Spring 2000 HS Background Document A

This background information is provided as a basic introduction to the situations facing all of the countries represented in this simulation. It is provided as a basis for your own research. In order to prepare for the simulation, additional information must be gathered on your country, the other countries participating in the simulation, and the global issues that will be discussed in daily message exchanges and at conferences. The information is grouped by region, and is current as of January 2000.

The nations that will be represented in this simulation are: Brazil, China (PRC), Costa Rica, Egypt, Greece, India, Iran, Israel, Jordan, Mexico, Pakistan, Palestinians, Russia, Syria, United Kingdom (UK), United States (USA)

ASIA

While the Chinese government, led by the Communist Party, continues to liberalize its domestic economic policy, it still remains firmly against any political liberalization or reforms. In recent years, some countries have begun to view China's human rights policies separately from its economic policies. In November 1999, China and the United States reached an agreement that will allow foreign companies to access the Chinese market. In return, U.S. President Clinton agreed to sponsor China for entry into the World Trade Organization, something China had been trying to achieve for thirteen years. WTO membership for China will proceed if the U.S. Congress agrees to grant China permanent normal trade relations status. (Previously, the U.S. Congress has had to vote to renew NTR status for China on an annual basis.) While the Chinese government moves to open its markets to greater foreign access and continues with other economic reforms, it remains firmly against any political reform.

The government's unwillingness to allow for political reform adds to the negative view many take regarding China's record on human rights. In the past, Chinese citizens caught publically speaking out against the government are arrested and accused of "counterrevolutionary activities" and sentenced to long jail terms. In the same vein, President Jiang Zemin and the Chinese government continue to crack down on the millions of followers of the officially banned Falun Gong religious sect. Despite being banned, many Falun Gong members continue to non-violently protest harassment of the sect by the government, and are detained and jailed. Reiterating China's view of human rights in October 1999 as China celebrated fifty years of communism, President Jiang stated that basic human rights are defined as the rights to food and shelter.

China has been a major arms exporter since the 1980s, selling conventional weapons to nations around the globe. China also legally possesses nuclear arms, as it is allowed to do under the terms of the Nuclear Non-Proliferation Treaty (NPT). In 1997, the Chinese government promised to stop the sales of nuclear technology to Iran and Pakistan. However, in 1998, the U.S. confirmed that Chinese companies were still secretly selling nuclear technology to these countries, apparently with the knowledge and consent of the Chinese government.

Tensions between China and the Island of Taiwan became heated again in 1999, when Taiwanese president Lee Ten-hui suggested publically that there is not one China, but two. (Despite Lee's comment, nearly all countries continue to officially recognize mainland China and Taiwan as one country.) The Chinese government reacted swiftly to Lee's suggestion saying it would destroy the island of Taiwan should it attempt to separate from China. China has also warned the U.S. (which holds close ties to Taiwan) that it should not come to Taiwan's aid should the dispute escalate further.

China's success with its one-child policy has slowed its birth rate to American and Western European levels. The Chinese fertility rate is now lower than the rate required for replacement of its population. Since the Chinese population makes up about 21 percent of the world total, this has a big impact on world population growth. However, many see the Chinese program as a violation of human rights. Although the Chinese government claims that the program is voluntary, families that have more than one child are fined (usually by taxing them heavily) and there have been reports of widespread coercion in enforcing the policy. The traditional preference for male babies, coupled with the one-child policy, has led to the growth of the ratio of male to female children in society. This rise in the ratio is attributed to unreported births of baby girls, female infanticide in rural areas, and abortions of unwanted girls.

India is the world's most populous democracy; only China's population is larger. (It is estimated that India's population will be larger than China's by 2020.) However, nearly one-third of India's huge population lives in poverty. India is also severely divided along lines of caste, religion (Hindu, Muslim, Sikh), and demands for regional autonomy. In May 1991, the assassination of Prime Minister Rajiv Gandhi thrust the country into prolonged political turmoil. This turmoil continues today as the lines of power in the Indian Parliament, particularly over the course of the last three years, have changed frequently. The Hindu-nationalist party BJP (Bharatiya Janata Party) took over as the ruling party in March 1998, only to lose its hold on power in an April 1999 vote of no-confidence in parliament. In October 1999 elections that resulted from the no-confidence vote, the BJP surprisingly won reelection to lead India. The leader of the BJP, Atal Behari Vajpayee, resumed his duties as prime minister.

