US Department of State 

Dispatch, Vol 2, No 11, March 18, 1991

Title:

Two-Track Approach Toward Peace in the Middle East

Baker Source: Secretary Baker Description: News conference en route from Riyadh, Saudi Arabia, to Cairo, Egypt Date: Mar 10, 19913/10/91 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Israel Subject: Mideast Peace Process [TEXT] Secretary Baker. Let me say that I think we've had a good series of meetings today, particularly the meeting with the Gulf Cooperation Council (GCC) foreign ministers, the Foreign Minister of Egypt, and myself. After that, I had separate bilaterals with the ministers from Syria and from Egypt, and before the plenary meeting, I had separate bilaterals with each of the GCC foreign ministers. I know you are interested in the peace process, so let me say a word or two about that, and then I'll try and respond to your questions. First of all, as you know, we have been trying to work a two-track approach. I've been exploring with our Arab coalition partners what steps they might be able to take to signal their commitment to peace and reconciliation with Israel. Before this trip began, we had communicated to Israel the general outlines of our two-track approach, and I am now going to have the opportunity, when we get to Israel, to talk in detail and specifically with their leadership about what steps they might be willing to consider. Let me say, I am not going to go into the specific steps now because we are still exploring that. We still have a long way to go. It is very, very early. We are trying to get a process going, and I would simply say that I have a sense that even though it is early, there is a greater willingness to be active on this issue in the aftermath of the Gulf crisis than there was before. Q. Reading the statement tonight, both the Arab portion of it and the latter part, there doesn't appear to be anything here on the track of direct contacts with Israel, state to state. It all refers to the Palestinian issue, and I ask you--also, I should tell you that in the public statement of the ministers today, there was no indication of a willingness to go on that track. We have been told over and over again, this is a two-track process. Did you hear anything in private that would dissuade us from the view that the Arab foreign ministers and Gulf ministers were only talking about one track? Secretary Baker. Well, we talked at length about two tracks, and I made it very clear, at a very early stage in what we hope will be a process, we have not as yet even arrived in Israel. We have not had detailed discussions with the Israeli government about what steps they might be willing to consider and so, therefore, I don't think it is surprising that you don't have Arab governments coming out and unilaterally making statements about steps that they would be willing to take in the absence of knowing a little bit more about what might develop as the process moves forward. Q. You still are not really saying though whether the two- track approach is still alive and the second half of the question is in your statement: You say that the United States plans to signal peace and reconciliation to Israel. Is there any signal here beyond their traditional approach? Secretary Baker. Well, you read the language. The wording you just read sounds to me like it's like a signal. In terms of whether it's still alive, let me simply say that it was only born very, very recently, so please don't declare it dead until it's actually dead. I happen to think that it's at least alive until we explore the concept and the possibilities with the leadership of Israel. Let me say that I think that the Arab governments with whom we talked generally about this today exhibited, as I have just indicated to you, a greater willingness to be active than they had in the past or than they did before the Gulf crisis was resolved, and I would interpret that to be a willingness to be active along both tracks, assuming it is a process that is embraced by others, including, most importantly, Israel. Q. Did the Arab states with whom you met today give you specific concrete things they are willing to do assuming that there is reciprocity of some sort on the part of the Israelis? Secretary Baker. We are not at that point. I did not ask them to commit themselves in the absence of knowing what might or might not be possible on the other side of the equation. What I asked them to do was to simply consider the possibility of participating in this process and developing, in due course, some specific steps that they would be willing to consider taking if there was a willingness expressed on the part of the government of Israel. Q. Have you gotten any response back from your offer to meet with Palestinians when you're in Israel? And, there's a second part to that--as you go into Israel, there are new reports of the Israelis shooting and wounding Arabs after a disturbance--it seems that there's quite a lot of violence. What kind of signal does that send to you as you embark on a peace process? Secretary Baker. Well, obviously we have expressed our deep concern about violence in the past. I don't know the circumstances of the incident that you're talking about, so I don't want to comment beyond saying what I just said. With respect to the question of meeting with the Palestinians, it's my understanding that we have received some indication very recently that there was an interest on the part of some Palestinians in meeting with us, and, as far as I know, they're still working that question; I don't have a final answer for you. Q. Their statement seems to suggest that they did not support all of what President Bush had to say the other night although some participants said they did. Can you tell us whether they supported everything the President said on the issue of Arab-Israeli peace in the speech? Secretary Baker. I don't know--we did not sit down and go line-by-line through the President's speech, nor for that matter his interview with--the recent interview he had, I don't remember who the three journalists were. But in their general comments they were very supportive of the President's speech and conveyed their overall general agreement, I think, with the thrust of what he had to say. Q. Then I just want to add--can you tell me what it is you see in this statement that gives you the optimism or the hope that you expressed earlier about their willingness to be more forthcoming and change their view? Secretary Baker. I didn't suggest to you that my optimism-- don't by the way, don't make me overly optimistic, because I don't mean to be--but whatever sense I have there of a greater willingness to be active derives not just from that formal statement that's been put out. Q. Can you talk in a little more detail about the Gulf security structure? What kind of role are we going to have, what kind of role would they like us to have, what are your concerns about Iran, and how are we going to get 537,000 troops home? Secretary Baker. On the last question, I'm not going to get into that because that's basically an operational matter that the Defense Department could better answer for you, except to say that the President continues to make it clear that he wants to bring all of our forces home at the earliest possible opportunity. He continues to make the point that we do not desire a permanent ground presence in the Gulf, a fact that has been communicated in the meetings that I've had with all of these representatives--all of the governments that I've met with here--and one that I feel comfortable telling you that they not only accept but agree with. With respect to the security structure, let me say that we're talking about various levels. We're talking about an enhanced GCC. We're talking about an Arab force much as was indicated by the Damascus communique of these very countries that I've just met with that would be, in addition to GCC forces, would contain Egyptian and Syrian elements. We are talking about a role for the United Nations in terms of observers, particularly with respect to the Iraq-Kuwait border. We are talking about as well the possibility that the United States--not the possibility but the probability--that the United States will continue its naval presence in the Gulf which it has maintained for over 40 years, perhaps enhanced. We will be discussing with some countries in the Gulf the pre-positioning of equipment. We will be discussing as well, joint participation in training exercises and things like that.
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Two-Track Approach Toward Peace in the Middle East

