The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: Our summary of the news; the latest on the latest about what happened to Saddam Hussein; another chat with John Burns of the New York Times in Baghdad; a report on the history that was looted from a Baghdad museum; some perspective on the economic costs of the disease known as SARS; and the weekly analysis of Mark Shields and David Brooks.

JIM LEHRER: U.S. Forces claimed more progress today in the hunt for former Iraqi leaders. But there were also renewed questions about the fate of Saddam Hussein. Kwame Holman reports on the day's developments in Iraq.

KWAME HOLMAN: News of the latest capture of a senior Iraqi official came at central command headquarters this morning.

BRIGADIER GEN. VINCENT BROOKS: Samir Abd al-Aziz al-Najim, one of the top-55 leaders of the regime, was handed over to coalition forces by Iraqi Kurds near Mosul in northern Iraq. He was a Ba'ath Party official, a regional command chairman for the Baghdad district, and is believed to have first-hand knowledge of the Ba'ath Party central structure.

KWAME HOLMAN: Al-Najim had been chief of staff for Saddam Hussein after the 1991 gulf war and later oil minister. So far, four or five of the fifty-five most wanted have been captured or killed, according to officials. In addition to al-Najim, Saddam Hussein's science adviser and two of the leader's half- brothers are in U.S. custody. A fifth person, General Ali Hassan al-Majid, may have died in a raid on his house in Basra. As for Saddam himself, Abu Dhabi Television aired new video of the Iraqi leader reportedly taken on April 9, the day U.S. Forces moved into Baghdad. Abu Dhabi TV said these pictures were taken in the northern neighborhood of Azamiyah. In the downtown area, the ten- story ministry of information was set on fire, reportedly by looters. The central public health laboratory also was a target of looters. A sign there warned anyone entering the building could be exposed to HIV, Cholera, and polio. At Friday prayers at a Baghdad mosque, a leading Sunni cleric criticized the United States in his sermon. After the services, thousands marched through the streets, chanting anti-American slogans.

ABDULLAH SALAH: We want the American troops basically to leave Iraq completely, and leave the Iraqi people, basically, to rule Iraq. This is the main thing, okay? We don't want to go from one dictatorship to another dictatorship in this country.

KWAME HOLMAN: An Iraqi exile made his first public appearance in Baghdad today. Ahmad Chalabi said an interim government should take over within weeks, but he reiterated that he will not be the leader.

AHMAD CHALABI: I'm not a candidate for any position in the interim government. My role will be focused on building a civil society in Iraq. I want to help build a civil society, which I believe is the basis for a democratic system.

KWAME HOLMAN: In western Iraq, Australian special forces found the largest concentration yet of Iraqi military aircraft. 51 Russian-built MiG fighter jets were discovered along with anti-aircraft systems.

JIM LEHRER: U.S. Marines made ready today to withdraw from Baghdad, to be replaced by army units. The marines said they had seen no fighting in four days, but the army's fourth infantry division reported new skirmishes north of the city. They destroyed anti-aircraft guns and took several dozen prisoners. Coalition forces released nearly 900 Iraqi prisoners today. They had been held in a tent- city prison set up in southern Iraq. But a U.S. Military spokesman said it turned out they were not part of any military force. Close to 7,000 Iraqi prisoners remain in holding facilities around Iraq. Seven former American POW's made a brief appearance today, at a U.S. medical facility in Landstuhl, Germany. They were rescued earlier this week in Iraq. Today, they waved to well- wishers from a hospital balcony. Chief Warrant Officer David Williams, a helicopter pilot, spoke for the group.

CWO DAVID WILLIAMS: I'd like to thank all my fellow Americans. We all would like to thank the Americans for the tremendous support we have been getting. We're looking forward to coming home as soon as we possibly can. I would just like to remind everyone to say a special prayer for all those who are still fighting on the American defense. God bless America.

JIM LEHRER: The hospital said the seven soldiers are expected to leave for the U.S. tomorrow. Also today, the military raised the confirmed U.S. death toll in the war, to 128. Three U.S. Troops are still counted as missing. Foreign ministers of Turkey, Iran, and six Arab states called today for the occupation of Iraq to be brief. Meeting in Saudi Arabia, they urged the U.S. to quickly set up a transitional government. And they said the U.N. should have a central role in rebuilding the country. The ministers also criticized what they called U.S. threats against Syria. A handful of ancient objects stolen from Iraq's national museum were returned today. A U.S. soldier at the museum said local residents handed over bags containing 20 vases and other antiquities. Thousands of objects disappeared when looters had plundered museums and libraries in the city last week. Some of the artifacts were more than 5,000 years old. We'll have more on this story later in the program tonight. North Korea announced today it is now reprocessing nuclear fuel rods. That's a crucial step to making nuclear weapons. The reprocessing plant is located at a nuclear facility pictured in this satellite photo. In a statement, North Korea said the war in Iraq showed: "It is necessary to have a powerful, physical deterrent force." In response, a White House spokesman said the U.S. will consult with allies before deciding whether to go ahead with new talks with North Korea. They're scheduled to begin next week in Beijing. Communist Party leaders in China ordered officials today to stop concealing cases of the SARS virus. The World Health Organization had accused China of covering up the extent of the outbreak. The flu-like disease has spread to 25 countries, but China and Hong Kong have been hardest hit. We'll also have more on this story later in the program: Also coming, sighting Saddam, John Burns in Baghdad, the looting of history, and Shields and Brooks.