In May 1998, India, detonated a total of five nuclear devices in tests over a two day period, and removed any doubts about its capabilities to build and detonate nuclear weapons. Prior to the 1998 tests, India stated that its efforts to create a nuclear program was for defensive purposes only. The 1998 tests left the international community to wonder about India's motives regarding its nuclear weapons program. The tests brought condemnation from a number of countries including the United States, Germany and Pakistan. Two weeks after India tested its nuclear devices, Pakistan, India's neighbor and enemy, successfully tested its own nuclear devices. (Since India and Pakistan gained independence from Britain in 1947, there have been three wars fought between the two.) Before this time, Pakistan had never detonated a nuclear device although it was assumed that it had nuclear capabilities. With both countries testing nuclear devices so close together, it appeared as though both countries were poised to engage in an arms race. However, with its tests complete, India declared a moratorium on further tests, and one month later in June 1998, the Pakistani government also declared a moratorium on nuclear testing. Both countries have indicated that they are prepared to back off from a nuclear confrontation, if their demands can be met by the international community. India wants to be officially recognized as one of the world's nuclear powers, while Pakistan wants international security guarantees. India has also refused to sign the CTBT or NPT because it does not require the five recognized nuclear weapons- holding nations to destroy their nuclear arsenals.

The competition between India and Pakistan over both conventional and nuclear weapons constitutes one of the most destabilizing threats to both regional and international peace. The continuing conflict between India and Pakistan over control of the Indian state of Kashmir increases the danger that either side may resort to use of its nuclear weapons. In the spring of 1999, India discovered that Pakistani rebel forces had crossed into Indian territory in Kashmir. The government of Pakistan stated that these were not Pakistani military forces, but Islamic rebels acting independently fighting for the separation of Kashmir from Indian control. (Pakistani military forces were later discovered in the area, however.) A nearly two month long "mini war" resulted between the two sides until India was able to drive the rebels back into Pakistani territory.

Economic problems faced by India have forced the government to reevaluate its economic philosophies. India must now confront rising concerns that its foreign debt is becoming too large ($100 billion). The debt problems are complicated by a rising internal budget deficit and a widening trade deficit. However, it has a large amount of cash on hand to use for development and infrastructure and the economy shows few signs of slowing down. In the 1990s, India's economic growth rate was remarkable, especially in light of its burdensome population boom. Unfortunately, the high levels of external borrowing could trigger an economic crisis.

In October 1999, Pakistan's army overthrew the government of Prime Minister Nawaz Sharif in a bloodless coup d'etat. The catalyst for the army's ouster of Sharif was his attempt to dismiss General Pervez Musharraf , the top military official in Pakistan. As events unfolded after the army's takeover, General Musharraf inserted himself as Pakistan's leader effectively ending the rule of Pakistan's democratically elected government. Since its independence, Pakistan has been ruled by a military government for 25 of its 52 years. A large portion of Pakistan's people welcomed the ouster of Sharif's government and the return to a military controlled government. Many citizens viewed democracy in Pakistan as only beneficial to those holding positions in government, and not the common Pakistani citizen. Graft and corruption in Pakistan are widespread, and many citizens saw the return to military control as a way to clean up many of Pakistan's underlying problems. Many experts predict the military government will eventually have to allow civilians back into the government in order to rekindle its relationship with the international community--as well revive economic assistance that is so vital. (After the coup, many countries and organizations, including the IMF, halted the aid they provide to Pakistan).

The new military-led government has caused some concern since Pakistan has made it known to the world that it possesses nuclear weapons. Pakistan officially tested its nuclear weapons in June 1998. Pakistan's nuclear tests were in response to neighboring India's tests that took place two weeks earlier. In late 1998, now deposed prime minister Nawaz Sharif indicated that Pakistan would be willing to sign the Comprehensive Test Ban Treaty (CTBT) if India would adhere to its promise not to conduct further nuclear tests. Sharif also indicated that he would expect all sanctions to be lifted in return for Pakistan`s signing of the CTBT. Negotiations between the two countries on the signing of the CTBT in late 1998 and again in early 1999 were unproductive. No indication has been given by the new government, led by General Sharraf, as to whether it intends to negotiate on these terms.

Pakistan's history has been turbulent since its creation in 1947 when the Hindu-majority nation of India was partitioned, and the separate and sovereign Muslim nation of Pakistan was born. Pakistan has fought three wars since that time with India. Tensions with India remain as both countries continue to fight what amounts to a low-level war in the state of Kashmir over who has the right to govern this area. These tensions boiled over in May 1999, when India discovered that alleged Pakistan-supported Islamic rebels had taken up positions in the India-controlled portion Kashmir. India began attacks against the rebels to drive them back into Pakistan. Both sides agreed to peace talks to prevent an all-out war, although fighting continued until India claimed it had successfully swept the rebels out of its territory.

Political instability, natural disasters, and low demand for local products have all contributed to the near collapse of Pakistan's already weak economy. Pakistan supports the eighth largest military in the world with military equipment from the U.S., China, France, and the United Kingdom. Consequently, military spending and debt servicing have consumed up to two-thirds of Pakistan's revenues. This spending has become a target of reform for lending institutions like the IMF. Furthermore, Pakistan has drawn criticism for its acquisition of weapon supplies from China that could be used to accelerate its weapons programs. The Ghuari missile, capable of carrying nuclear warheads, was displayed in public for the first time in March 1999.

