The MacNeil/Lehrer NewsHour

MR. MUDD: Good evening. I'm Roger Mudd in Washington.

MR. MacNeil: And I'm Robert MacNeil in New York. After the News Summary we focus on the desperate conditions in Bosnia's capital, Sarajevo. We have a report from the city and talk to a World Health Organization doctor. Then the neighboring province of Kosovo. Charles Krause reports on the worries that Bosnian fighting might spread. Four our weekly political analysis Mark Shields is joined tonight by Kevin Phillips, and to close, Elizabeth Brackett updates the flooding along the Mississippi. NEWSSUMMARY

MR. MacNeil: The world's seven largest industrial powers today wrapped up their three-day Tokyo economic summit. In a closing communique, the leaders vowed to coordinate more closely their efforts to revive recession-plagued economies, but they committed themselves to few specific actions. The central accomplishments were a $3 billion aid program for Russia and an agreement cutting tariffs on manufactured goods. They also promised for the fourth year in a row to wrap up world trade talks by the end of the year. President Clinton pronounced the meeting a success but said that more work remained.

PRESIDENT CLINTON: All of us are mindful that we have a long way to go to restore real growth and opportunity to the global economy, but we have made a serious start. We reached an agreement here that can open manufacturing markets to American products and to all other products in ways that we have not seen in many years.

MR. MacNeil: The President leaves Tokyo tomorrow for South Korea where he will discuss nuclear security and other issues with that country's leaders. Roger.

MR. MUDD: More towns along the Mississippi River were evacuated today as levees were topped and broken. Thousands have been ordered from their homes in Iowa, Missouri, and Nebraska. So far there has been more than a billion dollars in damage to property and crops. A levee burst last night in St. Charles County, Missouri, spreading water on land between the Mississippi and Missouri Rivers. Vice President Gore has been overseeing the federal response while President Clinton has been in Tokyo. Today the media watch team held a conference call with governors from eight affected states.

SPOKESMAN: Let me assure you and everyone in your states that we are standing with you and standing by you. The suffering and devastation this flooding has created is causing very difficult times. And we're committed to helping in every way we possibly can.

MR. MUDD: The weather continued to be a big story on the East Coast today with no break from the heat wave. It was the sixth straight day of record breaking temperatures. Forecasters are blaming a weather system they call a Bermuda high. They say it will be sometime next week before things cool down. There were two record highs set in New York City and Atlantic City, New Jersey, today, 100 degrees. Washington, D.C., hit 98. It was 95 at Boston, and 92 in Burlington, Vermont.

MR. MacNeil: The leaders of Bosnia's Muslim government today rejected the latest peace proposal for the republic. The plan put forward by Serbs and Croats would divide Bosnia into three ethnic states. During the 15-month civil war the Muslims have lost most of their territory to Serb and Croat forces. In Serbia today, opposition leader Vuk Draskovic was released from custody by Serbian President Milosevic. Draskovic was severely beaten after his arrest last month during anti-government protests. The release of Draskovic and his wife, who was also arrested, came after appeals from President Clinton and other world leaders. Sec. of State Christopher today warned that Iraq could face further military action unless it allows U.N. monitoring of its missile sites. In an interview with CNN, Christopher said Iraq's refusal to allow surveillance cameras at the sites was part of a pattern of violations. President Clinton said any action would be multinational. U.N. inspectors are being sent to Iraq this weekend to seal the missile sites. The Iraqi government has not given any indication whether it will oppose the action.

MR. MUDD: The Board of Immigration Appeals today rejected Muslim Sheik Omar Abdel-Rahman's request for political asylum. Some of his followers have been charged in two New York City bombing conspiracies, including the World Trade Center bombing. The Sheik, who is in a federal prison in Otisville, New York, will be deported in 72 hours, unless he appeals. If he does appeal, the process could take until next year. That's it for the News Summary. Now it's on to the situation on the ground in Sarajevo, tension in neighboring Kosovo, weekly political analysis, and an update on the flooding on the Mississippi. FOCUS - RAVAGES OF WAR

MR. MacNeil: We focus first on the old Yugoslavia and start with the city that has come to symbolize its fate, Sarajevo, the capital of the republic of Bosnia. Today the Bosnian presidency rejected a proposal to divide Bosnia into ethnic zones. Yesterday the World Health Organization issued a report warning of an imminent public health catastrophe in Sarajevo. We'll talk to a doctor who headed the World Health Organization's office there in a moment, but first a report on the city narrated by Gaby Rado of Independent Television News.

GABY RADO, ITN: Daily life in Sarajevo now revolves around an increasingly desperate search for water. One hundred and eighty thousand people besieged inside the city spend most of their time scouring the streets for new supplies. It's now more than a month since water flowed out of any taps in this European capital city. These fuel tankers stuck outside Sarajevo could save lives were they allowed through by the Serbs. The diesels intended for generators to run water pumps and essentially equipment in hospitals, but the Serbs at checkpoints are demanding their cut of the fuel and whatever the U.N. offers them is never enough.

PETER KESSLER, UNHCR: I feel like our aid effort is getting a runaround by the Bosnian Serbs and that the fuel we have at the airport is not being allowed in. It's being used as a weapon at least as efficiently or perhaps more efficient than arms, than grenades, because without fuel everything comes to a halt, whereas, grenades can only kill twenty, thirty people a day.

