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NEWSROOM for April 25, 2001

Aired April 25, 2001 - 04:30   ET


ANNOUNCER: Seen in classrooms the world over, this is CNN NEWSROOM.

SHELLEY WALCOTT, CO-HOST: It's Wednesday, April 25th, and this is CNN NEWSROOM. Welcome. I'm Shelley Walcott.

TOM HAYNES, CO-HOST: Hey, I'm Tom Haynes. Welcome to the show.

Here's a quick look at today's rundown.

WALCOTT: In today's news, more tense moments between the U.S. and China as the Bush administration approves an arms deal with Taiwan.

HAYNES: Then in "Business Desk," why bankruptcy has become a viable option for people under the age of 30.

WALCOTT: From financial ruin to an economic comeback, "Worldview" examines Thailand's struggle through tough financial times.

HAYNES: And in "Chronicle," the latest installment of our series Storm. Today, the blizzard of 1978.

Despite protests from China, U.S. President Bush has approved what the White House calls the largest arms package in a decade for Taiwan. Now it's up to Taiwan to decide what it wants to buy. The deal includes four Kidd-class destroyers, eight diesel submarines and 12 anti-submarine aircraft, as well as various helicopters, assault vehicles and other arms. Taiwan, which lies about 100 miles or 161 kilometers from the southeast coast of mainland China, is viewed by Beijing as a rebellious province. In 1949, when the communists came to power on the mainland, Taiwan became the last territory still controlled by nationalist Chinese and today both sides still claim jurisdiction over the other.

Although Chinese-U.S. relations have been strained since the April collision of a U.S. Navy surveillance plane and a Chinese fighter jet, the U.S. says the arms offer was spurred by the 300 missiles China is aiming at Taiwan. The White House says President Bush believes the best chance for peace and stability is for Taiwan to have the means for its own defense.

President Bush has yet to decide whether to sell Taiwan what it wants most and what China most fears, that is, high tech U.S. destroyers equipped with the Aegis combat radar system. The U.S. made it clear that sales of the state-of-the-art system are still possible given China's recent arms buildup.

Rebecca MacKinnon reports now on Chinese reaction to the U.S.- Taiwan arms deal.


REBECCA MACKINNON, CNN CORRESPONDENT (voice-over): China condemned the United States for selling any advanced weapons to Taiwan.

ZHANG QIYUE, FOREIGN MINISTRY SPOKESWOMAN (through translator): It undermines China's sovereignty, interferes with China's internal affairs, and will give rise to tensions across the Taiwan straits.

MACKINNON: Privately, the Chinese diplomats are relieved the U.S. did not include destroyers equipped with Aegis radars, which could help shield Taiwan against Chinese missiles. Because Chinese Vice Premier Qian Qichen personally lobbied President George Bush against the Aegis sale, it would have been considered a direct slap in the face of China's leadership.

Even so, Beijing says it's offended by the sale of 1970's Kidd- class destroyers, diesel submarines and P-3 submarine hunters. So what will China do about it?

QIYUE (through translator): The Chinese side will continue to lodge representations to the U.S. side on this issue.

MACKINNON: Frustration with the United States continues to be a major theme here. Daily reports in the state-controlled media mourn the loss of Chinese fighter pilot Wang Wei after his collision with a U.S. spy plane. China's leaders honor his widow as the wife of a martyr who died trying to keep a bully away from China's doorstep.

China insists the U.S. plane caused the accident, and that its surveillance activities were an affront to Chinese sovereignty, each report contributing to a growing public image of the United States as a global bully.

"The U.S. feels its economy and military are so strong it can do what it wants," says this man, "but one day, China will be just as powerful, and then the U.S. won't be able to look down on us any more."

(on camera): The next bump in the road: a trip to the United States by Taiwan's former president, Lee Teng Hui. Washington's decision to grant him a visa is seen here as yet another sign of U.S. disregard for China's interests.

Rebecca MacKinnon, CNN, Beijing.

