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Barroso on Russia-Ukraine Crisis; Middle East Reacts to ISIS Brutality; ISIS Threat to Middle East; Developing Aqaba; Dubai's Hot Property; Tehran's Empty Homes; Aldar's Expanding Ambitions

Aired September 04, 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: Security threats on several fronts, but can the nations of NATO form the united front needed to tackle them? We're live

from the summit in Wales.

David Cameron speaks out on ISIS vowing to stand firm against the militant group. We'll examine how he and leaders here in the Middle East can play a

role in that process.

And as western leaders criticize Russia's destabilizing influence on Ukraine, we'll hear live from the European commission President Jose Manuel

Barrosso who reportedly had some very cross words with Vladimir Putin last week.

ANNOUNCER: Live from CNN Abu Dhabi, this is Connect the World with Becky Anderson.

ANDERSON: Very good evening. It is 7:00 here in Abu Dhabi. NATO faces a watershed moment at its summit in Wales as the alliance confronts what may

be the most dangerous threat to its security since the end of the Cold War.

NATO leaders must decide how to tackle the conflict in Ukraine and the sweeping advance of ISIS.

NATO's Secretary-General Anders Fogh Rasmussen opened the summit by imploring members to make decisions to, quote, help build stability in a

dangerous world.

Well CNN's Nick Robertson is at the summit in Wales. And he joins me now live.

President Obama and Prime Minister David Cameron of Britain have called on NATO to reject the isolationist impulses and confront the rising terrorist

threat posed by Sunni militants in the Middle East.

Let's start there. What's being said? And what is expected to be said so far as ISIS is concerned?

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: You know, one of the things I talked to Prime Minister David Cameron about was the fact that the

ISIS issue is not on the NATO agenda per se. He said, look, that does not mean it's not going to get discussed. It will likely be discussed at the

dinner, the banquet that's being held in Cardiff Castle later tonight, it will be discussed in the margins. It will be discussed bilaterally and in

other groups.

When I asked him about his attitude to ISIS and how they should be dealt with, this is what he told me.

(BEGIN VIDEO CLIP)

ROBERTSON: President Barack Obama yesterday in Estonia saying that ISIS should be destroyed. He also went on to say that it should be shrunk to a

manageable size. What should it be, destroyed or shrunk?

CAMERON: Destroyed, squeezed out of existence is the way that I would put it. But we should be clear what we're facing here is this Islamist

extremist narrative, poisonous narrative. It isn't just in Iraq and Syria, we've also seen it in Somalia, in Mali, of course in Afghanistan when

hosted by the Taliban.

So this is a generational struggle.

(END VIDEO CLIP)

ROBERTSON: And I asked him about how to tackle that struggle. Would there be airstrikes, British airstrikes on ISIS targets in Syria and Iraq? He

said they were considering all options. But his language really led me to believe that this was perhaps a ways further down the road when a broader

coalition was built.

He said what was important, though, was supporting those nations on the ground. King Hussein of Jordan, obviously not a NATO member, is present

here along with many other world leaders. And Prime Minister David Cameron singled out Jordan, saying Jordan has got a border there with both Iraq and

Syria. It is threatened. We need to support it. We need to give it military support. We need to make sure it's strong.

So these were some of the issues and the ways that he saw defeating ISIS.

ANDERSON: Listen, Nic, you've spoken to Mr. Cameron firsthand, as we saw. But he and the U.S. President Obama took the rare step of writing an op-ed

for the Times newspaper as they are in the UK.

An extract for our viewers, quote, "if terrorists think we will weaken in the face of their threats they could not be more wrong. Countries like

Britain and America will not be cowed by barbaric killers."

But, Nic, the anti-terror steps Mr. Cameron announced earlier this week aren't likely to scare off ISIS are they?

ROBERTSON: They're certainly not as strong as he would have hoped to have been able to make those measures, removing people's passports for good.

That's not an avenue he chose to go down. But the intent here, because the threat is not just to France and it's not just to Italy and it's not just

to Germany and it's not just the United States, it's to build a broader coalition to deal with this in Europe, United States and in the Middle East

as well.

So what we have seen these nations do individually, the belief is however you know there may be holes and what they're trying to do as individual

nations is not as strong as they would like. They would like to strengthen their efforts by working together. It's this unity idea that really

pervades here, the unity in dealing with Russia, the unity over ISIS. And of course these talks in the margins, talks over dinner tonight, that's

what's going to help generate that cohesiveness, Becky.

ANDERSON: Thank you, Nic. Interesting that Nic was suggesting it's this idea of unity. They're talking the talk, of course, clearly people are

going to walk the walk at this stage.

