The International System (Spring 2000)

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The simulation participants will be Argentina, Brazil, Canada, China, France, Germany, India, Ireland, Israel, Japan, Mexico, Netherlands, Pakistan, Panama, Poland, Russia, Slovakia, Turkey, UK, USA, and Venezuela.

To facilitate interaction, several multilateral conferences have been established. These conferences will be held at times to be announced by Simulation Control (Simcon) a few weeks before the simulation starts. All countries will attend several conferences, but might not attend every conference. However, all countries are expected to participate in the regular mail negotiations on every issue. In addition, countries should feel free to initiate relevant bilateral or multilateral discussions. Bear in mind, however, that not all countries have the same negotiation priorities.

It is common for teams to begin the simulation in a passive mode with plans to respond after other country-teams take the lead. This creates an unrealistic foreign policy atmosphere and ensures a slow start to the exercise. Students are urged to send initial policy statements on every issue the first day of the simulation. Each team should continue to send messages on each issue daily.

While the scenario sets the stage for the negotiation, the actual path that the negotiations will follow depends solely on the initiatives of the participating country-teams. Based upon their foreign policy goals, countries are encouraged to develop proposals to deal with specific problems that affect them. Ideally, the negotiations should be conducted over these proposals, not countries’ general reactions to the simulation issues.

The key to a successful simulation is found in the research that a country team does on a continuing basis throughout the program. You will need a thorough understanding of policy and issues in order to strike a balance between creativity and realism in the negotiations.

The setting for this simulation is winter 2000. The simulation is set in the future to encourage you to be creative in developing your own policies and proposals instead of duplicating real-life events and decisions as they happen.

PRE-ESTABLISHED CONFERENCES
There will be two, one-hour conferences scheduled for each of the issue areas to be negotiated in this simulation. All simulation participants are invited to all conferences. These conferences will be chaired by Simcon. A conference schedule and questions for negotiation prepared by Simcon will be distributed prior to the beginning of the simulation.

A conference agenda will be distributed several days before each of the scheduled conferences. Simcon will draft the agenda to take into account the course of the negotiations to date. Please remember that conferences are not necessarily the end of the negotiations; most often, they are just another step in the process.

In addition, participants will, with the approval of Simcon, have the opportunity to schedule meetings with other simulation members to discuss issues of mutual interest. To request such a meeting, the country should send a message to Simcon stating the time, participants, and issues for discussion.

International Trade
In comparison with its predecessor, the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO) has much more power in resolving disputes over, for example, tariffs, subsidies, dumping, agricultural products, and intellectual property rights. Still many world trade issues remain unresolved, and negotiations will continue among the nations of the world to determine whether global trading relationships can be improved. Many of these unresolved issues involve disputes concerning various economic sectors, such as agriculture or services, but there are several contentious issues at the very core of the concept of free trade.

One trend with uncertain consequences for global trade is that toward regional trade blocs. The European Union (EU) is seen by some outsiders as an economic fortress that will discourage trade with non-member nations. The U.S., Canada, and Mexico have entered a free trade agreement called the North American Free Trade Agreement (NAFTA). The U.S. has also proposed a free trade zone with Latin America that would create a trading bloc in most of the western hemisphere; under current plans, this would come into effect in 2005, although progress seems to have stalled. Meanwhile the leaders of Brazil, Argentina, Uruguay, and Paraguay have already established the Southern Cone Common Market (Mercosur). African leaders are also taking steps towards an African Economic Community, and members of the Association of South East Asian Nations (ASEAN) have also committed themselves to the creation of an ASEAN Free Trade Area (AFTA).

Some think that these regional free trade areas (FTAs) may undermine the global trading system, whereas others view these organizations as a complement and supplement to the operation of the global trading system. Observers favoring the former argument tend to believe that nations having a vested interest in regional preferential arrangements will be less willing to pursue global free trade. In addition, they are worried that although these regional markets would increase intra-bloc trade, trade between the members of an FTA may lower the members' joint trade with outsiders. If this occurs, the developing nations excluded from the "powerhouse" blocs may be the biggest losers. On the contrary, proponents of the latter argument tend to believe that by following both regional and global approaches, the world trade system can be built more rapidly.

A further challenge for WTO members is the extent to which trade rules should govern issues which have been primarily considered as falling within the purview of a country’s domestic policy, such as environmental standards, foreign investment policy, and labor policy. Concern over these issues was at the heart of the protests during the recent WTO meetings in Seattle. International regulation applying to foreign investment policy has emerged as a concern, especially now that firms are increasingly establishing factories in other countries to be able to serve the local population directly, rather than relying on the shipment of finished goods. (Toyota, for example, now builds most of its Camrys for the American market in the U.S.) On the one hand, how to handle foreign investment falls within the purview of national economic policy, but on the other, rules on foreign investment can directly affect the international trade system. There are some controls on what governments can require of foreign investors, and WTO rules do protect investors’ intellectual property. However, countries can still largely set the terms under which foreigners are allowed to invest, by for example, requiring that firms produce goods for export as well as for the domestic market.