Western nations have become concerned that Pakistan has become one of the world's premier staging area for terrorists, drug-runners and Islamic radicals. The Pakistani government has been unsuccessful in its attempts to curtail these activities. Moreover, Pakistan has been criticized by several nations for aiding the rule of the Taliban in neighboring Afghanistan. A hijacking of an Indian Airlines jetliner in December 1999, led some officials in the Indian government to accuse Pakistan of sponsoring the hijacking. In order to end the hijacking, which ultimately took the airplane to Afghanistan, the Indian government agreed to release a few Islamic radicals it had imprisoned. Unfortunately, the hijackers were able to avoid being captured.

EUROPE

The process of European economic unification, expanding NATO membership, and ethnic wars in Eastern Europe are the consuming issues for the governments of the European Union (EU). The EU members are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the UK. The official economic unification of Europe was celebrated on December 31, 1992.

The Greek government, led by Prime Minister Konstandinos Simitis, has taken on a larger role in recent years as a regional actor in Southeastern Europe. Greece is a member of NATO, the European Union, and other regional organizations, and has advocated for the expansion of these alliances into the former Communist countries of Eastern Europe. The recent crises in the Balkans have, at times, threatened to spill over into northern Greece, while tensions with Turkey over Cyprus are a continuing concern. In January 2000, Greek Foreign Minister George Papandreou traveled to Turkey for landmark high-level negotiations on economic agreements that promise to begin a new era of bilateral relations.

The Greek economy, which is divided equally between public and private ventures, is beginning to show signs of improvement after years of decline. In preparation for joining the European Union's single currency (the Euro), the government has tightened fiscal policy which resulted in lower budget deficits, lower inflation (around 4 percent in 1998), and 3 percent growth in GDP. Tourism is a key industry, although plans to privatize state-run industries should also provide a boost in foreign investment and trade over the next few years.

In September 1999, Greece was hit by an earthquake which was centered in the Athens area killing over 100 people and causing millions of dollars in damage. One of the side-effects of the earthquake, however, was cooperation between Greece and Turkey for disaster relief. The traditional regional rivals each experienced a major earthquake within a month of each other, and through their cooperation and mutual aid many diplomatic opportunities have resulted.

In Russia, President Boris Yeltsin unexpectedly resigned from office in December 1999. Criticism from within the Russian parliament about Yeltsin's competence as president as well as the condition of his health had been increasing. Recently appointed prime minister Vladimir Putin became acting president until official voting to elect Yeltsin's successor takes place in late March 2000. Putin is widely expected to win that election and officially become Russia's next president.

The transition to a market economy continues in Russia although there has been little progress since 1998. Severe economic problems in 1998 caused the Russian stock market to plunge more than 40 percent and the ruble to be devalued so far that it was worth almost nothing. Up to that point, Russia had increased foreign investment and trade, and instituted economic reforms that paved the way for its membership in the International Monetary Fund (IMF) and World Bank. However, Russian foreign debt (approximately $150 billion owed to foreign governments and banks and growing), the need for increased aid, and unregulated domestic economic policies undermined Russia's economic strength. Despite this, many foreign governments continue to cautiously support Russia by granting limited loans, even though there appears to be little stability in the economic system. The aid from the West has been far from unconditional, however. The price for such large aid packages has required further economic reform, which continues to make for difficult conditions for Russian citizens who have seen their social safety net disappear.

Privatization of industries is considered crucial to the success of Russia's economic reforms. Currently, about 75 percent of Russian economic activity is accounted for by private companies, which is encouraging, but benefits have been slow in coming. One of the most trying difficulties for the Russian government to overcome is the conversion of defense industries into the manufacture of consumer goods. (The Soviet Union built a massive defense industry which Russia cannot afford to maintain.) If this conversion fails, it may further exacerbate mass unemployment and social instability. However, not all of Russia's defense industries are targeted for conversion, increasing concerns about arms becoming a major export product.

In addition to meeting the military requirements for its own armed forces, the Russian arms industry is one of its best sources of foreign trade and hard currency. Russia is courting nations such as Israel, South Africa, Taiwan, Pakistan, and Iran as clients. Iran has already purchased large quantities of advanced conventional weaponry, including aircraft and tanks, worth approximately $600 million. This Russian-Iranian transfer of arms has brought harsh condemnation from the U.S. In 1999, it was discovered that the Russian government allowed three Russian institutes to sell missile and nuclear technology to Iran bringing threats of limited trade sanctions from the U.S. While weapons sales are beneficial to the Russian economy, many nations worry about the spread of Russia's military technology to other nations, particularly to countries such as Iran and Iraq. Reduced to the bottom line, Russia's economic realities will force a continued reliance on arms exports for hard currency earnings. However, many observers feel that it may not be the best time for Russia to ignore the wishes of the international community as it is currently so dependent on their aid, as well as continued loans from the IMF.

