed fuel and food subsidies and ushered in a wave of financial reforms. After generous financial support in the last year

from his oil-rich Gulf neighbors, the government is hoping stability can entice foreign investors.

On a visit here to the UAE, the country's prime minister, Ibrahim Mahlab, told me Egyptian people have firmly backed what have been painful


MAHLAB: There is a will for a big change in Egypt (INAUDIBLE), in economic reform and these people, the Egyptian people, has the will to

change. And now there is a leader with a vision, supported by the will of the people.

DEFTERIOS: How do you go from a state today where you get funding from Saudi Arabia, Kuwait and the UAE, where Egypt stands on its own two

feet financially?

MAHLAB: Well, we are now independent financially and because we always started with some big project, some big project, continuing the

growth. And now if you compare Egypt this year with last year, at the same time there is a gap. There is a financial gap. And there is a (INAUDIBLE)

and there is a common future for Egypt.

We need the support of our friends, of our brothers and we have support because it's quite (INAUDIBLE). We have (INAUDIBLE) and we have

the same dream about prosperity of this world. That's why it's really -- we feel that with the support of our brothers, we can really cover this gap

of deficit.

DEFTERIOS: You're in a unusual position. The tapes leaked out that President el-Sisi perhaps was being too greedy with his Gulf (ph) partners,

asking for more funding.

What sort of damage does this do to the partnership?


MAHLAB: There will be escapes (ph).

DEFTERIOS: They don't exist?

MAHLAB: No, no, I and (INAUDIBLE) enforced. And this has nothing to do with reality. The respect between Egypt and all our brothers is huge

and also the link, there is a future between us. And there you'll find objectives are so strong you can neglect all six steps (ph). Those are

fortunate (INAUDIBLE) are not reflecting the aim of cooperation between our countries.



DEFTERIOS (voice-over): Once again, Prime Minister Ibrahim Mahlab during our interview in Dubai.

Now he raised the issue of the closeness of Cairo with the Gulf states: Saudi Arabia, Kuwait and here in the United Arab Emirates. But

nobody really talks about why they're so close in 2015.

Let's bring in Amir Daftari and his chessboard to look at the geostrategic nature of this growing relationship, even this deepening


AMIR DAFTARI, CNN CORRESPONDENT: A relationship which is conditional. And here's why.

DEFTERIOS: That's a good point.

DAFTARI: Let's take three pieces. I'll tell you, we'll call the king Saudi Arabia; the rook can be Kuwait and here we'll put the knight, the

UAE. Now the link between these three, when it comes to Egypt, is that this like for the Muslim Brotherhood. So when the Muslim Brotherhood took

power in the wake of the Arab Spring, these three nations felt very threatened.

DEFTERIOS: Because of the deepening relationship, perhaps, with Qatar and getting caught flat-footed by the Arab Spring because there was an

opening here for them to come in after the ouster of Mohammed Morsi.

DAFTARI: They felt flat-footed. Now as you say, Mohammed Morsi and the Muslim Brotherhood were pushed to one side. And so that made way for

these three nations, Saudi Arabia, Kuwait and the UAE to then help Egypt's economy rebuild.

DEFTERIOS: They didn't even strategic in the way they've doled out the money here. It's not all about cash. Cash is part of this; it's on

the --


DAFTARI: -- last year alone.

DEFTERIOS: And how are they allocating those funds?

DAFTARI: Well, it comes out to their own individual expertise. So when it comes to Saudi Arabia, very oil-rich, they've been helping the

country out, petrochemical product, gas; the UAE, construction, housing projects; Kuwait, same sort of strategy.

DEFTERIOS: And how promising is the market? Now this is a country about 85 million consumers.

What was happening before the Arab Spring?

DAFTARI: There was a lot of criticism towards the then president, President Mubarak, things he would slow to reform. You can be sure now

that these three nations -- Kuwait, Saudi Arabia and the UAE -- will go in strong. Because as you say, 85 million people -- huge scale.

