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Connect the World
Demonstrations Amass In Sao Paulo Ahead Of Opening Match; Uncertain Future Ahead For ISIS Controlled Cities In Iraq, Syria
Aired June 12, 2014 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BECKY ANDERSON, HOST: No, not what football fans around the world will want to be watching either with just 13 hours, Mike, to go before
kickoff in the first match. The hosts, of course, Brazil playing against Croatia.
Let's get to Alex Thomas who is at Sao Paulo stadium where it all begins just hours from now. And let's bring him in and I'll bring you in
as we continue to watch these images coming to us from the streets, about 11 kilometers, I believe, away from the stadium.
What are you hearing?
ALEX THOMAS, CNN SPORTS CORRESPONDENT: Yeah, I can't see the images that you and our viewers are seeing, Becky. And I'm only one or two
kilometers away from the stadium. You can see how close it is behind me.
FIFA and the World Cup organizers have established a security perimeter, which is fairly standard practice now for the last series of
World Cups. They're held every four years, remember. And that perimeters is five kilometers away. We understand those protests are at least double
that distance away.
The whole approach of the security planning -- and it's always a major security operation on the opening day of any big global sporting event like
this, or the Olympic Games. The planning is always to try and allow the protests, but not to allow them to disrupt the sport itself. And all the
millions of pounds paid by sponsors and TV companies and the fans that are paid for tickets to see the game.
But, you and Michael Holmes are right when you say these are not the sort of images that Brazil wants to portray across the world. And we've
heard the cliche football carnival going on so long ever since Brazil were picked as hosts for a second time, Becky, that's what we wanted to see,
that's what Brazil's captain -- World Cup winning captain from 2002 Cafu told us on Monday saying he believes the protesters have a democratic right
to make themselves heard, but please don't do it during the World Cup. Let's welcome all these teams and fans from across the globe here to our
country.
ANDERSON: Let's just remind our viewers what they are looking at here. These are pictures coming to us live from one of the streets in Sao
Paulo where protesters have been demonstrating up against the security forces.
We've been pointing out that the street looks pretty empty, it has to be said, whether the security forces keeping a volume of demonstrators away
from this area is unclear at present. Michael Holmes, my colleague, pointing out there are -- seem to be more media actually on this street
than there were demonstrators earlier on. We've seen certainly one demonstrators, at least, dragged away by security forces.
Alex, as we continue to look at these pictures -- and we are looking at a police line at this point with barricades up -- and helmets on. We've
been hearing stun grenades. It looks as though -- it certainly seems as though the police may be using tear gas to break this demonstration up.
Remind us what is, and has been going on in Brazil's cities in the runup to this World Cup.
THOMAS: Well, we first saw some civil unrest in Brazil really make a global impact, Becky, around this time last year. And that's when Brazil
hosted the Confederation's Cup, another football tournament that's traditionally the warmup event to test facilities and to test the country's
infrastructure ahead of the main World Cup a year later.
Brazil actually won that Confederation's Cup. And it was a strange mix on the day when they beat the reigning world champions Spain, because
there were protests outside the stadium that day, too, but then there was massive cheering inside the stadium, the sort of outpouring of joy for
their team that we've not seen for many, many years in Brazil. They last hosted the event back in 1950 when they lost to Uruguay in the final. And
that was seen as a national tragedy.
A very different Brazil 64 years later, an emerging industrial power. But huge unrest on the streets, Becky, and bout the massive disparity
between rich and poor in the country. This World Cup has cost more than $11 billion to put on. And many are saying that money could have been put
to better use, spent on hospitals or new schools or even social housing.
We saw Shasta Darlington's report from the homeless camp very close to the stadium behind me. They've agreed to quiet -- not protest today,
because the government has promised to build a few thousand more social homes to react to their sort of quiet protest, if you like.
And mentioning Shasta and her producer Barbara Vanatides (ph) who are the permanent team based here in Sao Paulo, and have been for some years,
they were slightly injured earlier reporting on those protests from the ground. They were hit with I think now the latest information is they were
hit by a fragment of one of those stun grenades or tear gas canisters. They were taken to hospital for minor injuries. Barbara, we think, has a
suspected broken wrist.
They're both fine, I'm happy to say. That just shows how dangerous the situation it is.
Although you're right, Becky, to point out that the numbers of protests may be aren't as big as certainly the numbers of police.
ANDERSON: You've been eluding to what happened about an hour, an hour-and-a-half ago with Shasta Darlington and her producer. Let's just
get a sense of that. She was with her producer caught in the middle as you rightly point out of all of this when police moved in on these
demonstrators.
Just let's get our viewers a sense of how that unfolded.
(BEGIN VIDEOTAPE)
SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT: Things are getting pretty crazy here. There was a skirmish a short while ago, the
police fired tear gas. They ended up arresting one person. It looks like protesters want to start get moving out of there. Some pushing back as you
can see. We may have -- got to go.
BARBARA VANATIDES (PH), CNN PRODUCER: I got hit in my arm.