FOCUS - THE FINAL DAYS

JIM LEHRER: Now the search for Saddam, and to Terence Smith.

TERENCE SMITH: The latest tape of Saddam Hussein-- or someone looking and sounding like him-- was purportedly made nine days ago, just as his regime was collapsing around him. The man identified as Saddam was accompanied by a man who resembled his younger son, Qusay.

He took in the cheers as the crowd chanted, "With our blood and souls, we redeem you, Saddam." Abu Dhabi TV reported that the person who gave them the tape assured them that it was shot in Baghdad on April 9. U.S. Intelligence officials examining the tape say it is too soon to say whether it is authentic. (Speaking Arabic) In a separate audio tape supposedly broadcast that same day, a voice purported to be that of Saddam calls on the Iraqi people to resist the American invaders and assures them that he remains in charge. Western reporters have been scrambling through Baghdad in an effort to track the Iraqi leader's last movements before he disappeared. We have this report filed yesterday from Ian Williams of Independent Television News.

IAN WILLIAMS: Not so much a bunker as a bed-sit, Saddam command center in the closing days of the war was this residential house, according to al Jazeera the Arab satellite channel. The channel showed several rooms, including one said to be a conference room where the war cabinet met. A meeting shown at the time on Iraqi Television could well have taken place here, as could a recording of Saddam's last appeal to the nation. Al Jazeera also show diagrams it described as war plans, and the presidential seal to approve orders that by then were being widely ignored by his fleeing army. In the bedroom: A prayer mat and a Koran. There was a coat stand on which hung the jacket of a high-ranking officer. There may have been more than one house. Yesterday we filmed at another now stripped of furniture and phones, which had created suspicion among neighbors. It appeared to have been the target of a massive U.S. attack that flattened houses nearby. Saddam's low-tech command may also explain why the Americans have systematically flattened the city's telephone exchanges. So where is Saddam? Today we traveled to a former Ba'ath Party stronghold in the north of the city. It was here in Azamiyah last Wednesday that Saddam made his last appearance, sweeping up close to the mosque with an entourage of security men.

MAN (Translated): Saddam arrived about 1:00 in the afternoon. It was the second time he had come here. We were struck by the security there. There were many cars. They waved and greeted people. There was an American aircraft in the sky.

MAN (Translated): He was with the defense minister, his son Qusay, and his main bodyguard, Abid. He got out of the car and waved at the people around him.

IAN WILLIAMS: Saddam then went to have a peek at the Americans.

MAN (Translated): They drove up to the middle of the bridge behind here to take a look at the American tanks on the other side. Then he left.

IAN WILLIAMS: Saddam only stayed a few minutes. Hours later, the Americans, possibly acting on a tip-off, came storming in. They destroyed part of a cemetery behind the mosque, the most important Sunni mosque in Iraq. A shell hit the minaret during fierce fighting at the front and the marines went inside looking for Saddam.

TERENCE SMITH: Earlier, I spoke with our man in Baghdad, John Burns of the New York Times.

John, welcome. We're delighted to see and hear you again. This latest tape purportedly of Saddam Hussein, do you believe it's genuine? Do you believe he's still alive? Do have you any idea where he is?

JOHN BURNS: Well, I have a disadvantage in that I have not seen the tape, but I have spent many hours up in Azamiyah, the area where he was supposedly sighted last Wednesday talking to people who said that they did see him. And from those descriptions, I was pretty well-satisfied that it was Saddam Hussein.

TERENCE SMITH: And, indeed, do you think he's still alive and still in Baghdad?

JOHN BURNS: Well, I think we have to remember that this is the great survivor. This is a man who has survived countless assassination attempts, two heavy bombing attacks by the United States on locations within Baghdad that were identified by American intelligence as the locations of leadership meetings on March 20, the strike that began the war, and then again on April 7. I think Saddam Hussein probably is alive, and I think purely deductive this, but my guess is that he is probably still in Baghdad.

TERENCE SMITH: Wouldn't that be quite a feat to evade all the American forces and all the people who are looking for him?

JOHN BURNS: It would be. But this is a city of five million people. Think of an American city of that size and a manhunt for one individual who has the advantage, in this case, of moving in certain areas of the city amongst people who still support him. This is somewhat counter- intuitive, because people like myself have been reporting for many months now about the widespread hatred of Saddam Hussein. But the interesting thing... one of the interesting things about his appearance outside the mosque in Azamiyah last Wednesday was that he chose an area that is 100 percent Sunni Muslim, in a country which, as you know, what has got a 60 percent Shiite Muslim majority. It is one of very rare places in Baghdad where there is a Sunni Muslim majority, and it's also a place where the Ba'ath Party, the ruling party under Saddam Hussein, has a long history and a long underground history in the years when it was a persecuted party. There are other areas of Baghdad like that, and the people of Azamiyah said to me when I was up there with them three days ago, they said, "Let's assume that Saddam Hussein was still here amongst us. No amount of money and no amount of pressure would persuade us to give him up."