GABY RADO: The city's warehouses are also dangerously empty. The blockade by the Serbs immediately surrounding them and by the Croats sitting on the supply route further west has in the view of many Muslims suddenly got tighter in order to pressurize their leadership into accepting the three-way partition of Bosnia. But this afternoon, President Izetbegovic announced that the collective leadership of Bosnia was rejecting the plan.

ALIJA IZETBEGOVIC, Bosnian President: [speaking through interpreter] But it is not, it is no question of having three ethnic units, and these units will not be based upon ethnic principles. In other words, the ethnic division of Bosnia and Herzegovina has been refused.

GABY RADO: Yesterday at the G-7 summit in Tokyo, the pressure on the Muslims to agree to the plan came in the form of thinly veiled warnings that the U.N. may put out of Bosnia and lift the arms embargo. The Bosnian Muslims have long pleaded with the United Nations to let them buy the weapons they need on the open world market. At the moment, they're forced to manufacture many of the arms they need in makeshift factories and laboratories like this one in Sarajevo. Their enemies, the Serbs, have weapons from the former Yugoslav army which was the world's 12th largest force. The poorly armed Muslim forces may want to oppose any peace plan in hopes of exasperating the U.N. and getting the weapons embargo lifted. But itmay backfire against them. As in the free for all blood letting which would follow, they may be outgunned even more than they are at present.

MR. MacNeil: To bring us up to date on the situation in Sarajevo, we're joined by Dr. David MacFadyen of the World Health Organization and epidemiologist. He recently returned from a one year tour as the director of the WHO field office in Sarajevo. He now heads the International Medical Program at the Jefferson Medical College in Philadelphia. Dr. MacFadyen, thank you for joining us. Your head office yesterday predicted an imminent catastrophe in Sarajevo. Spell out what a catastrophe means in health terms.

DR. MacFADYEN: The appeal yesterday was for two things. You saw one on the film there was for fuel and the other is for water. So there are two things which the WHO has a role there for. The first is to protect the public health. You cannot protect the public health without water. And the other is to make sure the local people have the means to treat the sick and the injured. And you cannot do that without fuel. So that is the catastrophe. We've been focusing on getting food in and focusing on getting medicines in. But now the concentration has got to be on those two things, water and fuel.

MR. MacNeil: What are the consequences of not getting the fuel in? We saw the trucks that are being blocked apparently by the Serb, Bosnian Serbs.

DR. MacFADYEN: Yes. The Kosovo Hospital is an enormous hospital, 2,200 beds. And in that hospital the people have to have operations. They have to have sterile dressings. They have to have sterile instruments. They have to have oxygen. Other things require fuel to produce them.

MR. MacNeil: To produce electricity to run the --

DR. MacFADYEN: To produce -- the generators. And at the present time there are only some small auxiliary generators, and they are reserved for the emergency operations, so it has to be from within the hospital, they are casualties of war. And the casualties unfortunately continue day by day, so there's no lack of patients, but there is a lack of the diesel, of the fuel to drive the generators.

MR. MacNeil: How soon could that hospital be forced to shut down or stop doing operations?

DR. MacFADYEN: That is now running. It is the only emergency. Acutely ill and injured people have been taken into the hospital according to reports we have had yesterday. Could I just say that your introduction was very generous but not quite correct in that I established the WHO office there and we have a very devoted director of the office there who is thin, and I think it's important to know that the people we have there are fanatically neutral. The opinions that we're getting are not coming from the Bosnian government. They're coming from objective, independent assessments made by a person like Dr. Ritsterbe Haute who's there now who works not only with the Bosnians but also works with the Bosnian Serbs. Part of his time is working and the other on Sarajevo and working in hospitals as well as working in a Muslim hospital, the national hospital.

MR. MacNeil: Which lends credibility you would think to his account. Now --

DR. MacFADYEN: Can I say something on that? He is, I think, a very heroic person and, and in the message that I got from him today he said the situation was desperate. And that's not normal language that he uses. He has been in other besieged areas. He has been in Gorazde. It's also been under siege for 450 days. He's been in Zepa. So he described the situation in Sarajevo as desperate, but he's been the one that's been here all of this time through the winter, and he's now saying that here in the summer the situation is desperate.

MR. MacNeil: Now, go back to the water situation. Without fuel you can't drive the pumps to pump water through the taps, and you can't drive it through clarifying processes.

DR. MacFADYEN: Yes.

MR. MacNeil: What is the consequence of the water supply breaking down? And there are 380,000 people in Sarajevo.

DR. MacFADYEN: Yes. Well, again we heard just today that the -- one of the pumps in the brewery, there used to be just good beer in Sarajevo, and the water available was a good source of pure water. There the pumps stopped working today. And that is a very serious situation that the population of Sarajevo when I was last there, and they were getting that 20 liters per person a day, today they're getting two liters per person today. That's like six cans of Coca Cola, and that's the total volume you need for washing, for cooking, for drinking.

MR. MacNeil: And so are they, what is the danger from that?

DR. MacFADYEN: Well, the danger is there has been an up surge in diarrheal diseases. Of course, you will get that in any case during the summer time. And the concern is that because the water is now coming from rather shallow surface wells and people have to walk about two kilometers to stand at a hand pump and they take it from rather close to the surface, and there's very, very little water, and they're going to other, unpure sources of water and taking water. For instance, they're taking water at manholes that are really dirty and contaminated.

MR. MacNeil: And so what will happen if that continues?

DR. MacFADYEN: Well, as the director general said in his appeal yesterday to Boutros-Ghali that this is a serious situation, that in the past more people have been dying from the direct constant of the war than from disease, and we may be getting a reverse of that situation, that more people will die from disease than from bullets.

