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Lou Dobbs Tonight

Interview with Secretary of State Colin Powell

Aired December 25, 2003 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
ANNOUNCER: Now on a special edition of LOU DOBBS TONIGHT in conjunction with "The Economist" Magazine from dictator on the run to U.S. prisoner number one, Saddam's capture. For some, cause for celebration. For others, a time for revenge.

UNIDENTIFIED MALE: The probability of further attacks on the United States, much more serious than September 11 are quite possible.

UNIDENTIFIED FEMALE: At the end of the day, I think nature is a far, more dangerous proposition than any bioterrorist.

ANNOUNCER: And tonight another battle against one of the world's oldest and most powerful killers -- the microbe.

Plus elections in Russia. Will the big loser in 2004 be the country's fragile democracy?

UNIDENTIFIED MALE: You could get a very authoritarian regime with democratic trimmings.

ANNOUNCER: And China's most ambitious counterfeit yet, the copy car is costing billions to the manufacturers of the real thing.

UNIDENTIFIED MALE: They didn't really see this as theft. They see it as adoptive technology of other companies and other countries.

UNIDENTIFIED MALE: And liftoff.

ANNOUNCER: Also tonight, looking for clues on the red planet. Was there, is there life on Mars?

And our exclusive interview with Colin Powell. The secretary of state speaks out about the new wall in Israel, the growing divide with America's old allies and taking out Saddam.

COLIN POWELL, SECRETARY OF STATE: Do you think anybody in this administration is going to apologize for the fact that Saddam Hussein is no longer sitting on a throne in Iraq? We won't.

(END VIDEOTAPE)

ANNOUNCER: A special edition of LOU DOBBS TONIGHT in collaboration with "The Economist", a look ahead to the world in 2004. Here now, Lou Dobbs. LOU DOBBS, HOST: Good evening. 2004 will be a world with one last dictator oppressing and torturing his people. Saddam Hussein began the year a wealthy, bloody despot with a vast apparatus of killers and thugs at his command. He ended the year, as we all know, alone, dirty and living in a hole. But what, if anything, does that mean for the larger struggle between radical Islam and the West? And what can we expect to see in that war in 2004? We talked with three of the most provocative thinkers about the world's most pressing issue, radical Islamists.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): He was always number one in the deck of most wanted. But the capture and trial of Saddam Hussein may not win many friends in the Arab world.

SAMUEL HUNTINGTON, PROF. HARVARD UNIVERSITY: I think it will, in many respects, increase the Arab sense of humiliation. They will also see this as just another evidence of Western dominance.

GILLES KEPEL, PROF. INST. DETUDES POLITIQUES: The man who was arrested clearly looked like he was sort of (UNINTELLIGIBLE) hiding away in a cave, in a rat hole. I guess that there is a new generation now of anti-American guerrilla or terrorism in Iraq which may relate to the image of Saddam as some sort of an icon.

DANIEL PIPES, DIR. MIDDLE EAST FORUM: Having caught Saddam Hussein gives the United States, on the one hand, a greater prestige. On the other hand, it is more disliked for its success. So it's a complex duality of reaction.

DOBBS: Still with the specter of Saddam removed from Iraqi politics and Middle Eastern politics, will democracy's chances improve? Opinions, of course, differ.

PIPES: Democracy can be imposed from the outside. It's happened. Look at Germany, Italy, Japan, Austria. It's happened. It doesn't necessarily mean it can happen in Iraq. So it can be, in theory.

HUNTINGTON: And I don't think it has been done in practice. And I don't think the examples are evidence to support his point. Germany and Japan both developed democracies on their own. The 1920's, of course, you had the Vimar Republic (ph) in Germany, which is one of the most democratic regimes that has ever existed. In fact, it was probably too democratic.

DOBBS: Harvard Samuel Huntington wrote about the coming clash of civilizations between the West and Islam six years before September 11.

HUNTINGTON: One of the great problems we have had in Iraq is this assumption that somehow the Iraqi people and Iraqi society are like ours, but they're not. They're extremely different. The Iraqi society is based on family and clan and tribe. Half the marriages in Iraq are between cousins. You marry people in your own family because it's family that counts.

DOBBS: Around the world 2003 was a mixed year in the war against radical Islamists.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today in Tripoli, the leader of Libya, Colonel Moammar al Gadhafi, publicly confirmed his commitment to disclose and dismantle all weapons of mass destruction programs in his country.

DOBBS: In a further validation of the Bush administration's Middle East policy, Libya's Moammar Gadhafi announced he had programs to develop long-range missiles and weapons of mass destruction and agreed to dismantle both.

(APPLAUSE)

DOBBS: In Afghanistan, the Grand Counsel paved the way for national elections while secret U.S. raids in the East aim to drive out Taliban forces that are regrouping. And in nuclear-armed Pakistan, the third unsuccessful attempt on President Musharraf's life. Against this backdrop, though, Gilles Kepel says the radicals are slowly losing ground.

KEPEL: Radical Islamism is in decline. None of the pro-Western regimes in the Muslim world has been toppled for the time being. On the contrary, the Taliban regime in Afghanistan is nonexistent anymore. The Iranian regime is having a number of difficulties. Sudan has now gotten nearer and nearer to the U.S.

HUNTINGTON: I don't see evidence of any significant decline now. Reports are that al Qaeda and other Muslim groups have gathered more and more recruits.

DOBBS: So the war will go on in 2004. But where is it likely to end?

PIPES: I'm confident that the West or the civilized world, Muslim and non-Muslim, will defeat (UNINTELLIGIBLE) Islam. I'm not confident that it will be done as quickly and as expeditiously with a minimal loss of life.

HUNTINGTON: I think the probability of further attacks on the United States and its allies, possibly much more serious attacks than those that occurred on September 11 are quite possible.

(END VIDEOTAPE)

DOBBS: Coming up next, the battle against infectious diseases. Public health officials continue to fight outbreaks of diseases we once thought were eradicated.

And a president faces a re-election campaign and an economy faces a challenge to create more jobs. The economy is Russia. The president, Vladimir Putin.

And later, a one-on-one conversation with Secretary of State Colin Powell. We'll be talking about the war against Saddam Hussein, American foreign policy, and the Israeli Palestinian conflict. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Infectious diseases kill millions of people each year. In fact, those diseases account for more than a quarter of the deaths worldwide. And it is not only new diseases, public health experts are fighting outbreaks of tuberculosis, malaria and other diseases that we once thought had been eradicated. It is all part of why 2004 will see a continuing battle against the microbe.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): In an isolated facility at Columbia University, under very tight security, and off limits to all but four scientists, are some of the deadliest killers known to man. West Nile, (UNINTELLIGIBLE) virus, SARS and many others you may never have heard of. Last spring, as the death toll from SARS was climbing...

UNIDENTIFIED MALE: This is SARS infection of particular cells.

DOBBS: ... a group of scientists here developed a test for the new virus. Armed with 10,000 SARS test kits lab director Dr. Ian Lipkin flew to China.

DR. IAN LIPKIN, SCHOOL OF PUBLIC HEALTH, COLUMBIA UNIVERSITY: One of the things that struck me while I was there was that there was a lot of overreaction, I think, to the potential risk. I took off my mask, and I said this is really unnecessary in this sort of a context, and it was a very moving moment.

SHEREEN EL FEKI, HEALTHCARE CORRESPONDENT, "THE ECONOMIST": Most experts believed that SARS is really in abeyance. It hasn't been eradicated. We don't have any specific drugs to hit out against the virus which causes SARS. We don't have a vaccine.

DOBBS: As the search for answers to these high-profile threats to public health continues, there is also concern that more routine infections won't receive enough attention.

LIPKIN: There are other things which are more worrisome, say, for example, influenza virus, which we think could, in fact, cause a great deal more havoc than SARS has done.

DOBBS: Last year the flu cost the United States' economy more than $70 billion.

EL FEKI: Since 1973, there's been one new infectious disease identified every year. So the numbers of diseases that we're confronting have increased.

DOBBS: Around the world, tuberculosis kills two million people a year, malaria, more than a million. And then there is AIDS.

EL FEKI: It afflicts 40 million people around the world. And that's our biggest challenge at the moment.

DOBBS: 2003 is the worst year on record for AIDS. The disease has claimed three million worldwide.

DR. DAVID L. HEYMANN, WORLD HEALTH ORG.: It's very important that we understand that we're living in a world where there are no borders to infectious diseases.

DOBBS: Dr. David Heymann was part of the international team that is credited with the eradication of smallpox in the 1970's.