TERENCE SMITH: And the others in his regime from Tariq Aziz on down, do you expect that they are in hiding somewhere as well?

JOHN BURNS: I'm sure they all made their plans. To speak of Tariq Aziz, in particular, when I saw him for an interview in November, as I recall, in the Council of Ministers Building, 1,000 yards from where I'm now standing, across the Tigris River, a building that was one of the many that was destroyed by American bombings. As we were walking out, it being a rather grand imperialist colonnaded building, I said to him as he puffed on his cigar, How does it feel for you to contemplate General Franks coming into this building a few months from now to select his headquarters?" He said, "You tell your friend General Franks that by the time he arrives in this building, he will be chasing shadows." I took it that what he was referring to was plans already in place at that time for the Iraqi leadership to simply vanish.

TERENCE SMITH: And indeed that seems to be the case. Last night, John, when we were talking with you and lost the satellite connection, you were describing how the roles have reversed in Baghdad. Some of the Iraqis, I gather, that were making your life difficult before coming to the marines looking for jobs. What's happened on that front?

JOHN BURNS: Yeah, it's very interesting. The minders, of whom we've written and referred to so often, are now back by the score; that is to say the information ministry officials whose job was to guide and control us, and to report on everything we did and to report, more importantly, on everything any Iraqi said to us-- always with the threat that those Iraqis would be arrested, taken away to prison and never be heard again-- those minders are now back here in force right here at the Palestine Hotel from where I'm speaking. And there are two schools of thought on this. I think the prevailing one and probably the correct one is that in a society ruled by terror such as this, people really didn't have a choice about whether they served the master or they didn't. The differentiating factor of importance to me is whether those minders and other senior officials, some of whom have also returned here, did this with relish or with grace; that is to say with grace towards us.I, personally, as the bureau chief, for the time being at least, for the New York Times here, will entertain job applications from those who were at least gracious and as friendly as they could be. I won't from those who seemed to enjoy, if you will, the persecution of us and of Iraqis who spoke to us.

TERENCE SMITH: Do they in any way apologize or even explain away their behavior before?

JOHN BURNS: They do. And it's a sad thing to receive letters of which I've received perhaps half a dozen in the last three or four days, pass through the marine security around this hotel, apologies, abject apologies, explanations of the terrible state in which their families now found themselves, worries that they will be permanently unemployable, and so forth. You know, I think that we, like the United States government itself, which has produced, as I understand it, a list of 55 top leaders who are wanted, and excluded from the lists all manner of people who are pretty senior in this government, it seems to me our job insofar as it matters-- we're a group of a few hundred reporters with perhaps a few thousand jobs at our disposal-- our job, I think, is to be magnanimous.

TERENCE SMITH: And to do it with no hard feelings?

JOHN BURNS: To do it with no hard feelings. In my case, I have an interest in talking to some of the more senior people who I know are now back at their homes in Baghdad; have come out of hiding. They're not on the list of the wanted from the United States. I'm interested in talking to some of these people to try and understand from them why they did what they did, in particular in the last two weeks of the war with me-- why they turned me into a, if you will, a hunted person. I don't want to make myself into a victim of this. As I think I said to you last night, there are 24 million Iraqis who suffered more every day than I ever suffered from this. I never thought that they were going to put a noose around my neck. But I would like to know, simply for peace of mind in the future, that one or two individuals, in particular the director general of the information department, who was, if you will, our headmaster, whether some of the very unpleasant things he did were done because he had no choice or were done because he believed them to be right. Now I may be naive that any discussion with this man will be productive. But I am going to seek him out and have a conversation, and I've told him in a note that my purpose is not, in any event, to be triumphal or gloat over the changed power relationship that now exists. I simply am interested to know what was in his mind.

TERENCE SMITH: Well, we'll be fascinated to hear the answer as well, John. Just finally before we go, what's the situation in Baghdad tonight as you speak? Is it even approaching normal?

JOHN BURNS: It's a long way to go. I think that the United States has an enormous task ahead of it here. I would imagine that it's a task of years, not of months. I think simply putting together any kind of credible Iraqi administration here is going to be extremely difficult. And it seems to me that the real test of the United States will be as quickly as possible to restore utilities, schools, hospitals. This is a doable job. The United States can do this, has already got plans in hand to do it. And I think the mood of the people, which is at the moment confused, as one of my colleagues wrote the other day, "one eye laughing and one eye crying," will begin to change for the better from the American point of view once those basics are attended to.

TERENCE SMITH: All right. John Burns, thank you so much. We hope to continue to hear from you from Baghdad.

JOHN BURNS: Thank you, Terry.

JIM LEHRER: Still to come on the NewsHour tonight, destroying history in Baghdad, the economics of SARS, and Shields and Brooks.

FOCUS - PIECES OF HISTORY

JIM LEHRER: Arts correspondent Jeffrey Brown reports on the looting of the Baghdad Museum.

JEFFREY BROWN: First there were tears... (people crying out) ...and then anger, as the deputy director of the national museum of Iraq screamed at the last of the vandals. (Yelling) Sadness, recriminations and now a full-scale international recovery effort have marked the week since the lootings took place. The story of the Baghdad Museum has become a major focus of the aftermath of the Iraq war.

