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Lateline -

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Tonight - nuclear actors. The Prime Minister appoints Ziggy Switkowski to head a team of six to
examine nuclear energy, saying global warming has reopened the debate.

I think the mood has changed. I think it's changed a lot from the early 1980s. I've been surprised
by the number of environmentalists who have said they are prepared to look again at nuclear power
as an energy source.

And nuclear reactors...

Liberals have always had obsessions about nuclear power - they had obsessions when they wanted
nuclear weapons in the 1960s, Malcolm Fraser picked it up in the 1980s, now John Howard picks it

This program is captioned live. Good evening, welcome to Lateline. I'm Tony Jones. For more than
two years, until 2002 Major General Mike Smith was deputy commander of the Australian-led UN
peacekeeping force in East Timor. Now retired from the army, he's back on the island working to
help tens of thousands of refugees. As the CEO of the aid organisation Austcare, last week he said
the international security force, should never have left in the first place. And that the troops
should be prepared for a long stay this time because East Timor's mixture of poverty. Unemployment,
disease and ethnic tension meant the situation was likely to get worse. Before it gets better,
today he's been up in the mountains to gauge the situation outside Dili. And he'll join us live to
tell us what he found. That's coming up. But first our other headlines. Reformus interruptus - the
Federal Government moves to veto same sex marriages in the ACT. Latham's day in court, the former
Labor leader escapes a criminal conviction for destroying a newsman's camera.

PM appoints nuclear task force

PM appoints nuclear task force

Reporter: Dana Robertson

TONY JONES: The Prime Minister today fulfilled his promise to start a full-scale debate about
nuclear energy in Australia. Mr Howard has appointed a special task force to examine the issue,
looking at the economic, environmental and health and safety aspects of an expanded nuclear
industry. But the hand-picked group won't be deciding where any new nuclear reactors could be
located, which the Opposition says defeats the purpose of the inquiry. And even though the Prime
Minister says it'd be foolish for Australia to see itself only as a uranium exporter, he concedes
there'll be no domestic nuclear power stations anytime soon.

DANA ROBERTSON: On his last overseas trip, the Prime Minister signalled his desire for a
"full-blooded" debate on a domestic nuclear power industry and now he's started the talking.

JOHN HOWARD, PRIME MINISTER: We've had a paucity of debate, of knowledge and an absence of rigour
in discussion for a long time now.

DANA ROBERTSON: Mr Howard's appointed former Telstra boss and nuclear physicist Ziggy Switkowski to
chair a task force to review Australia's uranium and nuclear industries. He'll be joined by another
nuclear physicist George Dracoulis and economist Warwick McKibbin. Mr Howard says he's awaiting
their assessment with an open mind.

JOHN HOWARD: I am not persuaded as yet, although in my bones I think there has been a fundamental
change, but I want to see the evidence.

DANA ROBERTSON: The inquiry will look at: the capacity to increase uranium mining and exports,
whether nuclear energy could be competitive in the longer term, the potential for fuel enrichment,
fabrication and reprocessing in Australia, and whether nuclear energy will help reduce greenhouse
gas emissions. But there'll be no investigation of where any future reactors would be located.

KIM BEAZLEY, OPPOSITION LEADER: That is ultimate arrogance. We know that if you're going to get a
nuclear industry going, you've got to put the reactors near cities. You've got to put them near the
source of the market.

JOHN HOWARD: I know the ALP run a fear campaign. Well, let them do it. That will not deter me and
it will not deter the government.

DANA ROBERTSON: And the task force won't have much time either. In a sign of the political
sensitivity of the issue, Mr Howard wants to hear from them by Christmas, well before the next
election. There's no such rush though to embrace nuclear power stations.

JOHN HOWARD: I don't expect to have nuclear power stations within Australia in the next 2-3 years.
My sense is that we are some years into the future, but precisely because it is some years into the
future, now is the time to begin to have the debate.

DANA ROBERTSON: But Mr Howard's critics accuse him of using the prospect of nuclear reactors in
Australia as a stalking horse. The Greens believe the PM's real agenda is to establish a uranium
enrichment industry and to gain entry into the US-led nuclear fuel suppliers' group. Mr Howard says
a lot of Australians would find the idea attractive.