MR. MacNeil: Like what diseases?

DR. MacFADYEN: Well, the base diarrheal diseases. They are due to a contaminated water supply and that they quickly dehydrate children and old people, and the reserves are not strong enough, not reversed enough, to maintain the population with the small amount of intake that they have. And remember, these people have been besieged for over 400 days. Their nutrition is vulnerable as well, and the nutrients that have been flown in are going to be lost to the epidemic of diarrheal disease that will occur.

MR. MacNeil: So, I mean, are you talking about an epidemic that could be thousands and thousands of people dying?

DR. MacFADYEN: It's hundreds at the moment, and as entirety we don't know yet, but there has been established a system by the World Health Organization to see what the frequency of disease is and to see what the mortality is and see if there's any excess mortality due to disease. It's an ongoing process.

MR. MacNeil: And you've alerted, WHO has alerted the Secretary General, and he presumably the Security Council, so, in other words, it would take some forceful measures to get the blockade of those fuel trucks released or removed and to get the fuel in to start the pumps again, to stop what you're describing, is that, is the logic of that right?

DR. MacFADYEN: De-politicize the issue of water, and we just think that it's wrong that children do not have water for washing, for bathing, for toilet. It's wrong that the hospitals do not have fuel to look after the sick and injured, and I think that what's happening there is we're getting the boundaries of inhumanity have been breached, because it doesn't matter whether these are Muslim children or Serb children or Croat children, this is just wrong.

MR. MacNeil: I know you're not in a political role, but another logical inference from what happened today, the Izetbegovic government rejecting the peace plan, so called, that was being offered, means that there's no hope of a cease-fire, and the fighting will go on so this situation presumably will only get worse.

DR. MacFADYEN: Well, with regard to water supply, then that needn't happen, and there have been two initiatives taken in the past. Our part in the UNICEF, Mr. James Grant suggested there should have been a week of tranquility in which the water supply could have been restored, the pipe repaired, and that was proposed a long time ago to try to de-politicize the issue. And that didn't work.

MR. MacNeil: Well, Dr. MacFadyen, thank you very much for joining us.

MR. MUDD: Still ahead on the NewsHour, tension over Kosovo, Friday's political analysis, and an update on the Mississippi flood. FOCUS - ANOTHER BOSNIA?

MR. MUDD: Next tonight we turn further south in the old Yugoslavia to Kosovo. About 2 million Albanians live in Kosovo, a majority, but the territory has an emotional and a religious appeal for Serbians much like Mecca has for Muslims. Kosovo is strategically located, bordering Serbia, Montenegro, Albania, and the former Yugoslav republic of Macedonia. Today another advance party of U.S. troops arrived in Macedonia, part of the 300 to be deployed by the Clinton administration as a warning to Serbia not to expand the war south from Bosnia. But as Correspondent Charles Krause reports, the atmosphere in Kosovo is fraught.

MR. KRAUSE: The morning before ethnic cleansing began in Bosnia it had already started in Kosovo. Since at least February 1990, Serbian police and paramilitary units have brutally repressed Albanian strikes and protests. The Serbs have flooded Albanian schools, courts, and newspapers. Sixty thousand Serbian army troops have reportedly turned Pristina, Kosovo's capital, into an armed camp. Some 2 million Albanians make up a large majority of Kosovo's population, 85 to 90 percent. Yet, they no longer have the right to study or even to have street signs in their own language. As in Bosnia, Serb forces in Kosovo appear to be engaged in the deliberate campaign to terrorize the Albanian majority, which is mostly Muslim.

SALI MUSA, Albanian Cultural Center, N.J.: There are families getting beaten every day or every night. Especially they're doing all this terror over night, 2 o'clock, 3 o'clock in the morning.

MR. KRAUSE: Sali Musa is president of the Albanian Cultural Center & Mosque in Paterson, New Jersey. How many people do you think have been killed so far?

SALI MUSA: From what we know, it's close to 200, but they are in the jails, and with beating them and persecuting them, they are leaving Kosovo. They go into the houses and they ask for arms, and they say if you don't have the arms by tomorrow night, we will kill all the family or you leave Kosovo. So this is the word that we're getting from a lot of people.

MR. KRAUSE: There have been reports of Serbian jet fighters flying over Kosovo.

SALI MUSA: Right. I saw them with my own eyes. I was there.

MR. KRAUSE: Why are they doing that?

SALI MUSA: To scare the people, scare the people just so the people can believe that they will start the war any minute so something would happen, so they can find the way to kill them, kill them all.

MR. KRAUSE: And again thisis the kind of tactic used to terrorize people --

SALI MUSA: Right.

MR. KRAUSE: -- and pressure them to leave.

SALI MUSA: Right. Press them from, from leaving.