HEYMANN: If there's a resistance strain of tuberculosis somewhere in Africa, it can hop on an airplane with a passenger and go over to the U.S. or go over to Europe.

DOBBS: Urbanization, international travel and trade have extended the reach of infectious diseases. At the same time, technology, another product of globalization may be what helps stop the spread.

STEPHEN MORSE, PH.D., COLUMBIA UNIVERSITY, SCHOOL OF PUBLIC HEALTH: HIV/AIDS first came into the world sort of by stealth, hardly noticed.

DOBBS: To spread news of infection faster than infection itself, Stephen Morse helped create ProMED-mail 10 years ago.

UNIDENTIFIED MALE: There seems to be an ongoing outbreak right now of Ebola in the Congo.

DOBBS: It's the first international network to report and monitor disease via the Internet. It seems the harder we battle against the microbes, the stronger they come back. One reason drug companies may not be producing the needed drugs.

EL FEKI: Resistance means that the drugs are less effective. If the drugs are less effective, doctors are less likely to prescribe them. If doctors are less likely to prescribe them, that means they have a shorter shelf life. They're less profitable.

DOBBS: Now with the threat of bio terrorism, protection against disease is even more critical. Terrorists can bring back diseases like smallpox and they can even create their own.

UNIDENTIFIED MALE: The good news is that investing in defense systems protects against both deliberately caused and actually occurring infectious diseases.

EL FEKI: At the end of the day I think nature is a far more, a more dangerous proposition than any bio terrorist. You have to remember that the bacteria were here three billion years ago. Humanity arrived a hundred thousand years ago. And there's no prize in guessing which is actually going to inherit the earth.

(END VIDEOTAPE) DOBBS: Recently a medical researcher in Taiwan tested positive for SARS likely contracted through his laboratory work, though it's only one of two known cases since the outbreak was contained. It raises fears that the disease is still a threat.

2004 will be an election year, not only here in the United States, but also in Russia. Vladimir Putin will be on the ticket again and if his party's recent victory is any indication he will win reelection by a landslide.

December's elections were the first time since the Soviet days that one party won an overwhelming majority in Russia. But Putin's tactics have everyone from his political opposition to international observers raising questions about the fairness of those elections. Add to that, Putin's arrest of the CEO of the country's biggest oil company, Yukos, a move that has already cast shadows on the future of liberal capitalism in Russia. 2004 may well be the defining year of Russia's young democracy.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): It looked like multiparty democracy in Russia. But for the first time since the fall of communism, one party united Russia, the one backed by President Putin, won an overwhelming majority of the vote.

Boris Fyodorov felt he was campaigning from the margins. He was a candidate for Russia's new Coarse Automotive Party (ph) running against the Kremlin. Fyodorov claims he came up against some heavy- handed government tactics.

BORIS FYODOROV, FMR. MINISTER OF FINANCE: What I see in the city of Moscow (UNINTELLIGIBLE) my poster is being taken away. All small businessmen basically have cajoled into putting the official candidates' posters in their windows. Policemen, instead of fighting corruption, going and arresting my educators in the district, that's bad. That's very worrying.

DOBBS: Opposition parties submitted campaign commercials, but they rarely appeared on government-controlled television in blatant disregard for the law which requires equal media coverage for all candidates. It was an election campaign that many say was the least democratic since Soviet times.

According to observers, of the seven parties that ran, as many as three were puppet parties, created for the sole purpose of splitting the vote to strengthen Putin's control. But the overwhelming victory for Putin is clearly the will of the people, at least for now.

VLADIMIR POSNER, REPORTER: You could get a very authoritarian regime with democratic trimmings, which is to say you have a Parliament elected by the people, you can't deny that, and yet it's totally behind the president, and therefore what one man wants, one man gets, which is not good.

DOBBS: But others say the results will produce more stability. Dmitri Rogozin was reelected as part of the Putin landslide. He says the real danger to democracy comes from rich oligarchs.

DMITRI ROGOZIN, PARLIAMENTARY REP (through translator): When you're riding in a top of the line Mercedes escorted by 15 bodyguards, when your annual income is several million dollars and at the same time you're talking about the welfare of the common people, somehow that's not credible. Democracy in our country remains for the chosen ones, the oligarchs.

DOBBS: In the heady days of privatization under Yeltsin, oligarchs like Mikhail Khodorkovsky, bought, some say stole, a majority share of oil giant Yukos paying $309 million. A few months later the company was trading on Russia's stock market valued at $6 billion. When President Putin came on the scene in 2000, he made it clear that big business should mind its own business.

POSNER: He said, look, you have become wealthy beyond your wildest dreams, through certain things that perhaps weren't very legitimate, let alone fair. But the past is the past. Make your money, that's fine. But don't get involved in politics. Stay away.

DOBBS: Khodorkovsky it seems wasn't listening.

BILL EMMOTT, EDITOR, "THE ECONOMIST": Khodorkovsky stepped over the line by financing political parties. And therefore Putin felt that he had to push him back both because of a threat to him personally and as an example to the others.

DOBBS: On October 25, 2003, Putin put a very public stop to Khodorkovsky's political future. Since then, the richest man in Russia has been behind bars, charged with tax evasion and fraud.

UNIDENTIFIED MALE: And I would laugh to see in the cell next to (UNINTELLIGIBLE) a few guys who helped him. And these people would have been ministers, some judges and some policemen.

DOBBS: Across Russia's political spectrum, it seems few people believe business and politics should mix. The consensus view is that Khodorkovsky is likely guilty of at least something.

LILIA SHEVTSOVA, POLITICAL ANALYST: Too many skeletons in everyone's closet. But one can get out of the oligarch (UNINTELLIGIBLE) through rule of law and Putin (UNINTELLIGIBLE) of pressure on the part of his team has chosen a different way.

UNIDENTIFIED MALE: I think the rule of law is always fragile in Russia. It is not destroyed, but it could be destroyed. The investment climate's already difficult, but an end to the rule of law would just destroy it.

DOBBS: Putin may be just another politician calculating that the ends justify the means.

POSNER: President Putin is someone who believes himself to be a kind of Peter the Great, whose fate it is to change Russia. With the idea that actually the goal justifies just about anything you do.

DOBBS: As far as foreign investment goes, so far, so good. Some of the biggest multinationals like General Motors are moving forward. And oil companies seem to be the least put off by the Yukos affair. ExxonMobil is still signaling interest in acquiring a share of Yukos itself at a price tag in the billions.

(END VIDEOTAPE)

DOBBS: Coming up next here, Secretary of State Colin Powell. We talk about the year ahead in American foreign policy.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: In 2000, we forecasted Afghanistan would be the worse place to live in 2001. Turkmenistan was selected as being the worst place to live in 2004. In Turkmenistan you have a leader who is increasingly creating a massive cult of personality, of a sort that we perhaps last saw with Stalin himself.

MICHAEL NAKORYAKOV, NEWS EDITOR, "SALT LAKE TRIBUNE": (UNINTELLIGIBLE) his name actually is (UNINTELLIGIBLE). In 1999, he decided to become president for life. There are not going to be elections coming anytime soon over there.

UNIDENTIFIED MALE: The whole country being involved in a sort of collective orchestrated hero worship. He erects gold statues in his own image. Some of them turn around to face the sun.

UNIDENTIFIED MALE: It's amazing. It's huge. It's 100 feet tall.

DANIEL FRANKLIN, EDITOR, THE WORLD IN 2004: He has even named days of the week and months of the year after himself and his family.

NAKORYAKOV: He does those things just because he can.

FRANKLIN: It's an extremely repressive place with very limited opportunities for free economic activity and freedom of thought, very limited rights for public assembly. You have to register even weddings and even funerals.

UNIDENTIFIED MALE: It's so closed as a society, you can't get any news from Turkmenistan.

FRANKLIN: I think for the moment it escapes scrutiny partly by being friendly to the United States.

NAKORYAKOV: It's a nightmare of a country. Luckily I'm not there.

FRANKLIN: It's a truly eccentric regime, a dream for standup comedians, but also a tragedy for its own citizens and a potential worry for the world.

(END VIDEOTAPE) (COMMERCIAL BREAK)

DOBBS: As difficult as the past year has been in testing traditional international alliances, 2004 promises to be every bit as challenging and perhaps even more complex. The European Union was unable to reach a consensus on a constitution. Just as France and Germany oppose the United States, the United Kingdom, Poland, Spain and Italy in the war against Saddam Hussein, they once again found themselves in opposition, this time with European states over the future of their union.