DARLINGTON: Here I can come back up. I can come back up now.
As you can see, they -- if you guys can see us -- you can see us, they did -- yeah, well, they did -- OK, they shot the tear gas. This is
obviously getting very tense. This is actually a large group of protesters but the police are firing tear gas. It's clear they do not want protesters
getting anywhere near the stadium.
At this point, we're 11 kilometers away. The idea is to march as close as they can get. But police have said they're going to keep a
perimeter of at least five kilometers. They're not going to get much closer than that.
And I've got to say, things are very tense. These are people who feel the World Cup should never have been held here in the first place. They
think the $11 billion spent on the event should have been spent on things like schools and hospitals, public transportation. And they want to make
sure that today the opening game day, people aren't just thinking about the games, they're also thinking about what's going on in Brazil, about what
they feel are very poor services.
And they also accuse the government for using a lot of the money for own personal gain.
So this is something I think we're going to be seeing all day, not letting up any time soon.
(END VIDEOTAPE)
ANDERSON: Shasta Darlington reporting about an hour-and-a-half, two hours ago now. I can confirm that they are OK.
The pictures that you are looking at now coming to us from Brazil.
The Brazilian city of Sao Paulo where tear gas is being used to break up a protest against the football World Cup just hours before the city
hosts the opening match.
As Shasta was pointing out there, there was a security cordon around the actual stadium. And what I believe this is, is one of the roads
leading up to effectively the stadium. It's about eight miles, or 11 kilometers away from the stadium.
But this is where protesters had and are trying to block the leadup to the stadium where the opening ceremony, of course, will take place just
hours from now.
Let's get back to Alex Thomas who is there at the stadium.
I mean, you know, one can only really sigh as we watch these photographs again, these images coming to us live from the scene.
Talk me through the preparations at the stadium at present. Although clearly these images taking precedent at this point.
THOMAS: There have been so many different controversial things in the buildup to this World Cup, Becky. I think when the tournament was awarded
to the country everyone rejoiced, certainly football fans did.
As I said, it's been 64 long years since Brazil last hosted the event. And while England maybe the birthplace of football, Brazil is certainly its
spiritual home. The team has played some of the best, the most exciting and entertaining brand of football of any international sides in this
tournament down the years. They've won the World Cup five times, more than any other team. And people really thought that by bringing the World Cup
here, Brazil would be the perfect host nation. They would really welcome the world and all its football fans and the billions watching across the
globe on TV into their arms and show what a good tournament they could organize.
As it is, the buildup has been beset by construction delays, but overrunning of costs, even workers dying on site tragically. And we were
in the Sao Paulo arena behind me just four days ago and it was in a dreadful state, Becky.
You know, we're on the ground in South Africa in 2010 and there were concerns about South Africa getting ready in time, but I can tell you
Soccer City stadium, the venue for the opening match there was in a far better state that close to the opening game than the Sao Paulo arena was.
It'll have to be ready. It will go ahead kickoff 5:00 this evening local time when Brazil take on Croatia, but certainly been far from smooth
running.
ANDERSON: Listen, not only these protests, but these traffic woes that have beset the city ahead of this World Cup, the strikes that have
been carried out.
I know the strike -- am I correct in saying that the transport workers that actually said that they would stand down from striking today, this
being the opening day, but threats of strikes at the airport for incoming fans.
If you had any advice to fans traveling to Sao Paulo today or any time during this World Cup to travel to the country to watch what should be a
carnival of football, what would it be at this point, Alex?
THOMAS: I've only been in Sao Paulo so far, Becky, not to Rio yet. So I can't talk for that.
But when we landed here last Friday in Sao Paulo, it took us all day from about 9:00 in the morning to about 6:00 in the evening to make two
stops on our way from the airport to our hotel. I've n ever seen traffic like that at all in over 20 years of sports broadcasting.
I was in Mumbai when India won the cricket world cup. And we know how cricket mad India is. And the traffic there is pretty crazy, but nothing
to what I've seen here on the streets in Sao Paulo.
That Friday was the day of one of the strikes for transport workers. And we were told by our local CNN crew on the ground here that that's as
bad as it gets. And it was pretty shocking. It's made logistically the challenges for us very difficult, so it's the same, of course, for fans.
FIFA officials are OK in their sort of police escorted limousines, or anyone rich enough to afford a helicopter.
But it is tough going . I mean, the people have been very, very friendly. But even the locals we've spoken to said there's not the same
carnival atmosphere they expected four years ago when South Africa hosted it. Brazil weren't even the host. There were far more street parties
going on and flags around. It's been a bit muted.
ANDERSON: Right. And as you speak, let me just describe for you and our viewers what we are watching here. This a street in Sao Paulo, you see
the police with their shields, with their batons, with their water cannon now trying to disperse what doesn't appear to be an enormous volume of
protesters, it has to be said, but it's pretty violent stuff. We've seen - - or heard the use of stun grenades. It appears that police have been using tear gas to break up demonstrations just hours before kickoff in what
is the World Cup 2014.