But we're also seeing that unity of voice, this concerted effort from this region here in the Gulf and around the Middle East as well. And that's

something we'll discuss a little later in this show.

Let's get you to Iraq now. A human rights group says a mass killing carried out by ISIS almost three months ago in Iraq is a lot worse than

originally thought.

Human Rights Watch says it has evidence that nearly 800 soldiers, Iraqi soldiers, were massacred in Tikrit this past June. The group says it spoke

to survivors, analyzed videos released by ISIS and looked at satellite images.

Human Rights Watch says the evidence confirms the existence of a mass grave and a total of five execution sites, one of them within the presidential

palace compound.

Well, NATO says if Iraq requests help in fighting ISIS, the alliance would seriously consider it. Jomana Karadsheh joins us now live from Baghdad.

Is a request likely from the sort of ill-functioning Iraqi government at present, Jomana?

JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Very likely. And Becky, within the coming days we're going to have a new government here. We're hearing that government is going to be presented to parliament

very soon.

It's no secret Iraqi officials have said they want more support. They want more training, more equipping to be provided by the international community

and western powers, really, to help them.

You remember back in 2011 when the U.S. military left Iraq, they basically said they were leaving behind a capable force, a ready Iraqi security force

to stand on its own. But obviously if the major task, Becky, was June, what we saw happen in Iraq's second largest city Mosul, they really failed

that test and showed that they are not capable and not ready to handle this on their own.

So they pretty much will take what they can get, whatever is being offered. We've seen that with more U.S. advisers. Of course, U.S. and Iraq do have

a bilateral security agreement. And with hundreds of U.S. advisers back on the ground here in these joint security stations and helping the Iraqi

forces.

This, of course, one concern when it comes to equipping Iraqi security forces is what we saw happen with that collapse of the military in Mosul

when they desert their positions there and pretty much left all the gear behind, all the U.S. equipment that ended up in the hands of ISIS. And

they were used for gains and advances in Syria. So if course that is a concern.

But no doubt, they need more training and support.

ANDERSON: Jomana is in Baghdad for you.

Still to come tonight -- thank you, Jomana -- they slaughter the innocent by the thousands in a cold and calculated manner. More evidence of the

barbaric brutality that is ISIS.

First, though, the president of the European commission joins me live from the NATO summit. Hear what he has to say about the EU's role in the crisis

in Ukraine and elsewhere.

(COMMERCIAL BREAK)

ANDERSON: You're back with CNN. This is the Connect the World with me, Becky Anderson at 11 minutes past 7:00 here in the Gulf.

Two Americans have been mercilessly beheaded on video by the terror group ISIS. Amnesty International this week added to the stack of war crimes,

accusations against ISIS publishing evidence of mass killings and abductions that Amnesty say are part of a systematic campaign of ethnic

cleansing in northern Iraq. Its brutality, some would say, is evil so extreme that for you to understand it we believe we've got a responsibility

to show some of it.

And what we are about to show you is certainly not appropriate for children. The report from CNN's Nic Robertson will run about three

minutes. When it's over, I'm going to discuss Nic's reporting, but I'm not going to show you any more of the graphic images.

As Nic reports, ISIS has built a military strategy that relies on a detailed cataloguing of terror to instill fear raising questions about the

humanity of those who follow the strategy.

(BEGIN VIDEOTAPE)??

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): The more ISIS grows, the more it fights like a regular army. Light infantry

backed up by artillery. Tactics that have landed them heavy weapons. But don't be fooled, these fighters are barbaric in a way no fighting force has

ever been before, cataloging and posting in near real-time their war crimes. Last week, pictures emerged from human rights groups showing more

than 100 captured Syrian soldiers, paraded in their underwear. Then images of those same men, dead. ??

But ISIS wanted to make sure the world knew it was responsible, wasting little time posting this video showing commanders giving the order to fire,

then the nauseating hail of bullets, confirmation of how those soldiers were brutally executed. Its propaganda. Like me, you want to turn away. But

when we do, we give in. We are terrorized. And their goal is achieved. ??

Almost a decade ago, al Qaeda in Iraq, which ultimately morphed into ISIS, was led by this violent jihadist. He sprung to fame, beheading American

businessman Nicholas Berg. Bin Laden's deputy, Ayman al Zawahiri, wrote him, criticizing his blood-thirsty tactics. The beheadings stopped. But

when ISIS murders journalist James Foley in the same way, the same al Qaeda core leader has no response. At least not yet. As a result, extreme

violence for propaganda seems to have no bounds. ??