(END VIDEOTAPE) HAYNES: The nationalist-led Republic of China has clung to sovereignty on Taiwan since losing the Chinese mainland to communist forces in 1949. Over the years, Taiwan has steadily lost ground to Beijing's People's Republic of China. Beijing denies diplomatic relations to any country that establishes formal ties with Taiwan and it opposes Taiwan's membership in international organizations.

The U.S. has maintained unofficial ties with Taiwan since it broke diplomatic relations in 1979, yet in the ensuing years, Taiwan has become evermore militarily reliant on the U.S.

Mike Chinoy explains.


MIKE CHINOY, CNN SENIOR ASIA CORRESPONDENT (voice-over): It's the part of Taiwan-American military cooperation neither government wants to talk about, what the experts call interoperability, enabling the United States to better support Taiwan's armed forces in the event of a conflict with Mainland China. At the moment, it barely exists.

PHILIP YANG, NATIONAL TAIWAN UNIVERSITY: We need more communication and linkage with U.S. Army communication system and command and control and information sharing and possibly some high- tech linkage, you know, radar and some information-sharing satellite, all the things like that.

CHINOY: There's been pressure in both militaries to upgrade cooperation. Defense experts here and in Washington say such a move could be a crucial but hidden element in future U.S. arms deals for Taiwan.

MAJOR GENERAL HWANG SUI-SHENG, TAIWAN MINISTRY SPOKESMAN: We don't talk about military exchanges at press conferences, but we are interested in exchanges with other countries, especially those with advanced weapons.

CHINOY: In fact, analysts say, Taiwan's desire to buy the Aegis radar system was fueled not only by the need to counter China's missile threat but also by the hope of bringing the two militaries closer together.

ANDREW YANG, COUNCIL OF ADVANCED POLICY ANALYSIS: We consider that by getting Aegis that way enhance of consolidating the U.S.- Taiwan military relations and possibly work, you know, integrate the U.S. military with Taiwanese military in future war scenarios.

CHINOY: That's why some analysts believe interoperability may be more important than Aegis itself.

ERICH SHIH, DEFENSE INTERNATIONAL: Having access to a modern army's ability to coordinate and manage battlefield operations would be more significant than getting any particular weapon system.

CHINOY (on camera): While neither side is talking, there's no doubt China is watching closely, concerned that any move in this direction could bring Taiwan into a de facto military alliance with the United States.

Mike Chinoy, CNN, Taipei.


WALCOTT: One of the issues we often highlight in "Business Desk" is responsible spending. Recently we featured a story on establishing good credit and staying out of debt. In that, we learned the importance of managing your finances. Truth is, most people have some debt. They owe a monthly payment for things like houses and cars. But when that debt becomes unmanageable it can create big problems.

The modern legal remedy for this situation is sometimes bankruptcy. While it may not be as painful as being imprisoned by a creditor, as was the common practice centuries ago, bankruptcy is a very serious way to address the problem of overwhelming debt.

Brian Palmer has details.


BRIAN PALMER, CNN CORRESPONDENT: Twenty-eight year old Tisa Cohen (ph) works as a waitress and a freelance writer. She is making one of the hardest choices of her life.

UNIDENTIFIED MAN: Here, have a seat. OK, today you're signing your bankruptcy petition.

PALMER: Cohen got her first credit card as a college freshman, charging new expenses, making minimum payments, eventually getting overwhelmed by ballooning debt as interest charges piled up. After her husband lost his job, Cohen could no longer make her $400 a month payments. Cohen admits she made a mistake by racking up those bills. She says Chapter 7 bankruptcy was a last resort.

TISA COHEN: I'm not saying that I'm this innocent victim and out of nowhere, you know, $10,000 was on my card and I don't know how it got there. I mean these are my purchases. I take responsibility for them. But also there's a line here that's almost borderline loan sharking.

PALMER: Cohen's interest rate on one credit card account, 24.49 percent. Bankruptcy specialists say young people who wind up in financial trouble may have been enticed by credit card companies, but they have also probably mismanaged their money.

