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Spring 2001 Country Backgrounds (Simulation 1)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, you must research additional information on your country, the other countries participating in the simulation, and the global issues that will be discussed. The information is current as of March 2001. The nations that will be represented in this simulation are: Argentina, Brazil, Chile, People's Republic of China, Republic of China (Taiwan), Estonia, France, Mexico, Russia, Spain, Sweden, United Kingdom, and the United States of America. Argentina As the second largest country in South America, Argentina has natural resources, a highly literate population, strong agricultural sector, and a diversified industrial base. A key development in Argentina's recent economic success, has been its dramatic increase in foreign trade. Earnings from its growing export sector have helped Argentina meet its scheduled debt payments. Further development of its foreign trade plays an increasingly important role in Argentina's overall economic development. Argentina has been working to solidify its relationship with the U.S., and trying to bolster its relationship with other countries, both industrialized and underdeveloped. In recent years, Argentina has been supportive of the U.S. and its allies, sending troops to the Gulf War in 1991 and participating in peacekeeping missions in Haiti and Bosnia. It has also been an outspoken supporter of international disarmament efforts, the fight against international terrorism, and of strong environmental policies. Argentina is still dealing with the aftermath of the military dictatorship that held power from 1976 to 1983. A recent court ruling overturning the law granting amnesty to soldiers accused of torture, murder and kidnapping may result in a wave of new trials. The judge said that the immunity laws, which protected all but the highest -ranking officials, violated international human rights agreements signed by Argentina. Brazil Things were not always so. Market reforms and debt restructuring programs adopted by President Fernando Henrique Cardoso earlier in the decade had reduced Brazilian inflation from over 40 percent to less than ten percent. In 1994, Brazil agreed to a debt restructuring plan that emphasized the privatization of government-owned companies and the use of austerity measures to reduce government expenditures. However, the global economic crisis of 1997-98 sent Brazil's economy spiraling, and a regional recession led to a 30 percent drop in trade between the nations of the Mercosur group (Argentina, Brazil, Paraguay, and Uruguay). In an effort to halt the economic slide, President Cardoso devalued the real, Brazil's currency, in January 1999, a move he had promised not to take when he was reelected the previous year. In part, the currency devaluation was an attempt by Cardoso to get the Brazilian Congress to approve new proposed economic reform measures and austerity measures. These reforms had been agreed to under a $41.5 billion debt relief deal negotiated by Brazil with the IMF in 1998. Brazilian citizens are unhappy with both the reforms and the unimproved economic situation, so the Brazilian Congress has been reluctant to make cuts, particularly in social programs. But if social programs have not been cut, they have not been expanded either, and the nation continues to suffer a huge disparity in income distribution. The poorest 20 percent of its population shares only two percent of the its wealth. An estimated one-fifth of Brazilians - well over 30 million people - live at the so-called "misery level." To increase industrial output, improve agricultural production, and relieve pressures created by rapid population growth, the Brazilian government has actively encouraged the settlement and development of Brazil's tropical rainforest. As a result, the government has come under intense pressure from industrialized countries and international environmentalists to curb its policy. But Brazilians blame their current environmental crisis on the industrialized countries, and the government is reluctant to halt a policy that it considers key to Brazil's continued economic development and social stability. Brazil has managed to stabilize the number of new AIDS cases and cut the number of AIDS deaths, but its policies have brought it into a trade conflict with the U.S. In the absence of reduced prices for AIDS drugs produced by major pharmaceutical companies, Brazil supports the manufacture of generic versions of AIDS drugs, which can cost 80 to 90 percent less than the patented counterparts. The U.S. has asked the World Trade Organization to form a dispute panel to investigate Brazil's policies. Chile Over the last decade, Chile has experienced steady economic growth. During the Pinochet regime, the military ruler pursued market-based economic policies with advice and support from the United States. These free-market policies continued into the 1990s, contributing to consistent economic growth. These economic policies emphasize increased investment, improved trade relations, continuing privatization, and improved social services. As part of a plan to increase its diversity of global trading partners, Chile joined Mercosur and APEC, and it is a candidate