The MacNeil/Lehrer NewsHour

Intro ROBERT MacNEIL: Good evening. Leading the news this Wednesday, President Reagansaid partisan politics are hampering the war on drugs. Three people were killed in an explosion at a chemical plant in the Soviet Union. White House Chief of Staff Howard Baker said he is hopeful that the U. S. will remove Panama's Noriega from power. We'll have details in our news summary in a moment. Judy Woodruff is in Washington tonight. Judy? JUDY WOODRUFF: After the news summary we focus first on the politics of drugs. Correspondent Cokie Roberts reports on why the war on drugs has suddenly turned into a battle between the President and Congress. Then we'll get four different views on what the government should be doing to combat the problem. Finally, Paul Solman explains why so much third world lending has gone sour, and we talk to World Bank President Barber Conable about the U. S. role in helping those countries.News Summary MacNEIL: President Reagan today urged that a joint congressional executive branch task force be formed to recommend solutions to the drug problem. He told a graduating class at the Coast Guard Academy that excessive drug politics is getting in the way of the war on drugs. Pres. RONALD REAGAN: If America's anti drug effort gets tripped up in partisanship, if we permit politics to determine policy, it'll mean a disaster for our future and that of our children. Because if we cannot remove the politics from drugs, how can we hope to remove the drugs from our communities, work places and schools? MacNEIL: As the President spoke, the Senate was tied up by drug politics. It has been prevented from passing a Pentagon budget bill because of an unrelated amendment providing the death penalty for some drug dealers. The chief author of the amendment, Republican Senator Alfonse D'Amato of New York, had a curt response to the President's charge of politicking.

Sen. ALFONSE D'AMATO, (R) New York: I'm sick and tired of those who would say we wait for election year to go forward. I think that if it takes the election year to get action that overwhelmingly the American people support, then I'm committed to following and pursuing that course, regardless of what people will label these tactics. WOODRUFF: White House Chief of Staff Howard Baker again left open the possibility today that the Reagan Administration may offer to drop the indictment against Panama's General Manuel Noriega on drug charges. Baker told reporters that he is reasonably hopeful the U. S. will be able to remove Noriega from power. But he refused to be specific about how Noriega might be persuaded to step down. HOWARD BAKER, Chief of Staff: There's nobody that's tougher on drugs than this President and this Administration. I support the indictment, I think it would be absolutely (unintelligible) not to indict him if you have proof of complicity in drug traffic, which we did and do. So I have no quarrel with the indictment. The question is how to best utilize that indictment. MacNEIL: Howard Baker also said it would be a major plus if the Senate ratified the medium range missile treaty before the Moscow summit. Failure to do so, he said, might have some effect on the Soviet's willingness to go ahead with the next treaty. Today's Senate debate centered on a side issue, the Democrats' demand that the Administration say it will not later reinterpret the treaty. For the Republicans, Senator Arlen Spector said that was a boobytrap that could sink the whole ratification process.

Sen. ARLEN SPECTOR, (R) Utah: This ABM reinterpretation condition establishes realistically viewed a two treaty doctrine. It establishes an approach that there is a treaty between the executive branch and the Soviet Union and at the same time a second treaty between the executive branch and the United States Senate. Sen. PAUL SARBANES, (D) Maryland: The Senate in fact here is not trying to assert primacy. It's simply asserting that when the executive makes an authoritative representation as to the meaning of a treaty and the Senate subsequently goes ahead and approves that treaty, gives its consent to it, that an executive cannot later come along and contend to the contrary as to the meaning of the treaty. MacNEIL: The Soviets acknowledged today that three people died last Thursday in an explosion at a factory in Pavlograd 500 miles southwest of Moscow. But the Soviets said it was caused by a chemical explosion, not missile fuel, as alleged in the West. They disputed a Pentagon statement that said the blast had destroyed the sole production line for the new SS 24 nuclear missile. Kremlin spokesman Gennadi Gerasimov said it was still working at full capacity. WOODRUFF: Also in the Soviet Union, the first contingent of Soviet troops to be withdrawn from Afghanistan returned home today. More than 1200 Soviet soldiers in a column of about 300 armored vehicles crossed the border onto Soviet soil at Teer Mezh where they were greeted by cheering crowds. It took the Russians three days to make the 440 mile trip from Jalalabad in Southeastern Afghanistan. The unit was posted there in 1979. In Osaka, Japan, tragedy struck a Soviet cruise ship early today. Eleven people were killed and at least 26 injured when fire gutted the 4800 ton vessel. The ship was on a tour of Japan and carried 295 members of the Communist Youth League as passengers, and a crew of 129. Japanese investigators said consular officials have refused to allow them to question the ship's captain, the crew and the surviving passengers. MacNEIL: In the Punjab region of India, the 10 day siege at the Golden Temple in Amritsar ended today. Police said the last 46 holdouts among the Sikh extremists left the temple and surrendered. At least 37 persons were killed during the siege and today's surrender resulted in another five deaths. Two Sikhs were shot to death when they broke away from the main group. And three others reportedly committed suicide by swallowing cyanide pills. Punjab violence also claimed 31 lives in a camp of Hindu workers in the province last night. Police said a note left at the scene indicated Sikh militants had shot the workers in retaliation for the temple siege. WOODRUFF: The new French Premier said today that France will reestablish diplomatic relations with Iran. The two countries broke off ties last summer after an Iranian Embassy employee in Paris refused to submit to questioning about a 1986 terrorist bombing. The renewal of relations is being justified by the release May 4 of three French hostages who were kidnapped in Lebanon. Welcoming them home, then Premier Jacques Chirac praised Iran for its help in obtaining their release. And he said diplomatic relations were now possible. The new Premier Michele Rocard said today his government would keep the promises made by the previous government. Meanwhile, in Beirut, Lebanon, fighting between rival Shiite Moslem militiamen continued today as an Iranian mediator tried to end the 13 day battle. One plan under consideration is the deployment of Syrian troops to separate the factions. Reuters News Agency reported today that the kidnappers of Western hostages in Lebanon are threatening to kill the hostages if Syrian troops move in. MacNEIL: Back in this country, Democratic frontrunner Michael Dukakis scored another win over Jesse Jackson in Oregon yesterday, and called himself a candidate who can win the presidency. But Jackson pressed on into California, not conceding the race yet, and brushing aside news that a Missouri couple had been arrested in an alleged plot on his life. He said there were no plans for increased security. A Gallup poll today showed Dukakis with a lead of 54 points to 38 over Republican George Bush in current voter preferences for the November election. WOODRUFF: Finally in the news, four men were arraigned in Chicago today on charges they tried to embezzle $70 million from the First National Bank of Chicago, the nation's 10th largest bank. A bank spokesman called the scheme one of the biggest almost crimes in the country. The alleged plot would have channeled the money into overseas accounts through a series of computerized cash transfers. First National Bank officials said their own security system uncovered the plan. That's our news summary. Still ahead on the NewsHour, a political fracas in the war on drugs, and a third world worsening death problem. Politics of Drugs MacNEIL: We devote most of the program tonight to a look at the war on drugs with perspectives from the White House, the Congress and a panel of experts. We start with President Reagan's speech today at the Coast Guard Academy, criticizing the Congress for playing politics with the issue and calling for new action to deal with the drug crisis.

