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CNN STUDENT NEWS For July 12, 2002

Aired July 12, 2002 - 04:00   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.
ANNOUNCER: You're watching CNN STUDENT NEWS seen in schools around the world because learning never stops and neither does the news.

SHELLEY WALCOTT, CO-HOST: The global conference on AIDS tops our agenda for this Friday. The details are coming your way in "Lead Story."

MICHAEL MCMANUS, CO-HOST: Moving on to "Chronicle," we look at the Big Apple captured on film.

WALCOTT: We extend our stay in New York to cover a very special session of the United Nations.

MCMANUS: Later, Student Bureau takes us on a unique tour of Rio.

And welcome to your week ending CNN STUDENT NEWS. I'm Michael McManus.

WALCOTT: And I'm Shelley Walcott.

The 14th Annual International AIDS Conference shed light on an alarming health problem around the world.

MCMANUS: That's right. Twenty years into the epidemic and the disease is showing no signs of leveling off. Across the globe more than 40 million people are infected with the AIDS virus, and the disease is spreading most rapidly in the former Soviet Union. AIDS is also taking its toll on the continent of Africa where seven countries now have life expectancies under 40 years of age.

In other parts of the world, lack of knowledge about HIV abounds. In China, nearly 75 percent of people don't know the disease is caused by a virus and aren't sure how to avoid infection. As of last year, the Asian nation had about 850,000 AIDS cases, up from 600,000 the year before.

AIDS cases are also on the rise in India, increasing 10 fold in a decade.

We bring you a report now on one Indian family struggling to live with the disease and its stigma.

(BEGIN VIDEOTAPE) SOHASINI HEATHER (ph), CNN CORRESPONDENT (voice-over): Two-and- a-half-year-old Elizabeth (ph) Kumar isn't HIV positive, but she lives with the virus. Her mother, Niyoung (ph), and her father, Naveen, are both HIV positive.

NAVEEN KUMAR, HIV/AIDS ACTIVIST: She says, papa, demara (ph), you know. Papa, are you sick?

HEATHER: Naveen Kumar, a prominent HIV/AIDS activist, knew Niyoung had HIV when he fell in love with her and contracted the virus from her. He says he was prepared to live his life with her. He wasn't prepared for how hard it would be for them to find a home to live together in. At one house he rented...

KUMAR: Then they (ph) told me, oh, I saw you cutting (ph) in the newspaper, you're HIV positive, get out. No only (ph) just take your truck and move a bit (ph).

HEATHER: Naveen has moved four homes with his family in just one year. But that hasn't stopped his work as head of the Delhi Network for Positive People. Here he counsels other HIV patients and helps them fight discrimination.

K.K. ABRAHAM, INDIAN NETWORK FOR PEOPLE LIVING WITH HIV/AIDS: I worked in the army. Because of HIV I lose my job.

HEATHER: Abraham was dismissed from the Indian Army nine years ago when he tested positive. He now heads a countrywide support group for people living with HIV/AIDS. On his way to Barcelona for the AIDS conference, he says the biggest problem is the high cost of anti-retro viral drugs for them.

Naveen Kumar says he often has to take loans just to pay for the drugs for him and his wife. He hopes the drugs will help him be around when a cure for HIV is found, around for Elizabeth.

KUMAR: We have -- we have a daughter. We play with her and that also gives us, you know, a kind of strength to go on further in life.

HEATHER: And around to help out thousands of others like him who have to cope with the illness and also the stigma that the HIV virus brings with it here.

Sohasini Heather, CNN, New Delhi.

(END VIDEOTAPE)

MCMANUS: This week, however, there is new hope for the treatment of those living with AIDS. T-20, if approved by the FDA, would be added to the cocktail of drugs already taken by HIV patients.

Also on the research front, a new vaccine trial is set to run in Thailand. Overseen by the U.S. government, this trial is the largest yet with 16,000 volunteers.

Over the years, the cost of AIDS drugs has decreased but not enough for many countries in dire need.

