announcer: from our studios in new york city, this is "charlie rose." charlie: ash carter is here. he is the outgoing secretary of defense. president obama appointed him in december of 2014. it was a capstone for eight decades-long career at the pentagon. awarded the defense intelligence metal and the department's distinguished service medal five times. contra marriage and -- confirmation hearings for the man who will succeed him started

in the senate today. welcome. sec. carter: good to be here. charlie: we have done these conversations in office and out of office. i appreciate you coming by. the time you have been secretary of state, tell me what you set out to do and what you believe you have accomplished. what was your highest agenda? sec. carter: in the here and now, it was to put us on a path with respect to the principal dangers that we face today, which are first and foremost isil and put together the campaign plan that you now see unfolding towards the destruction of isil. toond, a strategic approach russia and possible russian aggression, iran, north korea, china. those are our principle here and now problems and put together a strategic approach and get us on the path. the other thing is that if you were secretary of defense, your

other jobs to make sure that your successor and your successor's successor had what i had, which is the finest fighting force the world has ever known. i have inherited that from decades behind us and i need to pass that on. that is in people. it is in technology. it is making sure we are competitive and ahead of everyone else. those are the two things i have tried to accomplish over the and you'rears from right, 35 year involvement with the department of defense. charlie: people look at the world today, 2017, and they use this term. there is a new world order. how has the structure changed? people look at it and say there are three huge powers. russia because of the nuclear weapons it has, certainly china because it is growing, and there is the united states. is the world order changing? who plays what role? sec. carter: we, that is the

united states, still is far and away in terms of copperheads of comprehensive -- military power, is the strongest. you mention russia and china. they are extremely important. there are others. india. japan. europe as a block. in addition to our military strength, the thing that sets the united states aside is, and i hear this all the time when i travel around the world. foreign leaders say to me we like working with your people. it is not just that they are awesomely capable. it is what they stand for as well. and what wer values stand for and the way we conduct ourselves, those things. that is why the united states has not only strongest military in the world, but we have all the friends and allies.

most of our major antagonists have few or none. charlie: when you look at the world today and the nature of warfare, is there a dramatic increase in the possibility of cyber warfare and the ability to defend against it? sec. carter: sure. there is certainly a dramatically increased role of cyber in warfare. i'm hesitant to say cyber warfare because it suggest you have a cyber attack response. i think an attack is an attack. is to limit a toponse in the united states the way we were attacked. it is also true our military works on networks. it is one of the things that makes us the best. our planes, our ships, our tanks, our people are all network together. if i don't defend that -- that

is job one for me, making sure that our wartime network is secure. talking about the next generation, the kids who come in our kids who have been on iphones their whole lives. they are not going to understand a style of operating or leadership that does not involve technology. simply to connect with the next generation, we have to stay ahead in information. we have a lot of different things we do. it is part of warfare, but i always caution people to say warfare is not cyber warfare. it is warfare. cyber is a dimension. charlie: in the national security area, what is the legacy of barack obama? sec. carter: well, he has a number of them. i would say in so far as we are concerned, i have been grateful for his support and approval and his encouragement.

as i put together with the chairman and joint chiefs of staff and presented to him over the last 14 or 15 months, step-by-step an accelerating campaign against isil, president obama has approved every step we have asked for and sometimes that is difficult in that environment. he did not want to be any less aggressive than you wanted to be? sec. carter: he told me early on that he wanted to get rid of isil. i took him at his word and he kept his word. charlie: he gave you everything you needed in terms of -- sec. carter: boots on the ground, that expression. aircraft, money requests from congress, authorities. charlie: everything you have requested he has given you. sec. carter: the granted every request we made.

i am very grateful for that. we have continuously seen opportunities. when you do a raid, you capture a guy. you learn something. that leads to another raid, another airstrike. every time we reached another step or we trained more iraqi forces for what is now, what will be the taking of mo sul. we are planning for that. we devised at 15 months ago. charlie: you and i talked about that. sec. carter: we did. we needed to train the iraqi forces. we needed to position them there and support them for the destruction of isil in northern the rack -- northern iraq. every step, the general and i were saying to ourselves and talking to our commander, how can we make that go faster? how can we hasten that toss us

