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(generated from captions) there'll be much racheting up

of the level of violence. I

think what will happen is

taxpayerisation as it possibly a greater sec

taxpayerisation as it were of

the military fortions --

sectarianisation of the

military forces. In terms of

the ability to control levels

of violence in areas that are

now ethnically or sectarianally purely cleansed becomes purely cleansed becomes much less. So I don't think there

will be a serious effect on the

overall level of violence. But

the instability will continue. Now despite decades

of opposition to Saddam you

describe the war as one of

America's greatest ever

strategic blunders. Did you

never believe that the risks

would be worth it to get rid of

Saddam, an obviously ruthless

dictator? Yes, I mean the

balance sheet if we look at balance sheet if we look at it,

on one side we got rid of a

terrible dictatorship and a

terrible tyranny and we have

introduced the forms of

democratic politic s in Iraq.

Against that, there is the

collapse of the state. There

is increasing sectarian

violence, increasing ethnic

number of people who have been violence and there is a large

displaced, made refugees and

killed as a result of this war.

So the balance sheet is not as

clear as some people would like

to make it out to be. Two

years ago I'd have said, yes,

on balance we could reform the

post-war situation and the

overthrow of the dictatorship

and the introduction of democratic forms was a good

enough outcome. Now I think we

are still somewhat maybe in the

positive balance. I think

number of people who primarily because a large

number of people who were disempowered in the days of

Saddam, in particular the

Shi'ia Arabs and the Kurds are

now empowered. But we still

have to construct a state and

we still have to construct an

order that is not only stable

but is fair and just and so far

we have failed to do that. I

think we've moved now beyond

whether the overthrow of Saddam

was a good or a bad thing.

What are we going to do with

this state now? What are we

going to do with this Iraq that

has gone through four years of terrible hardships? The

consequences have to be

addressed and managed. How many Iraqi civilians do you believe

were killed since the beginning

of the war? I mean, this is a

guesstimate. We have ranges.

The top range is around

650,000, which was mooted by British Medical Journal called 650,000, which was mooted by a

and 'Lancet'. The bottom range

is the Iraq body count which

puts it at around 100,000. I

think possibly the figure of 250,000 killed as a result of

violent actions caused by the

war or because of things,

events connected to the war and

the to the the to the post-war environment, I think it's

probably the right figure.

Maybe around 200,000 to

250,000, a huge number by any

count. A final question on the consequences and perhaps we'll

talk to you on another occasion

to go through your potential

solutions for this. My final

question is, given this

invasion and the war was part

of a global war on terrorism,

how effective has it been in

that regard? I think it's been very counterproductive, in the

sense that it was to some

extent a self-fulfilling

prophesy. Saddam had terrible

flaws and was a terrible tyrant. But one of the things

he did not do was challenge the

United States through

terrorism. The connection

between al-Qaeda and terrorism directed at the United States and the West generally could

not be established. The fact

that we have now one of the

worst terrorist problems in the

world is now in Iraq, it's not

in the United States or in

Australia or western Europe.

Daily we have people killed by

terrorist bombs and dozens are

principal target of terrorism. killed every day. So Iraq is a

There's no way I think that

terrorism has decreased in

Iraq. Certainly not. And I

don't think as a consequence of

that throughout the world. What has happened is, in fact,

a large number of so-called

jihadist groups have been

empowered as a result of the

continuing large-scale American

military presence in Iraq. And

in the process, the threat of

terrorism has increased. I

never believed for once that

you could tackle terrorism

through conventional military

forces. It should have been

done through heightened security and intelligence and

better coordination through the international anti-terrorist and counter-terrorist

agencies. Ali Allawi, I know

you have deep thoughts on the

way out of this mess. We

haven't got time to go into

that detail now. I'm hoping

while we have you here we could

maybe get you back on the

program to talk about those solutions. We thank you very

much for coming on

tonight. Thank you very much.