JOHN HOWARD: I think a lot of Australians like the idea of adding value to our natural resources.

DANA ROBERTSON: But some on his own side are staying well away from the PM's nuclear vision.

PETER DEBNAM, NSW OPPOSITION LEADER: I'm going to actually leave that to John Howard to stimulate
that debate, and I'm sure its going to be a debate that will rage for a number of years.

PHILIP DAVID, VIC ENERGY SPOKESMAN: We will continue to work with the coal industry in Victoria to
guarantee the employment base for all Victorians.

DANA ROBERTSON: Mr Howard will announce the final three members of his nuclear task force tomorrow.
He says at least one will have expertise in the safety of nuclear energy. Dana Robertson, Lateline.

Govt's climate change response 'lacks balance'

Govt's climate change response 'lacks balance'

Reporter: Margot O'Neill

TONY JONES: While the Prime Minister has called for a nuclear power debate, some of Australia's
largest companies believe the Federal Government's response to climate change lacks balance and
could prove unworkable. The companies, which include bankers, insurers, recyclers and natural gas
producers, claim investment in Australia's future energy infrastructure is at risk because the
government is delaying action to protect the interests of some mining companies. Meanwhile, a new
documentary by former US Vice-President Al Gore has upset the American fossil fuel industry. Margot
O'Neill reports.

FILM CLIP: From Paramount classic pictures, the film that's shocked the world.

MARGOT O'NEILL: It's Hollywood meets PowerPoint presentation - and it stars global warming activist
and former US vice president Al Gore.

AL GORE: Think of the impact of a couple of hundred thousand refugees and then imagine 100 million.

MARGOT O'NEILL: American climate change sceptics who are partly funded by big fossil fuel companies
have hit back with a TV campaign hailing the virtues of carbon dioxide.

ADVERTISEMENT: Carbon dioxide - they call it pollution, we call it life.

MARGOT O'NEILL: In Australia, the argument is not over whether climate change is a problem, but
over how much time we have to act. According to a powerful new coalition of Australian bankers,
insurers and energy companies, called the Business Roundtable on Climate Change, Australia has a
'go slow' policy as a result of influence wielded by some mining companies.

TONY WOOD, ORIGIN ENERGY: I think the resources sector certainly has made a very strong argument to
government about their concerns, in relation, not so much to whether we respond to climate change,
because I think most industry now has accepted that, but how quickly we should do so. I think that
is reflected by government policy. Other industries need to make it clear that they're concerned,
otherwise you will get, to some extent, an imbalance in this process, and that's what we've seen to

MARGOT O'NEILL: The Roundtable includes the companies Westpac, IAG - which is Australia's largest
insurer, and the natural gas company, Origin Energy. They want the Government to adopt a national
carbon emissions trading scheme, which would put a price on carbon pollution - making greenhouse
emissions a business cost and pushing the market to cleaner alternatives.

TONY COLEMAN, IAG: It is entirely possible with existing technologies to materially reduce our
carbon emissions in Australia by about 60% by 2050, and to do that with minimal impact on economic
growth. It can be done with technologies that do not include nuclear power.

MARGOT O'NEILL: It's an action plan that doesn't wait for longer-term possibilities like nuclear
power or carbon geosequestration technology - which promises to clean up coal-fired power stations
by burying carbon emissions. While they both could be part of longer term solutions, the Business
Roundtable says the Government should move now to introduce a carbon price or risk the marketplace
ignoring green technologies.

TONY WOOD: If you're looking at some of those lower-emission technologies such as clean coal or
gas, you'd want to know that no-one else would be given protection from a carbon price, so it's the
very fact that we don't have clarity about a carbon price is the first question - we need to
understand that no-one will be given a carbon holiday,

MARGOT O'NEILL: John Daley represents the Australian Industry Greenhouse Network, whose members
include many fossil fuel companies. He says the industry is happy to support a carbon price, but
only after technologies like geosequestration becomes viable - and that could take up to 20 years.
In other words, we should all wait.

