>> rose: welcome to the program. tonight, we continue our look at the iran nuclear deal as it goes to congress. we talk with bill burns. he is president of the carnegie endowment for international peace and former u.s. ambassador. he holds title of career diplomat and is former deputy secretary of state. bill burns on the iranian nuclear deal. >> that's the danger, i think in walking away from this agreement now because i think the reality is if we were to do that in pursuit of a so-called better deal or strengthen sanctions, we would end up being isolated because i think most of our partners would see that as acting in bad faith. i think you would start to see the sanctions regime crumble and weaken maybe not overnight but certainly over time. i think it's the irannians that would benefit and we would be left with what's not a good outcome, an unconstrained and

uninspected iranian nuclear program. >> rose: bill burns the next hour. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: bill burns is here, one of america's most senior and well-respected diplomats. he was deputy secretary of state from 2011 to 2014. prior to that, he was under secretary for political affairs, also u.s. ambassador to both russia and jordan. in 2013 burns led secret talks with iran which set the stage

for the comprehensive agreement that was made last week. burns retired from government last year and is now president for interest carnegie endowment for international peace. i am pleased to have him back at this table. welcome. >> thanks, charlie. >> rose: how do you lining this new role away from government? >> i'm enjoying it. i was very lucky in public service for 30 years and loved it but i'm enjoying life after government. >> rose: take me to amman. how did this trip happen, there trip with you and jake sullivan and others meeting with iranian esentatives covertly. >> i think you have to remember that, at the beginning of 2013, beginning of president obama's second term, we had built up a lot of leverage working with international partners to bring pressure to bear against iran to get it to negotiate seriously. iran's oil exports dropped by 50%, the value of its currency with dropped by 50%. the reasons we built up the

coalition is not because of iranian intransients, it's because the united states showed we were serious about negotiations. so the president concluded rightly that the time had come to try to test, you know whether or not iran would be serious about negotiating on the nuclear issue. in a sense, it was both a test of whether they were serious but also an investment in that international coalition to show we were serious and, if that test didn't work out so that we could sustain and strengthen the sanctions regime. i think it's fair to say we were all skeptical going in. we had gone 35 years without sustained diplomatic contact with iran, a huge amount of baggage on both sides in washington and tehran. the best way to test it would have been to do it directly and quietly. it would have been difficult to get it if we had had publicity so the amaanis were effective facilitators for much of 2013. >> rose: a little like nixon

and china, isn't it? a different issue, but nevertheless you have to do these things in a kind of quiet way without the glare of publicity and knowledge and people taking shots before you have any understanding of where you might go. >> i think that's exactly right, and it certainly became clear after president rouhani was elected in early summer of 2013, that rouhani, foreign minister zarif, two principal deputies with whom we dealt with in that period were serious about trying to negotiate. in fairness, they were probably as skeptical and suspiciousen as we were. but over time in the course of all meetings 2013 i developed a fair amount of professional respect for them. they're very tough skillful negotiators, and we were able to begin to get some traction. >> rose: were they motivated by the elimination of sanction or was its a broader sense of we need to change the perception of iran and our relationship with the broader world?

>> i think it's a little of both. i mean, in the sense that iran is as i've discovered over the years, is not a monolith. there are debates that go on within the leadership and in tehran over these issues burks i think what ran across the political spectrum was a sense of the economic pressure that i described before in the sense that the only way to begin to relieve the pressure was to deal seriously on the nuclear issue and seriously not just with american concerns but international concerns about the need to constrain their program. >> rose: why do they continue to say we do not want a nuclear weapon? i've had -- i've interviewed the last three presidents of iran. >> you know -- >> rose: it's not necessary. i've heard that assertion many times, it's been embodied in a fatwa which the supreme leader, but any negotiation and effort in diplomacy you can't base it on trust or public assertions, you have to base it on the quality of the agreement. >> rose: but why say it if, in

fact everybody thinks it's not true, unless you believe it's true and there is some definition you have that's different from the definition of the world. >> yeah, i mean the only definition i think that we can try to apply is one that's verifiable and that's what we set out to do, going back to 2013. >> rose: why do you assume they have been cheating in the past? >> i think you look at the i.a.e.a.'s record, the reasons blind the security council sanctions resolutions that were passed based on iran not living up to its international obligations. so, you know, there is a very intricate record that would build suspicion about their program and that's what we had to deal with. >> rose: we now have an agreement between p5+1 and iran in which the singular goal was to get iran not to move forward to have a nuclear weapon and, at the same time to lessen the sanctions.