A day after cracking down on

Moscow an anti-government rally in

Moscow police have beaten and

detained Opposition protesters

in St Peter Burge. Security

forces almost outnumbered

demonstrators, as they arrested

120 people. The protesters

accused Vladimir Putin of

dismantling democracy. They're

demanding free elections. At

least 200 people were arrested

in Moscow in a similar

demonstration. Back home, and

an independent study has found

cheapest and that rainwater tanks are the

cheapest and most energy

efficient way of saving water.

The report found that giving

free tanks to homeowners would

be cheaper than building dams

or desalination plants. Sarah

Clarke reports. It's a simple

way to store water. And with

supplies dwindling in most

cities, Pam Jacobs says

installing a backyard tank is

an easy choice. Everybody is

being encouraged to save water

I thought I could use the tank

for watering my garden. A new

study reveals tanks are twice

as energy efficient as dams and five times greater than desalination plants. By

installing tanks in just 5% of homes in South East Queensland

and in Sydney, building big water infrastructure could be

delayed. If we rolled out

rainwater tanks we could defer the need for that for more than

ten years and each year we deferred we're saving

significant money. Some States

argue they're already offering

financial incentives. We

support the use of water tanks.

In fact my two were delivered

this morning. The Government's

plan already increases the

rebate from $800 to $1500 and

extends it to rural and

regional areas across the State. Currently fewer than one

in five homes has a tank.The

report also found that a

variety of measures are needed

if Australia's water crisis is

to be solved. That's a point

that unites the Federal

Government and the Opposition. I think rainwater

tanks are an important part of

a mix of things which are

options for us meeting our

water needs into the

future. Now all that's needed

is rain. A quick look at the

weather. Lateline Business coming up

in just a moment. If you'd

like to look back at tonight's

interview with Ali Allawi or

review stories or transcripts,

you can visit our website. But now here's Lateline Business

with Ali Moore. Thanks, Tony.

Tonight - selling summit, as

directors of uranium explorer Summit Resources recommend pal

din's latest takeover offer,

the pal din boss talks up the

prospect of a change in Labor

Party policy on nuclear power. So I think that the

Federal Opposition will accede

and come out with a more

appropriate policy and the

States may take a little

while. Long-term benefits - predictions Australia will

continue to benefit from

China's economic boom for many

years to come. And, coming of

age - biotech industries once

considered too risky are now

reaching maturity. Over the

last 20 years biotechnology has

been the best performing sector

on the ASX, and the reason is choosing stocks correctly is

vital. To the markets now, and

it was another record setting

day for Australian shares. The

All Ordinaries finished in new

territory with a big bank and

mining stocks leading the way.

The benchmark ASX200 rose

steadily to close 1% higher.

In Japan a weaker yen helped

and Nikkei put on 1.5%. The

Hang Seng reached a 7-week high

and after starting at a 6-year high

high the FTSE has made a solid

start to the week. We'll cross

to London later. Despite

Australia's reputation as a

world leader in medicine shares

in biotech companies are seen

as risky. That was underscored

by a recent profit slump at

Clinical Cell Culture the

company that developed spray on

skin for burns victims.

Analysts say the industry is

maturing and is no longer maturing and is no longer hype

and hope. Stem cell research

is a hot political issue in

Australia and abroad, making it

a risky commercial proposition.

But one Anglo-Australian

company believes it has the

formula for success. Stem cell

sciences cultivates neural

cells avoiding the controversy

of embryonic stem cells. We

provide technologies to the

pharmaceutical industry such as

stem cells for drug screening.

This is where the majority of

our revenues come from at the

moment. So in some respects

they're cautious about taking on the controversial technology

which is the human embryonic

stem cell. The company has

listed on the Australian market

to raise cash for its operations but its chief executive, Peter Mountford warns it will take some time