JOHN DALY, AUSTRALIAN INDUSTRY GREENHOUSE NETWORK: We have time to do this. That's why the real
effort should be focusing on those technologies so that we can develop those alternatives for that
future out in that time frame. Many will be ready for deployment on a fairly extensive scale within
10, 15, 20 years - and that is okay.

MARGOT O'NEILL: Mark O'Neill from the Australian Coal Association is also unimpressed with the
Business Roundtable's plan.

MARK O'NEILL, AUSTRALIAN COAL ASSOCIATION: At the moment, you've got players in there like banks
and insurance companies that can sit on the sidelines and say we need to do more about climate
change but I don't see them putting their hands in their pockets. Perhaps, foe example, the banks
could siphon off some of their bank fees into public-good activities like funding research and
development and demonstration of new technologies - that would be a real contribution.

MARGOT O'NEILL: But Tony Coleman from IAG says there can be no more delays.

TONY COLEMAN: We need to do more and we need to do it quite quickly. The facts are that climate
change and global warming are accelerating at the moment. All of the scientific data is confirming
that. Major icons like the Great Barrier Reef of Australia, which will be pretty much destroyed if
temperatures rise by 2 degrees Centigrade. And that of course means a lot of export dollars won't
be earned anymore.

MARGOT O'NEILL: The Federal Government could yet find itself caught in the crossfire between some
of Australia's largest business titans. Margot O'Neill, Lateline.

Former Opposition leader Mark Latham has been put on a two-year good behaviour bond, with no
conviction recorded after pleading guilty to malicious damage. The charge relates to an altercation
between Mr Latham and a photographer earlier this year. Mr Latham appeared this morning in
Campbelltown Local Court arriving with members of his legal team. Two charges relating to assault
and theft were dropped but Mr Latham pleaded guilty to the malicious damage count and has paid
damages to the newspaper involved. The court case came about after Mr Latham and a News Limited
photographer clashed outside a fast food outlet in Sydney's west last January. Mr Latham was
accused of taking the camera and then punching the photographer when he demanded it back. The
Federal Government has decided to veto the ACT's laws, giving legal recognition to same sex
couples. Cabinet has approved the use of the Commonwealth's constitutional powers to quash the
legislation, which it's dismissed as a cynical attempt to undermine marriage. Passed by the
Legislative Assembly in May, torpedoed by Federal Cabinet today - the ACT's Civil Unions Act was
law for just 26 days.

The Governor-General, on advice, will be asked to disallow the ACT enactment.

It had given legal recognition to the union of gay and lesbian couples in ceremonies conducted by
ACT celebrants. But in the Federal Government's view, it was marriage by another name.

The legislation, by its own admission, is an attempt to equate civil unions with marriage.

Something he says the Commonwealth could never tolerate.

The founding fathers in their wisdom, gave constitutional authority in relation to these matters to
the Commonwealth.

It's simply the conservative political morality of John Howard and his government.

The Territory Government had made amendments, believing the final shape of the bill might have
placated the Commonwealth's concerns.

We have not trespassed in any way on the Commonwealth's powers to make laws in relation to

Even so, Simon Corbell accepts there's little he can do about it.

Our options are extremely limited. We are a creature of the Commonwealth.

The gay and lesbian community feared the federal veto but was not prepared when it came.

It's pretty - pretty horrible to think that it doesn't really have much legal basis for this
overturn but it's more about political and homophobia.

The last time the Federal Government overturned a Territory law was nine years ago with a full
parliamentary vote on voluntary euthanasia. But on this, Cabinet's decision will be the final word.
Philip Ruddock's aiming to have the Governor-General wipe out the act by August before any
ceremonies are held. Greg Jennett, Lateline.

Dili protests put pressure on troops

Dili protests put pressure on troops

Reporter: Mark Bowling

TONY JONES: Protesters have staged a noisy rally in the Timorese capital demanding the resignation
of Prime Minister Mari Alkatiri. Most of the demonstrators had travelled from the country's west
and spent more than an hour negotiating with international troops before being allowed into the
capital. The protests have put more pressure on Australian troops, who spent another day trying to
bring rival gangs under control. From Dili, Mark Bowling reports.