Finally, member nations face the difficult issue of whether labor standards in individual countries should be a matter of international concern. In December 1996, the first ministerial conference of the WTO in Singapore confronted this very controversial issue. The US and other European countries are concerned about the use of child laborers, the rights of trade unions, and unsafe sweatshop conditions. Developing nations, led by India, Pakistan, and Egypt, view the proposals by developed countries as interference in their domestic policies and as an attempt to undermine their market advantage--cheap labor. The Singapore agreement represented a compromise in that it rejected the use of protectionist policies to force changes in labor standards, but did note the role of the International Labor Organization (ILO) in protecting the rights of workers. However, this compromise does not resolve the underlying tensions.

Perhaps the most difficult issue in the labor standards debate is child labor. The elimination of child labor has become one of the ILO's priorities. The ILO provided technical support to the Amsterdam Child Labor Conference in February 1997, and the International Conference on Child Labor in October 1997. According to recent global estimates by the ILO, the number of working children between the ages of 5 and 14 in developing countries is on the order of 250 million, of whom some 120 million work full time. These estimates suggest that Africa, the poorest region, has the highest incidence of child workers - some 40 per cent -, while the corresponding figure for both Asia and Latin America is about 20 per cent. But Asia, as the most populous region, has the largest absolute number of child workers.

Globalization and trade liberalization may exacerbate the problem. As firms and countries attempt to cut production costs in export industries, they may be tempted to employ children to acquire or maintain a competitive advantage in world markets. Such fears have fueled calls for a "social clause" in international trade agreements and this has become a contentious issue in international trade negotiations, along with the possibility of using negative economic incentives to discourage child labor in developing countries. In addition, the International Programme on the Elimination of Child Labor (ILO-IPEC), which is financed by donors from 18 developed countries and was launched in 1992, aims to eliminate child labor by strengthening national capacities to address the problem and by contributing to a worldwide movement to combat such abuse. (In July 1999, the ILO adopted the "Convention Concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labor," but this dealt primarily with slavery, prostitution and illicit activities.)

International trade talks will focus on the intriguing and controversial relationship between regional and global free trade agreements - i.e., what is the next step in global talks: promoting additional regional free trade agreements, maintaining the current global free trade framework, or both regional and global approaches to the creation of free trade? Participating country teams will also confront the issues of whether trade rules should apply to foreign investment and labor standards.

International Debt and Development
In the summer of 2000, there are two overriding issues in the area of international debt: how to deal with current international financial crises (and prevent new ones) and what to do about developing countries that are crushed by unsupportable debt.

East and Southeast Asian economic crises since 1997 have had worldwide effects due to the high level of international economic interdependence. These economic crises began in Thailand, where the value of the baht fell dramatically, ending the tremendous growth of the Thai economy (which, like the other "powerhouse" economies of the region, had been growing at 7 to 9 percent a year). The Thai government blamed currency speculators for the crisis, while other observers have pointed out the role of Thai policies in creating a ripe environment for problems. Indonesia and South Korea, which had been the eleventh largest economy in the world, also saw their economies badly damaged. To avoid default, the governments of these countries required the assistance of the International Monetary Fund (to the tune of $100 billion), which insisted on a package of economic reform and austerity measures.

Since the summer of 1999, however, the threat of this recession growing has lessened, due in part to the strength of the U.S. economy, along with growth in Western Europe and Japan. (Despite improving conditions in Asia, there is trouble brewing in Latin America, where Brazil is suffering from a deep recession and the government was forced to devalue the real in January 1999. In addition, the world has been concerned with the latest economic crises in Russia, where the ruble has plummeted in value and support for continuing economic reforms has greatly diminished.) The role of the IMF in resolving this crisis remains an open question. While some credit the IMF, Malaysia’s prime minister, Mahathir Mohamad, claims that his country’s rejection of IMF policies and adoption of currency controls is what led to the stabilization of his country’s and the regions economy.