for the rewards of stem cell

production to match the risks. I think the biotech

industry is emerging from a

period where it was seen to be

very much speculative and a lot

of small companies running on

hype and hope, into more a

mature industry where actually

products and revenues are required to be a successful

company in the space. The stem

cell science IPO is very

important. It's going to give

us a benchmark to determine an

appetite that people have for biotechnology. Some investors

may have lost their appetite

for biotech because of the

recent troubles at Clinical

Cell Culture the company behind 2005 Australian of the Year Dr

Fiona Wood. Its CEO quit after

the company posted a $5 million

half-year loss and is planning

to slash its workforce and

research projects. Analyst

Darren Grubb says it's a highly speculative industry but value

can be found. Over the last 20

years biotechnology has been

the best performing sector on

the ASX. The reason is

choosing stocks correctly is

vital. You must choose late

stage product, good management

and make sure that the company

actually is well-run and is going to produce something needed in the

needed in the market. Darren

Grubb says there's a critical

value inflection point on the

release of phase two trial data

when biotech's prices typically

take off. It's the initial data

that a company generate s that

shows that its drug or device

or other compound has the ability to be able to treat a

particular type of disease.

Now that is the point where the

value inflection is the

highest. From an investment

standpoint, investors want to

look at companies which are

going to be getting to that

point and speculating on the

outcome of that five to six

months prior to that event occurring. For now at least

investors are buying the stem

cell science's story. Its

shares ended up 9% on their

first day of trade.

Tattersall's are set to control

half hoft country's lottery

sales after agreeing to buy the

Queensland Government's

monopoly lottery business. Tattersall's will spend $530

million toe purchase Golden

Casket lottery. The deal lifts

annual sales to over $2 billion

and delivers it a monopoly in

three States. It's

Tattersall's third takeover in

seven months. In September it

bought UniTab for $2 billion

but gaming stocks fell today

with the Victorian Government's

surprise decision to raise its

tax on poker machines. Shares

in Tattersall's and rival

Tabcorp both shed nearly 1%. A

leading economic forecaster is

predicting a new phase in the

expansion of China which will

underpin the Australian economy

for many years to come.

According to Access Economics,

Australia is in the midst of a

golden economic period with the

biggest cloud being the looming

federal election . Andrew

Robertson reports. Australia

has benefited enormously from

China's economic boom through

soaring commodity prices and Access Economics says continued

strong demand will underpin higher sales for years to

come. We're now selling more

volumes into China, more coal,

more iron ore, more of lots of

things. Extra tonnes of output as we are getting new

production to market in big volumes. A process helped by

billions of dollars of

investment to overcome the capacity constraints which had

been holding back the

Australian economy. We've done

the hard yards in terms of big

investment, particularly in

resources and that's going to

bear fruit over the next 12 to

18 to 24 months as a

substantial increase in our

exports and industrial inputs

to Asia. Based on that investment, Access Economics is predicting the Australian

economy will grow at 4.5% next

year, a view other economists

such as Craig James at CommSec believe is a little

optimistic. Given high levels

of immigration, that's

increased labour supply and it

means the Australian economy

can be running at levels like

3.5% growth rates without

concern about generating higher

inflation. Where access and

CommSec are agreed is that

there are dangers for the

Government in an overly

generous Budget aimed at buying

votes in this year's election. If it provides too

much in the way of tax cuts or

spending the Reserve Bank will hike interest rates to hike interest rates to curtail

the inflationary impact. In

2007 we will see a lot of extra

money promised. Good news for

some, bad news if you have a

big mortgage. There's a risk

it would show up in higher

interest rates. Last year's

three interest rate rises are

keeping a lid on the building

industry with BIS Shrapnel

predicting a 3% fall in housing

construction this year. One of

the hardest hit areas will be Perth which has been leading

the way in construction in

recent times. If you look at

the number of loans to

first-home buyers that was down

about 30% year on year terms in

the last 6 months.

Affordability has reached a

ceiling pressure for first-home

buyers in Perth. The other side

of the coin is that the home

building industry in Perth has been overheated and will be returning

returning to more normal levels

at both supply and price.

Markets in Europe are open for

business and the latest news we're joined by Henk Potts from

Barclay's Wealth. The FTSE is

up around 30 points, a good

start to the week? Last week we

finished with the FTSE at a

6-year high, same for the

European forces. In good

shapes. A couple of things you

can point to, the wave of

merger and acquisition activity continues to be supportive for

the London market. There's an

expectation that corporate

profitability as we move

through this earning psychosl

likely to hold up nicely. Both

investors are confident about

that. Seen a lot of activity in the drug sector, of course,

we had a good update from

America in the United States.