ISIS' wholesale slaughter of both Syrian and Iraqi army troops is institutionalized in the organization now. Even women, even young children,

are given severed heads to hold. ISIS leader Baghdadi is marginalizing al Qaeda's core, which means when his proteges target the west, it could be

even more despicable than the terror we have seen in the past. These are fighters who have so debased and degraded themselves they have lost moral

compass. And as any regular military commander will tell you, that puts them almost beyond control and ultimately a danger to their own

organization. But unless they implode, despite the veneer of a regular army, they'll likely be more horrors like these. ??

Nic Robertson, CNN, London.

(END VIDEOTAPE)

ANDERSON: As I said we'll be talking more about this vital issue a little later in the program. We're going to get a look at how Gulf states here,

nations, are responding to what is a threat that everybody feels all over this region and beyond at present. That and ore after this.

(COMMERCIAL BREAK)

ANDERSON: You're watching Connect the World live from Abu Dhabi. I'm Becky Anderson. Welcome back.

As the saying goes, hell hath no fury like a woman scorned.

Well, the former French First Lady Valerie Treirweiler has just published a tell-all book about her seven year relationship with President Francois

Hollande, which ended after Hollande's affair with an actress was revealed.

Well, in "Merci Pour ce Moment" French for thank you for the moment, she portrays Mr. Hollande in, well, let me say unflattering light as someone

who is constantly afraid to lose.

So what else is in the book? And will if affect Mr. Hollande's already pretty poor approval ratings? We'll discuss this further. French

journalist Agnes Poignier (ph) joining me now live from Paris via Skype.

Boy did the French president's former girlfriend feel scorned in what was a very public way.

She's, therefore, dishing the dirt as many women would say she has the right to do.

You've ready it. What sticks in your mind.

UNIDENTIFIED FEMALE: Not in time, because it hit the book stands this morning. But, yes, I've gone through it.

ANDERSON: What sticks in your mind the most?

UNIDENTIFEID FEMALE: Well, you know, I wish I didn't have to read this. But that's my job, obviously.

You know, the -- you know, the problem with this book is that she is a journalist. And she claims that, you know, very often she felt she was on

the reporting assignment while being by the -- at the side of the president. And the problem is, this is not journalism at all. This is

revenge, fine. She was extremely hurt and very publicly so. And so we might have some sympathy for her as a private person, but this is actually

gaining back publicity for journalism, for journalists. So a lot of my colleagues and myself are this angry at her for pretending to do journalism

while it's not.

And I'll say it's just one version of the breakup. And we all know that there are many versions to the breakup. And we also know that the French

president is not going to sue her and certainly not give his own version of the events.

So, you know, she said, for instance that at some point he was trying to woo her back into -- and he was sending 29 text messages in 24 hours, and

that was during the D-Day commemorations in Normandy when Francois Hollande was receiving the heads of states and Barack Obama and the Queen of

England.

But, you know, perhaps she was bombarding him with 70 text messages, what do we know?

So, I think a--

ANDERSON: Let me--

UNIDENTIFIED FEMALE: Yes, tell me.

ANDERSON: Sorry, I just want -- yeah, I want to talk to you about how this book is going to be received and how Hollande's approval ratings might be

affected for good, bad or indifferent.

Let me just get our viewers, though, a little taste of what's in this book. She details the moment her relationship with Mr. Hollande fell apart. Let

me just read here.

"Julie Gayet was top of the morning news. I'm cracking up. I can't hear anything. I rush to the bathroom. I take the small plastic bag containing

sleeping pills. Francois follows me. He tries to snatch the bag. I run into the bedroom. The pills scatter onto the bed and floor. I manage to

grab them. I swallow what I can. I want to sleep. I feel the storm about to break around me, and I don't have the strength to resist it."

Of course, she then spent several days in hospital with stress and fatigue.

How will the French public view the description of their life as just read by me there. And also how will this affect his popularity. He's in pretty

poor shape when it comes to approval ratings at present, isn't he?

UNIDENTIFIED FEMALE: Well, he can't go worse, I think. So it's not going to have, you know, it's damaging, obviously. And the French people are

sort of, you know, also suffer from fatigue, you know. The whole affair in January of him gallivanting in the streets of Paris on a scooter. The

bodyguard delivering croissants to him, you know, and his lover, the actress Julie Gayet, you know, at first we were amused.

But, you know, nine months later, you know, there are so many problems in France and in the world that I think the French who are rather mature on

the questions of love and privacy will think that she's just, you know, being a bit cheap and revengeful. And that that president actually

retaliate in any form. So, I think there might (inaudible) on that point.

ANDERSON: Yeah, and you make a very good point. Perhaps the French public are a little bit more mature than just sort of swallowing the words of what

could be perceived as just a very, you know, revengeful woman.