These pictures coming to you live. You can see that the police regrouping, moving forward, trying clearly to push these demonstrators away
from what I believe is a street which would ultimately take you to the Sao Paulo stadium where the opening ceremony will be held and of course Brazil
will play Croatia later on today, this being the first day -- the opening day of the World Cup in Brazil.
It does seem an awful shame.
And while I've got you there, Alex, I talked to a lot of people on the ground and they are telling me that it -- it was a sense of sort of
ambivalence to a certain extent when you talk to Brazilians on the ground. Not those tourists who come in to watch the game, but they've been
surprised by sort of ambivalence.
I know that advertising banned in around town anyway. So even FIFA weren't able to get over the ban in advertising. So you don't see an awful
lot of sort of fun and frolics as it were on billboards that you might see elsewhere around the world in the runup to the World Cup.
But this sense of, I don't know, reticence as it were that the World Cup is being held -- staged here when so many voices have made so much
protest against this ahead of time, is that the sense that you're getting? I know you've only been on the ground for a period of time. But what's the
mood?
THOMAS: It's a real mix of partying and protests. It's the only way I can describe it, Becky.
It's very strange, because you're right, when we drove from the airport into town on that first day last Friday we were looking around
saying, hold on, is there a World Cup happening here? Have we got the wrong place? And I've been -- I've been, you know, covering major sports
events around the world and there's always a very obvious visual cue when you get out of the airport that this is the place and it's staging the
sports event. And that hasn't been the case here.
As I mentioned a little bit earlier, people we've spoken to on the ground agree that the country is not as excited as it was four years ago,
because they've almost in solidarity for the protesters who while even if you are Brazilian and you're not protesting yourself, if you're not a rich
Brazilian you're probably agreeing with most of the protesters said.
As I said, I spoke to the Brazil World Cup winning captain from 2002 Cafu who grew up in the Favelas, many of Brazil's best footballers have
escaped poverty through the medium of football. And he has huge sympathy with the protesters, but didn't want them to demonstrate during the World
Cup, because he wants this to be a festival of football.
I think over the last 48 hours we've suddenly seen a huge increase in the numbers of Brazilian flags on cars. Even as I speak, I'm hearing horns
being blown reminiscent of the vuvuzelas from South Africa four years ago. Other bangs that aren't the flash bangs or the grenades of the police, it's
just firecrackers and fireworks.
People are starting to get excited. It almost feels like we're on the brink of a big party, but no one is quite sure when to get it started,
Becky.
ANDERSON: Yeah, just as you're talking I'm looking at my Twitter feed here. It says, "excuse me, what time does the carnival begin around here?
Mixed emotions in Brazil." Reminding our viewers that these scenes that they are seeing are a calmer version, if it were, of what we've seen over
the past hour-and-a-half.
We've seen the use of tear gas and stun grenades by the police in Sao Paulo as they try and clear what is at least one street. These are the
images that we are getting live into CNN. At least one street where there was a small volume of demonstrators, it has to be said.
What's going on around the corners, well, I can't see because I'm seeing the same pictures as you are, viewers, as we speak.
But a small volume, a cohort of demonstrators, some of whom looked as if they were wearing gas masks. That could have been the media there as
well who will clearly always be prepared for any eventuality. We have seen, and heard, a lot of noise, and we have seen at least one person being
dragged away by police.
This is some distance, but not a long way away from the Corinthians Stadium in Sao Paulo where Alex Thomas is as we speak where of course we
hope we'll see the carnival begin just less than 12 hours from now when the World Cup kicks off in Brazil.
And when I say we hope we will, clearly I'm talking as a football fan. There are clearly many, many people in Brazil who are distressed about the
holding of the World Cup here. There have been lots of protests in the runup to this tournament -- strikes, we've seen traffic chaos in a city
which is used to traffic chaos, we've seen traffic chaos over the past couple of days. A really difficult time for those in these cities, a
difficult time for Brazil as the world and you watch these pictures of what is going on in the runup to this tournament.
Before we move on, I just want to get back to you, Alex, let's talk football before I leave you for the time being. I'll get back to you this
hour.
Let's just talk football. Big match coming up. What are your predictions?
THOMAS: Well, because we've been talking about the protests for so long, Becky, there is a big link isn't there? There's definitely a firm
feeling here that if Brazil beat Croatia in the opening game in the hours ahead in the stadium behind me, and if they do it in style scoring plenty
of goals, they've got their 2002 World Cup winning coach Luis Felipe Scolari guiding the team. He's very, very good at getting them in the
right formation. They've got a very solid defense. They've got the poster boy Neymar leading the attack. If they win handsomely and get their World
Cup campaign off to a flying start, there's a real sense here on the ground it will just calm things down a bit.
Suddenly, the Brazilians will have their passion for football reignited, and maybe we can now start talking about the football. It seems
like ages since I last did.