beyond that, what is the import of this deal? >> well, first, i think charlie, you're exactly right that the focus of this was to prevent iran from acquiring a nuclear weapon, and i do believe this is a solid verifiable agreement with very strong international support. i believe it's the best of the available alternatives for ensuring iran doesn't acquire a nuclear weapon. the truth, is there are risks involved in any choice you make on the iranian nuclear issue and any option you pursue. and we have to be honest about that and honest about how best to manage them. i personally have always tried to be very pragmatic about this. i do not assume there is going to be any overnight transformation in iranian behavior elsewhere in the middle east whether in lebanon or syria or iraq. >> rose: and, in fact the ayatollah said there will not be, we're not changing our policy. >> right. and, therefore, i think it's very important for us to base our policy, our strategy on the

assumption that that kind of behavior is going to continue to threaten our interests, the interests of our friends for some time to come but i also believe that that behavior would be much more threatening if iran had a nuclear weapon or its nuclear program was unconstrained and uninexpected. >> rose: biewbl iran would have had a nuclear weapon sooner without this agreement? >> i think there would be a real risk iran could accelerate its program and get closer and closer to that point and i think that just adds to a degree of instability and fragility in a region that already has more of its share than both of -- >> rose: but they're a month or two months away from a break now aren't they? >> currently without this agreement, the iranians would be two or three months away from developing enough fissile material for developinga nuclear weapon. that's only one dimension. you then have to develop an

explosive device to deliver it and that takes the two or three months and extends it to a year over a longer duration. >> rose: do they have the other two developments, the means to explode it and the means to deliver it? >> up until 2003 our intelligence community believes they were trying to develop a weapons program. i don't think we've ever been entirely sure how far they got which makes it all the more important that the verification provisions and disagreement are very tight. >> rose: we do know they were trying to put together fissile material, do we not? >> yes, and their stockpile increased steadily in 2003. they had 164 centrifuges installed. ten years laird they had 19,000 centrifuges installed and a stockpile of 10 now kilograms of enriched material. and one of the big advantages of this agreement is it will reduce the stockpile which is ten weapons worth of fissile material by 98% down to

300 kilograms over 15 years and that's less than what it takes for one nuclear explosive device. >> rose: have you read the document? >> i have. i spent a lot of time over the years. >> rose: i now know two people who have read the document. ari shavit was here last night. he said this document is an incredible way, guarantees the nuclear program in iran the danger you will not have control of what happens outside of the known sites that's the danger. >> i think the danger of iran sneaking out to develop a nuclear weapon is always greater than them using a declared facility to do that. that makes the verification provisions in this agreement extraordinarily important because, without those verification provisions, it would be impossible or at least extremely difficult to tell whether or not the iranians were trying to develop a covert site. now, some of the other provisions of the agreement are extremely helpful in this regard, too. for example, you will have

continuous access to the whole nuclear supply chain from iranian mines and mills to the production of centrifuges and the storage of centrifuges. it's very difficult to construct a covert site and an entire separate covert supply chain. >> rose: the fact that we'll be able to trace the supply chain along the way is crucial? >> extremely important and something we embedded in the interim agreement in 2013 and built upon in the comprehensive agreement. >> rose: why do you think there is so much skepticism about the agreement? is it just politics or a genuine concern by people who worry that the iranians got the better of this dismeel. >> i think this is an issue that deserves serious debate. it's a really important issue not just in terms of the u.s. and iran or the international community and iran, but the stability and future to have the middle east as well. so it deserves that kind of, you know serious debate and not surprising honest people are

going to differ over whether particular provisions are strong enough. there is also understandable concern about what this means in a region in which, as i said before, i don't expect an overnight transformation of iranian behavior. so what does the relaxation of sanctions mean for iran to exert influence, whether shia militia in iraq or houthis in yemen. those are legitimate questions. i'm convinced we're far better off at the end of the day with this agreement than without it. for all of the debate and controversy, there are two questions we have to keep coming back to. the first is that if we were to walk away from this agreement, could we get a better one. the second one is if we can't get a better one, are we better off with this deal or without it. >> rose: could i add one more? sure. >> rose: could we have gotten a better deal if we continued to negotiate? because some argue that time was on our side because the iranians

knew that, down the road with a new president, who would likely be tougher than president obama i'm asking that. >> sure. i think president obama's been very tough and very realistic and pragmatic on this issue and i think if he had wanted to get a deal sooner, he could have done that. the reason this took so long and the negotiations were so pains taking is he was determined to get a solid verifiable deal, which is what i think he produced. >> rose: what's the weakness of the deal as you see it? >> i think, as i said it's a solid deal. i think, you know, there are questions that arise particularly with regard to, i guess, two challenges that lie ahead. first is the execution of the agreement, because implementing this agreement is going to require the kind of sustained say day-in, day-out, sharp focus that, you know, we haven't always been great at in the u.s. government and we'll need to do that this time and i'm confident they will be able to. second is to embed a nuclear agreement in a wider strategy in