Paula Hancocks has this report.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): The chance to save lives, an opportunity few would want to miss. But a vaccine or (ph) treatment for the AIDS disease could prove too high a price for drugs companies to pay, companies whose first responsibility is to their shareholders.

The approximate cost of developing a drug from pre-clinical to launching onto the market is about $800 million, a difficult amount to recoup when you consider many countries with a high AIDS count also have a high poverty count, putting pressure on companies to lower prices.

ANDREW PENDRILL, ABN AMRO: If you spend an awful lot of money on research and development of a product, and then you get sort of I guess beaten up by foreign nations into giving a product away for free, clearly you're not going to get the return so the shareholder would view (ph) as necessary.

HANCOCKS: Pressure has already substantially broken down the price of AIDS drugs. Medicine that once cost $13,000 per person per year is now closer to $350.

DAVID REDDY, ROCHE: Clearly we have to recoup those costs. And yes, ultimately our shareholders are interested in seeing a profit. However, the other side of it is also that we're doing, I believe, the right thing in developing drugs against a resistant virus where there's a need today.

HANCOCKS: Even drugs at a lower cost can be too expensive for poorer nations. Without the will of richer governments to help shoulder the cost, drugs companies could find developing potential new AIDS drugs simply unaffordable.

ANDREW RIDLEY, TERENCE HIGGINS TRUST: It really depends on the actions of politicians. If we see a clear commitment to global leadership and investment on a huge scale, then we're optimistic that this epidemic can be brought under control.

HANCOCKS: The World Health Organization has estimated that $10 billion is needed annually to fight AIDS. The current amount spent is just $3 billion.

Paula Hancocks, CNN, London.

(END VIDEOTAPE)

MCMANUS: Our "Lead Story" continues online, log on to CNNSTUDENTNEWS.com for a wealth of resources. Get the latest facts and figures as well as informative interactives.

WALCOTT: If you've been seeing red arrows on TV and in the newspapers, they're probably pointing down, the direction most stocks have been headed. With such a downturn in the economy, the market has been described as a bear market. This is when stocks trend downward over a long period. Conversely, when market prices head up over several months, the term bull market is used.

Now according to MoneyCentral.com, these terms were selected based on the way the two animals attack. You see a bull thrusts forward and pushes his horns upward. A bear, on the other hand, swats downward with his paws. The bear has a wide reach when the U.S. markets tumble. So goes the rest of the world.

To put this worldwide recession into perspective, Jim Bolden looks back, way back, into financial history.

(BEGIN VIDEOTAPE)

JIM BOLDEN, CNN CORRESPONDENT (voice-over): The two-year bear takes another bite and now investors appear really worried. Wednesday's big falls were followed by more Thursday morning. The across-the-board wipeout reminding investors with long memories of days when inflation was high and the world suffered an oil crisis.

DAVID THWAITES, BNP PARIBAS: I think a lot of people will now be looking back to what happened in the 1970s when we had a market going down to this degree. I think this time around, though, what we do see is the market has fallen a lot further, a lot more sharply. It's fallen a lot further in a much shorter space of time, and I think that is what is unnerving an awful lot of people.

BOLDEN: Wednesday's slide took some big stock indices to pre- Internet fever days. The FTSE 100 in London, nearing five-year lows again. The broader S&P 500, its worse close since November 1997. The Nasdaq, down 25 percent this year. It's lost three-quarters of its value since its bubble peak. That's the biggest fall for a major index since the 1930's Depression.

Not a time to buy yet, say most analysts. But there does seem to be some brave souls out there. The proof is trading volumes in London are higher.

ROSS GREEWOOD, SHARES MAGAZINE: And this indicates two things, No. 1, a lot of people selling. But the one point you've seen characteristically for the last three months of the market was no volume whatsoever through the markets. Once you start to see a little bit more volume coming in it (ph), you actually do identify there are some buyers seeking bargains as well as, obviously, those sellers trying to get out.

BOLDEN: Equities are now looking cheap versus bonds, say some analysts, but fear still rules the day.