Pres. REAGAN: I want to use this opportunity today to call for a special initiative. One of America's greatest strengths is our unique capacity for coming together during times of national emergency. We set aside those differences that divide us and unite as one people, one government, one nation. We've done this before, we must do it now. Illegal drug use is the foremost concern in our country. And frankly, as I finish my final year in office and look ahead, I worry that excessive drug politics might undermine effective drug policy. If America's anti drug effort gets tripped up in partisanship, if we permit politics to determine policy, it'll mean a disaster for our future and that of our children. That's why today I'm calling on both Houses of the Congress, both sides of the aisle, to join with my representatives in a special executive legislative task force to advance America's unified response to the problem of illegal drug use. Because if we cannot remove the politics from drugs, how can we hope to remove the drugs from our communities, work places and schools? Our task force should agree on solutions for every area of the drug problem, from blocking supplies to curtailing demand. From treatment to education to prosecution, from interdiction and confiscation, to eradication. Nothing should be overlooked or left out. Our policy is one of zero tolerance for illegal drugs, and we're looking for solutions, not just a restatement of the problem. And no later than 45 days from now there should be a report to me and to the bipartisan leadership of Congress laying out our proposals. Let me take a minute to spell out some specific items that need to be considered. First, to deter violent crime and narcotics trafficking, we have to deal with the drug syndicates on our terms. That means when a death results from narcotics trafficking, or when a law enforcement officer is killed in the battle, the law must provide for swift, certain and just punishment, including capital punishment. I have also today directed Secretary of Defense Carlucci to tap the best minds both inside and outside of government, to come up with creative solutions on how we can better use military resources and technologies to detect drugs and support civil law enforcement agencies in interdiction. We need stepped up international eradication programs to reduce the supply of drugs and additional education and prevention programs to reduce demand, including the use of civil sanctions, such as fines and loss of federal privileges. Our encouragement, our goal should be for those who have never tried drugs, to remain drug free. You see, at the root of the drug crisis is a crisis of values and of spiritual hunger. I believe that as a society we're still paying for the permissiveness of the 1960s and 1970s, when restrictions on personal behavior came under attack by a cultural establishment, whose slogan was just say yes. WOODRUFF: President Reagan focused on drug issues in today's address in the wake of heavy Senate debate on the subject over the past week. Several drug related amendments have been attached to a defense bill. A vote on the measure has been blocked by an argument over a proposal to impose the death penalty for certain drug related killings. Congressional correspondent Cokie Roberts has a report on what's been going on in the Senate reaction to the President's speech.

COKIE ROBERTS: President Reagan took his message today to some of the men in uniform currently involved in the war on drugs. The response from Congressional critics came quickly. Senator Alfonse D'Amato is a Republican from New York. Senator ALFONSE D'AMATO, (R) New York: The problem of drugs is important and it's unfortunate that the Administration has not addressed itself prior to the election cycle to this problem. It's unfortunate that it took the Congress of the United States to drag the crying to the altar, so to speak, to perform the marriage of the military and the mission of at least detection to help detect and to really use some of its resources of those planes and those ships that are carrying drugs.

ROBERTS: Senator D'Amato has been one of the leaders in the battle to keep narcotics from flowing over U. S. borders. He brought an amendment to the Senate floor last week to provide for surveillance and detection of drug runners and to use the Armed Forces Communication and Intelligence. Sen. D'AMATO: I'd suggest that we have achieved the proper balance here, and we may have to fine tune this law, but why not use the technical resources, the radar systems, the detection devices that we have to help us track down those more than 20,000 planes carrying cargoes of death and destruction into our communities? Sen. JOHN GLENN, (D) Ohio: We have no prosecution, we have no lockups, we have no anything to follow this up, except here we are in a great hysteria. Nobody is going to out anti drug me, I can tell you that. So we all get up, posture, make our little funny statements here, and it isn't going to make a hill of beans difference.