The purpose of the IMF is to protect the soundness of the global economic system by providing emergency relief when members experience severe balance-of-payment problems, and cannot acquire any other external financing. Critics claim that the IMF, though, protects foreign bankers from the consequences of imprudent loans, and provides a cover for bad economic policies, and perhaps, corruption. It has been argued that the IMF is not equipped to see problems before they develop, and that there is currently not enough regulation, either domestically or globally, of major financial institutions and markets. Several countries, notably Malaysia, have revisited the idea of currency controls, which allow them to stem capital flight and stop short-term speculation. Many proponents claim that the use of such controls in Chile, for example, placing a one year waiting period on the withdrawal of capital, has allowed it to maintain a stable economy, while critics argue that such controls dampen economic growth by discouraging foreign investment. The Asian economic crisis has prompted widespread review of IMF policies. Many observers have focused on reforming the international financial system, to decrease its susceptibility to sudden short-term capital flows. Some critics claim that the role and function of the IMF must be changed or expanded to allow it to take a more positive role in preventing, not just reacting to, potential economic disasters.

At the same time, foreign debt burdens, some dating from the 1970s, continue to be a problem for many developing countries. The current economic crisis is beginning to exacerbate this by increasing the cost of borrowing money, thereby making debt servicing more expensive for debtor countries. Debt relief is crucial to their future economic prospects. In the 1990s, one of the primary methods for dealing with debt has been the Brady Plan, which grants official credit for debt reduction in return for the implementation of IMF-sanctioned structural reforms. While the Brady Plan has been given a great deal of the credit for stabilizing the Mexican and Argentine economies, it has been held accountable for much of the political and economic turmoil in Venezuela. Venezuela’s experience, and the recent Asian financial crisis, raises questions about whether orthodox, economic stabilization programs help or hurt. (The principal goals of orthodox policies are increased economic efficiency, stabilization, and the generation of hard currency revenues; countries are encouraged to open their economies to foreign investment, to open their markets to foreign competition, and to privatize government owned industry.)

Finally, there are concerns that some of the most highly debt-burdened countries, especially in Africa, may require even more assistance. Despite reforms, countries like Mozambique cannot get ahead of its interest payments; Oxfam International reports that Mozambique spends four times as much on debt payments as on health. Getting creditors to reduce debt to sustainable levels may be the only way that such countries can improve their standards of living. This is the goal of a new joint debt relief plan managed by the IMF and World Bank, which began in 1998. The Highly Indebted Poor Countries (HIPC) Initiative entails coordinated action by the international community to reduce the external debt burden to sustainable levels.

One of the most promising solutions to the debt crisis may lie in the improvement of international trading relations to help developing countries increase their exports. With more and varied exports, those countries could earn more Western currency to service their debts. The future of attempts to liberalize the international trading system in the interest of developing countries is closely tied to the WTO accords and current trends toward regional alliances and protectionism.

Intertwined with the issue of international debt are international development issues. Efforts to industrialize the LDCs over the past four decades have had little success. The construction of factories, which create both jobs and exports, requires capital, which is not readily available in LDCs. Foreign producers have often been reluctant to invest in developing countries because of high taxes, strict regulations, patent questions, possible political unrest, and the potential for nationalization. Many LDC governments have opposed foreign business investments because the profits usually go back to the home country. Meanwhile, the infrastructure of most developing countries is in desperate need of improvement. However, the resources for infrastructure improvements are not available, considering the nations' needs and austerity pressures.

The developing nations and development experts promote various strategies to address economic development in the developing countries. Some nations continue to pursue import substitution policies to encourage domestic production and industrialization. In general, though, import substitution involves the restriction of imports and foreign investment (although some foreign firms may be encouraged to establish subsidiaries) to allow a developing country to establish selected infant industries without outside competition.

A conflicting development strategy is export-led growth, which encourages foreign investment to produce industrialization that is geared toward the production of goods for export to earn hard currency. Export-led growth strategies require economic policies that encourage foreign investment and trade liberalization. However, this strategy also relies on an international trade regime that promotes and protects LDC competition in international trade.

These development strategies have come under criticism by many who believe that such programs will undermine traditional cultural values and lead to environmental devastation in developing countries. Concern about the cultural and material effects of Western models of development have led to another approach, known as sustainable development. Rather than promoting increased trade and consumer consumption, this strategy focuses on the grassroots level to improve the standard of living without changing people's lifestyles or placing additional strains on resources or the environment. Sustainable development efforts focus primarily on health, education, and small-scale agricultural techniques to improve the quality of life in the villages and to decrease the level of dependency on technology and the industrialized world.

The International Debt and Development conference will be a forum to attempt to work out a mutually acceptable approach to IMF reform, international debt problems, and problems of underdevelopment.

Global Environment
The 1992 UN Conference on Environment and Development held in Rio de Janeiro, Brazil began a negotiation process on a number of pressing international environmental concerns, among them global warming, deforestation, and biodiversity.