(on camera): All this gloom comes despite low interest rates, low inflation and generally good economic activity. It's rare for markets to perform so poorly in these conditions and that worries analysts for two reasons, there's no historic precedent to try to predict when the markets may bottom and investors may take their losses in the stock market and try to cut spending here in the supermarket.

Jim Bolden, CNN, London.

(END VIDEOTAPE)

WALCOTT: Now that we know what's going on in the markets, let's take a look at who's doing the buying and the selling in the bear of an economy.

Here's Peter Viles.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): The crisis of confidence in the stock market and corporate America has rapidly become a major political issue and it is introducing Washington to a potentially powerful class of voters, American investors, 49 million household strong.

PETER HART, DEMOCRATIC POLLSTER: It's no longer the upward income, up scale people. These are average, hard working people who are now invested in the market, and it's their life savings and it's their future and they're scared. They're nervous. They're uncertain because they don't think the rules of the game are fair anymore.

VILES: The most recent widespread survey of investors is three years old. It found that 78.7 million Americans owned stocks, either directly or through mutual funds. That's 48 percent of all households, a dramatic increase from just 19 percent in 1983.

JIM SPELLMAN, SECURITIES INDUSTRY ASSN: The average investor is middle age, in their mid 40s, baby boomer, earning about $65,000 a year. They gave about $70,000, $80,000 in the market and that represents about two-thirds of their total financial assets excluding their house.

VILES: For all the concerns over investors who have never lived through a bear market, the typical American investor is a seasoned investor. Fifty-four percent of all equity holders bought their first stock or mutual fund before 1990. Twenty-eight percent in the first half of the '90s.

Only 18 percent after 1995. An important point, though, roughly half of the people we're talking about do not own stocks directly. Eighty-five percent of those exposed to the stock market own mutual funds. Only 54 percent own stocks directly. Sixty-six percent of the total investing class own stocks or mutual funds through an employer- sponsored retirement plan such as a 401(k).

(on camera): Another important point about where the power is inside the investing class. You think about an army of investors rising up, but individual investors don't have as much power as the institutions. Individuals own 38 percent of the market, but those big institutions, the mutual funds, the pension funds, they own 42 percent of the stock market.

Peter Viles, CNN Financial News, New York.

(END VIDEOTAPE)

MCMANUS: In the meantime, it's the city often referred to as the "center of the world." To many of its residents, it is the "center of the universe." Now for years, New York City has been the backdrop of choice for artists of every genre, especially photographers.

Phil Hirschkorn has this report.

(BEGIN VIDEOTAPE)

PHIL HIRSCHKORN, CNN CORRESPONDENT (voice-over): From Fifth Avenue to the canyons of Wall Street, from its urban playgrounds to its old baseball parks, the energy of New York is captured on film, not just celebrities and skyscrapers, but also the candid shot, the regular person and the outlandish. This summer's exhibit at the Jewish Museum makes the case for New York as the capital of street photography.

KAREN LEVITOV, CURATOR: New York photography often is thought of as, you know, looking at the grand buildings and the glamorous scenes and the famous people. But what we've done in this exhibition is focusing on the faces of the New Yorkers that make New York what it is.

HIRSCHKORN: Eight million people call New York City home, many immigrants. A huge European influx at the turn of the 20th century, their first stop was usually Ellis Island.

LEVITOV: And it shows immigrants who have already passed the inspections that could have sent them back to their native countries.

HIRSCHKORN: Immigrants packed into tenements in Brooklyn in the Lower East Side of Manhattan, selling their goods outside.

(on camera): People think of New York now as being a very crowded city, but at the turn of the century, it was even more densely populated, wasn't it?

LEVITOV: Right, the streets were narrower and people had their pushcarts and walking and horses and carriages through the streets, so it was a different kind of traffic jam that occurred.

HIRSCHKORN: This exhibit is at the Jewish Museum. What's particularly Jewish about street photography or New York photography?

MAX KOZLOFF, CURATOR: The attention and care and solicit (ph) given to minorities is particularly characteristic of photographers of Jewish origin. This is a form of social activism and also of melancholy reflection, very characteristic of a Jewish mind.

