The NewsHour with Jim Lehrer

ELIZABETH FARNSWORTH: Good evening. I'm Elizabeth Farnsworth. Jim Lehrer is away. On the NewsHour tonight, is Milosevic's pullout from Kosovo for real; we talk to analysts and the man who made the deal, Richard Holbrooke; also a look at the barter economy of Siberia; high hopes for Texas Governor George Bush; and the art of war as seen by Poet Laureate Robert Pinksy and Essayist Clarence Page. It all follows our summary of the news this Tuesday.% ? NEWS SUMMARY

ELIZABETH FARNSWORTH: The United States and its NATO allies decided today not to launch air strikes against Serb forces. NATO ambassadors meeting in Brussels determined that Yugoslav President Slobodan Milosevic has pulled back enough soldiers and police in Kosovo to delay an aerial attack. But NATO officials said the alliance retained the authorization to attack in the future to protect ethnic Albanians. NATO had given Milosevic until early this afternoon to draw down his troops in the Southern Serb province. In Washington, President Clinton said the NATO threat had accomplished its major objectives. He spoke at the State Department.

PRESIDENT CLINTON: The fighting has stopped. Displaced people are beginning to return to their homes. Humanitarian aid is slowing. And Mr. Milosevic has agreed to negotiate self-government for Kosovo with a timetable to achieve it. It is not enough, however, for Mr. Milosevic to come into compliance. He must also stay in compliance. To verify that, the International Community will continue to deploy an unprecedented international presence in Kosovo on the ground and in the air, something Mr. Milosevic had resisted before for a decade.

ELIZABETH FARNSWORTH: We'll have much more on Kosovo after the News Summary. Hurricane Mitch weakened slightly today. Its winds diminished from 180 to 155 miles an hour. It was some 80 miles North of Honduras and heading West, threatening the coasts of Guatemala and Belize. The storm was blamed for at least 10 deaths in the Caribbean. In Honduras high winds and heavy rains churned up waves, flooding coastal areas. Hundreds of storm victims packed shelters. The hurricane is expected to hit Mexico's Yucatan Peninsula within the next two days. In Cape Canaveral, Florida, NASA officials said the hurricane would have no impact on Thursday's scheduled launch of the space shuttle Discovery. In economic news today consumer confidence fell to a two-year low this month. A private business research group in New York reported consumer sentiment was down in October, the fourth straight monthly decline. The Conference Board attributed the decline to overseas financial turmoil and recent layoff announcements in the United States. And in the Middle East today Israeli Prime Minister Netanyahu indefinitely delayed a cabinet vote on the peace deal he signed last week with Palestinian Leader Yasser Arafat. Israeli officials said they were waiting for a Palestinian plan to attack terrorism. But a Palestinian official criticized Netanyahu for yielding to Israeli opponents of the accord. Palestinian security forces said today they had arrested two Palestinian suspects in yesterday's murder of a Jewish settler in Hebron. Russia has requested food aid from the United States Agriculture Secretary Dan Glickman said today. He did not say how much meat, rice, and other grains would be sent. He said U.S. officials were evaluating food supplies in Moscow and would make a determination later this week. And in Russia today President Yeltsin canceled a trip to Austria and moved into a sanatorium for treatment for exhaustion. We'll have more on Russia later in the program. Also coming, an update on Kosovo, Governor Bush of Texas, and the art of war.% ? UPDATE - MAKING THE DEADLINE?

ELIZABETH FARNSWORTH: The Kosovo story is first tonight. Charles Krause begins our coverage.

CHARLES KRAUSE: Yugoslav President Slobodan Milosevic waited until the last minute, and even then, there was widespread skepticism. But by today's deadline enough Yugoslav army and police units have been withdrawn from Kosovo to avert the military action NATO had threatened. That decision came this afternoon after NATO ambassadors met in Brussels. Then in Washington President Clinton explained the decision, saying that while there is still more to be done, Milosevic and the Serbs are now in essential compliance.

PRESIDENT CLINTON: We are at a hopeful moment. But we should be under no illusion there is still a lot of hard road to walk before triumph - excuse me - before hope can triumph over hatred in the Balkans. I feel much better today about this, but we've still got to stay on the case if we want to see hope, freedom, and peace prevail.

CHARLES KRAUSE: The original agreement that led to today's withdrawal was announced two weeks ago, the result of long and difficult negotiations between Serbia's wily and autocratic president, Milosevic, and U.S. Special Envoy to the Balkans, Richard Holbrooke.

RICHARD HOLBROOKE: We have agree with President Milosevic on a ground verification program, augmented by an important aerial verification program.

CHARLES KRAUSE: The agreement called for Milosevic and the Serbs to stop six months of escalating violence against Albanian civilians in Kosovo. It also required the Serbs to remove about a third of the army and police units sent into Kosovo since February to fight Albanian guerrillas; to allow NATO reconnaissance planes to overfly Kosovo to verify compliance; to grant partial self-government to the Albanian majority in Kosovo, whose political rights Milosevic rescinded 10 years ago. The agreement also called for a new police force, provincial elections, for international aid workers to be allowed to help resettle more than 300,000 ethnic Albanians who've been left homeless by the fighting, and also to allow 2,000 western observers to monitor the process on the ground and report violations. Originally, Milosevic was given four days to carry out the agreement or face NATO military reprisals. But the first deadline came and went without compliance. Serb forces remained in Kosovo and continued to fire on unarmed civilians, most recently, this weekend, when sniper fire disrupted funeral services for an 11-year-old Albanian boy, who was himself killed by sniper fire late last week. Still, NATO extended the first deadline until today, hoping Milosevic would eventually comply. But it wasn't until yesterday that the promised redeployment began in large numbers. And even then, NATO officials on the ground said they couldn't be sure if the Serb forces were, in face, being withdrawn from Kosovo, or simply being moved elsewhere within the beleaguered province. Meanwhile, there were signs today that the insurgent forces belonging to the Kosovo Liberation Army have begun to reoccupy positions lost to the Serbs over the summer, an ominous sign that could lead to renewed fighting. The KLA guerrillas are demanding independence for Kosovo, which belongs to Serbia but where at least three quarters of the population is ethnic Albanian. It's one of the complicating factors of the situation that while the U.S. and NATO have demanded that the Serbs withdraw militarily from Kosovo, they're also opposed to the Albanians' demand of independence.