But they're up against Croatia who are no mugs. Real Madrid star Luka Modric in their midfield, although they are without their top leading
goalscorer Mario Mandzukic, who is suspended. It should be a really good opening game. And the World Cup down the years has had a few surprises in
opening games. You think of Argentina losing and France as well to Cameroon and Senegal respectively in the 1990s.
So you never know what can happen. Either way, it will be great when the action starts.
ANDERSON: It will.
Good on you. Alex Thomas there reporting from Sao Paulo, talking football. And that, one hopes, for everybody's sake to a certain extent.
Will be what the discussion is going forward.
But some very distressing scenes on the streets of Sao Paulo, at least one street of Sao Paulo as we've watched stun grenades being used by the
police to break up demonstrations, the use of tear gas and water cannon in the past couple of hours. Our own Shasta Darlington and her producer
getting caught up, sadly in that report. But they are OK.
But things have been very, very tough in what is clearly a very important day for Brazil as the world's eyes are focused on that country,
on this city, as the tournament kicks off just hours from now.
All right, let's take a very short break here on CNN. This is Connect the World with Becky Anderson.
More after this.
(COMMERCIAL BREAK)
ANDERSON: You're with CNN. This is Connect the world with me, Becky Anderson. Welcome back.
We're in the UAE for you this evening as ever. We want to take you now to live pictures from Sao Paulo, get you back there and just get a
sense of what these scene is now.
This is a much, much calmer scene than that which we've seen over the past hour or so.
Just 10, 15 minutes ago we were witnessing the police in cordons with water cannon, with stun grenades and with tear gas trying to move
demonstrators on from an area fairly close to the stadium where the opening ceremony and the first game of the World Cup in 2014 will take place. One
of the streets in Sao Paulo.
Protests had been expected. Demonstrators demanding all manner of things, not least that the World Cup shouldn't be held in this country at a
time when things are so tough for so many people.
It is a much quieter scene as we speak. We'll get back to things in Brazil as we move through this hour.
Half a million people reportedly displaced, dozens held captive, countless killed. But according to the militants on the rampage in norther
Iraq the battle is not yet raging.
ISIS, the Islamic State in Iraq and Syria has warned that the capital Baghdad is in its sights. But the Iraqi parliament has so far failed to
agree on a state of emergency.
Talking to me a little earlier foreign minister Hoshyar Zabari explained that national borders are no barrier to the militant threat.
This map gives you an idea of just how large an area we are talking about.
And these cities in red are where ISIS is said to be in control, the orange is where the militant group has a presence. You see Tikrit is in
purple with the fate of that city very unclear at this point.
Well, despite the growing crisis, Zabari says nobody is calling for U.S. military boots on the ground at this stage.
We'll have much more of my interview with him just in a few minutes.
First, though, let's get you live to Ebil (ph) in Iraq and CNN's senior international correspondent Arwa Damon.
Arwa, describe where you are and what is happening on the ground.
All right, we don't seem to have Arwa at the moment, let's take a very short break -- oh, I think we may have her. Do we have Arwa?
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): Hi, Becky, can you hear me?
ANDERSON: -- get you -- yes, I can. I was going to move onto the foreign minister, but we've got you there. You are in Arbil. Talk us
through where you are and what you're seeing on the ground and hearing.
DAMON: We are right now on the main road that leads from Mosul into Iraqi Kurdistan, past one of the first checkpoints that is controlled by
the Kurdish force, the peshmerga, surrounded by vehicles filled with families that continue to flee Mosul.
Interestingly, Becky, many of them at this stage telling us that they're not necessarily fleeing because of fear of ISIS, the Islamic State
in Iraq and Syria, that terrorist organization, but because of retaliation by the Iraqi security forces, the bombardment that they are anticipating
and only going to intensify and a ground invasion.
We have also been seeing some families deciding to return, and when you ask them why, they'll say, well, we're hearing the situation in Mosul
is normal. But one has to remember that normal in this country that has been ravaged by war for over a decade is very different than how one would
tend to describe it.
They say ISIS has proved themselves. Yes, they came in. Yes, they drove the Iraqi security forces out, but they have not bee conducting mass
executions of the population, they have not been looting, they have not been pillaging.
And for many of them -- remember, this is a predominantly Sunni area - - they say that they would prefer at this stage to be ruled by ISIS than to be under the thumb of the predominantly Shia -- as they view them -- Iraqi
security forces, Becky.
ANDERSON: When you say that those you are speaking to fear a full-on ground invasion and assault and they fear that from the Iraqi government
forces, where are those reports coming from? Is there any evidence to suggest that that is in the offing at this point anytime soon?
DAMON: Well, there have been some air strikes that did take place overnight, and the Iraqi government did put out a warning telling people to
stay away from government buildings and from military installations where - -
(AUDIO GAP)
DAMON: -- snipers have taken up their various positions. But one also has to look at Iraq history. When the ISIS fighters took over al-
Anbar province, for example, the Iraqi security forces went in and, according to the Sunni population in al-Anbar province, carried out an
indiscriminate campaign.
They are very worried that the government here views the fact that Mosul has been taken over by ISIS will once again carry out their
indiscriminate campaign against the Sunni population.
