US Department of State 

Dispatch, Vol 1, No 15, December 10, 1990


America's Strategy in the Persian Gulf Crisis

Baker Source: Secretary Baker Description: Statement before the Senate Foreign Relations Committee, Washington, DC Date: Dec 5, 199012/5/90 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Iraq, Kuwait Subject: Military Affairs [TEXT] Today, I come before you for the third time since August 2 to discuss Iraq's continuing occupation of Kuwait. I have come here to consult with you because a very dangerous dictator--armed to the teeth--is threatening a critical region at what is really a defining moment in history. He must be stopped--peacefully if possible but by force if necessary. I would like to focus my prepared remarks on three aspects of the situation: One, on explaining the President's strategy; Two, on detailing the reasons that preparations for the possible use of force--and, indeed, a willingness to use force, if necessary--remain, in our view, essential to achieving a peaceful resolution of this crisis; and Three, on presenting the compelling interests that we have in seeing Saddam Hussein's brutal aggression reversed.
From the outset, the international community has rallied behind four objectives: First, the immediate, complete, and unconditional Iraqi withdrawal from Kuwait; Second, the restoration of Kuwait's legitimate government; Third, the release of all hostages; and Fourth, a commitment to the security and stability of the gulf. The President has stated repeatedly that we want to achieve these objectives peacefully. He has also made clear that we seek to achieve them at the least cost to ourselves and at the least cost to the other members of the international coalition. From the outset, our strategy to achieve these objectives has been to make Saddam Hussein pay such a high price for his aggression that he would quit Kuwait. We have aimed to impose costs on him for his aggression by taking increasingly harsh steps on a continuum of pressure and pain--politically, economically, and militarily. On this continuum, economic sanctions and military preparations are not alternatives but are really reinforcing and escalating steps of the same strategy. Notwithstanding our desire for peace, from the outset we have proceeded with the full realization that if these objectives cannot be achieved peacefully, then we really must be prepared to use force, given the vital interests that we have at stake. Thus, starting on August 2, an international coalition led by the United States began to impose costs on Iraq for its aggression. The day of the invasion, the Security Council of the United Nations passed Resolution 660, calling for an immediate Iraqi withdrawal from Kuwait. When this effort and the diplomatic efforts of the Arab League were summarily rejected by Hussein, on August 6 the Security Council imposed mandatory economic sanctions to increase the pressure on Iraq and to make it pay greater costs for its aggression. The hope was that by isolating Iraq politically and economically, Saddam Hussein would withdraw. While these diplomatic and economic steps were being taken, military forces were deployed in the region to deter further aggression and to support the Security Council resolutions. As of now, 27 nations have joined in this truly unprecedented multinational force. To date, the international coalition has had considerable success in isolating Iraq and in making it pay high costs for its occupation of Kuwait. We regret the pain that this causes the innocent citizens of Iraq, a people with whom we have no quarrel. But the question before us now is whether the costs we impose on Saddam Hussein through sanctions alone will be high enough to cause him to withdraw peacefully from Kuwait. We have to face the fact that, 4 months into this conflict, none of our efforts have yet produced any sign of change in Saddam Hussein. He shows no signs of complying with any of the Security Council resolutions. Instead, he appears to be doubling his bets. He has tried to make Kuwait part of Iraq, systematically looting and dismembering a sovereign Arab state. He has been terrorizing the population, his soldiers committing unspeakable crimes against innocent Kuwaitis. He has called for the overthrow of King Fahd of Saudi Arabia and President Mubarak of Egypt. He has threatened to rain terror and mass destruction on his Arab neighbors as well as on Israel. He has been playing the cruelest of games with hostages and their families and with our diplomats in Kuwait.
Preparing for War To Achieve Peace
After serious and sobering consultations, the UN Security Council last Thursday [November 29] passed by an overwhelming majority a 12th resolution--one that authorizes all necessary means, including the use of force, to eject Iraq from Kuwait after January 15, 1991. In passing this resolution, the international community is giving Saddam yet another chance--indeed, one last chance--to come to his senses. In passing Thursday's resolution, the international community sends the following clear message: "We continue to seek a diplomatic solution. Peace is your only sensible option. You can choose peace by respecting the will of the international community. But if you fail to do so, you will risk all. The choice is yours." To ensure that he understands this choice, the President has invited the Foreign Minister [Tariq Aziz] of Iraq to Washington and has directed me to go to Baghdad. Put bluntly, this is the last best chance for a peaceful solution. If we are to have any chance of success, I must go to Baghdad with the fullest support of the Congress and the American people behind the message of the international community. Let me be clear: This meeting will not be the beginning of a negotiation over the terms of the UN resolutions. Those terms are clear: a complete, immediate, and unconditional withdrawal from Kuwait; the restoration of the legitimate Kuwaiti government; and the release of all foreign nationals. Nor is this the beginning of a negotiation on subjects which are unrelated to Iraq's brutal occupation of Kuwait. I will not be negotiating the Palestinian question or the civil war in Lebanon. Saddam Hussein did not invade Kuwait to help the Palestinians. He did it for his own self-aggrandizement. As [Soviet Foreign Minister] Eduard Shevardnadze has said, you do not enslave one people to free another. Put simply, my mission to Baghdad will be an attempt to explain to Saddam the choice he faces: comply with the objectives of the Security Council or risk disaster for Iraq. To give substance to these words, the President has directed the Secretary of Defense [Richard Cheney], the Chairman of the Joint Chiefs [Gen. Colin Powell], and me to work with the other members of the international coalition to reinforce the multinational force in the gulf and to coordinate its efforts. Our aim is to ensure that if force must be used, it will be used suddenly, massively, and decisively. Do the troop reinforcements and the Security Council resolution mean that war is inevitable? Surely not. There is a peaceful solution possible--one that does not reward aggression-- and everyone, including Saddam Hussein, knows what that is. He can choose peace by withdrawing unconditionally from Kuwait and by releasing all hostages. He will not make that peaceful choice, however, in our opinion, unless he understands that the alternative to peaceful compliance is that he will be forced to comply. That is the message that we are trying in every way we know how to send him. That is the meaning of the steps the international community has taken over the past month. It is not a new strategy but rather a continuation and reinforcement of the strategy that we have been pursuing since August. Now, I know that some here and throughout the country are uneasy about the prospects of war. No one wants war: none of us-- not you; not the President; not me; none of us. None of us, though, have sought this conflict, and we are making every attempt possible to resolve it peacefully--to resolve it peacefully without appeasing the aggressor. I know the arguments of those who believe that time and the economic embargo alone will work to resolve this conflict peacefully. But, I think, we have to face some very hard facts. If sanctions are to succeed, they've got to do more than simply hurt Iraq economically. They must hurt Iraq so much that Saddam Hussein changes his behavior and withdraws from Kuwait. That is the criteria of success by which sanctions must be judged. In considering the role of sanctions in our strategy, we need to ask ourselves: -- Can economic sanctions alone compel a dictator like Saddam Hussein to make the politically difficult choice of withdrawing from Kuwait? -- Absent a credible military threat, will he take the Security Council's actions seriously? -- Is there anything in Saddam Hussein's history that could lead us to believe that sanctions alone would get him out of Kuwait? If I might, let me try to answer these questions, based on the results so far. After 4 months of a stringent embargo, no one doubts that sanctions are having some effect on the Iraqi economy. But we have to face the difficult fact, I think, that no one can tell you that sanctions alone will ever be able to impose a high enough cost on Saddam Hussein to get him to withdraw. So far, all available evidence suggests that they have had little if any effect on his inclination to withdraw. That's in part because Saddam, to a considerable extent, can decide who in Iraq gets hurt by the sanctions. And you can bet the Iraqi people will feel the pain first and most deeply--not the Iraqi military or Saddam himself, and not the government of Iraq itself. Saddam has a long history of imposing great pain and suffering on the Iraqi people. It is not new for him to impose economic sacrifices on the Iraqi people in pursuit of his ambitions. So, we need to remember who it is we are trying to get out of Kuwait. He is a ruthless dictator. He has an inflated sense of Iraq's leverage and a very high pain threshold. He undoubtedly believes he can endure economic sanctions. However, surely he understands more acutely the consequences of military force. Waiting not only gives him time to break the sanctions, but waiting imposes costs on us. As we wait, Saddam will continue torturing Kuwait, and continue killing it as a nation. As we wait, he will continue manipulating hostages, attempting to break the coalition. As we wait, he will continue to fortify Kuwait, he will continue to build chemical and biological weapons, and he will continue to acquire a nuclear weapons capability. As we wait, he expects other issues to deflect our attention, to weaken our resolve, and to dissolve the international coalition. And as we wait, his crime weighs heavier on the world. That is why we must make credible our preparations to use force. The international community has clearly agreed that force will not be used before January 15 of next year, provided, of course, there is no provocation in the intervening time frame. Thus, we need to remind ourselves that, for now, no one is making a decision about going to war. Indeed, in asking me to go to Baghdad, the President has made it clear that he will use the next 6 weeks to exhaust all diplomatic opportunities. But to support these diplomatic efforts, the President has also made it clear that we need continued support for our military preparations to make credible an offensive option to liberate Kuwait. While not prejudging any decision whether force should be used sometime after January 15, I can state unequivocally that failure to continue preparations now has at least three dangerous consequences. First, it would undercut our diplomatic leverage by removing the other alternative to a peaceful withdrawal, which is use of force. It would send Iraq exactly the wrong message--that is, "Continue to play for time. You will have lots of it because the Security Council resolution is just a bluff. The international coalition is not even preparing the option to use force, let alone take that option." That is a message that we should not and must not send. We must show Saddam Hussein that time is not on his side. He needs to know that even if he believes he can withstand the sanctions, and he may well be right in this belief, we can and will impose even greater costs on him through the use of force if that is necessary. Second, the failure to prepare a credible offensive military option would only tend to reaffirm the status quo and to legitimize to some the brutal occupation that he is now carrying out against Kuwait and its people. Third, the failure to prepare adequately now would mean that should conflict come, we would be irresponsibly risking greater casualties --putting the lives of those young Americans already on the front lines in the Persian Gulf at greater risk than they need to be. The President will not stand for that. And neither will, I submit, the American people.
What's at Stake
We do not proceed along this path unaware of the dangers and the risks that are involved. But let there be no doubt, that succeeding in this endeavor--hopefully in peace, if necessary by force--is in the vital interest of the American people. It is often said that there has been no clear answer given to the question of why we are in the gulf. Much of this, I think, results from the search for a single cause for our involvement, a single reason the President could use to explain why the lives of American men and women should be put in harm's way in the sands of Arabia, on the seas around it, or in the air above it. Let us stop this search. Let us be honest with ourselves and with each other. There are multiple causes; there are multiple dangers; there are multiple threats. Standing alone, each is compelling. But you put them all together, and the case is overwhelming. Put very bluntly: A very dangerous dictator--armed to the teeth--is threatening a critical region at a defining moment in history. It is the combination of these reasons--that is, who is threatening our interests, what capabilities he has and is developing, where he is carrying out his aggression, and when he has chosen to act--that make the stakes so very high for all of us. Let me explain. -- Strategically, this man is a capricious dictator whose lust for power is as unlimited as his brutality in the pursuit of it. He has invaded two neighbors; he is harboring terrorists and now is systematically exterminating Kuwait. He uses poison gas--even against his own people; he develops deadly toxins; and he seeks relentlessly to acquire nuclear bombs. He has built the world's sixth largest army, has the world's fifth largest tank army, and has deployed ballistic missiles. -- Geographically, Saddam's aggression has occurred in a political tinderbox that is a crossroads to three continents. His success would only guarantee more strife, more conflict, and eventually a wider war. There would be little hope for any effort at peace-making in the Middle East. -- Economically, his aggression imperils the world's oil lifelines, threatening recession and depression, here and abroad, hitting hardest those fledgling democracies that are least able to cope with it. His aggression is an attempt to mortgage the economic promise of the post-Cold War world to the whims of a single man. -- Morally, we must act so that international laws, not international outlaws, govern the post-Cold War world. We must act so that right, not might, dictates success in the post-Cold War world. We must act so that innocent men and women and diplomats are protected, not held hostage, in the post-Cold War world. -- Historically, we must stand with the people of Kuwait so that the annexation of Kuwait does not become the first reality that mars our vision of a new world order. We must stand with the world community so that the United Nations does not go the same way as the League of Nations. -- Politically, we must stand for American leadership, not because we seek it but simply because no one else can do the job. And we did not stand united for 40 years to bring the Cold War to a peaceful end in order to make the world safe for the likes of Saddam Hussein. So, these then are the stakes. If he is not stopped now, if his aggressive designs are not frustrated--peacefully or if necessary by force--we will all pay a much higher price later on. As the Security Council did last Thursday, this Congress and the American people must tell Saddam Hussein in unmistakable actions and words: "Get out of Kuwait now or risk all." Now--more than at any time during this conflict--it is important that we stand united with the world community in full support of the UN Security Council resolutions. Simply put, it is a choice between what's right and what's wrong--between what's right and what's wrong. I think we have the courage and fortitude to do what's right. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