ELIZABETH FARNSWORTH: Margaret Warner takes the story from there.

MARGARET WARNER: For reaction now we're joined by Robert Hunter, U.S. Ambassador to NATO in President Clinton's first term, and now a senior fellow at Rand, a research organization; James Hooper, a retired foreign service officer and now director of the Balkan Action Council, a study and advocacy group that focuses on the former Yugoslavia; and Gary Dempsey, a foreign policy analyst at the CATO Institute. He was last in Kosovo in June.Mr. Hooper, you heard the administration saying Milosevic is in substantial compliance. NATO's decided not to launch air strikes for now. Is this a good outcome?

JAMES HOOPER, Former State Department Official: I think it's a bad day for NATO. What happened here is when NATO threatens force, it has to be prepared to use force, if it's called on that. This is the third time that Mr. Milosevic has called NATO's bluff, beginning with the attack on February 28th of this year. Secondly, in June, he has driven over 1/2 million Kosovar Albanians from their homes, destroyed 490 villages, upwards of 18,000 homes, killed over 1,000 people. What Mr. Milosevic has agreed to is to withdraw a part of his forces in Kosovo. NATO has even - and he's allowed to keep almost 20,000 military police there, even those that he has said he would withdraw he has not withdrawn and NATO has allowed him to get away with this. So I think this is a bad day for NATO's credibility.

MARGARET WARNER: A bad day, Mr. Dempsey?

GARY DEMPSEY, CATO Institute: Well, I think this agreement really buys time for both sides. It buys time for Milosevic, because the presence of 2000 observers on the ground basically protects him against a carrying out of the NATO air strike anytime in the immediate future, and it buys time for the KLA simply because over the winter - if there are these threats in place - they will have time to regroup and collect new recruits. I fully expect that they will launch an offensive in the spring. I expect that the authorities in Belgrade will crack down, and we will have 2000 unarmed observers caught in the cross-fire. This human trip fire will surely bring in NATO. In effect, this agreement has created a trap. We put ourselves in a trap, and I expect it to snap closed in four or five months.

MARGARET WARNER: A trap?

ROBERT HUNTER, Former U.S. Ambassador, NATO: NATO has no choice but to be involved. This is right next door to where the allies live. It's the result of a series of promises, including we made -the famous Christmas pledge made by President Bush in 1992 - and frankly, the credibility of the alliance has been on the line. If you can't do something this close that's this egregious, then what else are you going to be able to do?

MARGARET WARNER: Do you think it was successful? I mean, is the outcome today a good outcome?

ROBERT HUNTER: The basic thing is Milosevic is now moving in the right direction. Why did it - I suspect people will debate it for a long period of time, particularly since NATO did temporize - did wait month after month while talking brave, did give him an extra 10 days to say pretty please, do it. The real thing is what President Clinton said. We have to stay on case, and make sure that over the next few months the verifiers are in, the surveillance gets done, the movement towards elections, all of these things that have been agreed that Milosevic does, rather than just wait for spring, and then get back in the killing business. The credibility of NATO is going to be judged tomorrow, not today.

MARGARET WARNER: But let me go back to today just for a minute, because the President said, look, this achieved our objectives. We stopped the carnage, and we prevented at least through this winter a humanitarian crisis with all these refugees stuck up in the woods. Do those - were those limited objectives at least reached, Mr. Hooper?

JAMES HOOPER: Well, even that, they haven't prevented the carnage. There was the killing of an 11-year-old boy yesterday, Sunday - reported in yesterday's Washington Post. There was a verifier who was there for the funeral of this. There was additional sniping by Serb snipers at the mourners there at the funeral and the grave diggers. A verifier was called upon to interpose his vehicle between them to allow the funeral to continue. He called headquarters to see if he could get permission. He was not authorized to do so. He drove away. So I think what you see - and this is a cameo - is that the verifiers are not going to provide the kind of security that Kosovo Albanians need to return to their homes. And I think that's going to cause considerable - a continuation of the considerable humanitarian problems that we've seen so far.

MARGARET WARNER: Do you agree with that? You've been on the ground there.

GARY DEMPSEY: Yes. I think that this agreement will simply postpone the conflict. I think that in the spring, as I mentioned before, you will see a resurgent KLA, and I think that the carnage will continue. And at that point I think NATO will be forced to intervene.

MARGARET WARNER: But I mean, for now, do you - do you at least buy what the President said, that it has a verdict - at least a humanitarian crisis for now?

GARY DEMPSEY: In the immediate future, yes.

ROBERT HUNTER: We bought time and the time has to be used wisely, diplomatically, and also getting the allies to the point where they will understand that next year no more temporizing, no more backing and filling. If, indeed, the fighting starts again, and it's Milosevic doing it, then NATO has to be prepared to act. At the same time, they have to try to give enough of a deal to the Albanians so the KLA, the liberation army, doesn't have a chance itself to get the fighting going again.

MARGARET WARNER: What about the KLA? What's to prevent the KLA from moving back into position and reasserting itself in territory that the Serbs abandoned and the Serbs in turn moving back to reassert their position?