MARK BOWLING: They came from the mountains in the west. A convoy of 1,000 protesters turning into a
show of force on the streets of Dili. They rallied outside the country's government headquarters,
demanding that Prime Minister Mari Alkatiri stand down immediately - to take responsibility for the
precarious state of East Timor. President Xanana Gusmao tried to reassure the crowd. The only
blemish came when youths jumped from their trucks and went on a rampage through a market. Their
presence in Dili, a security nightmare.

LIEUTENANT COLONEL MICHAEL MUMFORD, COMMANDING OFFICER: Of course in a democracy, it's their right
to come and protest. My job is to make sure that it's not violent.

MARK BOWLING: Earlier, Dr Alkatiri arrived for his first Cabinet meeting since his Defence Minister
and Interior Minister were sacked last week. It's not yet known how he intends to restore political
stability. But it's law and order that's still the biggest concern. The daily ritual of attacks and
arson continues in Dili's gang-controlled neighbourhoods. It's up to Australian troops to lead the
security operation until there's backing for a strong international police force. Even though the
fires continue, there is a sense that the tide is turning. Just as new fires are lit, Australian
troops and firemen arrive to do what they can. Soldiers pitch in as best they can. It's not what
they expected to be doing in East Timor.

SERGEANT CLINTON BOSWOTH: AUSTRALIAN DEFENCE FORCE: It's the last thing probably on our mind when
we sort of, stepped off from Townsville, but, yes, it's one of the jobs that we are sort of here to

MARK BOWLING: As the cycle of violence continues, the ABC News car became one of the targets. A
plan to bolster Australian Federal Police numbers from 100 officers is already in place.

PHILIP RUDDOCK, ATTORNEY-GENERAL: We have a capacity for further deployment and as, operationally,
it's suggested to us that that might be necessary, it'll occur.

MARK BOWLING: This protest rally ended peacefully, but it's unlikely to be the last showdown
between the people and the politicians in Dili. Mark Bowling, Lateline.

E Timor tensions 'mostly confined to Dili'

E Timor tensions 'mostly confined to Dili'

Reporter: Tony Jones

TONY JONES: Well, as we said earlier Major General Mike Smith was deputy commander of the
Australian-led UN peacekeeping force in East Timor for two years before becoming CEO of the aid
organisation Austcare. He's currently in East Timor in that capacity, assessing the humanitarian
situation. And he joins us now from Dili. Mike Smith, thanks for being there.


TONY JONES: I know you've been up in the hills today. We haven't heard a lot about what's happening
outside Dili. Can you give us your assessment of what you saw?

MAJOR-GENERAL MIKE SMITH (RET): My assessment is it's pretty quiet in the hills, in all the
districts, in fact. This is very much a Dili-centric problem. I'm going out again, I'm going down
to the border tomorrow because we've got projects on down there. Peace-building projects, education
projects, agricultural projects which are critical for the people of Timor. So I'm heading off down
there tomorrow.

TONY JONES: So you're saying effectively the tensions we're seeing in the capital are not reflected
out in the bush, as it were?

MAJOR-GENERAL MIKE SMITH (RET): Well, certainly the reading I'm getting on it, Tony, is that that
is the case. It's very Dili-centric and you know, comments about civil war and genocide and ethnic
cleansing - all of those sorts of comments I don't think are appropriate to East Timor today.

TONY JONES: Your main office, of course, is in the Dili suburb of Comoro. There have been quite a
deal of violence and action around there. You must have seen a lot of what's going on in Dili at
least up close?