for membership in NAFTA. The success of these economic policies and social reform has allowed Chile to rapidly pay off its debt while improving the living standards of nearly all Chileans. Current President Ricardo Lagos continues to pursue a policy of cooperation and linkage with countries within the region, as well as with the U.S. Although Chile is often compared to the "economic tigers" of Asia, the nation has some difficult issues to confront. Currently, natural resources account for a majority of Chilean exports, which has directly contributed to the job market and improved living standards. However, many believe the nation needs to focus on sustainable development policies to ensure its continued economic growth. Concerns over future sustainability and environmental degradation are creating pressure for new approaches to economic policy. In 1998, Chile was ranked number three in the World Wildlife Fund's report of nations that are degrading and destroying their natural resources. People's Republic of China In the past, Chinese citizens caught publicly speaking out against the government have been arrested and accused of "counterrevolutionary activities" and sentenced to long jail terms. 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 possesses nuclear arms, as allowed 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, a year later the United States confirmed that Chinese companies were still secretly selling nuclear technology to these countries, apparently with the knowledge and consent of the Chinese government. Additionally, international parties have accused China of aiding North Korea in its pursuit of weapons of mass destruction. Tensions between China and the island of Taiwan became heated again in 1999, when then-President Lee Teng-hui suggested publicly 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 by suggesting it would destroy the island of Taiwan should it attempt to separate from China. China has also warned the United States (which retains close ties to Taiwan) that it should not come to the island's aid should the dispute escalate further. Republic of China (Taiwan) In its 50-year history Taiwan has transformed itself from a poor agricultural economy into one of Asia's leading manufacturing, industrial, and service economies--a true Asian "Tiger." Over the last 10 to 15 years the government of Taiwan has moved steadily away from repression and martial law towards a considerably more open and democratic system. Restrictions on the press and the people have been loosened or eliminated, and an ever-increasing list of public offices have been put to the vote, including seats in the national legislature and the presidency itself. Taiwan's first non-Kuomintang president, Chen Shui-bian was inaugurated in May 2000. This economic and political success has spurred a growing sense of Taiwanese nationalism, which runs through much of modern Taiwanese society and politics. Taiwan's foreign policy is, for the most part, framed and defined by its relationship with the People's Republic of China. For decades, the PRC has aimed at regaining control of its "lost province." Mainland and Taiwanese forces have occasionally battled each other--most notably over the small islands of Quemoy and Matsu--though the mainland has never mounted a full-scale invasion. Taiwan's foreign policy has been based on resisting any such unilateral takeover. Nonetheless, Taiwan and the PRC have established exceptionally close economic ties, with Taiwan becoming the leading "foreign" investor on the mainland. Despite these economic ties, though, the PRC has been quick to show its anger over real and perceived moves by Taiwan towards political autonomy or independence. For example, after a 1995 visit by Taiwan's President Lee Teng-hui to the United States, China broke off talks with the island and test-fired missiles into the East China Sea. Lee's 1996 victory in the country's first-ever democratic presidential election resulted in China's firing more missiles near Taiwan. Despite the lack of official U.S. recognition, Taiwan still depends on U.S. security guarantees and the U.S.'s willingness to sell it advanced weaponry and other military equipment. President Chen has urged the U.S. to review its "one China" policy and support Taiwan's entrance into international organizations that require state membership. Estonia After centuries of occupation, Estonia is now an independent nation struggling to find an independent identity while maintaining trade and political relations with the other nations of Europe. In 1995 Estonia received agreement for associate membership status in the European Union, allowing free trade with the West and increased integration into the European economy. Nearly fifty years of Soviet economic practice has left Estonia with an underdeveloped economic base, outmoded production facilities, and serious environmental degradation. Estonia has privatized a number of state enterprises, and continues to work to build a market-based economy. The environmental problems, however, are more difficult to fix, although Estonia has implemented a set of strong environmental regulations. Estonia has applied for NATO membership, and has been part of some NATO exercises and operations, including peacekeeping in Bosnia and Kosovo. In addition, Estonian