While North Korea trying to drive a wedge between the United States and its Pacific allies, China emerged as a cooperative diplomatic partner and helped establish six-party talks that are critical to a peaceful resolution. Secretary of State Colin Powell wrote in "The Economist" Magazine that the Bush administration has been unfairly criticized as unilateralist. I talked with Secretary Powell at the State Department about the characterization that he sees as unfair.

(BEGIN VIDEOTAPE)

DOBBS: Mr. Secretary, you've written that there is a caricature particularly amongst our European allies of the Bush administration as shoot from the hip unilateralist. Why is there that impression, and what is there, in your judgment, to refute that in the administration's policies?

POWELL: Well, Lou, let me start with the second part of your question. Let me refute the caricature. When you look at what this nation has done under President Bush's over the last -- over the past -- under his leadership over the past three years, there's so much evidence that we want to be part of the international community, and we are an effective part of the international community.

We work with the international community to develop a program to go after the deadliest problem we have in the face of the earth, HIV/AIDS. We helped Kofi Annan set up a fund. The president's committed another $15 billion working with the international community in generating more money.

When you look at what we've done in foreign policy with respect to our approach to North Korea, we haven't gone off unilaterally and said we're going to invade North Korea or change the regime in North Korea. Different tools for different tools problems.

In this case, we are working with all of North Korea's neighbors to create a denuclearized peninsula. It's slow, grinding, diplomatic work, but that's what the president's committed to.

And if you look at where people think we have a unilateral take, Iraq, case number one, the exhibit "A", as everyone says, it is the international community that for 12 years said to Saddam Hussein, tell us what you're doing. Stop what you're doing. You are in violation of the will of the international community, not the will of the United States, but the will of the international community as expressed in resolution after resolution.

And when the president finally determined that something had to be done about this in 2002, he didn't say, let's go invade. He went to the United Nations. He went to New York, September 12 of 2002, and said to the United Nations General Assembly, we must act against this danger, against this threat. And then over the next seven weeks, I worked on a resolution with my Security Council colleagues that pulled Security Council together.

Now, unfortunately the consensus we created, the unanimous agreement we had in the Security Council didn't last through the spring because people were unwilling to impose the consequences on Iraq that Iraq had invited upon itself.

And so at that point, President Bush felt it was important for our safety and for the safety of the region and the world to act and he acted with likeminded nations. And we removed their terror lore regime and if you think anybody in this administration or anybody in the coalition is going to apologize for the fact that Saddam Hussein is no longer sitting on a throne in Iraq, we won't. The people of Iraq have a better future ahead of them now and it was the coalition that came together. Was it under a U.N. mandate?

I think it was. I think the resolution that was passed covered what we did. Some would disagree with that. But the point is, it was not just the United States acting alone. A lot of nations realized this was the danger that had to be dealt with.

DOBBS: Mr. Secretary, you've also called upon NATO to expand its role and to apply its resources and forces in Iraq in support of the coalition and the reconstruction of Iraq. Have we reached a point where we can no longer look to NATO or to the European Union monolithically because of what appears to be a counter veiling force represented by France and in tandem with Germany.

POWELL: Not at all. After 9/11, if I can go back that far, the very next day, NATO invoked mutual defense clause, Article 5 of the Washington Treaty. And everybody came together behind what we might have to do in response to 9/11. We went into Afghanistan and right now in Afghanistan NATO as an alliance is in charge of the security systems force and they're looking to expand their role in Afghanistan. The entire alliance is doing that.

With respect to Iraq, both I and Secretary Don Rumsfeld have been speaking to our colleagues in NATO in recent weeks and in my presentations to the North Atlantic Council about 10 days ago, everyone heard the pitch that maybe NATO should play a role in Iraq and nobody said no, we can't consider it.

Now, what role to be played in Iraq remains to be determined whether or not NATO might at some point in the future take over the zone of the Polish division or might do something else or might take over a broader role, mission is to be determined. We'll have to talk about that. But nobody in NATO is now saying we can't go do anything in Iraq at any point in the future. I think this shows that the alliance can come together. DOBBS: Is it likely in your judgment that it will on the issue of Iraq?

POWELL: I think it is premature to say what the alliance might do next year. I think they're waiting to see how the political process unfolds. But let me make this point, Lou. Of the 26 nations in NATO or are about to exceed to NATO membership, 18 of them have troops on the ground in Iraq working alongside Ambassador Bremer and General Sanchez and General Abizaid.

Now is that NATO in Iraq or not? When 18 of the 26 nations have contributed and many other nations not in NATO have contributed, it seems to me we have drawn on the experience and training and partnerships and friendships that we had developed over the years within the NATO alliance.

DOBBS: There's a large number of European countries represented, but not NATO itself. And, again, absent in Iraq, France and Germany. Is that a condition that you think will exist for some time?

POWELL: Both the French and the Germans are watching. They are anxious to see a political process in place that rapidly leads to return of sovereignty to the Iraqi people. They were very much opposed to our actions in Iraq. So I could not now expect them just in a matter of a couple months to say, well, we have completely changed our view. We want to get involved now. They want to see more on the political process.

What's important is that both France and Germany now believe, along with us, that we should be committed to reconstruction and the development of a democracy in Iraq. What role they might play in the future, that is considerably different than the role they played in recent months, remains to be seen.

But I think there is every prospect that NATO could play a role in Iraq as an alliance and not just as individual members of the alliance, but as an alliance. I believe it is quite possible for NATO to play a role either by taking over a zone or some other role as yet to be determined sometime next year.

But I can't tell you that for sure. The thing about alliances is that NATO and the European Union work by a consensus. Everybody has to agree. And until you get that agreement then you have essentially to find workarounds or you find like-minded nations who are willing to participate. It's not unusual. It happened at Kosovo. It's happened in other operations that have been conducted, as we defended our interest around the world.

(END VIDEOTAPE)

DOBBS: Coming up next, our conversation with Secretary of State Colin Powell continues.

And later here, a look at some exciting new discoveries about the possibility of life on Mars.

(COMMERCIAL BREAK)

DOBBS: Our talk with Secretary of State Powell continues. The secretary focuses on that security fence between Israel and Palestine.

(BEGIN VIDEOTAPE)

DOBBS: Like-minded consensus has been most elusive on the issue of Israel and Palestine, the Israeli/Palestine conflict, the Sharon government obviously very upset with your support of the Geneva initiative. The issue of the fence, the wall if you will, the security fence that the Sharon government insists on extending. Where do we go from here?

POWELL: The only support I have given to any plan is the plan that we have put forward with our quartet partners -- the European Union, the Russian Federation, and the United Nations -- and that plan is executed by the road map. That's where the plan is documented. And the plan flows from the vision that the president put before the world in his famous speech June 24 of last year where he called for the creation of a Palestine state to live side by side in peace with Israel. We haven't changed. That's what we support.

I see no reason, however, that I as the American secretary of state should not listen to other ideas of dedicated people who have experience in these matters. And so I met with the authors of the Geneva Accord, and I met with another group of leaders who have a different approach to the problem.

There's no reason I shouldn't meet with them. I know it might have upset some members of the Sharon government, but it's my responsibility to listen to ideas, and I welcome those ideas. I don't necessarily support them, but I welcome them. And if they add to the debate on this most to solve -- that will help solve this most difficult issue between the Israelis and Palestinians, I think I have an obligation to hear that.

DOBBS: We have called the negotiations about Israel and about the Palestinians, and as you say, the president setting forward -- setting forth a two-state solution, we called it a peace process for a half-century. It's been a half-century of conflict and war, brutality and violence. Is it time to quit calling it a peace process? Is it time to really think that we can see a solution as a result of U.S. leadership in particular?

POWELL: I think a solution is still possible. And I mean, it's been a long and tortured history to this whole process, but peace was achieved between Israel and Egypt. Peace was achieved between Israel and Jordan. And what we have to do now is find a way to achieve peace between Israel and the Palestinian population of the occupied territories in Gaza. Well, there is no alternative. People talk about unilateral action. We cannot support unilateral action on the part of one or the other party.

Sooner or later, they will have to find a way to negotiate agreement between the two of them so that two states can arise. One already exists, the Jewish state of Israel, we want another state to arise, the state of Palestine for the Palestinian people. And we can't lose that dream. And there's no reason we should give that dream up.

We know what ultimately it will take difficult compromises on both sides, good faith negotiations between the two, and leadership position of the United States is critical here. And we will play our leadership role as the president did when he gave his 24 June speech and when he stood up at Acuba (ph) with those leaders and blessed the road map.