HIRSCHKORN (voice-over): The out of work and tunnel workers, builders that gave the city its look.

KOZLOFF: It's about joy. It's about the joy of work. HIRSCHKORN (on camera): Is this about the joy of shaving?

(LAUGHTER)

HIRSCHKORN (voice-over): The joy of summer comes across in this 89 degree moment at Coney Island Beach 1940.

KOZLOFF: Nowhere else in the world would you have seen a scene quite like this. This is the ultra-New York spectacle.

HIRSCHKORN: So is Times Square, the day World War II was won or the crossroads that it is today. Photographs across a century reveal the promise of a city seen in the view from aboard the Staten Island ferry.

KOZLOFF: It seems to summarize the feeling an outsider might have about New York as a -- as a city to look (ph) power, as that kind of a crucial (UNINTELLIGIBLE) democracy.

HIRSCHKORN: A democracy tested like never before on September 11, 2001.

Phil Hirschkorn, CNN, New York.

(END VIDEOTAPE)

ANNOUNCER: Exploring our world, here now is CNN STUDENT NEWS "Perspectives."

WALCOTT: More from New York now as we take a look back at a recent U.N. Special Session. Representatives from all over the world gathered for an historic week of discussions about education, health and other issues affecting young people. And who better to take an active role in those talks than young people themselves.

Our Michael McManus was there.

(BEGIN VIDEOTAPE)

MCMANUS: U.N. Secretary-General Kofi Annan kicked off the historic children's session with several goals in mind.

KOFI ANNAN, SECRETARY-GENERAL: Wherever you may live, you have the right to grow up free of poverty and hunger. You have the right to quality education, whether you are a girl or a boy.

MCMANUS: Did the special session accomplish what its members set out to do? We asked delegates in attendance who could best answer that question, the kids themselves.

CAROLINE BAREBWOHA, UGANDA: This is the first time that adults have gotten to listen to our views as children.

ABIGAIL FABRIGAS, PHILIPPINES: The children's forum was really a great success. That was really a great showcase of optimism. MCMANUS: Abigail Fabrigas is a 16-year-old delegate from the Philippines who discussed an epidemic problem within her country: poverty.

FABRIGAS: More than half of the population of the Philippines, or at least half the population, lives under the poverty line. With that poverty, we have drug addiction, we have education overpopulation, lack of health services, et cetera.

GERALDINE KAMBIDE, KENYA: Poverty is the key to everything. I think poverty is the key of everything, education, lack of food, everything.

BAREBWOHA: It does not matter whether you are boy or you are girl, you should all go to school and have quality education. And there should be no gender imbalance in schools.

MCMANUS: The head of the U.S. delegation, Health and Human Services secretary, Tommy Thompson, spoke for the Bush administration against abortion and in favor of abstinence.

TOMMY THOMPSON, HEALTH AND HUMAN SERVICES: Our efforts include strengthening close parent-child relationships, encouraging the delay of sexual activity and supporting abstinence education programs.

MCMANUS: Finding a consensus proved difficult.

STEPHEN SCHWARTZ, UNITED STATES: Abortion is allowed in the U.S. so I don't think that's right, that Bush is trying to limit that right in other nations.

FABRIGAS: It is a right of every child to be given a chance to live, to be born, to be happy, to be healthy.

MCMANUS: And still others were upset with the plight of the youngest victims of war.

SEVINJ MASIYEVA, AZERBAIJAN: Children which live in war situation, how they live.

SCHWARTZ: In Africa there are lots of use of child soldiers. And these children, the psychological effects as well as the physical effects, are devastating.

FABRIGAS: We, the children, have power. But we couldn't deny the fact that we are still vulnerable.

BAREBWOHA: It's not only about speeches, talking and talking. We have to implement what has been said.

MCMANUS (on camera): Young people are long known for being a bellwether for change and that was no different here. Whether they voiced a concern, an opinion or just a thought, the bottom line, said one, the world was listening.