forces have participated in UN missions in Croatia and Lebanon. Among the Baltic states, Estonia has participated in a number of regional defense initiatives as well. Among the top priorities of Estonia is the modernization of its military, both in terms of equipment as well as overall organization and capability. France Chirac, a member of the conservative Gaullist Party , and Jospin, a member of the Socialist Party, have been governing together under "cohabitation" since 1997, but they have begun to publicly feud over domestic and foreign policies. Both men are expected to be candidates for president in the next election, to be held in 2002. France's economy has rebounded from the crisis it went through during the 1980s and early 1990s. At that time, inflation was nearly 14 percent per year, and little economic growth was occurring. During the 1990s the French economy began to rebound, due in part to an aggressive privatization scheme, increased exports, and the impact of the global economic boom during the late 1990s. However, unemployment, which has been rising for 20 years, remains a serious issue for France, despite the fact that rates fell to 9 percent in 2000. Government expenditures for social benefits, and taxation levels, are also high, while France continues to accumulate an annual budget deficit. France signed the Nuclear Non-Proliferation Treaty in 1991, but continued its program of nuclear weapons tests in the South Pacific until the end of 1995, despite vigorous opposition from many nations and non-governmental organizations, such as Greenpeace. In early 1996, President Chirac declared an end to the French tests; France signed the Comprehensive Test Ban Treaty in September 1996. France participates in UN peacekeeping missions and conducts its own peacekeeping efforts in Francophone (former French colonial) Africa. Currently, France has peacekeeping troops serving in Lebanon, Western Sahara, Angola, Georgia, and on the Iraq/Kuwait border. France is also a large supplier of weapons to developing nations, an activity that has drawn considerable criticism from the international community. Mexico Although Mexico has long claimed to be a democracy, only one political party, the PRI (Revolutionary Institutional Party), held power between 1929 and 2000. The surprise electoral victory of former Coca-Cola executive Vicente Fox of the Partido Acción Nacional in July 2000 has inspired hope in Mexico. Fox has promised to end corruption and poverty in Mexico, and has proposed changes in relations with the United States. These include opening the border to unregulated crossing as a means of addressing illegal immigration, ending Mexico's cooperation in the "war on drugs" in favor of stepped up U.S. efforts at demand-reduction, and shifting investment incentives to attract more high-tech investment under NAFTA. Human rights have been an issue in the Chiapas region of Mexico. In 1994 peasants there formed a militant underground political movement known as the Zapatista Front of National Liberation (EZLN). The Zapatistas, led by Subcomandante Marcos, aim to gain political representation and economic opportunities for local peasant communities left behind by the national government's development efforts. The government's response to the emerging Zapatista movement has been violent and repressive, resulting in accusations of human rights abuses. The resistance in Chiapas has continued since 1994, with varying degrees of violence and international attention, while the government has continued its efforts to isolate and destroy the Zapatista movement. Since taking office in December 2000, President Fox has said that resolving the conflict is a top priority, and there is hope that his administration will be able to make progress where his predecessors have failed. Russia Presently, Russia is facing difficulties on many fronts. The conflict in Chechnya continues, destabilizing the political situation across the Caucasus region. In addition, the sinking of the submarine Kursk in August 2000 underscored the Russian military's decline, which has been attributed to funding cuts for maintenance, training, and pay. Numerous labor disruptions by unpaid workers in a number of economic sectors threatens the Russian economy, while organized crime has solidified its infiltration of Russian political and economic life. By the mid 1990s, Russia had increased its foreign investment and trade, and it had instituted economic reforms that paved the way for its membership in the International Monetary Fund (IMF) and the World Bank. Despite these successes, Russian foreign debt increased to approximately $150 billion, while unregulated domestic economic policies undermined Russia's economic strength. Then, in 1998, the Russian stock market plunged more than 40 percent and Russia's currency, the ruble, was devalued almost to the point of worthlessness. Despite this instability, many foreign governments continued to grant loans. However, this Western aid was not unconditional. Western lenders required continued economic reforms- reforms that, at least in the short term, made life more difficult in a country that had seen its social safety net shredded. Through all this, Russian arms sales have remained one of the country's best sources of foreign trade and hard currency. Russia