Defense is a problem, as the president has said. Israel, quite rightly, wants to protect its population and it believes the fence does that. Our concern is when the fence goes deeply into Palestinian areas and starts to create conditions on the ground with the fence, it might make it more difficult to reach a solution.

DOBBS: Secretary of State Powell, we thank you.

POWELL: Thank you, Lou.

(END VIDEOTAPE)

DOBBS: Coming up next, you knew about fake Rolexes, Gucci's, perhaps even knockoff airplane parts, but China's biggest growth industry is counterfeit cars. Stay with us.

(COMMERCIAL BREAK)

DOBBS: 2004 will be the year of the copied car, at least in China. From Beijing to Shanghai, copy cars are crowding the roads and dealerships. Chinese fans of the Chevrolet Spark and now by the QQ. It is far cheaper. It looks and drives just like the real thing. Knockoff Toyotas and Mercedes are pouring off Chinese assembly lines faster than you can say rip-off.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: China is the home of counterfeits, copying DVD's and videos and computers and all sorts of software.

DOBBS (voice-over): The FBI estimates that American businesses lose 200 to $250 billion each year to counterfeiting.

GRAEME MAXTON, DIRECTOR, AUTOPOLIS: Why China? Well, this has been part of the economic model they've adopted. I mean they don't really see this as theft. They see it as adopting a technology of other companies and other countries so that they can then develop their own.

DOBBS: But now China has moved even higher up the manufacturing chain to where the real value is -- copying cars.

MAXTON: In 1996, I interviewed the head of Volkswagen in China at the time, and I asked him whether or not it was possible that we could see counterfeit cars in China. And he just laughed. He said, you know, this is impossible. Within four years there they were. DOBBS: The Chinese counterfeit car industry is already moving into high gear with copies of Volkswagens, Toyotas and General Motors cars filling the roads. Gigli (ph) is one of China's top private carmakers. Gigli (ph) has produced three different vehicles remarkably similar to Toyotas at half the price.

TIMOTHY TRAINER, INTL. ANTI-COUNTERFEIT COALITION: What makes it possible as far as counterfeiting cars is the fact that you now have foreign manufacturers in China. So clearly, the know-how exists today, much more so than it did seven or eight years ago.

DOBBS: Chery, another Chinese carmaker has made an even bolder grab.

MAXTON: The funniest one of all is this one called the QQ, which was launched in mid-2003 and is a copy of a Chevrolet Spark, which was being made by General Motors and it was actually launched ahead of General Motors' car. So here was the copy appearing in the market before the original.

DOBBS: How did this happen? The Chinese government began encouraging automobile technology transfer from western joint venture partners as early as 1994. But industry experts like Volkswagen's Martin Post (ph) miscalculated about how far the Chinese would go.

MAXTON: Well, he underestimated the determination of the Chinese to do this.

DOBBS: So far China's court system offers no protection.

MAXTON: The application of the rule of law in China is not the same as it is elsewhere. If you're going to go invest in China and you're going to expect the rule of law to protect you, protect your technology, then you're dreaming quite frankly.

TRAINER: It's still a developing judicial system. You're taking a lot of risk, so it is a bit of a gamble.

DOBBS: But there are other reasons beyond China's judicial system.

MAXTON: I mean, the world auto market is flat. And China is the most attractive fastest growing vehicle market in the world. And the big multinational companies are just desperate to get a slice of this cake. They see the prize as being greater than the cost.

DOBBS: The foreign carmakers seem to fear that if they complain too loudly, they may well find themselves locked out of the world's fastest growing car market.

MAXTON: Everybody sees China as the answer to their problems for growth. I don't think it is. I think China is like the Wild West. I think China will take your technology. I think most of the foreign companies are going to lose out.

MAXTON: But China, 3,000 years of culture, never been colonized, never been economically colonized for sure, doesn't see why it should be beholden to America or Europe for the technology in such a basic industry.

(END VIDEOTAPE)

DOBBS: Coming up next, is there life on Mars? Was there ever? The red planet has fascinated us for years and years. 2004 brings a closer look at Mars from the most advanced space rovers in history. We'll show you what to expect next.

(COMMERCIAL BREAK)

DOBBS: Is there life on Mars? Has there ever been? Could there be? Those are the questions researchers worldwide are trying to answer. In August of 2003, the red planet passed as close to the planet earth as it's been in the (AUDIO GAP) two are already orbiting Mars. Three of these sophisticated robots will actually try to land on the surface and send back dramatic new information about the red planet.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): The red planet has long captivated the human imagination.

JAMES GARVIN, CHIEF SCIENTIST MARS EXPLORATION, NASA: I probably became a real Martian when I first walked across the desert, myself as a child, and was mesmerized by this hostile alien environment. And the minute the first pictures from the surface of Mars came back, it brought it all back. And that's what I knew I had to do.

DOBBS: That was back in 1965 when earth's first unmanned mission to Mars snapped 22 grainy photos of the red planet. Today James Garvin, now one of NASA's leading Mars exploration scientists, has hundreds of thousands of high-resolution images to study, enabling him and other researchers to actually map Mars, literally understanding the lay of the land. Nonetheless, much on Mars remains a mystery.

OLIVER MORTON, AUTHOR, "MAPPING MARS": It's a strange mixture of the very alien and incredibly cold, arid poisonous soil, and at the same time, more hospitable than anywhere else. It's the only other planet on which you can realistically imagine people standing, walking, living their lives.

DOBBS: We now know that Mars has days and nights, climates and seasons, but as yet no evidence, no proof of life.

JOHN LOGSDON, DIR., GWU SPACE POLICY INST.: Mars, I think, is the Holy Grail in the sense that it has the possibility of providing the answer to the question, are we alone?

DOBBS: That Mars is frozen landscape home to ice caps and glaciers is old news. But recent evidence suggest that Mars may have been much wetter than the planet is today. In fact, Mars once might have harbored a planet-wide ocean. GARVIN: The big question that we don't know the answer to now is how long was Mars wet? Was it wet at times long enough to have been the wellspring of life? The fact that there are realistic prospects that Mars harbored life is what just mesmerizes me. We've got to go find out.

DOBBS: 2004 may be the year Garvin and the world discover more about Mars than ever before. As many as seven different spacecraft from three different countries could be on or orbiting around Mars.

MORTON: You think about Mars as a planet, which has the same surface area as all of the continents of the earth and four billion years of history to examine. Then it might sense that, you know, you can't answer all the questions with one machine.

DOBBS: At $400 million apiece, NASA hopes that their new Mars rovers Spirit and Opportunity, will bring back evidence of water on the planet's surface.

GARVIN: This is their approach on method to exploring Mars. Get to the rocks, they tell a story. Some of these are exactly what we're hoping to find with the rovers. For example, this is a limestone. It was found inside a big impact crater here on earth. Guess what? Boom inside this rock is the record of life.

DOBBS: The European Space Agency's Mars Express will probe the planet with the first radar capable of returning data below the Martian surface. But scientists are under no illusions. Mars is well known as the graveyard of space.

MORTON: Don't forget also that spacecraft don't go around with motors like on "Star Trek." Those things, since they left the earth, have basically been falling towards Mars, and unless their final maneuvers work absolutely right, they will go on falling until they hit Mars.

DOBBS: Of a dozen efforts to reach the surface of Mars since 1971, only three have succeeded. Experts say human travel in deep space exploration is still at least a decade away, and would certainly involve loss of life on the first few missions. But for now, scientists will stay millions of miles away and will be more than satisfied if they find even microscopic evidence of life on Mars.

(END VIDEOTAPE)

DOBBS: We'll be back in a few minutes with some concluding thoughts about the year ahead.

(COMMERCIAL BREAK)

DOBBS: As we take a look at what's to come in 2004, it's clear the year ahead will bring opportunity for change and choices. A year in which the power of the people's voice will be heard and counted in elections all around the world. It will also be a year that will test the strength of democracies, young and old. As Iraq begins to rebuild, 2004 may mark the birth of a new democracy, the first in the Arab world. It will almost certainly see a trial as dramatic as any since Nuremberg with a bloody, fallen dictator exposed. In Europe 10 nations will join the European Union. Many of them ex-communist countries and another ex-communist country, Russia, will face its own presidential election and questions about its one party politics and the future of its nascent democracy.

And of course 2004 brings a presidential election to the world's longest running democracy, the United States. 2004 will undoubtedly be a year of many challenges and surprises. But we also hope it's a year rich in rewards. And we wish you all the best and health, wealth and happiness.