ROBERTS: The plan to involve the military passed the Senate. The House of Representatives had already approved a measure to involve the military in the drug battle. The Senate then went on to add more drug related amendments to the defense bill. Senator Jesse Helm's plan cuts off funds to the Panamanian military as long as General Manuel Noriega remains in power. Sen. JESSE HELMS, (R) North Carolina: The bottom line, Mr. President, at least in the judgment of this Senator, is that those obligations include the obligation to insist that the dictator General Noriega is brought to justice for drug trafficking aimed at the young people of this country and our present and future security as a nation.

ROBERTS: And Republican Leader Robert Dole's resolution called on the Administration not to drop drug charges against Noriega. Sen. ROBERT DOLE, Minority Leader: The evidence appears to beoverwhelming. Noriega deals drugs, protects drug traffickers, launders drug money. Pick your title. Noriega fits them all, Drug Kingpin, Drug Overlord, Drug Godfather. If we let Noriega off the hook on the drug indictments that had been brought against him, no matter what the motives, we have sent a very regrettable message to the world.

ROBERTS: Senator D'Amato also wants to impose the death penalty for certain drug related killings. Sen. D'AMATO: I'm pushing for the death penalty for those who order the assassination of people, the drug kingpins who use that as a method to enforce terror, who would use them to assassinate police, who raze territory in communities, and we've seen it in one neighborhood after another throughout the length and breadth of the nation.

ROBERTS: Others in the Senate agree with President Reagan that the whole issue has gotten caught in election 1988 politics. Washington Republican Senator Daniel Evans is retiring this year. Sen. DANIEL EVANS, (R) Washington: It's the intensity of these political solutions that I think are in many cases leading us in the wrong direction, using the armed forces unwisely, coming in with proposed death penalties for drug war lords, when, in fact, the murders that are carried out are mostly murders of drug dealers. It's fooling the people, trying to make them believe that something is happening when in reality these efforts won't be very effectual.

