US Department of State 

Dispatch, Vol 1, No 8, October 22, 1990


From Points to Pathways of Mutual Advantage: Next Steps in Soviet-American Relations

Baker Source: Secretary Baker Description: Address before the American Committee on US-Soviet Relations, Washington, DC Date: Oct 19, 199010/19/90 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former) Subject: Democratization, Military Affairs [TEXT] I am honored to address this important audience and to share with my friend Eduard Shevardnadze [Soviet Foreign Minister] the distinguished George Kennan Award. It is an honor because Ambassador Kennan has served his country long and ably as both diplomat and historian. Ambassador Kennan, you have been an eyewitness to and a participant in the historic events of our time: the establishment of relations with the Bolsheviks, the construction of the Marshall Plan, and the ebb and flow of the Cold War. I was particularly struck, however, by an account in your memoirs about that spring day in Moscow in 1945 when the happy crowd swarmed around you simply because you were an American and the war was over. Your Russian words captured the moment: "Congratulations on the day of victory. All honor to the Soviet allies." But that moment, that springtime, was fleeting. It was soon chilled by the excesses of Stalinism. The grand alliance and its hopes for a post-war order turned into a long Cold War. Now, we live in new days of promise. The epoch of the Cold War is over. Any lingering doubts have been dispelled by the events of the past month. The Cold War in Europe ended quietly in New York on October 1: Foreign Minister Shevardnadze and I joined with our German, British, and French colleagues in signing away the rights of the World War II victors, recognizing a new united Germany and the trust among former adversaries that made it possible. The Cold War that was played out across the rest of the globe ended more dramatically. It was closed by the partnership against Iraqi aggression that President Bush and President Gorbachev forged at the Helsinki summit. But the new epoch is just beginning. An important determinant of its future will be the change in the Soviet Union itself--a revolution that is transforming both Soviet foreign policy and Soviet society. While the people of the United States can take justifiable pride that their nation was a trustee of freedom throughout the Cold War, I am also pleased to recognize that President Gorbachev's revolution of new thinking and perestroika is, in large part, responsible for the end of the Cold War. And that is why President Gorbachev is so deserving of the Nobel Peace Prize.
From Containment to Points of Mutual Advantage
Five years ago, the internal contradictions of Stalinist power, successfully contained, started to lead to what Ambassador Kennan once termed a mellowing, and what President Gorbachev calls perestroika, glasnost, and new thinking. Eighteen months ago, President Bush gave our government a new direction, too. He told us to move beyond containment. And a year ago this week, I presented the details of the President's new course. Before the Foreign Policy Association in New York, I advocated that the United States pursue a creative search for points of mutual advantage with the Soviet Union. This, I believed, was the surest way to turn the promise of perestroika and new thinking into the reality of Soviet policy beneficial to the West. By standing pat, I contended, we would gain nothing and lose this chance to transform East-West relations. So together, we began a revolution in US-Soviet relations. We helped end the Cold War. Now, we need to look forward to the time after the Cold War: we began with a search for points of mutual advantage. Next, we need to mark pathways of cooperation for addressing the post-Cold War challenges. This could prove a unique historical opportunity. I should start by examining how our pursuit of points of mutual advantage has achieved results on which we can build. Over the past year, we broadened and deepened our relationship with the Soviet Union by working on five topics: making Europe whole and free; resolving regional conflicts; stabilizing and reducing the arms competition; promoting human rights and democratic institutions; and assisting economic reform. In each, we've begun a fundamental change. First, the
changes in Europe
over the past year may be the most hopeful ones of this century. Germany has unified, peacefully and freely. The peoples of Warsaw, Budapest, Prague, Sofia, and even Bucharest are struggling to establish democracies and ensure economic liberty. This movement of, by, and for the people could not have succeeded peacefully without the courageous, far-sighted cooperation of President Gorbachev, Foreign Minister Shevardnadze, and the other new thinkers in Moscow. They were the first Soviet leaders to understand that security ultimately rests on the legitimacy that can only be granted by the consent of the governed. But this also came to pass because the United States and others in the West simultaneously reached out to Moscow. We developed new mechanisms and adapted longstanding institutions to handle this sensitive transition. For example, we initiated the Two-Plus-Four mechanism to reconcile competing interests into a common European interest. President Bush called for and then led the first stage of NATO's adaptation that culminated in the London Summit Declaration. We supported the people power revolutions in Central and Eastern Europe in a way that assured Moscow that a free Europe would better serve true Soviet interests than a steel curtain or a concrete wall. And we worked to strengthen the Helsinki process, the conscience of the continent, so it can better support political freedom and economic liberty from North America to the Soviet Union. Second, we have made great
progress in resolving regional conflicts
outside Europe. Most notable has been the solidarity we have shared with Moscow over Iraq's invasion of Kuwait, especially in the Helsinki joint statement [see Dispatch, p. 92]. In it, President Bush and President Gorbachev set the international community's bottom line: "Nothing short of complete implementation of the United Nations Security Council Resolutions is acceptable." Yet Iraq is only the most obvious example of a regional conflict resolution policy we've built, step by step, since the spring of 1989. Our first real effort was in Central America, where we combined a US diplomatic approach toward Nicaragua with limits on Soviet arms shipments to give the people of that wounded nation a chance to determine their own future. The Soviets joined us in a commitment to respect both the electoral process and its result. Peace and democracy were the outcome. Now we are trying to stop the killing in El Salvador, too, so as to give democracy a chance there as well. In Africa, our joint efforts with Moscow led to full Namibian independence. Now, we are working together to achieve a cease- fire and multi-party elections in Angola. And we have tried to bring basic, humanitarian aid to the war-torn Horn of Africa. In Asia, we began a [UN] Permanent Five process to draw the Cambodian factions together behind another elections plan. In Southwest Asia, we have narrowed our differences over Afghanistan and are working to find a way to help move this conflict from the battlefield to the ballot box under UN auspices. I'm hopeful we'll get there soon. Third, our points of mutual advantage may be most noticeable in
conventional arms control.
The Soviet conventional force imbalance, which for decades spawned fears of a continent-wide offensive, will disappear through a CFE [conventional armed forces in Europe] treaty. Tens of thousands of pieces of military equipment will be destroyed. A military revolution this fall will match the political revolutions of last autumn. We also continue to make progress on START [strategic arms reduction talks]--an agreement that will lock in substantial reductions, including a roughly 50% cut in the most destabilizing nuclear weapons. And nuclear testing treaties that were hung up for 15 years have now been ratified. Perhaps even more important for the post-Cold War world, the Soviet Union and the United States are making a concerted effort to address the problems of spreading weapons of mass destruction. We are cooperating in implementing the chemical weapons initiative the President presented to the United Nations last year. Soviet and American bilateral destruction of the bulk of each of our chemical weapons stockpiles will move us along a realistic path toward our mutual goal: a global ban on these weapons of horror. The two of us are also working multilaterally on the control of missile technology. Fourth, we have supported
Soviet political reform
. We have made real progress on "zeroing" out human rights cases, although our work is not yet done. We have also instituted programs to help the Soviets build democratic institutions and the rule of law. Finally, we have launched a
wide range of economic contacts
. Our technical economic cooperation already covers a breadth of activities--from market education to small business development. We are making efforts to introduce American businesspeople to the Soviet Union and to introduce the Soviets to the steps that will create a conducive climate for private investment. Some of these businesses are also helping to train Soviet managers. Over time, we hope to expand our efforts to help republic and even some city leaders. In the international sphere, we have helped open up possibilities for the Soviets to participate in and learn from international market institutions.
From Points to Pathways of Mutual Advantage
Our search for points of mutual advantage has been productive. And the search must continue--in new, more ambitious ways. We now need to pursue our hopes for the post-Cold War future. We need to build a new international order--what the President has called a "new partnership of nations." Any policy toward the Soviet Union, however, must begin with a sober appreciation of the twin revolutions in motion: the first-- the Soviet government's relations with the outside world; the second--the changes within Soviet society. I will begin with the external revolution--the transformation of Moscow's foreign and defense policies. New thinking and reasonable sufficiency have become essential elements of this leadership's policy. We have never enjoyed greater possibilities for cooperation between our governments. US-Soviet relations always will be unique. But our relations could become more like those we have with many other governments. Cooperation could become the norm, and disagreements could be limited to specific disputes. A "normal" relationship--possibly even a genuine partnership--may be in reach. In our search for points of mutual advantage, we have tested whether new thinking could guide Soviet policy, even when it confronted hard choices. This Soviet leadership has shown it can make the right hard choices. Now, we need to pose a different question: Can we build on our points of mutual advantage to create something more durable, something that strengthens and accelerates our ability to achieve results to our mutual advantage? An answer to this question will depend to a great degree on continued new thinking in Moscow. But for our part, we hope to build pathways of mutual advantage from the points we've begun. The notion of pathways assumes that continuous, even lasting cooperation, not just intermittent or episodic agreements, may be possible. This idea assumes cooperation can operate in a regular, almost day-by-day fashion, to manage problems as they evolve. A pathway assumes that cooperation may prevent future problems as well as resolve past ones. And the pathways concept assumes that mechanisms and processes--built on democratic values and practices--will be the key to maintaining US-Soviet cooperation as we search for answers to the complex problems of the future. This concept, in short, proceeds from the premise that cooperation can become the norm, not the exception; that common problems can best be solved mutually, not unilaterally; and that many of our difficulties may stem not from US-Soviet differences but from the complications inherent in leaving behind the Cold War and building a new international order. We might look to build pathways and mechanisms of cooperation in three broad areas: eliminating the old vestiges of Cold War; addressing the new threats to the post-Cold War order; and dealing with the transnational dangers to peoples all over the globe. One, we need to chart