That's given -- Merk. Oil

continues to rise and we're

continuing to see strength in

the mining stocks as well.

Metal prices continue to rise.

A favourable start to the

week. Indeed it sounds like it.

Our dollar has been rising and

your pound is climbing. Is

this expectations of a British

rate rise? That's right. The

market has moved to an 80%

chance that the Bank of England

will raise at its May meeting.

Important data likely to

influence the markets during

the course of this week,

tomorrow we get tomorrow we get the Consumer

Price Index inflation numbers. We get the Bank of England

minutes out on Wednesday that

gives us a better clue as to

what they were thinking at the

last meeting. We're close to

that magical, mythical $2 in

terms of the pound against the

dollar. We believe we're

likely to hit that soonerer

rather than later. A big day

for air Atala? Of course the

Italian Government has really

given up trying to turn around

this loss-making aircraft operator and, therefore,

they've decided to put it up

for sale. Today's the last day for non-binding bids to be put into the government. The

government have got a lot of important parameters they're

talking about. It must remain

Italian flavoured for the next eight years and there's all

sorts of rules about how much

debt they must pay down and how

much money they've got to come

up with. It's a massive job

for anyone taking on the

airline company. It will need

huge restructuring to turn it

back to profitability. It's a

question - what does

Italian-flavoured mean? I think

it means it should be kept with

an Italian flag and a lot of

Italian workers, one would

suspect. No doubt. Finally,

the outlook for Wall

Street? Looking for a better

opener on the US markets.

Currently calling the Dow Jones

up 32 points for the

open. Thanks for your

time. Pleasure.

Now for a look at the major

movers on our market today.

Two of Australia's uranium

companies look set to

companies look set to become one with Summit Resources today recommending shareholders

accept a sweetened takeover bid

from Palladin. After rejecting an earlier offer, Summit says

the benefits of accepting the

now $1.2 billion bid outweigh

the risks, with Summit's key

assets in Queensland where the

State Government has a ban on

uranium mining. For its part,

Paladin Resources has just

opened a new uranium mine in

Namibia and is working on

another project in Malawi. The

takeover comes as uranium

prices have risen sharply off

the back of strong demand.

Paladin Resources' managing

director John Borshoff joined

me from our Perth studio earlier this evening. Nice to

see you again. You upped your

offer and now Summit Resources

has accepted. Is this a done

deal? I think there's still a

few issues and see how few issues and see how many

shareholders will accede and

take the recommendations. But

I think most of the hard work

is done. Of course, one of

Summit's reasons for accepting

your bid were the risks of not

accepting primarily whether the

Queensland Government will ever

lift its Juan on uranium

mining, the main asset being

the Val halla deposit in

Queensland. If that goes

through, that risk will be 100% your's? We've always accepted

that risk and in our model we have always put our development

further back than some

Muhaddiayah Organisation. Some

of the reasons -- back some had

had. I think that the Federal

Opposition will accede and come

out with a more appropriate

policy and the States may take

a little while to come in and I

think Queensland is in that

sort of " this way, that way

mode" . I think within a

certain amount of time we'll

see a pro-uranium policy in

that State. What timeframe do

you put on it? When do you

think that resource, that Val

halla deposit will be able to

be mined? I think we should

look forward to commissioning

that mine around 2012. I think even though there'll be some

uncertainty, we will proceed

with the project and do the

early sort of studies and

drilling so that virtually our

time starts ticking from this

year. Although, we'll be

anticipating the changes of

policies later on. If you don't

get the changes of policy s

that you want, though, it's a

very expensive asset in waiting

to be sitting on, isn't it? I

read a saying a little way back

is that if, you will not find

new oceans if you don't have

the courage to lose sight of

the shore and I think that in a way we have considered very

much, I think we know the

uranium sort of situation in

Australia and we are more than

confident. If it doesn't we

will have a bit of egg on our

face, yes. Before Summit

accepted your offer, made a strategic alliance with the

French nuclear giant Areva set

to buy 18% of Summit, what

happens to that deal now? Well,

essentially as we've stated the

Areva Association is something

that we are comfortable with.