Michael McManus, CNN, the United Nations. (END VIDEOTAPE)

WALCOTT: You know these days it seems like more wildfires are burning on Wall Street than out west. Investors are losing faith in corporations. And with financial scandals over the past few months, stocks have taken a big hit. So much so that U.S. President Bush addressed the problem this week on a couple of occasions.

Joel Hochmuth looks over the past week of speeches and sell offs.

(BEGIN VIDEOTAPE)

JOEL HOCHMUTH, CNN CORRESPONDENT (voice-over): With Bears roaming wild on Wall Street, all eyes were on President Bush for his much anticipated speech on corporate responsibility Tuesday. Hopes were high his words would soothe investors rattled by the accounting scandals at companies like Enron, WorldCom and others.

He came to Wall Street to layout his proposals to better enforce ethical business practices.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The government cannot remove risk from investment, I know that, or chance from the market. But government can do more to promote transparency and ensure that risks are honest. And government can ensure that those who breach the trust of the American people are punished.

HOCHMUTH: The president announced he's creating a task force to help investigate major accounting fraud and other corporate crime. He wants to double the jail time for some financial crimes. And he wants to give the Securities and Exchange Commission another $100 million next year to hire more investigators to expose corporate corruption.

BUSH: And so again today I'm calling for a new ethic of personal responsibility in the business community, an ethic that will increase investor confidence, that will make employees proud of their companies and again regain the trust of the American people.

HOCHMUTH: Democrats on Capitol Hill were underwhelmed.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: But we need the president to lead on this issue. And giving a speech long on rhetoric and short on details, failing to support legislation in front of the Congress, that is supported by Democrats and Republicans, was a lack of leadership this morning.

HOCHMUTH: Democrats in the Senate are pushing their own proposals they claim have more teeth. Their bill is still being debated.

It's clear the spirit of bipartisanship shown in the fight against terrorism is long gone.

SEN. TOM DASCHLE (D), SOUTH DAKOTA: To us it's not enough to talk about accountability, you have to act to ensure it. The test for the president today is not whether he shares the outrage that the workers and shareholders in these companies feel. I have no doubt that he does. The question is whether he is willing to take action on that outrage and support the legislation which will actually help solve the problem.

SEN. PHIL GRAMM (R), TEXAS: I think it's clear that no matter what the president does or says, that the Democrats have decided to try to make this a partisan political issue.

HOCHMUTH: The president's words failed to appease Democrats, and they didn't stop the slide on Wall Street either. By Wednesday, the Dow Jones average had plunged 566 points over three sessions and closed below the 9,000 mark for the first time since October. While the market stabilized on Thursday, investors clearly are still nervous. It remains to be seen whether Mr. Bush's efforts to clean up corporate America and right the economy will work.

As Jeff Greenfield reports, he's certainly not the first president to face such challenges.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SR. ANALYST: President Bush's speech on Wall Street today is a stark reminder of just how much the financial -- and, therefore, the political -- climate has changed in the last couple of years: $6 trillion in wealth gone, once-celebrated CEOs on the griddle.

So, this political question: If it's no longer true that greed is good, as Gordon Gekko said in the movie "Wall Street," are the rich about to become political targets? Clearly, this has happened before.

(voice-over): It was a century ago when Teddy Roosevelt railed against malefactors of great wealth and put the government to work reining in captains of industry and finance like J.P. Morgan and John D. Rockefeller.

It was 70 years ago when FDR proclaimed that the money-changers have been driven from the temple, as the Great Depression put one- quarter of the country out of work. Harry Truman won an upset victory in 1948 in part by making the titans of Wall Street the target of his wrath. And it was President Kennedy who, in the middle of a fight with the steel industry, said: "My father told me all businessmen were SOBs, but I never believed him until now." He did not use the initials.

But during his presidency, Bill Clinton presided over an unbroken era of prosperity. As the rising tide lifted most of the boats, corporate leaders like Microsoft's Bill Gates and GE's Jack Welch were lionized. Even with the government's antitrust suit against Microsoft, it was very hard to argue that the software giant had somehow made the poor poorer.