GARY DEMPSEY: I think this is happening already, as they mentioned in the setup piece, that the Albanians are retaking a number of police posts, a number of the Serbs are burning them on their way out so that they can't. But I would predict by the spring a lot of the territory will be retaken by the KLA. They will have new recruits, and they'll have plans.

JAMES HOOPER: Margaret, the way to undermine the KLA is to come up with a political settlement to offer the Kosovo Albanians that is strong enough to build a moderate center. That means for a start an interim agreement that at least offers the Kosovo Albanians a return to the autonomy that they enjoyed in 1989 before it was taken away by Mr. Milosevic. The agreement that the United States has offered to them - no Kosovo Albanian leader has accepted. It is far short - far short of the 1989 autonomy agreement. It is going to radicalize Kosovo Albanian society, and it is a gift, in fact, to the KLA. We should be working the other way to build up the moderates in Kosovo.

MARGARET WARNER: Well, now, what about what the President said today, that this is supposed to set thescene for some real negotiations between Milosevic and the Kosovars?

JAMES HOOPER: I don't think there's going to be negotiations that are serious at all. Mr. Milosevic has only shown that he's prepared to negotiate in good faith and constructively if he sees - if he's forced to the negotiating table. Again, what we've seen is because of the lack of NATO - NATO's unwillingness to use force. I think Mr. Milosevic feels that he's taken the measure of NATO. I don't think he's going to negotiate seriously.

ROBERT HUNTER: I think the jury is still out on that, as Jim is saying. The allies really didn't want to use force here. And part of the success of Amb. Holbrooke was getting enough so the allies could take a formal decision but then not see it happen. Of course, Milosevic made sure that point was made. The real question is what we do now to help make a real deal. And we have to be prepared. It may be a deal in the end in which there is an independent Kosovo. We have to be ready for that.

GARY DEMPSEY: I think that's true, but I think that has ramifications for Bosnia in the sense that you have an enclave of people within a sovereign country wanting to break away. I don't know how that will resonate with the - with the Serbs and the Croats for that matter in Bosnia if they can point to an example in Serbia and say, well, why did the international community let Kosovo go, yet, they are requiring that we stay within Bosnia.

MARGARET WARNER: NATO today made a point of saying that it was keeping the threat of force alive. The activation order has not been rescinded. Do you see that threat as real? Do you think Milosevic sees that threat as real?

JAMES HOOPER: Of course he doesn't. He said the same thing about the Christmas warning by President Bush. That was in force. It was on the table. It was not removed from the table, and Milosevic launched his - launched this conflict on February 28th of this year. He destroyed several villages. He stopped. He waited to see what Washington was going to do. All they saw was rhetoric - some meetings by the six-nation contact group - but no military action and so he upped the ante and escalated the violence.

MARGARET WARNER: Do you think he sees the threat as real at this point?

ROBERT HUNTER: I don't think so.

MARGARET WARNER: You don't?

ROBERT HUNTER: There's been too much talk and not enough do over time. The real thing is to get to the point where he will understand that, and that means having a credible policy on the ground with the verifiers, with the surveillance. It means having a real negotiating posture, working with Amb. Chris Hill and others, and then our working on the allies, so they'll understand the next time we can't do this kind of back and forth. If NATO is going to go into this again, it has to be ready to do it and show Milosevic. Now, maybe he'll get the message; maybe he won't. So far, I'm afraid, he has judged quite accurately that the alliance really would rather not use force.

GARY DEMPSEY: I think we should address the root of the problem, and that is Slobodan Milosevic. I think that the West should take steps to support the opposition, independent media inside of Serbia, and in Montenegro support -- his rival, Milo Dekonovic, the president of Montenegro Unfortunately, I think that actually launching an air strike, cruise missiles and warplanes against Serbia will have the opposite effect. It will give Milosevic a rationale, a justification to impose martial law, and we won't see a post-Milosevic democratic Yugoslavia for years.

MARGARET WARNER: So you wouldn't want this threat to derail?

GARY DEMPSEY: That's correct.

ROBERT HUNTER: That's been one of the problems. The Russians opposed it. We have a problem. And the allies really didn't like it. It's a question of playing into the hands of the other people, but some time you've got to stand up a show a threat is real because Milosevic only understands force.

MARGARET WARNER: All right. Thank you, all three of you very much.

ELIZABETH FARNSWORTH: And now to Richard Holbrooke, the special envoy who negotiated the Kosovo troop withdrawal with President Milosevic. Thank you for being with us, Mr. Ambassador.

RICHARD HOLBROOKE, Special Envoy: My pleasure.

ELIZABETH FARNSWORTH: Before we get into some of the questions we just heard raised, what's your reaction to today's events?