is courting nations such as Israel, South Africa, Taiwan, Pakistan, and Iran as clients. For example, Iran has already purchased $600 million worth of advanced conventional weaponry, including jet fighters and tanks. While weapons sales benefit the Russian economy, many nations worry about the spread of Russia's military technology, particularly to countries such as Iran and Iraq. Dependent on foreign aid and loans from financial institutions like the IMF, Russia may not be able to long ignore the fears of the international community. But despite other nations' misgivings, Russian economic realities point to a continued reliance on arms exports for hard currency earnings. Spain Current President José María Aznar was elected in 1996 from the conservative People's Party. Aznar has worked to liberalize, deregulate and privatize the Spanish economy. The president has been working with the UK's Tony Blair to change EU rules that would allow for more foreign investment in Europe, a high priority in Spain. In its external relations, other priorities include the strengthening of NATO compliance with the Maastricht Treaty provisions for membership in the European Union. Spain has also strengthened its bilateral military and economic relationship with the United States, including agreements on U.S. military bases and space program facilities. Despite these improvements, Spain continues to struggle with internal issues, which have been exacerbated by the government's emphasis on fiscal conservatism and international relations. High unemployment and trade deficits continue to create economic woes for Spain, with unemployment in the double digits (although lower than its high of 25 percent in 1994). Tourism and the service industry remain the major components of the Spanish economy, although the chemical and manufacturing sectors are growing in importance. In addition, there is continued tension with the Basques, who have long expressed a desire for more autonomy. The Basque separatist group ETA, which is seeking independence from Spain, has been blamed for about 800 deaths in the last 32 years. Sweden During the 1990s, Sweden experienced a serious economic crisis. The global recession of the early 1990s hit Sweden particularly hard. Unemployment rose and government expenditures increased in the form of social benefits for its citizens. This fiscal crisis led to a re-evaluation of the welfare state model (in which the government guarantees economic benefits for all citizens), leading to increased private investment and growth. Sweden's economy has rebounded, but its tax burden of 52.9 percent of GDP remains the highest of all developed countries. As other European countries lower taxes, the IMF has urged Sweden to follow suit. Business leaders note that high taxes put Swedish businesses at a disadvantage in attracting and keeping skilled employees. This could undermine Sweden's economic strategy of aggressively pursuing information technology, emphasizing education and investment in the technology sector. Sweden is a member of the European Union, but has not yet accepted the euro as its currency. In a recent referendum on the issue in Denmark, voters decided against adopting the euro. These results are likely to be influential in Sweden, which will probably postpone its own referendum until 2003 or later. In the international arena, Sweden is one of the leaders in international development assistance. Development aid levels as a percentage of GDP are among the highest in the world, with funding funneled through the UN, bilateral agreements, and Swedish non-governmental organizations. (Only the Nordic countries and the Netherlands meet the UN-recommended level of 0.7 percent of national income spent on development aid.) While involved in every region in the world, Sweden has been particularly active in Eastern Europe and Africa, assisting in health, democratization, and economic development. Swedish troops are also disproportionately represented among peacekeeping missions, in United Nations operations as well as the operations of other international organizations. United Kingdom Despite its Labour government, the United Kingdom remains one of the more conservative European Union (EU) members, especially regarding security, political, and monetary union. For example, the United Kingdom 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 United Kingdom refused to replace its currency, the pound, with the new EU currency, the euro. (Three other EU members, Denmark, Sweden, and Greece, have also rejected adoption of the euro.) While the United Kingdom advocates extending EU membership to include selected Eastern European countries, it is concerned about efforts aimed at increasing the Union's political powers at the expense of the member states. That is, it is against increased EU control over issues, such as labor and environmental policy, that used to be considered purely domestic. France and Germany, among other countries, support this "federalization," but the UK wants to ensure that member nations do not lose any more of this power. The UK has been beset by a number of disease scares that have had serious consequences for European Union agriculture. "Mad cow" disease (bovine spongiform encephalopathy, or BSE) was first detected in British cows in the