-- hasten that process? every time we said we could do more, and i said we will do more when we see an opportunity. more, hee we have seen has given it to us. i am grateful for that and it has allowed us to come up both in iraq and syria, carry out the plan. it is necessary to destroy isil in iraq and syria. because that is necessary to destroy both the fact and the idea that there could be an islamic state based upon this ideology. it is necessary. it is not sufficient because we have to operating -- operate against them in other places in the world. our top priority is external operators. that is people who were plotting attacks on western countries. we are killing those people. charlie: that is ratcheting up

and they lose territory in iraq and syria. that is the only means they have? sec. carter: they are constantly trying to do more in that area. , ishey lose their territory going to be harder for them to plan and coordinate complicated attacks. that is good. and the narrative that fuels the inspired attacker as opposed to the organized attacker -- organized attackers will have less of a base and a free territory to operate from. that is a good thing. when the islamic state is so obviously destroyed, it means that those who -- the person on the internet who has never been to iraq and syria but gets inspired to carry out a violent act, the expectation is that that inspiration will also go down. that will make us safer as well.

relocate from ozone raqqa. from mosul and those that we don't kill there. we will pursue them iraqi in syrian forces elsewhere in the country. charlie: i want to talk about that. as the taking of mosul been a more difficult challenge then the military strategists thought it would be? sec. carter: no. it has gone the way we thought. we thought it would be difficult. charlie: they were dug in. sec. carter: we were ready for as weng, simply because step-by-step, the isil defenses, and over in inia, each of the battles

those cities had a different dynamic. sometimes they fought harder and sometimes they did not fight as hard. we knew they would fight hard for mosul. 's defensest mosul were a set of concentric shells. you saw us in early weeks punch through the first shell and you get to the next. they are now through that. they are on the inner-city now. they are on the eastern side of the cities and there is a citadel in the middle. they are in between that second line and the citadel on the eastern side of the city. then they will go to the tigris river, the left bank of the tigris river, and then cross over. that has always been our plan. it is going for you much according to plan. charlie: when do you think mosul will -- sec. carter: in war, you don't

predict. change. plans sec. carter: the plan is clear and our plans have not change. we are pretty much on schedule in our plan but i would rather over-deliver. that is what our commanders have consistently done. let me put it this way. i'm confident of the result. it is going to take place in 2017. sec. carter: i believe so. charlie: and about raqqa? sec. carter: same thing. i do. that is in the plan. that is every reason to have that expectation. you want to say it is more and the reality and the dynamics of war intervened. , we havehe momentum the plan, we have the forces. we are assembling the forces. i'm confident that it will

occur. charlie: you think you will capture or kill -- sec. carter: eventually. charlie: do we know where he is? sec. carter: if i knew exactly where he was, first of all, i would not tell you, and second of all, he would not have long. he moves around. i don't want to say any more than that. i would not want to be a senior isil leader. many have died already. the more we learn about where they are. his days are numbers and that is true of the rest of the leadership. charlie: his days are numbered. sec. carter: absolutely. charlie: have the russians giving you any help at all? sec. carter: no. and that's a real source of disappointment only in the sense -- disappointed in the sense that they said they would do

otherwise. charlie: they said they would come in in part to take on isil. sec. carter: they said they were going to do two things. one is to help end the syrian civil war, which is one of , bysources of the thing .udging aside bashir al-assad it allows it to be governed with a moderate opposition as well and beginning to put back together a country and a more decent life than that poor, tragically-stricken population has had the last few years. they did not do that. they doubled down on the civil war. charlie: they doubled down on their support of assad. sec. carter: correct, and you see what the consequences are. charlie: what are the consequences? sec. carter: well, the continued