RAFAEL ALVAREZ, CREDIT COUNSELOR, CCCS OF SOUTHERN NEW YORK: Students are not being taught, I mean it wasn't taught in schools and it wasn't taught by our parents the terms and conditions on credit cards or how they work. It's basically understanding the terms and conditions of a credit card.

PALMER: If her petition is approved, she will be free of her crippling debt. If not...

COHEN: I don't know. I mean at this point it's just kind of like taking it one day at a time, one step at a time.

PALMER: Brian Palmer, CNN, New York.


WALCOTT: We focus on one country in "Worldview," the Asian nation of Thailand. We'll look at its economy and its solution to hoof and mouth disease. Instead of eating beef, eat crocodile. We'll chew on that later. But first, the push to protect other animals in Thailand.

Nestled in a cluster of Southeast Asian nations, Thailand is sometimes called the jewel of the Orient. The beautiful country draws a lot of tourists with its low cost, tasty food and reputation for hospitality.

Yet Thailand's wildlife remains a top attraction for tourists. The country spans a variety of geological and climactic zones, making it an ideal home for the more than 1,200 animal species living there. Familiar faces such as tigers and primates share a home with more unusual animals such as the mud skipper. That's a fish capable of walking on land.

But it is tourists' fascination with these rare animals that's causing their decline. So a group of activists has hatched a plan to save them.

Chris Riker explains.


CHRIS RIKER, CNN CORRESPONDENT (voice-over): Baby gibbons, virtually irresistible to tourists who flock to Bangkok. Police say that's exactly what one restaurant wanted - to draw in business. But animal rights activist say these creatures' mothers were almost certainly slaughtered during their capture.

There are many players in the illegal animal trade, and Thailand is by no means alone. The Worldwide Fund for Nature has identified 27 species of rare animals and plants that are being traded here, traded into oblivion. Working with Thai agencies, they're hoping to stop the trade by cutting demand.

Tourists will notice special videos on Thai Airways flights. There'll also be brochures, posters and training for tour guides.

So as visitors enjoy the floating market of Rachaburi, it's hoped they'll know the difference between legal and illegal souvenirs. As it has in many nations, the WWF is taking a long-term approach in Thailand.

ROB MATHER, WORLDWIDE FUND FOR NATURE: If we look at the situation in three years' time at the end of the project, at least 50 percent of the Nordic tourists and 10 percent of the East Asian tourists arriving in Thailand in that year will have a much better understanding of the situation and will have heard our message. RIKER: Since Europe is a key market, Denmark is also stepping in. Many of the tourists may not know their treasures are illegal, but that doesn't matter.

MICHAEL ANDERSON, DANISH FOREST & NATURE AGENCY: Most of the products are sea turtles - stuffed sea turtles and snakeskins, but also ivory. And it is on a weekly basis that we confiscate these products from the tourists in the airport.

RIKER: Eight and a half million people visited Thailand last year. Activists hope that one day tourists will see this land's exotic beauty without harming some of its most exotic animals.

Chris Riker, CNN.


HAYNES: More from Thailand now as we focus on the nation's economy. Thailand is struggling through tough economic times. It's still feeling the effects of Asia's economic crisis from 1997. To assist the troubled nation, the International Monetary Fund has stepped up to provide temporary financial relief. The IMF is an agency of the United Nations established in 1944 to lend stability to the international financial market.

Andrew Stevens reports on Thailand's efforts at an economic comeback.


ANDREW STEVENS, CNN CORRESPONDENT (voice-over): It's 6:30 in the morning in Bangkok. Sirabat Borovanbudikan (ph) leads his small team out onto the streets. For the next eight hours, they will sell sandwiches and sushi to passersby.

If he looks familiar, that's not surprising. Sirabat is, in many ways, the public face of Thailand's economic crisis. The former property developer and stock market player lost just about everything as the economy collapsed in 1997.

His riches-to-rags story became a staple for both the national and international media. Three and a half years on, he's still hurting.

SIRABAT BOROVANBUDIKAN: I'm still surviving and struggling, although I'm not coming up yet. But I'm still alive.