But I was interested just to see some reports of other things that she wrote, which perhaps will make a bit more of an impact on the French

public. "This is a man who portrays himself as -- who doesn't like the rich. In reality, the president does not like the poor," she says. "He is

a man of the left who calls the poor toothless."

Some pretty specific words about -- you know, if we were to believe these, how he feels about his constituents.

UNIDENTIFIED FEMALE: Well, that's very bad. But obviously, you know, he's a socialist president. And she presents him as mocking her social

background. She comes from a very modest family. And apparently, you know, he made a few jokes saying well it's not very rosy in your family.

But, all in all, you know, this is -- oh -- this is the intimacy of a president. And, you know -- I think the public at large doesn't want to

know all these things. And we all know that we make some pretty bad jokes.

Obviously you expect the president never to make any bad jokes, even in his you know private life. But this happens. And I think the French people

will be mature -- although they might be quite curious and they might go in France to buy the book.

ANDERSON: With that, we're going to leave it there. I hope we haven't lost that wall beside you, or a shelf or something.

Thank you very much indeed for your words and your thoughts this evening.

The latest world news headlines are just ahead. Plus, as NATO leaders discuss a threat from ISIS militants, what are the leaders in this region

saying. And what, if anything, can be done to combat the risks. We're going to investigate that after this.

(COMMERCIAL BREAK)

ANDERSON: This is Connect the World with me Becky Anderson. The top stories for you this hour. We are in the UAE.

The NATO summit is now underway in Wales. Leaders are meeting to address security threats from around the globe, the crisis in Ukraine and the

threat from the Sunni extremist group ISIS are expected to dominate the agenda.

Well, Pro Russia separatists in eastern Ukraine say they are prepared to order a ceasefire at 3:00 p.m. local time tomorrow if an agreement is

reached on a political settlement to end the conflict. Itertass (ph) news agency says separatist leaders will present their proposals to the contact

group in Minsk.

Well, one man has recently found himself at the center of the dispute between Russia and Ukraine. Jose Manuel Barroso, president of the European

Commission, joining me now from the NATO summit in Wales.

And sir, I just want to remind our viewers why I say that you've been front and center, certainly at the beginning of the week, in the headlines. I

want to play a short clip from last weekend in which you referred to your dealing with the Russian president over the crisis in Ukraine. Let's have

a listen to that.

(BEGIN VIDEO CLIP)

JOSE MANUEL BARROSO, PRESIDENT OF THE EUROPEAN COMMISSION: I had a very long and frank talk with President Putin over the phone. I had the

opportunity to convey these messages to President Putin. I urged him to change course. No one's interest is served by new wars on our continent.

No one's interest is served by confrontation. This is simply not that way that responsible, proud nations should behave in the 21st century.

(END VIDEO CLIP)

ANDERSON: Well, you got yourself into a bit of trouble with Mr. Putin by suggesting that he had boasted of his ability to, and I quote, "take Kiev

in two weeks" to you. Can you clarify those comments for us?

BARROSO: What happened was very simply, after the many contacts I had with President Poroshenko and also with President Putin, because I've been

working on that. I'm the European Commissioner, I've been mediating between Russia and Ukraine on the issues of the trade agreement and also

the issue of energy.

I debriefed my colleagues in the European Council about my contacts with President Putin, and there was a quote completely out of context that

appeared publicly. Not put by myself. But I repeat, it was completely out of context and even distorted, the reference that appeared publicly.

ANDERSON: All right. OK, we're hearing about a cease-fire or a truce, at least. Do you buy that? And if it were to go into place at 3:00 PM local

time, is that the sort of NATO job done, as it were? No need to get this rapid reaction force in place and start defending its eastern borders?

BARROSO: I hope so. I hope that it will work. But frankly, the situation that so far has been so volatile, and we have seen so many contradictions

between what some people say and what they do, that I cannot, of course, be sure of that. But it will be good news if you have a real cease-fire. At

the same time, of course, in full respect of the independence and sovereignty and integrity of Ukraine.

That is our goal, and we as the European Union, I'm here to represent the European Union, and I cannot speak on behalf of others, we very much have

been fighting for this outcome, a political outcome, because we believe there is no military solution for the conflict between Russia and Ukraine.

ANDERSON: I was speaking to the secretary-general, Mr. Rasmussen, at this time on this show yesterday, and I asked him a very simple question: is

NATO fit for purpose, given that there is so much discussion about it being in disarray?

The idea of a rapid reaction force to go up against what would be perceived to be the aggressor of Russia with just 5,000 men compared to tens of

thousands, if not hundreds of thousands from the Russians.

Alliance members who aren't stumping up on their defense bills.. I put the same question to you: is NATO fit for purpose?