By signing the Kyoto Protocol to the 1992 UN Framework Convention on Climate Control in December 1997, 38 industrialized countries agreed to adopt binding targets for reducing emissions of the greenhouse gases believed to be responsible for global warming. The United States committed to a 7 percent reduction from the base year 1990, while Japan committed to a 6 percent reduction. The largest percentage reduction by signatories is that of several European countries which committed to an 8 percent reduction. Developing countries, making up the rest of the 160 parties to the protocol, are under no obligation to begin reductions. The effect of the Kyoto conference remains unclear. Some observers see the agreement reached as a necessary first step to alleviating the problem, while some critics claim that the agreement contains too many loopholes and not enough specificity on how it will be implemented.

Whether the protocol will be ratified by the signatory countries is one of the biggest outstanding issues coming out of the conference. (To date, very few states have ratified it; those that have are primarily island nations, which face the greatest danger from global warming.) Although the results of Kyoto are consistent with a 1995 agreement that rich countries should act to cut emissions before discussing what poorer countries should do, critics in industrialized countries claim that not requiring developing countries to reduce is unfair, and prevents real progress from being made. (Emission levels in developing countries are expected to overtake those of the developed world in about 15 years.) Developing countries, though, claim that the industrialized countries are responsible for global warming, and that they themselves need the time that the industrialized countries had to concentrate on economic development.

The countries that agreed to reduction now have to figure out how they are going to achieve their goals. There is, of course, concern that the costs of reduction could prove economically detrimental. The agreement includes provisions for a system for industrialized countries to trade emissions credits, but the details of how such a system would operate were left to be worked out in the future. (An emissions credits trading system is an attempt to provide free-market incentives to cut pollution and encourage technological innovation.)

Because of the role that the world’s forests have in absorbing large amounts of carbon dioxide, deforestation is closely related to global warming. A statement of principles on deforestation was released at the Rio Summit in Brazil in 1992. It recognizes the economic applications of the rain forests as well as the global need to preserve them. The statement does not require any specific actions by rain forest countries, which resist a binding treaty out of concern for their sovereignty and economic development.(Some observers claim that deforestation demonstrates the growing rift between economic "haves" and "have-nots" in regards to environmental conditions. Japan, in particular, has been praised for preserving its forests, and at the same time criticized for its high rates of consumption of lumber, which has provided great financial incentives for poorer countries in Southeast Asia to export forest resources.)

Biodiversity is another area of international concern. The Convention on Biological Diversity has as its objectives "the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources." The treaty came into force in late 1993, and the signatory parties have met regularly since to work out implementation issues. However, possibly because of the fact that the impact of biodiversity on humankind is difficult to assess, far less progress has been made in this area than in dealing with climate change.

Of the countries participating in the current ICONS negotiations, all but the U.S. have signed and ratified the treaty. The Clinton administration has signed, but the U.S. Senate has not ratified it; therefore, the U.S. is not a full partner in the negotiations. There has been some concern about the limits that the treaty could place on the U.S. biotechnology industry. Among the issues not yet fully dealt with in the treaty process have been questions about compensating the developing nations for biological materials with medical and commercial applications while protecting the investments and interests of the biotechnology and pharmaceutical industries.

The first ecosystem to be addressed within the CBD framework is marine and coastal areas. At a meeting in Jakarta in March 1997, experts met to begin the process of developing a plan for preserving the biodiversity of these areas. The economic importance of ocean resources has led to marine biodiversity coming under attack from a number of sectors: construction, mining, shipping, agriculture, tourism, and fishing. The growth of commercial fishing provides one of the most obvious examples of the problem; the UN’s Food and Agriculture Organization estimates that 70 percent of the world's commercially important fish stocks are fully or over-exploited.

The upcoming Global Environment Conference follows up on the Rio and Kyoto conferences, as well as the CBD framework, in an attempt to develop mutually acceptable and effective approaches to these environmental issues.

Human Rights
One of the principal problems in the protection of human rights lies in the inability of governments to agree on exactly what constitutes human rights. The Universal Declaration of Human Rights was adopted by the United Nations on December 10, 1948. Subsequent UN efforts, including the International Covenant on Economic, Social, and Cultural Rights and the International Covenant on Civil and Political Rights have further expanded the concept of human rights. Nevertheless, the June 1993 International Conference on Human Rights revealed that the definition of human rights still remains a subject of international debate. Western nations, including the U.S., continue to define human rights largely in political terms. Many developing countries maintain that economic rights to food, shelter and education supercede rights of free speech and representation. The debate over the nature of the international definition of human rights stymied any real progress in the 1993 Human Rights Conference.