JOHN RUSSELL, Massachusetts College of Art: I've been trying to think of another example where 10,000 years of human history has been erased at a moment, and I can't think of anything. So many cultures. So much time. So much of our past.

JEFFREY BROWN: One among a number of archeologists and art historians familiar with the museum is John Russell of the Massachusetts College of Art.

JOHN RUSSELL: It was world-class; it was a major collection by any standard, and for what it was, it was the only complete collection on earth.

JEFFREY BROWN: The museum housed artifacts excavated from Iraq's thousands of ancient sites, the remains of the Sumerians, Assyrians, Babylonians and many others who made this the "cradle of civilization." The world's first cities, first writing, first codes of law.

JOHN RUSSELL: What we have here are the people of the city of Uruk, around 3000 B.C., Growing things-- crops and produce.

JEFFREY BROWN: Using rare catalogues, John Russell showed us some of his favorite objects from the museums, including this vase.

JOHN RUSSELL: Showing the first image of a cult scene of a religious progression.

JEFFREY BROWN: Yesterday in Baghdad, Donny George of the Iraqi Antiquities Department was showing reporters the same item as one among the missing.

DONNY GEORGE: Nothing else like it in the whole world.

JEFFREY BROWN: Early reports said more than 170,000 artifacts were taken or destroyed, but a full accounting continues. Some prized possessions may have been hidden in vaults not violated by the looters. What has become clear to experts is that at least some of the looting was well-organized, probably by international syndicates outside the country working with Iraqis within.

DONNY GEORGE: They have passed by the copy, the Egyptian copy of the black obelisk that we have, so this means that they knew what they wanted. There must have been specialists.

JEFFREY BROWN: In Paris yesterday, leading international experts gathered under the auspices of UNESCO, the U.N.'S cultural agency.

McGUIRE GIBSON, Archeologist, University of Chicago: It looks as if part of that looting is a deliberate planned action and that they had... they were able to obtain keys from somewhere for the vaults and were able to take out the very important, the very best material.

JEFFREY BROWN: Indeed, there have been hints of a possible inside job, undertaken either by low- level museum employees or by people close to Saddam Hussein, though so far no hard evidence has surfaced. What is known, archeologist John Russell told us, is that a black market for antiquities grew out of the first Gulf War in 1991, when there was looting at regional museums around the country.

JOHN RUSSELL: That decade in between, Iraq developed, sadly, a looting and smuggling network. So there is organizedcrime for antiquities theft and smuggling in Iraq, and I would be very surprised if those groups weren't eagerly awaiting the moment that the museum was unprotected. For major pieces, I think you'd almost have to imagine that there's a group of potential buyers out there, possibly even people who had placed orders for these things.

JEFFREY BROWN: You mean it's possible that collectors may have placed orders on specific items?

JOHN RUSSELL: Not the majority. But for some collectors, it's a dream. You go through the catalog, pick the pieces you want and then wait for the opportunity.

JEROME EISENBERG, Royal Athena Gallery: Here, for example, is a Babylonian sword that dates roughly 1200 to 800 B.C.

JEFFREY BROWN: There is, of course, a very open antiquities market worldwide. A leading American dealer is Jerome Eisenberg, owner of the Royal Athena Gallery in Manhattan, who showed us some of his near-eastern pieces.

JEROME EISENBERG: Right now, it's an all-points alarm. The International Association of Dealers in Ancient Art, of which I'm a founding member, sent out an all-points bulletin just hours after this happened, alerting all the dealers that no pieces should be purchased from the Mesopotamian period or from Iraq without demonstrably good provenance. In other words, if you don't know who you're dealing with, and you don't know where the pieces came from, stay far away.

JEFFREY BROWN: To the extent that any or some part of this was organized looting by people who know what they were going after, can you ever really stop the movement of this material?

JEROME EISENBERG: It would be really difficult. You have, as with any trade in the world, enough wealthy people that don't care about source that would buy objects. I'm sure you'd have a given market in, let's say, South America or Japan; there are people that would relish a major work of art hidden away in their own house, in their own home. It's a big problem. But I don't think any respectable dealer would want to trade on any of this material.

JEFFREY BROWN: You said respectable.

JEROME EISENBERG: There are always two or three rotten eggs in every barrel.

JEFFREY BROWN: In Paris yesterday, the University of Chicago's McGuire Gibson said he had unverified reports that objects had already shown up in Iran, Paris and elsewhere in Europe. And UNESCO's director general called for a U.N. resolution imposing a temporary embargo on all trade in Iraqi antiquities. Finally, there are the continuing questions about whether the U.S. could or should have prevented the looting in the first place. Museum officials claimed they had begged for protection as the looting began.

SPOKESMAN: This guy went there, and there was an Arabic translator with them. He begged them to come and to protect the Iraq museum.

JEFFREY BROWN: Several marines reportedly did come briefly. When they left, the looting resumed.

JOHN RUSSELL: The danger of looting of the museum in Baghdad was as sure as the sun rising every morning. There could be no question that museum would be a target of looting, based on the fears of the antiquities department, their experience with these looters, and the very well- publicized experience after the '91 war. There was no question it was going to happen unless the museum was protected and we tried very hard, a number of scholars all over the world, to convey that to the Defense Department.