Contributing further to its tenuous relationship with some of its allies, Russia again sent its armed forces to invade the southern Russian region of Chechnya after several terrorist bombings in Moscow were reportedly linked to Islamic separatists from that region. This was the second time since the fall of the Soviet Union that Russian forces and Chechen rebels have quarreled in the region. Chechnya, populated by a Muslim majority, wants to separate from Russian control. The Russian invasion of Chechnya this time was particularly brutal bringing some criticism from many in the international community.

In the United Kingdom, Tony Blair became Prime Minister of Britain in 1997 in a landslide election. Prior to the election of Blair, the government faced repeated crises, which led to strong discontent among Britons with their former government. Despite Blair's left-leaning government, the UK remains one of the more conservative European Union members on issues of common security and political unification. The UK was the only member of the EU that opted out of some of the clauses of the Maastricht Treaty when it was drafted in December 1991. In addition, the UK has also declined to phase out the pound as its currency and implement the euro, the new European single currency. (Three other EU members, Denmark, Sweden and Greece also did not assume the euro as their currency.)

The United Kingdom continues its close ties with the U.S. aligning itself with the U.S. on many international issues. In 1998, the UK fully supported and participated with a military airstrike against Iraq for its refusal to abide by terms for weapons inspections made after the Gulf War. The UK also voiced its full support for military strikes taken by the U.S. on terrorist facilities in Sudan and Afghanistan in retaliation for the bombings of the U.S. embassies in Kenya and Tanzania. Similarly, the UK was the strongest supporter of US airstrikes against Serbia in 1999, and helped to unify NATO behind these actions.

LATIN AMERICA

Costa Rica is one of Central America's most stable democracies, despite its close proximity to regional conflicts in Panama, Nicaragua and El Salvador. This has allowed Costa Rica to develop a strong tourism industry, based on the variety of species and climates within the country. The vast bio-diversity that exists in Costa Rica attracts tourists from around the world. Agricultural exports are the core of the economy, although manufacturing is also growing quickly due to preferential tariff structures designed to attract foreign investment. Conservation measures are becoming a priority for the government, however, as development begins to endanger the environment which tourism depends upon.

While Costa Rica was spared the worst effects from Hurricane Mitch in October/November of 1998, substantial flooding and infrastructure damage did occur. As a region, Central America's development is estimated to have been set back 20 years by the Hurricane, which has created additional pressure for Costa Rica to seek international sources of trade. Attempting to balance manufacturing, agriculture, and tourism is a challenge to Costa Rica for the future. In terms of the domestic economy, President Miguel Angel Rodriguez-Echeverria has had limited success in curbing inflation, which was near 10 percent in 1999. A substantial trade imbalance is also a concern, with imports outweighing exports by 600 million US dollars in 1997.

MIDDLE EAST

The Arab Republic of Egypt is respected for its positive relationship with the nations of the Middle East, and with the major powers of the West, as well. In comparison to its current international relationships, previous controversies created tensions between Egypt and other countries around the globe, including its Arab neighbors. Egypt's relationship with its Arab neighbors were most tense when the late Egyptian President Anwar Sadat engaged the Israeli government with the hope of forging a better relationship between the two countries. (At that time, most Arab states in the region refused to recognize Israel's existence and officially remained in a state of war with Israel.) Sadat eventually traveled to Israel and met with then Israeli Prime Minister, Menachem Begin. In 1978, both leaders were able to reach agreement on several divisive issues between the two countries. These negotiations between Sadat and Begin were moderated by U.S. President Jimmy Carter, and became known as the Camp David Accords named after the location in Maryland where the negotiations took place. The Camp David Accords led to a formal peace agreement between Egypt and Israel in 1979. President Sadat's willingness to negotiate with the Israelis turned Egypt's Arab allies in the region against him, and he was labeled a traitor. Sadly, Sadat was assassinated by Islamic extremists in 1981.

After Sadat's assassination, Vice President Hosni Mubarak was elected president and remains in that position today (Mubarak was elected to a fourth term in 1999.) Mubarak has worked to institute political and economic reforms, restore Egypt to a major power among the Arab states, and maintain a strong relationship with the West. Mubarak has instituted political reforms that have increased political participation and provide more democratic-style freedoms, however, many opponents feel some of these political reforms have not gone far enough, or fail to be fully recognized, in some cases. Since the early 1990s, he has also instituted several economic reforms aimed at increasing privatization of major industries and bolstering foreign trade. Egypt's solid attempts at economic reform, as well as it's participation in the Gulf War coalition against Iraq in 1991, have led several nations to grant sizable debt relief packages which have been instrumental in its push to solidify its economy.

The Egyptian government has also continued its efforts to take a leadership position on several affairs in the Middle East region. President Mubarak continues to condemn those Arab states that support terrorist activities, and has pushed for those countries who continue to support terrorist activities to cease in order for widespread peace to be achieved in the region. Mubarak stepped up his anti- terrorism campaign after Islamic militants attacked tourists in Egypt in 1997. Further, Mubarak has worked over the years to bring the Israeli government and the Palestinian leadership together to work out their differences.