slaughter of people and a continued drive towards extremism among those who oppose assad. that is not what they said they would do. they did something different. the other thing they said is by isil -- is they would fight isil and that is not what they are doing. they are mostly fighting the moderate opposition. it is very hard to associate ourselves, and we have not cooperated with that because it is not in line with our interests. we do have a military to military channel to make sure we don't create incidents with one another. it is very professional. it works very well. in the larger sense, because they have not done what they said they would do, we have not been able to associate ourselves with what they are doing. charlie: it has been argued by diplomats in the state department that they needed more leverage on the ground in order to have diplomatic leverage and

they simply did not have it. they put together that in terms of criticism of our military presence on the ground. it is said that secretary kerry wanted to do more cooperation with the russians in terms of airstrikes. what can you say? sec. carter: well, these are two different things. there are those, and you read it out in the press, who would have had the united states join the civil war in syria. we have not gone to war with the syrian regime as a military. charlie: why not? why not? sec. carter: because that is an undertaking and this is a decision the president made consistently. that would be not to try to settle the civil war, but again to try to overthrow the

government of syria. that is a very big project, as we have discovered. charlie: and a risk that the united states was not going to taste. sec. carter: it is not a matter of risk. it is a matter of where our interests lie. our interests are first and foremost in destroying isil. and that we have managed to do. charlie: that runs against the argument that as long as a sod is there, he is a recruiting tool for isil. sec. carter: well, that does not mean that we don't have to protect ourselves from isil, charlie, even though the civil war is raging in syria. it does mean that syria is going to be a continuing source of ult in the region. the solution that we have favored, and i think the right one, is a solution where there is a political transition from the assad regime to a government that is more inclusive. not a military conquest or let

alone an occupation by the western countries of syria. that is the right approach to syria. that is the one we have taken. the right approach to iso-his military destruction and we have taken that. ♪

charlie: you have just said this il.r we will destroy is this year.

no alternative that you thought was possible? sec. carter: what we are doing against isil, absolutely not. we had to do everything we possibly could. we added every ingredient we possibly could, every accelerant to the campaign to destroy isil. that is about protecting our people, charlie. and at the end of the day, that is the most important responsibility of the department of defense, is to protect our people. that necessitated the focus we have had on isil and we are on the path to meeting our objective there. that has been job one me and job one for us. charlie: a massive question and i have asked it more than once. when you look at what happened to aleppo and the destruction of syria from the civil war, it is such a tragedy. it, is there any

sense on your part that may be else we could do that we did not do? or we did not do it in time? us is a tragic situation that the united states did not have other ways to prevent and the ways that i think were attempted. i think the right approach is a political transition. we tried to foster that. that is what you saw secretary kerry trying to do with the russians. they did not go along with that. that was the right approach to take. neither the russians nor a sod -- assad. to donot expect assad that but the russians said they would try to promote that. that was a reasonable thing for them to do in a reasonable thing for us to attempt to work with them on but that is not what

they did. as the protection of our own people from terrorists in iraq and syria, which is my responsibility, we have done what i recommended in what i thought was necessary and what i think is going to succeed in destroying isil. charlie: what is it do you think drives let a mere putin -- vladimir putin? sec. carter: i don't know. russians,ked with the if you don't know, for probably 30 years. including some eras very cooperatively. i was the man who ran the program to control all the nuclear weapons when the wall came down. i negotiated with the russians to get them into kosovo, the

opposite outcome from syria, to settle the kosovo civil war in the balkans in the 1990's. i have some experience with that. interests notour identical with russia. they are not with any country. what we should be doing always is look where our interests can be aligned with another power, work with them cooperatively. for the first quarter century after the end of the cold war, there were many areas where that was possible. those areas, particularly under putin, have narrowed. charlie: why is that? sec. carter: progressively. i am not the person to ask that. by the way, there still are some areas where we work productively with them. for example, nonproliferation involving iran. charlie: the iranian nuclear