JEFFREY BROWN: In fact, the military appears to have been very sensitive to the need to avoid bombing archeological sites, including the museum. But after Baghdad was entered and taken, there was chaos on the streets. Defense Secretary Rumsfeld responded to criticisms earlier this week.

DONALD RUMSFELD: Looting is an unfortunate thing. It happens and it's unfortunate. And to the extent that it can be stopped, it should be stopped. To the extent it happens in a war zone, it's difficult to stop. But to try to lay off the fact of that unfortunate activity on a defect in a war plan, it strikes me as a stretch.

JEFFREY BROWN: In recent days, Rumsfeld and other top officials have publicly discussed a reward or amnesty program for those who return objects, something many are calling for as a necessary and immediate step. No formal program has yet been announced. Yesterday, FBI Director Robert Mueller said his agency is now taking action.

ROBERT MUELLER: These steps include sending FBI agents to Iraq to assist with criminal investigations, issuing Interpol alerts to all member nations regarding the potential sale of stolen Iraqi art and artifacts on both the open and the black markets, and then assisting with the recovery of any such stolen items.

JEFFREY BROWN: And today, Interpol, the international police organization, said it too was sending a team to Iraq.

JEFFREY BROWN: Given the international attention now and given the promise of action by governments, is there any reason for hope looking ahead?

JOHN RUSSELL: I'm hopeful that eventually pieces will be recovered. But I need to be perfectly clear: What I'm talking about are the people of the past. I'm talking about the loss of 10,000 years of humans. The museum for me is not a collection of pretty objects, though it is that, but a collection of a great archive of the people who touched those objects, who created them, who were found with them. That's what was housed there, and that's what'll be gone.

JEFFREY BROWN: Another part of Iraq's rich cultural past was also damaged this week, when the national library was ransacked and burned. Among its treasures were books and manuscripts from throughout Islamic history.

FOCUS - WORKING WITH FEAR

JIM LEHRER: Now Margaret Warner has the latest on the SARS story in Asia.

MARGARET WARNER: After more than a month of global efforts to stem its spread, the deadly respiratory illness known as SARS continues to take its most punishing toll in Asia. Six more deaths were reported today, four of them in Hong Kong, bringing the number of fatalities worldwide to 171 out of nearly 3,500 suspected cases -- the overwhelming number of them in China and Hong Kong. China has reported more than 1,400 cases and 67 deaths, many in the southern province of Guangdong where it's believed SARS originated. The disease has now spread to other parts of the country. In Hong Kong, more than 1,300 people have fallen ill-- nearly as many as China-- and 69 have died. In a city renowned as one of Asia's most prosperous business and financial hubs, the streets are filled with people wearing face masks. Today, nearly 40 percent of the scheduled flights into and out of the city weren't operating. Restaurant tables sit empty, as do shopping streets like this one, usually packed with bargain-hungry tourists.

MAN: There is no business, no tourists. We are all depending on tourists. That's why we have no business in Hong Kong.

WOMAN: It makes you more cautious, certainly. And I certainly see it is not as busy as would I have expected it to be.

MARGARET WARNER: Trying to restore confidence in the city's safety, authorities announced this week they would begin screening all entering and departing passengers for high fever, a warning signof SARS.

MARGARET WARNER: More now on the economic impact SARS is having in Hong Kong, China and throughout Asia. K.C. Fung is a professor of economics at the University of California at Santa Cruz. He's also a senior research fellow at the University of Hong Kong, and co-director of the Santa Cruz Center for International Economics. Richard Medley is the chairman of medley global advisors, which provides economic and political analysis for governments, corporations, and financial institutions. Welcome, gentlemen, to you both.

Mr. Medley, how severe a blow is this to the economy? First of all, let's look at Hong Kong.

RICHARD MEDLEY: Well, right now it's more of a kind of tourist blow. It's a blow to the internal commerce. What we worry about is if this is not contained in the next few weeks to month, this could start to become more of a prolonged blow in terms of trade. People may stop ordering things because they have to go there to do contracts. If that begins to happen in the next few weeks, this could become a several-year economic blow to a region that was already in some trouble.

MARGARET WARNER: What would you add to that, Professor Fung, in terms of the situation in Hong Kong right now?

K.C. FUNG: I think right now it has already cost Hong Kong about $1.7 billion. These losses occurred in the form of losses in businesses related to tourism such as restaurants, hotel, airlines and retails. In the slightly longer run, it has been estimated that the growth rate of Hong Kong will decline by about .5 percent.

MARGARET WARNER: I know you talk to people there, professor, often. What is the mood like among people you know?

K.C. FUNG: I think the mood is very pessimistic. Hong Kong is now at a juncture where it is trying to reinvent itself, and trying to figure a way out of its economic problems. So the SARS virus definitely adds to further economic problems and adds uncertainties to the economy.

MARGARET WARNER: Back to you, Mr. Medley. Now, take this to China as a whole. Same number of cases, of course much, much bigger country. Is it having an impact there yet on tourism or on, for instance, investment or economic activity?

RICHARD MEDLEY: Well, let me say first of all we don't know that it's the same number of cases. There is a lot of suspicion that it may be at least twice as many cases as the government scrambles to come to grips with the truth of SARS.

MARGARET WARNER: I should have said recorded cases.