MR. KRAUSE: Serbs and Albanians have been fighting over Kosovo almost as long as they've lived there, hundreds, if not thousands, of years. Like almost everything else in the Balkans their differences are rooted in centuries of ethnic and religious conflict and differing interpretations of history. The origins of the conflict are now largely lost in the midst of time. But the current tensions go back just a couple of decades to the Tito era. In 1974, Yugoslavia's communist leader recognized the Albanian majority in Kosovo by granting the province autonomy in Serbia. For the first time Albanian Muslims had virtual control over Kosovo's internal affairs. But Serbs both in Kosovo and in Serbia, itself, could never accept Tito's decision. They view Muslims as infidels and Kosovo as the cradle of their civilization, for Christianity was first introduced to the Serbs nearly 2,000 years ago. The Serbs' resentment towards the Albanians reached a crescendo in 1989 when Serbs by the hundreds of thousands converged on an ancient battle field to commemorate the battle of Kosovo. Serbia lost that battle 600 years ago, but the loss to an invading army of Muslim Turks is still a symbol to a Serbian nation and Orthodox Serbs have vowed to avenge their defeat ever since. Serbian President Slobodan Milosevic, long a communist functionary, saw the rising tide of Serbian nationalism as a political opportunity. He promised to revoke Kosovo's autonomy and reassert Serb control over Kosovo's police and political institutions. Viseslav Simic, a Serb interpreter and journalist, was forced into exile by the communists in 1988. He's now one of Milosevic's most vocal opponents. Yet, even he approves of the Serbian president's decision to revoke Kosovo's autonomy.

VISESLAV SIMIC, Serbian Exile: The decision by Slobodan Milosevic to revoke the autonomy of Kosovo was very popular in Serbia because it finally showed some strength on the Serbian side to stand for, stand up for their rights. Serbs had been humiliated, slaughtered, killed, terrorized, intimidated, put down for at least sixty years, now since 1931.

MR. KRAUSE: In Kosovo.

VISELAV SIMIC: In Kosovo, in Serbia, in Macedonia, in Bosnia, and Herzegovina, in Croatian Slovenia, everywhere in the territory of the former Yugoslavia.

MR. KRAUSE: It was in Kosovo where the Serbs moved first to redress their longstanding grievances. This tape smuggled out of the country shows the aftermath of a 1991 police raid on several private homes in Kosovo. Thirty-six Albanians were reportedly arrested, some of them beaten, their homes destroyed. Albanians call what's happening to them "quiet ethnic cleansing." Unlike Bosnia, Serb forces in Kosovo have not yet laid siege to cities or moved whole populations out of rural areas. Instead, they've set up a police state to intimidate and terrorize the Albanian majority. In one particularly gruesome incident, hundreds of Albanian schoolchildren were hospitalized in 1990 after being stricken by a mysterious illness. Albanian leaders accused the Serbs of using military gas to poison children. The incident they say marked the beginning of the Serb campaign to force Albanians to leave and thus reverse the ethnic and religious balance in Kosovo.

AGIM ALICKAJ, Kosovan Emigre: I had to leave Kosovo because I had no opportunity there either to work or live normally.

MR. KRAUSE: Agim Alickaj, now a travel agent inthe Bronx, is one of thousands who've left Kosovo since the campaign of quiet ethnic cleansing began.

AGIM ALICKAJ: Oppression started in 1989, full scale repression, repression of Albanians, and they fired me from the job as they did a hundred other people were working with me, but they abolished the parliament. They took over everything there. And then I had no, no other choice. I just stay there and wait until someone comes and search your house or, or the street and to search you and beat you just for being Albanian. That, you know, I had no, no future. I saw no future over there at this moment.

MR. KRAUSE: As you know, the West has threatened to use military force in Bosnia, has threatened to do it.

AGIM ALICKAJ: Yes.

MR. KRAUSE: But up until now -- and now it looks as if that is not going to happen. How does that affect the view, the perception, the situation in Kosovo?

AGIM ALICKAJ: Well, it does affect a lot, because Serbs, now they see that the West does not mean business, and they respect force, they respect force, because everything that they're doing is by force, and there is no force which stands in-between them and the victims who are getting killed. Children or whatever, they are going to continue, and there, it is not until they achieve the goal of greater Serbia, they are not going to stop, and when they see that in Bosnia no one is taking action, then they will continue the same thing in Kosovo.

MR. KRAUSE: But Simic says the Albanians also are guilty of abuses and now they're getting what they deserve.

VISELAV SIMIC: Unfortunately, I have no pictures to show how many Serbian children, nuns, ordinary people were beaten up, raped, killed, slaughtered, and harassed and intimidated by the Albanians in the last couple of years since the journalists from the West tend to go only to the Albanians' houses and talk only to the Albanians and never take anything that Serbian reports seriously and dismiss any allegations from the Serbs about the Albanian atrocities as lies and unjustified, it's very difficult to prove. And children do not carry cameras and are usually not taken as serious witnesses.

MR. KRAUSE: How do you respond to that charge?

JOSEPH DioGUARDI, Chairman, Albanian American Civic League: Easily.

MR. KRAUSE: Joseph DioGuardi is President of the Albanian American Civic League. He vehemently denies Albanians ever systematically persecuted the Serbs in Kosovo.

JOSEPH DioGUARDI: They have used the propaganda of individual incidents to say that this was institutional against the Serbian people. There's a big difference here. What you see happening to the Albanian people is institutional. This is a state run, institutional policy of discrimination, of torture, of maiming, of raping, of human rights violations, of taking away freedom of the press, freedom of the assembly. This is not one or two incidents.

MR. KRAUSE: Few American officials have ever visited Kosovo, but in 1989, Congressman Tom Lantos and DioGuardi were two of the first. The van was mobbed by pro-American demonstrators, most of them Albanians hoping for protection from the United States.

JOSEPH DioGUARDI: And shortly since 1989 when we saw Slobodan Milosevic mark with his troops into Kosovo --

MR. KRAUSE: DioGuardi now has his own radio program in New York, broadcasting news and comments about events in the Balkans. He believes Milosevic and the Serbs are now stepping up the pressure in Kosovo, deliberately trying to polarize the situation and undermine Albanian Leader Ibrahim Ragova, who has urged Albanians not to take up arms.