deal. sec. carter: yes, exactly. one of the things that russia seems to do under putin is an objective of thwarting or frustrating the united states and international community, or trying to as an objective in itself. charlie, it is hard to build a strategic bridge to that motivation. otherwise, it is part of military diplomacy to build bridges to common interests where you can and stand strong where you can't. in the russia relationship, we are both strong and balanced, but we have had to emphasize the strength far, both unilaterally and in nato within recent years. strategyow a deterrent

for russian aggression in europe. for about a quarter century, we did not have to do that. now we do. we are putting money behind that. we putting forces behind that. we are putting operational plans behind that. charlie: and that includes the baltic states? sec. carter: absolutely. they are nato states. charlie: do you believe the russians have intent to do something about the baltic states other than make those states feel like they are under their influence? sec. carter: we need to be ready for anything that could happen. charlie: militarily, we are ready for anything that could happen? sec. carter: yes, absolutely. there are plans to respond to aggression. not just traditional aggression of the traditional military sort, what including the kind of what we call hybrid warfare. the little green men phenomenon that you saw in ukraine. charlie: what do you make of hacking by the russians in terms

of the american political process? sec. carter: well, i can't add anything to what the intelligence community and fbi have said on that. they did careful intelligence work. they obviously, in a very painstaking way, reported the conclusions that they did and that you heard about a couple of weeks ago. think that is an aggression upon the united states that we have responded to, but i would say that is just the beginning. my guess is that is the floor and not the ceiling. charlie: henry kissinger went to china in part as leverage against the soviet union. some suggest they would like to see a better relation with russia to forthwart the ambitios

of china. does that make sense to you? sec. carter: you are right. there is a long history of font expectations by russians, -- by americans, that the russians and chinese will check each other. we have a different relationship with both of them. we have with both of them a relationship that has competitive aspects to it, but also cooperative aspects as i said when you asked me before, the ones with cooperative ones with russia have been unfortunately shrinking but we have to be realistic about that. , there is a strand, an aspect of chinese strategic thating which recognizes

the peace and prosperity of the asia-pacific region over the last seven decades, of which they have been a part, has only been possible because there is peace and security and the u.s. presence and roll their has been essential for that peace and security. there was another strain of chinese thinking that goes back long in chinese history that .hey deserve to be dominant that not onlying the united states, as a pacific power, will naturally resist, but all the other countries of the region will as well. what we see today in addition to our own determination to continue our military presence there and every way, making enormous investments. we call it the rebalance. we have shifted a lot of forces

to the asia-pacific specifically to make it clear that the united states will continue to play a military role in the asia-pacific. chineseond strand of behavior, the affected is having is to drive many in the region to our arms, he centrally looking for greater cooperation. charlie: do they feel the need for some partnership that will bolster them? sec. carter: on top of them many are in their own rising military powers. india, destined to be a major regional power. even vietnam, which we have such i know theirtory, defense ministers going back.

that is a relationship that you never would have thought would have gotten where it did today. thisg the effect, behavior, that is not the region week -- not the reason we wish that to happen but it is having that effect. charlie: has it been fair to say they have been more aggressive in the south china sea, putting in different kind of military facilities. sec. carter: they certainly have done more than any other countries. china is done by far more than anybody else. that is part of the reason we have taken the actions we have to continue to fly, sale,

operate. our operations have not changed and will not change. charlie: hasn't stopped them? sec. carter: no, it hasn't stopped them. i think she jinping -- i think she jinping -- i think xi jingping said -- this is that second strand of chinese behavior in action. don't expect we can only eliminate that strain of thinking. i think we have to take that as a reality to which we need to the militarye capability in the defense department, that is what we are doing. we should continue to do what diplomats have been doing, which is to try to get them to change course. my job is to make sure we are changed if they don't change

course. asrlie: do you believe that the chinese president consolidates power he is becoming more aggressive in china nationalism and china interest and china as a global player? carter: i knew hoosier and knew -- say he is is fair to a stronger and more unitary hiser then either of predecessors. he is emboldened politically at home. i think he is quite concerned

about the economic and demographic prints. i think you see that tendency in the chinese leadership. it has been lost in many countries. i see all of those things and that is one of the reasons we see that strand in chinese strategic thinking being so distinct. whether it is growing or not because other factors weigh against it. ios 8 trying is one of the things we make military investments, military operational plans. even as russia is, even as north korea is.