RICHARD MEDLEY: Secondly, it is really beginning to have an impact. From what we've heard, spring trade fairs in China that are normally packed... that's where people make deals to do business later in the year or the next year, those are virtually empty like you saw the shopping streets in Hong Kong. So it's beginning to have a trade impact already in China. And what we're afraid is if it keeps going and... you also should mention that Singapore is an affected area... the trade entrepots of Asia are all basically suffering from SARS that are making people change their plans to travel. That will become an economic impact in longer term trade flows, and I think could depress growth in China and in Hong Kong even below the current estimates which I agree with.

MARGARET WARNER: So, have estimates been... of economic growth for 2003... I know they have been reduced for Hong Kong, have they been reduced already by analysts who do this kind of work for other parts of Asia, based on SARS?

RICHARD MEDLEY: Everyone is kind of making up numbers now, whether it's 0.5 percent or 1.5 percent or more, will really depend on whether this thing begins to look like it is under control in the next few weeks. If not, there's really no way to talk about estimates. And I think one other point needs to be made and that is that financial firms, which were kind of the mines and the canary because they can shut off computers and move people relatively quickly, are beginning to move people out of Hong Kong and out of the affected areas in Guangdong Province and back to Tokyo or London and New York because people don't want to be there. They can do that first and fastest. Other companies like manufacturing companies, obviously take a much longer time to do that. But that's the future if this doesn't come under control.

MARGARET WARNER: Professor Fung, your thoughts on the situation in China.

K.C. FUNG: I mean China is a much bigger country. It's hard to estimate the economic effects. But currently, the best estimate is that it has already cost China about $2.2 billion. And there are some estimates for the current year growth rate that it will decline by, again, by about .5 percent. Again, that's just an estimate, depending on how the eventual situation can be handled. I think one aspect of how SARS might affect China is to look at the flow of foreign capital into China. China has now become the most attractive place to invest. In 2002, it received more than $50 billion, the largest recipient of foreign capital in the world, so most investors are interested in China because of its low cost, high quality, and at the same time, reliability. And I think the SARS virus and the way that the Chinese government is perceived to have mishandled the case, adds to uncertainty about how reliable the economy is and how attractive the place is as a foreign direct investment.

MARGARET WARNER: Would you agree with that, Mr. Medley; that this may have shaken the confidence of foreign investors in China as not just an economy but a political system, a place to do business?

RICHARD MEDLEY: I couldn't agree more. I think that's 100 percent right. And I think what Professor Fung was saying is very important because it's not just the impact on China, but the impact on the rest of the world. Remember, those trade flows that he was talking about going in or foreign direct investment flows going in created factories in a low-wage cost environment that helped keep inflation and prices down across the world. If you begin to even marginally take China out of the picture for the next year or so, the pressure on prices across the world for goods is going to start to rise. Those trade-- those investment flows slowing in China almost certainly mean higher prices in inflation in the rest of the world.

MARGARET WARNER: Professor Fung, let's go back one more time to Hong Kong. As I understand it, it had already been having some economic problems. Are the SARS-related economic effects which, if it's not checked, could continue for some time until a vaccine is developed; are they the kind of things that ultimately Hong Kong would recover from, or could this be a kind of permanent blow to Hong Kong's status as a major financial sort of powerhouse in that part of the world?

K.C. FUNG: I think Hong Kong has been undergoing tremendous transformation. Since 1997, the Asian financial crisis hit, Hong Kong has faced several severe economic setbacks including drop in prices in property, stock market prices dropped, as well as loss in competitiveness in traditional areas of strength such as light manufacturing, which has all now moved into southern China; such as finance and banking. Even in that sector a lot of the financial institutions are now moving into Shanghai. So while I believe that eventually Hong Kong people and Hong Kong government would figure out a way out of this dilemma, but currently the mood in Hong Kong is that you cannot find a solution to this multiple problems that are facing Hong Kong. They try high-tech for a while. That didn't seem to work. They tried to bolster tourism by attracting Disney, which will open in 2005. Unfortunately, the SARS virus hit precisely this particular sector, which is the tourism sector. So, the SARS virus may not be the final straw to add to the Hong Kong problems, but if the Hong Kong government mismanaged this, and if the Hong Kong private sector does not respond quickly, it could add to a long list of major problems facing Hong Kong.

MARGARET WARNER: Professor Fung, and Mr. Medley, thank you both.

FOCUS - SHIELDS AND BROOKS

JIM LEHRER: And finally tonight, the analysis of Shields and Brooks -- syndicated columnist Mark Shields and David Brooks of the Weekly Standard. Mark, how is peace going in Iraq as it seems to you?

MARK SHIELDS: Jim, I think as a general rule of thumb, if the post-war looting lasts longer than the war, it can't be considered an unqualified success. And I would have to say that the looting, first of all, tarnished to a considerable degree the luster for both the Americans and the Iraqis; that not only took some of the joy out of the military triumph, but it also had a practical impact and has had a practical impact. And that is in the rush to protect the oilfields from being set on fire, the oil company offices and all the computers and all the equipment and much of the vehicles were stolen and looted; thus postponing further. Add to that, the sort of human tragedy of hospitals unable to provide treatment and relief to people who are suffering, and I think that there's been a sense of disappointment. And the irony to me was Don Rumsfeld confounded his critics militarily, who said he had too small a force to do it. And yet this is the revenge of General Shinseki, who is the army chief of staff who crossed ways with Rumsfeld, 18 months before Shinseki's term was up, announced a successor thus making him a lame duck in everybody's eyes, but he said in congressional testimony it would take 200,000 troops to bring occupation and pacification to a post-war Iraq. And the problem has been that we've had too few troops and it has translated into indifference because we haven't had the numbers to bring the order and peace and law, it's disappeared; it's been a strong perception of American indifference -- the tragedies we've seen.