mid-1990s, leading to widespread bans on British beef. Cases have turned up in other European countries, and EU agriculture ministers have taken steps to confront the disease as a pan-European problem, banning all animal feed that contains animal products. Another disease outbreak is having more economic than health consequences. A case of "foot-and-mouth disease" was discovered in the UK in February 2001, and has led to the slaughter of thousands of possibly infected animals, which is considered to be one of the only effective methods of control. Unlike BSE , foot-and-mouth disease cannot be passed to humans. However, humans can carry the highly contagious virus on their clothes, shoes, and tires. To avoid spreading the illness to herds of domesticated animals on the continent, livestock imports from Britain were banned, and visitors arriving from the UK have had to disinfect their shoes. Nonetheless, cases of the disease have been found in France and Argentina, which have led many countries to ban livestock and dairy imports from the EU. The United Kingdom is a long-time ally of the United States. In 1998, it fully supported and participated in a military airstrike against Iraq for that country's refusal to allow weapons inspections required under the terms of the Gulf War peace. The United Kingdom also publicly voiced its support for military strikes taken by the United States on alleged terrorist facilities in Sudan and Afghanistan in retaliation for the bombings of the U.S. embassies in Kenya and Tanzania. Similarly, the United Kingdom was the strongest supporter of U.S. airstrikes against Serbia, with the Blair government helping unify NATO behind the action. United States of America In its statements, the United States places a great deal of emphasis on human rights, which it defines in largely political terms (e.g., rights of free speech, assembly, religion, etc.). However, actual U.S. policy on international human rights remains problematic and controversial. For example, the Clinton administration was criticized by human rights organizations for supporting China's admission into the WTO, for its refusal to sign the 1997 treaty banning the use and production of anti-personnel land mines, and for drastically scaling back the number of refugees allowed to enter the country. In addition, the United States has opposed the creation of an International Criminal Court as a venue for war crimes prosecutions. Moreover, the United States itself has been criticized by human rights groups for its continued use of the death penalty, its continued police brutality, its practice of racial profiling by various law enforcement agencies, and its use of electronic surveillance equipment both domestically and internationally. On the environment, in December 1997 the Clinton administration agreed to the terms of the Kyoto Protocol, committing the United States to accept specific international limits on its greenhouse gas emissions. By the year 2012, U.S. greenhouse gas emissions are supposed to fall to a level roughly 6 percent lower than they were in 1990. However, the U.S. Senate seems unlikely to ratify it. Some members of Congress feel that the treaty unfairly exempts many developing countries and would damage the U.S. companies' economic competitiveness. During his campaign, President Bush said that he would seek to limit carbon dioxide emissions by power plants, but in a move decried by environmentalists, he recently changed his mind. This incident illustrates the tension that the U.S. is likely to feel between its energy needs-particularly in the light of energy shortages in California--and environmental concerns. Bush and Vice President Dick Cheney, both of whom have ties to the oil industry, support drilling for oil in the Artic National Wildlife Refuge to help the U.S. achieve "energy independence." International trade was a central focus of the Clinton administration, and is likely to be just as important to the Bush team. The passage of the North American Free Trade Agreement (NAFTA) and Uruguay round GATT agreement by the U.S. Congress were major successes for Clinton in his first term. In addition, Clinton met with Asian and Latin American leaders about a proposed free trade zone encompassing the entire western hemisphere, to 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 Japanese markets. At the same time, trade frictions with China were lessened when China agreed to allow greater foreign access to its markets in November 1999. In return, the United States agreed to sponsor China for membership in the World Trade Organization (WTO). More recently, the U.S. Congress approved permanent normal trade relations status for China. (Previously, Congress voted on China's trade status annually.) Trade tensions continue between the United States and the European Union (EU) over genetically-engineered food products, which have been approved in the States, but are still viewed with concern in most European countries. (The recent discovery of genetically-altered corn-unapproved for human consumption-in U.S. supermarkets is likely to increase these tensions.) In March 2001, the U.S. banned imports of livestock and dairy products from the EU in the light of the "foot-and-mouth disease" outbreak there.
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