RICHARD HOLBROOKE: Well, I'd like to respond to a couple of things I just heard, but let me start out by trying to explain what really happened today because I think the previous discussion obscured the extraordinary events in the last few weeks. First of all, let me make clear that even my friend and colleague, Bob Hunter, is not correct when he says Milosevic didn't think the threat was real. He not only thought the threat was real, Bob, but the threat was real, and if it hadn't been real, this would not have been achieved. There is no question in his mind, nor is there any in mind that we were prepared to use force. I went to Brussels on my way to Belgrade with the team, but over the targeting list I left when I arrived in Belgrade, I thought the chance of use of force was at least 70 percent, and it was only because Milosevic met the general who was going to handle the bombing and I went over the bombing with him, that he realized that this was for real. The other thing that made Milosevic realize it was for real was that the allies belatedly and reluctantly finally came around to unified position after a summer of foot-dragging over legalisms and UN resolutions and Bob, as a former ambassador to NATO, was very instrumental in achieving the same result three years ago for Bosnia. When President Clinton met with German new Chancellor Schroeder and got the Germans on board and I went in to see Milosevic the next morning and said and he hoped you have a new German government would hold off the NATO action is over, that had impact. The second point I'd like to make is the more fundamental one. What happened in the last few days is that after a decade of subordinating and destroying Albanian rights in Kosovo and saying there was an internal affair, while the rest of the world looked on helplessly, NATO resolve, backed up by American-led diplomacy, forced the Yugoslav leadership into internationalizing Kosovo. Not only do we have this intrusive NATO air surveillance regime, which will fly over Kosovo whenever and wherever we want, while they turn off their radars and put their weapons in cold storage. But we will have a 2,000-person or more civilian army on the ground led by Amb. William Walker, an American diplomat, including people who will run elections and not observe them but run them. I saw in your setup piece, Elizabeth, that you talked about OSCE monitors. But they're not monitors; they're verifiers. And they are going to be there to run the elections. You know, no Albanian would accept an election run by Serbs. We'll have internationally-run elections run in nine months. We're going to start training the local Albanian police, all of you who were interested in Kosovo know that the destruction of the local Albanian police was one of the central tragedies the last decade. We're going to have an international mediator, Chris Hill, the American diplomat, who will handle the political outcome, and Jim Hooper is correct when he says that the political outcome is going to be difficult and critical. But I don't think he gives Chris Hill enough credit for his subtlety and his skills, and his understanding of the problem.

ELIZABETH FARNSWORTH: Okay.

RICHARD HOLBROOKE: We're going to have - I want to be clear for your viewers - the enormous concessions - and I use the same word the "New York Times," the "Economist," the "Financial Times" have used - the enormous concessions that Belgrade made, which in order to avoid getting bombed while the threat of bombing continues, and finally, Elizabeth, one additional point that no one has yet mentioned, which Secretary Albright outlined today for the first time in public - we're going to put - we, NATO, led by the British and French, not the U.S., will put a force into nearby Macedonia, which will help stabilize the situation and provide us the ability to take care of any emergencies that might happen to the verification force.

ELIZABETH FARNSWORTH: Okay. Very briefly on that before we go some of these points, how big will that force be?

RICHARD HOLBROOKE: That is for the British and French to announce, and I think I would be jumping the gun if I outlined any specific number, but let me say that we'll be - it will be large enough to be sufficient. It will be backed up by Americans on ships in the Adriatic, and additionally backed up by the NATO-led force in Bosnia, and it will be part of the NATO command, and it is, in my view, in a major development something that I personally - as Bob Hunter knows - have been advocating for many years.

ELIZABETH FARNSWORTH: Okay. Some of the points we just heard - and we don't have a lot of time, so if you could be a little bit brief on this - only -

RICHARD HOLBROOKE: I'll try.

ELIZABETH FARNSWORTH: Some of the concessions that you said you won, what the prior discussion did was raise some questions about whether those really were such big concessions.

RICHARD HOLBROOKE: Well, Mr. Dempsey -

ELIZABETH FARNSWORTH: For example, James Hooper said that only part of the forces are being withdrawn, that the forces that they were supposed to withdraw aren't all being withdrawn. What about that?

RICHARD HOLBROOKE: Well, I think we ought to sit down with the people who know what's going on. There's no point in having a numbers debate here. But Mr. Dempsey made the single most important point. And in this he is entirely correct. If you were to ask what the major problems we face are today, I would say number one, that the Serb security forces will break their word and go back and leave the barracks and start again, and if they do that, NATO will reactivate its actor. Number two, the -

ELIZABETH FARNSWORTH: How can NATO reactivate, though, if there are all these people on the ground? They can't -

RICHARD HOLBROOKE: That is a false issue.

ELIZABETH FARNSWORTH: Why?

RICHARD HOLBROOKE: Because it's 25 minutes from Pristina to the Cambodian - to the Macedonian border - a little longer to Cambodia. And we have an emergency evacuation planned for every single person, and we're well aware of the problem. But the real problem, and here Mr. Dempsey is entirely correct and it must be stressed is the Kosovo Liberation Army, the KLA. They have the ability to provoke the resumption of fighting now or more likely in the spring, and we are engaged in a full court diplomatic effort, talking to them through confidential direct and indirect channels in Pristina, in Europe, even here in New York City, to make sure that the KLA understands that they must guarantee the safety of the verification force, that they must also observe the cease-fire, but they must not try to turn NATO into their force, and if they do all that, they have a legitimate right to participate in the political process, and that's the key point. The third point, which concerns me, is that we don't ramp up rapidly enough in the verification mission. In Bosnia, our civilian implementation got off to a very slow start, and that was costly. So those are my three concerns tonight. And what otherwise, Elizabeth, has to be judged an extraordinarily positive day, people are coming out of the forests, and going back to their homes today, because the NATO credibility was believed perhaps not by the previous panel but it sure was believed in Belgrade, and that's because it was not a bluff.

ELIZABETH FARNSWORTH: And what about the point made, that the negotiations -- to make this peace last, I guess, there has to be a political settlement that is lasting, and the point was made that negotiations won't be serious because the Milosevic government doesn't want them to be serious.

RICHARD HOLBROOKE: I agree with Jim Hooper that this is going to be "the" key issue, and it's going to be the most difficult issue. What I don't agree with is his macro-his micro-critique of a document that he hasn't seen, because he's operating from drafts that are several editions old. Amb. Hill is in Kosovo tonight. He is meeting with all elements of the political leadership, starting in the morning, and the negotiations are starting not anew, because there's 80 years of history here, but they're starting from a much stronger base. And let me say one thing to everyone. The Albanian leadership, itself, in Kosovo wants the civilian force; they want what we're doing. So let's remember that in the end this is about them. This is about getting them out from under the yolk of a brutal oppression that they've suffered for over a decade, and unimpeded until the last few days.