STEVENS: That could be a metaphor for the country -- surviving, but not yet prospering. Thailand was the first victim of Asia's economic crisis. Years of big spending on borrowed money with loose financial controls ended on July 2, 1997, when the Thai baht imploded, corporate debt soared and the economy spiraled into deep recession.

Under an IMF program, the economy has come out of recession, although a lot of that is because of a booming export market. Look behind the numbers, and the picture is not so upbeat. Poverty is growing. Sixteen percent of Thailand's 62 million people live on less than dollar a day, up from 11 percent before the crisis.

Per capita GDP, the value of economic output per person, is still lower than four years ago, and unemployment is more than twice the pre-crisis level.

(on camera): The scars are not just on people's minds either. Dotted throughout Bangkok are half-finished tower blocks like this one, a monument to the easy money days of the mid 1990s where the sky really was the limit. This one, in the heart of the up-market hotel district, has been idle for the past three and a half years.

(voice-over): Property prices have come down by about half from their peak. But oversupply remains a major problem, and many buildings will never be sold.

MARC LAVOIE, HEAD OF RESEARCH, ASSET PLUS: These things were built four or five years ago. There have been no maintenance. They're falling apart. You know, as a consumer, you and I, if we're, you know, I've been around looking at these things for myself, and some of them are just a disaster. Why am I going to buy them?

STEVENS: But despite these problems, the worst is over. The property market is showing signs of turning around. The banks have more than halved their bad debts, and the foundations are being laid for sustained economic growth.

J. SHIVAKUMAR, COUNTRY DIR., WORLD BANK: I would say there's a framework basically for recovery. A lot of progress has been made in several areas, but much more needs to be done.

STEVENS: The key issue for new prime minister Thaksin Shinawatra is getting the domestic economy moving again. That means strengthening the banking system so the debt-laden banks can start lending again, restoring confidence and dealing with issues ranging from corruption to more corporate disclosure.

And the task will be made even harder as Thailand's economy weakens on the back of the global economic slowdown.

SHIVAKUMAR: I think the government is on top of those issues. We have to wait and see whether the solutions are really going to work.

STEVENS: And until that happens, Thais like Sirabat will continue to struggle to stay on their own road to recovery.

Andrew Stevens, CNN, Bangkok.


WALCOTT: Now more on Thailand's wild kingdom as we hear about one of its largest reptiles, the crocodile. Crocodiles are often confused with alligators. They both have long bodies, short legs and long, powerful tails which they use for swimming. They also have tough hides, long snouts and sharp teeth for catching prey. The difference is that in most crocodiles, the snout comes to a point in the front while the alligator's snout is rounded.

Crocodiles live in tropical countries throughout the world. They usually live in large bodies of shallow water, swamps, slow moving rivers and marshes, where they like to float with only their eyes and nostrils above the water. Crocodiles eat many small animals like fish, birds and turtles, but they themselves serve as a delicacy in some parts of Asia.

Karuna Shinsho has the story.


KARUNA SHINSHO, CNN CORRESPONDENT (voice-over): Believe it or not, crocodile meat is poised to become the meat of choice for Europeans. At least that's what employees of this crocodile farm, located east of Bangkok, believe.

KAMTHORN TEMSIRIPONG, SRIRACHA CROCODILE FARM: Crocodile meat has no effect with mad cow disease and mouth-and-claw rot disease.

UNIDENTIFIED REPORTER: On the average, crocodile meat is safe to consume.

TEMSIRIPONG: Yes, it's very safe to consume.

SHINSHO: The Sriracha farm is one of Thailand's biggest producers of crocodile meat. It houses over 50,000 crocs and exports some 30,000 carcasses a year. Long a delicacy enjoyed by people in China and Taiwan, crocodile meat is seriously being considered as a safer alternative by Europeans.

TEMSIRIPONG: This is very exciting story of our farm, because this is the first shipment for us to start to export to European market. And Germany is the best potential market.

SHINSHO: The farm will export its first ton of meat to Germany later this month. But with increasing interest from other countries like Italy and Belgium, the farm is worried about meeting the new demand from Europe.

Karuna Shinsho, CNN.