ROBERTS: A House Senate Conference Committee will eventually decide the extent of the military's involvement in fighting the war on drugs, but the question is no longer whether the armed forces will play a role, but only how great that role will be, and it's clear that as November comes closer, the skirmishes on the drug issue in Congress and on the campaign trail will escalate unless the voters decide that some other issue is more important than drugs in this election year. MacNEIL: In proposing his task force on narcotics, President Reagan said he planned to tap the best minds both inside and outside government to come up with creative solutions, and we have some of those best minds here tonight to consider some solutions. Dr. Mark Gold is director of research at Fair Oaks Hospital in New Jersey, and founder of the National Cocaine Hotline. Sterling Johnson is special narcotics prosecutor for New York City. Peter Reuter is a senior economist at the Rand Corporation. And joining us from Baltimore is Mayor Kurt Schmoke, a former assistant U. S. Attorney and prosecutor. You're a politician, Mayor Schomke. Is that the problem now? Is it politics that's the problem? KURT SCHMOKE, Mayor, Baltimore: Well, as you may know, I recently made a speech to the U. S. Conference of Mayors where I called upon Congress to hold hearings to rethink the national drug policies. And I asked that these hearings and I asked that these hearings be held after the November elections, because I didn't want it to get involved in election year politics. Now my proposal, as you may know, is that we should consider the decriminalization of drugs as one way of taking the profits out of these drugs and really go after the drug dealers. MacNEIL: I was going to come back to that a little later. Mayor SCHMOKE: The only reason why I mentioned it is that the President today said nothing should be overlooked or left out in our new consideration of a new drug policy, and I want to make sure that that is an issue that is considered. MacNEIL: I see. Let me go around the table here and ask each of you. Starting with you, Dr. Gold, how would you characterize the state of the drug war and the response of the Congress and the Administration so far right now? Dr. MARK GOLD, Fair Oaks Hospital: I'd say that there has been some progress, but the progress has been difficult for all of us to see. Progress is difficult for me to see, people who are drug victims, patients who are addicted, people who call asking for help. But there has been significant progress. And let me give you some examples. The progress that's measurable is progress in attitudes, attitudes of high school seniors. It's very clear following in high school senior surveys since 1978 and before that perceived dangerousness, do you believe that smoking marijuana occasionally is dangers? Yes, over three times as many high school seniors. Do you believe that using cocaine once is extremely dangerous, over half of the high school seniors now. You know, are you smoking marijuana every day, rather than one out of ten high school seniors way, way down. Now so there's been changes in attitudes. Now all of us that are working on another front, AIDS prevention, talking about changing attitudes. You need to change attitudes, so we've had some significant changes in attitudes. People don't say, I got addicted to cocaine, it's impossible, it couldn't have happened, cocaine is safe. They say now cocaine is dangerous, I know I'm taking a risk, or I'm addicted, so attitudes have changed and I think a lot of things have come together, the media, Mrs. Reagan's efforts, the parents' movements, the partnership for a drug free America, public service announcements, have gotten people to the point that you can't find anyone really who says that cocaine is safe, or that drugs are safe. They're not as chic as they used to be. It's a far cry from -- we were talking the kind of debates that I was in, 1975, 1980, even with 1983 with health professionals who said, cocaine isn't dangerous, it's people that give it a bad name. MacNEIL: Let me ask Mr. Johnson -- as a prosecutor, do you see some progress? STERLING JOHNSON, Jr., Narcotics Prosecutor: No, I really don't. In fact, I see we're falling back. We see conversations now about legalizing or decriminalizing drugs, which I think is extremely dangerous at a time -- MacNEIL: -- out of frustration -- Mr. JOHNSON: Frustration, I really do think so. I can imagine someone being ill and you having a doctor who is going to operate on you and he is under the influence of drugs, an airline pilot who's flying a plane and he's under the influence of drugs, babies that are born addicted, and you're going to give these young kids -- and you want to talk about that. There is really nothing to talk about. We have not had a war on drugs. We have not even had a police action on drugs. MacNEIL: There's no war on drugs? Mr. JOHNSON: We have not had a war on drugs, we've had a lot of rhetoric. But no war on drugs. We've had eight years of an Administration that talked about it, we've just had a White House conference, and now we want another conference on drugs. I think the best thing that happened in this Administration is Mrs. Reagan. I think she's been terrific. And I say this as far as this administration, even the Democratic Administration, we have not had a serious war on drugs since 1972, when President Nixon was there, and he was the man. We talked a lot. Now I'm a prosecutor, local prosecutor. We don't get enough resources to prosecute the cases, and we do a good job not because of the Administration, but in spite of the Administration. And I have been here the night of the long night when federal law enforcement did not have enough money to go out in the street and buy drugs. They're talking about a war on drugs. I think it's a farce -- 1981 there were 50 tons, estimated 50 tons of cocaine coming into this country; 1987, you're talking about 180 tons. Now if we're winning the war on drugs, the next question is, who is we? MacNEIL: Do you see any discernible progress, Peter Reuter? PETER REUTER, Rand Corporation: There certainly are changes in what you call the outputs of the criminal justice effort against drugs. I mean, I've studied it in the District of Columbia in particular and they see a dramatic increase in the number of drug dealers that go to prison for some period of time. And I think the District of Columbia judge has handed out 8,000 years of prison time, 30 times as much as they did in 1981. Yet we see lots of indicators going in the wrong direction. The number of deaths associated with cocaine use, emergency room admissions involving cocaine use. There's no question that all of these are up. I don't think that one can claim that there has been with respect to current users a change in the right direction, even though, as Dr. Gold said, there clearly are changes in youthful attitudes that in the long run suggest that things will get better. But it could be a long time. MacNEIL: Mayor Schmoke, is your resort to suggesting a debate on legalizing these illicit drugs, is it, as Mr. Johnson suggests, just out of frustration because you don't see any progress? Mayor SCHMOKE: No. Absolutely not. I am making this suggestion because I have been a prosecutor for seven and a half years and I know that what I'm saying now is bringing common sense to this debate. It's not a retreat. It's fighting drug dealers on the turf that they really understand, and that's money. We cannot prosecute our way out of this problem. I live in a city in which we have a jail designed to hold 2100 people. It has 2650 in there. Our state prison was designed to hold 9500 people. It's got 14,000 in there. And we can just keep prosecuting. The only thing I'm saying is that we have an example in prohibition