Becky, I'm so sorry, but I represent Europe and I cannot speak on behalf of NATO, even if myself and my country have been members of NATO, my country

since the founding of NATO. So, it's not -- I simply cannot speak on behalf of NATO.

What I can tell you of course, personally, is that NATO today is -- Ukraine is not a member of NATO, and that is the argument that NATO countries have

been making clear, so that's why also one of the reasons I believe that we should work for a political settlement of this issue, and that's what we

have been doing.

Now, of course, not only the European Union, or the institutions, but also the member states of the European Union. As you know, most of them are

members of NATO. So I cannot speak on behalf of NATO even if the European Union, as such, has a strategic agreement with NATO. In fact, I came here

--

ANDERSON: All right.

BARROSO: -- also invited by NATO namely because of Afghanistan, but also, of course, I will be happy to see that NATO sends a strong signal today

that we are concerned and we are ready to work to protect the security in Europe. Because what's happening, in fact, in Ukraine is a matter of

concern to all of us about the security in Europe.

ANDERSON: Of course. One of the reasons I asked you that was you've made no secret of the fact, I believe, that in the past you were interested in

the job of secretary-general, so I just wondered if you were running, whether you'd be in a position to make it better fit for purpose. But you

know what? You've made your point. Let's move on.

Talk to me about Afghanistan very briefly, because I know that was why you were invited. I'm going to talk about ISIS and Iraq and Syria with my next

guest, so let's just concentrate for one moment on Afghanistan. What was your message to NATO members and those others who have been invited to

Wales?

BARROSO: European Union has been very involved during the last 12 years, and we came here also to say that we will remain involved with Afghanistan.

In fact, we are going to put 1.4 billion euros -- it means more than $1.8 billion next year, until 2020, and we are now focusing our action on some

areas, like of course, the building or the consolidation of the rule of law in Afghanistan.

So, our message to all the partners of this coalition for Afghanistan is that we are here for the long run, and it will be a mistake, of course, now

to put at risk what was achieved. The work is not yet complete, in terms of all our goals.

But certainly, the situation is Afghanistan is much better now than it was ten years ago. But we have to remain committed, and the European Union

certainly is committed to this stabilization and also consolidation of the rule of law in Afghanistan.

ANDERSON: Let me ask you a very brief question: do you then fear a full pullout of US troops at this point? It sounds to me as if that is what

you're saying.

BARROSO: We know that that commitment was taken, and of course, we have to respect the commitment taken by all those who have put troops on the

ground, and we have today paid tribute to the -- all those that died to protect, of course, freedom in that part of the world.

But now, we believe that, of course, while the situation is much better, there is still some work to do, mainly in terms of --

ANDERSON: OK.

BARROSO: -- for instance, training the police, forming the decision. That's what the European Union, together with partners, will be doing also

in the future.

ANDERSON: Sure. Mr. Barroso, always a pleasure. Thank you.

Well, here in the Middle East, nations rapidly rallying against ISIS as it blazes its way through Iraq and beyond, all in the name of Islam. The

region's leaders have condemned the barbaric group and its actions and are looking at concerted efforts, now, on how to protect their people from what

is violent extremism.

(BEGIN VIDEOTAPE)

ANDERSON (voice-over): Gruesome beheadings. Mass executions. Cold- blooded murder. These are the nauseating images ISIS extremists want you to remember the next time you hear their name.

They call themselves the Islamic State and justify their violent acts by arguing that they are waging jihad, or holy war, against infidels and

nonbelievers. But people across this region are speaking out against that ideology of hate.

On Wednesday, the UAE became the latest regional actor to condemn ISIS's actions, saying they, quote, "threaten universal humanitarian values,

cultural heritage, and norms of tolerance, multiculturalism, and religious diversity."

And Turkey's top cleric says of ISIS, "It is not possible to find these sicknesses in Islam or in any sect of Islam," he added.

ANDERSON (on camera): Well, clearly the mainstream Muslim community see ISIS as a real threat. This is Hedayah, an NGO set up to combat all forms

of extremism, hosted here in the UAE. Let's find out what they're up to.

Good to see you. Hi.

MAQSOUD KRUSE, CHIEF EXECUTIVE OFFICER, HEDAYAH: There are those out there who are, unfortunately, promoting a culture of death, a culture of

destruction. What Hedayah hopes to do is to promote a culture of life, a culture of construction.

The phenomena of violent extremism is multidimensional by nature. It has this inherent complexity that requires all kinds of efforts, but also the

different angles, the different aspects to understanding what violent extremism is and how we can counter it.

ANDERSON: Give me some practical examples of the sort of stuff you're talking about.