In addition to the problem of defining human rights, the nations of the world are constantly debating which countries are violating human rights. Even after nations agree on whether another country is violating human rights, it remains difficult to determine how to encourage change. The concept of sovereignty prevents one nation from interfering with the domestic affairs of another. Yet the world as a whole has determined that some cases of human rights abuse warrant international attention regardless of sovereignty. Apartheid in South Africa and the treatment of Kosovar Albanians are two examples of human rights issues in which many nations of the world felt justified in becoming involved. As nations discuss human rights standards and violations, they must consider what can and should be done to protect human rights on an international scale. However, countries may hold different views on the issue of human rights because of their cultures or particular political conditions. For example, some Southeast Asian leaders deny the accusation of human rights violations by asserting their "Asian values" to be different from the value Western nations place on human rights and democracy. Hence, as in every other international effort to monitor and influence human rights, the issues of sovereignty and the question of enforcement weigh heavily on the debate.

The September 1995 World Conference on Women in Beijing focused global attention on the issue of unequal treatment of women due to social, cultural, and economic forces. A United Nations Development Fund study on the status of women throughout the world, which was released shortly before the conference, revealed that women are the primary victims of poverty and violence, receive lower pay than male counterparts, work longer hours, and face social, cultural, and professional obstacles. In addition, particularly in many developing countries, women have far less access to education than men. Worldwide, in 1995, the estimated number of illiterate women aged 15 and over in developing countries is about 556 million, compared with 315 million illiterate men.

The discussion of the rights of women is constrained by cultural and economic realities. In some cultures, women are perceived as inferior, and the birth of a female child is an undesirable situation. Other cultures have other reasons for believing that women should be treated differently from men, and in many countries, laws are written to reflect this difference. This has been carried to its most extreme in Afghanistan, where the Taliban, which now controls all the major cities in the country, has imposed restrictive gender policies based upon a strict interpretation of Islamic law. Women are not allowed to leave home unless completely covered and accompanied by a male relative, are barred from working, and have very limited access to health care and education. The Ministry for the Enforcement of Virtue and Suppression of Vice is known to enforce these edicts through arbitrary beatings and detainment.

In addition to cultural considerations, many nations face economic obstacles that prevent them from addressing the rights of women. While studies have revealed that education and improved employment for women reduces population growth and poverty, many countries lack the resources to provide these opportunities. Of particular concern is the lack of effective contraception, which leads to frequent pregnancies and large family sizes, both of which inflict a burden on a woman's health and economic well-being. Contraception may be unavailable due to expense, lack of access to a health clinic, or religious considerations.

The International Conference on Human Rights will concentrate on developing an international approach to these human rights questions. It will also seek to identify other cases of human rights violations in conjunction with an internationally accepted definition of human rights, as well as discussing strategies for improving the status of women.

World Health
According to the World Health Organization (WHO), communicable diseases killed 17 million people in 1996, with 99 percent of these deaths occurred in developing countries. (Infectious diseases are more likely to affect poor or rural people, while higher income individuals, who have a higher life expectancy, are more affected by non-communicable diseases such as cancer and heart disease.) Communicable diseases are currently the world’s leading cause of death.

Many communicable diseases are preventable or curable, but can have devastating effects when left untreated. Despite the fact that it can be effectively treated with drugs, tuberculosis killed 3 million people worldwide in 1996, while hepatitis-B, a disease for which there is a vaccine available, killed 1 million. Another example is cholera, an intestinal disease spread by contaminated food and water, which has become increasingly widespread over the past several years. With good treatment, the fatality rate for those afflicted with cholera can be less than one percent. Death can come quickly, however, where treatment is not available. Although Latin America had been free from the disease for over a century, an epidemic begun in Peru in 1991 has spread throughout the region. WHO has also reported large cholera outbreaks in Central Africa, particularly in Somalia and in and around refugee camps in the Democratic Republic of Congo (formerly Zaire), claiming nearly 1,000 lives in the region through mid-1997. As in the case of cholera, environmental conditions associated with poverty make disease more likely to occur, while poverty itself often prevents effective treatment.

However, poverty alone is not the problem, as the emergence of diseases resistant to current treatment demonstrates. The outbreak of Ebola virus in Zaire and the plague in India in 1995 were more cause for international concern. Ebola is unusually swift and deadly, killing over 90 percent of its victims in a little as a week. The epidemic ended in August 1995, having killed close to 300. One of the most troubling aspects of these outbreaks is the potential difficulty in containing them. Mechanized transportation, including global air travel, has made it possible for diseases such as these to rapidly spread beyond the primary area of contamination. This factor has raised concerns that the next epidemic will not be so quickly contained. (These concerns are important not just for swift-acting epidemics, but for diseases that cause chronic infections, such as malaria, a mosquito-transmitted disease that kills over 5,000 Africans a day. Some strains of malaria, which is transmitted by mosquitoes, are becoming increasingly resistant to existing drugs.)