Obviously if we get 100% of

Summit the framework may

change, the arrangement by how

one achieves those objectives

may change. In the end, we

will discuss with Areva and work within whichever framework

is available to us. So if they

were looking to buy 18%, if you

got 100%, would you be prepared

to sell them 18%? Well, we

would look at some type of

rearrangement which will allow

those financial commitments at

least to be made and in doing

that there will be some Areva

requirements as well. So we

believe we can do something that's mutually satisfactory. What would that

be, though? Them taking a stake

of say 10, 15%? It could be.

It could be by way of a joint

venture. If we had 100% of a

project, of Summit, that just

means that there are other ways

in which one could achieve the

same result. How optimistic are

you that the mood has changed

now and that Australia is

moving closer to the sort of

world that you would want to

see in terms of mining? Oh, I

see a huge shift in sentiment

with the nuclear industry back

in the sort of '90s and early

21. There was always a dying

aspect to the industry and now

we're going through a fabulous

total re Juvianisation in terms

of the political recalibrating

of energy needs in the planet

and what fuel mixes will be

required and these are enormous

issues and Australia as a major

sort of resource in uranium has

to engage in the world in

Australia. So give five years

and do you think it'll be a

very different scene in this

country? Yes, yes, I do. I think that it's always acknowledged and it's basically

the issue of unwinding from a

policy where there was firstly

- the reason the policy wasn't

changed is there was no

markets. As they used to say,

if there's a market, we'll do

something. Nobody wants the

darn stuff. Now obviously they

do and you've seen within a

matter of 18 months there is

already significant shifts in

Australia which people two

years ago would not have thought absolutely possible. A

few years ago no-one wanted and

darn stuff now the price of

uranium has gone up 10-fold in

the last ten years. I know you are inclined to talk your own

book but can you see anything

on the horizon likely to dampen that enthusiasm for

uranium? No. I see

uranium? No. I see that

essentially the industry was

asleep at the wheel for 25%. I

think there were fundamental

aspects that have now been

introduced into this industry

that it is virtually in

handicap to a degree and I

think just the supply shortages

there for the existing nuclear

fleets can be issues, never

mind the enormous growth to

accommodate. We'll see supply

chasing demand in the sense -

demand will be the controller.

That has reached nowhere near

the peak at the moment. John Borshoff, many thanks for

joining us. Thank you.

Still on energy, and an

American expert says clean coal

initiatives should be abandoned

in favour of clean gas to address climate change

concerns. Jesse Ausubel from

New York's Rockefeller

University made the comments at

a petroleum industry conference

in Adelaide today. Leah

MacLennan reports. Professor

Jesse Ausubel has been studying

carbon emissions for at the

kadz. He says the best way to

address climate change is to

build gas power stations. The 21st century will be the century of Met Anne as the 21st

was the century of oil and the

19th was coal. Professor Jesse

Ausubel says some renewable

energies such as solar, wind and

and ethanol production are

environmentally damaging.

That's because some product projects require huge amount of

land. I don't want hundreds of

millions of hectares around the

world to provide whiskey for my

Toyota. The Professor says

while gas is the immediate

solution to carbon emissions it

will gradually be replaced by

nuclear energy. His views are

at odds with environment

groups. We can look at gas as a

transition fuel and we

shouldn't be looking at

uranium. At the petroleum

conference Ian Macfarlane

issued a warning to the gas

industry to quickly take up

overseas marketing

opportunities. If the gas industry

industry doesn't get down and

go hard they may find our

customers leapfrog gas and go

straight to the one proven

baseload zero emission

technology and that's

nuclear. The gas industry has

outlined a 10-year plan that

includes tax breaks and a more

flexible licensing system. Ian

Macfarlane says he'll consider

it but he says the gas industry

isn't facing hard times. My

understanding talking to oil

and gas companies is they're

knocking customers back with a

stick. The conference resumes

tomorrow. Leah MacLennan

reporting. A Federal Court

class action against the AWA is

to be backed by IMF.