the region that reassures our friends in the gulf and in israel and elsewhere and pushes back against iranian behavior that is going to continue to threaten us. >> rose: i think i understand what you mean but embedded in a wired strategy that says this deal ought to be part of -- one part of a relationship with iran and another part of a relationship with iran ought to be trying to push back to ameliorate their behavior with the neighboring states. >> i agree. easier to say than do, but i farmly believe those are the ingredients of a sensible, workable strategy. >> rose: due do -- but do the neighbors have the same opinion? saudi arabia has its issues with iran emirates and israel have their own arguments. have they reached the same judgment about the consequences of the deal and the embeddingment, i guess, of a new

strategy? >> none of those players have been shy about expressing their doubts about this issue. so we have a serious challenge ahead of us, the united states does, in terms of reassuring. that's the reason the president hosted a number of gulf leaders in camp david in may, why ash carter is in the region now why secretary kerry plans to go at the beginning of august. a single meeting is not a strategy. we'll have to keep this up over time. but i think it's possible over time to build that sense of assurance. >> rose: tell me what the argument would be with respect to saudi arabia and the emirates and israel, if you were in the role that ash carter has today. >> i think the core issue is we're clear-eyed about iranian behavior continuing to threaten our friends and our interests for some time to come. but that behavior would be much more threatening if you had an unconstrained iranian nuclear program or iran that had a nuclear weapon. so it seems to me to make sense to try to ensure that at least you're not going to have that

element of threat or risk or fragility, but still leaves you with the wider challenge of dealing with iran's other behavior, and that's something we need to work with our friends to take on. >> rose: how do we change iran's behavior with respect to supporting hezbollah providing money and arms for them, hamas the houthis in yemen? >> i think there are two dimensioningdimensions of this. in the short term, we need to make better use of the tools that exist. there are security council resolutions that prohibit iran from sending weapons to hezbollah, shia in iraq and houthis in yemen. so we need to step up intelligence sharing do what we can to improve the capacity of our friends to help prevent that in the future and work, i think more energetically and effectively to counter those kind of pressures. in the long term, i think there is the reality that you have an iranian population 70% of whom

were under the age of 30. you saw in the reaction of the announcement of the agreement -- >> rose: the cheering in the streets. >> yeah, and the the first of people and not just in the younger generation but the entrepreneurial class to connect with the rest to have the world. i don't expect overnight transformation of behavior. there are a lot of risks involved in this. but i do think over time, that's going to have an impact as well in terms of how iran interacts with the rest of the region. henry kissinger rightly said a while ago that iran has to choose ultimately as to whether a revolution in a cause or another big ambition in the region. >> rose: or an ideology. ight, and i don't think the choice has been made. >> rose: they haven't made that choice? >> it's not apparent to me. >> rose: they feel that they're part of a worldwide movement. what makes up that movement? is it theocracy? >> there is a revolutionary

ideology that's, you know, been at the core of what animates that regime for more than 35 years -- >> rose: a huge part of it is anti-american. >> it animates whatever americans say their policy regime change is. that's not true but some people believe that at the core of the regime. >> rose: how hard is it in the conversations you had to get beyond that, the sort of sense that america has never been on the side of iran, outside the revolution in '79? >> that hovers in the background of conversations today and sometimes it spills into the conversation and the truth is there's a lot of the same sense of grievance and suspicion on the american side too going back to the hostage crisis. so navigating through that is not an easy thing to do and, as i said, none of this effort at diplomacy has been based on trust or the notion that somehow you can just leap over that historical reality on either side. but i think what has been

demonstrated is that you can focus on practical issues and make some progress. >> rose: you know that i'm interested in russia. >> mm-hmm. >> rose: you were the ambassador to russia. the president has said, russia played an important role, a positive role. what role did they play? >> well, i think throughout this process, again, you know, this wasn't just want the united states and iran. it was about mobilizing international support first in favor of sanction res gem of unprecedented intensity and then ultimately to come up with a common negotiating position with iran and that's not a small achievement for the president or john kerry when you consider that there were lots of other crises between us, like in ukraine between the united states and russia, so it's not been a small thing that we were able to, despite all those problems to sustain first sanctions and then, you know, a serious coherent effort at negotiations. and thing that was largely on the russian side because the russians don't have an interest

in the nuclear armed iran. i think they understand the challenge and the threat that that would pose to their interests as well as everyone else. i mean the russians and my experience tend to be pretty unsentimental about this, and you know, i think that's what sustained them. >> rose: what's interesting to me is that, when given an opportunity to take a position to be on the same side as the united states, that they viewed as in the public interest of russia, they were there. >> right. and that's true of china as well. >> rose: a knee jerk reaction against america. >> no. and the same is true with china, where we've had our share of differences in recent years as well. so, you know, continuing to hold that coalition together and, you know, keep people together at the negotiating table was, you know, i think -- >> rose: a diplomatic achievement. >> it was, for both the president and secretary kerry. >> rose: beyond that the untold story seems to me, and you've certainly alluded to it is it was not easy to build the