Another communicable disease, AIDS, continues to be a problem. Although AIDS has been detected throughout the world, it is of particular concern in Africa. Some African countries that have not yet been hard hit by the epidemic are reluctant to dedicate many limited resources to education and prevention. Other health threats such as malnutrition and traditional diseases present an immediate need and drain resources that might otherwise be used to prevent the spread of AIDS. In other nations, the resources being used to fight AIDS represent a drain of funds that might otherwise be available to prevent or cure other diseases. In addition, African governments and AIDS patients seldom have the resources to afford expensive drugs, such as AZT, that are often used in the treatment of AIDS in the U.S. and Europe. African countries, as well as other nations grappling with the AIDS epidemic, are forced to allocate limited resources among AIDS treatment, prevention, and research towards finding a cure. In addition, countries must balance their AIDS-related expenditures with spending on other health concerns.

Another pressing health concern involves proper international responses to humanitarian crises. The past several years have seen a number of notable humanitarian relief efforts, both in response to conflict (for example, in Rwanda and Kosovo) and to natural disaster (in Central America in the aftermath of Hurricane Mitch and in Turkey and Afghanistan following devastating earthquakes). The goal of such aid is to provide for basic human needs in the event of an emergency, as well as helping to alleviate longer-term concerns, such as the spread of disease in the aftermath of disasters.

The newly reorganized UN Office for the Coordination of Humanitarian Affairs (formerly the Department of Humanitarian Affairs) has the job of coordinating the activities of the participating governments, non-governmental organizations (NGOs), and UN agencies in an emergency situation to ensure a coherent response Recently, it has been credited with facilitating the rescue and relief operations following the recent earthquakes in Turkey, a task especially important in light of the disorganization within the Turkish government.

While humanitarian aid is supposed to be non-political, it can be difficult, if not impossible, to keep politics separate. For example, relief given to refugees displaced by conflicts in Bosnia and Kosovo was criticized as supporting the Serb policy of ethnic cleansing by facilitating the movement of Bosnian Muslims and Kosovar Albanians out of the region. In North Korea, where 2-3 million people have died due to famine since 1995, Japan ended relief aid after the August 1998 North Korean test fire of a medium-range ballistic missile that flew over the Japanese mainland. South Korea and the U.S. have threatened to end their aid if North Korea proceeds with plans to test fire a long-range missile. Politics can also become involved in ways that are not so immediately obvious, leading some critics to claim that there may be cases where aid should not be given. For example, in war situations, aid may actually prolong the conflict. Operation Lifeline Sudan was launched in 1989 to alleviate the starvation caused by an on-going civil war. Ten years and more than $2 billion later, the situation remains unchanged; the war continues and people still live under "emergency" conditions. John Garang, the head of the Sudanese People’s Liberation Army recently told a UN delegation, "The S.P.L.A. has decided to continue the war. It is up to the international community to provide humanitarian aid." Deciding the proper course of action in such a situation is, of course, an ethical dilemma. One difficulty in ensuring a coherent response is the number and diversity of NGOs and governments providing aid in "emergency" situations, as underscored by award of the 1999 Nobel Peace Prize to the relief group Doctors without Borders (Médecins Sans Frontières). A further complication is that a proper response to today’s conflicts could require mediators, human rights inspectors, and even military intervention, in addition to basic humanitarian aid. The situations in Bosnia, Kosovo, and East Timor are examples of this.

Even in natural disaster situations, aid can be harmful if not handled properly. There are criticisms that the American-led effort to alleviate the famine in Somalia in 1993 wiped out indigenous agriculture and created a detrimental new economic system that many domestic players are unwilling to change because they gain great benefits from it.

The World Health Conference will grapple with these issues in an attempt to develop a global approach to preventing and treating communicable diseases and dealing with humanitarian crises.

International Security
Since the end of the Cold War, political instability throughout the world has increased concerns about terrorism, illegal arms sales, and the spread of nuclear weapons. The growth and diversification of the arms market raises concern in the world community about the threat posed by the widespread proliferation of arms and military technology, especially to groups engaged in terrorism.

Unlike past decades, when most terrorism was conducted by groups who sought to achieve some concrete political aim (the African National Congress, Basque separatist ETA, Irish Republican Army, and Palestinian Liberation Organization, among others), more terrorist acts today seem to have less clear purposes, with the "statement" as the most important reason for carrying out an attack. How else to explain the Aum Shinrikyo religious sect’s 1995 nerve gas attack in the Tokyo subway system? Terrorism has also become more global in scope, with attacks occurring beyond previously defined "dangerous" areas, for example, the 1993 bombing of the World Trade Center in New York, the 1994 bombing of a Jewish community building in Buenos Aires, and the recent embassy bombings in Africa.