pathways to eliminate the remnants of the Cold War
and prevent a resurgence of the conflicts that preceded it. Some of these concerns will be alleviated by CFE and its follow-on talks; by the adaptation of NATO and the EC [European Community] to new needs; and by strengthening CSCE [Conference on Security and Cooperation in Europe], politically and institutionally. But working in concert with our allies and the new European democracies, we can do more. We can deepen our dialogue with the Soviets to exchange regularly our ideas about European challenges that concern all of us. We should focus our dialogue on ways democracy, economic liberty, reconciliation, and tolerance could be fostered across Europe within the CSCE context. We also might address our common interest in easing the economic transition of the new democracies in Central and Eastern Europe, which face problems of energy supply, disrupted markets, and debt, among others. The Cold War could also be left further behind--as I stressed last fall in a speech in San Francisco--by broadening our dialogue to explore more fully the "software" side of the arms competition: strategy and doctrine. This would be a natural addition now to our attempts to constrain or reduce destabilizing military capabilities- -the "hardware" side. In US-Soviet arms control negotiations, we are working to constrain and reduce weapons. We should open up a complementary mechanism to learn more about the doctrine and strategy Soviet leaders follow for use of those weapons, in peace and war. Therefore, I will propose to Foreign Minister Shevardnadze that we also set up a working group on deterrence, reassurance, and stability. This would complement discussions the Chairman of the Joint Chiefs and the Secretary of Defense are pursuing with their counterparts. Our dialogue must also be broadened by talks on defense conversion. The Secretary of Defense is exploring this topic in his meetings in Moscow this week. A defense conversion dialogue with the Soviets can be a pathway to greater openness as well as to building down the possibilities of future war even further. Two, the United States and the Soviet Union need
pathways and mechanisms for managing new threats
to the emerging international order. Iraq's brutal subjugation of Kuwait leaves no doubt that even though the danger of US-Soviet confrontation has eased, the world remains a dangerous place. The world community's condemnation of Iraq also demonstrates that when the United States and Soviet Union lead, others are likely to follow. US, Soviet, and multilateral cooperation needs to anticipate regional conflicts and to try to resolve them before they lead to war. Regional conflict prevention must become a goal of US-Soviet cooperation. Hand-in-hand with these discussions of regional conflicts, we plan to move more vigorously to cope with the new security agenda I detailed in San Francisco last October. The incipient nuclear programs of Iraq and North Korea are the best argument that our nonproliferation effort needs a new impetus to cope with a new danger. We cannot approach proliferation in a business-as-usual manner. I believe Foreign Minister Shevardnadze agrees. We both see proliferation as perhaps the greatest security challenge of the 1990s. We concur that it is unconscionable that Iraq, with a leader who used chemical weapons against his own people, should be in a position where it could acquire nuclear weapons in the future. And we agree that stopping and countering proliferation must be a central part of our agenda. Working together, we may be able to inspire a more comprehensive approach to nuclear, chemical, biological, and missile proliferation. Just as our bilateral agreement on destroying our chemical weapons stocks set a critical example--and makes a global ban more achievable--so now the two of us can help lead the way on the other weapons of mass destruction. We must work with others, improving existing mechanisms and developing new ones to cut off the supply of necessary technology and reduce the demand for acquiring weapons of mass destruction. Our experience in Europe in developing confidence- building measures may also be useful in different regions of the world, possibly providing mechanisms for gradually reversing proliferation where it has occurred. And we will work with the Soviets to explore sanctions, both bilateral and multilateral, that might be imposed against those states that violate international non-proliferation norms or use weapons of mass destruction. Developing together a pathway for countering the danger of nuclear, chemical, biological, and missile proliferation will be essential to any new, peaceful order. Here, again, I'll propose a ministerial working group to keep channels open and promote continual cooperation. One instrument for fashioning a new international order is the United Nations. The Iraqi conflict has shown how much the Security Council can do when the Permanent Five, especially the old adversaries the United States and the Soviet Union, are united. We are particularly pleased with the US-Soviet joint statement on the United Nations that we issued in New York during the General Assembly [see Dispatch, p. 189]. We hope to build on it in the months ahead. Three, we need to build
pathways to cope with those transnational dangers
that threaten all peoples and all nations. That's why I added the transnational issues of drug trafficking, terrorism, and environmental degradation to the formal US-Soviet agenda early in 1989. But we need to achieve greater results. We should explore the idea of an international center for ecological research at Lake Baikal. The center could become a pathway to more precise knowledge of our global environment for Soviet, American, and other scientists. Situated on Lake Baikal, the world's largest body of fresh water, it could stand for our commitment to end man's despoiling of nature's resources. In addition, I propose that we advance energy efficiency as a topic for discussion. This could enhance prospects for economic growth, limit environmental degradation, and reduce our vulnerability to supply disruptions. We would invite the private sector and nongovernmental organizations and develop new US- Soviet exchanges. Oil extraction would be another potential area for discussion. We will also continue to build a pathway with Moscow to cooperate to counter international terrorism. On civil aviation, we have already begun discussions on procedures for handling crises such as hijackings. We are also exploring possibilities for cooperation in ending state-supported terrorism.
Pathways to a Democratic Dialogue
Let me turn now to the other Soviet revolution--the changes in Soviet society. The internal revolution, in contrast to the new thinking in foreign and defense policy, presents an altogether different challenge to American policy. And it presents a novel opportunity for the American people. Like most revolutions, perestroika has become a mix of paradoxical elements. On one side, we see remarkable, previously unthinkable progress. The Supreme Soviet is asserting its parliamentary powers. In key cities and regions, democrats--with a small "d"--run the government. The Communist Party has formally surrendered its political monopoly, and alternative parties are beginning to form. The ideas of private property and market pricing are accepted now in mainstream Soviet economic debates. And Moscow is abandoning the Stalinist principle of empire--where the center dictated everything--and seems to be moving toward a confederation through negotiation. All of this is fundamentally to the good. It represents the "normalization" of Soviet society: the pluralization of political power, the decentralization of economic life, and the long-overdue recognition of the need for a voluntary multinational union. Unfortunately, this "normalization" is matched and oftentimes exceeded by a deterioration in Soviet life. Fragmentation equals or exceeds pluralization in many Soviet political debates. Standards of living are deteriorating, shortages are spreading, and the harvest is rotting. Freedom has unleashed age-old ethnic animosities that often shout down the voices of tolerance. This other, darker side of the Soviet revolution concerns all of us. We all must be understanding of the hardship a great people is now enduring. In this, all must remember that democratic change must come through peaceful, democratic means--as Andrei Sakharov, another Nobel Laureate, so often reminded us. The Cold War image of a single totalitarian monolith is gone, replaced by a confusing, jumbled mosaic that presents danger as well as hope. The danger is that the breakdown of the old Stalinist system will outstrip the development of a new system--one built on universal democratic values and the rule of law. The hope is that devolution of political authority and decentralization of economic power will prevail over deterioration and decay. As President Gorbachev has stated plainly, the Soviet future depends ultimately on the choices the Soviet peoples make. He is right. Their choices are their own. Building a new system will take all the courage and hard work and hope the men and women of the Soviet Union can muster. But their choices will be less hard if we in the West stand by their side. Our influence may only be marginal. But help, however offered and however marginal, can still make a difference. The American people can make a difference. Here is how they can help. At the height of the Cold War, dialogue was practically impossible. The Iron Curtain had few openings. This made it necessary for most contacts with the Soviet Union to pass from our diplomats in Washington to Soviet leaders in Moscow. The path of formal government-to-government contact was often the only one. But this was, as we always knew, abnormal. Indeed, the determination of Stalin and his successors to close off the Soviet people to normal exchanges and dialogue with the outside world stood as both hallmark and linchpin of Stalinist repression. And it is perhaps the main reason for the backwardness and poverty in which much of the Soviet economy is mired today. Glasnost and democratization have created an opportunity our people have long sought: the chance to reach out to the Soviet people directly. The Cold War destroyed much, but it never destroyed the good will or hope between our peoples--peoples who fought and died together in World War II. Almost from the very outset of this administration, I have stood on the side of hope--hope for a new Soviet Union built on democratic values. I intend to continue to stand there. That's why today I urge the American people--along with state and local governments--to join us in reaching out to the Soviet Union to help the Soviet peoples build better lives. We can build pathways between peoples--pathways built on mutual respect for universal democratic values and a common interest in freedom, security, prosperity, and justice. Pathways to a true democratic dialogue. These paths should cross at all levels: among persons, groups, firms, institutions, cities, and states. In joining at the local or city level, we can help create models or demonstrations of success. That can give hope. To lend momentum to this effort, I want to announce today the President's decision to include the Soviet Union in the Citizens Democracy Corps. We know a Europe whole and free must include the Soviet Union. We know Soviet reform can be accelerated by multiplied contacts with the American people. Through the Citizens Democracy Corps, we will try to help the leaders of the new Soviet Union by increasing their knowledge of democratic processes and market economics, by increasing their opportunities for interchange with our citizens and institutions, and above all, by giving them greater hope.
After the Cold War
Ambassador Kennan, I began by recounting a different time of hope 45 years ago. Now, we are at the end of another war-- the Cold War. But today Stalin and his perverse ideology are truly gone. Instead, new Soviet leaders welcome us. They welcome us to join with the peoples of the Soviet Union in a new revolution--a revolution of openness, of growing democratic change. We should accept their invitation. For if by our example and assistance, their world is made the better, both our peoples and our governments will be the better. And if by our work, we rekindle some of the values of our experience--hard work, individual liberty, initiative, and tolerance--that will be all for the good, too. (###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