Iran continues to struggle at home and abroad with perceptions of the proper balance between fundamentalist and secular state policy. While the 1997 election of President Mohammed Khatami marked a departure from the hardline Islamic governance of the Ayatollah Khomeni and Khameni era, broad reform has still not occurred to any large degree. Student protests against existing conservative policies erupted in 1999, potentially signaling a broader consensus for change within the nation. Several of these protests have ended in violence, and protest activities are continuing.

Economically, the isolation of the past 20 years has taken its toll on Iran. While oil remains a potentially lucrative export, embargoes by the United States and other nations have served to undercut the potential that petroleum exports could have. Iran has sought to repair its image as a terrorist state recently, although these efforts have not met with much success especially from the US. Unemployment is high and continues to rise, and GDP per capita is at pre-1979 levels. The long war with Iraq during the 1980's, coupled with continued tensions along the border, have consumed a substantial amount of the nations wealth and effort. The lack of foreign investment and trade are not offset by the limited exports of oil that Iran produces.

In addition to the economic pressures facing Iran, international concerns about their potential to acquire weapons of mass destruction continue to keep Iran isolated. Recent concerns over the potential for Iran to develop nuclear weapons have eroded what little diplomatic progress had been made in the recent past. Exports of nuclear reactor technology from Russia, China, and North Korea have come under increasing suspicion from the US. Allegations of missile development, and steady importation of weapons systems, have been made by international observers.

In September 1993, after long, secret negotiations in Oslo, Norway, the late Israeli Prime Minister, Yitzhak Rabin and Palestinian Liberation Organization (PLO), leader Yassir Arafat surprised the world by announcing that they had reached an agreement to exchange recognition and to start the peace process. This peace accord between Israel and the PLO marked a significant new chapter in the efforts to attain permanent peace in the Middle East.

Soon afterwards, the peace process was undermined by extremists on both sides. Prime Minister Rabin was assassinated by an Israeli extremist in November 1995 and a series of terrorist strikes by the Palestinian extremist group, Hamas, weakened Israeli support for the peace process. In May 1996, Binyamin Netanyahu was elected prime minister by a narrow margin over Shimon Peres, Rabin's successor. Netanyahu voiced his reluctance to continue the peace process; consequently, there were serious doubts on both sides about the future of the Oslo agreement and regional peace. However, in January 1997, with the help of the late King Hussein of Jordan, the two sides signed the Hebron-West Bank Accord. This agreement set a timetable for Israeli withdrawal from specific areas in the West Bank, detailed control of Israeli settlements, and specified areas for Israeli security. Progress on the implementation of these agreements was slow, though, and led to both sides meeting again to negotiate the Wye River agreement, which was brokered by the United States in October 1998. The Wye River agreement established a more comprehensive framework in which to work but also increased further division within Israel. In December 1998, Netanyahu froze all movement on Israel's behalf on the Wye River agreement claiming that the Palestinians were not meeting their side of the agreement.

Growing dissent within the Israeli Knesset, primarily over the terms of the Wye River agreement, was sparking rumors of a vote of no-confidence for Prime Minister Netanyahu in December 1998. But before the no-confidence vote could be taken, Netanyahu called for new elections to be held. The result of the May 1999 election saw Netanyahu defeated by Ehud Barak in the contest for prime minister. During his campaign, Barak said he would work to increase negotiations with the Palestinians, and fully implement previously reached agreements between the two sides. Once elected, Barak was able to form a coalition government, and set out to ease tensions among those in the new government and with the Palestinian leadership. Barak's efforts to reach out to the Palestinians were rewarded in September 1999, when both sides came to terms on a modified Wye River agreement. In December 1999, Barak suggested that he might be willing to return the Golan Heights to Syria if it would bring peace between the two countries. Negotiations were begun between the two sides on this issue, but stalled in January 2000.

The declaration of principles between Israel and the Palestinians under the Oslo agreement in 1993 marked a new era for the leadership of the Palestinian people. Yassir Arafat had been criticized in the past for endorsing terrorism and his commitment to the dissolution of the state of Israel. However, by committing himself to peaceful transition beginning with the Oslo meeting in 1993, Arafat has renounced terrorist tactics and has recognized Israel's right to exist. Despite this progress, however, the Palestinian people still face serious problems. The territories that have been designated for Palestinians are impoverished and isolated. Furthermore, throughout the Middle East, nearly a half-million Palestinian refugees remain. The Palestinian Authority continues to push the Israel government to fully adhere to the terms of all of the agreements reached since Oslo.

