tonight on "worldfocus" -- >> iran test-fires a missile capable of hitting israel and u.s. military bases, upping the ante for this week's crucial showdown between the west and iran over its nuclear program. europe's biggest economy gets a nudge to the right and angela merkel and her allies sweep to victory in german elections. what will it mean for the united states? tonight we take you to a scenic valley in peru where cocaine is king and local villagers have teamed up with a terrorist group to keep the military and police out.

and our "signature story" focuses on the philippines and life after the americans. the departure of u.s. forces left empty bases but the story has a silver, you could say even, gold lining. from the world's leading reporters and analysts, here's d what's happening from around the world. this is "worldfocus."ñrxdçóñr major support has been provided by rosalind p. walter and the çó peter g. peterson foundation, dedicated to promoting fiscal responsibility and addressing key economic challenges facing america's future. and additional funding is provided by the following supporters -- good evening. i'm martin savidge. thanks for joining us. i'll be with you all this week. we're going to start tonight with the latest developments in what has become a growing war of words between the united states and iran just days before they're scheduled to hold their

first direct negotiations in three decades. that meeting among iran, the u.s. and other world powers is set for this thursday in geneva. today iran said it was ready for any military threat and flexed its muscles by testing its longest range missiles which have a range of 1200 miles. they tested shorter range missiles over the weekend. iran's foreign ministry said the tests have nothing to do with the disclosure that iran is developing a second enrichment plant. it seemed aimed at bolstering iran's position going into this week's talks. robert gates said yesterday the american aim is to get iran to resume negotiations on its nuclear program. >> and then if that doesn't work, then i think you begin to move in the direction of severe sanctions. and their economic problems are difficult enough that i think that severe sanctions would have the poteial of bringing them to change their policies.

>> in tonight's lead focus, we begin with the heightened tensions between iran and the ñó west with this report from carl dinnen of itn. >> reporter: this, according to iranian tv, is the shahab 3 missile. it was tested earlier today during "operation great prophet 4." shahab 3 has been launched before, but this variant appears to have a longer range. today's launch has an added edge in the light of last week's revelations of a new iranian nuclear facility near the city of qom. the iranians keen to point out there is no link. >> translator: the main purpose of the missile tests is of a defensive nature. we've made progress in missile technology, so we need to perform such tests just like the other countries. there's no link between the missile maneuvers and our peaceful nuclear activities. >> reporter: but the range of the shahab 3 clearly now threatens israel.

add to that the expanding nuclear program and the iranian president's professed desire for israel to be wiped off the map, and it's clear that israel's response to this will be key. there is likely to be an element of positioning in iran's weekend military maneuvers. on thursday, iranian officials will meet representatives of the international community to discuss a proposed deal over ñi iran's nuclear program. >> firing missiles, testing missiles is not a serious response. but on thursday they'll meet the representatives of the six countries leading negotiations with them. and we expect a serious response to the offer that we have put on the table. iran will be treated as a normal country when it starts behaving as a normal country. >> reporter: the missile launches over the last couple of days, well publicized as they have been, may have been as much about negotiating strength as about military strength. >> that report was from carl dinnen of itn. by the way, iran's news agency is quoting a british

media report that says israeli jets would be permitted to use saudi air space to launch any attack on iran's nuclear facilities. it saysútse plan was discussed at añi meeting in london involvg british, israeli and saudi officials. all this week in a series of interviews we are going to be taking a look at this growing crisis surrounding iran's nuclear program and western threats to impose harsher sanctions against iran. tonight we begin with a view from the arab world. joining us for that is ghassan shabaneh, an assistant professor of middle east and international studies at marymount manhattan college here in new york. welcome back. >> thank you, thank you. >> the perception, i suppose, the way how to frame this, seems that we have not heard much from arab nations when it comes to sanctions against iran. is that inaccurate? >> it is not accurate. the egyptians and the saudis will be more than happy to see some sanctions imposed on iran.

today in their newspapers, major newspaper newspapers, wrote about the subject and both are in agreement with the western -- with certain western measures to impose harsher sanctions on the iranian regime, but they are a little bit afraid of a military strike at this stage because they feel that it may not get us where we want to be. >> is it safe to say that arab nations do not want to see a nuclear armed iran, and if so, why not? >> i would say that on this point t arabs are split. the syrians and the libyans might not mind it or maybe would like to see it. the saudis and the entire gulf, the egyptians, yemenis and jordanians would like to not see a nuclear iran because it would change the balance of power. and there's also another element and that's a religious element in the arab world. most of those countries that i have counted in the arab gulf have a lot of shiites among them. iraq, for example, 65%, saudi arabia 35%, yemen 90%.