and it was not prosecutors, it was not federal agents that ended the crime associated with the trade in alcohol. It was ending prohibition. And what I'm trying to say is that I would like to end this latest prohibition and use these billions of dollars in resources to attack this as a public health problem. And if you don't agree, at least let us debate it during the course of -- MacNEIL: We did debate that on this program about ten days ago. And we don't want to go into it in detail. But I'd just like to hear what each of our guests tonight has to say about -- since we're not excluding any possibilities -- about the legalization issue. And then we'll move on to some of the other things that are being discussed. What do you think, Dr. Gold? Dr. GOLD: First of all, when we talk about alcohol, we talk about a drug that's widely available and that causes at least eight and sometimes ten percent of the population to need treatment at one time in their life. The estimates from professionals, just taking cocaine alone and saying what percent of the people who've ever tried cocaine if cocaine were legal would require treatment, treatment resources, and that would cost a lot of money and cost a lot of lives. You talk about emergency room visits and hospital treatment. We don't have a treatment for cocaine overdose. That's the reason that people are dying. In addition to the fact that the drug kills, there's no treatment. You're better off to overdose on heroin. The estimates from experts would be somewhere in excess of one out of four. Some experts say one out of three people who've ever tried cocaine as compared to the 8% that we're stuck with of tragedies and misery with alcohol. We have, as Mr. Johnson said, the whole issue of cocaine intoxicated babies. We're dealing, everyone's frustrated because doctors are trying to help people . We have no treatment for overdose. If you look to medical treatments as the care, I'll tell you, we have good treatments for heroin overdose, we have good treatments for heroin detoxification and we have a new medicine that prevents people from ever feeling heroin again or preventing relapse. Those treatments didn't solve the heroin problem. You can't look at research and research treatments and say those medical treatments are going to solve the problem, not at all. MacNEIL: That's your argument against it. You've made yours, Mr. Johnson. Mr. JOHNSON: But there's also, you have an example in England. They've tried that. A dismal failure. And I've had people come over from England to speak to me about what can we do because our free heroin experiment did not work. It's just not going to work. MacNEIL: What do you think, Mr. Reuter? Mr. REUTER: I think the reference to the English experience is somewhat misleading. The English tried a medical model in which you could as an addict obtain heroin from a clinic, but the clinics were in the hands of doctors. Doctors are in the business of curing people, and they stopped giving out much heroin and started moving their patients toward Methadone and a lot of talking. And that I think was part of the reason that the experiment, or the policy, seems to have failed and created a large black market. I think there are no analogous experiences that really give us clear direction about what would happen with legalization. MacNEIL: The prohibition analogy is not a good one? Mr. REUTER: No, because that was -- whatever we think about the seriousness about the cocaine problem, we're not talking about a drug that is really available throughout the length and breadth of this country to every segment of society. It's still expensive. Regular cocaine use is still a rare behavior. It's a very different business to regulate this market, even though it turns out to be expensive, than to regulate the alcohol market after it has become -- MacNEIL: That's obviously a very big subject, and I'm sure we'll be coming back to it as this debate that Mayor Schmoke and others have proposed goes on. But let's take in the remainder of our time some of the other ideas that are being discussed. You, Mr. Reuter, have just done a study for Rand on what the effects would be, or the effectiveness of using, as the Congress has now mandated, the military in an increased way for drug interdiction. Just briefly summarize your findings for us. Mr. REUTER: Increased military involvement, any increase in the interdiction effort, no matter what the resources used, is likely to have a very modest effect on the drug problem in this country. There are simply too many ways of bringing drugs in, not all of them subject to the sort of use of military assets. The smugglers have proved too adaptable, there's too much refining and production capacity down there, there are too many smugglers now with experience for interdiction to really have any prospect of making a significant dent in cocaine consumption in this country. MacNEIL: So do you agree with Senator Evans, we saw a moment ago, who said, all this talk of using the military people is just fooling the people, it's not going to do anything? Mr. REUTER: That's the political interpretation. I just think that there's a certain amount of sincerity to the cause, a sort of natural instinct to reach for the high tech military, but against the low tech fellow. I think Sen. Evans is right, it will do very little. MacNEIL: Mayor Schmoke, what do you think about using the military in an increasing way? Mayor SCHMOKE: I think it will just drive up the cost of drugs on the streets, and it will make the price higher, and it will mean more junkies have to break into more homes and steal more goods in order to deal with the price hat it's going to -- MacNEIL: It will drive up the price you believe, because it will be a little bit effective in shrinking the supply you mean? Mayor SCHMOKE: That's right. We admit now as a government that we interdict about 10% of the drugs; if we interdict another 10%, then the cost of the 80% is just going to increase. MacNEIL: That's an argument you've made earlier on this program, Mr. Reuter, that any effective shrinking of supply only drives the price up and increases the motive for engaging in the trade. Mr. REUTER: Where I disagree with him there is that we can, in fact, affect the street price very much through interdiction. When the drug, when cocaine lands in this country, it sells now for about $15,000 a kilo in Miami. The street price is something more like $250,000 a kilo. We can seize a lot of $15,000 a kilo cocaine before we make much different to the street price. Interdiction can only affect drug consumption through price, but, alas, it cannot do much to affect that price. We can have a lot more interdiction and see very little change in consumption. MacNEIL: What do you think of using the military in an increased way, Mr. Johnson? Mr. JOHNSON: First of all, I think that it's a given that the military will be used. They're going to go to the altar. It might be a shotgun wedding, but they're going to go to the altar. I think that New York Mayor Koch's suggestion just to take these people who must do two weeks' active duty and put them out at the airport and let them do some searching and assisting the customs authorities. I think we have a resource and we have to use every available resource that we have. If it works, fine. If it does not work, at least we have tried. MacNEIL: No harm done. Mr. JOHNSON: No harm done at all. I also disagree with Mr. Schmoke, Kurt Schmoke, in a sense that we have been seizing more drugs than ever before and the price has not increased, the price has decreased. MacNEIL: Because the supply presumably despite the seizures has increased? Mr. JOHNSON: Absolutely. We're doing one heck of a job, a tremendous job. MacNEIL: But the smugglers are doing an ever better job. Mr. JOHNSON: They're doing it even better and there are more of them. They have more resources. In 1981, a kilo of cocaine would cost you $60,000 in New York and as Peter Schmoke said, right now in New York, I am buying a kilo of cocaine for $15,000. You can get it for eight or nine thousand in Florida. MacNEIL: Just a moment -- you talked for a moment about using military people to help the customs people. What percentage of the drug smuggling is done through, being flown in through planes and brought in by ships and what comes in in the personal baggage of -- Mr. JOHNSON: Drug smugglers are limited only by their imagination. They can bring it in using the cavities of the dead bodies of babies, and this has been done. The same thing -- MacNEIL: But what percentage comes in in big lots through the skies and through boats, and what comes in in personal baggage? Mr. JOHNSON: I don't think we really know. We just seized, or the Drug Enforcement Administration just seized, four tons in Florida. And the next day the Drug Enforcement Administration here in New York seized another ton, or ton and a half. And there was no impact upon drugs in the streets of New York. MacNEIL: What do you think about the use of the military for interdiction? Dr. GOLD: People in treatment want any measure that increases the price of the drug, because we see hundreds and some people hear from hundreds of thousands of addicts who say if it was just a little bit less expensive, I could use more, and they would be in the emergency rooms who die and who need treatment. In addition, we have like a very confusing situation. We hear the proposal for the military, but what we're doing is we're using the military to basically close off our borders, and no one is proposing using the military to attack the actual source of the drug. For example, we know where at least 70% of the cocaine is grown on plants. We have probably the ability to identify the site, the valleys, and we probably could attack them. And it takes two years for the cocaine plant to mature. We could cause a two year problem now. MacNEIL: If you had the agreement of those countries. Dr. GOLD: Exactly, so there are creative ways that the military could be even more effective than just sealing off the border. Let me propose one more thing that we see. We see the cocaine epidemic, and, as you know, we've been tracking this since it started, changes all the time. It started as the drug for the rich and famous and the employed. Now the typical cocaine user tends to be uneducated, without a job, early twenties, poor, living in the city. A lot of cocaine is coming in. The interdiction is picking up more and more of the drug and the price is going down. One possible reason might be that the price is chasing the continuous users, the poorer users who can't afford the exaggerated price, and much of cocaine is being wholesaled in the United States, transshipped to Europe. MacNEIL: We have just a few minutes left, and I'd like to come back to the other proposal that's attracting a lot of attention and, in fact, holding up a Pentagon bill in the Senate now. Would it do any good to mandate the death penalty for certain crimes by drug users? Would that make any difference. Mr. JOHNSON: It would make a difference to the person who has been executed. Now you're asking an ex police officer. I worked with the Drug Enforcement Administration, and I am aware of those situations where they have tortured agents and murdered and assassinated police officers, and I think, yes, there should be a death penalty for people who do this. Dr. GOLD: I won't disagree, but our problems are more pervasive than that. I mean, for years we've known that cigarette smoking is dangerous. The packs have labels. There's no question that people knew this; that didn't change their behavior. What's changing cigarette smokers' behavior are these rules that are isolating them and separating them and causing you and I and other people to say, You're abnormal, you're sick, there's something wrong, stop, get away from me, don't blow smoke at me. But let me tell you that right now people aren't looking at themselves. They go to parties where people use drugs and they stand by. They walk past it in the street. We have very basic problems and tolerance for drug users. MacNEIL: You mean people who would not tolerate somebody smoking a cigarette beside them will go to a party and tolerate somebody smoking pot or taking coke or something? Dr. GOLD: No question about it. I see this, I confront this. I've confronted it myself as an expert at a concert where I said these are non smoking seats, what are you telling me, and they said, ''Well, that's only cigarettes, Doctor. '' MacNEIL: Do you have an opinion, Mayor Schmoke on mandating the death penalty for some drug related crimes? Will that do any good, or is that just political rhetoric? Mayor SCHMOKE: It's just political rhetoric. I think that what you've seen tonight is that we cannot all agree on the same strategies and there's differences of opinions about what will be effective. I hope that we can agree, though, that there is a need for the country to rethink its policies, to do so in a very thorough way after the 1988 election and try to come to a new consensus. MacNEIL: We have a minute or so left here. Briefly, what is the one thing each of you would like to see done, and I would emphasize briefly, that would really be a creative and helpful thing? Mr. Reuter, do you have an idea? Mr. REUTER: I'm better at figuring out what doesn't work than thinking of things that will. I think that if we are going to keep the prohibitions, that using more of our resources against users rather than against dealers has some attraction. I wouldn't sell it as the answer. MacNEIL: What is your idea? Mr. JOHNSON: You have to have a commitment from 1600 Pennsylvania Avenue, and not just a rhetorical commitment. Drug abuse has to be the -- MacNEIL: Commitment means big money, does it? Mr. JOHNSON: Big money or the best minds; it has to be on the same plane as the defense budget, the economy, and even communism, but we haven't had that since 1972. MacNEIL: What is your idea? Dr. GOLD: I would agree with Mr. Reuter on that idea and say in addition when we turn to doctors, don't expect treatment to be the answer, that we have good treatments for other drugs and that's not the answer, but, please, let's devote some resources to get a treatment for these people who overdose from cocaine. Len Bias, if they would have been able to give him the same thing we would give the heroin addict would have woken up and said, Oh, my God, I'm going to go to cocaine anonymous meetings. MacNEIL: Mayor Schmoke, besides legalizing or debating legalizing, what is your idea? Mayor SCHMOKE: Essentially, my idea is to treat the drug problem as a public health problem and not as a crime problem. Let's use these billions of resources to go after it as a health problem. MacNEIL: We thank you very much for joining us, Mr. Reuter in Washington, Mr. Johnson, Dr. Gold in New York, thank you. World of Debt WOODRUFF: Next tonight we focus on the world debt problem that won't go away. We will talk with World Bank President Barber Conable. Conable and top members of the Reagan Administration have been lobbying hard in recent weeks for Congress to appropriate millions in additional funds for the World Bank. The bank is also asking its 150 other member nations to increase their contributions as well. The request of the United States has run into strong resistance from liberals and conservatives in Congress. We will ask Mr. Conable about that in a moment since he's a former member of Congress himself. But first, special business correspondent Paul Solman tells us why foreign lending to developing nations has been less successful in recent years.