State Department Gulf Crisis Information

Date: Dec 10, 199012/10/90 Region: MidEast/North Africa Country: Iraq, Kuwait Subject: Military Affairs, Democratization [TEXT]
202-647-0900 (24 hours) Questions or comments about the Administration's Persian Gulf policy: 202-647-6575 or 6576, Monday-Friday 8:30 am-5 pm (Eastern Standard Time)(###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

America's Objectives in the Persian Gulf

Quayle Source: Vice President Quayle Description: Address at Seton Hall University, South Orange, New Jersey Date: Nov 29, 199011/29/90 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Iraq, Kuwait Subject: Military Affairs, Democratization [TEXT] (introductory remarks deleted) As all of you know, our country, along with the rest of the international community, currently faces a grave crisis in the Persian Gulf. This crisis carries with it the risk of war. Some in this country have questioned whether the United States has any interest in the gulf that is worth fighting for. Today, I would like to step back a bit from the current debate. I'd like to speak to the larger perspectives of the subject that is too often presented in 10-second soundbites on television. Why is the region so important? What have the strategic goals of US Middle East policy been over the last 40 years? And how do these goals apply in the current crisis? The Middle East, as everyone knows, is the source of much of the oil on which the industrialized world and developing nations depend. It is a region of striking contrasts: vast wealth and grinding poverty; secular radicalism and religious fundamentalism; hatred of the West and emulation of the West. Most importantly, perhaps, the Middle East is caught up in a vast process of change as ancient societies and cultures strive to adapt to the modern world. This process of adaptation, which entails much turmoil and instability, is what makes the Middle East such an interesting place. Unfortunately, it also makes the Middle East a dangerous place.
US Objectives in the Region
Since the onset of the Cold War, the United States has had three strategic objectives in the region. The first objective was to contain Soviet expansionism. In 1947, the Soviet threat to one regional state, Turkey, played a role in President Truman's decision to issue the doctrine that bears his name. Thirty-three years later, the threat of Soviet encroachment on another region of the Middle East--the Persian Gulf--led President Carter to proclaim the equivalent of the Truman Doctrine for the gulf. The Carter Doctrine, which also was reinforced by President Reagan, warned that, "Any attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force." But the Cold War is over. And because it is over--because one of America's strategic objectives has been realized--some commentators have assumed that all of our objectives have been realized. They could not be more mistaken. For in addition to containing the Soviets, American foreign policy has traditionally pursued two other strategic objectives in the Middle East. It has sought to prevent any local Middle East power from achieving hegemony over its neighbors, and it has sought to secure the uninterrupted supply of oil at a reasonable price. Let me describe both of these objectives in greater detail. Today, all the states of the Middle East face a major threat in Saddam Hussein's Iraq. Saddam's ambitions are not confined to Kuwait. Rather, his goal is to dominate the Persian Gulf region and use its vast wealth to become the greatest Arab hero of modern times, the leader of a new Arab superpower. To that end, he spent some $50 billion on arms imports during the 1980s alone. He has launched two wars of aggression during this period, against Iran and against Kuwait, at a cost of some 1 million lives--thus far. He has built the sixth largest military force in the world. He has acquired a sizable stockpile of both chemical and biological weapons and is estimated to have employed several thousand tons of chemical agents against Iranians and against his own people--Iraqi Kurds--in the 1980s. And he has launched a massive program to acquire nuclear weapons. The United States opposes Saddam Hussein's bid for regional hegemony for the same reasons that we have opposed other bids. We do not think any government has the right to impose its political will on other countries through subversion or conquest. We do not think Israel's existence, or the existence of other friendly regional states, should be threatened. And, of course, the prospect of Saddam Hussein strutting across the world stage at the head of a malevolent global power, armed to the teeth with weapons of mass destruction, and controlling a large portion of the world's energy supplies, is something no sane person would welcome. That is why we are working to contain Saddam Hussein's bid for hegemony today--just as we worked to contain other bids for hegemony yesterday. Of course, no discussion of America's strategic objectives in the region is complete without mention of oil, so let me turn to that issue now. A key strategic goal of US Middle East policy has been to assure the uninterrupted flow of oil at reasonable prices. This does not mean, as some cynics have suggested, that we are risking war to prevent the price of oil from going up a few cents a gallon. During the Arab oil embargo of 1973-74 and during the 1979 oil price shock that came in the wake of the Iranian revolution, the price of oil went up much more than that. But we never thought of going to war because the price of oil was too high. We were confident that market forces would eventually bring the price of oil down--and we were right. We did prepare for all contingencies, however, when the Soviet invasion of Afghanistan, coupled with instability in Iran, brought Soviet forces within striking distance of the Persian Gulf-- hence the Carter Doctrine. For if "any outside force," as the Carter Doctrine put it, could control the flow of Persian Gulf oil, it would, as President Bush said, place our independence and way of life at risk. No nation should be willing to tolerate such a state of affairs, just as no individual should be willing to allow anyone to hold a gun to his or her head. That is why President Carter was willing to commit the United States to preventing a single power--the Soviet Union--from controlling the gulf. And that is why President Bush has dispatched American troops to Saudi Arabia to prevent another power--Iraq, this time--from doing likewise. Neither President was prepared to jeopardize American security by permitting, in President Bush's words, "a resource so vital to be dominated by one so ruthless"-- either Leonid Brezhnev of Moscow or Saddam Hussein of Baghdad. So far, I have talked about traditional US strategic objectives in the Middle East. But there is another strategic American objective in the current crisis that is not traditional--that has only emerged, in fact, as a result of the end of the Cold War. This objective might be described as strengthening the foundations of world order. Let me explain what I mean. When the Cold War was still raging, any regional crisis in the Third World contained within it the seeds of a possible Soviet- American confrontation. That is why, in the Middle East and elsewhere, both the United States and the Soviet Union often made significant efforts to restrain their clients from rash behavior. These efforts were part of the unwritten "rules of the game" that prevented Soviet-American competition from getting out of hand during the Cold War. With the end of the Cold War, the chances of a Soviet- American clash in any Third World conflict, including the Middle East, have greatly diminished. Unfortunately, so have the traditional restraints that the superpowers used to impose on their regional clients. As a result, unless the UN Charter's rules about using force are not reaffirmed and defended fairly quickly, we face the dangerous prospect of a new, post-Cold War world that is actually more anarchic, and more violence prone, than the world which preceded it. Iraq's invasion of Kuwait is the first crisis of the post-Cold War world. One way or another, it is bound to set a precedent-- either on behalf of greater world order or on behalf of greater chaos. If Saddam Hussein succeeds in his aggression, it is likely that his success will embolden other dictators to emulate his example. But if he fails--and believe me, he will fail--others will draw the lesson that might does not make right and that aggression will not be allowed to succeed. This is why President Bush has sought to rally the international community against Iraq's aggression. This is why the UN Security Council has passed 11 resolutions condemning Iraq, and is considering yet another resolution today. This is why scores of nations have agreed to contribute economically or militarily to the joint effort against Saddam Hussein. And this is why 27 nations have sent troops or military materiel to the Persian Gulf. Everyone recognizes that this is a test case. Everyone can see that, beyond America's traditional objectives in the region, what is at stake is nothing less than the shape of tomorrow. None of these considerations, of course, frees us from the responsibility to proceed carefully. The moral and human implications of war--any war--are very grave. No reasonable effort should be spared in the quest for a peaceful solution. That is why, despite the use of American hostages as human shields, despite the outrages against our embassy, despite Iraq's continued barbarism in Kuwait, we have refrained from military action against Saddam Hussein. But even as we exercise patience and restraint, we also must be alert to the moral costs of such a course. Consider, for example, the fate of the people of Kuwait. With every day that passes, their plight grows more desperate. Being patient with Iraq allows Saddam Hussein to prolong their agony. Is this a moral course of action? Or consider the fate of American military personnel in Saudi Arabia. The longer we refrain from action against Iraq, the more time Saddam Hussein has to tighten his grip on Kuwait, and the harder it may be to break that grip, if and when war comes. Does patience today risk greater American casualties tomorrow? And if so, is this a moral course of action? Or consider Iraq's drive for nuclear weapons. As President Bush told American troops in Saudi Arabia during Thanksgiving, "Each day that passes brings Saddam one day closer to realizing his goal of a nuclear weapons arsenal. . . . And we do know this for sure: He has never possessed a weapon that he didn't use." Will continued patience with Iraq help make the world vulnerable to nuclear blackmail by Saddam Hussein? And if so, is this a moral course of action? Please don't misunderstand me. I believe that every reasonable effort must be made to resolve this crisis peacefully. I also think that there must be limits to our patience. And those limits are reached when our restraint threatens to undermine other, equally moral goals. These goals, as I said, include ending Kuwait's agony as soon as possible; minimizing American casualties in the event of war; and preventing Saddam Hussein from adding nuclear weapons to his already formidable arsenal of mass destruction. It is in order to prevent Saddam Hussein from thwarting these goals that the UN Security Council is expected to adopt a resolution today endorsing the use of force against Iraq if Saddam does not withdraw his forces from Kuwait. The challenge the civilized world faces today is very grave. But it is not unprecedented. In 1936, the world faced a rather similar challenge when Adolf Hitler, who had only recently come to power, moved German troops into the Rhineland, in open defiance of the treaties of Versailles and Locarno. British and French leaders faced a major dilemma. To confront Hitler militarily could mean war. Not to confront him meant acquiescing in a cynical breach of international law. What to do? But while British and French leaders vacillated between their hopes and their fears, one voice rang out loud and clear. On March 13, 1936, Winston Churchill called on the League of Nations to take tough action against German aggression. His words deserve to be quoted at some length: "If no means of lawful redress can be offered to the aggrieved party," Churchill wrote, "the whole doctrine of international law and cooperation upon which the hopes of the future are based would lapse ignominiously. . . . But the risk! No one must ignore it. How can it be minimized? There is a simple method: the assembly of an overwhelming force, moral and physical, in support of international law . . . If the forces at the disposal of the League of Nations are four or five times as strong as those that the aggressor can yet command, the chances of a peaceful and friendly solution are very good. . . . The constabulary of the world is at hand. On every side of Geneva stand great nations, armed and ready, whose interests as well as whose obligations bind them to uphold, and in the last resort enforce, the public law. This may never come to pass again. The fateful moment has arrived for choice between the New Age and the Old." Tragically, most leaders did not see the stakes as clearly as Churchill did. They did not force the issue to a head in the League of Nations. Instead, they acquiesced in Hitler's aggression. When, many years later, Churchill called World War II the "unnecessary war," it was the failure of British and French statesmanship during the Rhineland crisis that he had in mind. Today, the UN Security Council stands poised at a historic juncture not unlike that faced by the League of Nations in 1936. We are hopeful--indeed, we are confident--that it will not fail the test. Some will thoughtlessly say that a vote for today's UN resolution is a vote for war. We reject this idea. Saddam has shown that he understands no language other than the language of force. Today's UN resolution is our last and best hope for peace-- for a genuine peace, not the false peace that is only a prelude to another "unnecessary war."(###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