And underlying all of this, Becky, is these ongoing sectarian tensions that have been further fueled by Prime Minister Nouri al-Maliki's
polarizing politics. Many people do feel at the very root of this, there needs to be some sort of a political solution.
And one man who we were speaking to is saying, look, of course we don't want to be ruled by ISIS. We don't want to live in an Islamic
caliphate, but we do not want to be ruled by Prime Minister Maliki, either.
ANDERSON: All right. Arwa, for the time being, thank you for that. Arwa Damon in Iraq for you on the ground on the story. Earlier, I spoke
with the Iraqi foreign minister, Hoshyar Zebari, he was in London.
He told me first that the government is taking steps to push the terrorists back, but that the takeover of Mosul, which was something that
you will be aware happened about 24 hours ago, that is a town further out, is a major security setback. Have a listen to our discussion.
(BEGIN VIDEOTAPE)
ANDERSON: This is a country in meltdown, isn't it? Just how big a threat are ISIS or ISIL at this point? And with Mosul, with Tikrit, with
Fallujah gone, what is preventing the fall of Baghdad at this point?
HOSHYAR ZEBARI, IRAQI FOREIGN MINISTER: Well, I think it's a long- distance prize for them to get Baghdad. I doubt if they have the capacity or the ability to do so.
But what happened in Mosul was really the collapse, the speedy collapse of two army divisions and the fleeing of their commanders from the
battlefield. And they left behind all their equipment, all their weapons, and tried to escape in a state of panic and fear.
ANDERSON: What is the government doing at this point, given that security forces over the past two days have just fled these militants?
ZEBARI: Well, it has collapsed, basically. They have melted down, unfortunately. Two army divisions in the city, and their commanders
escaped to the north. And that's why the forces have been demoralized. And really, the government needs to take serious action and to have a
serious look at the makeup and the induction of the new Iraqi armed forces.
ANDERSON: Many blame this Shia-dominated, Maliki-led government for what is going on on the ground. They say there is a lack of trust between
the government and the Sunni Iraqis. They say that there was a deficit of trust and this was an inevitability. What do you say to that?
ZEBARI: We have been through all this. There are tensions between Baghdad and the Kurdish region on a number of issues. But really, this is
not the time to be involved in this internal political differences. We are facing a larger threat from al Qaeda, from this new rise of terrorism, of
the Islamic State and the other armed groups.
ANDERSON: All right. Are you asking for US help in Iraq or over Iraq to prevent these militants spreading, getting into Baghdad, taking control
of the country?
(CROSSTALK)
ZEBARI: Well, this is the declared --
ANDERSON: This is the question.
ZEBARI: This is the declared policy of Washington, of the United States, of the whole world, now, that terrorism is a global threat to
everybody. So, wherever it would be, in Iraq, or in Afghanistan, or in Yemen, definitely there are certain responsibilities that Washington has to
deal, and to take some action, to be more proactive.
ANDERSON: Do you feel let down at the moment? By Washington?
ZEBARI: No, we are cooperating, actually. I think it's a matter of expectation. How much would you expect? But definitely, this is a serious
situation.
And this is what we in Iraq have all along warned everybody, the world, our neighborhood, the Arab countries, that this conflict in Syria,
you cannot contain it. We will suffer in Iraq as the first country from the spillover, and we are seeing over the last couple of days what we meant
in stating those statements.
ANDERSON: The Iranian president has suggested, and I paraphrase him here, that Iran will combat terrorists in Iraq. What sort of help would
you take from Tehran?
ZEBARI: Well, the Iranian foreign minister spoke to me yesterday, actually, and he did express their willingness, their readiness to provide
whatever assistance and needs. So has the Turkish foreign minister and the Arab foreign minister from the Gulf, from Egypt, from the United Arab
Emirates.
ANDERSON: Who is it that you believe is funding the militancy in your country and why?
ZEBARI: Really, there has been foreign intervention, Becky, let's say, in Iraq since the beginning of the regime change, of the democratic
change. And many, many countries collaborated then. But really, I'm not in a position to name any country, so forgive me for that.
ANDERSON: How much of what is going on, then, in your country -- perhaps you can answer this question -- is about a fight for regional
power, and what influence the business of oil in all of this, sir?
ZEBARI: Well, oil is a major factor, but regional competition also over Iraq, actually, has been there. There was this fear of Iraq turning
into a model of democracy, of stability, of prosperity, at the heart of the Middle East, and so on.
And this example was fought very harshly, and we Iraqis have paid a heavy, heavy price in blood and tears over the years to sustain this nation
democratic form of government.
(END VIDEOTAPE)
ANDERSON: That's the Iraqi foreign minister speaking to me just before we came to this show. Well, ISIS, or ISIL, as some would have it,
has taken control of the city, which is home to the country's largest refinery at Baiji, and there are concerns it may move into other oil
producing areas.