sanctions to the extent they did. clearly they had an impact because they were effective and it's not easy when you have all these countries that have all kinds of economic interests that run counter to iran. >> in moments post 2008 economic fragility around the world to get countries to reduce imports of iranian oil was not an easy thing to do and the reason for that was partly the strength of the u.s. financial system, partly iran intrancejence. president obama demonstrated we were serious about negotiations. sometimes people argue we could have stayed at the table and increased sanctions indefinitely. the problem is if we reached a moment where the iranians were serious about compromise especially in the eyes of most of the big international players, and we weren't, then

you see is sanctions regime and the international coalition erode. so there comes a point where you build up sanctions pressure and you have to use it or lose it. >> rose: the president always said this was impossible and he understood it, but others argued including the prime minister of israel that if sanctions were working, more sanctions worked bet around what you need to have had was a deal that we would eliminate the sanctions if iran would simply rim nate all centrifuges and all its capacity to build a nuclear weapon. >> i understand the argument burks i think there are two problems with it. first, there isn't any evidence to suggest sanction ace loan would have caused iran to abandon its enrichment program altogether. second -- >> rose: let me just explore that. why not? if, in fact, they were hurting and hurt so much they came to the table, hurting more would not have achieved your ultimate objective and have them say, okay fine, we give up our nuclear program? >> i just don't see any evidence

that the iranians were going to capitulate on that core issue. it's certainly possible to get the iranians to accept, as we've done, very sharp constraints on their program over a long duration, solid enough verifiable enough to give us confidence that they're not going to acquire a nuclear weapon. but the second problem with that thesis is that i just don't think it was possible to build a strong international consensus around dismantling their program. and it was that interpretational consensus that made the sanctions so effective, because it wasn't just about the united states and iran, it was about others joining and applying that pressure. >> rose: so western europe and others would not necessarily have been there for that kind of tightening the screws on sanctions? >> i don't think they would in the end. as i said in a perfect world that's the kind of outcome we would have aimed for and achieved but we just don't live in a perfect world and perfect alternatives never have been on the menu in dealing with this

issue. >> rose: the president also said that if, in fact, this deal had not been able to be worked out that the sanctions would have falon apart in part because the sanctions got you there to negotiate, and then the negotiations fell apart, but you couldn't build them back. yet, at the same time, a snapback function is part of the deal. those things could be a little bit in contradiction. >> well, but i think what binds those two together is a snapback, a reimposition of sanctions would be in reaction to iranian violation of a deal. >> rose: they would be more motivated to rejoin the sanctions effort. >> right, you can build international support for that. but i think we had come to a pointy you had a new iranian government which is at least prepared to engage seriously on these issues, where is i said before you really face the choice of, you know, making maximum use of the leverage we had built up or, if we were seen to be the party not the iranians which wasn't negotiating seriously then there was a real risk that we would start to louis it.

that's the danger i think in walking away from this agreement now because i think the reality is if we were to do that in pursuit of a so-called better deal or to strengthen sanctions, we would end up being isolated because i think most of our partners would see that as acting in bad faith. i think you would start to see the sanctions regime crumble and weaken maybe not overnight but certainly over time. i think the iranians would benefit and we would be left with what is not an appealing outcome, an iranian nuclear program that's unconstrained and uninspected. >> rose: the other thing that comes out and there are many aspects of this that the u.s. wanted this more than the iranians did because this deal, because the president would prevent them in getting a nuclear weapon and all its ramifications. at the same time as the arms embargo issue came up which

iranians argued was a sanctions effort and should be eliminated, you guys argued differently but settled on that and it seems to have settled, according to watt we and i read because secretary kerry called the president and the president made the decision this deal is too important for us to sort of go for all or nothing on the arms embargo, so, therefore, we'll compromise on it, but suggests a very strong belief by the president that this deal would prevent them from getting a nuclear weapon and we couldn't afford to lose it over this arms embargo conflict. >> well, first charlie -- >> rose: or am i unclear about it? >> no i think the criticism that somehow we were desperate for a deal, the president secretary kerry wanted it more than the iranians did is not a fair one. as i said before, had, you know, the united states wanted to get a deal at any cost, we could have done it a whole lot sooner and with a lot of less similarmatic pain. the reality, i think when you look at really difficult issues

like the arms embargo, the restriction on ballistic missiles that we're putting the security council resolutions as a punitive measure against iran's nuclear progress. the reality is that to sustain those and security council resolutions, you have to persuade our partners as well. most of our partners or many of our partners had different views on this as well. so it wasn't just a u.s. judgment to be made. it was something that had to reflect the views of the whole group. second, as i said before, though, there are a number of other measures that exist that prohibit iran from supplying weapons to hezbollah or shia militias in iraq or the houthis in yemen. we need to make more effective use of those. so there are a number of things we can do to push back against iranian behavior and it is true that we need to find ways to be more effective in doing that. >> rose: the other argument being made by critics of this is the idea that $200 billion that the iranians will come into because it's owed them and the reasons you add up to get