JOSEPH DioGUARDI: My greatest fear is that some group of Albanians will now say, the foreign policy of the republic of Kosovo has not worked, thank you, Dr. Ragova for what you've done, you're a great leader, but we cannot take any more of this, and at that point, they may somehow, who knows, get some weapons, I don't believe they have any weapons, but God forbid, they decide to fire back, you will then see the fuse ignite in Kosovo to give the Serbs what they've been looking for since April of 1989, and that's an excuse to massacre this population of 2 million defenseless Albanians who have been looking for democracy since 1989.

MR. KRAUSE: The Clinton administration's decision to send 300 U.S. troops to Macedonia, Kosovo's neighbor, is meant as a warning to Serbia not to expand the war south. Here in Washington and in Western Europe, there's growing concern that if Kosovo is next, the fighting there will be even bloodier and more prolonged than in Bosnia. There's also concern that a war in Kosovo would almost certainly draw in Kosovo's neighbors. Senate Minority Leader Bob Dole has taken a special interest in the Balkans and visited Kosovo three years ago.

SEN. BOB DOLE, Minority Leader: If things start happening in that part of Yugoslavia, then you've got the danger in Macedonia, you've got the danger of the Greeks and the Turks in Bulgaria and Albania. There'd be a much wider conflict. I don't think we could avoid some involvement if it spreads.

MR. KRAUSE: So, in other words, you do see Kosovo as a kind of key?

SEN. BOB DOLE: Oh, yes. I think it's sort of the linchpin.

MR. KRAUSE: But Simic says the world needn't worry, there'll be war only if the Albanians in Kosovo act on their threat to secede from Serbia and set up an independent republic.

VISELAV SIMIC: Serbia does not want to go into a war. Milosevic is not crazy. He is a very smart politician. He knows that he cannot fight on five sides at the same time. Even a great country, a big country cannot afford that. Germany lost when, when it started fighting on two fronts. And Serbia's too small and not too many Serbs. With all the enemies around us, we cannot afford to fight on, on too many sides. Serbians have no intention of occupying Macedonia or attacking Macedonia or Bulgaria or Rumania or Hungary for that matter. In Kosovo, Serbs want just to preserve the borders. When Albanians refuse to change, you know, when Albanians decide that they will stay within Serbia and be a minority within Serbia, with good rights as they had before, but without this desire and attempts to secede from Serbia, there will be no fighting there.

MR. KRAUSE: But in Kosovo and in the restaurants and community centers where Albanian-Americans gather to watch satellite news broadcasts from the former Yugoslavia, Serbs are viewed as the enemy. Albanians want the United States to intervene, because they fear that all out ethnic cleansing as in Bosnia will soon begin in Kosovo.

MR. KRAUSE: Your families, you have families, all of you have families there, are they frightened? Are they thinking of leaving, or are they angry and ready to fight?

MAN: They have no weapons to fight. They took everything from them. They're searching the houses every day for the money, the army tears them out. With what to fight?

OTHER MAN: They are very frightened, but they will not leave there. They will die there. And I myself would go and die there because it's my land, it's my country, and it was never Serbians' country there. I'm not going in Serbia. I'm going to Kosovo. It's my land. It is my grandfather's land. We are not bothering anymore there. We're not indefinite. We don't want to be with Serbians. We don't want to live with them anymore.

MR. KRAUSE: Even with tensions and emotions, most Albanians in the United States continue to pray for peace. They know that if war breaks out in Kosovo thousands will be killed. But they believe the Serbs are trying to provoke them and in that way create a pretext for more repression. They warn that if the situation in Kosovo is not quickly de-fused, it too, like Croatia and Bosnia, could soon explode. FOCUS - POLITICAL WRAP

MR. MUDD: We go next tonight to a report on the final day of the Tokyo summit. The meeting was President Clinton's debut at the annual gathering of the major industrial nations known as the group of seven, the G-7. Our report is from Steve Levinson of Independent Television News.

MR. LEVINSON: With Boris Yeltsin's arrival, the G-7 became the G-8 for one day at least. Mr. Yeltsin had reason to look pleased. He's to get $3 billion to help privatize old state industries. But despite the handshake, the Russian leader also feels slightly left out. At a press conference, he complained that the West still had too many trade restrictions against Russia, the hang over from the Cold War, but he was confident Russia would soon become an accepted partner and summiteer.

PRES. BORIS YELTSIN, Russia: [speaking through interpreter] Time is on our side. We are bound to be part of the group of eight. And I am convinced it. Be it one year earlier, one year later, sooner or later, we're bound to be there.

MR. LEVINSON: President Mitterrand also injected a dose of realism, complaining that little had been done to help the world's poorest nations struggling under a mountain of debt. The U.S. and Japan in particular could do much more. But the Japanese hosts and other leaders were doing the best to concentrate on the positive aspects of the summit. Reading the communique at the end of the meeting, Prime Minister Miyazawa made it clear tackling world recession was the new priority.

KIICHI MIYAZAWA, Prime Minister, Japan: [speaking through interpreter] We are concerned about the state of growth and employment in our economy. In particular, more than 23 million people are unemployed in our country. That is unacceptable.

MR. LEVINSON: Marking a distinct break from the past, there was barely a mention of inflation in the document. Instead, at the end of this summit, the emphasis was on lower interest rates, freer trade, putting government finances in order, and labor market reforms to help that back into jobs. In part, that's due to the arrival on the scene of a Democrat President and a clean break with Reaganomics. President Clinton also took the opportunity to invite the G-7 nations to a special jobs summit in the U.S. in the autumn.