Counter-terrorism databases list 3,000 suspected terrorist groups. The more successful of these have plenty of money to support training, the acquisition of weaponry (along with explosives and chemical and biological agents), and the planning and implementation of large-scale attacks. (This is an especially worrisome point, given the low cost of carrying out the bombing of the U.S. federal building in Oklahoma City.) Osama bin Laden, the Saudi expatriate whose group is alleged to have orchestrated the August 1998 attack on U.S. embassies in Kenya and Tanzania, has a personal fortune estimated to be as high as $300 million.

The sophistication of weapons available to terrorist groups is a great cause for concern. Aum Shinrikyo had estimated assets of about $1 billion, and had taken advantage of the fall of the Soviet Union and economic problems in Russia to equip itself with sophisticated weaponry. Much of the weaponry available on the international black market, including tons of Semtex, the Czech-manufactured plastic explosive, and tens of thousands of Kalishnikov rifles, comes from the arsenals of the former Warsaw Pact nations. (Black-market arms sales are those which violate the laws or policies of one or more of the states where the transaction occurs.) Covert support to insurgent groups by government agencies, such as the U.S. Central Intelligence Agency’s supply of weapons--including Stinger surface-to-air missiles--to guerrillas in Afghanistan, Angola and Central America during the 1980s have also introduced weapons into the illicit market. The threats posed by terrorism and insurgency have led to increased international attention to the issue of black-market arms sales.

As terrorism has become more international in scope, dealing with it has required more international cooperation, as may be seen in the investigations of the bombings of Pan Am 103 and the embassies in Africa, as well as attempts to bring the alleged perpetrators to justice. In addition, cooperation is obviously necessary in preventing these attacks in the first place.

While terrorism and illegal arms sales are emerging as primary issues in international security, the spread of nuclear weapons has been the subject of many international agreements and discussions for over 30 years. The Nuclear Non-Proliferation Treaty (NPT), which was first signed in 1968, limits the spread of nuclear weapons. However, as the Iraqi and North Korean attempts to build nuclear arsenals have demonstrated, the NPT is far from a foolproof guarantee of nuclear security. The principal supporters of the NPT have always been the nuclear superpowers. The major non-signatories of the treaty remain India, Israel, and Pakistan. (Brazil acceded to the treaty in September 1998.) India and Pakistan tested nuclear weapons in May 1998. Israel has not yet tested, but is widely believed to have the capability. In the face of attempts to strengthen and extend the NPT, non-signatories contend that the NPT simply protects superpower dominance in nuclear weapons.

The development of delivery systems is also an increasing cause for international concern and tension. The Missile Technology Control Regime (MTCR) was founded in 1987 to restrict the proliferation of missiles and systems for the delivery of weapons of mass destruction. However, while some of the world’s biggest suppliers are members, it is not a legally binding agreement and membership is still limited. (India’s objections to the MTCR are similar to its objections to the NPT, i.e., that it is discriminatory, too narrow in approach, and impedes economic development.) North Korea has tested ballistic missiles and regularly exports technology. China agreed to abide by MTCR guidelines in 1992, but has continued to export missile technology to Pakistan and Iran.

In addition to these outstanding issues, serious questions remain regarding the enforcement of the Treaty. The International Atomic Energy Agency (IAEA) has the authority to inspect weapons facilities in member nations to ensure compliance. However, the inspections must be announced in advance. The discovery of the Iraqi and North Korean plans to build nuclear arsenals and the possibility that other nations could do the same have raised concern about the effectiveness of the IAEA. The question remains as to whether there is a more effective approach than the NPT to controlling and verifying nuclear arms production.

Despite shortcomings, the NPT was extended indefinitely by its signatories in May 1995. There were no formal conditions tied to indefinite extension, but countries agreed upon a list of "principles and objectives": a comprehensive test ban treaty by 1996 (the text of which has been agreed upon, but which has not yet entered into force), an end to plutonium and highly enriched uranium production, and reaffirmation of ultimate goal of nuclear disarmament. (Citizen action groups all over the world have joined together in the call for achieving a treaty by the year 2000 to create a nuclear-free world, but there has not been any action by nuclear weapons states.) However, nuclear proliferation, enforcement, and cheating remain problems to be solved.

The upcoming International Arms Control Conference will address these issues of terrorism and nuclear proliferation.

International Crime
The increasingly interdependent world of the 1990s, with fewer trade and border restrictions and the advent of truly global financial and telecommunications systems, has created new opportunities for criminals to extend their operations beyond national borders. Drug trafficking is seen as a legitimate threat to national security, while the ability of international crime groups to transfer money between countries allows them to continue to elude the grip of traditional crime prevention entities. They function more like multinational corporations, with global reach and infrastructure.