what if those shiites after iran acquires a nuclear bomb say come, please and protect us, come please and give us more human rights. maybe they will see an intention by them to secede from those countries. >> so this would be very worrying to saudi arabia or other countries that have those large populations. >> all of those countries are in fear of iran because of the shiite minorities in their countries. >> what influence do these arab nations, if any, have over iran? >> i would say aside from syria, very little whatsoever. why syria? it is ruled by a shiite minority. and also the syrians because of their relation with hezbollah, iran would like to maintain a good relationship with hezbollah. the only key to that is syria. syria and iranian relationships are the closest in the arab world. besides that no other arab country is willing to give iran the cover or the leeway that it would like to see in the middle east.

>> let's talk about syria. do you think if the west, if the united states asked, that somehow syria would somehow try to use its influence with iraq? >> i thing the price will be the golan heights and the shiba farm. if the westerners would pressure israel to sign a peace agreement with syria, then we'd see the syrians more willing to use their leverage with the iranians on the nuclear weapon and also on hezbollah. >> all of this seems to go back to the question of whether israel may or may not have nuclear weapons. and that is an issue for much of the arab world as they face the prospect of iran with a nuclear weapon, right? >> yes, indeed. i believe this ought to be looked at from two layers. the first is the arab people or the arab street. the arab street is very angered by some of their statements of their governments really use or utter because they're not talking about an israelixdçó nur bomb. often they are talking about a potential iranian nuclear bomb. when it comes to imposing sanctions on israel or asking israel to open its facilities for inspections, we don't see ñi

the arabs are willing to ask the west to be as harsh or as critical or as open on their demand as they are on iran. >> ghassan shabaneh, we appreciate it. thank you. >> thank you, sir. the day after germany held national elections, chancellor angela merkel said today she hopes to have a new government in place by the beginning of november. yesterday's vote for members of the lower house of parliament gave merkel a comfortable center right majority. thanks to a strong performance by the pro-business fr free democrats who will become the key partner in merkel's alliance. as she prepares for a second four-year term, she made it clear she will continue to seek consensus as germany weathers the economic crisis. now, joining us for a closer look at germany's election is nikolaus piper, a senior correspondent here in new york for "suddeutsche zeitung," one of germany's largest daily

newspapers. welcome. >> good to be here. >> well, normally in times of economic turmoil like, of course, the rest of the world and germany is seeing, the governments that were in power are often voted out, but that was not the case. >> i mean, the situation in germany was so that angela merkel had no chance to become not chancellor because she could continue with the current coalition as with the social democrats, the center left, or she could go to the center right with the free democrats. and that's what she'll do now. so it was a very stable situation. >> so there was no doubt that she would come back as chancellor, just under what form of government? >> exactly, yeah. >> now this government, this new one, appears to be more conservative. >> yeah, that's right. and it will be more market oriented and -- but the difference for the outside world will be not too big.

>> let me start with this. because in her remarks today, chancellor merkel seemed to praise the benefits of stimulus spending. and if we go back a couple of months -- and of course this country has done a great deal on that -- there seemed to be some criticism coming from germany at least on the thought of stimulus spending. is that a change? >> i wouldn't say so. there is a misinterpretation in the public about the german stimulus plan. it was a huge stimulus plan. by german standards, it was the biggest we ever had. but it's right that the german government was a little bit behind the curve for a while, but it was only, let's say, four or five weeks. and after that, when they realized how bad the situation was, they made a very, very big stimulus package. it's not as big as in the united states, but by german standards, it's big.

and you have to notice that in germany, the welfare state is much stronger than in the united states. the welfare state is in itself is stabilizing the business cycle. >> right. it's helping to sort of ease the economic impact. >> exactly. >> how do you think this new government -- or will the relationship with the united states change? both in how we enact, work with one another and also in afghanistan where there's a tme? >> i would say in the short term it's just more of the same you will get. there's no distance among social democrats and fr free democrats with regards to the united states. when it comes to afghanistan, ñi the situation is unpredictable. if things go very bad there, i think it will be difficult to sell the war in germany. due to our history, germany's a very pacifist country and

therefore, the war is extremely unpopular. we even don't call it a war. we call it a humanitarian intervention. what's only part of the story. the other part of the story, it's a war. so there are some open questions. >> nikolaunk you very much for joining us today. >> thanks for having me. in switzerland, the lawyer for film director roman polanski said today that he will fight american attempts to extradite him to the united states in the sex case that goes back more than 30 years. the 76-year-old director was arrested saturday on arrival in zurich to receive a lifetime achievement award from a film festival. polanski pleaded guilty in california to having sex with a 13-year-old girl in 1977 but then fled to france before his sentencing. french officials have expressed astonishment over the arrest, one calling it a bit sinister. we'd like to know what you think of this case. our question tonight, should roman polanski be extradited to the united states to face sentencing in a case that's now more than three decades old?