Gulf Crisis Update

Date: Dec 10, 199012/10/90 Category: Fact Sheets Region: MidEast/North Africa Country: Iraq, Kuwait Subject: Military Affairs, Democratization [TEXT] The following is an overview of US objectives in the Persian Gulf crisis based on statements by President Bush and Secretary Baker and actions of the UN Security Council. It will be updated periodically.
US Objectives
US objectives in the Persian Gulf call for the: -- Immediate implementation of all relevant UN Security Council resolutions; -- Immediate, complete, and unconditional withdrawal of all Iraqi forces from Kuwait; -- Restoration of Kuwait's legitimate government; -- Security and stability of Saudi Arabia and the Persian Gulf; -- Protection of American citizens held hostage by Iraq, both in Iraq and Kuwait.
The Stakes
-- Saddam is a very dangerous dictator--armed to the teeth--who is threatening a critical region at a defining moment in history. Saddam has invaded two neighbors, harbors terrorists, and now is systematically exterminating Kuwait. Saddam uses poisonous gas, brandishes deadly toxins, and tries relentlessly to acquire nuclear bombs. He has built the world's sixth largest army, has acquired the fourth largest tank army, and has deployed ballistic missiles. -- Iraq's aggression against Kuwait challenges world peace and threatens the vision of a better world in the aftermath of the Cold War. As Presidents Bush and Gorbachev stated jointly in Helsinki: "No peaceful international order is possible if larger states can devour their smaller neighbors." Saddam Hussein's aggression is a challenge to the rest of the international community. If we reverse his aggression, we will help define the world that lies beyond the Cold War as a place where civilized rules of conduct apply. -- Iraq's aggression is a regional challenge. The Middle East is an area of unresolved conflicts, sectarian and social strife, and economic disparities. A peaceful solution to these problems is the only way to preserve the security of our friends. -- Iraq's aggression challenges the global economy. If an aggressive state is allowed to sit astride the economic lifeline of the industrial world, everyone will suffer profound setbacks to economic growth. As Secretary Baker stated, "If [Saddam] is not stopped now, if his aggressive designs are not frustrated, peacefully if possible or, if necessary, by force, we will all pay a higher price later." -- We must stand with the people of Kuwait so that the annexation of Kuwait does not become the first reality that mars our vision of a new world order.
-- UN Security Council Resolution 678 of November 29, 1990, authorizes "member states cooperating with the government of Kuwait" to use "all necessary means" to uphold the above resolutions, while giving Iraq "one final opportunity, as a pause of good will" to abide by the resolutions by January 15, 1990. This "pause for peace" gives the international community "a better opportunity" to find a peaceful solution to the crisis. The UN Security Council resolution authorizes the use of all necessary means but certainly does not require it. It should be crystal clear to Iraq that force is not going to be ruled out as an option. It is a real, live, credible option. -- President Bush and Secretary Baker have devoted great personal efforts to find a diplomatic, political, and peaceful solution to this problem. The United States does not intend to leave any stones unturned in our search for a solution. -- The President has invited Iraqi Foreign Minister Tariq Aziz to meet with him. The President also suggested that Secretary Baker meet with Saddam Hussein in Baghdad. Both will be prepared to discuss all aspects of the gulf within the mandate of the UN resolutions to exhaust all means for a diplomatic and political solution. -- The President and Secretary Baker will not discuss anything less than Iraq's complete withdrawal from Kuwait, restoration of Kuwait's legitimate government, and freedom for all hostages.
-- After 4 months of a stringent embargo, sanctions are having some effect on the Iraqi economy, but no one can say that sanctions alone can impose a high enough cost on Saddam Hussein to get him to withdraw. -- Adverse economic impact on Iraq is not the way to measure success. Success is Iraqi withdrawal from Kuwait. -- Saddam believes that he can endure economic sanctions. In part, that is because he can, to a considerable extent, decide who in Iraq gets hurt by them. He continues to impose economic sacrifices on the Iraqi people to support his army and ambitions. -- Waiting for sanctions to work effectively gives Saddam time to break them but also imposes enormous costs. He will continue to grind up Kuwait, to fortify it, to build chemical and biological weapons, to acquire nuclear capability, and to generate other issues aimed at dissolving the coalition arrayed against him. -- That is why the US must make credible military preparations aimed at achieving peace. Our diplomatic efforts will continue, but full support for our military preparations will make credible our offensive option to liberate Kuwait. -- Failure to continue military preparations would have at least three dangerous consequences. 1) It would undercut our diplomatic leverage by removing the new option to use force. 2) It would tend to reaffirm the status quo and to legitimize to some extent Iraq's brutal occupation of Kuwait. 3) Finally, it would mean risking greater casualties, should conflict occur.
International Response
-- The international coalition has had considerable success in isolating Iraq and making it pay high costs for its occupation and rape of Kuwait. Twenty-seven nations have joined in a truly unprecedented multinational force, deploying a substantial number of troops in the region to deter further aggression and to support UN Security Council resolutions. -- For calendar year 1990, the Saudis and the smaller gulf states have pledged more than $6 billion so far toward our direct defense costs. They also have pledged $6 billion in aid to front-line states and $2.5 billion to other affected nations to resettle refugees, subsidize higher oil bills, and defray other costs. -- In 1991, additional responsibility-sharing will be required. All of our coalition partners recognize this fact.
-- The US Government acknowledged that Saddam's offer to release all hostages is a welcome and significant development. Such a release does not lessen, nor should it lessen, US determination that Iraq's aggression against Kuwait must be reversed by full implementation of all of the UN Security Council resolutions. It is a sign that our strategy of diplomatic and military pressure is working.(###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