those are our principal five. military occupations of today. each one ofg sure those we have the right military path. i am confident in what we are doing. the other thing that is very in other thing that has been an important preoccupation is making sure the military is also the world's best. as you know, because you do another that she do a lot of discussions on this. -- you do a lot of discussions on this.

it is changing constantly. certainly not entirely governmental. of commercial and global technology. most technology of consequence to military affairs arose in the united states. we need to have different relationship. >> and to bring their best in price. intent too why i'm so the generation of the future. many people have parents and i have been very intent on contending -- on

connecting to the next , inspiring them with our mission, being flexible where we can. to understand they are different to beoday's generation welcoming to their technology friendliness. charlie: let me go to north korea. some kind of relationship but china is good and necessary. >> it fortunately has not borne the fruit that we all expected. it is very much in their interest. they have not -- the chinese behaved in regard to chinese interest, which is having a war

or nuclear weapons on the immediate border. koreans of course to us come off -- all north korean children are taught they are the enemy, the devil. our ability to influence north korean thinking except through deterrence is not great. therefore when it came to the diplomatic approach, the theory behind the six part party that behind the six party talks was they could use the historical history thatal they have with north korea uniquely to try to reach the north korean leadership. that has not borne fruit.

, everyone i have talked to -- everyone i have talked to, they remind me of how they have elevated the threat of north korea. carter: let me put it this way. north korea has always been -- and i have been doing this for a long time and i have forked for the first time on the north korean more palin -- korean war plan. i was a different circumstance at a different time. -- that was a different circumstance at a different time. we have spent money and made careful plans to stay one step ahead of north korea. built sense that we have missile defenses and expectations that they may develop missiles that are longer

and longer range. that is why you see us increasing the number and the technological sophistication of the missile defenses of our country. that is why ucs building new defenses in south korea and japan, in guam. charlie: giving them the same kind of defense system we have, the state-of-the-art defense system. ourselvesr: operating . had theh koreans have patriots for quite some time. we are doing all of that, including with them. it is an alliance decision and capability. we have been staying one step ahead in both deterrence and defense. we have 20,500 troops on the korean peninsula and a major

plan to do a major reinforcement should war come. we stand to our slogan on the korean peninsula, fight tonight. you have talked about the counter isil campaign, russia, china, iran. in each and every case we are making investments and heavy operational plans to deter. with comes to a conflict respect to those different contingencies, they are all out there. that is a world that faces us. >> have a developed all the other technology so once they have the missile it would fit on the missile? >> that isat close?

an intelligence judgment. in anticipation that could occur. and making sure we will be prepared, that is the reason we began some years ago to build field and then increase in the last four years or so, increasing both the number and sophistication of the missile defenses of north america. we in the defense department are staying one step ahead of it. and we are. ♪

♪ charlie: y do you put iran -- brady you put i ron? -- where do you put iran? is. carter: if it implemented it does stop them from getting a nuclear weapon, however it doesn't stop iranian activities in the region in general. it doesn't take an -- doesn't take away iran's potential for

aggression. that is why they are also there in missile defense. we have forces in the gulf for two principal reasons. first is to carry out the campaign to defeat isil. iranianr is to deter aggression. our ally starting of course with israel, but not limited. charlie: a lot of the sunni arabs are worried. they have had american support. that is an ongoing diplomatic relationship. sec. carter: it is more than a diplomatic relationship, it is a military relationship. we have had relationships with