JIM LEHRER: You see it that way?

DAVID BROOKS: Not quite. If we had 200,000 troops, the war would be going on another two or three months. We sacrificed speed; there were trade-offs involved, but we saved lives and made the war quicker because we had so few troops and we were so quick -- we were able to go in quickly. To me what is happening in Iraq is on the one hand the Hobbsian state of nature as Mark describes with all the looting and the chaos and the hospitals and everything being stolen. On the other hand, an amazing, even in one week, birth of some sort of nations, civil society that shows that Hobbs was wrong about states of nature -- that people really do get together and come together. There are the town councils that are meeting; there's a neighborhood anti-looting brigade, and the thing that amazes me the most is the emergence of political parties. There are now dozens of them. People have some sort of group consciousness. My favorite one so far is the Liberal Democratic Party of Iraq. I was wondering where all the liberal democrats went. They're all in Baghdad. They have been meeting....

JIM LEHRER: Mark was wondering about that.

DAVID BROOKS: I'm for liberal democrats as long as they're in Baghdad. That's my view. The amazing thing is that they have been meeting in secret cells, 2,000 people, underground, under Saddam's rein. They emerged. They have a building and a platform and they're going to the talks and the talks are happening. So on the one hand you have this looting and the chaos and the anarchy, on the other hand, you begin to see the roots.

JIM LEHRER: You are not seeing anything positive, Mark?

MARK SHIELDS: I'm not questioning. I think, Jim, what people are seeing is that an impatience and a frustration with the fact that water isn't turned on, that there isn't....

JIM LEHRER: Supposed to be on in another couple of days.

MARK SHIELDS: Another couple of days. That's a great consolation to us sitting 10,000 miles away. I'd say also, Jim, what is probably the most bothersome of all is that we've hit now 36 different sites that were prime sights; we had them on the bird. We knew exactly where all the weapons were.

JIM LEHRER: The weapons of mass destruction.

MARK SHIELDS: And none has been uncovered. I think that the time has probably drawn past where we have to get U.N. inspectors in there to confer a legitimacy upon the inspections because I think skepticism will grow and suspicion will grow if we go much longer and oh, my gosh, do turn it up.

JIM LEHRER: Do you think it is a problem?

DAVID BROOKS: Well, it would obviously be nice for the administration if they found it. They've found plenty of sites that look like they create -- the labs and things like that but they found none of the material. Rumsfeld's new phrase is that they're going to have to interview the actual scientists, wait for somebody to lead it to them. And I don't see why they're allowing some inspectors in and allowing some retired inspectors in to help supervise the force. There has been a lot of looting that has destroyed a lot of evidence. I don't think it would hurt to have maybe not Hans Blix but some of the U.N. inspectors in.

JIM LEHRER: I interviewed Secretary of State Powell last night, and he said without any hesitation, he said I know that stuff was in there when I was talking at the United Nations Security Council. And he still seems convinced of that.

DAVID BROOKS: They seem utterly convinced. Even the people who are experts seem utterly convinced there are things there. The question will be the quantities.

JIM LEHRER: Syria thing. What is going on there, David? What is that all about?

DAVID BROOKS: You have got Hafez al-Assad, the father of Bashar al-Assad, the new, current leader who was a ruthless, brutal man but also a very intelligent and clever man. And his philosophy always was I'm going to do horrible things but I'm always going to keep a cordial relationship with the United States. You have his son, Bashar who is as ruthless and as evil in some ways but a lot dumber. And what he has done is he has alienated the U.S. in unnecessary ways. He called on the Iraqis to declare holy war on the U.S. invaders, he allowed the Syrians to export these night goggles into Iraq to help the war, allowed the export of terrorists into Iraq to fight against the Americans. So what he has done is he has truly alienated the United States in a way that has -- Syria has never alienated under his more wily father. He has done it at the moment when I think a lot of the U.S. Officials realize this is a moment in the Middle East; we've got to take advantage of the victory in Baghdad and take advantage of the prevailing winds and really do something positive about the Middle East, about Syria, about Iran, about Lebanon, a country that's been occupied for a dozen years. And so....

JIM LEHRER: As well as the Palestinian issue.

DAVID BROOKS: Exactly. The pressure is ratcheted up to take advantage of the moment.

JIM LEHRER: How do you read it?

MARK SHIELDS: Well, I thought what was next on the agenda, everybody's agenda, the president made a major speech about a year ago, not about Syria. It was about Palestinian and Israeli peace. And, you know, the overheated rhetoric, I think, caught up with the United States. Your interview with Colin Powell last night, I think Condi Rice, I think the vice president has realized they have gone too far. There is no question about it. All of a sudden they made not only the United States nervous, they've made Europeans nervous, they've made Arabs nervous.