MAJOR-GENERAL MIKE SMITH (RET): Yes, up close and personal actually. We seem to take in a lot of
stray people for sanctuary. One of our mandates is protection and we've been protecting on the
spot, actually. So it's been interesting times but I must say the woman who owns the house is
absolutely inspirational and she talks to the people and I tend to go out there with her and
convince them that we don't take sides in this. We're not political and that's what this is
basically all about. It's political. We're just here to help the people of East Timor and so far,
although some houses around us have gone up in smoke, ours seems to have been respected, touch

TONY JONES: We have seen and we're constantly seeing images of gang violence and houses burning in
the capital. Do you understand why it was that the Australian military and indeed the political
leadership of this country, appeared to be unprepared for this when they sent the troops in in the
first place?

MAJOR-GENERAL MIKE SMITH (RET): I think that this sort of operation is not an easy operation for
any military force to do and some of us for some time have been saying that this type of operation
is the future for the Australian Defence Force and has to be mainstreamed and ADF forces whether
they like it or not, are going to be doing more of this in the future in the arc of instability
that's to our north. So we'd better get used to it.

TONY JONES: And from what you're saying the Australian military needs to get used to this for quite
a long time in East Timor?

MAJOR-GENERAL MIKE SMITH (RET): Well, I think that there will be a transition from a
military-strong component, increasingly to a police component and that will be good. But what needs
to happen immediately - and I might say that I've been observing the Australian Defence Force and
the Kiwis and the excellent Malaysian forces I've seen - and I must say that without their presence
I think Dili now would almost be destroyed. And I'd like to pay compliments to the commander of
this force, Brigadier Mick Slater. I think they come no better. He's doing all he can and so are
the troops in a very difficult situation. The real lessons, which have been relearned is, if we're
going to put soldiers into this sort of situation then they have to be trained and they
particularly need to understand civil military coordination and cooperation and to practice it more
so than they have in the past.

TONY JONES: Do you think the mix is shortly going to be rife with more police sent in? And do you
have any sense at all as to how many police you would actually need to control the streets there,
given the level the violence that we're seeing day after day?

MAJOR-GENERAL MIKE SMITH (RET): Tony, it's going to take a long time, because you'll recall that
the UN did set up a police force but it was not very successful and really, it's going back to
scratch or square one now and building, rebuilding a police force from the beginning. It will take
time. When people talk about, "We want riot police," and all the rest of it, you certainly do need
some of that, and I know the Portuguese have arrived. But more importantly, you need good community
policing. In the short-term before that, what has to happen now is that the international
peacekeeping force that's here needs to do a lot more with the civil-based organisations.
Organisations like Austcare, and working closely with the UN and the East Timorese Government - and
they are starting to do this. But there's a lot, a lot more learning to go into that process. I'd
like to see places like Austcare as safe houses in communities where we had particular or specific
communications so that if something did arise we could quickly call somebody in. We don't have that
yet, so we have to call and wait and hope if something crops up. So we need to get the people out
of the internally displaced person's camps. 70,000 of them in Dili and they won't leave there until
they really feel that they have security and that will only come about if the ADF and the civil
community work together. And that's one of the reasons why Austcare is working so hard, to try and
get funding to put protection officers, civil protection officers - these aren't people with guns
and rifles - these are civil protection officers working closely with the UN agencies to make sure
that people can integrate back into society here and this nation can go forward. This is the
poorest nation in Asia.

TONY JONES: I'll come on to that in a moment. But I'd just like to reflect just for a moment on
what you've just said. Because it seems to us that the Reverend Tim Costello from World Vision was
saying very similar things right at the very beginning when the Australian troops went in there. So
it's hard for us to understand now why the military is not working more closely with aid
organisations such as your own after what was said at the beginning. Do you understand why?

MAJOR-GENERAL MIKE SMITH (RET): Let me just say that they are working closely. I've had personal
discussions with a number of military people and I might say, that's not a reflection on my
previous military career. I rang a number, asked could I see somebody and I did. I think they've
been outstanding in what they've been doing. But they are underresourced and underequipped to do
this sort of operation. ADF, the Australian Defence Force, is fundamentally a war-fighting
organisation. It is not a peace enforcement, peacekeeping. They've always done it in addition to
war fighting and what I'm saying is you can't do it in addition anymore, you've got to mainstream

TONY JONES: Let me just ask you this, and I want to go back to something you said in the past. You
actually said in the past that Australian intelligence failed to anticipate what happened in, or
what was going to happen in 1999. Are we seeing now the results of another intelligence failure?