The opening of the Gaza International Airport in November 1998 was hailed as a important step in establishing a Palestinian state, though, difficulties still surround the issue of Palestinian statehood. Agreements reached between both sides called for a Palestinian state to be achieved by May 4, 1999. As that date grew nearer, it appeared that the Israeli government was unwilling to proceed with the possibility of a Palestinian state as former Prime Minister Netanyahu felt that the Palestinians still had not fully honored their commitments to previous agreements. Arafat appeared to be intent on declaring statehood, though, which increased tensions further. As the date grew nearer, many in the international community, including the United States, urged Arafat agreed to delay his declaration until sometime after the Israeli elections. Ultimately, Arafat agreed to delay his declaration of a Palestinian state. The move towards full realization of this state continues to face difficulties in the development of its economy, achieving internal security, and building relationships with its neighbors. The international community has committed itself to easing this transition, in the form of economic aid and security assistance.

In October 1999, Israel and the Palestinians agreed on a route for safe passage between the West Bank and Gaza further increasing hope for the Palestinians to be formally recognized. Also, November 1999, both sides met to formally discuss a long-term peace accord. The intent is to have a framework for peace between Israel and the Palestinians in place in February 2000, and an agreement signed by October, however, progress towards this effort has slowed recently. In December 1999, these talks were threatened when the Palestinians walked out of the talks because Israeli settlements were still being constructed in the West Bank. Prime Minister Barak agreed to a moratorium--though not a complete halt--on the construction of new settlements in the West Bank which appeased the Palestinian negotiators. Also, in January 2000, Barak and Arafat agreed that Israel would turn over another 6 percent of the West Bank to the Palestinians. The specific area of the West Bank that was to be returned was not clear, however.

King Hussein, who ruled Jordan since 1952, died in early 1999. It was learned that the king was suffering from cancer in July 1998. In December 1998, the king surprised observers by appointing his oldest son Prince Abdullah heir to the throne, a post which the king's brother, Prince Hassan, had held for thirty-four years. The death of King Hussein represents a matter of concern for those involved in the Israeli-Palestinian peace process. The king had increasingly worked over the last decade to bring both sides in peace process together. Most notable were his efforts in 1997, getting both sides to agree to the Hebron-West Bank Accord, and in 1998, when he participated in the Wye River meetings, helping to broker the deal between Israel and the Palestinians. King Abdullah has stated that he will continue to encourage peace in the region just as his father did.

Although Jordan has been pro-Western in its foreign policy, a rift developed in the early 1990s as Jordan aligned with Iraq during the Persian Gulf war. This cost Jordan much of its Western economic aid, and Jordan absorbed 600,000 Jordanian and Palestinian refugees from Kuwait and Saudi Arabia. The war was also costly for Jordan because it lost its biggest trading partner, Iraq, because of the post-war economic sanctions. Eventually, King Hussein joined the West in calling for Saddam Hussein to be replaced, and reconciled with Saudi Arabia's King Fahd after a six year rift. More controversy came about in 1994, when Jordan signed a peace agreement with Israel. This agreement has created tensions between Jordan and the Palestinians. While the Palestinians are not opposed to peace between Israel and Jordan, they believe that Jordan should have waited until some issues between Israel and the Palestinians were more fully settled. (Jordan has a large Palestinian population, some of whom are native born citizens and others who are refugees from Israeli-occupied territory. The refugees have put a serious strain on the Jordanian economy.)

Jordan began an austerity program under the guidance of the International Monetary Fund (IMF) in 1989. However, the economic problems caused by the loss of aid and the other economic problems brought about by the Persian Gulf war have forced Jordan to abandon the economic reform program and suspend debt payments. The past few years have seen an increase in privatization and foreign investment, which is beginning to lower debt levels and stabilize the economy. Jordan recently signed an agreement with the European Union which aims for a pan-Mediterranean free trade zone by the year 2010.

The Syrian Arab Republic, which became independent in 1946, has been led by President Hafez al- Assad since he came to power in a military coup in 1970. Prior to the Gulf War, Syria was considered to be a hard-line Arab country, although in the post-War era Syria has moved to build better relations with the West. Syria has long been considered a terrorist state by the United States and Western Europe, and has been accused of providing safe passage and training for terrorists planning attacks on Israel. The Syrian government is also rumored to have been involved in the capture and imprisonment of Western hostages in the Middle East. Following the historic signing of the peace agreements between Israel and the Palestinians and Israel and Jordan, attention has been directed toward Syria to determine if a similar peace can be negotiated between Israel and Syria. High-level negotiations were begun in December 1999, and hinged upon Israel returning the Golan Heights to Syria. These talks stalled a month later with little real progress made.

Throughout the 1980s, Syria was heavily armed by the Soviet Union. In the post-Soviet era, President Assad made significant strides toward changing his reputation in the West by siding with the allied forces during the Persian Gulf War, continuing a rivalry with Iraq that began in the 1980s. Syria is seeking to end the isolation of the recent past by increased diplomatic efforts and trade agreements.