Good night from New York. We wish you the very happiest of holidays.

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Aired December 25, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: Now on a special edition of LOU DOBBS TONIGHT in conjunction with "The Economist" Magazine from dictator on the run to U.S. prisoner number one, Saddam's capture. For some, cause for celebration. For others, a time for revenge.

UNIDENTIFIED MALE: The probability of further attacks on the United States, much more serious than September 11 are quite possible.

UNIDENTIFIED FEMALE: At the end of the day, I think nature is a far, more dangerous proposition than any bioterrorist.

ANNOUNCER: And tonight another battle against one of the world's oldest and most powerful killers -- the microbe.

Plus elections in Russia. Will the big loser in 2004 be the country's fragile democracy?

UNIDENTIFIED MALE: You could get a very authoritarian regime with democratic trimmings.

ANNOUNCER: And China's most ambitious counterfeit yet, the copy car is costing billions to the manufacturers of the real thing.

UNIDENTIFIED MALE: They didn't really see this as theft. They see it as adoptive technology of other companies and other countries.

UNIDENTIFIED MALE: And liftoff.

ANNOUNCER: Also tonight, looking for clues on the red planet. Was there, is there life on Mars?

And our exclusive interview with Colin Powell. The secretary of state speaks out about the new wall in Israel, the growing divide with America's old allies and taking out Saddam.

COLIN POWELL, SECRETARY OF STATE: Do you think anybody in this administration is going to apologize for the fact that Saddam Hussein is no longer sitting on a throne in Iraq? We won't.

(END VIDEOTAPE)

ANNOUNCER: A special edition of LOU DOBBS TONIGHT in collaboration with "The Economist", a look ahead to the world in 2004. Here now, Lou Dobbs. LOU DOBBS, HOST: Good evening. 2004 will be a world with one last dictator oppressing and torturing his people. Saddam Hussein began the year a wealthy, bloody despot with a vast apparatus of killers and thugs at his command. He ended the year, as we all know, alone, dirty and living in a hole. But what, if anything, does that mean for the larger struggle between radical Islam and the West? And what can we expect to see in that war in 2004? We talked with three of the most provocative thinkers about the world's most pressing issue, radical Islamists.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): He was always number one in the deck of most wanted. But the capture and trial of Saddam Hussein may not win many friends in the Arab world.

SAMUEL HUNTINGTON, PROF. HARVARD UNIVERSITY: I think it will, in many respects, increase the Arab sense of humiliation. They will also see this as just another evidence of Western dominance.

GILLES KEPEL, PROF. INST. DETUDES POLITIQUES: The man who was arrested clearly looked like he was sort of (UNINTELLIGIBLE) hiding away in a cave, in a rat hole. I guess that there is a new generation now of anti-American guerrilla or terrorism in Iraq which may relate to the image of Saddam as some sort of an icon.

DANIEL PIPES, DIR. MIDDLE EAST FORUM: Having caught Saddam Hussein gives the United States, on the one hand, a greater prestige. On the other hand, it is more disliked for its success. So it's a complex duality of reaction.

DOBBS: Still with the specter of Saddam removed from Iraqi politics and Middle Eastern politics, will democracy's chances improve? Opinions, of course, differ.

PIPES: Democracy can be imposed from the outside. It's happened. Look at Germany, Italy, Japan, Austria. It's happened. It doesn't necessarily mean it can happen in Iraq. So it can be, in theory.

HUNTINGTON: And I don't think it has been done in practice. And I don't think the examples are evidence to support his point. Germany and Japan both developed democracies on their own. The 1920's, of course, you had the Vimar Republic (ph) in Germany, which is one of the most democratic regimes that has ever existed. In fact, it was probably too democratic.

DOBBS: Harvard Samuel Huntington wrote about the coming clash of civilizations between the West and Islam six years before September 11.

HUNTINGTON: One of the great problems we have had in Iraq is this assumption that somehow the Iraqi people and Iraqi society are like ours, but they're not. They're extremely different. The Iraqi society is based on family and clan and tribe. Half the marriages in Iraq are between cousins. You marry people in your own family because it's family that counts.

DOBBS: Around the world 2003 was a mixed year in the war against radical Islamists.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today in Tripoli, the leader of Libya, Colonel Moammar al Gadhafi, publicly confirmed his commitment to disclose and dismantle all weapons of mass destruction programs in his country.

DOBBS: In a further validation of the Bush administration's Middle East policy, Libya's Moammar Gadhafi announced he had programs to develop long-range missiles and weapons of mass destruction and agreed to dismantle both.

(APPLAUSE)

DOBBS: In Afghanistan, the Grand Counsel paved the way for national elections while secret U.S. raids in the East aim to drive out Taliban forces that are regrouping. And in nuclear-armed Pakistan, the third unsuccessful attempt on President Musharraf's life. Against this backdrop, though, Gilles Kepel says the radicals are slowly losing ground.

KEPEL: Radical Islamism is in decline. None of the pro-Western regimes in the Muslim world has been toppled for the time being. On the contrary, the Taliban regime in Afghanistan is nonexistent anymore. The Iranian regime is having a number of difficulties. Sudan has now gotten nearer and nearer to the U.S.

HUNTINGTON: I don't see evidence of any significant decline now. Reports are that al Qaeda and other Muslim groups have gathered more and more recruits.

DOBBS: So the war will go on in 2004. But where is it likely to end?

PIPES: I'm confident that the West or the civilized world, Muslim and non-Muslim, will defeat (UNINTELLIGIBLE) Islam. I'm not confident that it will be done as quickly and as expeditiously with a minimal loss of life.

HUNTINGTON: I think the probability of further attacks on the United States and its allies, possibly much more serious attacks than those that occurred on September 11 are quite possible.

(END VIDEOTAPE)

DOBBS: Coming up next, the battle against infectious diseases. Public health officials continue to fight outbreaks of diseases we once thought were eradicated.

And a president faces a re-election campaign and an economy faces a challenge to create more jobs. The economy is Russia. The president, Vladimir Putin.

And later, a one-on-one conversation with Secretary of State Colin Powell. We'll be talking about the war against Saddam Hussein, American foreign policy, and the Israeli Palestinian conflict. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Infectious diseases kill millions of people each year. In fact, those diseases account for more than a quarter of the deaths worldwide. And it is not only new diseases, public health experts are fighting outbreaks of tuberculosis, malaria and other diseases that we once thought had been eradicated. It is all part of why 2004 will see a continuing battle against the microbe.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): In an isolated facility at Columbia University, under very tight security, and off limits to all but four scientists, are some of the deadliest killers known to man. West Nile, (UNINTELLIGIBLE) virus, SARS and many others you may never have heard of. Last spring, as the death toll from SARS was climbing...

UNIDENTIFIED MALE: This is SARS infection of particular cells.

DOBBS: ... a group of scientists here developed a test for the new virus. Armed with 10,000 SARS test kits lab director Dr. Ian Lipkin flew to China.

DR. IAN LIPKIN, SCHOOL OF PUBLIC HEALTH, COLUMBIA UNIVERSITY: One of the things that struck me while I was there was that there was a lot of overreaction, I think, to the potential risk. I took off my mask, and I said this is really unnecessary in this sort of a context, and it was a very moving moment.

SHEREEN EL FEKI, HEALTHCARE CORRESPONDENT, "THE ECONOMIST": Most experts believed that SARS is really in abeyance. It hasn't been eradicated. We don't have any specific drugs to hit out against the virus which causes SARS. We don't have a vaccine.

DOBBS: As the search for answers to these high-profile threats to public health continues, there is also concern that more routine infections won't receive enough attention.

LIPKIN: There are other things which are more worrisome, say, for example, influenza virus, which we think could, in fact, cause a great deal more havoc than SARS has done.

DOBBS: Last year the flu cost the United States' economy more than $70 billion.

EL FEKI: Since 1973, there's been one new infectious disease identified every year. So the numbers of diseases that we're confronting have increased.

DOBBS: Around the world, tuberculosis kills two million people a year, malaria, more than a million. And then there is AIDS.

EL FEKI: It afflicts 40 million people around the world. And that's our biggest challenge at the moment.

DOBBS: 2003 is the worst year on record for AIDS. The disease has claimed three million worldwide.

DR. DAVID L. HEYMANN, WORLD HEALTH ORG.: It's very important that we understand that we're living in a world where there are no borders to infectious diseases.

DOBBS: Dr. David Heymann was part of the international team that is credited with the eradication of smallpox in the 1970's.