And that is keeping the energy market on edge. In fact, I believe, when I last looked, the price of oil is higher today. John Defterios with
me with the details. John, when I asked the Iraqi foreign minister who it was who was funding these militants, he wouldn't answer that question, but
when I asked him whether oil played a part in what was going on, he said, and I quote, "Oil is a major factor."
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Yes, indeed. And this is why the market's getting a little bit jittery right now. We're at a
ten-month high, in fact, Becky. It crossed over $110 a barrel for North Sea Brent, $106 for West Texas Intermediate.
And the strategy here is, how far do they go beyond Baiji? Can they go and challenge Kirkuk again? Now, let's take a map here that shows you
the layout of the pipeline network in Iraq and where the real bounty is.
If you go to the southern border of Basra, here, which is a Shiite stronghold, nobody really thinks that they can challenge going deep into
the south. Think of it almost like a tornado picking up energy.
ANDERSON: Yes.
DEFTERIOS: They picked up troops here, with the support of Saddam Hussein's former military leaders. And they don't think this can happen in
the north of the Kurdish region as well. These are the two major oil- producing areas, 75 percent of the oil comes now from Basra, and about a quarter of it comes from the Kurdish region.
(CROSSTALK)
ANDERSON: That's down in the southeast of the country, there --
DEFTERIOS: In the southeast --
ANDERSON: Then you're talking about the Kurdish regions --
DEFTERIOS: -- where you'll see that refinery on the edge.
ANDERSON: -- to the north, of course, yes.
DEFTERIOS: And the northeast. So, the northeast, for example, for the last two years, has been an area like the United Nations of oil
producers. We've seen 15 major oil companies going after 50 blocks. Why? Because the Kurdish region has been very, very secure.
ANDERSON: So, the question, then, is this, and this is on everybody's list. We sit in a region which makes an awful lot of money out of oil,
here --
DEFTERIOS: Absolutely.
ANDERSON: -- in the Gulf. The question is this: is it convenient for others that Iraq would be in trouble and its oil-producing capabilities
would be in trouble at the moment? Because there are certainly --
DEFTERIOS: Right.
ANDERSON: -- conspiracy theories --
DEFTERIOS: Of course.
ANDERSON: -- around that. Clearly the impact on the industry is one thing, as this violence rages. So, the next question is, where is the
foreign influence or foreign intervention at this point?
DEFTERIOS: Right. Well, this I the big question in the Sunni-Shia divide that we see throughout the region here. The major Gulf oil
producers -- Saudi Arabia, Kuwait, the UAE -- are Sunni strongholds, of course. And they didn't like the direction Iraq was going under the
influence of Iran right now.
But Iraq is considered the last of the easy oil, 140 billion barrels of reserves. They were trying to get to 8 million barrels by the end of
this decade. They wanted to challenge Saudi Arabia, to answer your point here.
So, you're seeing Saudi Arabia, a Sunni stronghold, the major swing producer in the world being challenged by Iraq, under Shiite control, and
Iran under Shiite control. Both of those countries wanted to challenge Saudi Arabia by the end of the decade.
Now, this would be a setback, no doubt. But nobody really believes -- and I spoke to an oil executive who has operations in the Kurdish north,
this evening. He has an evacuation plan in place, he said.
He doesn't think he's going to need to use it. The Kurdish security has been very strong. ISIS has not been able to cross over the border yet.
If ISIS wanted to go south into Basra, right at the bottom right now, where all of the oil majors are who put up their own very serious security
forces to protect their assets, it would be a far stretch. But you see the oil market responding because it's a big question mark still.
ANDERSON: Yes. And to remind ourselves, some $0.5 billion worth of oil on a daily basis. That was the idea with these -- with the amount of
oil that Iraq thinks it can pump on a daily basis.
(CROSSTALK)
DEFTERIOS: Well, it's interesting --
ANDERSON: It's an awful lot of money for a country.
DEFTERIOS: -- they want to get to 4 million barrels by the end of this year, 8 million by 2020, and they want to challenge Saudi Arabia by
the mid of next decade. It's a far reach, but that was the intention.
ANDERSON: Fascinating.
DEFTERIOS: Yes.
ANDERSON: John, thank you very much, indeed. The story out of Iraq today. Juggling two stories for you this hour, so I want to get you back
to Brazil and to live pictures from Sao Paulo. We are getting these images from Reuters.
Now, this the scene on one of the roads which would effectively take you up to the Sao Paulo stadium were the opening ceremony and the opening
game of the World Cup, Brazil against Croatia, just about 12 hours from now, the opening ceremony, of course, before that.
This is a fairly calm scene compared to that which we saw about 20, 25 minutes ago, and for about 2 or 3 hours before that. Protesters and police
are clashing on the streets, really just moments ago. Stun grenades being used, water cannon being used to push these protesters away.
It is still very unclear how big a cohort of protesters there are in this area. There are certainly -- there is certainly an awfully big police
and security presence. You see the fire engines behind those or what were just moments ago, really, firing water canon to disperse the protesters.