The Us and Brazil: Fulfilling a Common Destiny

Bush Source: President Bush Description: Remarks to a joint session of the Brazilian Congress, Brasilia, Brazil Date: Dec 3, 199012/3/90 Category: Speeches, Testimony, Statements Region: South America Country: Brazil Subject: Trade/Economics [TEXT] It is a privilege; it is an honor to join you in this great hall of democracy. My thoughts today could have no better forum than this National Congress--my words--no better audience than the people of Brazil. We meet at an extraordinary moment in our shared history. A time of serious challenges and important choices that calls for mutual respect, candor, and collective will. I've met with many Latin [American] and Caribbean leaders, and beyond any single issue that we've discussed, all of us have been galvanized by a new era of hope and opportunity throughout the Americas--especially here in Brazil. By pioneering bold new economic reforms and consolidating its democracy, Brazil today is poised to enter the 21st century as a leader among nations. That is a tribute to a leader whose friendship and vision I value and respect--a man who represents a new generation of democratic leadership now sweeping across Latin America--your dynamic new president, Fernando Collor de Mello. President Collor has spoken eloquently of Brazil's rightful place at the table of the First World, and I agree. I believe it is time, in fact, to end the false distinctions between the First World and Third World that have for too long limited political and economic relations in the Americas. Let us instead speak of the New World. This hemisphere has always found strength in diversity. After all, here I stand, addressing Portuguese speakers in English, because of an Italian sailing on behalf of Spain five centuries ago. What we hold in common transcends borders and translates into any language. The nations of the Americas all struggled and gained independence from the old ways of the Old World--ended the injustice of slavery and colonialism--and built republics of promise and renewal around the dignity and the power of the individual and the rule of law.
Charting a Course for Freedom
Now, as we approach the 500th anniversary of Columbus' discovery of Americas and the arrival of [Pedro] Cabral's Portuguese fleet in Brazil, this is our moment to chart the course for the New World--a course of freedom, a course of democracy, a course of prosperity. We've all witnessed in wonder the dawn of democracy in Eastern Europe. But in the Americas, we, too, have seen extraordinary political and economic change that is transforming the face of this hemisphere; nowhere more so than right here; no more so than in the great nation of Brazil. The changes you are carrying out in your economy--reducing the size of the state, privatizing enterprises, combating inflation and liberalizing trade--are the keys to growth and prosperity in the global economy of the 21st century, whose outlines we already see today. I am here to tell you that you are not only on the right path, but the United States wants you to succeed and supports your efforts every step of the way. I believe that we've just begun to press forward, toward the real promise of the Americas. Territories may end at borders, but mankind's capacity for progress knows no bounds. Continents may end at the water's edge, but human potential knows only those limits set by human imagination. The Americas' role in the world is not defined by geography. It is defined by its people and its ideals. I truly believe that we are approaching a new dawn in the New World. Our thinking must be bold; our will, resolute. Our challenge now is to hew out of a wilderness of competing interests a new kind of opportunity in the Americas. To fulfill the New World's destiny, all of the Americas and the Caribbean must embark on a venture for the coming century: to create the first fully democratic hemisphere in the history of mankind. The first hemisphere devoted to the democratic ideal--to unleash the power of free people, free elections, and free markets.
Four Principles of Freedom
Two weeks ago in Czechoslovakia, I spoke to a people that had paid dearly for its freedom. I talked about a new commonwealth of freedom, based on four key principles. This hemisphere already shares these convictions: -- An unshakable belief in the dignity and rights of man; -- The conviction that just government derives its power from the people; -- The belief that men and women everywhere must be free to enjoy the fruits of their labor; and, four, -- That the rule of law must govern the conduct of nations. Every nation that joins this commonwealth of freedom advances us one step closer to a new world order. We must persist until this victory for freedom and democracy is won completely.
Growing Economic Opportunity
It is also within our power to make this hemisphere the largest free-trading partnership of sovereign nations in the world. From the northern-most reaches of Canada to the tip of Cape Horn, we see a future where growing opportunity, the power of technology, and the benefits of prosperity are developed and shared by all. Change will not come easily. Economies, now dependent on protection and state regulation, must open to competition. The transition, for a time, will be painful. Many in the Americas will have to make serious adjustments to compete with Southeast Asia and to take advantage of the European market after 1992. But we are confident that solutions will be found--by Brazilians, by Chileans, by Venezuelans--by all of the Americas. And the results, growing economies and sound currencies, will bring unprecedented prosperity and growth for all our citizens to share. That was the vision of the Enterprise for the Americas Initiative that we announced last June. And, Deputy Fiuza, I listened very carefully to your strong speech in this regard. And I thank you for those frank and forceful comments. The initiative calls for a major hemispheric effort to unify the New World in the three key areas of trade, investment, and debt.
Trade, Investment, and Debt
In trade, our first priority should be to promote long-term growth. The most effective first step is the successful conclusion of the Uruguay Round [of the General Agreement on Tariffs and Trade], now in its final stages in Brussels. An end to export subsidies on agricultural goods and new openings for developing country exports means new market opportunities and a higher standard of living for the farmer in Para, the textile worker in Santa Catarina, and the engineer in Sao Paulo. But the Uruguay Round and bilateral trade agreements are only first steps. The Southern Cone common market, now developing under the leadership of your president and his colleagues in neighboring countries, is another major step toward the world's first hemispheric free trade zone. To promote new investment in the Americas, the dead hand of state control must be lifted. We must allow entrepreneurs the flexibility to adapt, create, and produce. So, as we chart a course for the future of the New World, let us hold firmly in our minds an unshakable conviction in the importance and benefit of free enterprise. Let us work together so that any man or woman who wants to launch a new enterprise views the state as an ally, not as an obstacle--and all who pursue the fruits of the free market see other nations not as threats to sovereignty, but as partners in trade and mutual prosperity. Individuals cannot succeed if government is burdened by debt. So the third leg of our Enterprise for the Americas Initiative is a comprehensive commitment to work with Brazil and others in Latin America to restructure US official debt. Our new approach to official debt will complement commercial debt restructuring through the Brady Plan. I understand the importance to Brazil and, indeed, to the international financial community of reaching a new and effective agreement on commercial debt. I believe, through your program of economic reform, you have taken the first crucial step toward that goal. Global capital flows will be vital to your development, and we are ready to assist wherever possible.
Funds for the Environment
We've submitted a request to our Congress for the authority to implement our proposals. But we know that real solutions must involve all of us in the Americas. That's why we envision a permanent partnership between all the nations of the Americas, to confront challenges that know no borders. We envision a hemisphere where a collaborative commitment is shared to protect our environmental legacy. There can be no sustained economic growth without respect for the environment. That's why the Enterprise for the Americas Initiative joins environmental protection with bilateral debt relief--not as a challenge to national sovereignty, not as a challenge to the sovereignty, in this case of Brazil, but as an affirmation of shared international interests. Senator Tito--and I do appreciate, sir, your using this podium for a frank exchange--talked about partners in growth. I believe you said partners in growth rather than shareholders of misery. That is what you want, and that is what we want. I encourage Brazil and other creditor nations to convert debt into funds for the environment. The entire world stands in awe of Brazil's unique endowment of wildlife, trees, and plants in the Amazon and the Atlantic rain forests. No nation on earth--none--is as rich in flora and fauna, with all of their potential to provide future medicines and foods, and crops and fibers. Your hosting of the UN Conference on Environment and Development in 1992 places Brazil in a position of true global leadership. We hope that conference will mark the culmination of a number of initiatives to protect and wisely utilize the world's resources. We also are challenged to make ours a hemisphere where sovereign nations are joined in collective determination to eradicate the disease of drugs. On this one, the time for blame is long over. We in the United States recognize that we must do more to reduce what seems to you as insatiable demand. And you understand that the spreading tentacles of the drug trade threaten any democratic society. President Collor has taken a strong position against drugs for the sake of youth in Brazil. I know full well it is a demand problem as well as a supply problem for my country. I pledge the full efforts of my government to continue to dampen demand. There is only one answer to the drug problem in this hemisphere, and that is to defeat these narcotics traffickers who prey on our children-- once and for all. Finally, in this era of great challenges around the world, we want the Western Hemisphere to be a model to the world for security, stability, and peace. Together, let us ensure that this hemisphere stands united to prevent the spread of nuclear weapons or new, more dangerous, ballistic missiles anywhere in the world. We hope that all countries in this hemisphere will follow Brazil's and Argentina's recent decision to bring the non-proliferation Treaty of Tlatelolco into force. I want to applaud, as many other nations have done, the recent announcement by Brazil and Argentina that together they will ensure that no nuclear program in their countries is used for anything but peaceful purposes. We applaud your decision to move forward on full-scope nuclear safeguards. But your leadership today goes beyond this hemisphere. Just as Brazil made valiant contributions to the cause of freedom in World War II, you were among the very first to implement the sanctions against Iraq. I realize the sacrifices that Saddam's brutality has caused this nation and its people, has caused many nations around the world. In this country, I was told this morning [of] the impact--$5 billion in higher oil prices alone for 1 year; $5 billion to your economy, [which is] struggling to move forward, because of the brutality and the aggression of Saddam Hussein. In Czechoslovakia, a country that knows about aggression, Vaclav Havel told me [that the cost is] $1.5 billion, just because of the aggression of Saddam Hussein. I salute your leadership in the world's community and united stand against Iraq's aggression and in defense of the rule of law. Our nations, long ago, achieved independence from the Old World, and so now let us work toward a new declaration of interdependence among the American nations of the New World. If, as Jose Bonifacio once said, "Brazilians are enthusiasts of a beautiful ideal," let us not limit the New World's potential with old thinking. After the half millennium we've had in this hemisphere to form our nations and find our way, let the nations of the Americas now fulfill their common potential. Standing on this central plateau, soon to be the seat of great decisions, President [Juscelino] Kubitschek [1956-61] said this: "I look once again at the future of my country and see this dawn with unyielding faith and unlimited confidence in its great destiny." My friends, our neighbors, let the new dawn come to Brazil and to the New World, and let us fulfill the promise of these great lands. Thank you very much. Addresses by President Bush in Chile and Venezuela with accompanying Fact Sheets and Country Profiles will appear in Dispatch No. 16, December 17, 1990. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

The President's Trip to Brazil, December 3, 1990

Date: Dec 3, 199012/3/90 Category: Fact Sheets Region: South America Country: Brazil Subject: Environment, Democratization, Trade/Economics [TEXT]
Trip Overview
President Bush visited Brazil December 3, 1990, during his five- nation trip to South America. He last traveled to Brazil in March 1985, as vice president, for the inauguration of President Tancredo de Almeida Neves. (Neves fell ill on inauguration eve and died 1 month later, to be succeeded by Vice President Jose Sarney.) The 1989 elections, which brought Fernando Collor to office, were the first direct presidential elections in Brazil in 29 years.
With more than 150 million people, Brazil is the largest nation in Latin America and the fifth largest in the world. More than two- thirds of the population live in urban areas. Though 76% of Brazilians are functionally literate, only 20% of those who begin public school complete the primary grades. Per capita income exceeds $2,400 per year, putting Brazil in the ranks of middle- income developing countries. There are wide disparities in income distribution, with only 2% of national income going to the lowest 20% of the population and 65% going to the upper 20%. Brasilia is the capital. Forests cover approximately one-half of Brazil's interior, which includes a major share of the Amazon Basin and the largest tropical rain forest in the world. Largely self-sufficient in food, Brazil is the world's leading exporter of coffee and orange juice concentrate; the second-largest exporter of cocoa and soybeans; and a major exporter of sugar, meat, and cotton.
Consolidation of Democracy
Major events in the transition to democracy included the return to civilian rule in 1985, promulgation of a new constitution in 1988, and the presidential election of 1989. More than 80 million voters went to the polls in November and December 1989 for elections that were both peaceful and free of irregularities. Congressional elections were held in October 1990 for all 503 seats in the Chamber of Deputies and one-third of the 81-member Senate. Many parties are represented in Congress, and party affiliations are highly fluid.
Economic, Trade, and Debt Issues
When President Collor assumed office, inflation exceeded 80% per month. He introduced a sweeping program of economic adjustment and reform, beginning with an attack on inflation through a sharp freeze on liquidity. He also announced plans to privatize state enterprises; eliminate the fiscal deficit; and dramatically reduce government intervention in the economy and foreign trade. In response, inflation has dropped sharply, although recently it showed signs of increasing. The government continues to work on detailed plans for the sale of state enterprises, reducing the federal work force, and new foreign trade regulations. Brazil enjoyed a foreign-trade surplus of $16.5 billion in 1989 (down from $19 billion in 1988). The United States and other trading partners have taken exception to Brazilian import restrictions including outright prohibition of imports, market reserves, and other non-tariff barriers. President Collor has largely eliminated these practices, and the United States has ended its trade actions under Section 301 of the Trade Act of 1988. Brazil is the largest developing-country debtor, owing $112 billion to external creditors. It has remained current in payments to international financial organizations, although not to other governments (including the United States). The government entered a de facto moratorium on payments to foreign commercial banks in September 1989; arrears now approach $10 billion. It has reached a preliminary agreement with the International Monetary Fund on a letter of intent that includes a promise to try to reach a debt- rescheduling agreement with the commercial banks. The government resumed debt negotiations with the commercial banks in October 1990.
Environmental Issues
International concern about the destruction of the Amazon rain forest has increased dramatically in the past few years, heightened by the December 1988 murder of environmentalist/labor leader Chico Mendes. In April 1989, the government began an environmental program called "Our Nature" designed to slow the destruction of the rain forest while seeking alternatives to develop the region. However, the government lacks the financial resources to implement this ambitious program. President Collor has shown a strong personal commitment to environmental protection. Brazil will host the 1992 UN Conference on Environment and Development.
Foreign Policy Issues
President Collor has signaled his interest in shifting Brazilian foreign policy toward Europe and away from the Third World focus that has characterized it in the past. He has made improving relations with the United States a high priority. The resolution of trade differences with the United States during the early weeks of his term has done much to remove earlier points of friction.
Nuclear Issues
Although the constitution prohibits non-peaceful uses of nuclear energy, Brazil has had an unsafeguarded nuclear research-and- enrichment program conducted by the military. Brazil is also committed to developing its own nuclear-powered submarine. Shortly after taking office, President Collor ordered a complete review of nuclear programs and policy. In September 1990, he told the UN General Assembly that Brazil would not undertake any experiments involving nuclear explosives, even for peaceful purposes. On November 28, he and President Menem of Argentina announced their intention to undertake a program of bilateral nuclear safeguards and inspections, to negotiate jointly a safeguards agreement with the International Atomic Energy Agency, and to take steps to bring the Treaty of Tlatelolco into force. Brazil has a national space program aimed at developing and launching its own satellites.
US-Brazilian Relations
The United States was the first country to recognize Brazil's independence in 1822. During the 1950s and 1960s, Brazil received about $2.4 billion in US economic assistance. Due to its impressive economic development and increased ability to obtain loans and technical assistance from private and multilateral sources, US assistance programs were phased out during the 1970s. The United States is Brazil's most important commercial partner and largest investor. US-Brazilian relations are cordial and cooperative, and the two countries' shared respect for democracy and commitment to economic liberalization has strengthened ties since the return of democratic government in the mid-1980s. President Collor's successful pre-inauguration visit to the United States in January 1990, visits by senior US officials to Brazil since he assumed office, and his meeting with President Bush at the United Nations in September reflected this increased warmth in bilateral relations.(###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