DEFTERIOS: So of course, to have the sort of economic potential you need stability; big question mark raised, of course, because of security in

the last week and the attack against Egyptians in Libya.

When we come back, we'll talk about the security situation with the prime minister of Egypt and have a report from Cairo as well.

That's next on "Marketplace Middle East."




DEFTERIOS: Welcome back to "Marketplace Middle East."

A bit earlier we heard from the prime minister of Egypt about trying to reboot the economy there. But it's the absence of security which has

scared off global investors. I asked Prime Minister Mahlab about the recent crackdown, for example, on 16,000 Egyptians affiliated with the

Muslim Brotherhood.


MAHLAB: I cannot comment about any legal or any court piece. I cannot comment about it.


DEFTERIOS: -- the snuffing out of 16,000 members in detainment it's unbelievable, the scale of what we're talking about.

MAHLAB: Don't forget about this. And there was something criminal and the level of appeals and as prime minister, we are respected

institutions. I cannot really comment on any court piece but I can assure you a judge in Egypt are completely separate from government and that piece

is very good. They are going to get all right to (INAUDIBLE).

DEFTERIOS: Prime minister, what does the stampede that we saw at the football stadium tell us about the Egyptian people, particularly the youth

today? They don't need to abide by the rule of law after the revolution? It's quite alarming to see a case like that unfold before your eyes and the

world's eyes.

MAHLAB: Well, as long as there are some investigations but I can assure you that all sorts sometimes are planned to jeopardize the

(INAUDIBLE). Egyptian people are really aware. Government is aware . But we are paying a heavy (INAUDIBLE) to combat terrorists.

DEFTERIOS: Specifically, is Egypt not getting the support to combat the terrorism that's in the Sinai and on the border of Israel?

MAHLAB: Well, we are facing -- we are facing and we are getting -- you know, it's a question of Egyptian armies facing and we can face it. We

can face it alone in Egypt and we have really -- we can really defend our (INAUDIBLE). We have very strong army and we are facing. But it's

questions that it is time now to launch international and a global mechanism to combat the terrorists.

But in our (INAUDIBLE), we can face it and, believe me, we are going to (INAUDIBLE) it.


DEFTERIOS: Once again, Ibrahim Mahlab, the prime minister of Egypt. That interview was conducted just a few days before the attacks on Egyptian

citizens in Libya. Now Egypt has joined the fight against ISIS. But it puts it in a very precarious position as it tries to regain stability. Ian

Lee has more from Cairo.


IAN LEE, CNN CORRESPONDENT (voice-over): In the early morning under the cover of darkness, Egyptian F-16s roar into the night sky. Their

target: ISIS training camps and weapons depots in Libya.

The morning light reveals the destruction in Derna, the Mediterranean city close to the Egyptian border and just 200 miles from the European


The airstrikes: revenge for the beheading of 21 Egyptian Christians by ISIS militants.

ABDEL FATTAH EL-SISI, PRESIDENT OF EGYPT (through translator): Egypt reserves the right of retaliation and with the methods and timing it sees

fit for retribution from those murders and criminals who are without the slightest humanity.

LEE (voice-over): The families urged the government to rescue their loved ones sooner. Now, too late; the situation in Libya grows

increasingly more


GEN. SAMEH SEIF ELYAZAL (RET.), CHAIRMAN, AL GOMHOURIA: Number one, first risk now is definitely the western border with Libya.

LEE (voice-over): Egypt already wages a bloody fight against ISIS militants in Sinai. Hundreds of policeman and soldiers have been killed in

the more than year-long battle.

But, will Egypt commit troops to Libya as well?

ELYAZAL: I don't think we would put boots on ground. I don't this is in our, I would say, aim now. Our aim is to strike whenever we can.

LEE (voice-over): Egypt hasn't given a timeline for its current operation. But to fix Libya, it may take a lot more than killing ISIS from

the sky -- Ian Lee, CNN, Cairo.


DEFTERIOS: And that's our special look at the political and economic situation right now in Egypt. And that's all for this edition of CNN

"Marketplace Middle East." I'm John Defterios. Thanks for watching.