Difficult scenes on a day that the eyes of the world are clearly on Brazil for other reasons. It's been a tough day. Even our own staff have
been caught up in it, Shasta Darlington and her producer caught up in what was a pretty violent scene just about two or three hours ago. I can say
that they are safe and sound. But tough times in Brazil at present.
We're going to take a very short break. We will be back after this.
(COMMERCIAL BREAK)
DEFTERIOS: This week on MARKETPLACE MIDDLE EAST, as Qatar awaits the findings of a FIFA investigation into the World Cup 2022 bid, we take a
look at what might happen to billions of dollars worth of infrastructure projects if the right to host the tournament is taken away.
And as the region starts to feel the heat of soaring summer temperatures, we speak to the CEO of one company with the mandate to keep
cities cool.
Welcome to MARKETPLACE MIDDLE EAST. FIFA wrapped up its investigations on the World Cup bid this week amid fresh allegations from a
UK newspaper against Qatar. The results won't be known for a number of weeks, but there are shockwaves already being felt in Doha. Leone Lakhani
explores the potential fallout if the Gulf state loses the right to host the beautiful game.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Qatar!
(CROWD CHEERS)
LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): When Qatar won the bid to host the 2022 FIFA World Cup, there was much pomp and
pageantry. It would be the first country in the Middle East to host football's most prestigious event.
LAKHANI (on camera): But almost as soon as it won the bid, it's been dogged by controversy. The feasibility of playing in scorching summer
temperatures similar to here, conditions of migrant workers building the World Cup infrastructure, and allegations of bribery and corruption.
LAKHANI (voice-over): The latest are reports from "The Sunday Times" claiming a Qatari official paid more than $5 million to secure support for
his country's bid. That prompted some of FIFA's main partners, who are believed to pay around $180 million in sponsorships to voice their
concerns, including Sony, which called on FIFA to investigate, and Adidas.
"The negative tenor of the public debate around FIFA at the moment is neither good for football nor for FIFA and its partners," it said in a
statement.
An independent FIFA investigator is looking into the claims. His findings are expected in July. Qatar says it's cooperating on the probe
and that it won the bid fairly. But the debate has now raised questions about whether Qatar could lose 2022, with some calling for a re-vote.
It also casts doubt on Qatar's preparations. Work on the first World Cup stadium has begun, and the government set out its most ambitious budget
to date this year: $62 billion, much of it earmarked to build infrastructure for the World Cup. Without the tournament, some building
plans could slow down.
FAROUK SOUSSA, CHIEF ECONOMIST, MENA, CITI: If you look long-term, the bigger risk is the loss to brand Qatar. Qatar has ambitions to be the
regional hub for commerce, Finance, tourism, et cetera. The World Cup was an integral part of that plan.
LAKHANI: But Qatari officials say plans will go ahead.
RASHID ALI AL-MANSOORI, CEO, QATAR STOCK EXCHANGE: First of all, we are confident that the World Cup will be in Qatar in 2022. Second, nothing
will stop. Everything will go forward in steps.
LAKHANI: Still, the uncertainty sent jitters through Qatar's financial markets after the initial "Sunday Times" report emerged, wiping
off $5 billion from the main stock exchange in the in the first two days.
Some of those losses were made back, and economist say Qatar still has its enormous gas wealth to fall back on. It's the world's largest exporter
of liquefied natural gas, and that's not expected to change anytime soon.
SOUSSA: Qatar's costs of extraction is much, much lower than all these new emerging sources are. So, Qatar always has a cost advantage, in
terms of providing gas to the market.
LAKHANI: Analysts say Qatar's gas prospects may keep investors coming in for now, but that sentiment could change if Qatar loses the prized World
Cup.
(END VIDEOTAPE)
DEFTERIOS: Qatar remains at the top of the news agenda, but there were other major business stories impacted in the region this week.
Egypt swore in its new president, Abdul Fattah el-Sisi, this week, prompting the International Monetary Fund to say it was ready to restart
previously stalled talks on a $4.8 billion loan. Egypt received an additional $12 billion from Saudi Arabia, Kuwait, and the United Arab
Emirates, collectively known as the G3.
Saudi Arabia is set to launch its first sovereign wealth fund to manage hundreds of billions of dollars of surplus budget from oil revenues.
And Alitalia and the Abu Dhabi carrier Etihad are a few weeks away from closing a deal. The Italian national carrier's CEO said the deal
could see Etihad invest approximately $760 million in Alitalia, which would include job cuts and measures to reduce the airline's debt.
It means "chilled" in Arabic, and that's exactly what cooling company Tabreed is keeping people living in this region. We'll show you how when
MARKETPLACE MIDDLE EAST continues.
(COMMERCIAL BREAK)
DEFTERIOS: Welcome back to MARKETPLACE MIDDLE EAST. Well, it's that time of the year where temperatures are on the rise, and so are demands on
cooling systems. Tabreed is an Abu Dhabi-based district cooling company which has been in the business for well over a decade. I had a chance to
visit one of their cooling plants with CEO Jasim Thabet to see how its done.