Country Profile: Brazil

Date: Dec 3, 199012/3/90 Category: Country Data Region: South America Country: Brazil Subject: History, Trade/Economics, International Organizations [TEXT] Official Name: Federative Republic of Brazil
Area (1989): 8.5 million sq. km. (3,290,000 sq. mi.). Cities (1989): Capital--Brasilia (pop. 1.8 million). Other cities-- Sao Paulo (11 million), Rio de Janeiro (6 million), Belo Horizonte (2.3 million), Salvador (2 million), Recife (1.4 million). Terrain: Dense forests in northern regions, including Amazon Basin; semi-arid along northeast coast; mountains, hills, and rolling plains in the southwest (including Mato Grasso); and coastal strip. Climate: Mostly tropical or semi-tropical with temperate zone in the south.
Nationality: Noun and adjective--Brazilian(s). Population (1989 est.): 150 million. Annual growth rate (1989): 2.1%. Density: 17.6 per sq. km. (45.6 per sq mi.). Ethnic groups: Portuguese, Italian, German, Japanese, African, Indians, principally Tupi and Guarani linguistic stock. Religion: Roman Catholic (89%). Education: Literacy--78% of adult population. Health: Infant mortality rate--109/1,000. Life expectancy--61.3 yrs. Work force (1989, 62.5 million): Agriculture--35%. Industry--25%. Services--40%. Trade union membership--about 6 million.
Type: Federative Republic. Independence: September 7, 1822. Constitution: Promulgated October 5, 1988. Branches: Executive--president (chief of state and head of government) popularly elected to a single 5-year term. Legislative- -Senate (81 members popularly elected to 8-year terms), Chamber of Deputies (495 members popularly elected to 4-year terms). Judicial--Supreme Federal Tribunal. Political parties (with congressional representation): Brazilian Democratic Movement Party (PMDB), National Reconstruction Party (PRN), Liberal Front Party (PFL), Democratic Social Party (PDS), Democratic Workers Party (PDT), Workers Party (PT), Brazilian Labor Party (PTB), Liberal Party (PL), Brazilian Socialist Party (PSB), Communist Party of Brazil (PCB), Christian Democratic Party (PDC), Brazilian Social Democratic Party (PSDB). Suffrage: Compulsory from 18 to 70. Subdivisions: 26 states, federal district (Brasilia). Defense: 2.6% of 1990 government budget. Flag: A yellow diamond on a green field; a blue globe with 23 white stars and a band with Ordem e Progresso centered on the diamond.
GDP (1989): $370 billion. Annual real growth rate (1987-89): 2.4%. Per capita GDP (1989): $2,593. Natural resources: Iron ore, manganese, bauxite, nickel, uranium, gemstones, oil. Agriculture (12% of GDP): Products--coffee, soybeans, sugarcane, cocoa, rice, beef, corn, oranges, cotton, wheat. Land--17% arable, cultivable, or pasture. Industry: Types--steel, chemicals, petrochemicals, machinery, motor vehicles, consumer durables, cement, lumber, shipbuilding. Trade (1989): Exports--$34.4 billion. Major markets--US 23%, Japan 7%, Netherlands 8%, Germany 4%, Italy 4%, Argentina 3%. Imports--$18.3 billion. Major suppliers--US 21%, Germany 10%, Japan 7%, Argentina 5%, France 4%. Foreign direct investment and rein-vestment in Brazil (registered with Central Bank as of Dec. 1989): $34.3 billion. Sources--US $11.4 billion (33%); Germany $5.0 billion (14%) Japan $3.1 billion (9%) Switzerland $2.9 billion (9%), UK $1.9 billion (6%), Canada $1.4 billion (5%). Fiscal year: Calendar year.
Membership in International Organizations
UN and some of its specialized and related agencies, including the World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT); Inter-American Development Bank (IDB); Organization of American States (OAS), Rio Pact, Latin American Integration Association (ALADI); International Sugar Organization (ISO); International Cocoa Organization (ICCO); International Coffee Organization; INTELSAT; Group of 77. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

United States and Uruguay: Common Ties, Common Goals

Bush Source: President Bush Description: Address to the Uruguayan Congress, Legislative Palace, Montevideo, Uruguay Date: Dec 4, 199012/4/90 Category: Speeches, Testimony, Statements Region: South America Country: Uruguay Subject: Trade/Economics, Environment, Military Affairs [TEXT] All of us have been deeply touched by your warm welcome. From the moment I got here, I've felt at home. Montevideo is graced by images that were once familiar features in our own nation's frontier tradition--the dramatic statues of Belloni and Zorrilla depicting covered wagons, a stagecoach, the gaucho himself. For a moment, I thought I was back home in Texas. The peoples of our two countries have long been linked by bonds of tradition and belief. Both emphasize equality. Both place their trust in the individual. Both are deeply rooted to the land. Uruguay is blessed with some of the best farmland in the world-- and flying over it this morning, it reminded me of the fertile heartland of the United States. But the truth is, there is no place quite like Uruguay--this heart-shaped country that's not only at the heart of the Southern Cone but at the heart of South America's exciting new movement toward free markets and free ideas. Uruguay appears small on the map but looms large in real life- -large in land, large in character, large in heritage, and large in dreams. More than a century ago, W.H. Hudson crossed Uruguay's rolling grasslands and purple banks and brought them vividly to life in his epic saga, The Purple Land. The Uruguay he saw was a trackless prairie of vast spaces and limitless horizons. Today, the horizons of Uruguay once again open up to a future without limit. Just look around--behind me, Jose Artigas, father of a modern nation, and before me, the Uruguayan Congress--a new generation of pioneers, seeking not to tame a land but to build a nation.
A New Dawn For the New World
Our visit comes at a time when the Western Hemisphere looks out upon a new era, an era not for the First World or the Third World, but an era that marks "a new dawn for the New World." Together, we've embarked on a journey spurred by profound worldwide changes--political renewal, economic restructuring, understanding, social realignment. And together we're leading the way. We have a unique chance to realize the dreams and ambitions of the people who came to the Americas, North and South, seeking a better life for themselves and for those who followed. Like the United States, Uruguay is a nation of immigrants. The history of our republics is told in the history of our families. One such family was the MacGillycuddys of Ireland, who left the shores of Europe in the last century. One went north, and one went south. Both worked hard, prayed to the same God, learned the languages of their adopted countries. And today, their grandchildren are the children of the Americas: Eduardo Macgillycuddy, Uruguay's Ambassador to Washington, and Cornelius MacGillycuddy, better known in my country as US Senator Connie Mack--common dreams; common bonds; common families. This is my first trip to Uruguay, and yet I feel I know your president--President [Luis Alberto] Lacalle--well. We met in Washington last February and again in October in New York. Not only does your president have a vision for his country, but he has the rare talent of being able to act on his vision for the benefit of the people.
Enterprise for the Americas Initiative
Last June, I announced the Enterprise for the Americas Initiative-- an ambitious new plan to increase trade, investment, and growth throughout the hemisphere. It is a major step in our shared dream for the world's first completely democratic hemisphere. And President Lacalle was the first--the very first leader--to call me to discuss how we could work together to realize its objectives. The world is changing faster than anyone believed possible. Fundamental changes are sweeping Uruguay and Latin America. From Tierra del Fuego to the Texas border, old ways of doing business are being reexamined, and new ideas are on the march. The democratic form of government has come to be recognized as the heart of political legitimacy. The democratic ideal has not triumphed everywhere, and, to be sure, not all men live today in total freedom or in democracy. But we've reached the point where all are demanding to live in freedom as their God-given right. The Western Hemisphere can take pride in having launched this worldwide transformation from dictatorship to democracy. And nowhere has the process been more impressive than right here, where your people have demonstrated the courage, cooperation, and self-sacrifice necessary to win success. The transition was difficult, but the potential rewards are great. The conversion of the hemisphere to representative government and to rational economic management opens up the possibility of unprecedented mutual respect and common purpose across the Americas. Here in Uruguay, President Lacalle has set forth a bold program to restructure the economy, changes which will improve Uruguay's overall strength and prosperity. In time, the economy will produce more goods and services, provide more jobs for all, and in short, improve Uruguay's very quality of life. Fundamental changes often involve costs--there are no easy solutions, no quick fixes. But you are not alone. Our Enterprise for the Americas Initiative is aimed at extending a helping hand to our neighbors in South America on trade, investment, and debt reduction. I know some in Latin America fear we've become preoccupied with the dramatic developments in the Old World. Let me assure you today that we have not. The Enterprise for the Americas Initiative represents a fundamental shift in our relationship with Latin America. It recognizes a simple truth, a truth President Lacalle recognized last June at the Organization of American States (OAS), a truth that has now been heard and embraced throughout the Americas. Prosperity in our hemisphere, he said, depends on trade- -not aid. Trade. In order to promote trade, we are working toward a framework agreement with Uruguay, Brazil, Argentina, and Paraguay that commits us to explore practical ways to reduce trade and investment barriers. A strong multilateral trading system is the cornerstone of a healthy, expanding world economy--benefiting both developing and developed nations alike. That's why I have made the successful conclusion of the Uruguay Round of the GATT [General Agreement on Tariffs and Trade] a top trade priority--and, that's why it has such a prominent place in my Enterprise for the Americas Initiative. It presents us an extraordinary opportunity for unparalleled economic growth for all nations, well into the 21st century. In the final talks at the GATT this week, we stand firmly with you and other Latin nations in insisting that countries sharply reduce the agricultural subsidies that distort world trade. The land has historically been at the heart of both our economies, and from Montevideo to Montana, our farmers and our ranchers enjoyed shared traditions, shared interests, and shared concerns. As our trade ministers meet in Brussels this week, I want to speak to them from the place where the round began. It began with a commitment to expansion of world trade. So, let us finish the round in the same spirit--translating good intentions into firm commitments that will benefit us all by substantially expanding world trade. As the traveler in The Purple Land says: "We lose half our opportunities in life through too much caution." The new dawn is breaking. The stakes are high. Let's successfully conclude the GATT Round. And that means opening up Europe's market to this hemisphere's agricultural products. Investment. The Enterprise for the Americas Initiative also acknowledges that improved trade must be bolstered by assistance with investment and with debt. To promote investment, we've been working with the Inter-American Development Bank (IDB) to create a sectoral loan program. The IDB's response has been outstanding. That's no surprise--it's led by an Uruguayan, Enrique Iglesias. We also will help countries committed to economic and investment reform to shake loose the burden of debt. Debt reduction. I want to congratulate President Lacalle on his successful negotiation of a debt agreement with the commercial banks under the Brady Plan. That is a vote of confidence in Uruguay's economic policies by the international financial community. And we've also asked our Congress to approve a new package to reduce Uruguay's official debt. This will allow us to convert other payments to investment in industry and to swap "debt-for-nature" to protect your natural beauty.
Environment and Narcotics
Environmental destruction knows no borders. It is our responsibility to leave future generations not only a more prosperous world but a cleaner and a safer world. A safer world also means a world free from the scourge of this hemisphere--the scourge called cocaine. For the sake of our kids, every country must do its part to stop the explosive cycle of drugs, dependency, and dollars. Let me assure you we are doing our level-best to reduce demand in the United States for these outrageous illegal narcotics. Finally, a safer world also means a world safe for freedom, a world governed by the rule of law. Just a few minutes ago, I was privileged to meet with your Supreme Court. A free, honest, and impartial judicial system is fundamental to the freedom of a democracy, just as the rule of law is fundamental to the freedom of the world.
The Persian Gulf and UN Sanctions
What the world faces in the Persian Gulf, believe me, is fundamental. -- We will not, we must not, reward a nation that would wipe another country off the face of the earth; -- We will not reward a nation that has literally--and the tales are agonizing--has literally raped and terrorized its smaller neighbor; -- We will not reward a nation that kidnaps people and holds them hostage, staking them out as human shields--a nation that violates the sanctity of foreign embassies; and -- We will not reward a nation whose unprovoked aggression is driving economies all around the world into ever-greater financial distress. I want to just say a special word in tribute to your president and to your proud democracy. Uruguay has shown great courage and commitment in support for UN sanctions against Iraqi aggression. Some may not realize this, but Uruguay paid a double price for upholding these sanctions--first, in higher oil prices but also in substantial markets lost for now for your products. Yet, you never flinched--your country never flinched. You never wavered in support of these UN sanctions. Some seek to portray the crisis in the gulf as a conflict between Iraq and the United States. In truth, as your example clearly demonstrates--it is a conflict between a united world community and an isolated, brutal dictator; the rule of law against Saddam Hussein's brutal aggression. That's why I'm convinced-- totally convinced--that the world community will prevail in the end. The UN sanctions in their entirety will be upheld, and aggression will not be rewarded. That--and it will come--that will be a great victory for peace and global security. And I want to take this occasion once again to salute you--to salute your nation for your leadership in this struggle. In Czechoslovakia, President [Vaclav] Havel told me the cost to his country was $1.5 billion. And in Brazil yesterday, President Collor told me $5 billion is his estimated annual cost. And here in Uruguay, President Lacalle said the impact is substantial. All because of Iraq's determination to violate the sanctity and the sovereignty of little Kuwait. No one in your great country needs to be told about sovereignty. In 1811, Artigas and his gauchos led an exodus of free Uruguayans who refused to submit to the control of foreign despots. His demand was simple: complete autonomy for Uruguay. His dream was not realized overnight. But, today, many believe that had it not been for Artigas' brave stand, Uruguay would surely have been absorbed into another nation.
Exactly 30 years ago, President Eisenhower spoke to the people of Uruguay from this very podium. Our message hasn't changed. He said, "The United States does not covet a single acre of land that belongs to another. We don't wish to control or dictate to another government." And he went on: "We believe that the people of every nation are endowed with the right of free choice and that the most sacred obligation of the world community is to guarantee such choice to all." A generation later, Juan Lavalleja and the 33 Immortals completed Uruguay's transition to sovereign freedom. Today, their legacy has fallen to you--an inheritance from Uruguay and for all of the Americas. Today, the new 33 Immortals are the very nations of this continent--the OAS nations, now barreling in confidence toward the new century. All of us have a stake in working together. Our goal is to work with Latin America to build a hemisphere where trade and investment are unfettered, private enterprise can flourish, and individual rights are respected. I see a hemisphere with strong democratic institutions and leaders; an ever-expanding economic opportunity for all members of society--a society free of drugs and crime; a cleaner environment; and a new era of cooperation between Latin America and the United States. Yours is a colorful land of spectacular beauty, from the lush green expanses outside Salto, to the purple banks of the Yi River, to the white beaches of Punta del Este. And as a new dawn breaks over the New World, Uruguay and all the hemisphere will continue on our voyage of discovery guided by the true colors of the Americas--the colors of free ideas, free markets, and free trade. And as you travel, we will be watching with great hopes. We will be standing with you. Godspeed you on this journey, and God bless the wonderful people of this country. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