US-Soviet Joint Statement on El Salvador

Description: Issued by the governments of the United States and the Soviet Union in Washington, DC, and in Moscow Date: Oct 18, 199010/18/90 Category: Speeches, Testimony, Statements Region: Central America Country: El Salvador [TEXT] Secretary of State James A. Baker, III, and Soviet Foreign Minister Eduard Shevardnadze directed that officials of the United States and the Soviet Union responsible for Latin America-- Assistant Secretary for Inter-American Affairs Bernard Aronson and his Soviet counterparts, Mr. Valery Nikolayenko and Mr. Yuriy Pavlov--meet in Washington last week. In these meetings, the two sides expressed their continued support for a peaceful solution in El Salvador, as the government of El Salvador and the FMLN [Farabundo Marti National Liberation Front] have committed themselves to in the Geneva and the Caracas agreements. The Soviet and American participants considered it desirable that the parties in conflict intensify their negotiations with a view toward reaching political agreements and a cease-fire as quickly as possible. They also consider that both sides in the dialogue should refrain from military actions that would damage the prospects for peace. (###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Isolation Strategy Toward Iraq

Baker Source: Secretary Baker Description: Statement before the Senate Foreign Relations Committee, Washington, DC Date: Oct 17, 199010/17/90 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Iraq Subject: Trade/Economics, Democratization, Military Affairs [TEXT] Six weeks ago, it was my privilege to speak to this committee and, through you, to the American people about Iraq's aggression against Kuwait. At that time, I outlined the President's goals: First, the immediate, complete, and unconditional withdrawal of all Iraqi forces from Kuwait as mandated in UN Security Council Resolution 660; Second, the restoration of Kuwait's legitimate government; Third, the protection of the lives of American citizens held hostage by Iraq, both in Iraq and in Kuwait; and Fourth, a commitment to the security and stability of the Persian Gulf. I also described our strategy for achieving these goals. The key element of that approach is American leadership of a global alliance that isolates Iraq--politically, economically, and militarily. Today, I would like to discuss with you what we have done to carry out that strategy since early September, including how responsibilities are being shared and what results have been achieved.
Maintaining the Coalition
First, we have been working successfully through the UN Security Council to isolate Iraq politically and to impose penalties for its refusal to comply with the UN resolutions. That effort is continuing today as the council considers its 10th resolution on the gulf. Second, we have secured notable cooperation from the Soviet Union. We have described this conflict as the first real crisis of the post-Cold War period. The positive approach of the Soviet Union has validated that label. In their Helsinki joint statement, President Bush and President Gorbachev declared, "We are united in the belief that Iraq's aggression must not be tolerated. No peaceful international order is possible if larger states can devour their smaller neighbors." Since then, I have met with Foreign Minister Shevardnadze on several occasions, both in Moscow and in New York and have talked to him on the phone frequently. The Soviets continue to support the objectives of the Security Council resolutions. Third, from the beginning, we recognized that maintaining such an unprecedented international coalition would necessitate special efforts. The United States could lead--indeed, had to lead-- but we should not carry the responsibility alone. The principle of shared responsibility had to be observed. We must jointly face the military threat. But we must also act collectively to support the many nations observing the economic embargo or contributing forces for the defense of Saudi Arabia. Iraq's pillage of Kuwait continues to displace hundreds of thousands of workers, straining the resources of neighboring states and the fragile economies of their homelands. Immediately after testifying before this committee early last month, I left at the President's request to visit our major allies and partners in the Arabian Peninsula, the European Community, Italy, and Germany to put responsibility-sharing into effect. The Secretary of the Treasury [Nicholas Brady] led a similar mission to London, Paris, Tokyo, and Seoul. This exercise in sharing responsibilities produced commitments of $20 billion in resources, equally divided between support for the front-line states of Egypt, Turkey, and Jordan and assistance to the multinational military effort. This includes support for a substantial portion of our incremental defense costs, now running about $1 billion per month. I would summarize the results of our on-going efforts as follows. -- Fifty-four nations have contributed or offered to contribute militarily and/or economically to the gulf effort. -- The three gulf states of Saudi Arabia, Kuwait, and the United Arab Emirates have agreed to contribute more than $12 billion to this effort in 1990. All of the states in the Gulf Cooperation Council (GCC) have contributed troops to the multinational force in Saudi Arabia and are providing access and services in support of US forces. Host-nation support for our deployed forces includes the free use of ports, logistical facilities, bases, and fuel. -- The United Kingdom is deploying over 6,000 combat troops, over 50 aircraft, and 12 warships. -- France has deployed over 4,000 combat troops, 30 aircraft, and 12 warships. -- Japan has pledged $4 billion: $2 billion in support of the military effort plus $2 billion in economic aid. And we hope to see that commitment fulfilled promptly and in a form immediately usable. -- Germany has pledged $2 billion: $1 billion in support of the military effort plus $1 billion in economic aid. -- The European Community has pledged $670 million in economic aid, along with member state commitments of an additional $1.3 billion. -- Italy has deployed four warships and eight aircraft. -- Korea has pledged $220 million: $95 million in support of the military effort plus $125 million in economic aid. To coordinate timely and effective economic assistance to the front-line states, the President launched the Gulf Crisis Financial Coordinating Group on September 25. This group unites the major donors of Europe, Asia, and the gulf under US chairmanship, with technical support from the IMF [International Monetary Fund] and World Bank. We see it as an important vehicle for maintaining the international coalition. The most important demonstration of America's commitment to bolstering the economic stability of our front-line aIlies is the President's proposal to cancel Egypt's FMS [foreign military sales] debt. No other signal would send the same powerful message to our friends in the region that we are determined to stand by them, even on the toughest issues. Last Thursday's [October 11] assassination of the Speaker of Egypt's Parliament is a tragic reminder of how far Egypt's enemies are prepared to go to divert President Mubarak from his responsible and courageous course. Strong congressional endorsement of Egyptian debt cancellation would provide Egypt critical economic relief and send a powerful and timely signal that the United States stands by its friends. The political and economic isolation of Iraq has been achieved. The costs and responsibilities for enforcing this isolation are being fairly distributed. Economic leakage is minimal. The Iraqi economy will suffer badly, and the Iraqi war machine will be hurt, too.
The Military Track
A discussion of diplomacy and economic sanctions, however, should not blind us to the other essential track of our policy: the military build-up in the gulf. I have just detailed for you the contributions made by our allies, including combat units, aircraft, and warships. In addition, Arab states such as Egypt and Syria are sending major units. There are now many thousands of Arab and Muslim soldiers deployed with the multinational forces in and around Saudi Arabia. And, of course, very large numbers of American marines, soldiers, sailors, and airmen are there already. All told, over 25 countries are now supplying men or materiel in support of the Security Council resolutions. Our military objectives are to deter an Iraqi attack on Saudi Arabia and to ensure the effective implementation of the UN sanctions. Economic sanctions against an aggressor like Saddam Hussein would never be effective unless the international community could help ensure the security of those nations, such as Saudi Arabia and Turkey, who must apply those sanctions. Our military forces are also there to protect American lives and to provide an effective and decisive response should Iraq escalate its aggression to active combat with the multinational force. Saddam Hussein must know that he lacks not only the political and economic options of holding Kuwait but also the military option to succeed with his aggression. The political, economic, and military aspects of our strategy reinforce each other.
The Need for Time
As the strategy takes effect, we face a difficult task. We must remain firm, not wavering from the goals we have set or our focus on the blatant aggression committed by Iraq. We must exercise patience as the grip of sanctions tightens with increasing severity. Some may urge action for action's sake. But the only truly effective action we can take now is to continue to heighten Iraq's political, economic, and military isolation. Every day--in Washington, in New York, in the region--we continue our search for a peaceful solution. Action that moves toward a partial solution would be self- defeating appeasement. And should there be any doubt about the awful consequences of a partial solution, I would urge a close look at what Saddam Hussein is doing to the people of Kuwait. Because Saddam Hussein controls access to the true story of Kuwait, this is a story that is not told frequently enough. So I commend the Congress' effort to secure eyewitness testimony of the brutalities now taking place. It is the rape of Kuwait. Hospitals have been looted without regard for the sick. Parents have been tortured and executed in front of their children. Children have been tortured and executed in front of their parents. Even after his military conquest, Saddam has continued to make war on the people of Kuwait. Let me be blunt: Saddam Hussein has invaded and tortured a peaceful Arab neighbor purely for self-aggrandizement. He is not raping Kuwait to advance the Palestinian cause. We cannot allow this violent way to become the wave of the future in the Middle East. Saddam Hussein must fail if peace is to succeed. The prospects for a just and lasting peace between Israel and its Arab neighbors will be shattered if he prevails. It is time to clear the air once and for all about the relationship between Saddam's aggression in Kuwait and other conflicts and problems in the region. I will put it to you simply: Does anyone seriously think that if this aggression succeeds, that prospects will be better for peace between Israel and the Palestinians? Can anyone seriously believe that if Iraq wins this contest with the international community, it will be easier to eliminate chemical weapons or biological weapons or nuclear weapons in the region? Of course not. Every hope for peace in this conflict-ridden region depends on stopping Iraq's aggression and ultimately reversing its capacity for future aggression.
Defeating Aggression
Since we met last, a great coalition of nations has gathered to isolate Iraq and its dictator. Where before his aggression Saddam Hussein found allies of consequence, today he finds none. Where before the invasion, the Iraqi economy had important international links, today it has none. And where once there were prospects for successful Iraqi aggression against Saudi Arabia, today there are none. Unity remains essential. I do not believe we could have come this far if most nations did not agree with President Bush that we all have a stake in a world where conflicts are settled peacefully. And that unity, expressed in political, economic, and military terms, remains the best hope for a peaceful solution to this conflict as well. It is gratifying that the vast majority of Americans have rallied behind the President in support of both our goals and our strategy in the Persian Gulf. Indeed, most of the world has done so, as well. Saddam Hussein cannot be allowed to ruin the region. He cannot be allowed to spoil this time of hope in the world for a more secure and prosperous future. There is a morality among nations. That morality must prevail.
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Iraqi Atrocities in Kuwait