(BEGIN VIDEOTAPE)
DEFTERIOS (voice-over): In this checkerboard building baking in the desert sun is a cooling plant that drives air conditioning for a 25-
kilometer area on Yas Island. It is one of 60 such plants that Tabreed owns and operates in the UAE. The company cools the Sheikh Zayed Mosque,
the new Etihad Towers hotel, and the Dubai Metro network.
DEFTERIOS (on camera): We arrived early morning to this interview to try to beat the heat, because by mid-afternoon, it should hit about 40
degrees centigrade, over 105 degrees Fahrenheit. And if you think about it, you couldn't have development here on Yas Island, the home of the F1
circuit, without a company like Tabreed.
JASIM THABET, CEO, TABREED: So, welcome to Yas Island's cooling plant.
DEFTERIOS (voice-over): On the rooftop of their Yas plant, I meet chief executive Jasim Hussein Thabet, who explains how he's built in
capacity for expansion in each location. The language of measurement in this industry is cooling tons.
THABET: This plant has an install capacity of 35,000 cooling tons, and it's expandable to 60,000 tons.
DEFTERIOS: Thabet is expanding in the region, with five plants outside of his home base, including Saudi Arabia's holy city of Medina. In
all, Tabreed, which means "to cool" or "chill" in Arabic, has hit output of 850,000 tons. The CEO uses a Dubai landmark, the world's tallest tower, to
illustrate what he can deliver.
THABET: So, people visualize, how much is 850,000 tons? It's like providing cooling to over 80 Burj Khalifas next to each other.
DEFTERIOS: In a land where air conditioning is a way of life nearly half the year, the task of bringing down the Emirates' carbon footprint is
a difficult one. From inside the plant in the control room, Thabet says this technology is part of the solution.
THABET: The biggest benefit of district cooling is the energy savings. It is 50 percent more energy efficient compared to the
conventional, the regular cooling. And with that energy savings, if you look at -- if you take a look at the complete life cycle cost analysis, it
is roughly 60 percent more cost-effective.
DEFTERIOS (on camera): You are the largest district cooling company in the world. That tells us a lot about the development of the Emirate
itself.
THABET: Yes. We are the largest cooling company in the world. We have 60 plants in the UAE alone, and what's also quite unique about Tabreed
is we're not only a cooling company. We reach a position where we're exporting expertise.
DEFTERIOS: Now, the technology's not new in itself, but what are going to be breakthroughs going forward?
THABET: We are looking at various ways to improve inefficiencies. We've signed research contracts with Master. We're looking at how to
improve the algorithms, software, and how you operate the chillers. We have plants that run on sewage -- treated sewage water, and we're looking
at how to roll that out into other plants.
And also, we're exploring how to use seawater in -- because we have a cooling plant in Bahrain that runs on seawater, that way you avoid having
the cooling towers and you reduce your consumption. So, we're looking at how we roll out that also in other plants.
DEFTERIOS: Is it fair to say this is an industry that most people overlook? But in this region of the world, it's absolutely essential.
THABET: It is overlooked. People underestimate the cooling requirements and how much effort goes into providing cooling. Like I said,
70 percent of the power requirements for the country in peak summer goes to cooling.
So, you can imagine if a country is subsidizing power and water, you can imagine the savings to the governments, not only to the governments,
also to the end users, because it is over the life cycle cost, it is much more efficient.
DEFTERIOS: You built this technology and this kind of model for the UAE, but you have the wherewithal now to go into the Gulf states. Why have
they opened the door to Tabreed, in your view?
THABET: The Gulf states, like Saudi Arabia, Qatar, Bahrain, and Amman, where we operate, they've realized the benefits of district cooling,
the 50 percent energy efficient, it's more cost-effective if you have the right building density.
And with our partners, we're building cooling plants in Qatar. In Doha, we've just announced we're building our fourth plant in West Bay,
where you have the right building density there.
In fact, we're very closet to completing construction in Mecca, in the whole city of Mecca, we're building a cooling plant there, providing
cooling to the Jabal Omar project in Mecca. So, there's significant developments.
DEFTERIOS: Getting past a million tons, is this a big landmark for Tabreed coming up in the next year or two?
THABET: It's going to be a landmark for us, and it's achievable. We're in a region where cooling is required year-round. The economy is
growing, the population is growing. There will always be a need for hospitals, for schools, the universities, and the governments continue to
invest in critical infrastructure. And district cooling is the way to go, it's more efficient.
So, I'm very optimistic, also especially with the Dubai 2020 Expo, we see a lot of opportunity, and we're exploring several projects in Dubai now
related to the Expo.
(END VIDEOTAPE)
DEFTERIOS: The CEO of Tabreed sharing his insights on that business. By the way, each one of those cooling plants costs about $100 million to
build.
For more about the program, check out our website, cnn.com/mme, and you can reach out and message us on Facebook as well.
And that's all for this edition of CNN MARKETPLACE MIDDLE EAST. I'm John Defterios, thanks for watching. We'll see you next week.
END