you can give us your opinion by going on to the "how you see it" section of the homepage of the website and that's worldfocus.org. britain's royal navy has made its biggest drug seizure ever, capturing a ship off the coast of south america carrying cocaine worth almost $400 million. the operation first disclosed today took place earlier this month in an undisclosed location off south america. a british frigate captured the fishing boat and discovered more than 200 bales of cocaine hidden in secret compartments. itses destination was not known. the crew was arrested and the boat later sunk by gunfire. of course, a good deal of the cocaine that ends up in britain and elsewhere is manufactured in south america, in peru. we want to take you there tonight for a rare look inside peru's cocaine industry.

it's a region controlled by the maoist guerrilla movement known as the shining path. our report is by jenny wivell of itn and shows just how ingrained cocaine is in the culture there. >> reporter: this is the new epicenter of the world's cocaine production, the peruvian jungle. and it's where most of britain's cocaine is manufactured. in maceration pits under the forest canopy, chemists mix coca leaves with acid to make cocaine in its purist form. >> translator: here we're placing it in tanks with kerosene so the drug will start coming out. here the chemicals are mixing and curdling with the drug as it's stirred. >> reporter: according to the united nations office on drugs and crime, peruvian traffickers got away with exporting 282 tons of cocaine last year making peru the world's number one exporter. >> most of the cocaine that is

produced in colombia goes towards the north american market. and most of the cocaine that is produced in peru is now headed towards the european market. >> reporter: unlike in colombia, growing coca leaves in peru is legal. the company enaco sells it to workers who chew on the leaves to help them acclimatize to high altitudes. but enaco estimates that 95% of the crop is sold to drug traffickers who pay more than twice the government rate. >> translator: i began growing alternative crops, legal products. but it wasn't cost effective as this line of work. it was leading me to poverty. now if the price was improved for other products, then it wouldn't be necessary for me to be making this drug. >> reporter: here in the valley

of apurimac and ene rivers, cocaine production is a way of life. here central government law doesn't rule. instead authority comes from the guns of the shining path, the former guerrilla army that terrorized peru in the '80s and '90s. self-defense units comprised of peasants who were originally armed by the peruvian government to fight the shining path are now working alongside their former enemies, getting rich on britain's appetite for cocaine. >> translator: authorities don't come into the area, apart from the local ones we vote for. but the police just don't enteró they don't come. of course, the fear is being attacked by the shining path. that's why they never patrol this area. >> reporter: over the last six months more than 50 soldiers have been killed trying to gain control of this one valley. with coca even being dried on the doorstep of this army base in pichari, it appears that some elements of the military have already lost their appetite for a fight. >> translator: ocourse,

cocaine production has increased and the shining path participates in the whole process of its production. they yield it, grow it, they produce coca base, plus they give security to those transporting out of the area. >> reporter: there are some crops other than coca grown in this poverty stricken valley, but for most farmers chocolate and sugar just don't cut it financially. while europe's demand for cocaine shows no sign of reaching the end of the line, many believe the only way to crack the cocaine trade here is economic development. >> one more note from south america. in case you missed it this weekend, there was an unusual summit of 30 south american and african leaders. the so-called south south summit was held in venezuela and was led by president hugo chavez and moammar gadhafi of libya. it addressed a range of concerns from hunger in africa to the economic crisis and climate change. gadhafi suggested creating a nato of the south and calling it sato.