PAUL SOLMAN: The idea behind foreign lending is simple. You lend money to a country so that it can invest in its economy, built it up and pay you back with interest from the money its investments will supposedly earn. And that's how our country developed, England lending us for iron mills, agriculture, and the like. But the developing countries of recent years, particularly in South America and Africa, just haven't developed. The money that they would supposedly earn hasn't been enough to maintain their standards of living, much less pay back their lenders. What went wrong? Well, basically the money was spent, or misspent, in four ways: First on domestic consumption, tortilla subsidies for the poor, Mercedes Benz for government bureaucrats; second, development money that simply left the country; third, money spent on grandiose projects; and fourth, on the development of unprofitable industries. Now, let's consider these expenditures a little more closely. First, consumption. We can certainly sympathize with poor countries spending borrowed money on their people. But, say the lenders, consumption today comes at the expense of investment for tomorrow, where still they say it's not just the needy whose consumption has been subsidized. Harvard Professor Phil Wellons has been thinking for years about the problems of development. Prof. PHIL WELLONS, Harvard University: In every country that borrowed, you see a period of false prosperity when consumer purchases rise, people are better off, all classes of people are better off, not just the poor.

SOLMAN: In Africa, for example, official bureaucrats practice conspicuous consumption. Prof. WELLONS: You see senior government officials ordering Mercedes Benz cars for themselves, for their personal use, official use. As a result, Swahili got a new word in its language; the word was 'mabenzi. ' It meant the people who drive Mercedes Benzes.