KRUSE: For example, what's the role of education and how can the educational system be able to support the efforts of countering violent

extremism? What's the role of families? Children? Women? They all play a central role in countering violent extremism in all of its forms and

manifestations.

ANDERSON: In an effort to combat violent extremism in the West, we're seeing governments crack down on mosques, crack down on certain members of

the community, introduce new legislation. Yours is a much holistic approach.

KRUSE: It's not about who's doing what, it's about what we need to do more in order to protect our children, our youth, our communities and get the

people involved in countering violent extremism.

(END VIDEOTAPE)

ANDERSON: Well, let's look now at how big a threat ISIS is to this region. I'm in the Gulf. Joining me now in Abu Dhabi is H.A. Hellyer, non-resident

fellow at the Center for Middle East Policy at the Brookings Institution in Washington. A regular guest on this show and always a pleasure to have you

on.

H.A. HELLYER, BROOKINGS INSTITUTION CENTER FOR MIDDLE EAST POLICY: Thank you.

ANDERSON: There is no doubt that I have heard what has been a very vocal and concerted effort across this region to get people to come together and

fight this scourge that is ISIS. Like I say, this is pretty unique. We've been complaining about not hearing from the Arab leaders for a very long

time.

HELLYER: We have indeed, and I think that the reason why some of us haven't actually heard is that we haven't really been listening. I think

that's been part of it over the past few years, that you've seen many across the region, whether it's society leaders, the religious

establishment, even political leaders, speak quite vocally about the threat of things like ISIS, al Qaeda, and so on.

But indeed, over the past few months, with the rise of ISIS forces in Iraq, Syria, the spread that they've managed to achieve in a very small amount of

time has really taken a lot of people by surprise.

ANDERSON: The other problem that the leadership has here and elsewhere across this region is the rise of political Islam. And that is also a

massive concern, isn't it? And possibly the reason we saw the actions that we did just recently in Libya.

HELLYER: Indeed. And I think that there is an issue here in that the disaggregation and the reaggregation of different types of political

Islamism is also subject of some concern within this region and elsewhere.

Because of course, we have different types of political Islamism, and some them will express themselves in extreme, violent ways, and others in less

so. The question is how you engage with those that may not be ISIS or things like ISIS or on a par with that, but how do you engage with them

otherwise?

ANDERSON: There's no simple solution.

HELLYER: Indeed. The complexity in this region increases, it deepens. And we have to be very careful about putting all these things together.

ANDERSON: We didn't have very long. It is always a pleasure, we thank you very much, indeed.

HELLYER: Not at all.

ANDERSON: Come back.

HELLYER: Thank you.

ANDERSON: I'm Becky Anderson, that was CONNECT THE WORLD, thank you for watching.

(COMMERCIAL BREAK)

JOHN DEFTERIOS, HOST: This week on MARKETPLACE MIDDLE EAST, we take a tour of the region's property hot spots, from Jordan's Port of Aqaba to Tehran.

We look at what is driving prices, despite regional unrest.

(BEGIN VIDEO CLIP)

MOHAMED KHALIFA AL MUBARAK, CEO, ALDAR PROPERTIES: We look at this mall. This mall to me is a California mall.

(END VIDEO CLIP)

DEFTERIOS: And 235,000 square meters, but who is counting? We'll get an early look of Abu Dhabi's foray into what is called a super-regional mall

market at Yas Island.

Welcome to MARKETPLACE MIDDLE EAST and our special look at property this week. The Arab Spring has altered the landscape and created some hot spots

along the way. Over the past year, we have visited cities, developments, and even ports.

Let's begin our coverage on the Red Sea port of Aqaba, and how money from here in the UAE is sparking a property boom there.

(BEGIN VIDEOTAPE)

DEFTERIOS (voice-over): For a small city on the Red Sea, the Port of Aqaba has some big things going on. There is a construction boom underway, with

housing going up at a rapid pace. This is a working model of Marsa Zayed, one of the biggest projects to break ground.

DEFTERIOS (on camera): Can Aqaba absorb this sort of scale of a project? Right now, it looks like a fairly sleepy town. But you don't expect it to

stay that way.

EMAD KILANI, CEO, AL MAABAR JORDAN: We all believe in the vision that His Majesty has for Aqaba.

DEFTERIOS (voice-over): His Majesty, of course, is King Abdullah of Jordan, who has kept plans alive for the port since the launch in 2001.

Container traffic has more than doubled in eight years under the management of Danish operator AP Moller-Maersk. Fifteen shipping lines serve Jordan,

Iraq, and north to central Asia.

And there are designs for Aqaba to be the new financial hub.

KILANI: Where we are heading today is that it will be the economic capital of Jordan.