Bush Source: President Bush Description: Excerpt from remarks at the Hyatt Regency Hotel, Dallas, Texas Date: Oct 15, 199010/15/90 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Iraq, Kuwait Subject: Human Rights [TEXT] . . . We all know the grave economic consequences of Iraq's occupation of Kuwait. But as serious as these consequences may be, what is ultimately at stake is far more than a matter of economics or oil. What is at stake is whether the nations of the world can take a common stand against aggression or whether Iraqi aggression will go unanswered. Whether we will live in a world governed by the rule of law or by the law of the jungle. Every day now, new word filters out about the ghastly atrocities perpetrated by Saddam's forces. Eyewitness accounts of the cruel and senseless suffering endured by the people of Kuwait; of a systematic assault on the soul of a nation. Summary executions, routine torture. Under the forces of Iraqi occupation, we are told that mere possession of the Kuwaiti flag or a photograph of the Kuwait's Amir are crimes punishable by death. And last month at the White House, I met with the Amir of Kuwait. And I heard horrible tales: newborn babies thrown out of incubators and the incubators then shipped off to Baghdad. Dialysis patients ripped from their machines and those machines then, too, sent off to Baghdad. The story of two young kids passing out leaflets: Iraqi troops rounded up their parents and made them watch while those two kids were shot to death--executed before their eyes. Hitler revisited. But remember, when Hitler's war ended, there were the Nuremburg trials. America will not stand aside. The world will not allow the strong to swallow up the weak. . . .(###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

US Statement on the Situation in the Occupied Territories

Pickering Source: Thomas R. Pickering, US Permanent Representative to the United Nations Description: Statement before the UN Security Council, and Resolution 672, New York, New York Date: Oct 12, 199010/12/90 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Israel Subject: United Nations, Democratization [TEXT] My government supports this resolution on the tragic event which occurred in Jerusalem on October 8. My government extends its condolences to the families and friends of those many innocent persons and worshippers who were victims of violence on that sad day. This is an incident which never should have happened. The Security Council tonight grieves for those lost and injured, condemns the acts of violence--both provocative and reactive--and reaffirms the obligations and responsibilities conferred upon the occupying power by the fourth Geneva Convention. Moreover, we recall and reaffirm--properly and urgently I might add--that a just and lasting solution to the Arab-Israeli conflict must be based on Security Council Resolutions 242 and 338. My government is dedicated to doing whatever it can to bring the parties closer to a negotiated peace. We want to be clear for the record that this resolution, however, should not be misinterpreted: the council's action does not empower it to address any subject beyond the matters directly contained in this resolution. Most obviously and certainly, this resolution makes clear it does not address in any way the status of the Middle East peace process, nor does it change in any way the role of the United Nations in that regard. We expect the Secretary General's mission to examine the circumstances of the October 8 incident and report back. We look forward to reviewing that report. On behalf of the United States and in accordance with this resolution, I would like to call on all sides to exercise restraint in words and actions so that calm can be restored and the holy places of all faiths respected.
Resolution 672, October 12, 1990
The Security Council, Recalling its resolutions 476 (1980) and 478 (1980), Reaffirming that a just and lasting solution to the Arab- Israeli conflict must be based on its resolutions 242 (1967) and 338 (1973) through an active negotiating process which takes into account the right to security for all States in the region, including Israel, as well as the legitimate political rights of the Palestinian people. Taking into consideration the statement of the Secretary- General relative to the purpose of the mission he is sending to the region and conveyed to the Council by the President on 12 October 1990. 1. Expresses alarm at the violence which took place on 8 October at the Al Haram Al Shareef and other Holy Places of Jerusalem resulting in over twenty Palestinian deaths and to the injury of more than one hundred and fifty people, including Palestinian civilians and innocent worshippers; 2. Condemns especially the acts of violence committed by the Israeli security forces resulting in injuries and loss of human life; 3. Calls upon Israel, the occupying Power, to abide scrupulously by its legal obligations and responsibilities under the Fourth Geneva Convention, which is applicable to all the territories occupied by Israel since 1967; 4. Requests, in connection with the decision of the Secretary- General to send a mission to the region, which the Council welcomes, that he submit a report to it before the end of October 1990 containing his findings and conclusions and that he use as appropriate all of the resources of the United Nations in the region in carrying out the mission. VOTE: Unanimous (15-0).(###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Rewards for Terrorism Information Program

Baker Source: Secretary Baker Description: Opening statement at a news conference, Washington, DC Date: Oct 16, 199010/16/90 Category: Speeches, Testimony, Statements Subject: Terrorism [TEXT] Let me welcome all of you this morning to the Department of State, and let me start by saying it's a pleasure to be here to boost our Rewards for Terrorism Information Program. This array of distinguished guests form the private sector and from the executive and legislative branches of government testifies to our strong nationwide commitment to counter-terrorism. At the outset of this administration, we made a solemn pledge to integrate counter-terrorism into our global foreign policy efforts, and I want to reaffirm that pledge today. We will do all that we can to ensure that everyone, everywhere, understands that terrorists are criminals--international criminals. Their targets are mankind's most fundamental values: a respect for human life, for legitimate processes of government, and for peaceful international relations. In short, terrorism is a crime really against civilization itself. The United States will accept no rationalization for terrorism. We will not make deals with terrorists. We and the rest of the civilized world must give no outlet nor quarter to terrorists. Acts of terror are meant to brutalize and to bully and to demoralize and to destroy. Pan Am 103 and the assassination last week of the speaker of the Egyptian parliament, all are meant to seize us with horror, to bring daily life to a standstill, and to hold entire nations hostage. Even as we recoil in horror at the carnage, there are ways that governments and citizens can work together to ensure that the warped psychology of the terrorist does not dominate our lives or distort our policies. Every government and every citizen has a stake in bringing terrorists to justice. Every government and every citizen can take a stand. Programs such as the Rewards for Terrorism Information play a key role. Role-playing comes naturally to Charlie Sheen, Charles Bronson, and Charleton Heston, all of whom have volunteered their time and talent to make public service announcements for radio and television about the Rewards for Terrorism Information Program. As concerned citizens, they are doing their part, and that matters very much. The announcements will be aired at home, and they will be announced as well abroad. They will help spread the message that the US government can now pay rewards of up to $4 million for information that prevents or resolves an act of terrorism or brings terrorists to justice. Our program also involves a unique public-private partnership. The government can pay up to $2 million for each reward. The Air Transport Association and the Air Line Pilots' Association, represented today by Mr. Robert Aaronson and Capt. Henry Duffy, each pledge up to $1 million in matching funds for terrorism against US civil aviation. I also want to, particularly this morning, acknowledge the vital work done by Bruce Smith. Bruce is a Pan Am pilot whose wife was murdered in the Pan Am 103 bombing. Bruce has successfully lobbied the Congress to raise the fund ceiling for our rewards program. As you can see, we have posters advertising the program. Mr. George Hughes, President of the George King Company, printed 7,000 of these posters for free. The posters will be distributed to airports, to airline offices, to US embassies, and to other government facilities worldwide. The rewards program itself, which has INTERPOL's unqualified endorsement, has been working very effectively. So we've scored some important victories. Recently, the largest rewards to date were paid to people who provided information that facilitated the successful prosecution of an international terrorist. In the past year, we have paid $500,000 in rewards, and more are under consideration. We can also relocate people who provide helpful information, and this has been done as well. Moreover, the US government continues to expand its intelligence exchanges with other governments, its police-to-police liaison work, and its training of foreign law enforcement personnel in anti-terrorism techniques. Our gathering today and the launching of our public campaign marks another step forward in our ongoing counter-terrorism effort. Advertising the Rewards for Terrorism Information Program can help save lives. It can help put terrorists behind bars, increase public awareness, and show the world where we stand. (###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