The President's Trip to Uruguay, December 4-5, 1990

Date: Dec 4, 199012/4/90 Category: Fact Sheets Region: South America Country: Uruguay Subject: Democratization, Trade/Economics [TEXT]
Trip Overview
President Bush visited Uruguay December 4-5, 1990, as part of his trip to South America. This was his first trip to Uruguay.
About the same size as Oklahoma, Uruguay has a population of slightly more than 3 million people that is distinguished by a high literacy rate (96%) and large urban middle class. Blessed with rolling grassy plains and low hills, Uruguay enjoys abundant pastureland, a good water supply, and a temperate climate. Its capital is Montevideo (estimated population: 1.3 million).
Consolidation of Democracy
Uruguay is in its sixth year of democratic civilian government following 12 years of military rule. Blanco Party leader Luis Alberto Lacalle won the 1989 presidential election, but his party failed to win a majority in the bicameral legislature. He has had to include members of the other traditional party, the Colorados, in his cabinet in order to form a government and block maneuvers of the Broad Front, a grouping of leftist parties. Since taking office on March 1, 1990, Lacalle has concentrated on economic and social reforms. His administration has pledged to reduce the budget deficit and foreign debt, sell state enterprises, reform the civil service, and improve education and labor programs.
While Uruguay has one of the highest per capita external debts in the hemisphere, it has remained current in its payments. The Lacalle administration has introduced a package of economic reforms aimed at modernizing the economy and reducing the fiscal deficit in nation, and economic distortions. Revenue increases to reduce the budget deficit have been passed, but measures to demonopolize and privatize the public sector, and reform the social security system, are still pending. Among the targets of the program is reducing inflation, which has recently exceeded 100% per year, to below 30% by early 1991. Recent increases in petroleum prices, however, have made attainment of that objective unlikely. The government has successfully implemented an export- based strategy that aims to achieve the economic growth necessary to meet debt-service obligations and to improve the standard of living.
Foreign Policy Issues
Uruguay has strong political and cultural links with the democratic countries of the Americas and Europe. It shares basic values with those countries, such as support for constitutional democracy, political pluralism, and individual liberties. Its foreign relations have been guided historically by the principles of nonintervention, respect for national sovereignty, and reliance on the rule of law to settle disputes. Uruguay's location between Argentina and Brazil makes close relations with those two larger neighbors particularly desirable. The three countries have been working toward integrating their economic systems and improving relations across the spectrum.
US-Uruguayan Relations
Traditionally, relations between the United States and Uruguay have been based on a common outlook and dedication to democratic ideals. The United States expressed a deep concern over the human rights situation during the military regime and strongly supported Uruguay's transition to democracy. Uruguay is a minor, but increasingly used, transit country for drugs, mostly cocaine, going to Europe and the United States. Also, the strict bank-secrecy provisions of Uruguay's financial institution statute make it a potentially attractive site for money "laundering" operations. Uruguay cooperates with US efforts to prevent drug trafficking from becoming a major menace in the region. Negotiations are underway on a mutual legal assistance treaty that will help to ensure that Uruguay does not become a money-laundering haven. The Uruguayan government placed a high priority on debt renegotiation and recently reached an agreement in principle with commercial bank creditors to restructure Uruguay's commercial bank debt, providing significant debt reduction. The Uruguayan government has set an exemplary record of full compliance in its principal and interest payments while working with the United States bilaterally, and in international trade liberalization, to foster economic and political cooperation and to improve regional cooperation. The United States works to continue this tradition of friendship, to support the new democracy, and to strengthen the Uruguayan economy. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

Country Profile: Uruguay

Date: Dec 4, 199012/4/90 Category: Country Data Region: South America Country: Uruguay Subject: History, Trade/Economics, International Organizations [TEXT] Official Name: Oriental Republic of Uruguay
Area: 176,215 sq. km. (68,037 sq. mi.); slightly smaller than Oklahoma. Cities: Capital--Montevideo (est. pop. 1.3 million). Terrain: Plains and low hills, 84% agricultural. Climate: Temperate.
Nationality: Noun and adjective--Uruguayan(s). Population (1990 est): 3.1 million. Annual growth rate (1989-90): 0.6%. Ethnic groups (est.): 90% white, 7% mestizo, 3% black. Religions: Roman Catholic 66%, Protestant 2%, Jewish 2%, nonprofessing or other 30%. Language: Spanish. Education: (Projected school-age pop., 1990--538,350 ages 5-14 yrs.; 260,238 ages 15-19 yrs.) Literacy--96%. Health: Life expectancy (1985-90)--75.3 yrs. (female); 68.9 yrs. (male). Infant mortality rate (1990)--24.41/1,000. Work force (1990): 1.4 million. Manufacturing--22%. Government-- 20%. Agriculture--13%. Commerce--17%. Utilities, construction, transport, and communications--12%. Other services--16%.
Type: Republic. Independence: August 25, 1825. Constitution: February 1967. Branches: Executive--president (chief of state and head of government). Legislative--General Assembly consisting of Chamber of Deputies, 99 seats; Senate, 30 seats. Judicial--Supreme Court of Justice. Administrative subdivisions: 19 departments with limited autonomy. Political parties: Colorado, Blanco (National), Broad Front Coalition, New Space Party, Civic Union. Suffrage: Universal over 18. Central government budget (1989): $1.5 billion. Defense (1989): 1.4% of GDP. Flag: Nine horizontal stripes--five white and four blue with a yellow sun in the left corner. The flag was adopted in 1830.
GDP (1989): $8.4 billion. Annual growth rate (1989): 1.5%. Per capita GDP (1989): $2,736. Avg. inflation rate (1989): 80.4%. Natural resources: Soil, hydroelectric potential, gold, granite, and marble. Agriculture (11.8% of GDP, 1989): Products--beef, wool, grains, fruits, vegetables. Industry (21% of GDP, 1989): Types--meat processing, wool and hides, textiles, shoes, handbags, leather apparel, tires, cement, fishing, petroleum refining. Trade: Exports--$1.6 billion (f.o.b. 1989): meat, wool, hides, leather and wool products, fish, rice, furs. Major markets--US 11%, EC 23% (Germany 8%), ALADI 37% (Argentina 5%, Brazil 28%). Imports-- $1.2 billion (c.i.f. 1989): fuels, chemicals, machinery, metals. Major suppliers--US 10%, EC 19.2% (Germany 6%), ALADI 51% (Argentina 16%, Brazil 26%). Fiscal year: Calendar year. Economic aid received: IBRD-$693 million (to June 1988); IFC-$35 million (to June 1988); IDB-$716 million (1966-88); US-$205 million (FY 1946-88). Military aid-$67 million (1950-87).
Membership in International Organizations
UN and some of its specialized and related agencies; INTELSAT; Latin American Integration Association (ALADI); Organization of American States (OAS); the Antarctic Consultative Group; Latin American Economic System (SELA); Rio Group (informal group of Latin American states which deals with multilateral regional issues). (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