The production of and trafficking in drugs is a global concern as illicit drug cultivation, processing, sales, and use are all intricately related to criminal activity and social degradation. Many Latin American countries and some areas of Asia have been transformed into primary supply sources for the U.S. and European drug markets by powerful criminal organizations that make huge profits from the trade. China, India and other Asian countries face a serious drug problem from the abuse of opium, which is grown and processed locally. The illicit export of opium based products has drawn many Asian nations into the international efforts to control drug trafficking and related criminal activities. Many African countries, especially Nigeria, are involved in the drug trade as transshipment points. Narcotics industries (i.e., drug production and distribution) rank as the world’s most successful illegal enterprises, generating annual profits of roughly $300 billion to $400 billion. Major production and trafficking complexes seem impervious to international enforcement programs, and are becoming larger, more powerful, and more entrenched in the global economy and in the economies and societies of individual states.

It remains unclear which strategy or combination of strategies is best suited to reduce narcotics production and exports. Each strategy has its limitations. Coca eradication is particularly problematic because of the harsh environmental and political side effects, while crop substitution requires subsidizing farmers to guarantee that they switch to the production of legal crops. Often, brute law enforcement efforts have led only to a swamping of the judicial system and overcrowding of prisons. In many areas of production and processing, the law enforcement officials themselves have been coopted by the drug traffickers. Most producer countries argue that the only viable solution to the drug crisis is reduced demand in developed countries, claiming that the market for these substances has driven the supply sectors in their countries to increase production. Of course, legalization of illicit drugs, with attendant governmental control, is another possible answer.

Organized crime activities can generate substantial profits, so groups must find a way to disguise the source of the funds so that they appear to come from legitimate activities. Consequently, international banking regulations must figure prominently into discussions of international crime because of the connection of money laundering to drug and contraband trafficking. The IMF estimates that money laundering activities could amount to as much as two to five percent of the world’s GDP. Recent allegations of Russian organized crime groups laundering funds through accounts at the Bank of New York has highlighted the problem. Although the process is usually quite complicated, laundering, in general, works in three steps: 1) deposits of small amounts of money in bank accounts, 2) multiple transfers of funds to other banks, and 3) re-integration of the funds in the legitimate economy, for example, through the purchase of real estate or businesses. Transfers are sometimes used to pay for goods and services, as in the "peso broker" scheme used by Colombian drug cartels.

Money laundering is seen as especially destabilizing in developing economies because of increased corruption due to the influence that organized crime can wield in the country’s commercial and financial sectors. For example, Colombia’s highly developed drug trafficking enterprises employ hundreds of specialized personnel--pilots, shippers, chemists, accountants, lawyers, financial managers, assassins--and earn an estimated $7 billion annually, mainly from cocaine sales in the U.S. and Europe. These revenues endow narco-traffickers with a significant capability to bribe or otherwise influence the behavior of key Colombian officials and political leaders. It is estimated that the Colombian cartels spend more than $100 million on bribes in that country. The recent Russian controversy has raised tensions between the U.S. and Russia, as there are suspicions that a significant percentage of the money laundering activity comes from government officials pilfering government funds.

There have been international efforts to get countries to develop and enforce anti-money laundering statutes, such as provisions under the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the establishment of the Financial Action Task Force (FATF) by the G­7 Economic Summit in Paris in 1989. The FATF’s job is to develop and promote policies to combat money laundering; most notable is its "40 Recommendations," which establish a basic framework for anti-money laundering activities. However, there are complications in these efforts:

• the increased penetration of worldwide financial systems by organized crime groups;
• the use of new drug transit routes across ever more remote countries, where anti­money laundering laws are rare;
• differences in levels of compliance with international anti­money laundering standards, specifically in Asia and Latin America as compared with the U.S., Canada and Western Europe; and
• the interest in achieving the fastest possible system for international transfers of payments, which benefits both banking/business and criminal money laundering groups.

Among the challenges for the international community are to develop better reporting and surveillance to gain more information about the scope and perpetrators of the problem, to encourage acceptance of and adherence to international standards, and to develop enforcement mechanisms.

The International Crime Conference will focus on international efforts to control drug trafficking, as well as actions that can be taken to prevent the money laundering that allows these groups to flourish.

This scenario is an introduction to the issues you will be discussing in the ICONS simulation. It also gives a very brief overview of some of the interests and policies of other nations in the program. The scenario is not meant to be the principal resource for the development of your policies or the conduct of your negotiations. It is a starting point. You now need to research your own nation's history, foreign policy, and relations with the other countries involved.

There may be developments in these issues before the program begins. A scenario update may be released before the beginning of the program. After the program begins, real world developments will not affect the ICONS simulation. Your challenge will be to come up with a better agreement than the experts have found.

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