ELIZABETH FARNSWORTH: But do they want what has been outlined for them? The criticism was also made, as you've just heard, that the autonomy that's being offered is not what they had in the past.

RICHARD HOLBROOKE: Well, the autonomy - they want - they want a great deal more than Belgrade is now offering, but there's a misunderstanding on the part of some of your previous panel. The U.S. is not imposing anything on the Albanians. In our negotiations in Belgrade we never signed any documents with Milosevic on politics, and in Kosovo, we never asked any Albanians to agree to anything. Why? Because Belgrade is not yet at a point where it's offering sufficient self-governance provisions to the Albanians. Amb. Hill knows that. He's our most seasoned Albanian negotiator, and I can assure you and your previous panel that he is not going to do anything which the Albanians themselves don't want. So the theory that we're cramming something down the Albanian throat is coming from people who either don't know what's going on or haven't talked to the right people. But this is a real issue, but it has been seriously misportrayed by some people who don't really know what has been going on.

ELIZABETH FARNSWORTH: All right. And very briefly, before we go, you said that there's a plan for every single person who comes in as a verifier to get them out so that they can't be used as hostages.

RICHARD HOLBROOKE: That's right.

ELIZABETH FARNSWORTH: How could that work? How can you get somebody in from Macedonia so fast to get them out and they wouldn't be taken hostage? It just seems impossible.

RICHARD HOLBROOKE: Well, let me be clear on this. First of all, the fact that they're unarmed doesn't make them more vulnerable. Mladic took 550 armed UN peacekeepers hostage because there was no such plan. But Kosovo is a very small place. It's smaller than the state of Connecticut, and by the way not as pretty. And the - and you can get from Pristina, the capital, to the Macedonian border, in 25 minutes. There is no - we will have an individual plan for each person. We'll have collection sites. To be sure, people can get hurt. There's no question about that. But I feel that this issue, while real, should not be considered a constraint. And, above all, let's get out of the bizarre thinking that we're creating 2,000 hostages. It sounds good on the Lehrer NewsHour, but it just isn't true. Anyone who harms an OSCE verifier is going to be risking a great deal more than they're gaining. We are not going to be held hostage the way Mladic held the UN hostage three and a half years ago in Bosnia, an action, which, by the way, led directly to the NATO bombing in Bosnia, bombing which Milosevic knows makes our threats today credible.

ELIZABETH FARNSWORTH: Okay. Richard Holbrooke, thank you very much for being with us.

RICHARD HOLBROOKE: Thanks a lot. FOCUS - BARTER ECONOMY

ELIZABETH FARNSWORTH: Now, how ordinary Russians are coping in a collapsing economy. Special Correspondent Jennifer Griffin reports from Southern Siberia.

JENNIFER GRIFFIN, Gorno-Altaisk, Russia: Yelena Efimova, like most Russians, hasn't received her salary since April. She teaches Russian in the Siberian town of Gorno-Altaisk. Now inside classrooms like Efimova's, an experiment born out of economic desperation is taking place. The local government has started paying its wage arrears through barter. It now lets teachers go to local stores choose the products they need and deduct them from their salaries. Store owners keep track of what the teachers buy, checking their names off lists given by the school. Under the new system little money ever changes hands, but the teachers get what they need - flower, pasta, and, of course, vodka. In the state-owned dormitories where the teachers live, Alexei Zorkin pulls from his cupboard the goods he bartered for this month. Many teachers traded their salaries for vodka, which Zorkin says has long been an alternative currency.

LEXEI ZORKIN, Teacher: (speaking through interpreter) During the Soviet Union vodka was highly valued. When someone came to fix your electricity, you offered to pay them in vodka, which seemed more decent than offering money.

JENNIFER GRIFFIN: Now, everyone gets something out of the barter system. Stores that owe taxes can deduct the value of the goods chosen by the teachers from what the shops owe the government. Rather than wait for the tax police to confiscate their goods, the shopkeepers happily comply. In a land where bills are still figured on an abacus, it's not that strange to return to such an old way of doing business. Efimova and her colleagues say it isn't a perfect solution; it is a desperate measure.

LENA EFIMOVA: (speaking through interpreter) We didn't have money before, and we don't have money now. The prices have grown, but what do we care whether something is thirty or forty-five rubles? We don't have either.

JENNIFER GRIFFIN: So Efimova is preparing for what is always a long winter in Siberia, storing food she grows in her garden and pickling anything fresh so that she and her daughter have something to eat. In kitchens across Russia, a similar ritual is taking place, because people don't know how long food supplies will last. Nearly half of all consumer goods Russians buy are imported. With hard currency reserves dwindling, those imports are slowly disappearing. In remote parts of Russia, like here in the Republic of Altai near Russia's Mongolian border, it's not necessary to rely on imports. People from here have always lived off the land. Rich in natural resources like lumber, the republic has stopped depending on Moscow to subsidize its local industries. Now, it trades its lumber for coal and other necessities from neighboring republics. What strikes people most about the Russians is their patience, especially under difficult circumstances. In this Siberian town most of the winter it is 30 degrees below zero. When asked how they deal with such brutal winters, the people of Altai said, "You get used to it." But the government is worried not everyone will remain patient. One man grew so desperate about not being paid that he fell to his death as he tried to hang himself from the Lenin statue in downtown Gorno-Altaisk. Local officials say more suicides or violence could result if the national government in Moscow doesn't find a quick solution to the economic crisis, which grew dramatically worse in August, when the government defaulted on its debt.