Democracy Takes Root in Argentina

Bush Source: President Bush Description: Address to the Argentine Congress, Buenos Aires, Argentina Date: Dec 5, 199012/5/90 Category: Speeches, Testimony, Statements Region: South America Country: Argentina Subject: Democratization, Nuclear Nonproliferation, Trade/Economics [TEXT] I am honored to be with you today in this beautiful Hall of Democracy with so many members of your Congress. And I am privileged to be with you at this time in history, both your own history, and the history we share as members of the same hemisphere. For we live in an era of dramatic change. Some may have thought that the events of Monday [aborted military rebellion] would make me change my plans. To the contrary, they strengthened my resolve to come to Argentina, to stand shoulder-to-shoulder with President [Carlos] Menem and the Argentine people, who love democracy and refuse to see it subverted. The message today from Argentina is clear. Democracy is here to stay. Too many brave people sacrificed and died to bring democracy back to Latin America. Let those who would attack constitutional democracy understand: In Latin America the day of the dictator is over. Violent assaults upon the rule of law represent the old way of thinking and acting that history has left behind. It is time to think anew. No longer should we think in terms of "the Old World," where our roots lie. Or of "the First World," or "the Third World." No, we must move beyond the labels that once separated us, to grasp the common future that unites us. Argentina, the United States, and the other nations in this continent share the promise of a new dawn in a new world. So, I have come to Argentina to speak about change, the kind of positive, hopeful change symbolized by the spirit of the "Sun of May" in your dramatic seal behind me. But above all, we share a devotion and commitment to our respective nations that would have pleased General San Martin, who wrote: "Love for one's native land fuels noble souls." All of this is part of the unique bond between our countries. But it's also recent history that unites us. Your return of democracy has brought our peoples closer than ever before. Your sacrifice during past decades caused us deep anguish and concern. But your people did not lose faith in the democratic ideal, and the United States did not lose faith in you. As we prepare, with optimism and anticipation, for the challenges facing this hemisphere and the rest of the world, some things are clear. We all know that we want to live in a new world that is a model of security and stability. This means regional arms control, as well as nuclear, missile, and chemical non-proliferation, and the collective determination to face down aggression.
Moves for Nuclear Safeguards
As I said in Brasilia, the United States applauds the decision, announced on November 28 by the leaders of Argentina and Brazil, to move forward on nuclear safeguards and to bring the Treaty of Tlatelolco into force. We hope you will move quickly to realize both of these commitments, as they have a direct, measurable impact on regional and world security. Such action also will impact on regional and world security. Such action also will allow the United States and other countries to expand significantly the range of our nuclear and other technical cooperation. In the current crisis in the gulf, you have also shown strength and vision by helping to lead international efforts to stop Saddam's brutal aggression. Your contribution to the multinational force in the gulf is a statement of your commitment to peace and the rule of law, and a clear sign that you are assuming your rightful place as a leader among freedom-loving nations. Argentina and President Menem have not limited their efforts to promoting international security. Here in Argentina, you have embarked on another courageous action, the restoration of your economic dynamism. Your President, Carlos Menem, has defined the challenge we face today. He said, "To take advantage of democratic experiences to propel economic growth and progress is the principal crossroads and challenge for our peoples and governments." It is a difficult challenge as well. I believe few presidents have ever taken office under more testing circumstances than did President Menem. Yet, he and his colleagues in this Congress didn't shrink from the task at hand. Instead, you set into motion a forward-looking structural, economic, and social transformation of this country. We know of the painful, short-term sacrifices you are being called upon to make, in what your own president has called "surgery without anesthesia." For this tremendous undertaking to succeed, it will not take miracles. It will take work. But know that the United States is prepared to work with you every step of the way.
New Treaties and Initiatives
Just yesterday, we signed two new agreements, a mutual legal assistance treaty and a mutual customs cooperation agreement. And last June, to help this movement in your nation and the others of this continent, we proposed the Enterprise for the Americas Initiative, which calls for a major hemispheric effort to expand trade and investment and reduce debt, to unleash energy, to encourage initiative, and to let the incentive of reward inspire people to better themselves, their families, and their futures. We are absolutely committed to this initiative as a major priority. It will give impetus to the essential economic restructuring which is already underway. And it will sustain and deepen this process in tangible ways. The initiative is our hemisphere's new declaration of interdependence. For economic revolution is the equal of political revolution. And economic cooperation must be embraced not as a threat to privilege for a few but as the key to prosperity for all. We know that prosperity in our hemisphere depends on trade, not aid. And it is within our power to make our region the largest trading center of sovereign nations in the world. Already, the Southern Cone common market is moving us closer to our ultimate objective, a free trade system that links all of the Americas. We support you in this and look forward to completing a framework agreement on trade and investment between the United States and the southern cone. But to promote long-term growth, we need the successful conclusion of the Uruguay Round. The negotiators must succeed in their efforts to reduce or eliminate tariffs, subsidies, and other barriers to agricultural products. This will mean new market opportunities for the farmer in Buenos Aires province, the agricultural workers in Jujuy, and the engineer in Rosario. No act could be more significant for your nation than the move toward a market-oriented economy, a move crucial to attracting foreign investment. It lays the groundwork for your future, building a road that leads to a modern, growing Argentina. A free enterprise economy will encourage capital investment, greater individual initiative, and real prosperity for this and future generations. With the help of the Inter-American Development Bank, we want to encourage the reform and opening of investment regimes. The spirit of enterprise will unleash your great potential and assure this nation of its position as one of the most vigorous nations in the world. The reforms that you are carrying out in your economy, including your bold program of privatization, are not only the key to economic growth and expanded opportunity, they are also the first crucial steps under the Brady plan to achieve debt reduction with your commercial creditors. I understand the burden of debt that weighs on Argentina. But I believe that today, like Mexico, Venezuela, Uruguay, and Costa Rica, Argentina is on the right road to reduce that burden under the Brady Plan. The way we deal with our common economic realities can be a stepping stone to a permanent partnership among all the nations of the Americas. I believe we are on the brink of something unprecedented in world history: the first wholly democratic hemisphere--the first hemisphere devoted to freedom; to free speech; free elections; free enterprise; free trade; free markets. That's why I've come to your country--to celebrate what we share; to recommit my nation to the movement toward democracy and prosperity in the Americas; to stress the vital importance of mutual cooperation and understanding among traditional friends. For we read in Martin Fierro: "Brothers should stand by each other, because this is the first law: Keep a true bond between you at each and every time." Argentina is a great nation with enormous resources, but none more impressive than the Argentinian people themselves. When this century began, Argentina was among the most prosperous and productive nations in the entire world. I am confident that Argentina will be such an economic leader again. Together, yet from our own beloved lands, we will watch freedom, democracy, and prosperity grow. We will watch it from the vantage point of two countries strong in liberty and expanding in economy. And we can look forward, with shared optimism, to the 21st century, to the brilliant new dawn of a splendid new world. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

The President's Trip to Argentina, December 5 and 6, 1990

Date: Dec 5, 199012/5/90 Category: Fact Sheets Region: South America Country: Argentina Subject: Democratization, Trade/Economics [TEXT]
Trip Overview
President Bush visited Argentina December 5-6, 1990, during his trip to South America. The last time he traveled to Argentina was in December 1983 when, as vice president, he led the US delegation to the inauguration of Raul Alfonsin, the first civilian president after years of military rule. On July 9, 1989, Carlos Menem became president, the first time in 60 years that one elected civilian president succeeded another in Argentina.
About the size of the United States east of the Mississippi River, Argentina is the second-largest country in South America, after Brazil, and the eighth largest in the world. Its population of 32 million is 97% European, primarily descendants of Italian and Spanish immigrants. The Indian population, estimated at 50,000, is concentrated in the provinces of the north and northwest. Eighty percent of the population lives in urban areas, with about one-third of the total in the metropolitan area of the capital, Buenos Aires. Education is compulsory for 7 years; 94% of Argentines are literate. The country's topography ranges from subtropical lowlands in the north to the towering Andes mountains in the west and the bleak, windswept Patagonian steppe and Tierra del Fuego in the south. Argentina's heartland is the rich temperate plains, known as the pampas, in the east central part of the country. This is some of the finest farmland in the world, from which come large quantities of wheat, corn, sorghum, soybeans, and sunflower seeds. The pampas also provide year-round pasturage for Argentina's important cattle industry. Argentina is one of the largest exporters of foodstuffs in the world.
Consolidation of Democracy
Argentina is in its seventh year of democratic civilian government. Peronist Carlos Menem formed a broad-based government, appointing many non-Peronists to top positions. In October 1989, he pardoned military officers accused of human rights violations during the 1976-83 period of military rule. Some leftist terrorists were also pardoned. The pardons, intended to promote national reconciliation, were criticized by human rights groups but appear to have been accepted by the population as a whole. President Menem also has announced his intention to pardon military junta leaders from this period who are presently in jail. The leaders of three army rebellions since April 1987 have been retired from the military. On December 3, 1990, a small group of officers involved in earlier rebellions took over army headquarters and other sites in the Buenos Aires area in a protest over internal military matters. President Menem acted firmly to put down the revolt, which was not supported by the rest of the military nor by Argentine society.
Economic and Debt Issues
In 1989, Argentina suffered perhaps its worst economic crisis of this century. Inflation for the year was almost 5000%. Upon taking office, President Menem embarked on a bold economic reform program to halt hyperinflation, privatize inefficient state enterprises, open up the economy to greater trade and competition, encourage foreign investment, and reform the tax system. Although monthly inflation fell to single digits a few months after Menem took office, by the end of 1989 hyperinflation had returned and the value of the currency (the austral) had plunged. Since April 1990, further austerity measures have reduced inflation dramatically. The root cause of Argentina's chronic economic problems remains the government's fiscal deficit. Argentina is the third-largest debtor among developing countries, with more than $60 billion in external debt. Argentina recently began to make small interest payments on its $39 billion debt to commercial banks. Interest arrears are currently about $7 billion. The Menem government seeks to reduce its debt burden by allowing debt-equity swaps in privatizations. Payments due on much of Argentina's non-bank debt were rescheduled in the Paris Club (official government creditors) in December 1989.
Foreign Policy Issues
Under President Menem, Argentina has pursued a foreign policy designed to produce practical benefits for the country. Pursuit of closer economic integration with its neighbors, particularly Brazil and Uruguay, and strong ties to the West, especially to the United States, are key elements of this policy. The positions of the Menem government generally have coincided with US positions on major issues. Argentina's overtures to the United Kingdom led to resumption of diplomatic relations between the two countries in February 1990. (Relations had been broken in early 1982 during the war over the Falkland Islands, which are known in Argentina as the Islas Malvinas). Argentina has two ships participating in the multinational naval force in the Persian Gulf.
Nuclear and Military Issues
Argentina has the most advanced nuclear-energy program in Latin America. Argentina signed the Treaty of Tlatelolco, a hemispheric non-proliferation accord, but has not yet ratified it. President Menem has renewed Argentina's commitment to the peaceful uses of nuclear energy. Despite its commitment to safeguards agreements for its nuclear exports, Argentina has declined to adopt full-scope safeguards on significant portions of its national nuclear program, a policy that limits the cooperation available from the United States and other key nuclear suppliers. The United States is seriously concerned about Argentina's involvement in developing the Condor II ballistic missile. The United States works closely with its Missile Technology Control Regime partners to deny exports of sensitive technology to programs such as Condor. President Menem has stated that the Condor program has been "deactivated."
US-Argentina Relations
The primary US goal in Argentina is to strengthen democracy by encouraging political pluralism and economic reforms that will promote sustained growth and social stability. US policy toward Argentina aims to support the consolidation of democratic institutions, assure maximum cooperation between our countries, and resolve any differences in the spirit of mutual respect and understanding. US-Argentine relations are cordial and cooperative and involve daily official and private contacts at all governmental, business, social, and cultural levels. Based on a shared respect for democracy, ties have strengthened since the return of democratic government to Argentina in December 1983. President Menem's successful visits to the United States in September 1989 and October 1990 reflected this improvement in bilateral relations. (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