Syria's industry is based largely on oil and textile manufactures, although the government is investing in diversifying into other sectors. Limited privatization is also occurring, as efforts to attract foreign investment and trade are ongoing. Agricultural production remains the largest component of the economy, however. Recent economic efforts include building relationships with European partners to increase exports of manufactured goods. Syria has also sought increased trade ties with neighboring countries, including Iraq with which they recently signed a bilateral trade agreement. Recent political and economic agreements with Turkey and Russia have increased Syria's international standing.

NORTH AMERICA

After almost a decade of recognition as an example of an economic success story, Mexico entered a severe financial crisis in December 1994. The government of President Ernest Zedillo was forced to devalue the peso (the Mexican currency) which resulted in a stock market and bond market crisis that had ripple effects throughout Latin America and the entire developing world. In response, the U.S. government increased Mexico's credit line in an attempt to avoid the kind of debt crisis that threatened the stability of U.S. banks in the mid 1980s. Today though, analysts are still concerned about the stability of the Mexican economy. President Zedillo continues to push economic liberalization policies with good results, and in 1997 Mexico earned $11 billion from foreign investment in the country. President Zedillo hopes that economic growth as a result of NAFTA, and Mexico's participation in the Asia-Pacific Economic Cooperation (APEC) forum, will help the country to continue to emerge from the financial crisis of 1994-95. U.S. efforts to stabilize Mexico's economy appear to be successful, although it remains to be seen if this is a long-term change.

Although Mexico claims to be a democracy because it holds regular elections, one party has been in power since 1929. Mexico has been accused of being an autocracy and violating the political rights of the opposition by maintaining one-party rule. The ruling PRI (Revolutionary Institutional Party) has been accused of wide spread election fraud to maintain control of the country. However, events in 1997 may have weakened, to a degree, the PRI's hold on power. In July of that year, the PRI lost a majority of seats in the lower house of the Mexican Congress. Additionally, recent strides have been made to uphold true democracy, by reducing election fraud and promoting cooperation between parties. In response to these challenges, the PRI announced plans for an open presidential primary that took place in November 1999, breaking with the tradition of presidents naming their own successors. The two main opposition parties are moving closer to an alliance as well, which could lead to the first change in presidential power in over 70 years when the election is held in July 2000.

Human rights are an issue in the Chiapas region of Mexico, where in 1994 peasants formed a violent underground political movement known as the Zapatistas. This movement was designed to gain political representation and economic opportunities. The government's response to the emerging Zapatista movement was violent and repressive, resulting in accusations of human rights abuses. In 1997 violence in the Chiapas region flared again as 45 indigenous Indians were killed. It was later learned that the Indians were killed by another group of indigenous Indians whose desires were different from the Indians of the Chiapas, and who were associated with the PRI, the ruling party in government in Mexico. Although negotiations officially continue between the PRI government and the rebel leaders in Chiapas, they have slowed for the time being. Peace talks between Zapatista rebels and the government broke down again in November 1998, and the stalemate appears to have no end in sight.

In the United States, trade has been a central focus of the Clinton Administration's foreign policy. The passage of the North American Free Trade Agreement (NAFTA) and Uruguay round GATT agreement by the U.S. Congress were major successes for the President in his first term. In addition, Clinton has met with Asian and Latin American leaders about free trade (a proposed free trade zone encompassing the entire western hemisphere may be in place as early as 2005.). American-Japanese trade relations have also been improving, with the Japanese government agreeing to grant American automotive and telecommunications industries greater access to the Japanese markets. At the same time, trade frictions with China have apparently been diffused as China agreed to allow greater foreign access to its markets in November 1999. In return, the U.S. agreed to sponsor China for membership in the World Trade Organization (WTO). China will be allowed to become a WTO member if the U.S. Congress agrees to grant China permanent normal trade relations status. (Previously, Congress has had to vote to renew NTR status for China on an annual basis.) Trade tensions between the U.S. and the European Union over the EU's refusal to end its ban on the importation of American beef raised with special growth hormones, (The EU countries were concerned that the hormones could present a health risk, while the U.S. argued that they do not.). The EU's refusal to open its markets continued after a WTO deadline to halt the ban passed. As a last resort, the U.S. received WTO permission to retaliate in July 1999 by imposing 100 percent tariffs on a range of luxury goods imported from Europe.

In its statements, the U.S. places a great deal of emphasis on human rights. The U.S. continues to define human rights largely in political terms, however, the U.S's differences on domestic and international policies that protect human rights remain problematic and controversial. The Clinton administration continues to face criticism by human rights organizations for its negotiations with China allowing it to enter the WTO , and for the refusal to sign the 1997 treaty banning the use and production of anti-personnel land mines (The U.S. did agree to most parts of the land mine treaty, however, it wanted an exemption in the treaty to keep its land mines along the border between North and South Korea citing protection of U.S. troops in that region.) The changing of immigration policies that drastically scaled back the numbers of refugees allowed to enter the U.S., has also brought sharp criticism from human rights organizations.