JIM LEHRER: You mean in reacting -- the things that David said.

MARK SHIELDS: To this sort of overheated rhetoric of where are we going next. We have a must invade list somewhere buried and that this was going to be tried out. I think they've backed off from it. You saw Spain come out and say this is our good friend, Syria. And I think it's....

JIM LEHRER: It's over then?

MARK SHIELDS: It's understandable that they want to put pressure on, that Hezbollah has had Syrian support and Syrian backing. And I think the Israelis would understandably like to see that curtailed and eliminated. And I think that was part of their pitch to the United States on it. But I don't think there is any question, Jim, that the key, the next point has to be some movement and real movement on peace between the Israelis and the Palestinians.

JIM LEHRER: Do you agree with that?

DAVID BROOKS: I think Colin Powell said that last night. The other thing I would say is we talked about Syria whether we were going to turn left and invade Syria or Iran last week and the week before. I sort of laughed it off. And the following week I heard all these people theorizing the administration, that the war mongers had another war in mind, six or more empires in mind. The only thing I'd say is that there are a lot of people who dislike the administration who will believe anything about the administration, and tell each other stories about the administration. It reminds me a little bit about the Republicans who believed anything about Bill Clinton, and would you get all these cockamamie scandal ideas. Now there are a lot of cockamamie stories about what the Bush administration has in mind. It is really important to be skeptical about them because there was never any thought of going to Syria or Iran.

JIM LEHRER: A domestic thing before we go, speaking of heated rhetoric. What is going on Bill Frist? There have been all kinds of stories saying the Senate majority leader is not making it, has all kinds of problems. How should we read this?

DAVID BROOKS: The Republicans feuding. I had forgotten Republicans could feud. It's like seeing the Teletubbies fight.

JIM LEHRER: Went out of your mind.

DAVID BROOKS: They had not had an internal party disagreement since I had hair. It has been a long time. What happened was the Republican .. the White House had this big tax cut idea, $750 billion. The House strongly supported it. A few key moderates in the Senate said we don't support that number. We want to go down to $350 billion. Frist accommodated them. And he accommodated them in a clumsy way without telling the House. And so that made them angry on procedural grounds. The White House and A lot of Senate Republicans thought he could have leaned on those two and gotten it up. So they are really angry at each other.

JIM LEHRER: You're talking about Voinovich of Ohio and Olympia Snowe of Maine.

DAVID BROOKS: And they're angry about the size but also the way Frist handled it.

JIM LEHRER: Is this a real thing --

MARK SHIELDS: David asked what happened to liberal Democrats, what happened to the conservatives is they're having a civil war in the leper colony. There's no question - going back and forth - recriminations. I mean, Denny Hastert, Speaker of the House, an easy going Midwesterner has accused Chuck Grassley, the Republican chairman of the Finance Committee of being irrelevant. The things they're saying about Bill Frist are not printable in a family show and Frist....

JIM LEHRER: Who is they? Who is saying this, people in the House?

MARK SHIELDS: People in the House. They had the rug pulled out from under them. Let's be very frank about it. Bill Frist is new on the job. He wants to be president. He didn't want to be Senate majority leader. It was the White House's idea that he be Senate majority leader. Remember Strom Thurmond's birthday party and Trent Lott.

JIM LEHRER: I remember that.

MARK SHIELDS: Bill Frist was the man to the rescue, he was the guy on the white charger. So he isn't the most savvy insider, but I think he probably cut a deal that was the only deal that could have been cut. I mean the reality, I think David has made the point on this show, that even though $750 billion tax cut at a time of war and deficits and all the rest of it is problematical, questionable, dubious at very best. And I think that, you know, we've got people who really do believe, like George Voinovich of Ohio and Olympia Snowe, we will go $350 billion and that's a bunch.

JIM LEHRER: Is Frist going to survive it?

DAVID BROOKS: I agree with Mark; he cut the best deal he could. I don't think there wasn't a bigger tax cut. The votes weren't there. But I think a lot of people will try to make frenzy and say okay it's a rookie mistake.

JIM LEHRER: He'll move on and he will earn from this. In a way he kind of won, did he not, in a way?

DAVID BROOKS: I wouldn't want to be Bill Frist tonight.

MARK SHIELDS: You got sniping at him, you got Rick Santorum, the number three guy taking a shot at him.

JIM LEHRER: I didn't say that. I take all of that back.

MARK SHIELDS: You don't want victories like that one.

JIM LEHRER: I'll leave it all that stuff to you two and say good night. Thank you very much.

RECAP

JIM LEHRER: And again, the major developments of this day: The U.S. Military reported the capture of a top Ba'ath Party leader in northern Iraq. Thousands of Iraqis marched in Baghdad, demanding that U.S. forces leave soon. And North Korea released a statement in English stating it had begun reprocessing nuclear fuel rods to build nuclear weapons. But later, wire service reports said that was apparently a mistranslation. They said it appears North Korea meant to say it was on the verge of reprocessing.

JIM LEHRER: And, once again, we close with our continuing honor roll, in silence, of American military personnel killed in Iraq. We present them only after the deaths are official, and photographs are available.

JIM LEHRER: A reminder: Washington Week can be seen on most PBS stations later this evening. We'll see you online, and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.