200 billion, they will immediately use in part to support all of the things we're against. >> yeah, i mean, i think the figure is probably closer to $100 billion, but a lot of money and a very fair concern that people raise because the truth, is we don't know exactly what this iranian leadership will do with that money. it's fair to assume that at least some of it will go to supporting the wars and others fighting in proxy wars against our friends in the region. at the same time, i think one of the reasons iran came to the table is because it was suffering economically and faces huge economic needs to go well beyond $100 billion. it's also fair to assume that a significant portion of that money is going to have to go to, you know showing iranian citizens that their economic life is getting better as well. so i don't honestly know what the balance will be. it's a fair concern. it's all the more reason to embed the nuclear agreement in

that wider strategy that i talked about. >> rose: which has not been done but is underway to try to embed it. >> right, and i think that's going to have to require a lot of priority and focus for the united states and it's partners. >> rose: there is also this, a lot of people feel after 10, 15 years, they will have an unfettered access to get a nuclear weapon and so they simply have delayed their opportunity by ten to 12 years. >> yeah, i mean, i think the reality is first. the iranians have made a permanent commitment not to require a weapon embodied in the security council resolution. we'll have had the experience of not ten or 15 years burks an open-ended commitment by iran to the additional protocol of the international atomic energy agency which does apply, you know, very stringent inspection procedures. we've also had in addition to tad additional protocol an experience of between ten and 25 years, depending on the provision, of, you know inspection procedures that go well beyond the additional protocol.

so we'll have a strong track record against which to measure iranian behavior after that period. so i think there are a number of reasons to believe that, you know, we'll be able to exert international pressure against iran to live up to its commitment not to seek a nuclear weapon long beyond the period of this agreement. and again people express understandable concern about the sunset provision, the number of dimensions of this agreement have an expiration date. but the sun isn't going to set on all the options the united states has at its disposal including military ones if we ever get to the point after the expiration of this agreement where iran seeks to break international obligations and develop a nuclear weapon. >> rose: we then have military option if we elect to use it. >> we certainly do and with a fair amount of international support because we've demonstrated our good faith in implementing this agreement and it's iran which would have violated agreement where it

violated long-term international agreement if it sought a nuclear weapon. >> rose: speak to this -- a lot of people think this is a crucially important time. as you said, this is an important time to have a debate about beyond this agreement about nuclear weapons in general and iran and its role in the world specifically, and they argue that, if in fact, if they believe it's more likely iran will get a nuclear weapon then what you will have is a middle east that is a more dangerous powder keg than it's ever been, and that's likely to happen if they believe it's likely they will get the nuclear weapon after 15 years. i'm asking you to speak just to the question of the powder keg idea. if iran has a nuclear weapon, all bets are off in terms of the middle east. >> i think the middle east is today lar powder keg and a nuclear armed iran would make it that much more explosive. i think it's far less likely that iran will acquire a nuclear weapon with this agreement than

without it. i think without this agreement, that concern that understandable concern would become much more immediate and accelerated which is the last thing the middle east needs right now. but there are a lot of other dimensions of that powder keg that the united states is going to have to address for some years to come. >> rose: which are? well, i mean, first it's going to be pushing back against i.s.i.s. and ultimately defeating i.s.i.s. which is a huge challenge and it's going to take time and enormous effort in iraq it's going to take a strategy not just about security, the strength and the capacity of the iraqi security forces, but it's also political as well, because you can retake tikrit or mosul, but if on the day after you don't have a legitimate sunni arab political answer to the question that's on the minds of lots of sunni inhabitants and the arab inhabitants of those areas this problem is going to recur in the future. so that's one dimension. syria is a huge catastrophe and you know, that's going to demand our attention for some time to

come. so, you know, the problems in the middle east i'm afraid, are going to be with the people of that region and the united states for the next generation and beyond. >> rose: i was at a conference when you were participating in a panel and someone raised the question of what are we doing to make sure that we are part of a program and an idea so that young people don't turn to i.s.i.s. and you, in a sense came alive at that argument because it seemed to resonate with you that somehow part of our strategy against i.s.i.s. has to be what is the lure for people to go there and how do you provide an alternative opportunity. >> i mean, i think that's an extremely important point charlie. i think, first, it's only people and leaders in that region, in particularly in the arab world who are going to be able to answer that question. because the problem with the powder keg or the vacuum that exists in the middle east right now is the crumbling of much of the arab state system. and there's a big question hanging over all that what

comes next? i.s.i.s. has its own answer to that question, so does iran. >> rose: and includes a lot of places -- saudi arabia, lebanon jordan -- >> right, and ultimately, as i said, it's the people in that region that will have to come up to w the answer to the question of what comes next and that's going to require a long-term commitment to better educational systems to create a sense of economic hope which doesn't exist in that and many of those societies to create a sense of confidence in governor nens nancy which also doesn't exist and which is at the root of what we saw in the last four or five years in the arab resolutions. so it's going to take a long time to do that. the united states can contribute to that you know, in terms of those long-term challenges trying to help modernize educational systems, trying to help modernize economies but also in the short term by trying to limit some of the risks and fragilities that exist and that's what i would argue fits in the case of the iranian nuclear question, on the assumption that a nuclear deal armed iran or an armed nuclear