YURI ANTARADONOV, Governor, Altai Republic Russia: (speaking through interpreter) Barter will continue, but it can't go on forever. A person needs more than just food to exist. He should also educate his children, be well dressed, and pursue a cultural life. In "Das Kapital" Karl Marx wrote that barter worked under feudalism until the peasant exchanged their wheat for axes.

JENNIFER GRIFFIN: Among those ready to trade their wheat, their axes are these mothers, who are demanding child support from the government. They are unemployed and have nothing to barter.

NADEZHDA SURKASHEVA, Unemployed Teacher: (speaking through interpreter) We are not getting any help from the federal government. Our people are on the verge of extinction we have nothing to feed our children. They can't go to school because they don't have clothes or boots to wear. There is a high suicide rate among our youth. Kids don't just want to live. In the villages it's even worse. That is why we are here protesting.

JENNIFER GRIFFIN: But many don't have the energy to protest and, instead, show up at work each day, hoping that someday the crisis will ease. At the town's children's hospital workers haven't seen wages in five months, and now that winter has arrived, there is no heat.

LUDMILA PONOMAREVA, Nurse: (speaking through interpreter) We have no drugs or medicine and no bandages. Our clinic is technically closed. We only take kids in critical condition.

JENNIFER GRIFFIN: Even the children who are admitted are crowded into wards like this, waiting to get well. Their mothers share their beds and bring them food from home because the hospital can't afford to feed them. There are no quick remedies to these children's ailments, nor for the Russian economy. And so all across Russia people are doing what they always have done to scrape buy. Thousands of miles from Siberia in this potato field near the town of Korolyov outside Moscow, potatoes are like gold and people fight over what they find. Soldiers who haven't been paid either search the government's collective fields looking for potatoes in exchange for their wages. When they finish, they let pensioners like Galina Varvarcheva scrounge for leftovers.

GALINA VARVARCHEVA: (speaking through interpreter) This is a sick one. This one is sick too. But this year we'll even eat the sick ones.

JENNIFER GRIFFIN: Mikhail Maxov says he and his mother found enough potatoes to survive the winter.

MIKHAIL MAXOV, Security Guard: (speaking through interpreter) I have a small salary, so my only hope was in these potatoes. I don't know what will happen further down the line with my work. They could fire me, so I have to put my faith in the harvest this year.

JENNIFER GRIFFIN: Elsewhere, in towns like Yaroslavl, about 150 miles East of Moscow, the situation is even more desperate. People line up each day to sell their blood to the government. They are paid $3 a pint. Most donors say they wish they could come more often, but the blood bank officials limit them to once a month.

DR. ANATOLY VERONIN, Director, Yaroslavl Blood Bank: (speaking through interpreter) So many people are showing up here and not only in Yaroslavl but across Russia I am hearing connected, of course, with the financial crisis, unpaid wages, unpaid pensions, a general delay in all payments. Due to this, people are desperate for any way to make money. Here they can make a bit of money that will at least get through another week.

JENNIFER GRIFFIN: But in Siberia, unlike Yaroslavl, things aren't that bad. People like Yelena Efimova still have food in their gardens, and Alexei Zorkin is rationing his bartered salary to make it through the winter - a winter in which many fear the worst. At least for some of the people living in towns like Gorno-Altaisk, they have something to barter and to eat.% ? FOCUS - HIGH HOPES

ELIZABETH FARNSWORTH: Next, Governor George W. Bush of Texas campaigns for re-election and possibly much more. Betty Bowser reports.

BETTY ANN BOWSER: If the polls are correct...he is the most popular Republican in America...and could very well be the party's nominee for president in 2000.

SPOKESMAN: George W. Bush. (applause)

BETTY ANN BOWSER: But right now George W. Bush is concentrating on getting himself re-elected as governor of Texas. If he wins, he'll be the first back-to-back two-term governor in the history of the state. His opponent is 44 year old Democratic land commissioner Garry Mauro, who is so far behind in the race that observers say it's almost no contest. Mauro is campaigning with limited money and without the support of the state's most powerful Democrat -- Lt. Governor Bob Bullock, who broke from the party to endorse Bush. Bullock and a few other prominent Democrats are supporting Bush because he has made it a policy to work in a bipartisan way to get his agenda passed. Rice University political science Professor Bob Stein says that coalition building is one of the reasons for the governor's popularity.

BOB STEIN: He's not Trent Lott; he's not Newt Gingrich; he's just an experienced relatively new politician who wants to solve problems. He's the kind of guy you can sit down and have a conversation with. This is not a man whose ego is in front of you. You feel comfortable, talk to reporters, talk to politicians.

BETTY ANN BOWSER: Earlier this year, the governor demonstrated those down to earth qualities when he flew to the Rio Grande Valley to talk to Texans who had been flooded out of their homes.

GOVERNOR: There is hope - in Del Rio.

BETTY ANN BOWSER: Bush is the first born son of former President George Bush. He spent his early years in Texas. Then -- like his father -- he went on to Andover and Yale -- and like his dad he became a pilot. But as a young man he says he was unfocused -- at times a party boy. After getting an MBA from Harvard, Bush headed back to his roots in Texas, where he dabbled in the oil business, and eventually became a part owner of the Texas Rangers baseball team. In 1976, he married librarian Laura Welch. They have raised their twin teenaged daughters in Texas. It is those Texas ties -- says family friend and former Texas Republican Party chairman George Strake -- that make him so appealing.

GEORGE STRAKE: If he has perhaps one strength over his Dad, it's that it looks like his conservatism comes from in here (pointing to heart), and he didn't have to learn it as he was growing up. I think his roots out there in Odessa oil patch taught him what basic Texas philosophy was -- basic Texas conservatism was. And that projects pretty well.

BETTY ANN BOWSER: Bush is known as a straight talker and for sometimes being downright blunt -- a trait he says he gets from his mother.