have -- we do with turkey, we obviously do with israel. charlie: when you see the turks and russians cooperating against said -- is sec. carter: it is said we don't observe that. you are getting ahead of what we don't see. with respect to the turks and the counter isil campaign, that turkeye you are heading, is a member of the coalition, a member of nato. we work well with them. they allow us to use a basis in turkey. they have been doing more every month for the timeline -- for the time i have been secretary of defense. do have issues with turkey

but we do work with them very systematically. we have done that in syria and iraq. and our relationship on the ground and working with turkey , this is something we work on every day. these are complicated places. iraq and syria are complicated places. my northstar is american interests. and i don't -- i don't expect to make simplicity there. i am clear about what u.s. interests are. with turkey we are very effective in pursuing our interests. as always they are not identical. but they overlap very substantially. it's not like russia where they

overlap -- where the overlap is quite small. almost any country you don't have an identity of interests. my job is to carry out anybody's national interests. it would be nice to solve everybody else's problem in every problem in the world. job one is to protect the american people. we know what they are and we can do that. charlie: i have heard you say and your memo. your exit memo. he also talked about ofernization and the quality the men and women and your commitment to them.

sec. carter: innovative military is important. to be technology and pico's -- technology and people. is ahing i'm so proud of learning institution. it is tremendously adaptable. over time it has been the forefront of every field of military. i spent a lot of my time continuing to the outside of the pentagon. and making sure we are constantly looking around for ways that we can do things differently. people tend to think it is a big

bureaucracy. there are aspects of it that are that way. by and large it is a learning institution. if we set a direction, and my experiences we set a direction, our military will move into the future faster and better than everybody. that is as important to me and must be to any secretary of defense as is dealing with the secretary -- dealing with the circumstances of the day. i am confident with what we are doing today, but i am confident institution to dominate the future as well. that is not a birth but something we have to work out.

we need consistent leadership and not just budgetary support. support by our troops. thing i forgot and i wanted to bring it up, we have more troops there engaged in battle. where are we? carter: i have been at this one for a long time as well. i remember our overall approach is as always to protect our own interest and make sure that attacks like 9/11 never reach their again. no safe haven. our approach has been a number of years. to strengthen the capabilities

of the afghan security forces. they have gotten stronger through two successive fighting seasons. they have held their own. we are down some winter cycle where they refresh. they are getting stronger and stronger in every way. that is pretty much the path we are on. one of the things i recommend it was that wedent keep more forces in afghanistan this coming year. these are enablers, people equip the afghan security forces.

we had the expertise and the capacity to do it. nudge to the extra afghan security forces, a little of security in this overall strategy. -- i'm not going to deceive you, you have been at this for a while. our expectation is we will be at this, which is not substituting for the afghan forces any longer. not only we but everybody else who has been part of this since the beginning is committed to continuing that rule. it's important we do that so we don't have a nest of terrorism in south asia. it is also not bad to have a very willing and cooperative

security partner. i never overlooked that and we and allies that are an enormous asset to our having aand cooperative partner has that upside. charlie: as we leave this conversation and looking at all the things you are proud of, what is it around the corner that you want to say to all of us? sec. carter: we have discussed pretty much everything. i have to say i have tended to everything i thought was necessary and part of the future. i think we are on the path strategically and today and to the improvements we know. the only thing i would say is this requires persistent effort,

particularly to stay ahead of our enemies. there will be changes in technology, and the strategic wayscape, changes in the our people think about their own future. we need a defense department that is agile. i have a lot of admiration and confidence. the innovativeness of the u.s. military, they have dealt with ethical situations in recent history. in each case we have climbed on top of our circumstance. i am confident in this future for that reason. predict theidently

future, because we have never successfully predicted the strategic future. it's important to continue to be agile and be the best. ♪

♪ welcome to the best of bloomberg markets: middle east. driving major stories headlines from the region this week. oil show some signs of life. the united arab emirates says oil is around $50 a barrel won't cut it. an update on the mini meeting. there is no let up inside turkey's beleaguered currency. we take a look at how the political quagmire and inflation have combined