HEYMANN: If there's a resistance strain of tuberculosis somewhere in Africa, it can hop on an airplane with a passenger and go over to the U.S. or go over to Europe.

DOBBS: Urbanization, international travel and trade have extended the reach of infectious diseases. At the same time, technology, another product of globalization may be what helps stop the spread.

STEPHEN MORSE, PH.D., COLUMBIA UNIVERSITY, SCHOOL OF PUBLIC HEALTH: HIV/AIDS first came into the world sort of by stealth, hardly noticed.

DOBBS: To spread news of infection faster than infection itself, Stephen Morse helped create ProMED-mail 10 years ago.

UNIDENTIFIED MALE: There seems to be an ongoing outbreak right now of Ebola in the Congo.

DOBBS: It's the first international network to report and monitor disease via the Internet. It seems the harder we battle against the microbes, the stronger they come back. One reason drug companies may not be producing the needed drugs.

EL FEKI: Resistance means that the drugs are less effective. If the drugs are less effective, doctors are less likely to prescribe them. If doctors are less likely to prescribe them, that means they have a shorter shelf life. They're less profitable.

DOBBS: Now with the threat of bio terrorism, protection against disease is even more critical. Terrorists can bring back diseases like smallpox and they can even create their own.

UNIDENTIFIED MALE: The good news is that investing in defense systems protects against both deliberately caused and actually occurring infectious diseases.

EL FEKI: At the end of the day I think nature is a far more, a more dangerous proposition than any bio terrorist. You have to remember that the bacteria were here three billion years ago. Humanity arrived a hundred thousand years ago. And there's no prize in guessing which is actually going to inherit the earth.

(END VIDEOTAPE) DOBBS: Recently a medical researcher in Taiwan tested positive for SARS likely contracted through his laboratory work, though it's only one of two known cases since the outbreak was contained. It raises fears that the disease is still a threat.

2004 will be an election year, not only here in the United States, but also in Russia. Vladimir Putin will be on the ticket again and if his party's recent victory is any indication he will win reelection by a landslide.

December's elections were the first time since the Soviet days that one party won an overwhelming majority in Russia. But Putin's tactics have everyone from his political opposition to international observers raising questions about the fairness of those elections. Add to that, Putin's arrest of the CEO of the country's biggest oil company, Yukos, a move that has already cast shadows on the future of liberal capitalism in Russia. 2004 may well be the defining year of Russia's young democracy.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): It looked like multiparty democracy in Russia. But for the first time since the fall of communism, one party united Russia, the one backed by President Putin, won an overwhelming majority of the vote.

Boris Fyodorov felt he was campaigning from the margins. He was a candidate for Russia's new Coarse Automotive Party (ph) running against the Kremlin. Fyodorov claims he came up against some heavy- handed government tactics.

BORIS FYODOROV, FMR. MINISTER OF FINANCE: What I see in the city of Moscow (UNINTELLIGIBLE) my poster is being taken away. All small businessmen basically have cajoled into putting the official candidates' posters in their windows. Policemen, instead of fighting corruption, going and arresting my educators in the district, that's bad. That's very worrying.

DOBBS: Opposition parties submitted campaign commercials, but they rarely appeared on government-controlled television in blatant disregard for the law which requires equal media coverage for all candidates. It was an election campaign that many say was the least democratic since Soviet times.

According to observers, of the seven parties that ran, as many as three were puppet parties, created for the sole purpose of splitting the vote to strengthen Putin's control. But the overwhelming victory for Putin is clearly the will of the people, at least for now.

VLADIMIR POSNER, REPORTER: You could get a very authoritarian regime with democratic trimmings, which is to say you have a Parliament elected by the people, you can't deny that, and yet it's totally behind the president, and therefore what one man wants, one man gets, which is not good.

DOBBS: But others say the results will produce more stability. Dmitri Rogozin was reelected as part of the Putin landslide. He says the real danger to democracy comes from rich oligarchs.

DMITRI ROGOZIN, PARLIAMENTARY REP (through translator): When you're riding in a top of the line Mercedes escorted by 15 bodyguards, when your annual income is several million dollars and at the same time you're talking about the welfare of the common people, somehow that's not credible. Democracy in our country remains for the chosen ones, the oligarchs.

DOBBS: In the heady days of privatization under Yeltsin, oligarchs like Mikhail Khodorkovsky, bought, some say stole, a majority share of oil giant Yukos paying $309 million. A few months later the company was trading on Russia's stock market valued at $6 billion. When President Putin came on the scene in 2000, he made it clear that big business should mind its own business.

POSNER: He said, look, you have become wealthy beyond your wildest dreams, through certain things that perhaps weren't very legitimate, let alone fair. But the past is the past. Make your money, that's fine. But don't get involved in politics. Stay away.

DOBBS: Khodorkovsky it seems wasn't listening.

BILL EMMOTT, EDITOR, "THE ECONOMIST": Khodorkovsky stepped over the line by financing political parties. And therefore Putin felt that he had to push him back both because of a threat to him personally and as an example to the others.

DOBBS: On October 25, 2003, Putin put a very public stop to Khodorkovsky's political future. Since then, the richest man in Russia has been behind bars, charged with tax evasion and fraud.

UNIDENTIFIED MALE: And I would laugh to see in the cell next to (UNINTELLIGIBLE) a few guys who helped him. And these people would have been ministers, some judges and some policemen.

DOBBS: Across Russia's political spectrum, it seems few people believe business and politics should mix. The consensus view is that Khodorkovsky is likely guilty of at least something.

LILIA SHEVTSOVA, POLITICAL ANALYST: Too many skeletons in everyone's closet. But one can get out of the oligarch (UNINTELLIGIBLE) through rule of law and Putin (UNINTELLIGIBLE) of pressure on the part of his team has chosen a different way.

UNIDENTIFIED MALE: I think the rule of law is always fragile in Russia. It is not destroyed, but it could be destroyed. The investment climate's already difficult, but an end to the rule of law would just destroy it.

DOBBS: Putin may be just another politician calculating that the ends justify the means.

POSNER: President Putin is someone who believes himself to be a kind of Peter the Great, whose fate it is to change Russia. With the idea that actually the goal justifies just about anything you do.

DOBBS: As far as foreign investment goes, so far, so good. Some of the biggest multinationals like General Motors are moving forward. And oil companies seem to be the least put off by the Yukos affair. ExxonMobil is still signaling interest in acquiring a share of Yukos itself at a price tag in the billions.

(END VIDEOTAPE)

DOBBS: Coming up next here, Secretary of State Colin Powell. We talk about the year ahead in American foreign policy.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: In 2000, we forecasted Afghanistan would be the worse place to live in 2001. Turkmenistan was selected as being the worst place to live in 2004. In Turkmenistan you have a leader who is increasingly creating a massive cult of personality, of a sort that we perhaps last saw with Stalin himself.

MICHAEL NAKORYAKOV, NEWS EDITOR, "SALT LAKE TRIBUNE": (UNINTELLIGIBLE) his name actually is (UNINTELLIGIBLE). In 1999, he decided to become president for life. There are not going to be elections coming anytime soon over there.

UNIDENTIFIED MALE: The whole country being involved in a sort of collective orchestrated hero worship. He erects gold statues in his own image. Some of them turn around to face the sun.

UNIDENTIFIED MALE: It's amazing. It's huge. It's 100 feet tall.

DANIEL FRANKLIN, EDITOR, THE WORLD IN 2004: He has even named days of the week and months of the year after himself and his family.

NAKORYAKOV: He does those things just because he can.

FRANKLIN: It's an extremely repressive place with very limited opportunities for free economic activity and freedom of thought, very limited rights for public assembly. You have to register even weddings and even funerals.

UNIDENTIFIED MALE: It's so closed as a society, you can't get any news from Turkmenistan.

FRANKLIN: I think for the moment it escapes scrutiny partly by being friendly to the United States.

NAKORYAKOV: It's a nightmare of a country. Luckily I'm not there.

FRANKLIN: It's a truly eccentric regime, a dream for standup comedians, but also a tragedy for its own citizens and a potential worry for the world.

(END VIDEOTAPE) (COMMERCIAL BREAK)

DOBBS: As difficult as the past year has been in testing traditional international alliances, 2004 promises to be every bit as challenging and perhaps even more complex. The European Union was unable to reach a consensus on a constitution. Just as France and Germany oppose the United States, the United Kingdom, Poland, Spain and Italy in the war against Saddam Hussein, they once again found themselves in opposition, this time with European states over the future of their union.