program unrestrained will add another layer of danger to an already explosive situation. >> rose: seems like something that's fundamental, you have to have, way back to al quaida, you have to have in this region an alternative. i mean, it spawned in part the aber spring having to do with governments but also was the aspiration of people because in an internet world they saw what life was like elsewhere. >> right. they saw what other people had that they don't and that in many respects is animated, what we saw in the revolutions from 2011 on. there was a really interesting set of studies called the arab human development reports which were done more than a decade ago and if you reread them, they or as accurate and relevant as they were then because they talk about the deficit and educational systems and women's rights and economic opportunity, and until people and leaders in

the region, with support and creative help from us and others begin to address those -- >> rose: but the argument against american diplomacy by many here and abroad is we have ignored those ideas and those issues in the interest of having a stable relationship with someone who was on our side and in the interest of having a free flow of oil. >> that's been a fair criticism and lots of different points over recent decades and i think it's going to be extremely important as the united states looks at its strategy in the middle east and the years ahead to try to find an effective balance between short-term challenges, because order and stability are important if you're dealing with challenges like i.s.i.s. and others but not to be blind to the reality that, you know you can't sustain that kind of stability unless you're making progress on some of the longer-term issues because stability is not a static phenomenon. societies that adapt and

modernize, you know, are going to be able to stay ahead of those precious, -- pressures and those who don't will be brittle and break. >> rose: it goes back to the shah because the american diplomatic effort had no real knowledge or understanding or were fearful of having any kind of relationship to anybody who opposed the shah and i assume that's true in other places as well, whether egypt the muslim brotherhood or wherever. >> it tends to be a short sighted diplomacy when we do that, which when the united states looks ahead we'll have to find a balance between the short term and the need for order and stability, but recognizing you can't sustain the stability unless you make progress on the other issues. >> rose: this is the "new york times" today. i may not have it. i hope i do. i do. i want to talk about i.s.i.s. this is the lead story in the "new york times." i.s.i.s. leaders take steps to ensure groups' survival. power is parceled out drawing

lessons from militants depleted by drone strikes. islamic state's releasive leader ep empowered his circle of deputies as regional commanders in syria and iraq that wide ranging authority are ensuring top leaders are killed, the organization will adapt and keep fighting iraq and american military officials say. this is no uncommon enemy we have here. >> no, and the longer they are entrenched, the more difficult they will be to dislodge, which is why there has to be a real sense of urgency that the efforts we and others are making in iraq. again, why this has to be not just a security strategy but a security and political strategy as well. >> rose: and what do we mean by political strategy? >> it means you have to have a government and leadership in baghdad and a central government which can reach out to sunni arabs. >> rose: and a sunni majority they're tolerant of sunni aspirations. >> that's right, because if you can't demonstrate that sense of

tolerance, it's hard to hold a multi-ethnic, multi-sectarian -- >> rose: and places like bahrain where they have a shia majority. >> so there again having that long-term view about the importance of pluralism which doesn't middle eastern that you have to replicate american democratic institutions, but it does mean that you have to build a sense of tolerance a respect for pleurallism and the institutions that are going to knit societies like that together, and, you know, that doesn't exist in iraq today but that's the big challenge, i think, because the problem that i.s.i.s. poses in iraq, you know is a huge security challenge by also a big political challenge right now because they, you know, take advantage of the sense of grievance and frustration and resent meant on the parts of -- >> rose: but has it gotten a little bit or significant better since the maliki government was

replaced? >> well, the maliki government was a pretty low bar. it's gotten better, prime minister abadi is focused on the right kind of challenges and i don't mean to suggest that it's easy to take these on, given all the blood that's been shed in iraq well over a decade. so i think they're pointed in the right direction, but it's going to require a lot of help and support and encouragement from the united states and from others as well. >> rose: does this deal mean that it's more likely that somehow although the president said no that it's more likely that shia militias and the iraqi army shia militias supported by iran and others and the iraqi military and the united states air force will be working closer together? >> i don't know. >> rose: the shia militia supported by iran is an issue. >> right and shia militias in

iraq the most extreme have had a mixed record militarily on the ground against i.s.i.s. so i understand the concern and the reality they're kind of parallel interests here in the sense that iran and its allied shia militias don't want to see i.s.i.s. have success, and we're certainly working hard to defeat i.s.i.s. but that doesn't necessarily mean you will see close coordination. >> rose: when the history is written to have the two terms of the obama administration, is it possible that history will say this president because he came to power when the u.s. was withdrawing from iraq and he was committed to that to seeing it through, even to the fact that he left no troops there, and the afghanistan were, which he both surged and then began to reduce that he was so conscious of the lack of success in our military involvement that he made decisions that were too cautious too conservative and in that circumstance, i.s.i.s.