MAJOR-GENERAL MIKE SMITH (RET): Well, just let me first say there is no similarity between 1999 and
this particular issue here. We are now talking about totally an internal problem within East Timor,
as best as I can see. Did the Australian Government - was there a failure of intelligence? I don't
know, because I'm not in the Australian Government anymore. I'm interested in humanitarian relief
operations and that's how I spend my days now.

TONY JONES: OK, fair enough. Can you explain, though, why things have changed so dramatically from
the time when you were there for those two years, 2000 to 2002? What's happened to turn this
situation around so that we have virtually on our doorstep now a failed State?

MAJOR-GENERAL MIKE SMITH (RET): I think the problem is mainly political and it is mainly focussed
on Dili. But underlying all of that is a huge problem of poverty. And a population just over a
million of which more than 50% is under the age of 18. Most unemployed people out in the
countryside are finding it difficult to put food on their tables. We need to be doing grassroots
poverty alleviation programs. And we need to up the ante to do it. And please Australia, dig deep,
because this country East Timor, needs it.

TONY JONES: Yes, some people are actually arguing that what is now needed in East Timor is
something like a mini-marshal plan where huge international effort is put into rebuilding the
State, its institutions and its economy from the ground up. Is that the way you see things?

MAJOR-GENERAL MIKE SMITH (RET): I certainly see that there has to be security and development go
closely together and I believe that the East Timor Government is capable of taking a lead in that.
But it needs assistance, coordinated assistance from the United Nations - and I certainly hope an
up-gunned - that's the wrong phrase - a sort of an increased and more capable UN mission is put
here. I certainly hope that occurs. That's required and the ADF or the security forces that are
here all have to work in tandem. But the East Timorese Government needs to maintain the lead. And I
think it's do-able. We're not talking about a country that cannot get out of this situation. It
can, but it needs to be planned and as well as starting at the top end of town in terms of
governance, we really have to go to the bottom end. We have to go down to the rural poor. We have
to have employment schemes. We have to really think it through and we've got to fix up the lines of
communication. There is a mammoth effort required here, but the fact is it's do-able and we can
have a very secure and stable country to Australia's north. It's in the interests of the East
Timorese for this to happen. It's certainly in the interests of Australia for this to happen and
it's in the interests of Indonesia and the rest of the world as well.

TONY JONES: OK Mike Smith, I'm sure a lot of people have heard that appeal pretty clearly. We thank
you very much for taking the time to come and talk to us tonight.

Peru elects former disgraced leader

Peru elects former disgraced leader

Reporter: Mark Simkin

TONY JONES: Few world leaders cast such a long shadow that they can dominate another country's
election campaign. But Venezuela's Hugo Chavez is one of them. Peru has just been to the polls, and
the disgraced former leader Alan Garcia was elected president, largely because his opponent was
associated with Hugo Chavez. The result reflects a backlash against Chavez's anti-American
populism. And confounds the image of a region 'lurching to the left'. North America correspondent
Mark Simkin prepared this special report for Lateline.

MARK SIMKIN, NORTH AMERICA CORRESPONDENT: Even in a region where political comebacks are common,
this one was simply extraordinary. One and a half decades after leading Peru into economic
collapse, Alan Garcia is back,... his legacy of quadruple-digit inflation, alleged corruption and
increased rebel violence apparently forgiven, if not forgotten.

ALAN GARCIA, PERUVIAN PRESIDENT (TRANSLATION): During this second opportunity we will do everything
in our power not to fail or deceive the Peruvian people.

MARK SIMKIN: Venezuela's leader, Hugo Chavez, publicly endorsed Garcia's opponent... and Garcia's
support surged. In Peru, at least, it seems it's better to be associated with financial disaster
than Hugo Chavez.

ALAN GARCIA: Today the majority of the country has delivered a message in favor of national
independence, of national sovereignty and they have defeated the efforts of Mr Hugo Chavez to
integrate us into his militaristic and backwards expansion project that he intends to impose over
South America.