DEFTERIOS: UAE developer Al Maabar will eventually pump half of the $20 billion that officials say has been committed to Aqaba.

ZIAD ABU JABER, CHAIRMAN, JORDAN PROJECT FOR TOURISM DEVELOPMENTS: So, you come here to rest. To enjoy yourself, so --

DEFTERIOS: But credit has to go to the first mover here, developer Ziad Abu Jaber, who launched the Tala Bay complex a decade ago, with 440 units

and three hotels.

But the gains are nothing to laugh at. Apartments like this one went for $900 per square meter when Tala Bay launched. They have more than tripled

to $3,000 per square meter in just six years.

Today, Aqaba has only 3,000 four- and five-star hotel rooms

JABER: I'm greedy, so there's no limit for me. But in reality, I think Jordan, or Aqaba specifically, needs about 7,000 rooms within the next five

years.

DEFTERIOS: Developers can only hope that unrest does not derail their ambitious plan.

(END VIDEOTAPE)

DEFTERIOS: The regional unrest has had the opposite impact on Dubai. Since the Arab Spring, we've seen an influx of residents into the emirate,

and also, Dubai secured the World Expo in 2020. Those two factors have driven a property boom. Now there's concern that a bubble is forming

again. Let's take a closer look.

(BEGIN VIDEOTAPE)

DEFTERIOS (voice-over): In the last two decades, on what was once Dubai's desert now stands audacious and creative architecture. Preparations for

the World Expo 2020 fuel further construction. Residential property prices are on the rise, as are initial fears of a repeat property collapse like

that of 2009.

MASOOD AHMED, REGIONAL DIRECTOR, INTERNATIONAL MONETARY FUND: You do see an increase in property prices, particularly real estate prices in Dubai.

And these are things to watch out for. Overall, inflation rates in the GCC remain quite manageable, but you need to keep a vigilant eye.

DEFTERIOS: With this word of caution comes optimism. The International Monetary Fund predicts annual growth of about 5 percent for the next 6

years. Rather than allow the specter instability to cloud Dubai's future, the government has moved to cool the market.

ALAN ROBERTSON, CEO, JONES LANG LASALLE MENA: The Dubai government raised the transfer tax from 2 percent to 4 percent, so it made property

transactions more expensive and less attractive to flippers. The UAE Central Bank introduced new loan-to-value proportions on mortgage lending.

Some of the developers have been introducing their own regulation.

DEFTERIOS: Dubai is one of the world's top transit hubs. With no corporate tax and stable governance, investors keep coming. At this $19

million villa, one of the most exclusive addresses in the Emirate --

PATRICK CROWE, HEAD OF LUXURY RENTALS, LUXHABITAT: And of course, the beach right on your back doorstep.

DEFTERIOS: Estate agent Patrick Crowe says his high-network clients are undeterred.

CROWE: The driver seems to be lifestyle. Some of our clients, for example, Russian clients, they like seafront property, so the Palm suits

them well. Our GCC clients, they like penthouses. Indian, Pakistan clients that we have, they tend to go for the Emirates Hills properties.

DEFTERIOS: For those with less cash to splash, purchasing sales have slowed. But rents have soared. On average, 20 percent year-on-year.

NICK MACLEAN, MO, CBRE MIDDLE EAST: Cost of living is going up, not just housing prices here. So, Charger (ph), Russel Kamer (ph), Fugera (ph),

have been beneficiaries of people moving away to seek better value of accommodation. So, Dubai has to be very careful that this -- the

affordability gap, as we're calling it, doesn't get out of control.

DEFTERIOS: Dubai, known for its it "build it and they will come" philosophy, doesn't want to add the post-script, "but only if you can

afford to."

(END VIDEOTAPE)

DEFTERIOS: Across the Strait of Hormuz, we're starting to see property prices on the rise in Tehran. After years of sanctions against the overall

economy, investors decided to put their money into property as a safe haven. But it's not clear whether that will be a good bet or not. Reza

Sayah has the story.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (voice-over): A Japanese- inspired garden with mini waterfalls welcomes potential buyers to this newly-built luxury apartment for sale in the most exclusive neighborhood in

Tehran. A four-bedroom, four-bathroom unit with amenities that rival five- star hotels and apartments so posh, visitors are required to wear sanitary shoe covers.

At roughly $8,000 per square meter, the price tag, $3.5 million. But for the past year, this swanky apartment has sat empty without a buyer. Half

of the other units in the six-story building are empty, too. So are tens of thousands of other apartments throughout Tehran.

BAHAR KHALILI, AGENT, GOZINE BARTAR REAL ESTATE (through translator): Right now, we have a lot of apartments that aren't being sold and sitting

empty because of high prices.