GOV. BUSH: Well, as a woman one time walked up to the mike, she said, you know this boy make have his daddy's eyes but he's got his mother's mouth. And I think that Texans are looking for a straight forward thinker. I think most Americans are as well -- just somebody who is a plain talker. I think that's why mother captured the imagination of so many people in America. She was a plain talker and she also had a unique capacity to make people feel comfortable.

BETTY ANN BOWSER: One important group of voters Bush is trying to make comfortable with him is the state's Hispanic voters, who make up 28 percent of the population. But in ten years they are expected to be a majority of the state's population. This is a traditionally Democratic voting block. But Republican Bush is trying to make inroads.

AD SPOKESMAN: Used to be I just pulled the lever - Democrats. Doesn't always work, does it?

BETTY ANN BOWSER: His television ads are targeted specifically at those voters.

AD SPOKESMAN: Opportunity, George Bush.

(AD IN SPANISH)

BETTY ANN BOWSER: El Paso -- a city of 620,000 people in far West Texas -- is 70 percent Hispanic and historically very Democratic. For years it has been ignored by both parties. But this year El Paso has become thecornerstone of the Bush re-election strategy. National political observers are watching closely because Republican Bush is openly, aggressively courting Hispanics.

GOV. BUSH: I can't think of a better way to say to Texas that El Paso is important to the future of this state than to have the one governor's debate right here in this great city of El Paso.

BETTY ANN BOWSER: He wants to get 40 percent of the Hispanic vote in El Paso on election day. Political observers say if he can do that, it will be like taking back the Alamo. Bush has been to El Paso more than a dozen times. He frequently addresses crowds in Spanish -- at news conferences he answers reporters' questions inSpanish. Democratic Mayor Carlos Ramirez is a Bush convert.

MAYOR CARLOS RAMIREZ: He reaches out and wants to be part of a community; he cares about the community. I was over visiting with him in Austin a few months ago...my wife and I. We were sitting at the table ready to eat and he said let's grab hands and let's pray. Now that struck a chord; that struck a chord.

BETTY ANN BOWSER: The mayor also says on issues of substance the governor has delivered for El Paso.

GOV. BUSH: I think it's very important for me to show, if I can do well, to show that there's a way to attract Hispanic votes. The Hispanic vote is essentially a conservative vote. It is pro-family, it is pro-free enterprise, it historically has been a pro-military vote, it is a very Catholic vote, and, therefore, it's a vote that should be garnered by people of my philosophy. The problem is, is that oftentimes people in the Republican Party have sent mixed signals to the Hispanics. We on one hand talk about a common philosophy and on the other hand say things like English only. What English-only says to many Hispanics is me, not you.

MAURO: George Bush thinks that somehow he's going to do well in El Paso, because he's got a song and a dance. Now, he'll tell you, I speak a little Spanish; I've even got some singers to sing songs in Spanish about me; I think I can carry El Paso because I'm going to give the voters in El Paso a song and a dance.

BETTY ANN BOWSER: Bush's opponent Mauro says the Hispanic strategy is phony and tells Democratic voters they have nothing in common with the governor. Margarita Sanchez is an Hispanic community activist who is voting for Mauro.

MARGARITZ SANCHEZ: I believe that the governor needs to visit the areas where we have a big population of families who are either unemployed...have very little resources a low economic resources...limited English.

BETTY ANN BOWSER: Poor people?

MARGARITZ SANCHEZ: Poor people. I haven't seen anything of any substance when he comes in.

BETTY ANN BOWSER: And Democratic State Party Chairman Molly Beth Malcolm says the Bush strategy won't work.

MOLLY BETH MALCOLM: You know, in 1492, Columbus discovered America, and here it is in 1998, and finally, George Bush and the Republican Party discovered the Hispanic population of Texas. They can read the demographics. But the Hispanic population in Texas has been and always will be an important part of the Texas Democratic Party. You know, he thinks that he can go down with a song and a dance, and he's doing that, and he's taking a singer around with him to the Hispanic community, and saying oh, I'm your friend. I'm like you. He's very much patronizing people and people see through that.

BETTY ANN BOWSER: The governor has moderate views on immigration and he is not opposed to bilingual education, so he bristles at such comments.

GOV. BUSH: You can't just show up all of a sudden and start saying things that people find attractive. You must earn the Hispanic vote, which means you must ask, you must come and speak to leaders over the course in my case of three and a half years as the governor, and you must put policies in place that people say this guy cares about me.

BETTY ANN BOWSER: And some say Bush has a legitimate chance to make in-roads into the Hispanic vote on a national level.

STEIN: George Bush is the person in the Republican Party who can probably expand the coalition of Republicans to include what is in California, Florida, and Texas the fastest growing and largest minority population and most importantly the largest chunk of unclaimed voters - Hispanic. And, remember, California, Florida, and Texas, together represent almost a fifth of the electoral votes you need to become President of the United States.

BETTY ANN BOWSER: And Stein says Bush's stance as a moderate in his party will help him if he decides to run for President.

STEIN: He's staked out a middle position a lot like Clinton. He's taken an enormous amount of heat from the conservative right of his party and possibly some heat from the more liberal radical part of the Democratic Party, but he's found middle ground and in American politics when you find that middle ground, you hold onto it tenaciously and I think that's to a large extent his success.

BETTY ANN BOWSER: But former State Republican Party Chairman Tom Pauken says Bush's middle ground turns off a sizeable number of conservatives in the party and could hurt him in a possible run for the presidency.

TOM PAUKEN: There is a debate right now going on for the soul of the Republican Party. Do we follow what some are calling the third way, which is what Bill Clinton did with the Democrats. I think ultimately that will not be successful , that approach. I do think we need to get back to being an issue- driven party and quite frankly if the Republican Party chooses to go this third way and become a moderate centrist bipartisan party once again, as it was so much in the pre-Goldwater period. I think there will be a lot of conservatives leaving the Republican Party.