MARK SIMKIN: To some, Hugo Chavez is dangerously undemocratic. To others he's the hero of a
regional revolution. Earlier in the year, the Venezuelan leader visited Europe, predicting the end
of the "American empire". This was his response when someone compared him to George W Bush.

HUGO CHAVEZ: HUGO CHAVEZ (TRANSLATION): This is the first time I've been offended like this in
public, being compared to the biggest genocidal criminal in the history of humanity. The president
of the United States: a killer, immoral, that should be taken prisoner by international criminal

MARK SIMKIN: The diatribes are almost comic, but Venezuela is very wealthy. It has massive oil
reserves and is one of America's biggest suppliers. Chavez wants to use his economic muscle to
create a regional coalition, a Latin American bloc to counterbalance US policies and influence.

HUGO CHAVEZ: This is an irrational government in Washington that threatens the whole world. I
always say to Europe that it can do a lot to stop the imperial craziness. We need to walk forward
towards a world of alternatives.

MARK SIMKIN: Chavez accuses the United States of planning an invasion, backing a coup attempt and
plotting an assassination. There's no evidence of any of that, but it is clear the US is
unimpressed by his rhetoric and his attempts to consolidate power.

DONALD RUMSFELD, US DEFENCE SECRETARY: You've got Chavez in Venezuela. He's got a lot of oil money.
He's someone who was elected legally just as Adolf Hitler was elected legally.

MARK SIMKIN: Michael Skol is a former US ambassador to Venezuela and an expert on the region. He's
seen Chavez up close.

MICHAEL SKOL, FORMER AMBASSADOR: I think the results of what he's doing are evil. He is an
extremist, he is a populist, he is a megalomaniac, he is charismatic. He is a true believer in what
he says and does and he is also deluded, in my opinion.

MARK SIMKIN: Hugo Chavez is working closely with the leaders of Cuba and Bolivia. They're
ideological soul-mates. Evo Morales was swept to power in Bolivia last year, calling himself
"Washington's'worst nightmare". He's now nationalised his country's extensive natural gas supplies.

EVO MORALES (TRANSLATION): This is the solution to the social and economic problems of our country.
Once we have recovered these natural resources, this will generate work. It is the end of the
looting of our natural resources by multinational oil companies.

MARK SIMKIN: The US is unpopular in the region, largely because its economic prescriptions,
privatisation, globalisation, deregulation have either hurt the poor or failed to deliver
prosperity. In country after country, left-wing governments are being elected, although only a few
of them could be characterised as extremist.

MICHAEL SKOL: Many politicians here in Washington, and many in the media, have gotten to talking of
the great drift to the left in Latin America, which is, in my opinion, I think this is a whole lot
of virtual nothing in terms of major movements. If they include Chile, the newly elected president,
the Socialist, she's about as socialist as you are.

MARK SIMKIN: The Peruvian results are further evidence of that. The country has moved slightly to
the left, but it's still rejected the extreme anti-Americanism of Hugo Chavez. Several other
countries in the region will hold elections later in the year and the left-wing candidates are
expected to continue their resurgence. Mark Simkin, Lateline.

the year and the lefg candidates are expected to continue their resurgence. To the markets now,
which ended the day lower after weak leads from Wall Street overnight. The All Ords closed 78
points. Resources stocks were also down. BHP Billiton lost $0.83 while Rio Tinto shed more than $2.
Energy stocks were trend, with Woodside, Oil Search and Santos all closing in the red. The big
banks also lost ground. In the region, the Hang Seng and the Nikkei were lower. In London, the FTSE
is behind in early trade. On the commodities markets, both gold and oil retreated. And the
Australian dollar is currently buying US$0.7457. Now, to the weather. Showers for Sydney, and
morning showers clearing from Perth but fine tomorrow in the other capital cities. And that's all
for this evening. Our interview with Major-General Mike Smith will be on our website shortly, along
with our stories and transcripts at abc.net.au/lateline. I'll be back tomorrow night, so please
join me then. Goodnight.