SOLMAN: Consumption may not have been a cost effective way to use development money, but at least it was preferable to the second category of spending, simply sending the money abroad. Perhaps the most egregious example was Ferdinand Marcos of the Philippines, who did put some of the money back into the countryside, took the rest of the money and ran to buy up real estate for himself throughout the Western world. So called capital of flight, investing in foreign assets like this New York real estate, occurred in every underdeveloped country, and in some of them, it represented as much as 40% of all the money supposedly loaned for development. Prof. WELLONS: Rich Mexicans bought land in California, Texas, Miami; they put their deposits in Miami banks. If the money doesn't go in the country, how can they possibly repay the loans? There's no investment.

SOLMAN: Of course, some money was spent on real development projects, the third category. Unfortunately, however, many were just too large, out of scale with the economies and cultures in which they were built. This is a typical example, the gargantuan Brazilian dam, Itipou. It used to be a showcase of foreign investment, but huge industrial projects like this have often proved inappropriate to the resources and people of underdeveloped countries. Prof. WELLONS: Brazil put $6 billion into this, then didn't have enough money to buy the generators, so it couldn't produce the hydroelectric power the dam was supposed to produce. The result: the dam site there earning no funds, doing nothing for the country.

SOLMAN: Okay, so grandiose projects were wasteful, too, but even when a large project succeeded, as with oil and gas rigs in Mexico, there was a problem. And that's the fourth category of spending: overproduction. These same industries were being developed all over the world at exactly the same time. And that meant too much oil, gas, copper, steel, cocoa, which ultimately drove down world prices and made a great many of the projects unprofitable. According to critics of development, there is a common theme that links all four categories of spending. Centralized government decision making in the developing countries and the economic decisions they've made have not enabled them to pay back their lenders. Well, you listen to all this and you wonder if perhaps the main function of so called development isn't just to keep people alive. Charity? Nothing wrong with that, of course, but then shouldn't the World Bank and others simply declare themselves a sort of international Salvation Army, or is there some other role for development? These days, optimists are pointing to two promising trends. The first is the freeing up of historically inefficient government controlled economies. Proud Mexico, for example, after decades of nationalizing almost every industry in sight, most notably oil, is now enthusiastically encouraging private foreign investment, especially among its Northern border with the U. S. In fact, manufacturing plants, many built by foreigners, now account for more of Mexico's exporting income than oil. U. S. Treasury Secretary Jim Baker, among others, has been pushing debtor countries to go further and actually denationalize. That is, privatize their state run monopolies. The World Bank is also behind this free market approach, but third world critics of the bank say it's acting as a tool of the commercial lenders. All the bank really cares about is getting the old commercial loans paid off. There is, however, a second promising trend on which right and left both agree: small scale development, or micro development, as it's now sometimes referred to. This may mean nothing more than financing a modern tool for a farmer saddled with obsolete means of production, but as a form of development, it avoids all the pitfalls of the past. With smallscale projects and countries rolling out the red carpet to business, lenders are hoping the development will finally pay off. Commercial banks have been writing off their old loans and refusing to grant new ones. They're hoping that institutions like the World Bank will carry the load. The World Bank and its member governments are hoping that the commercial banks will renew their lending. But the point is that who lends and how much will depend on whether development at long last appears to be a reasonable investment instead of just throwing good money after bad. WOODRUFF: Now, the man who heads the institution that is the largest lender of money to developing nations, World Bank President Barber Conable. When I talked with him earlier this week, I started by asking if he agreed with Paul Solman's assessment of what went wrong with lending in the past and what could be done to improve the situation. BARBER CONABLE, President, World Bank: Well, there's a great truth in what he says, Judy. There have been mistakes made, but many of them were not mistakes made by the development institutions, but by the countries themselves. Currently we think we have a very close control over how the money we lend is invested in the developing world. And we believe that it's wisely invested. A little money wisely invested can make a tremendous amount of difference in the lives of the people out there, and we believe that we are meeting that test. WOODRUFF: So you think that there are controls that will prevent the sort of things that have happened in the past from happening again? Mr. CONABLE: Yes, that's correct. And I would agree that one of the answers has got to be to put greater emphasis on the private sector in the developing world. It's been an area where we've had neglect, too much emphasis on peristaltic or public business organizations that were not themselves efficient. And if we can get market forces to work with us in the developing world, there will be a great deal of efficiency, better production, and therefore, a reduction of poverty, which is the goal of the World Bank, to try to reduce poverty. WOODRUFF: To what extent is the World Bank counting on private banks in the United States to begin lending again to these countries in a major way? Mr. CONABLE: We think many of the large commercial banks will have every incentive to continue to lend for development. Indeed, one of the arguments against debt relief schemes is that it would create very severe losses for banks and, therefore, discourage them making additional loans to the developing world. WOODRUFF: Explain what you mean by debt relief. This is where you write off -- Mr. CONABLE: Debt relief would be where you wrote off a substantial part of the debt. Now, in a place like Latin America, where 60% of the debt is owned by commercial banks all over the world, it could not all be written off without massive banking losses. Now, we're not there to protect the banks, but we do believe that the multilateral development institutions like the World Bank cannot fill the gap made by this tremendous amount of debt if it were somehow wiped out and discourage the commercial banks from making further loans. So what we're trying to do is to find ways of reforming the economies of these countries, so the commercial banks will see the advantage in continuing to invest in development there. WOODRUFF: But do you really believe that it is realistic for us to expect these countries to pay back fully every dollar that they've borrowed from these banks? Mr. CONABLE: Some of the countries won't be able to do it, but we think many of the countries that are currently having difficulty meeting their debt service if they change their policies could pay their debts and should pay their debts. And that's one of the reasons that 25% of the loans we're making nowadays are economic reform loans. They're loans based on adjustment of the economy there. Now, I have to say every country is different, Judy, and so you can't generalize about whether debts can be paid back or not. A country like Brazil is currently in the news, has tremendous resources, and if they organize their economic affairs correctly, we believe they'd be able to turn their economy around almost overnight. WOODRUFF: But Brazil is just one country, and as you know -- Mr. CONABLE: A very big one. WOODRUFF: -- much of the criticism, the objections you're running into in the Congress from many of the Democrats is that unless you come up with a scheme, a way to write off or write down some of these debts, it's just not realistic to give the World Bank the money you're asking for. Mr. CONABLE: I want to make very clear to you that we are not a debt management institution. We are a development institution. We are interested in trying to encourage additional investments in the battle against poverty in the third world. We think it would be to everyone's interest to reduce poverty there. If all we do is manage the debt, if we don't get growth and change there, then there's no hope for the future either. WOODRUFF: But these people are saying, again the critics, many of them Democrats, are saying that you need to do both, that you need to deal with the debt as it exists today before you deal with the sort of development that you're talking about. Mr. CONABLE: I'll acknowledge that debt is a serious problem and that we've got to deal with it on a country by country basis in ways that will not turn people off from investing in development. I agree with that. And I also agree that there are some countries that will have difficulty repaying their debt because their resources are so low, relative to the debt that's already been occurring there. WOODRUFF: What do you think should be done about that? Mr. CONABLE: In those cases, we'll try to work out market related devices to help them reduce their debt. And at the same time they're increasing their production and their efficiency. WOODRUFF: Some of your former colleagues in Congress, the Republicans, are making a different argument. Among other things, they're saying we're lending to countries that in some cases have a socialist system of government, that we're lending to countries that are subsidizing -- we're subsidizing industries, for example, in Mexico, the steel industry, that are competing with our own industry. How do you deal with these sorts of criticisms? Mr. CONABLE: I would disagree with that. The loans we make are designed to encourage change. I'm not willing to leave the world the way it is. I think it is very inefficiently organized in some parts, particularly in the socialist and communist parts. And so I think if we use our resources to encourage them to accept market forces and the efficiency to go with it, we'll be doing a good job for the people who live in those countries and who are dependent now on the whims of the politicians as far as their economic life is concerned. WOODRUFF: But what about the competition question, subsidizing an industry, a steel industry, for example, that competes with our own industry? Mr. CONABLE: We don't support subsidies. Generally, they benefit the rich as much as the poor. We try to discourage that and that's part of the adjustment lending we do to discourage subsidies. As far as the Mexican steel loan is concerned, I'll defend that under any circumstances, because it put the emphasis on the private sector, reduced the great public investment in steel that Mexico is making, will greatly increase the efficiency of Mexican steel, plus opening their market so that imports can come in. Now that's one of the things we've been doing a good deal also, trying to encourage more competition through reduction of market constraints of one sort or another. WOODRUFF: What do you say just in general to the question people who look at what the World Bank does and say, ''Why should we bother with these countries at all. I mean, let them work out their own problems. I mean, why should the United States Congress be in any way subsidizing all these activities?'' Mr. CONABLE: I don't want to speak purely from an American point of view, because I work for an international organization now, but the dollar is down. The developing world is going to be expanding much faster than the developed world. The markets are out there to be developed. They're there also in the current state in a condition that makes for instability, for the kind of inhumanity that Americans don't like. They like to contribute to see suffering reduced, and I think generally speaking the way to approach it is through lending, not through welfare of one sort or another. The World Bank is a lending organization. WOODRUFF: Do you think you're going to get from Congress the money that you're asking for? Mr. CONABLE: I very much hope so, Judy. I think it's in the American interest to do so, and I would hate to see the United States turn away from an institution, a cooperative institution like ours in this confrontational world. My belief is that American interests are greatly advanced by the World Bank because of the economic development that's going on overseas. I think Congress is very likely to give us the American share of a capital increase which has already been approved, rather than pull back from support of an institution that is as important, as central to the development process as ours. WOODRUFF: But if Congress does not, what then? Mr. CONABLE: If Congress does not, then American influence in the World Bank is reduced and ultimately American interests are not advanced to the same degree they would be otherwise. We think we're a very cost efficient way for America to participate in influencing third world markets, in influencing third world people in stabilizing a very unstable and uncertain world. WOODRUFF: And, Barber Conable, we thank you for being with us. Mr. CONABLE: Thank you for having me. Recap MacNEIL: Again the main points in the news today. President Reagan said partisan politics were hampering the war on drugs and called for a joint Congressional White House task force to come up with solutions. The Soviets admitted that three people died in a factory explosion last Thursday, but said it was chemicals, not missile fuel as the Pentagon suggested. Mr. Reagan's Chief of Staff Howard Baker said he was hopeful that the U. S. will in the end remove Panama's General Noriega. Good night, Judy. WOODRUFF: Good night, Robin. That's our NewsHour for tonight. We'll be back tomorrow night. I'm Judy Woodruff. Thank you and good night.