The Rewards for Terrorism Information Program

Date: Oct 16, 199010/16/90 Category: Fact Sheets Subject: Terrorism [TEXT]
The Rewards for Terrorism Information Program was signed into law in September 1984 (The 1984 Act to Combat International Terrorism, Public Law 98-533). Administered jointly by the US Department of State's Bureau of Diplomatic Security and Office of the Coordinator for Counterterrorism, the program initially offered rewards for information leading to the arrest or conviction of those persons responsible for specific terrorist attacks. The following rewards were announced publicly: -- $250,000 for the December 4, 1984, hijacking of Kuwaiti Airlines Flight 221; -- $250,000 for the June 13, 1985, hijacking of TWA Flight 847; -- $100,000 for the June 19, 1985, assassination of four US Marines and two US civilians in El Salvador; -- $100,000 for the August 7-8, 1985, attacks at Rhein-Main Air Force Base that killed three US citizens; -- $250,000 for the November 24, 1985, bombing of the US Military Post Exchange at Rhein-Main Air Force Base; -- $250,000 for the April 2, 1986, terrorist bombing of TWA Flight 840; and -- $500,000 for the June 28, 1988, murder of US Defense Attache William Nordeen in Athens. In December 1988, the US Department of State announced that the rewards program had been expanded to include payment for information that would lead to the "prevention, frustration, or favorable resolution of terrorist acts against US persons or properties overseas." Specific rewards for particular terrorist incidents would no longer be announced. Rewards of more than $500,000 have been paid under this program. Details regarding these rewards are classified to protect confidentiality of informants. After the tragic bombing of Pan Am Flight 103, legislation was introduced in the US Congress by Senators Ted Stevens and Frank Murkowski (both Republicans from Alaska), and Representatives Dante Fascell (Democrat from Florida) and William Broomfield (Republican from Michigan) to raise the rewards payment ceiling from as much as $500,000 to a maximum of $2 million. This higher ceiling was seen as a vital tool to obtain information on major terrorist operations. President Bush signed this legislation on December 13, 1989.
Program Initiatives
The State Department's Bureau of Diplomatic Security and the Office of the Coordinator for Counterterrorism established a program to broadly publicize these rewards. Publicity initiatives include: -- Establishment of a special post office box for use by those people with terrorism information who are reluctant to contact US diplomatic missions. The post office box address is: PO Box 96781 Washington, DC 20090-6781 USA -- Printing a new Department of State rewards program poster in eight different languages listing the post office box address and the increased reward ceiling of $2 million. Languages include English, Arabic, Spanish, Greek, French, German, Italian, and Portuguese. These posters have been sent to all US diplomatic posts for public display and provided to INTERPOL for further distribution; -- Accepting offers by the Air Transport Association (ATA) and the Air Line Pilots' Association (ALPA) to match the Department of State's reward payment amounts, up to $1 million each. These matching rewards provide for a total of up to $4 million for information on terrorist acts against US civil aviation. A special reward poster on this issue has been prepared for display at airports and other public locations around the world. In addition, INTERPOL is being provided copies for further distribution. -- Producing radio and television Public Service Announcements (PSAs) that advertise the Rewards for Terrorism Information Program. These PSAs were produced in several languages for worldwide distribution (English, Arabic, Spanish, French, German, and Greek) and feature actors Charlie Sheen, Charlton Heston, and Charles Bronson. Their message is to encourage people with terrorism information to contact the appropriate authorities in their own country, the US government, or to write to "Heroes" at the address mentioned above. PSAs are being sent to US diplomatic missions overseas for distribution to the media with the cooperation of the host foreign government. The PSAs were written and produced by Jack Guerin of Hollywood Promos and directed by Wayne Williams. Copies of the PSAs and the posters are available by calling the Bureau of Diplomatic Security at (202) 663-0549.
A key element of the program is that the US government will ensure complete confidentiality for persons who provide information on terrorist attacks. If deemed appropriate, the US government will even relocate people in the United States. The Department of State would like to thank Capt. Bruce Smith of Pan Am Airlines for his untiring efforts in promoting the rewards program, and George Hughes of the George W. King Company for printing more than 7,000 copies of the special US government/airline industry poster at no cost to the government. The US Department of State hopes that this program will reach people who have information that will save innocent lives. For further information on the Rewards for Terrorism Information Program, call (202) 429-2207.(###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Diplomatic Immunity

Date: Oct 22, 199010/22/90 Category: Policy Briefs (Gist) Subject: Democratization [TEXT]
Diplomatic immunity is a principle of international law by which certain foreign government officials are not subject to the jurisdiction of local courts and other authorities. The concept of immunity began with ancient tribes. In order to exchange information, messengers were allowed to travel from tribe to tribe without fear of harm. They were protected even when they brought bad news. Today, immunity protects the channels of diplomatic communication by exempting diplomats from local jurisdiction so that they can perform their duties with freedom, independence, and security. Diplomatic immunity is not meant to benefit individuals personally; it is meant to ensure that foreign officials can do their jobs. Under the concept of reciprocity, diplomats assigned to any country in the world benefit equally from diplomatic immunity.
Legal Framework
The Vienna Convention on Diplomatic Relations of 1961 and the Vienna Convention on Consular Relations of 1963 codified most modern diplomatic and consular practices, including diplomatic immunity. More than 140 nations, including the United States, are parties to these treaties. The conventions provide immunity to persons according to their rank in a diplomatic mission or consular post and according to the need for immunity in performing their duties. For example, diplomatic agents and members of their immediate families are immune from all criminal prosecution and most civil law suits. Administrative and technical staff members of embassies have a lower level of immunity. Consular officers serving in consulates throughout the country have an even lower level of immunity. Members of an embassy's service staff and consular employees are immune only for acts performed as part of their official duties. The United States considers the Vienna conventions to be particularly important because of the large number of American diplomatic and consular personnel stationed in countries where judicial systems are very different and less protective of individual rights than our own or where unfriendly governments might use their police authorities to harass American diplomats and their families. Failure by US authorities to uphold the Vienna conventions would complicate US diplomatic relations and could lead to harsher treatment in foreign courts of US personnel abroad.
Abuses of Diplomatic Immunity
Under the Vienna conventions, all persons entitled to immunity have the obligation and duty to respect the laws and regulations of the host country. Immunity is not a license to commit a crime, and violations of the law are not condoned. In the United States, any time a person with immunity is alleged to have committed a crime, the Department of State advises his or her government of the incident and, where prosecution would be the normal procedure, requests a waiver of the alleged offender's immunity so that the case may be heard in the appropriate US court. If immunity is not waived, the Department of State may, in serious cases, order the withdrawal of the offender from the United States. In the case of an offense committed by a member of a diplomat's family, the diplomat and his or her entire family may be expelled. Diplomatic visas of serious offenders are canceled, and their names are entered into a worldwide lookout system to keep them from returning to the United States. The Department of State's Office of Protocol works with the injured parties and the foreign government to secure restitution in those cases where criminal incidents have resulted in injuries to individuals. The Diplomatic Relations Act of 1978 and related regulations require that before a person with immunity can obtain license plates for a vehicle, he or she must have liability insurance. Anyone injured in an automobile accident by a person with immunity may bring direct action against the vehicle's insurer in US District Court. In addition, diplomats do not have a right to endanger public safety by driving a vehicle while under the influence of alcohol or by disregarding the rules of the road. Police stop them and, if they are intoxicated, prevent them from driving. Police issue citations for driving offenses and the Department of State revokes drivers' permits for any persons found to be unsafe drivers or who continually abuse driving regulations. Furthermore, some countries follow the practice of investigating, and, if appropriate, taking legal action against their own diplomats who are accused of breaking a host country's laws. In those cases where immunity prevents civil suits, the Department of State works to settle the matter and mediates disputes in an effort to find a mutually satisfactory solution. The vast majority of persons entitled to some form of diplomatic immunity are law-abiding people. Only a few ever run afoul of the law. Unfortunately, those few who do exhibit egregious behavior draw the attention of the public and the media and damage the reputation of the entire group.(###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Cuba: An Anachronism in Today's World