PRESIDENT CLINTON: The summit we have concluded today sends a message of hope to America and to the world. Some have called this a jobs summit. And they are right, because the creation of new jobs in the United States and in all the other countries here present was at the center of all of our discussion. All of us are mindful that we have a long way to go to restore real growth and opportunity for the global economy, but we have made a serious start. We reached an agreement here that can open manufacturing markets to American products and to all other products in ways that we have not seen in many years. Indeed, the agreement, if finally concluded, could bring the largest reduction in tariffs in world history.

MR. LEVINSON: But despite these hopes, the world recession shows no signs of ending. In 1992, out of the G-7 countries, only the United Kingdom was in recession. This year, it's forecast the UK will recover and the U.S. and Canada will pick up speed. But the Japanese economy is faltering while Italy, France, and Germany are sinking into recession. Unemployment rates are now high in nearly all the G-7 countries. Next year, they're forecast to go even higher in Italy, France, and Germany. In Japan, the U.S., Canada, and the U.K. little change is expected.

JOHN MAJOR, Prime Minister, United Kingdom: If you actually look at the communique in terms of what it says for the world economy as a whole, there are several things in it that are quite clear. The Americans have to cut their fiscal deficit. The Europeans have to bring interest rates down. The Japanese have a fiscal expansion. All of those things are critical to expanding the world economy. Expanding the world economy means jobs.

MR. LEVINSON: As the leaders took their final bows, they also had something positive to cling on to. But summits don't have a good track record in terms of achievement, and observers remain skeptical. Such depressing thoughts, however, were pushed into the background in the more relaxed atmosphere of the summit end. President Clinton thinks he's got the Japanese playing ball on freer trade, but it's a team effort to beat the recession that will be the ultimate test of this summit.

MR. MacNeil: Now to our Friday analysis first of the summit and then the week's political news. It comes from our regular syndicated columnist, Mark Shields, and tonight Kevin Phillips, editor and publisher of the American Political Report. Well, I guess the G-7 is just the talk of the town, is it, Mark?

MR. SHIELDS: Everywhere you turn, Roger. I mean, I was coffee tables, saloons, taverns, bus stops, truck stops. As a general rule, at the economic summit after everything is said and done, a lot more is said than done, but I think, I think this probably worked as a plus, not a substantial historic, dramatic plus, but a plus to Bill Clinton.

MR. MUDD: One of the spokesmen over there said it was as good as we dared hope. What good do you think that summit did, Kevin?

MR. PHILLIPS: Oh, I don't think it did too much good. But on the other hand, I think that one thing Bill Clinton has gotten from having a Republican PR man is that they now know how to hype a half dead summit. And what you have here is a trade concession which doesn't really shake up the history books at all made into a big event, and it's linked to the great thing in American politics, jobs. Now we used to hear this from George Bush. George Bush would go to a summit. Some minor trade thing would be talked about and jobs would be uttered. Nobody would take it seriously. Now the big question is with all the continuing problems that are out there for trade, and this is just the bare bones start of something, will the American people take this seriously, or are they just going to yawn at this summit? I don't think that question is answered yet.

MR. MUDD: Jobs, jobs, jobs. When? And for whom?

MR. SHIELDS: I think, I think this became part of the President's economic stimulus package, at least rhetorically. He was starting to get tagged here at home as just a deficit reduction President. And I thought they made the best of what they had, quite frankly. He took the deficit reduction which he'd been battered on and criticized here at home and made it his trump card. He, in fact, took his domestic program and said this gave me the greater international credibility with all the other countries and congratulated the Congress, congratulated them for what they'd done, and stood up and so forth. But the jobs thing lingers and there are doubts and nagging doubts about NAFTA, the North American Free Trade Agreement, where people by better than a two to one margin feel that it's going to cost jobs, so what Bill Clinton has to do is make the case for America staying involved in the world and somehow justify it in terms that eventually there's going to be jobs for Americans.

MR. MUDD: Kevin, what do you think the future is of these economic summits? Have they outlived their usefulness?

MR. PHILLIPS: I think the summits in general have outlived their usefulness, because you don't have the cohesion between the western politicians that you had during the '80s. They were all in much better shape in the polls, and they could do things together, like deregulation and tax cuts, and in coordinating monetary policy. They can't really do that now. It's clear that Clinton for all it he likes the PR opportunity, was trying to put out a way to put a more reasonable summit together that doesn't create false expectations. But I think it's a very important point that Mark made about when you have this jobs issue out there linked to trade, the giant walking in the woods is not GATT, which is what they're talking about here, but NAFTA, and instead of dealing with people who just sort of smile at the reference to trade, you've got Ross Perot out there, and he basically says, trade liberalization is not a job creator, it's a job killer, and that resonates in large parts of the United States, not least the Mississippi Valley, which has been losing jobs where he wasn't while they were having problems this week.

MR. MUDD: So do I take it then that the economic summit really has become a political stage for politicians to perform on and that the time, the time to -- I mean, those seven leaders are not powerful enough at home to have done anything real, are they?

MR. SHIELDS: Well, this implicit statement was almost made by the President. The President went out there and he used it for domestic political purposes and I think adroitly and I think well, for which he deserves some credit. He didn't stumble, but it was almost an implicit and tacit acknowledgment that the other six weren't going to be there, that they weren't factors. Kevin's point about their inability to act collectively, I looked at the language last year in Munich. They threatened collective force against the Serbs and the Croats if they did not recognize the Bosnian autonomy. And now the, the stronger measures are not excluded this year. That in itself says just about everything you want to say about their collective will and ability to act.