But these days, newspapers routinely list major companies that face very tough questions about their ethics, even their legality. "The New York Times" tells us of whistle-blowers who warned of shady practices and were fired for their trouble. So does this portend a new political attack on the moneyed classes? Maybe not. Democrats might like to point to Vice President Cheney, who got rich as an oil company executive, or, for that matter, President Bush himself. But Senator and presidential hopeful John Edwards made millions as a personal-injury lawyer. Senator and presidential hopeful John Kerry married into massive wealth. And Democratic National Chair Terry McAuliffe made millions by investing in, then selling Global Crossing stock well before that company collapsed.

(on camera): Of course, just because you have money doesn't mean you can't attack money. Both Roosevelt and President Kennedy were born to great wealth. But when you remember how much money it takes to mount a political campaign these days and where that money is likely to come from, I'm not really sure either party is all that interested in a new round of class warfare.

Jeff Greenfield, CNN, on Wall Street.

(END VIDEOTAPE)

MCMANUS: At the beginning of the week, we took you to Brazil to meet a young AIDS activist. We return today to meet yet another youngster in one of that country's largest cities. When you think of Rio de Janeiro, what comes to mind? For years, this Brazilian city has been synonymous with vacation paradise, but there is another side to Rio that might surprise you.

Our Student Bureau has this report.

(BEGIN VIDEOTAPE)

LARRIZA HURLER (ph) CNN STUDENT BUREAU (voice-over): Every year, about one million tourists come to visit beautiful landscapes in Rio de Janeiro. Some of the attractions are Copa Cabana Beach, the Sugar Loaf Mountain and the famous Redeemer, but that's not all you can see in Rio. Visitors are finding out an unusual way to get closer to another side of this city.

Douglas Lemos is a 13-years-old student who (UNINTELLIGIBLE) his routine changes. He shows the foreigners the favela where he lives. Rocinha is South America's biggest slum. Douglas walks tourists through the narrow streets, introducing them to the way that poor people live.

Johnny Veselka came here from Texas for an accounting meeting and brought his wife and friends. Today they are going to enjoy a gyp (ph) tour and see one of the 500 slums around Rio de Janeiro.

JOHNNY VESELKA, TOURIST: I like to see the various culture different from the U.S., see how other people live, how they work and very interesting to see other people in other cultures.

HURLER: The favela's architecture catch their attention. Most of the 200,000 residents built their houses without safety considerations, plumbing and use of the official power grid. Even with all those problems, Rocinha became the most developed slum in the country. There are 200,500 shoppers (ph) in the area.

(on camera): Here in Rocinha, everything becomes (UNINTELLIGIBLE). But one place this tourist enjoyed visiting is the handicraft center.

(voice-over): There artists are people from the community and they are proud of showing their work. For those who have little, everything that can be recycled becomes a personal item (ph) product.

MIKE PRAGER, TOURIST: What they're making from recycled stuff that they're (UNINTELLIGIBLE) by the trash and making stuff like that. Matter of fact, we even bought a quilt from here made from different particles of cloth they just threw away.

LINDA VESELKA, TOURIST: Oh I think it's very pretty and unique. They use all their resources that they have to make neat things, and it's very different and very impressed.

HURLER: At the end of the tour, the tourists learned a little more about the poor Brazilian and Douglas learned more about his new American friends.

DOUGLAS LEMOS, BRAZILIAN STUDENT (through translator): We showed Rocinha to the tourists. We went to some tourist points and we took them to buy things. I really liked it.

HURLER: Larriza Hurler, CNN Student Bureau, Rio de Janeiro, Brazil.

(END VIDEOTAPE)

"Where in the World" synonymous with U.S. financial interests, named after a stockade or wall built in 1653 (ph) by Dutch colonists to protect the settled area south of it, stretches from Broadway to the East River in Lower Manhattan? Can you name this place? Wall Street, New York, New York, U.S.A.

MCMANUS: Have a good weekend.

WALCOTT: Bye-bye.

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