Kozak Source: Michael G. Kozak, Deputy Assistant Secretary for Inter-American Affairs Description: Address before the Cuban-American National Foundation, Washington, DC Date: Oct 11, 199010/11/90 Category: Speeches, Testimony, Statements Region: Caribbean Country: Cuba [TEXT] Thank you for the opportunity to come here today to discuss US policy toward Cuba. Over the years, the Cuban-American National Foundation has shown firm support for many of our policies on Cuba and been a source of great assistance in humanitarian efforts to help Cuban immigrants. It is a pleasure to be with you. In August 1989, I spoke to the Subcommittee on Western Hemisphere Affairs of the House Foreign Affairs Committee about US policy toward Cuba. Looking over that statement in preparation for speaking with you today, I had to marvel at how much the communist world has changed since then--and at how much Cuba has remained the same. While Eastern Europe and the Soviet Union have embarked on the path toward democratic freedom and market economy, President Fidel Castro has frozen Cuba in a time warp choked with 30 years of stale rhetoric and outmoded centralized control that, as each day passes, bring greater hardship to the Cuban people.
Cuba's Time Warp and US Policy
Developments in the socialist world have provided Castro with an opening for change. Yet, while other socialist nations move unequivocally toward democracy, the government of Cuba defies the times, forbidding any review of the country's single-party system. On the contrary, Castro has implemented the first phase of "the special period in peacetime." Instead of moving Cuba forward with the rest of the world, Castro has announced that Cuba is moving backward, toward a pre-industrial economy where beasts of burden and bicycles will replace 20th-century machines and modes of transportation--all in the name of preserving the purity of the revolution. In the name of that revolution, the government of Cuba has, for three decades, systematically deprived its people of basic political rights and economic freedoms, supported armed insurgencies abroad, and been the Soviet Union's major client state in the Western Hemisphere. These are the issues that separate Cuba from the United States. Where the American system fosters individual achievement, the Cuban structure stifles personal development, flattening the individual into a cog in the machinery of an increasingly discredited ideology. In the past year, Castro has not only closed Cuba off from the climate of international reform. He has, at the same time, increased repression at home and continued to support the efforts of Marxist guerrillas to overthrow the freely elected government of El Salvador in defiance of the regionally accepted peace process. Recently, I have heard rumors that US policy toward Cuba is under review: that we are hardening our line toward Cuba by targeting it in international forums or that we are softening our policy through moves to normalize relations. Neither is the case. US policy objectives toward Cuba have been constant for the nearly 30 years that Cuba has pursued policies inimical to American values and to US interests. The objectives of our policy are internal democratic reform, an end to human rights abuses, and an end to support for insurgency abroad. The tools of this policy are well known to you all: -- The absence of normal diplomatic relations; -- Diplomatic isolation in international organizations and from normal bilateral ties with other countries; -- The comprehensive economic embargo, which aims to deny Cuba the means to carry out policies inimical to the United States; and -- The broadcast of unbiased news and information to the Cuban people. US policy toward Cuba is the result of an unacceptable pattern of behavior by the Cuban government at home and abroad. The United States cannot have friendly relations with a government that abuses its own people, that resists reforms to improve the life of its citizens and supports insurgencies abroad. US policy toward Cuba has been and will remain constant until Cuba takes steps to remove the impediments to improved relations. These impediments are major and worthy of review.
Cuban Support for Subversion Abroad
Cuba's continued support of the FMLN [Farabundo Marti National Liberation Front] insurgency in El Salvador not only attempts to subvert a democratically elected government but also clashes with the policies of Cuba's regional neighbors, the authors of the peace process now in train. Why does Cuba continue to support the FMLN? Why does Cuba jeopardize the best chance we have had in a decade for peace in Central America? Why won't the Cubans use their influence to support progress in the negotiations? The only answer seems to be that Cuba is not willing to apply in Central America the lesson of the Namibian accords in Southern Africa, where Cuba's ongoing troop withdrawal from Angola is making a contribution to regional peace and stability. Instead, in this, our shared hemisphere, Cuba has persisted in disrupting the hopes of thousands for peace and democracy in Central America.
Human Rights Abuses and Political Repression in Cuba
Cuba continues to be one of the worst violators of human rights in our hemisphere. Since the revolution in 1959, Cubans have been denied the most basic democratic rights and guarantees for fair political and judicial processes. They are subjected to surveillance by block committees, denied legal due process, and prevented from travel abroad. Many have been subjected to arbitrary arrest and imprisonment. In recent months, the Cuban government has intensified its crackdown on dissent after a resolution passed by the UN Human Rights Commission on Cuba offered it an incentive to correct its abusive practices. Instead, in response to that resolution--which four East European nations supported--Castro replied: "Do not even dream that we are going to comply." Castro later articulated his concept of human rights: "Revolutionaries have complete freedom of expression, while counterrevolutionaries have no freedom of expression at all. That is the rule." Indeed, last July, a Cuban court meted out the stiffest sentences against human rights activists in nearly a decade. Seven members of the small Democratic Unity Movement were condemned to up to 7 years in prison for rebellion after they talked to foreign reporters. Just last week, eight activists were sentenced to up to 6 years in prison for "subversive propaganda" or "illegal associations." The leaders of four of Cuba's five principal human rights groups remain in detention; some without being charged. The longest- serving political prisoner in the world, Mario Chanes de Armas, is still detained after more than 29 years. Castro's denial of basic human and political freedom to Cuban citizens remains a major obstacle to the improvement of relations. We share the goal of all who seek the establishment of democracy in Cuba through a pluralistic process.
Cuba's Military Ties With the Soviet Union
Over the years, Soviet security assistance has given Cuba one of the largest and best equipped military establishments in the Western Hemisphere. In the past, Soviet military assistance to Cuba has hovered around $1.5 billion annually. It has enabled Cuba to project its power and influence in this hemisphere and elsewhere in a manner inimical to US interests and those of other peaceful nations. In turn, the Soviet Union has traditionally received important strategic benefits from its military ties to Cuba. Soviet aircraft and naval vessels use Cuban facilities. The Soviets' largest single intelligence gathering installation outside the USSR is located in Cuba. Although the overall Soviet-Cuban relationship is evolving, Soviet military support to Cuba remains a source of serious concern for the United States. We would like to see Soviet military assistance to Cuba eliminated. Changes in the Soviet Union may bring this about, but, so far, this has not occurred. Yet as Moscow moves forward with its own reforms, the ideological gap between Cuba and its longtime ally will grow. Castro has reacted harshly to the prospect of losing Soviet support, trying to minimize its importance. In his last July Rebellion Day speech, he rejected the lessons of the reforms in the Soviet Union. "If the USSR crumbled," he said, "if the USSR disappeared, we would continue building socialism in our country. Socialism is not . . . a temporary game. It is not and cannot be a transitory decision." Moscow has stated publicly its intention to put its trade relations with Cuba on a hard currency basis. The present Soviet economic relationship with Cuba allows Castro to prolong his corrupt system and to inflict greater suffering on the Cuban people. The United States would like to see Soviet aid and subsidized trade arrangements with Cuba evolve into an economic relationship more in consonance with general trade practices around the world--based on world market prices in hard currency. The Soviets have said that this is their intention. We hope that is so.
There is no sign that the Cuban government would consider the changes that could improve life inside Cuba and lead to better relations with the United States. On the contrary, Castro has taken the path of defiance, forcing the Cuban people to endure more hardship, deprivation, and repression. In Castro's words, "we shall not resign for any reason or circumstances whatsoever . . . from the path that we have chosen." His new, preferred motto is "socialism or death." The economic landscape in Cuba today paints a grim picture of what the consequences may be. Last week, Castro launched the austerity program known as the "special period in peacetime," with strict rationing of food, fuel, and consumer goods. Castro told the people they will have to make their own clothes. He plans to relocate more than 30,000 workers and students to rural areas, where they will till the farms with their hands. Shortages in basic commodities, deteriorating public services, long lines, and empty shelves define the daily disintegration of the lives of the Cuban people as they try to survive under a regime whose legitimacy erodes day by day. Castro has claimed that the US embargo is responsible for the economic destruction we now are watching in Cuba. That is simply not the case. Castro has ruled Cuba for 30 years. He and his policies are responsible for what has happened--no one else. He should cease evoking the specter of US plots and an imagined military threat "from the north" to justify his repressive regime. The government of Cuba must answer for the consequences of its policies on the Cuban people. The United States looks forward to the day when a democratic Cuba will flourish. Our policies seek to promote change in Cuba that will allow all Cubans to participate freely in the decisions that govern their lives. We know you share this goal.(###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Country Profile: Cuba

Date: Oct 22, 199010/22/90 Category: Country Data Region: Caribbean Country: Cuba Subject: History, Trade/Economics, International Organizations [TEXT] Official Name: Republic of Cuba
Nationality: Noun--Cuban(s); adjective--Cuban. Population: 10.5 million (Sept. 1989); 70% urban, 30% rural. Avg. annual growth rate: 0.93%. Density: 95/sq. km. (238/sq. mi.). Ethnic groups: Spanish-African mixture. Language: Spanish. Education: Years compulsory--6. Attendance: 92% (ages 6-16). Literacy: 98.5%. Health: Infant mortality rate--11.8/1,000. Life expectancy --75 years. No statistics available by sex. Work force: 3.3 million; 30% government and services, 29% industry, 13% agriculture, 11% commerce, 10% construction, 7% transportation and communications (1987).
Area: 110,860 sq. km. (44,200 sq. mi.); about the size of Pennsylvania. Capital--Havana (pop. 2 million). Other cities-- Santiago de Cuba, Camaguey, Santa Clara, Holguin, Matanzas, Cienfuegos, Pinar del Rio. Terrain: Flat or gently rolling plains, hills, mountains up to 2,000 meters (6,000 ft.) in the southeast. Climate: Tropical; moderated by trade winds; dry season (November- April); rainy season (May-October).
Type: Communist state; current government assumed power January 1, 1959. Independence: May 20, 1902. Constitution: February 24, 1976. Branches: Executive--President, Council of Ministers. Legislative- -National Assembly of People's Government. Judicial--People's Supreme Court. Political party: Cuban Communist Party (PCC). Suffrage: All citizens age 16 and older, except those who have applied for permanent emigration. National Assembly elections were held in 1986 and municipal elections for local assemblies in 1989. Administrative subdivisions: 14 provinces and one special municipality (Havana). Flag: White star centered on red triangle at staff side, three blue and two white horizontal bands.
Gross social product (GSP) (This economic measure is not convertible to GNP/GDP) (1990 est.): $27 billion. Real annual growth rate: 0% (1988). Per capita income: $2,644. Natural resources: Nickel, cobalt, iron ore, copper, manganese, salt, timber. Agriculture: Products--sugar, citrus and tropical fruits, tobacco, coffee, rice, beans, meat, and vegetables. Industry: Types--sugar, food processing, oil refining, cement, electric power, light consumer and industrial products. Trade: Exports--$5.4 billion (f.o.b. 1987): sugar and its byproducts, petroleum, nickel, seafood, citrus, tobacco, rum. Major markets-- USSR, 72%; other communist countries, 15% . Imports--$7.6 billion (c.i.f. 1987): capital goods, industrial raw materials, food, petroleum, consumer goods. Major suppliers--USSR, 72%, other communist countries, 14%. Official exchange rate: 1 Cuban peso=US$1.33.
Membership in International Organizations
Council for Mutual Economic Assistance (CEMA), Economic Commission for Latin America (ECLA), Group of 77 (G-77), Non- Aligned Movement (NAM), World Federation of Trade Unions (WFTU), Latin American Economic System (SELA), United Nations and some of its specialized and related agencies, including UN Educational, Scientific, and Cultural Organization (UNESCO), International Atomic Energy Agency (IAEA), International Civil Aviation Organization (ICAO), Food and Agriculture Organization (FAO), UN Human Rights Commission (UNHRC), Universal Postal Union (UPU), and the World Health Organization (WHO).(###)
US Department of State Dispatch, Vol 1, No 8, October 22, 1990 Title:

Focus on Central and Eastern Europe

Juster Source: Kenneth I. Juster, Senior Adviser to the Deputy Secretary of State Description: Remarks from conference sponsored by the RAND Corporation on Supporting East European Democracy and Free Markets, Santa Monica, California Date: Sep 21, 19909/21/90 Category: Focus on Emerging Democracies Region: E/C Europe Country: Czechoslovakia (former), Hungary, Yugoslavia (former), Romania Subject: Trade/Economics, Development/Relief Aid [TEXT] Following is an abridged version of remarks by Kenneth I. Juster, Senior Adviser to the Deputy Secretary of State, before a conference sponsored by the RAND Corporation on Supporting East European Democracy and Free Markets, Santa Monica, California, September 21, 1990. The President has designated Deputy Secretary of State Lawrence S. Eagleburger as the coordinator of US assistance to Eastern Europe. During the past year, we have witnessed the most dramatic changes on the European continent since the end of World War II. The turn away from communism and the emergence of democracies in Eastern Europe represent nothing less than a vindication of US foreign policy during the post-war era. But we also must appreciate the fact that the communists drove the countries of Eastern Europe and their economies to the brink of ruin. They have left behind in these countries an obsolescent industrial base, massive debt, and environmental decay. Perhaps the most damaging legacy, however, is psychological--populations grown accustomed to risk-avoidance, an atrophying of entrepreneurial skills, and a dependence on government largess (including price subsidies, guaranteed jobs, and rent control). Thus, the new governments of Central and Eastern Europe have their work cut out for them. And so does the West-- because it is in our interest that they succeed. A successful transition to democracy and free markets in Eastern Europe would serve US national interests in important ways: It would mean that the turn away from communism has become irreversible, and it would help ensure that the region will attain some stability and not once again become a power vacuum or an unstable theater of tension and rivalries. We, therefore, have every incentive to assist the Central and East European nations in their time of need--and we are doing just that.
General Framework for US Assistance
US assistance policy in Central and Eastern Europe is based on the concept of a "new democratic differentiation." This term was chosen to contrast with our long-standing policy of expanding contact with communist governments in Eastern Europe to the extent that their foreign policies differed from that of the Soviet Union. We now have adopted a new policy standard--that is, the United States will tailor its assistance to the specific needs of each East European country as it moves positively toward four objectives: First, progress toward political pluralism, based on free and fair elections and an end to the monopoly of the communist party; Second, progress toward economic reform, based on the emergence of a market-oriented economy with a substantial private sector; Third, enhanced respect for internationally recognized human rights, including the right to emigrate, and to speak and travel freely; and Fourth, a willingness on the part of each of these countries to build a friendly relationship with the United States. In practice, the "new democratic differentiation" distinguishes three levels of assistance to Central and East European countries. First, at the most basic level, some countries need short-term humanitarian aid to cope with severe shortages of necessities-- such as food and medicine. The United States has made humanitarian assistance available to all countries of the region. For example, we have provided medical supplies to the Romanians, and food relief totaling approximately $200 million to both Poland and Romania in their time of urgent need. Also during this fiscal year, the Department of Defense, through its humanitarian assistance program, has provided surplus equipment to Hungary, Romania, Poland, and Bulgaria. Second, over the medium term, there are a number of steps that the United States is taking to create an institutional framework to support political reform and the move toward market economies. Again, most of this assistance is open to all countries of the region but in proportion to their commitment to reform. There are four general categories of assistance here, and different priorities within each for each country.
Developing Democratic Institutions
One of our priorities is to assist in developing democratic institutions and the rule of law. Our initiatives in this area are concentrated in four areas. Rule of Law and Human Rights. The United States will assist democratic governments of Central and Eastern Europe to establish laws and legal systems based on the rule of the majority and protection of the rights of individuals and minorities. Political Process. The United States will help new legislatures, political parties, and civic organizations develop into effective, stable democratic institutions. Social Process and Cultural Pluralism. Through, among other things, support for educational curriculum reform, training of teachers, and support for trade unions and other non-governmental organizations, the United States will assist in strengthening the principles and practices of democratic pluralism within the societies of Central and Eastern Europe. Support for Independent Media. The United States will assist in establishing independent radio and television stations, publishing independent newspapers, and training journalists. Indeed, we have already launched an Independent Media Fund designed to advance these programs on a regional basis.
Technical Training and Assistance
A second medium-term priority is technical training and assistance in support of economic reform. Our priorities here include: -- Assistance in designing comprehensive economic reform policies, both in the macroeconomic and microeconomic areas. We have had extensive consultations with several of the East European governments on monetary policy, budget policy, and exchange rate convertibility, as well as on price reform, privatization, and competition policy; -- Assistance in restructuring state-owned enterprises and preparing them for privatization; -- Assistance aimed at developing an institutional infrastructure conducive to a market-based economy, with emphasis on banking and financial services, a securities exchange, new tax codes, and generally accepted accounting practices; -- Assistance to develop legal frameworks for private, market-based economies; -- Training of managers, accountants, and others in the basic workings of a market economy; and -- English-language training, which will facilitate the exchange of scientific and technical information. Based on the suggestions that the United States has received from the various East European governments, we are focusing this assistance most heavily in the areas of agriculture, banking, energy, health care, housing, small business, and public administration.
Environmental Assistance
The environment is a separate medium-term assistance priority. The primary goal of US environmental assistance programs in Eastern Europe is to strengthen the region's capacity for mitigation of critical environmental problems and remediation and prevention of pollution through the setting of new environmental standards and regulations, perhaps on a regional basis, that are compatible with economic growth. We also seek to maximize the rapid introduction of cost-effective energy conservation technologies in Central and Eastern Europe to bring about environmental improvements while lowering the cost and capital requirements for fossil fuel consumption.
Normalizing Trade and Investment Relations
Finally, though not strictly within the assistance framework, the US government seeks to normalize bilateral trade and investment relations with countries that meet the requirements of US law. Our efforts in this area include: Signing Bilateral Investment Treaties. We have concluded a comprehensive business and economic agreement with Poland. We are in the final stages of concluding a bilateral investment treaty with Czechoslovakia. We are in the midst of negotiations with Yugoslavia on a bilateral investment treaty. We are in the process of opening negotiations for such agreements with Hungary and Bulgaria. Signing Trade Agreements and Granting Most-Favored-Nation (MFN) Status. We have granted MFN status to Poland, Hungary, and Yugoslavia. We have signed a trade agreement with Czechoslovakia which will grant MFN status once approved by the Congress. We are beginning the process of negotiating the trade agreement necessary for such status with Bulgaria. This category of assistance also includes the programs of the Export-Import Bank (now operating in Poland, Hungary, Yugoslavia, and Czechoslovakia), the Overseas Private Investment Corporation (operating in Poland, Hungary, and Yugoslavia, and opening in Czechoslovakia in the near future), and the trade and development program (operating in Poland, Hungary, and Czechoslovakia), which provides US government money to foreign governments for feasibility studies by US firms. All of these agreements and activities are designed to stimulate the economies of Eastern Europe and, as such, to improve the quality of life.
Economic Support
The final level of assistance is bilateral and multilateral economic support and other measures designed to permit the integration of the countries of Central and Eastern Europe into the world economic community. This is the largest category of funding and is available, generally with a good deal of conditionality, for those countries which have decided to take the "leap" to a market-based economy by implementing major economic reform programs. Poland is clearly in this category, followed by Yugoslavia, with Hungary and Czechoslovakia not far behind them. US economic support here is in several forms. On the multilateral front, the United States is the major contributor (almost 20%) to the International Monetary Fund (IMF) stabilization programs and World Bank structural adjustment programs in these countries. Again, these two institutions are most active in Poland but have programs in Hungary and Yugoslavia as well. Czechoslovakia has just become a member of the IMF and the World Bank, and Bulgaria is currently in the process of seeking membership to these institutions. The United States is also one of the founding members of, and will be the largest contributor (10%) to, the new European Bank for Reconstruction and Development (EBRD). At least 60% of the EBRD's loans are to be devoted to private sector projects--to set up new enterprises or fund the privatization of state-owned enterprises. No more than 40% of the EBRD's loans will be for infrastructure improvements for state- owned enterprises that also should help nurture free enterprise-- such as improved telephone systems and railways. The United States has also taken the lead in establishing the new Organization for Economic Cooperation and Development (OECD) Center for Cooperation with European Economies in Transition and has proposed, in addition, that the OECD offer a new affiliate status at this time for Poland, Hungary, and Czechoslovakia. Yugoslavia has long been an associate member of the OECD. In terms of bilateral economic support, the United States led the way, with a $200-million grant, in establishing a $1-billion stabilization fund to support the convertibility of the Polish currency. In addition, one of our most significant initiatives has been the establishment of the Polish-American and Hungarian- American Enterprise Funds. The enterprise funds are a bold experiment in a new way of delivering economic assistance. Rather than have the US government provide a one-time grant to Poland or Hungary, we have developed, instead, the enterprise funds as a means for tapping into private-sector expertise to manage US government grants. The President, in consultation with the Congress, has asked a group of prominent private citizens from the United States, and from Poland and Hungary for each of the two funds, respectively, to form a corporation to use US government money to make loans, grants, equity investments, and other forms of financial transactions designed to promote private-sector development in Poland and Hungary. The hope is that these enterprise funds will be able to manage the US government grants in the way that an investment banker might do--unencumbered by the bureaucratic constraints normally associated with government activities--and that they will be able to multiply many times over the financial impact of the initial grants.
Guiding Principles
The United States has developed some general principles that guide its activities: -- Use assistance to advance the process of economic reform, not substitute for it; -- Emphasize projects that can start up fast and have an immediate impact to meet urgent needs; -- Concentrate assistance in each country in a limited number of areas, where the United States has a comparative advantage over other Western donors and where the United States can have an impact; -- Concentrate on practical, nuts-and-bolts programs rather than abstract theory or study; -- Encourage demonstration projects in key sectors of the economy, especially projects designed to improve the environment and the quality of life; -- Establish, where practical, generic programs which can then be tailored to the needs of each country; -- Put experts in the field for periods of up to 1 year; stay away from short visits or 1-day programs; -- Emphasize training in the recipient countries rather than in the United States, for reasons of both cost effectiveness and avoidance of a brain drain of valuable but limited talent; -- Emphasize educating the educators and training the trainers; -- Work with existing institutions, if possible (generally avoid creating new institutions because the overall costs and the time lag are too great); -- Establish sustainable relationships between US institutions and organizations in Central and Eastern Europe, so as to strengthen the American presence (and influence) in the region; -- Support programs which respond to the needs of the Central and East Europeans rather than those which are designed to suit the desires of US organizations; -- Develop a streamlined funding mechanism to gain maximum flexibility while maintaining accountability; and -- Before starting a new project, take into account the activities of other Western countries and of the international financial institutions. Coordinate efforts where possible.