Shareholders claim the wheat

exporter failed to properly inform the market of payments

made to Iraq when information

about the kickbacks was

presented to an inquiry into

the a AWB, the share price

plunged. They're seeking $25

million in damages. The Prime

Minister has written to business leaders asking them to

do more to tackle inequality in

Aboriginal communities. The

Opposition says it's an

admission the Government has

failed. But Mr Howard believes

business expertise could make a big difference. At the same

time, the Territory's largest

Aboriginal community is

launching legal action to

address what it says have been

almost three decades of

inequality and underfunding.

Danielle Parry reports. Like

many Aboriginal communities,

Wadeye had struggled to

overcome violence, poverty and

overcrowding. Lawyers for

Wadeye, 250 kilometres

south-west of Darwin believe

the community has had it worse

than most, thanks to almost 30

years of underfunding for the

local commissions school. The community's lawyers are lodging

a complaint with the Human

Rights and Equal Opportunities Commission, accusing the

Territory of failing to spend

money allocated by the

Commonwealth and of racial discrimination. They're

seeking an apology and millions

of dollars in compensation. So

we're looking at nearly 30

years of administration of

education funding for the

school at Wadeye through the

1979 agreement. So we're

looking at significant

underfunding for generations of

children and their families at

the school. I'd deny that the

formula is discriminatory.

There's a long history to this

and I acknowledge that. We

certainly need to put that

history behind us. The three

parties - the Territory

Government the Catholic

Education Office and the

Commonwealth Government - need

to extradite the closure of a

new funding agreement. The

Prime Minister believes big business rather than the

justice system could hold the

key to overcoming Indigenous

disadvantage in places like

Wadeye. John Howard is

appealing for help from the top

end of town, writing to the

chief executives of the

country's top 100 companies and

every Government agency. It's

an admission that we can all do

more and it's also an admission

that the ATSIC in its previous role certainly

role certainly wasn't the best

way of dealing with Indigenous

problems and it's no good

leaving this up to Government

on its own. The Chamber of

Commerce agrees there's scope for more Indigenous employment

opportunities but wants

Government help to navigate the associated welfare

bureaucracy. It's assistance in

terms of understanding the various myriad Government

programs that are available to

help with respect to getting

people out of welfare and into

work. Federal Labor says direct

Government appeals to corporate Australia have been unsuccessful in the past and

the Prime Minister has run out

of ideas. If anything, what it

is is an admission of failure

to have to now 11 years after

being in office engaging with

the private sector in this way. Wadeye's complaint will be used with the human rights

watchdog this week. Now a look

at tomorrow's business diary.

The latest Woolworths' sales

figures are due out. They're

expected to show the country's biggest retailer has widened

and gap between it and takeover

target Coles Group. Michael

Chaney will address a lunch on

business reform and a

telecommunications conference

opens in Sydney, among the

speakers will be ACCC chairman

Graeme Samuel, Foxtel CEO Kim

Williams and Fairfax media boss

David Kirk. A look at what's

making news in the business

sections of the papers

tomorrow. The 'Age' says

JetStar continues to have the

worst performance record of our

three domestic carriers. The 'Australian' examines Babcock &

Brown's revised bid for Alinta.

The ASX tells the 'Australian

Financial Review' it's cracking

down on market manipulation,

and the'Sun-Herald' leads on

Bruce Gordon's battle for

Perth's Channel Nine. The FTSE

is up 41 and the Dow is also up

41 in the first few minutes of trade. If you'd like to watch

any of tonight's stories or

stories from earlier programs,

log onto our website where you

can watch the whole thing

online or download it as a

Podcast. To write to us, the

email address is on the screen.

I'm Ali Moore, goodnight. Closed Captions by CSI

This program is not subtitled