grew, and part of the responsible has been that we didn't do enough at the right time? >> you know, i understand concerns on the criticism but i don't agree with them in the sense that, you know, you can take issue with sort of specific tactical decisions that were made whether in 2011 in iraq or elsewhere or at different points in afghanistan but in general i think the president has recognized very clearly what's at stake here and the critical world that the united states plays. >> rose: you think that we have done enough, enough to combat the rise of i.s.i.s.? >> no, i think there is more that we certainly can do today -- >> rose: i'm talking about not doing going forward i'm talking about looking back over the last two years. i mean, had we nod shown a sense of urgency and that, therefore they've taken advantage of that, in syria and iraq? >> i think in hindsight sure. i think we could have demonstrated a greater sense of

urgency earlier on in this process, but i don't think the roots of i.s.i.s., you know, go back to the kind of choices that you made. they go back to the collapse of much of the arab state system. as i mentioned before, they go back to external interventions whether there was an iraq in 2003 and elsewhere, you know, that contributed to changed realities that all sorts of groups have tried to take advantage of right now. so it's a very complicated phenomenon. you're right, a greater sense of urgency earlier on might have been more effective. but, you know, looking ahead, i think there is that sense of focus and urgency right now. >> rose: so what is the strategy? >> i think in iraq, as i described it's going to have to be a redoubled effort in both political and security terms. in syria, it's you know, an enormously thorny problem and i wish i had, you know, brighter insights on that issue. i do think that a negotiated transition, a leadership in damascus is going to be

essential, because i think the longer assad stays in power you know, the more of a recruiting magnet he is for i.s.i.s. and others, that's going to require persuading the russians and/or the iranians that bashar is not a long-term bet and we're not at that point yet. >> rose: i know you don't want to criticize the government you served in, and i understand that, but at the same time we seem to have been ambivalent about assad. >> i think, you know -- >> rose: in the beginning, you know, we accepted the idea that others said that assad had to go. we gave expression to that. then, at the same time when i.s.i.s. rose, we began to say you know, susan rice here at this table began to say we've got to look at this with different eyes. i mean, it's not necessarily the priority now to get rid of assad. >> you know, i just think charlie, it's very difficult to

disentangle the one problem from the other because i do think bashar al-assad and his continuance in office is a recruiting magnet for i.s.i.s. >> rose: but have we done enough to overthrow him, is my question, or did we lessen on that to go after i.s.i.s.? >> we could have done more and i think, at a moment when it might have had more influence in 2012 after the revolution began and there was intense debate over the issues which is not surprising. they're really complicated issues, and it's hard to answer the question, you know how do we avoid a slippery slope and what comes out next to play it out two or three steps but i think the honest answer is we could have done more. i can't say that it would have made a huge difference. i don't know if it would or wouldn't have, but i think it's a proposition worth testing. >> rose: do you worry -- you

were ambassador to russia. do you worry president putin is looking at a better relationship with china, a kind of russian-asian strategy as a wedge against the united states? >> there's a lot of talk about that in moscow right now. i have yet to run into the senior russian official that likes the idea about being china's junior partner. you know, there is a lot of history here as well. nor have i run into the senior chinese official who is deeply interested in the russian economy other than in hydrocarbons and the extraction of rue raw material. i don't think we should be complacent about it because you can see that dynamic but it's worth taking a step back and looking at that as well. >> rose: what are we missing with respect to russia and ukraine? >> i think the one thing -- it's not so much that we're missing but it's lose easy to lose sight to

have it's significant to help ukrainians rebuild their society. the european union is preoccupied with greece. the united states has preoccupations. a huge challenge in ukraine. but in many respects, as it's important to push back against russian aggressive behavior, it's equally important to help ukrainians rebuild their society and economy because in many respects that's the ultimate antidote to putin's aggression in ukraine. >> rose: the ultimate antidote is to have ukraine rebuild their economy and -- >> and healthy political system. there's a long way to do in doing that but it's extraordinarily important because i think putin operated in a target-rich environment, in a sense because he looked at the vulnerabilities of countries in a former soviet space and been able to take advantage of them. >> rose: will history say the united states missed an opportunity to have a better

relationship with russia after the fall of the wall and then we made so many mistakes that led to the rise of vladimir putin and a sense of wanting to restore russia's glory? >> no, i think there was a serious effort made in the '90s in the clinton administration and since then in the bush and obama administrations to try to build the healthiest possible relationship. i think, you know, there were some technical progress like 2009, 2010, you know, objectively we made progress -- >> rose: that was medvedev not putin. >> but putin was never far from the scene. >> rose: but while he was not far from the scene, the u.s. thought we could simply, i don't know purkts all our eggs in medvedev's basket because he was more likely to be -- >> i never thought that was the case. i think putin was not far from -- you know, the reality of