HAYNES: Forecasting, part science, part physics and a lot of luck. As technology improves our ability to predict, it also improves our ability to prepare. But what happens when the technology is new and not completely understood? Well, such was the case 23 years ago when forecasters braced for the blizzard of '78.

Mike McManus reports as we continue our special series, Storm.


UNIDENTIFIED MALE: This is the National Weather Service of Boston. Heavy snow warnings for Massachusetts this afternoon and tonight.

MICHAEL MCMANUS, CNN CORRESPONDENT: It was an event so rare that many in New England call it the "storm of the century."

UNIDENTIFIED MALE: But this is a giant whirlpool and it's going to last for a while. That means we've got winds lasting for a long time. It means we have heavier snow lasting for a long time. And take the combination of the two and you have the ingredients for, perhaps, the worst winter storm we've ever had here in New England.

MCMANUS: To understand the blizzard of '78, we first have to comprehend where the storm was headed, the prediction capabilities at the time, and, finally, the circumstances present that allowed it to develop.

BRUCE SCHWOEGLER, CHIEF METEOROLOGIST, WBZ-TV: Any time you're in a northern latitude, near mountains and a warm water current, you've got troubles.

HARVEY LEONARD, CHIEF METEOROLOGIST, WHDH-TV: We're talking back in 1978. We did have computer models, not as sophisticated as what we have today, not as numerous as what we have today.

MCMANUS: The computer models were calling for a weak snowstorm in Pennsylvania to combine with a mass of cold air headed toward New England from the Great Lakes. Predictions then called for this storm to energize from an existing system forming off the coast of Cape Hatteras, North Carolina.

SCHWOEGLER: And the question back then was do I believe this or not?

MCMANUS: The models proved correct. Once hitting the coast, it joined with moisture from the existing storm over the mid-Atlantic. The powder keg had its spark.

LEONARD: You have bitterly cold air over land. You have warm ocean waters to the east. And you have this tremendous chunk of energy approaching the East Coast, this huge, deep, cold pocket high up in the atmosphere. We have ignition. We have liftoff. We have the beginning of the blizzard of '78.

MCMANUS: The winter hurricane makes landfall early in the afternoon. It won't let up for the next 30 hours.

SCHWOEGLER: We had high tides -- very high high tides at that time.

MCMANUS: There was a full moon. And because of the gravitational pull between the earth and the moon, the seas were at their highest.

SCHWOEGLER: Oh, we had major flooding along the coast, major inundation, loss of life. People evacuated.

UNIDENTIFIED FEMALE: I was in water up to my waist from my house to the fire station. And the current was just pushing us up there, me and my son.

UNIDENTIFIED MALE: With all the cold air that's over us now, unquestionably, the bulk of this storm has to be in the form of snow. We think it's going to be a big one, one of the biggest of the winter.

LEONARD: The landscape is being rearranged and sculptured. It's an incredible sight. That's just the snow. Route 128 gets backed up for miles. Early in the storm, two tractor-trailers jackknife, backing it up for nine miles. Those cars were there until days after the storm.

MCMANUS: The damage was devastating.

UNIDENTIFIED MALE: We bought a lot of things, had nice things, had nice antiques, had -- everything is under salt water.

LEONARD: It paralyzed Boston for a solid four days -- quarantines on driving, marshal law kind of a institution.

MCMANUS: When it was over, there was between two and six feet of snow on the ground in the Northeast. Schools and businesses were closed for a week. The National Guard was called to help in rescues and snow removal. New England was declared a disaster area.

GOV. MICHAEL DUKAKIS (D), MASSACHUSETTS: Ladies and gentlemen, the weather situation that now exists in the Commonwealth is one of the worst in our history. And for that reason, I've ordered a state of emergency.

MARK ROSENTHAL, METEOROLOGIST, WCBV-TV: The blizzard of 1978, I think, has to be the Mecca of all storms.

SCHWOEGLER: It's become the benchmark of all winter storms.