The United States' relations with Cuba has caused some tension between the U.S. and its allies. After the Cuban government shot down two unarmed, U.S. civilian aircraft in February 1996, the U.S. adopted the Helms-Burton law, which allows the U.S. government to place restrictions on foreign companies in the U.S. that also do business in Cuba, and allows U.S. citizens to sue foreign companies for profiting from property confiscated by the Cuban government after 1959. Canada and the EU complained to the World Trade Organization (WTO) that this is a violation of their sovereignty because it represented legitimate restrictions on their right to do business. The U.S. reached an understanding with the EU in 1997 under which the EU agreed to suspend its WTO case and step up its efforts to promote democracy in Cuba. In 1998, President Clinton eased some restrictions on the U.S.'s embargo against Cuba which allowed for greater freedom to send money, charter flights, start a direct mail service, and sell food to non-governmental bodies.

The U.S. has promised to pay more attention to Africa, traditionally a low priority region. In 1993 the U.S. announced that it would forgive half of the debts owed to the U.S. by the 18 poorest countries in Africa; however, this only amounted to $228 million out of $50 billion in outstanding debt. (Nigeria was considered a middle-income country, and was therefore not eligible.) In 1997, in an attempt to jump-start the African economy, the U.S. agreed to grant the poorest countries the right to import up to 1,800 products duty-free into the U.S. As part of the same plan, an investment of $500 million was made to improve telecommunications and the infrastructure of those countries south of the Sahara. Additionally, in 1999, the U.S., a G8 member, agreed to a plan to forgive a portion of debt owed to the G8 countries by 30 of the world's poorest countries--many of which are located in Africa. Later in the year, the U.S., along with Canada and the United Kingdom agreed to forgive all debts owed to them by these countries.

In terms of the environment, in December 1997, the Clinton administration committed the U.S. to accept specific international limits on greenhouse gas emissions by agreeing to the terms of the Kyoto Protocol. This commits the U.S. to lower greenhouse gas emissions to a level roughly 6 percent lower than 1990 levels by the year 2012. However, the U.S. Congress has hinted that it will not ratify the treaty when the Clinton administration sends it to the Senate for approval. Some members of Congress feel that the treaty is unfair because it exempts many developing countries from the terms of the treaty, and that it is economically damaging.

SOUTH AMERICA

A shaky economy has been of great concern in Brazil in recent years. Brazil has been faced with a massive budget deficit, rising inflation rates, slow economic growth and investors pulling their money out of the Brazilian system. In January 1999, in an effort to halt the economic slide, President Fernando Henrique Cardoso devalued the Brazilian currency(something that he promised not to do when he was reelected in 1998). Cardoso, who rose to popularity by bringing Brazil's astronomical inflation rate under control as his country's finance minister in the early 1990s, has been facing extremely low approval ratings lately as Brazilian citizens are unhappy with the reforms and what appears to be an unchanging economic situation. Cardoso has been concerned with implementing tough austerity programs and free market reforms in an attempt to reintroduce some stability into the economy. The devaluation of the real was also an attempt by Cardoso to get the Brazilian Congress to take action and accept some of the reforms he had been proposing. The Brazilian Congress has been reluctant to make cuts in many areas, particularly in social programs. The reforms that Cardoso has been trying to implement are required as part of a deal negotiated with the IMF in 1998 that provides Brazil with $41.5 billion in debt relief.

Fallout from the global economic crisis of 1997-98, sent Brazil's economy spiraling downward just as it looked as if things had taken a turn for the better. The market reforms and debt restructuring programs adopted by President Cardoso reduced inflation to single digit figures. (In mid-1994, monthly inflation ran at 40 to 50 percent.) Brazil also agreed to a debt restructuring plan in 1994. This plan resembled the Brady Plan with its emphasis on privatization of government-owned companies and the use of austerity measures to reduce government expenditures. The austerity measures instituted under the debt restructuring plan have prevented an expansion of Brazil's welfare policies, which could be a problem given the huge disparity in income distribution. About 20 percent of Brazil's population shares only two percent of the country's wealth. In many cases, Brazil has been unwilling or unable to help its poorer citizens. An estimated one-fifth of the Brazilian population, about 33 million people, lives at the so-called "misery level". In addition, Brazil's economic woes, and a recession affecting several countries in the region, has led to a 30 percent drop in trade between the Mecousur group in which Brazil plays a large role.

To increase industrial output, improve agricultural production, and relieve the pressures of world record population growth in Rio de Janeiro and São Paulo, the government is actively encouraging the settlement of the rainforest for industrial development, agricultural expansion, and grazing land. There is currently intense pressure from industrialized countries and environmental groups to curb the development of the rainforest. Brazil blames the current environmental crisis on the industrialized countries, and is reluctant to halt rainforest development because it is considered one of the keys to Brazilian economic development.

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