While North Korea trying to drive a wedge between the United States and its Pacific allies, China emerged as a cooperative diplomatic partner and helped establish six-party talks that are critical to a peaceful resolution. Secretary of State Colin Powell wrote in "The Economist" Magazine that the Bush administration has been unfairly criticized as unilateralist. I talked with Secretary Powell at the State Department about the characterization that he sees as unfair.

(BEGIN VIDEOTAPE)

DOBBS: Mr. Secretary, you've written that there is a caricature particularly amongst our European allies of the Bush administration as shoot from the hip unilateralist. Why is there that impression, and what is there, in your judgment, to refute that in the administration's policies?

POWELL: Well, Lou, let me start with the second part of your question. Let me refute the caricature. When you look at what this nation has done under President Bush's over the last -- over the past -- under his leadership over the past three years, there's so much evidence that we want to be part of the international community, and we are an effective part of the international community.

We work with the international community to develop a program to go after the deadliest problem we have in the face of the earth, HIV/AIDS. We helped Kofi Annan set up a fund. The president's committed another $15 billion working with the international community in generating more money.

When you look at what we've done in foreign policy with respect to our approach to North Korea, we haven't gone off unilaterally and said we're going to invade North Korea or change the regime in North Korea. Different tools for different tools problems.

In this case, we are working with all of North Korea's neighbors to create a denuclearized peninsula. It's slow, grinding, diplomatic work, but that's what the president's committed to.

And if you look at where people think we have a unilateral take, Iraq, case number one, the exhibit "A", as everyone says, it is the international community that for 12 years said to Saddam Hussein, tell us what you're doing. Stop what you're doing. You are in violation of the will of the international community, not the will of the United States, but the will of the international community as expressed in resolution after resolution.

And when the president finally determined that something had to be done about this in 2002, he didn't say, let's go invade. He went to the United Nations. He went to New York, September 12 of 2002, and said to the United Nations General Assembly, we must act against this danger, against this threat. And then over the next seven weeks, I worked on a resolution with my Security Council colleagues that pulled Security Council together.

Now, unfortunately the consensus we created, the unanimous agreement we had in the Security Council didn't last through the spring because people were unwilling to impose the consequences on Iraq that Iraq had invited upon itself.

And so at that point, President Bush felt it was important for our safety and for the safety of the region and the world to act and he acted with likeminded nations. And we removed their terror lore regime and if you think anybody in this administration or anybody in the coalition is going to apologize for the fact that Saddam Hussein is no longer sitting on a throne in Iraq, we won't. The people of Iraq have a better future ahead of them now and it was the coalition that came together. Was it under a U.N. mandate?

I think it was. I think the resolution that was passed covered what we did. Some would disagree with that. But the point is, it was not just the United States acting alone. A lot of nations realized this was the danger that had to be dealt with.

DOBBS: Mr. Secretary, you've also called upon NATO to expand its role and to apply its resources and forces in Iraq in support of the coalition and the reconstruction of Iraq. Have we reached a point where we can no longer look to NATO or to the European Union monolithically because of what appears to be a counter veiling force represented by France and in tandem with Germany.

POWELL: Not at all. After 9/11, if I can go back that far, the very next day, NATO invoked mutual defense clause, Article 5 of the Washington Treaty. And everybody came together behind what we might have to do in response to 9/11. We went into Afghanistan and right now in Afghanistan NATO as an alliance is in charge of the security systems force and they're looking to expand their role in Afghanistan. The entire alliance is doing that.

With respect to Iraq, both I and Secretary Don Rumsfeld have been speaking to our colleagues in NATO in recent weeks and in my presentations to the North Atlantic Council about 10 days ago, everyone heard the pitch that maybe NATO should play a role in Iraq and nobody said no, we can't consider it.

Now, what role to be played in Iraq remains to be determined whether or not NATO might at some point in the future take over the zone of the Polish division or might do something else or might take over a broader role, mission is to be determined. We'll have to talk about that. But nobody in NATO is now saying we can't go do anything in Iraq at any point in the future. I think this shows that the alliance can come together. DOBBS: Is it likely in your judgment that it will on the issue of Iraq?

POWELL: I think it is premature to say what the alliance might do next year. I think they're waiting to see how the political process unfolds. But let me make this point, Lou. Of the 26 nations in NATO or are about to exceed to NATO membership, 18 of them have troops on the ground in Iraq working alongside Ambassador Bremer and General Sanchez and General Abizaid.

Now is that NATO in Iraq or not? When 18 of the 26 nations have contributed and many other nations not in NATO have contributed, it seems to me we have drawn on the experience and training and partnerships and friendships that we had developed over the years within the NATO alliance.

DOBBS: There's a large number of European countries represented, but not NATO itself. And, again, absent in Iraq, France and Germany. Is that a condition that you think will exist for some time?

POWELL: Both the French and the Germans are watching. They are anxious to see a political process in place that rapidly leads to return of sovereignty to the Iraqi people. They were very much opposed to our actions in Iraq. So I could not now expect them just in a matter of a couple months to say, well, we have completely changed our view. We want to get involved now. They want to see more on the political process.

What's important is that both France and Germany now believe, along with us, that we should be committed to reconstruction and the development of a democracy in Iraq. What role they might play in the future, that is considerably different than the role they played in recent months, remains to be seen.

But I think there is every prospect that NATO could play a role in Iraq as an alliance and not just as individual members of the alliance, but as an alliance. I believe it is quite possible for NATO to play a role either by taking over a zone or some other role as yet to be determined sometime next year.

But I can't tell you that for sure. The thing about alliances is that NATO and the European Union work by a consensus. Everybody has to agree. And until you get that agreement then you have essentially to find workarounds or you find like-minded nations who are willing to participate. It's not unusual. It happened at Kosovo. It's happened in other operations that have been conducted, as we defended our interest around the world.

(END VIDEOTAPE)

DOBBS: Coming up next, our conversation with Secretary of State Colin Powell continues.

And later here, a look at some exciting new discoveries about the possibility of life on Mars.

(COMMERCIAL BREAK)

DOBBS: Our talk with Secretary of State Powell continues. The secretary focuses on that security fence between Israel and Palestine.

(BEGIN VIDEOTAPE)

DOBBS: Like-minded consensus has been most elusive on the issue of Israel and Palestine, the Israeli/Palestine conflict, the Sharon government obviously very upset with your support of the Geneva initiative. The issue of the fence, the wall if you will, the security fence that the Sharon government insists on extending. Where do we go from here?

POWELL: The only support I have given to any plan is the plan that we have put forward with our quartet partners -- the European Union, the Russian Federation, and the United Nations -- and that plan is executed by the road map. That's where the plan is documented. And the plan flows from the vision that the president put before the world in his famous speech June 24 of last year where he called for the creation of a Palestine state to live side by side in peace with Israel. We haven't changed. That's what we support.

I see no reason, however, that I as the American secretary of state should not listen to other ideas of dedicated people who have experience in these matters. And so I met with the authors of the Geneva Accord, and I met with another group of leaders who have a different approach to the problem.

There's no reason I shouldn't meet with them. I know it might have upset some members of the Sharon government, but it's my responsibility to listen to ideas, and I welcome those ideas. I don't necessarily support them, but I welcome them. And if they add to the debate on this most to solve -- that will help solve this most difficult issue between the Israelis and Palestinians, I think I have an obligation to hear that.

DOBBS: We have called the negotiations about Israel and about the Palestinians, and as you say, the president setting forward -- setting forth a two-state solution, we called it a peace process for a half-century. It's been a half-century of conflict and war, brutality and violence. Is it time to quit calling it a peace process? Is it time to really think that we can see a solution as a result of U.S. leadership in particular?

POWELL: I think a solution is still possible. And I mean, it's been a long and tortured history to this whole process, but peace was achieved between Israel and Egypt. Peace was achieved between Israel and Jordan. And what we have to do now is find a way to achieve peace between Israel and the Palestinian population of the occupied territories in Gaza. Well, there is no alternative. People talk about unilateral action. We cannot support unilateral action on the part of one or the other party.

Sooner or later, they will have to find a way to negotiate agreement between the two of them so that two states can arise. One already exists, the Jewish state of Israel, we want another state to arise, the state of Palestine for the Palestinian people. And we can't lose that dream. And there's no reason we should give that dream up.

We know what ultimately it will take difficult compromises on both sides, good faith negotiations between the two, and leadership position of the United States is critical here. And we will play our leadership role as the president did when he gave his 24 June speech and when he stood up at Acuba (ph) with those leaders and blessed the road map.