Country Profile: Argentina

Date: Dec 4, 199012/4/90 Category: Country Data Region: South America Country: Argentina Subject: History, Trade/Economics, International Organizations [TEXT] Official Name: Republic of Argentina
Area: 2.8 million sq. km. (1.1 million sq. mi.); about the size of the US east of the Mississippi River. Cities: Capital--Buenos Aires (metropolitan area pop. 10.5 million). Other major cities--Cordoba, Rosario, La Plata, Mendoza. Terrain: Varied. Climate: Varied, predominantly temperate.
Nationality: Noun and adjective--Argentine(s). Population (1989 est.): 32.4 million. Annual growth rate (1989 est.): 1.5%. Density: 27.8 per sq. mi. Ethnic groups: European 97%, mostly Spanish and Italian. Religions: Roman Catholic 92%, Protestant 2%, Jewish 2%, other 4%. Languages: Spanish (official), English, Italian, German, French. Education: Years compulsory--7. Adult literacy--92%. Health: Infant mortality rate--27/1,000. Life expectancy--70 yrs. Work force: Agriculture--19%. Industry and commerce--36%. Services--20%. Transport and communications--6%. Other--19%.
Type: Republic. Independence: July 9, 1816. Constitution: 1853. Branches: Executive--president, vice president, cabinet. Legislative--bicameral Congress (46-member Senate, 254-member Chamber of Deputies). Judicial--Supreme Court. Subdivisions: 23 provinces, 1 district (federal capital). Political parties: Justicialista (Peronist), Radical Civic Union, numerous smaller national and provincial parties. Suffrage: Universal. Flag: Horizontal blue and white bands emblazoned with "Sun of May."
GDP (1990 est.): $84.3 billion. Annual growth rate (1990 est.): -3.5%. Per capita GDP (1990 est.): $2,564. Inflation rate (1990 est.): 1,500%. Natural resources: Fertile plains (pampas). Minerals--lead, zinc, tin, copper, iron, manganese, oil, uranium. Agriculture (15% of GNP, about 70% of exports by value): Products-- grains, oilseeds and byproducts, livestock products. Industry (23% of GNP): Types--food processing, motor vehicles, consumer durables, textiles, metallurgy, chemicals. Trade (1989): Exports--$9.5 billion (US--15%): grains, meats, oilseeds. Imports--$4.2 billion (US--25%): machinery, fuel and lubricating oils, iron and steel products, wood and lumber, automotive equipment and parts, chemicals. Major trading partners- -European Community, USSR, US, Brazil. External financing: IBRD and IDA--$887 million in FY 1989 (July 1, 1988-June 30, 1989); IDB--$12 million in CY 1989.
Membership in International Organizations
UN and some of its specialized and related agencies, Organization of American States (OAS), Latin American Integration Association, Nonaligned Movement, Group of 77, Latin American Economic System (SELA), New Group of 15, Rio Group (informal group of Latin American states which deals with multilateral regional issues). (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

US-Soviet Economic Relations

Date: Dec 10, 199012/10/90 Category: Policy Briefs (Gist) Region: Eurasia, North America Country: USSR (former), United States Subject: Trade/Economics [TEXT] The changes in the Soviet Union resulting from the process of political and economic reform are leading to further normalization of economic relations between the United States and the Soviet Union. President Gorbachev aims to restructure the Soviet economy and society through a reform process known as perestroika (restructuring). In October 1990, he announced an economic reform plan, "Basic Guidelines for the Stabilization of the Economy and the Transition to a Market Economy." The plan, later approved by the Supreme Soviet, contains measures that would replace the command economy with a market system. At Malta in December 1989, President Bush outlined for President Gorbachev a program of technical economic cooperation to advance the process of market- oriented economic reform in the Soviet Union. At the Washington summit in June 1990, the two presidents signed a new trade agreement. Two additional steps are needed before the Soviets receive most-favored-nation status: President Bush must grant the Soviet Union a waiver of the Jackson-Vanik Amendment to the 1974 Trade Act, and he must submit the trade agreement to Congress for approval. The President has stated that he is prepared to take these steps when the Supreme Soviet passes emigration legislation meeting international standards. Bilateral trade with the Soviet Union has doubled since 1986, but it accounted for less than 1% of total US trade in 1989. Factors tending to limit trade include the centrally planned nature of the Soviet economic system, an inconvertible ruble, the uncompetitiveness of Soviet finished goods, the rigid centralized trading system, and the inability to purchase industrial inputs within the Soviet Union because resources are allocated rather than sold. New emphasis is being placed on expanding trade and investment opportunities that will build upon improved relations.
US Trade Policy
As Secretary Baker has stated, "Mutually beneficial, non-strategic commercial exchanges are the best way to expand Soviet participation in the international economy." Toward that end, the United States signed a civil aviation agreement and a maritime transportation agreement with the Soviet Union at the June 1990 summit. We also have negotiated a long-term grains agreement and are continuing negotiations on bilateral investment and tax treaties. Responding to historic changes in the strategic environment, President Bush announced last May a set of proposals to modernize the Coordinating Committee for Multilateral Export Controls (COCOM), the Western security organization charged with safeguarding our strategic technology through the use of controls on the export of strategic Western goods and services to the USSR and other countries. Decisions made at the June 1990 COCOM high-level meeting incorporated all the essential elements of the President's proposals. The effect of its comprehensive trade liberalization measures will be to make available to the Soviet Union many of the previously controlled items in areas such as computers, telecommunications, and machine tools. COCOM members also affirmed their belief that COCOM remains an essential element of Western security. The United States favors the integration of the Soviet Union into the international economic community. Therefore, the United States supported the Soviet Union's application for observer status in the General Agreement on Tariff and Trade (GATT), which was granted last May. This step is expected to promote market-oriented reform in the Soviet Union. The United States also has encouraged the Soviets to develop contacts with the International Monetary Fund (IMF), the World Bank, and the Organization for Economic Cooperation and Development (OECD).
Economic Cooperation
The United States wants Soviet economic reform and restructuring to succeed. Such efforts by the Soviet Union would create a more open society, transfer resources to non-military purposes and promote Soviet integration into the world economic system. At the December 1989 summit meeting in Malta, the President proposed to the Soviets several initiatives in the area of technical economic cooperation. Secretary Baker proposed during his meeting with Foreign Minister Shevardnadze in Paris last July the expansion of technical cooperation and gave him a list of additional projects for consideration. These are designed to help the Soviets identify the issues involved in adopting market-oriented economic policies, devise a strategy of meaningful economic reform, and implement that strategy. Projects and contacts in this technical cooperation effort already are underway at the expert level. They are currently concentrated on small business development, formation of financial markets, banking reform, tax administration, anti-trust policy, statistical cooperation, and development of a private housing market. At the Houston economic summit meeting in July 1990, the United States supported the decision of its G-7 partners to ask the IMF, the World Bank, the OECD, and the designated president of the European Bank for Reconstruction and Development, in consultation with the European Community, to study the Soviet economy, make recommendations for its reform, and establish criteria for Western assistance that would support these reforms. This study should be completed by the end of 1990. A joint US-Soviet Commercial Commission plays an important role in promoting bilateral trade. In addition, the private US-USSR Trade and Economic Council meets annually to promote trade and investment between the two countries. More than 100 US companies are registered to undertake joint ventures in the Soviet Union.
US-Soviet Basic Indicators--1989
US USSR Population (million) 249 289 GNP ($ billion) 5,198 2,664 Per Capita GNP ($) 20,890 9,230 Exports ($ billion) 364 109 Imports ($ billion) 493 115 Source: Central Intelligence Agency, The World Factbook 1990 (###)
US Department of State Dispatch, Vol 1, No 15, December 10, 1990 Title:

Status Report: INF Treaty On-Site Inspections

Date: Nov 30, 199011/30/90 Category: Fact Sheets Region: Eurasia Country: USSR (former) Subject: Arms Control, International Organizations, Nuclear Nonproliferation [TEXT] The following was released by the Public Affairs Office of the On- Site Inspection Agency (OSIA) on November 30, 1990. Since July 1, 1988, inspectors from the On-Site Inspection Agency (OSIA) have conducted 382 inspections in the Soviet Union under the Intermediate-Range Nuclear Forces (INF) Treaty. In the same period, OSIA coordinated 163 Soviet inspections to US sites in this country and Western Europe. The INF Treaty between the United States and Soviet Union entered into force on June 1, 1988, when President Reagan and Soviet General Secretary Gorbachev exchanged the articles of implementation at the Moscow summit. The treaty calls for elimination of all US and Soviet ground-launched missile systems with a range of 500 to 5,500 kilometers (about 300 to 3,400 miles) within 3 years after entry into force. In the treaty's memorandum of understanding, the Soviets declared 1,846 missiles for elimination and the United States 846. OSIA is responsible for conducting and coordinating the treaty's inspection provisions. For the frst time in US and Soviet history, on-site inspections were included in the verification process of an arms control agreement between the countries. The period since entry into force of the treaty has been marked by almost continuous elimination of missiles, launchers and related equipment. Beginning with the first Soviet SS-12 missile destruction at Saryczek in August 1988, US inspectors have witnessed the elimination of 1,780 Soviet missiles through November 8, 1990. Since the initial elimination at Longhorn Army Ammunition Plant near Marshall, Texas, on September 8, 1988, Soviet inspectors have viewed the destruction of 654 US missiles. All declared shorter-range INF systems, those with ranges from 500 to 1,000 kilometers, were eliminated 1 month in advance of the treaty deadline of November 30, 1989. The US Pershing 1-A was the first shorter-range system to be eliminated, with the final missile eliminated on July 6, 1989. The Soviet Union eliminated the last of its declared shorter-range missiles, the SS-12, on July 26, 1989, and the SS-23 on October 27, 1989. The Soviet Union destroyed the last of 80 SSC-X-4 non- deployed cruise missiles on October 5, 1988, and the last of six SS- 5s on August 16, 1989. With the destruction of the last declared SS-4 on May 22, 1990, the only remaining Soviet system enumerated in the treaty is the SS-20. Continuous portal monitoring operations began in both countries in July 1988. At Magna, Utah, and Votkinsk, USSR, permanent groups of up to 30 inspectors each are situated outside the gates of former INF missile production and final assembly plants to check existing vehicles for treaty-limited items.
US, Soviet INF Inspections and Eliminations (1) June 1, 1988-November 30, 1990
By Soviets in US By US in USSR Initial 31 117 Monitor elimination 77 115 Short notice 50 49 Closeout 10 102 TOTAL 168 383
Subject to elimination Eliminated Soviet Systems SS-20 654 588 SS-12 718 718 SS-23 239 239 SS-4 149 149 SS-5 6 6 SSC-X-4 80 80 TOTAL 1,846 1,780 US Systems Pershing I 169 169 Pershing II 234 170 GLCM (2) 443 315 TOTAL 846 654 (1) Source : INF Treaty Memorandum of Understanding, June 1, 1988 Update. (2) Ground-launched cruise missiles. (###)