chavez cited a new era of unity between the countries as his country signed agreements to work on oil projects with at least five african nations. in the phil it's been described as the worst flooding to hit that country in 40 years. 140 people have been killed and dozens more arexd missing after tropical storm hit over the weekend.÷ a state of calamity was declared in manila and 25 provinces. more than a month's worth of rain, 16 inches, fell in just 12 hours. tot÷"áp)my, police, civilians and u.s. troops continued the search and rescue effort. and that takes us tour "signature story." today the american troop presence in the philippines is just a fraction of what it was

before two major u.s. military bases closed down almost two decades ago. in the years since, a stunning transformation has taken place, turning those bases literally from the ash heap of history into thriving economic enterprises. from the philippines, "worldfocus" special correspondent mark litke shows us how that was accomplished. >> this is the hub of operations during the vietnam war. >> reporter: for this woman, every day is a walk through history. >> there are things that happen in your life that you can forget. >> reporter: she's the curator of the clark air force base museum, formerly headquarters for the u.s. 13th air force, just north of manila. back then, she was a well loved aide and speech writer for a string of american commanders. >> the good old days. >> reporter: for americans who served here at clark and at the nearby naval base at subic bay, they were the good old days indeed. the most strategically important

u.s. bases in the pacific. clark and subic were a projection of american military power deep into asia. the philippines one of the best r & r ports. but it all came to an abrupt end in the early 1990s with two áeujuáy an explosion of filipino nationalism demanding an end to the u.s. military presence here. and an almost simultaneous explosion of nearby mount pinatubo which buried the bases under tons of volcanic ash. the americans were gone within a year. and nearly everyone assumed that clark and subic were history, too. well, just look at them today. the philippines has managed to now called freeport zones, clark and subic operate today under the flag of the philippines and are bustling with economic activity. companies from japan, korea, europe, canada and even the u.s. have come to set up

manufacturing and production while filipino firms have moved in with shopping malls, housing, casinos, tourism. it is all pouring millions a year into the philippine economy and might help this country become another one of those famous asian tigers. and there literally are asian tigers here now as well. but more on that later. first -- meet filipino senator richard gordon. >> i've been a mold breaker since i was a kid. >> reporter: he was mayor of the subic bay town when the u.s. navy sailed away for good. that's him on the right signing the final handover papers. >> we were very, very glum. we were looking forward to the day that we would see our lives, you know, suddenly change overnight. these are people i grew up with. i mean, the whole base i grew up with. >> reporter: gordon was not going to let subic bay sink. he personally organized thousands of locals who had lost

their base jobs into a volunteer army to repair and protect what the americans left behind. he kept pressing the central government to get involved. $10 billion in abandoned infrastructure was simply too good to waste. it took a couple of years, but the philippine government finally realized what a gold mine it had. today president gloria arroyo puts the importance of the freeport zones at the top of her economic agenda. reminding everyone that they are now very successful filipino operations. with a skilled, well educated english-speaking work force, low operating cost and tax lp incentives subic and clark have now brought in nearly $6 billior in foreign investment providing three times more jobs than the i u.s. military days. and the u.s. now pays about a çó million dollars a year for ship repair, maintenance and supplies. the u.s. ambassador says it makes good economic sense for both countries.

>> an interesting shift i think for us, too. we put into subic, it's easy, it's convenient, the facilities are all there. >> reporter: wherever there are former u.s. bases, of course, there are also the base towns which were so dependent on them. well, they, too, have had to learn how to adapt to life without the americans. although there are some old habits that are clearly hard to shake. angela city right outside clark is as raunchy as ever. but now instead of u.s. sailors, there are tourists from australia, korea, china. local officials say they're not happy with this, but the red light district remains a big source of jobs and city income until the economy matures, which it is doing. more legitimate businesses are now sprouting up. construction jobs are plentiful. and the old clark runway is now officially an international airport bringing in a new wave

of tourists for other pursuits. sports and leisure activities at clark. eco-tourism in the jungles of subic. swimming with whales and dolphins in subic bay itself. if all that isn't enough, there are those tigers we mentioned. at a disney-style jungle safari, one of the most popular new attractions at subic. it is certainly not what anyone would have imagined as the americans left 17 years ago. and though she misses the old days over at clark field -- >> that's an emotional one. >> reporter: -- she says she couldn't be happier. clark, subic, are now all yours. >> yes, yes. >> reporter: how does that make you feel? >> pride, pride. >> reporter: for "worldfoc this is mark litke in the philippines. that's our program for a monday night. a reminder to share your

opinions with us by going to worldfocus.org. i'm martin savidge in new york, thank you very much for joining us. we'll look for you back here tomorrow and any time on the internet. tomorrow and any time on the internet. until then, have a good night. -- captions by vitac -- www.vitac.com major support for "worldfocus" has been provided by rosalind p. walter and the peter g. peterson foundation, dedicated to promoting fiscal responsibility and addressing key economic challenges facing america's future. and additional funding is provided by the following

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