BETTY ANN BOWSER: Everywhere he goes, the governor is asked about the presidency.

GOV. BUSH: People all of sudden have this mindset -- well he's being touted -- therefore he is going to run, and that's not the way I think. I'm going to take my time; I'm going to look at this deal. At some point I'm going to have to let everybody know one way or the other but I'm thinking about it, and the reason I'm thinking about it, because everywhere I go in Texas, people are talking about it. And I'm talking about Texas. They're all walking up, I hope you're running, and - that's what happens when you've got a famous mother.

BETTY ANN BOWSER: The governor says he really hasn't made up his mind. And the President's problems in Washington have given him second thoughts.

GOV. BUSH: I got people calling from high school days, saying you know, I got a call from some reporter, Bush - and I say, well, good -- and you know -

BETTY ANN BOWSER: Asking questions about you back then and what you did?

GOV. BUSH: About my personal life, sure. And you know what they're going to find? They're going to find out that first and foremost I was a loyal husband. They'll find I'm a dedicated dad

BETTY ANN BOWSER: Never a question about that?

GOV. BUSH: Absolutely and they're going to find out that as governor of Texas I've brought honor and dignity to the office I ran for. And I said sure, when I was young and irresponsible, I behaved young and irresponsibly, but that's not the question for baby boomers. The question for baby boomers is have you grown up? Are you prepared to take on the responsibilities as an adult. And I have.

BETTY ANN BOWSER: Political scientist Stein says people who assume Bush is running for president may be disappointed.

STEIN: It's not clear which direction he's running -- for the presidency -- towards it or away.

BETTY ANN BOWSER: Right now Bush is focused very clearly on November. The main message of his campaign is a promise to see that every child in Texas learns to read. But he hasn't promised voters he'll be a full term governor if he's re-elected. This governor is keeping his options open. % ? ESSAY - REQUIRED READING

ELIZABETH FARNSWORTH: Because our discussion on Kosovo ran longer than expected, we will reschedule our poem and essay on war. In their place, essayist Roger Rosenblatt considers two recent adventure books.

ROGER ROSENBLATT: It may simply be a coincidence, but there's something striking about the near simultaneous successes of two non-fiction books in the past year or so. One book , "Into thin Air," is John Crackour's account of a disastrous climb of Mt. Everest in 1996. The other, "The Perfect Storm," is Sebastian Younger's account of a disastrous fishing voyage in 1991off the Coast of Massachusetts. That both these calamities really occurredtakes them out of the realm and the realm of appeal of the so-called "disaster movies" of the 1970's, such as "Earthquake" and the "Towering Inferno," or more recent examples of the genre like "Twister." These disasters - composed of gale-force winds and ice, occurred at the extremes of real life. The mountain one can see from one's window; the ocean down the road. Two understand the successes of these two books requires a decision on what the books are about: danger, death, striving, human courage, the capricious and murderous elements, or all or none of the above. Then there's the added question of why now? Do these tales of mis-adventure provide something that is deemed missing from the world, an enemy perhaps, the oldest enemy - nature? For as long as one can remember Public Enemy No. 1 was nuclear war, and it was oddly comforting to know that it was there, waiting. The big bad bomb took other menaces out of the picture. Now, though that menace is not really gone, it seems to be. The old Soviet Union no longer bangs its shoes on the table and is broke besides. In the mountain and the sea we may be rediscovering tried and true enemies of the past. Nuclear winter is replaced by real winter - maybe. Then too both books are stories of human striving, where everything achieved is difficult and won at great cost. No question that life has gotten a bit soft and convenient lately and plush and fat, especially for Americans. Nearly everyone is working. More people than ever can buy their own homes. Every time Alan Greenspan appears on television millions of mortgage holders redo their loans. Shoppers order out. All the luxuries of life can be easily delivered to one's door: pizza, flowers, mattresses. Get Direct TV and watch a billion channels. Shop by catalogue, bank by computer. Millennium time and the living is easy. And it could be that people do not want it to be quite as easy as it is. And so they order "The Perfect Storm" and "Into Thin Air." Of course, they order it on the Internet. These books relate terrible events, but they do it very well, and it may be that they're popular simply because they are tales well told. But I can't help thinking that, apart from qualities of difficulty and danger, that they appeal to the public's desire for significance. They tell of circumstances of life and death, things that matter. The commercial fishermen were not forced to head out to their perfect storm, but once they were in the thick of it, everything was important. The climbers of Everest wanted to do it because Everest was, as ever, there. But once on the mountain they were no mere hobbyists. Life counted. Actions had consequences. Some would hold that people take to such stories to escape from the real world, but, in fact, they may be moving toward a world more real - only interior. Through the pages of books they escape to the reality of a violent sea and an implacable mountain and are drawn into moments of deadly seriousness. We find that we belong in situations where we have never been before. These books become required reading. A strange feeling occurs when one puts them down and then meanders back into the relatively serene and harmless life of ordinary existence. Where is the avalanche in that? Where is the crushing wave? Sometimes one grabs a book to find the place where one truly lives, the hard, important, testing life of dreams. I'm Roger Rosenblatt.% ? RECAP

ELIZABETH FARNSWORTH: Again, the major stories of this Tuesday, the United States and its NATO allies decided not to launch air strikes against Serb forces but reserved the right to defend ethnic Albanians in Kosovo against Serb attacks. And Hurricane Mitch weakened slightly as it headed for the coast of Guatemala and Belize. We'll be with you online and again here tomorrow evening. I'm Elizabeth Farnsworth. Thank you and good night.