MR. MUDD: The President is now slowly making his way home. He's going to stop in South Korea and then he'll drop off in Hawaii for a vacation. Is it a good idea to have a vacation right now, Kevin?

MR. PHILLIPS: Well, he might need a vacation but I think one of the difficulties he's up against here is he's starting to look like he's back in the international travel business that George Bush was in. I listened to some of what he says and I start to hear echoes of George Bush, and that ought to make the Democratic political people nervous, because they were the ones that put on those T- shirts about stay at home, gang, we don't travel all the time, and now here they are, they're talking about international trade, they're on the plane, but they can't take what's happening to them back in the United States with a mismanaged economy and botched up social policy.

MR. SHIELDS: Politically I would come back. I would come back - -

MR. MUDD: Not stop in Hawaii.

MR. SHIELDS: Hawaii is obviously a united state and a very beautiful united state. You can ask Vice President Quayle that. I would come back just politically. I mean --

MR. MUDD: Come back and do what?

MR. SHIELDS: Well, the suffering right now, Roger, in the heartland of the country, which somehow the coastal America manages to think is just somewhere out there between Kansas and Utah, is enormous. I mean, this is the worst flood of the century. Americans are being wiped out, their life, their future, their savings, all the rest of it. And politically, looking at it just from the selfish point, every state that abuts the Mississippi, save the state of Mississippi, Bill Clinton carried in 1992. This is, if there is a Clinton base, this is it. I mean, I would return to that, that area I thought wisely called there on the radio, but I think it's important, and I don't think it is the time for a vacation.

MR. MUDD: Do you think that when he comes back to Washington, he comes back with enough enhanced political stature to face down two big battles that are coming up next week in Washington. One, the conferees begin to wrestle with the budget package, and two, he's got a deadline on the homosexual campaign pledge lifting the ban on homosexuals in the military. What do you think, Mark?

MR. SHIELDS: I think he -- the stature is not enormously enhanced. He's better off than when he left. He's better off than he was three weeks ago, but he's not a dominant force coming back. I think enough Democrats feel that their fate, fortune, and future is tied to his at this point, that he has an advantage going into the conference. Although there's mumbling and grumbling, there's a sense that we either sink together or sink separately. As far as the gays in the military, I think it will be worked out. I think it will be worked out thanks in large part and credit largely due to Colin Powell. I think he'll deliver a unanimous vote from the Joint Chiefs of Staff in support of a "don't ask, don't tell" policy which the President will get some criticism from his left arm and his old friends in the gay community, but I think it's the best that he can come out with and the conduct will be the awkward factor.

MR. MUDD: How about you, Kevin?

MR. PHILLIPS: Well, I don't think he's coming back with any real strength. One of the yardsticks of this which actually kind of amazed me is that just before he left to go over, Newsweek took a poll and they found that his job approval rating had inched up, that's their word, inched up to 38 percent, just a couple of percentage points above where it was a month ago. This, mind you, was after the attack on Iraq. It's just absolutely unprecedented toward American chief executives to successfully attack a foreign power and wind up with virtually nothing after people had a chance to think about it. So I think the American public is coming to a pretty negative judgment on this man.

MR. MUDD: But the attack didn't have much effect, did it, I mean, even --

MR. PHILLIPS: The attack didn't have much effect politically, physically or public opinionwise, but my point there is that if he could not get his ratings up on a more lasting basis with something like that, I don't think this is going to do it, and I think Mark is exactly right, that he's back into these pitfalls, and we can debate what the wisdom of the different positions are on gays in the military or what have you. But he's already suffered his damage there. The key thing is on the tax side of the budget issue.

MR. MUDD: So what about the tax side of the budget, do you think he's going to get out of that with what he went in with it? $500 billion --

MR. SHIELDS: I think he'll come close to the 500 billion.

MR. MUDD: You do?

MR. SHIELDS: Yes, I really do. I think there's increasing doubts about the job, and the fear that Americans have right now is about the economic future, whether there's going to be jobs for them and jobs for their kids. Now -- and the specter of the Jack Welsh America, the General Electric ideal which is you cut employment by a third, increase profits, double profits, sort of a jobless prosperity, is terrifying to, to generations of Americans who have identified with the company hiring as good times and prosperity. And I think that Bill Clinton is dealing, has to deal and confront that real fear.

MR. MUDD: One last purely political question. Why on earth would the President have done something that no President since FDR did I think in the Maryland Senate race, which is to get involved in the Chuck Robb/Douglas Wilder Senate race, endorsing Sen. Robb for re-election? Why would he do that?

MR. SHIELDS: Well, to quote Thomas P. O'Neill, Jr., all politics is local. Chuck Robb has a vote in the Senate on the tax bill. He needs him. Chuck Robb has stuck with him. It's a way of sending a message out that you stick with me and I stick with you even in a tough fight. Beyond that, maybe personal factors.

MR. MUDD: It was absolutely unprecedented, I mean, almost unprecedented.

MR. PHILLIPS: Well, it's not quite unprecedented, but when presidents have gotten involved in these things, they've often got their fingers burned like FDR did, but I think you could wonder whether this was a personal, you can wonder whether their shared role in the Democratic Leadership Council wasn't there, maybe a little bit of black and white politics. Clinton has not been beyond that before.