US Assistance Programs
Four countries qualify now for special attention because of their readiness to implement democratic reforms and their decision to make the transition to a market-based economy--Poland, Hungary, Czechoslovakia, and Yugoslavia. Of these four, we believe that Poland deserves top priority for several reasons: -- Its economic problems are the most severe. -- Its economic reforms are the most far-reaching. -- Its economy is the largest in the region. Poland is viewed by most observers as the "test case" in Eastern Europe. Success or failure of the Polish effort, therefore, is extremely important politically. Yugoslavia, under Prime Minister Markovic, has also embarked on an ambitious program of economic reform, and two of the republics--Slovenia and Croatia--have recently held free elections. The United States has provided substantial technical assistance to Yugoslavia, but we are concerned about the rising internal tensions in the country and the detrimental effect these tensions could have on further political and economic reforms. Hungary and Czechoslovakia have both elected new democratic governments this year and, while each country is moving toward a market-oriented economy, each is still in the process of defining a comprehensive economic reform program. With respect to Bulgaria, the US government has expressed its concern about the fairness of the elections in June, but we are cautiously optimistic about the new government just formed there. Assuming continued democratization, the United States is prepared to offer assistance. Finally, on Romania, the United States continues to have some reservations about the commitment there to democratic reforms and basic human rights. We have informed the Iliescu regime of the sorts of democratic reforms we would like to see, and we are prepared to assist the Romanians in building democratic institutions. As to specific programs in the region, the focus during the past year has been primarily on Poland and Hungary because those are the countries for which the Congress appropriated money. The initial legislation in this area--the Support for East European Democracy (SEED) Act of 1989--was written prior to the revolutions in Bulgaria, Czechoslovakia, Romania, and East Germany. The SEED Act, therefore, was designed to promote reforms in the two most liberalized countries in the region at the time--Poland and Hungary. Moreover, because at the time of the drafting of the SEED Act we were not yet dealing with popularly elected governments in those two countries, the act designated virtually all of the funds appropriated to be used for specific programs.
Humanitarian assistance--
-- Food assistance for Poland (over $130 million); -- Medical supplies for Poland ($2 million).
Democratic initiatives for Poland and Hungary--
($4 million).
Developing human resources for Poland and Hungary--
-- Technical training ($3 million); -- Labor market transition ($1.5 million); -- Peace Corps ($2 million); -- Educational/cultural exchanges ($3 million); -- Scholarship programs ($2 million); -- Science and technology exchanges ($1.5 million).
Environmental initiatives--
-- Clean fossil fuels in Poland ($10 million); -- Krakow environmental activities ($2.3 million); -- Regional Environmental Center ($1 million).
Trade and investment--
-- OPIC authority to operate in Poland and Hungary with $40 million of OPIC's investment guarantee authority earmarked for Poland; -- Export-Import Bank authority to guarantee, insure, finance, extend credit, and participate in extension of credit in Poland and Hungary; -- Trade credit insurance program--$200 million in secondary guarantees of short-term Export-Import Bank trade credits for exports for the private sector in Poland; -- Trade and development program--$2 million for financing planning services of the US private sector for important development projects.
Stabilization fund for Poland--
($200 million grant).
Enterprise funds--
-- Poland ($35 million) -- Hungary ($5 million) While the SEED Act provided authority for the expenditure of funds only in Poland and Hungary, there has been to date some limited authority for expenditures in the other East European countries. First, when the Congress passed the Panama act to provide emergency assistance to the new government in that country, it added authority for the expenditure of $10 million for democratic initiatives in Central and Eastern Europe. These funds have been used for pre-election assistance, development of an independent media fund, and the launching of rule-of-law programs, among other things. Second, various US government agencies--such as the Commerce Department, the Agency for International Development (AID), the US Information Agency (USIA), and the Peace Corps--have utilized existing budgetary authority or presidential waivers for additional programs in Central and Eastern Europe. The administration also introduced new legislation on March 7, entitled the "Eastern European Democracy and Free Market Act of 1990," to respond to the dramatic events in that region. The President's initiative, in effect, seeks to enact the general framework for assistance described above. It makes all the countries of Central and Eastern Europe, as well as Yugoslavia, eligible for assistance at a level corresponding to their positive movement toward US objectives for the region. It requests $300 million for FY 1991 for the funding of assistance programs. And it contains no earmarks, so as to provide the administration with the necessary flexibility to coordinate assistance based on developments in the region, the cooperative international effort, and requests from the recipient countries.
The International Effort
US strategy is to avoid pumping money willy-nilly into the region. Despite the calls for some kind of new "Marshall Plan" for Eastern Europe, the needs of the region today are substantially different from those of Western Europe in 1947. After World War II, we had to rebuild a region which was physically devastated but which, nevertheless, possessed the entrepreneurial know-how, economic infrastructure, and democratic institutions necessary for a quick recovery. In Central and Eastern Europe today, those skills and institutions are, to one degree or another, lacking. That is why, in addition to the financial assistance we are providing to back meaningful stabilization and structural adjustment programs, we are concentrating on transferring a wide range of technical assistance so that these countries will become equipped to absorb Western investment and aid. Simply throwing money at the region, even lots of it, without relating it to progress toward structural reforms may--as happened in the 1970s--only postpone the advent of change and squander our assistance efforts. There are a few additional points that should be made in response to those who are saying we are not doing enough. First, in large part because of US efforts, we now have powerful and prosperous European allies who can share with us the burden and responsibility of helping to rebuild the other half of their continent. Indeed, President Bush was instrumental in establishing the Group of 24 Western governments (G-24) that has already coordinated approximately $14 billion in grants, credits, guarantees, and technical assistance for Poland and Hungary. The G-24 is designed to harness the concerted efforts of the West to support political and economic reforms in Eastern Europe. The European Commission serves as the secretariat to the G-24. Its functions include: -- Coordinating the bilateral assistance programs of the donor countries; -- Serving as an information clearinghouse to exchange information and avoid duplication of effort; -- Conducting needs assessments and setting indicative priorities for the East European countries; and -- Helping implement initiatives and joint projects, such as the Polish stabilization fund and the regional environmental project in Budapest. The G-24 has agreed on criteria for eligibility for its coordinated assistance that are similar to those adopted by the United States. These criteria are progress toward the rule of law, respect for human rights, the introduction of multiparty systems, the holding of free and fair elections, and the development of market-oriented economies. The G-24 has also established working groups on food aid, investment, training, and the environment. The group on food aid was especially successful in coordinating emergency agricultural assistance to Poland. Finally, it needs to be said that when one looks at the actual budgetary outlays for assistance to Eastern Europe--as opposed to credits, insurance, and guarantees which make up the assistance programs of many of our partners--the United States is right at the top of the list of donor countries. The East Europeans know this, and they appreciate it.
Administration of US Assistance
Over 30 US government agencies have become involved in providing assistance of one form or another to the countries of Central and Eastern Europe. Some of these agencies are normally engaged in foreign affairs and are, therefore, familiar with operating in the international environment. However, in many cases, domestic agencies are seeking to become involved in the assistance process. These agencies have an important role to play, but coordinating among them has been a difficult task, especially when all agencies are competing for scarce resources. I suspect our West European counterparts have had similar experiences. It is even more difficult to coordinate private-sector activities, which include for-profit ventures, proposals for technical assistance that require government funding, and volunteer efforts. With regard to for-profit ventures, we can--and do-- provide guidance and encouragement because such ventures are critical to successful reforms in Central and Eastern Europe. But it is not government's role to subsidize or favor one business venture over another. As to private-sector groups seeking government funding, this is, in many instances, the most difficult category with which we deal. Both we and the governments of Central and Eastern Europe have been overrun by a vast array of private-sector proposals to provide technical assistance and the like, proposals which vary significantly in quality. We have to find ways to sort out the good from the bad. Finally, voluntary assistance represents a great untapped potential. We are now seeking to organize voluntary activities in the United States through the President's recently announced Citizens Democracy Corps. We plan to develop a clearinghouse that will provide an inventory of the technical skills and services that the US private sector can provide. We will then be able to match these skills and services with needs of the Central and Eastern European countries. One other important point to note is the need for coordination in-country by the recipients of our assistance. As new governments are formed in the region, they must develop their own sets of priorities, so that they can provide greater specificity of direction for the donor countries. In doing so, we also encourage the new governments of Central and Eastern Europe to increase the degree of dialogue and cooperation among them and even consider approaching some of their problems--such as energy efficiency--on a regional basis.
The Role of the Private Sector
I am convinced that we must accord a high priority to the role of the American private sector in the transformation and recovery of the Central and East European economies. Western public-sector money alone is not going to be the answer to the needs of the East Europeans today. In the long run, it is through American and Western private-sector investment that the region will obtain the amounts of capital needed to create jobs and self-sustaining economic growth. Clearly, the involvement of the private sector is not simply a matter of government exhortation or a sense of charity or adventure by US businessmen. It goes without saying that American companies will have to be satisfied that the mix of risk and return is competitive with opportunities elsewhere. The US government is doing everything it can to make Central and Eastern Europe a level playing field and an attractive place for American investment.
The task ahead for the East Europeans will not be an easy one. The current crisis in the Persian Gulf highlights some of their energy problems; the expected Soviet conversion to hard currency trade based on market prices this January will bring further problems. Moreover, we are now seeing new regimes learning that it was easier to unite in opposition to the communists than it is to develop the political skills necessary to govern under democratic conditions. We must be patient and realistic. We must acknowledge that reform is going to be a lengthy and painful process. In the final analysis, success depends on the democratically elected governments of the region. But Western assistance can make a difference. And if we do it right, we will have created a model for the transition in Central and Eastern Europe which can be applied to transitions we face elsewhere today, such as in the Soviet Union, and to transitions we will surely face tomorrow.(###)