Defense is a problem, as the president has said. Israel, quite rightly, wants to protect its population and it believes the fence does that. Our concern is when the fence goes deeply into Palestinian areas and starts to create conditions on the ground with the fence, it might make it more difficult to reach a solution.

DOBBS: Secretary of State Powell, we thank you.

POWELL: Thank you, Lou.

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DOBBS: Coming up next, you knew about fake Rolexes, Gucci's, perhaps even knockoff airplane parts, but China's biggest growth industry is counterfeit cars. Stay with us.

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DOBBS: 2004 will be the year of the copied car, at least in China. From Beijing to Shanghai, copy cars are crowding the roads and dealerships. Chinese fans of the Chevrolet Spark and now by the QQ. It is far cheaper. It looks and drives just like the real thing. Knockoff Toyotas and Mercedes are pouring off Chinese assembly lines faster than you can say rip-off.

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UNIDENTIFIED MALE: China is the home of counterfeits, copying DVD's and videos and computers and all sorts of software.

DOBBS (voice-over): The FBI estimates that American businesses lose 200 to $250 billion each year to counterfeiting.

GRAEME MAXTON, DIRECTOR, AUTOPOLIS: Why China? Well, this has been part of the economic model they've adopted. I mean they don't really see this as theft. They see it as adopting a technology of other companies and other countries so that they can then develop their own.

DOBBS: But now China has moved even higher up the manufacturing chain to where the real value is -- copying cars.

MAXTON: In 1996, I interviewed the head of Volkswagen in China at the time, and I asked him whether or not it was possible that we could see counterfeit cars in China. And he just laughed. He said, you know, this is impossible. Within four years there they were. DOBBS: The Chinese counterfeit car industry is already moving into high gear with copies of Volkswagens, Toyotas and General Motors cars filling the roads. Gigli (ph) is one of China's top private carmakers. Gigli (ph) has produced three different vehicles remarkably similar to Toyotas at half the price.

TIMOTHY TRAINER, INTL. ANTI-COUNTERFEIT COALITION: What makes it possible as far as counterfeiting cars is the fact that you now have foreign manufacturers in China. So clearly, the know-how exists today, much more so than it did seven or eight years ago.

DOBBS: Chery, another Chinese carmaker has made an even bolder grab.

MAXTON: The funniest one of all is this one called the QQ, which was launched in mid-2003 and is a copy of a Chevrolet Spark, which was being made by General Motors and it was actually launched ahead of General Motors' car. So here was the copy appearing in the market before the original.

DOBBS: How did this happen? The Chinese government began encouraging automobile technology transfer from western joint venture partners as early as 1994. But industry experts like Volkswagen's Martin Post (ph) miscalculated about how far the Chinese would go.

MAXTON: Well, he underestimated the determination of the Chinese to do this.

DOBBS: So far China's court system offers no protection.

MAXTON: The application of the rule of law in China is not the same as it is elsewhere. If you're going to go invest in China and you're going to expect the rule of law to protect you, protect your technology, then you're dreaming quite frankly.

TRAINER: It's still a developing judicial system. You're taking a lot of risk, so it is a bit of a gamble.

DOBBS: But there are other reasons beyond China's judicial system.

MAXTON: I mean, the world auto market is flat. And China is the most attractive fastest growing vehicle market in the world. And the big multinational companies are just desperate to get a slice of this cake. They see the prize as being greater than the cost.

DOBBS: The foreign carmakers seem to fear that if they complain too loudly, they may well find themselves locked out of the world's fastest growing car market.

MAXTON: Everybody sees China as the answer to their problems for growth. I don't think it is. I think China is like the Wild West. I think China will take your technology. I think most of the foreign companies are going to lose out.

MAXTON: But China, 3,000 years of culture, never been colonized, never been economically colonized for sure, doesn't see why it should be beholden to America or Europe for the technology in such a basic industry.

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DOBBS: Coming up next, is there life on Mars? Was there ever? The red planet has fascinated us for years and years. 2004 brings a closer look at Mars from the most advanced space rovers in history. We'll show you what to expect next.

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DOBBS: Is there life on Mars? Has there ever been? Could there be? Those are the questions researchers worldwide are trying to answer. In August of 2003, the red planet passed as close to the planet earth as it's been in the (AUDIO GAP) two are already orbiting Mars. Three of these sophisticated robots will actually try to land on the surface and send back dramatic new information about the red planet.

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DOBBS (voice-over): The red planet has long captivated the human imagination.

JAMES GARVIN, CHIEF SCIENTIST MARS EXPLORATION, NASA: I probably became a real Martian when I first walked across the desert, myself as a child, and was mesmerized by this hostile alien environment. And the minute the first pictures from the surface of Mars came back, it brought it all back. And that's what I knew I had to do.

DOBBS: That was back in 1965 when earth's first unmanned mission to Mars snapped 22 grainy photos of the red planet. Today James Garvin, now one of NASA's leading Mars exploration scientists, has hundreds of thousands of high-resolution images to study, enabling him and other researchers to actually map Mars, literally understanding the lay of the land. Nonetheless, much on Mars remains a mystery.

OLIVER MORTON, AUTHOR, "MAPPING MARS": It's a strange mixture of the very alien and incredibly cold, arid poisonous soil, and at the same time, more hospitable than anywhere else. It's the only other planet on which you can realistically imagine people standing, walking, living their lives.

DOBBS: We now know that Mars has days and nights, climates and seasons, but as yet no evidence, no proof of life.

JOHN LOGSDON, DIR., GWU SPACE POLICY INST.: Mars, I think, is the Holy Grail in the sense that it has the possibility of providing the answer to the question, are we alone?

DOBBS: That Mars is frozen landscape home to ice caps and glaciers is old news. But recent evidence suggest that Mars may have been much wetter than the planet is today. In fact, Mars once might have harbored a planet-wide ocean. GARVIN: The big question that we don't know the answer to now is how long was Mars wet? Was it wet at times long enough to have been the wellspring of life? The fact that there are realistic prospects that Mars harbored life is what just mesmerizes me. We've got to go find out.

DOBBS: 2004 may be the year Garvin and the world discover more about Mars than ever before. As many as seven different spacecraft from three different countries could be on or orbiting around Mars.

MORTON: You think about Mars as a planet, which has the same surface area as all of the continents of the earth and four billion years of history to examine. Then it might sense that, you know, you can't answer all the questions with one machine.

DOBBS: At $400 million apiece, NASA hopes that their new Mars rovers Spirit and Opportunity, will bring back evidence of water on the planet's surface.

GARVIN: This is their approach on method to exploring Mars. Get to the rocks, they tell a story. Some of these are exactly what we're hoping to find with the rovers. For example, this is a limestone. It was found inside a big impact crater here on earth. Guess what? Boom inside this rock is the record of life.

DOBBS: The European Space Agency's Mars Express will probe the planet with the first radar capable of returning data below the Martian surface. But scientists are under no illusions. Mars is well known as the graveyard of space.

MORTON: Don't forget also that spacecraft don't go around with motors like on "Star Trek." Those things, since they left the earth, have basically been falling towards Mars, and unless their final maneuvers work absolutely right, they will go on falling until they hit Mars.

DOBBS: Of a dozen efforts to reach the surface of Mars since 1971, only three have succeeded. Experts say human travel in deep space exploration is still at least a decade away, and would certainly involve loss of life on the first few missions. But for now, scientists will stay millions of miles away and will be more than satisfied if they find even microscopic evidence of life on Mars.

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DOBBS: We'll be back in a few minutes with some concluding thoughts about the year ahead.

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DOBBS: As we take a look at what's to come in 2004, it's clear the year ahead will bring opportunity for change and choices. A year in which the power of the people's voice will be heard and counted in elections all around the world. It will also be a year that will test the strength of democracies, young and old. As Iraq begins to rebuild, 2004 may mark the birth of a new democracy, the first in the Arab world. It will almost certainly see a trial as dramatic as any since Nuremberg with a bloody, fallen dictator exposed. In Europe 10 nations will join the European Union. Many of them ex-communist countries and another ex-communist country, Russia, will face its own presidential election and questions about its one party politics and the future of its nascent democracy.

And of course 2004 brings a presidential election to the world's longest running democracy, the United States. 2004 will undoubtedly be a year of many challenges and surprises. But we also hope it's a year rich in rewards. And we wish you all the best and health, wealth and happiness.

Good night from New York. We wish you the very happiest of holidays.

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