ROSENTHAL: When you see the snow blowing and there's zero visibility and then you have footage of waves crashing over the sea wall and flooding the coast line, I mean, you've got at least two or three things going on at once, which just makes it unbelievable.

MCMANUS: Thirty deaths were attributed to the blizzard. The destruction was fierce, but it was over.

LEONARD: The system worked. The warnings got out, people listened to them and injury and death was kept to a bare minimum.

MCMANUS: The blizzard of 1978 was an event that only comes along once every 100 years. But the lessons learned in both preparation for and the prediction of snowstorms continue to be practiced in New England today.

Michael McManus, CNN NEWSROOM, Boston, Massachusetts.


WALCOTT: It reminds me of those cold winters in Canada.

HAYNES: Hey, you know what? Tomorrow we go into the eye of the storm to check out hurricanes and tornadoes.

WALCOTT: I can't wait for that. And as we continue now in "Chronicle," we want to shift focus and talk about something a lot of you spend some time doing, volunteering your own time.

HAYNES: Yeah, that's right. Roughly three million children and young adults like you are turning out for national youth service days, two days of volunteer work in communities across the United States that are getting plenty of attention.

WALCOTT: And it's not just events like this one attracting young volunteers. Surveys show kids across the country are volunteering year round.

Brian Palmer hooks up with some young New Yorkers who are serious about helping others.


BRIAN PALMER, CNN CORRESPONDENT (voice-over): The Love Gospel Assembly in the Bronx prides itself on serving five-star meals to people in need.

UNIDENTIFIED MALE: This is a love kitchen. This is not a soup kitchen.

PALMER: Today's servers, 20-something volunteers from a local job training program, who are taking part in the 13th annual National Youth Service Day. 21-year-old Seneca John (ph) didn't even mind donning a hair net for the day. He has been volunteering since he was 14.

SENECA JOHN, VOLUNTEER: Back home in Harlem, I help coach a softball team, but I am giving out to less fortunate people is really something special to me right now.

FRANCES RODRIGUEZ, SOUTH BRONX JOB CORPORATION: This is what needs to be seen. I mean, this is what happens all the time. You have youth out there, and they are doing the work. Unfortunately, not to, you know, go against the media, but unfortunately it is always the bad stuff that gets the attention.

STEVE GULBERTSON, NATIONAL YOUTH SERVICE: We have got the greatest generation of the young people right under our noses, and one of the key indicators about that is their incredible commitment to service to others. We are seeing it in schools, we're seeing it in faith-based organizations, and we are seeing in youth development organizations.

PALMER: Voter participation among young people is down, but volunteering is up by 12 percent over the past 10 years, according to a recent UCLA survey.

HARRIS WOFFORD, CORPORATION FOR NATIONAL SERVICE: I don't think it's just volunteering that we are talking about it. I think it is engaging people in discovering their powers as citizens to solve problems in their community. And so, the test is going to be, what are the problems they are working on? And what is the contribution?

PALMER: At St. Joseph's church downtown, students from Dalton, a private school, help long-time volunteers serve lunch to upward of 300 people. The school requires students to perform community service.

Sophomore Efi Cameron (ph) says she would be here anyway.

EFI CAMERON, VOLUNTEER: I know what it's like to be hungry, and I am glad that I get to be on the giving end.

PALMER: Cameron says she will find other ways to give when she gets out of school.

CAMERON: I am going to be a (UNINTELLIGIBLE).

PALMER: Brian Palmer, CNN, New York.


WALCOTT: Good for them.


WALCOTT: Well, before we leave you today, a look at these images from orbit. Two astronauts from the space shuttle Endeavour went for a seven and a half hour space walk Tuesday.

HAYNES: Yeah, they spent most of their time hooking up cables to a new 58 foot robot arm. The arm is actually a billion dollar crane needed to complete construction of the new international space station.

WALCOTT: That's great.


WALCOTT: And that wraps up today's show.

HAYNES: We'll see you back here tomorrow. Take care.

WALCOTT: Good-bye.

ANNOUNCER: CNN NEWSROOM is part of Cable in the Classroom, a service of the cable television industry and your local cable company.



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