MR. MUDD: All right. Next week I'll ask you whatever happened to health reform. Thank you, Mark, thank you, Kevin. UPDATE - A RIVER RUNS THROUGH IT

MR. MacNeil: An update now on the Mississippi flood story. Heavy rains continued feeding the river and its tributaries. And as earthen levees collapsed under the force, thousands more were evacuated from communities up to seven miles away from the river's edge. Correspondent Elizabeth Brackett reports from the area around St. Louis, where the Mississippi is a foot higher today than yesterday and still rising.

MS. BRACKETT: Over the last 65 years, the United States has spent billions to construct an elaborate system of locks, dams, and levees to control the 400 miles of the upper Mississippi River Basin. Now the 26 dams that stretch from Minneapolis to St. Louis stand wide open. After a month of heavy rains, officials here say there is no way the record high surging waters can be controlled. And the main line of defense for most communities along the river, the earthen levees, are now starting to give. That's what happened in West Alton, Missouri. Fielding Schulz thought his house would be safe behind the levee. On Tuesday, he could still walk to the front door. When do you think you'll get back to your house again?

FIELDING SCHULZ: Well, if I can get it, I'll come in tomorrow, see where things are.

MS. BRACKETT: When do you think you will be back in residence?

FIELDING SCHULZ: In residence. Oh, my guess is it's going to be six weeks to two months.

MS. BRACKETT: Then the levee broke. Ten hours later, only the top of the Schulz house could be seen. Because the river water comes in so fast once a levee breaks, evacuation orders are taken seriously. Deerfield Trailer Park in St. Charles, Missouri, is seven miles from the river. But after a levee break last night, the orders were to get out.

TAMMY BRINKLEY: Well, I turned the corner and I saw all of these people and all of these moving trucks and I thought, oh, my God, what is going on, and you know, and then I come home and this is like, you know, this isn't a joke, people, this is my home, and now I have to leave it. It's all I have.

MS. BRACKETT: You're trying to decide what to take with you?

TAMMY BRINKLEY: Yeah. What do I take? What do I leave here? What do I let go?

MS. BRACKETT: Tammy Brinkley was moving in to her trailer four months ago. Last night, she was frantically deciding what to move out. Fueling her anxiety, she like many here does not have flood insurance.

TAMMY BRINKLEY: I'm divorced with two kids. I can't afford $700 a year for flood insurance. But now I'm looking at losing my home and having nowhere to go with two kids, one in a wheelchair. I don't know what I'm going to do.

MS. BRACKETT: Late last night Brinkley left with her children. By this morning, water was already seeping into the area. South of St. Louis, sandbaggers were still battling to save the levee that protects 70 homes in the unincorporated area of LeMay. This is 67 year old volunteer Vince Winkelman's third day of filling sandbags.

VINCE WINKELMAN, Volunteer: We tried anyway. Nothing ventured, nothing gained, you know. That's how I feel about it, try to help that out.

MS. BRACKETT: LeMay is on a tributary to the Mississippi, the river DuPree. Now because the Mississippi is so full, it is backing up into the DuPree and it, like many other tributaries, is actually lowing upstream, weakening the levee along the way. This is the way a levee break begins. The water seeps underneath this earthen levee and comes up in what's called a sand boil. That's what's in the middle of those sandbags behind me. Once this break begins, the entire levee can go. So what these men are doing now is building up the sandbags along the sand boil, but trying to get them to the same heighth as the levee. Bridget and David Kapper were anxiously watching the attempt to control the sand boil. The house they bought last October only four doors behind the weakened levee.

BRIDGET KAPPER: They evacuated us at 12:30 last night, gave us an hour to get out.

DAVID KAPPER: Yeah.

MS. BRACKETT: Then why are you still here?

BRIDGET KAPPER: Because it's kind of hard to leave. We've had so much into it.

DAVID KAPPER: Yeah.

MS. BRACKETT: The struggle to maintain the sand boil continued. But just as progress was being made, a new sand boil appeared. Still, County Official Buzz Westfall was hoping the levee would hope just as it had in the past.

BUZZ WESTFALL, St. Louis County Executive: There was a flood in 1973, and then the levees were built after that as a result of that, and they were built up to protect us from '73 levels, which we're going to surpass the '73 levels. From what we just found out from the Corps of Engineers we're at 41.5 river stage. We're predicted to go to 43, where 43.5 was the record in '73, and they're still predicting by Wednesday that the river's going to crest at 45 feet, which is a foot and a half above the previous flood. The good news for us and the tragic news for others is the levees are breaking north of us up into the Iowa area and Illinoisand then farther north in Missouri, and obviously when those levees break, that relieves the pressure on us because we're down river from them.

MS. BRACKETT: Fifteen minutes to the north in St. Louis, the earthen levees were replaced by concrete walls years ago. There is little chance that the river could spill into St. Louis's downtown, but residents here are pretty amazed by the Mississippi's waters lapping at the steps of their famous Arch. RECAP

MR. MacNeil: Again, the main stories of this Friday, the leaders of the world's seven largest industrial nations ended their Tokyo summit with a promise to more closely coordinate economic policies, but they gave few specifics on how they would do so. Tonight the Associated Press quoted U.S. officials in Tokyo as saying U.S. and Japan had reached the trade pact aimed at cutting the big imbalance between the two countries. More towns along the flooding Mississippi River were evacuated, and a relentless heat wave continued to set record temperatures on the East Coast. Good night, Roger.

MR. MUDD: Good night, Robin. That's the NewsHour for tonight. We'll see you on Monday. Have a cool or, and a dry weekend. Thank you and good night.