SAYAH: Housing prices in Tehran soared beginning in 2012, soon after Western powers imposed the toughest round of economic sanctions against

Iran to curb its disputed nuclear program.

The sanctions were a huge blow to Iran's economy, and when Iranian currency started taking a nosedive and no one could figure out where the economy was

going, many here poured their money into real estate.

KHALILI (through translator): This is the safest investment you can make today. Real estate has always increased in value.

SAYAH (on camera): But with uncertainty still plaguing Iran's economy, and may Iranians lacking buying power, the market is at a standstill. Sellers

not selling because they're hoping prices go up, buyers not buying because they're hoping prices go down.

SAYAH (voice-over): The outcome is a Tehran skyline full of empty apartments and investors still looking to buy and build, despite very

little demand.

(END VIDEOTAPE)

DEFTERIOS: Well, there's no shortage of shopping demand in the emirate of Dubai. Dubai Mall is known for its rush of shoppers from all around the

world. But Abu Dhabi's about to enter the super mall market. Up next on MARKETPLACE MIDDLE EAST, the chief executive of property group Aldar,

Mohamed Khalifa al Mubarak, and his plans for the Yas Mall. That's after the break.

(COMMERCIAL BREAK)

DEFTERIOS: Welcome back to MARKETPLACE MIDDLE EAST. Yas Island here in Abu Dhabi is already home to the F1 racing circuit, the Ferrari World theme

park, and also a gigantic water park. Soon, it will also be the home to the Yas Island Mall, a 235,000-square-meter complex for the entire family.

But the question is, is the market ready for a structure of this size? Here's the CEO of developer Aldar two months before its opening.

(BEGIN VIDEOTAPE)

MUBARAK: Over the last five years, the growth of both Dubai Mall and Mall of the Emirates have been immense. They have both done fantastic, and they

have both created the spaces in itself.

Abu Dhabi does not have that sort of destination here. It does not have that retail experience. It needs that. It's hungry for it. And Yas Mall

is hopefully going to cater for that hunger.

DEFTERIOS: As you look two months out from opening, do you say, I'm glad I built it this big? This is quite a --

(LAUGHTER)

DEFTERIOS: -- a destination.

MUBARAK: Absolutely. And we're already looking at phase two. There has been a -- the retailers have really liked this space. They like the

destination. They really understand its growth. They've become a lot forward-thinking, just like us. We couldn't fit the retails who wanted to

be here. So, we're already starting to plan phase two.

DEFTERIOS: What do you think you can accomplish with Yas Mall in terms of footfall, say, over a three-to-four-year period.

MUBARAK: We're taking a conservative approach here. I think in year one, we're looking at around 20 million visitors and increasing that voice to

anywhere between 5 to 8 percent every single year. It's conservative, but it's right.

DEFTERIOS: Does Yas Mall make a statement with a super-regional size that you're ready to go to the next level in terms of scale?

MUBARAK: From a recurring revenue, absolutely. Over the last year, we've grown -- Aldar has grown its recurring revenue to over $1 billion. Yas

Mall adds a significant addition to that, so we're very excited for that. We're excited to -- awareness to our shareholders on that behalf. It is

definitely a game changer for us.

DEFTERIOS: In 2013, you ranked 18th in the world in terms of new retail space. How do you balance it out where you don't have a massive glut in a

three or four year window and convince the rest of the world in the retail space this can be absorbed?

MUBARAK: It's all about growth. I think Abu Dhabi is a growing city. It's growing in its developments, it's growing in its demographics, and we

are catering our retail for each development. So, we have community retail, we have super-regional retail, and we have boutique retail.

DEFTERIOS: As a company, you were carrying a lot of debt, and you had the merger with Sorouh. Now are we seeing that the demand is picking up so the

properties that you're putting onto the market can be absorbed much quicker than you expected, so debt's not the issue that people thought that Aldar

had?

MUBARAK: No, we continue to manage our debt to the best of our abilities, and we continue to be a development company. Over the last year, we have

launched two major projects that have been completely sold out.

We've built in a mature, professional manner, whether it's been with the payment plans or even the designs of these buildings, and we've done a

fantastic job of doing so, and we will continue to build and develop new product for the market.

(END VIDEOTAPE)

DEFTERIOS: Mohamed Khalifa al Mubarak, the CEO of Aldar, the owner of the Yas Island Mall, and also the operator of the World Trade Center Mall here

in central Abu Dhabi.

And that's all for this edition of CNN MARKETPLACE MIDDLE EAST and our special look at the property sector. I'm John Defterios, thanks for

watching. We'll see you next week.

(COMMERCIAL BREAK)

END