politics and decision-making in russia. but i think the reality is for lots and lots of russians, even critics of putin today, the history of the last 20, 25 years is a narrative of the u.s. taking advantage of russia's historical weakness. i am not arguing we should accept or indulge that, but i think that's what a lot of russians think. >> rose: i guarantee you they think it. >> i think that's mistaken but i think it's reality. >> rose: it's not true but you think it's a reality that animates them? i'm asking you historically here -- >> yeah. >> rose: -- with respect to the march of n.a.t.o., we got close all the way to georgia and perhaps ukraine if things had gone differently. was that a good idea, knowing putin and russia's fear on their borders because of napoleon and world war ii? >> yeah ukraine, it's always been the rawest of raw nerves

for russians. in many respects, i think the challenge right now in ukraine is helping ukrainians to rebuild their economy, to rebuild a healthy political system and that needs to be the near-term priority. in addition, again, to pushing back against russian aggression. >> rose: and the west, not just the u.s. >> right. >> rose: so we'll have a new president in 2016. >> mm-hmm. >> rose: and if this president calls you up and say, bill how are you enjoying life? you say great. and he says, do me one favor tell me what you think my priorities ought to be, give me a memo to the president, what me priorities ought to be. how do i republican or democrat maximize our role in the world towards positive ends? >> first, i think there are a lot smarter people for somebody to call in 2016. second, i think you have to take

a step back. i think it's easy for americans after what's been a pretty complicated 15 years since 9/11, you know two long, costly, protracted painful conflicts in afghanistan and iraq, a global financial crisis, for americans to want to disengage from the world and lose sight of -- >> rose: in the politics. and it's natural. i think there's a natural sense that somehow the united states is on the decline or that somehow our relative influence isn't as great. that's simply not true. i don't mean it as a statement of american arrogance. it's not just the size and confidence of the american military, but the resilience of the economy through all our problems, our demographic constraints, if the energy revolution and increasing centrality of north america in that the atlantic and pacific

oceans that cushion us from a blow. i think the united states has a window looking at the next 10-40 years in which american preeminence objectively i don't think will be questioned. >> rose: economically and militarily? >> i think so. and politically if we play our cards right. the question is how do we use that window to help to adapt to a world and shape reshape institutions and our relationships and partnerships around the world to reflect the realities of 2016, 2017, you know not 1945. so that means, you know, in looking at, you know, how do you reshape global institutions, the i.m.f., for example and, you know, there is been legislation stuck in the congress for some years now to support reform of the i.m.f., to reflect china's rise, and we get ourselves in an unnecessary predicament when we don't take the initiative and use that window before us to reshape some of those institutions. we did a little bit of that with

the asia infrastructure investment bank. you know when here's an institution that's emerging when our answer could have been yes but we recognize the development in asia and stimulated by china but it's important there be international standards to ensure transparency and make it effective. i think we can still rally a lot of countries around that kind of approach. and we face a lot of challenges to regional order as well. so we're going to have to rebalance, you know, the famous term about rebalanced asia, not just in terms of regions that we focus on in the asia-pacific, i think, deserves high priority for the next administration and administrations for some time to come, don't pay enough attention to our own hemisphere which is in terms of the global energy transformation are more important. we've got lots more to do in terms of the transatlantic relationship to shore that up, not just in the face of the challenge pose bid russia, but to see if we can't build the

kind of trade and investment in our relationship that we're trying to do in the pacific as well. and then i think we also have to rebalance, you know, again, not just across regions and, you know, be clear about what our priorities are, but also rebalance the tools we use because i think, after 9/11, you know, at least in a number of instances, with we kind of fell into the habit of looking at force first and what diplomacy is used for is to deal with the aftermath of force or to facilitate it. the reality is, i think, you know, what you want to do is use diplomacy as, you know the tool of first resort backed up by the threat of force too. so rebalancing the tools and instruments of policy are going to be important, too. but remembering our enduring strengths, you know, being mindful of this window before us when i think the united states is still better able to shape events and realities than anyone else and it's important to use that window before other forces and other events shape them for

us over time. so that's an optimistic view of what's possible. >> rose: thank you for coming. a pleasure to have you. >> thank you. >> rose: bill burns for the hour. thank you for joining us. see you next time. for more about this and other episodes, visit us online at pbs.org and charlierose.com. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

this is "nightly business report" with tyler mathisen and sue herera. tech wreck, dow components apple and microsoft fall sharply after reporting late day profits, potentially extends today's deep selloff in stocks. >> new hope and a new generation of potential drugs, that can treat a growing disease with no cure. alzheimer's. >> not so fast the one thing that kohl prevent the federal reserve from raising interest r5i9s. all that and more tonight on nightly business report. >> good evening, everyone. >> welcome, everybody. sharon it was a blue chip wreck on wall street today. more on that in a moment but we begin tonight with earnings from apple and