Baker, Levy Source: Secretary Baker, Israeli Foreign Minister David Levy Description: Joint news conference, Jerusalem, Israel Date: Mar 11, 19913/11/91 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Israel Subject: Mideast Peace Process [TEXT] Q. Mr. Secretary, either in your talks tonight or in your meeting tomorrow with Prime Minister Shamir, have you or will you ask Israel to commit itself in principle to trading land for peace? Secretary Baker. I have not asked that during the course of the discussions tonight with David Levy. I don't think it comes as any surprise to all to know that the US policy position calls for a comprehensive settlement based on direct negotiations on the basis of [UN Resolutions] 242 and 338. And of course, President Bush made specific reference to this policy position in his address to the Congress several nights ago. Let me say that I do not come to Israel, to the region, with any specific, particular blueprint with regard to peace. But I do come with ideas. I come with a desire and a willingness to explore ideas that might be generated by others. I have corresponded with the minister about the importance of our developing ideas that might lead to peace. I told the minister and his colleagues this evening that I think that there are great opportunities in the aftermath of the recently concluded war; that I think the time is now for us to try and seize the moment to try and take advantage of these opportunities; that I sensed during my 2 days in Riyadh the beginnings of perhaps a bit of a different attitude on the part of some countries; that we would like to pursue the possibilities of peace on a dual track--moving in parallel on the track of Arab state-Israeli relations and on the path of Israeli- Palestinian relations, dialogue, and so forth. Q. Mr. Secretary, when your Administration speaks of political rights for the Palestinians, do you mean self-determination or do you consider self-rule, autonomy in the territories, as political rights? Secretary Baker. Well, I think that discussions of self- government fall within the definition of political rights. I think that the term is one that needs further definition and is subject to further definition, and perhaps further definition through direct negotiation between the parties. Q. Mr. Secretary, you spoke of what you sensed in Riyadh which sounds not quite concrete. Did you hear real, specific words from any specific Arab leaders of any specific step they're prepared to take to accept Israel, or do you just find a sort of an atmosphere that you find conducive to pursuing this mission? And secondly-- Secretary Baker. Let me answer the first question first, because I'll forget it by the time you ask your third question, so-- Let me elaborate on that by saying that on this trip, so far, I have seen what I consider to be at least signs of new thinking. I have seen what I consider to be a willingness to consider new approaches. I think that whether that ripens and materializes into specific, concrete commitments will depend in large part upon whether or not there is a similar attitude coming from the other side of the equation. And we hope very much that there will be. I have heard from others that the United States as a consequence of this recently concluded war has acquired an even greater credibility than it had before with Arabs and with Israel; I hope that's true. I don't assume it. And I hope when I say that, that it is understood that I do so without arrogance or without any sort of hubris. But I do want to say that it is the firm hope and desire and wish of my government, of my president, that we will not let what could be an historic opportunity pass for want of a willingness to commit ourselves to do the real, hard work of peace. Q. Mr. Secretary, I'll change my follow-up then, based on what you've just said. Then you spoke of looking for an attitude here. Is it correct then that here, too, you're not soliciting specific moves, specific actions from this government--you're trying to solicit some disposition, some attitude, some sense of giving to equate the sense of giving you found on the other side? Secretary Baker. That's a pretty good way to express it, I think. I'm encouraged by what I think was a very positive meeting that David and I have just concluded, together with our colleagues. Of course let me say that this war was only recently concluded. We are dealing here--talking about--an issue that is extraordinarily intractable, has proven to be so for many, many years. It will take a great deal of work and a great deal of goodwill, and a great deal of good faith on the part of all. The United States is committed to working just as hard as it knows how to contribute to the process. It is our view that we hopefully can serve as a catalyst, but we cannot impose peace. We would not try if we thought we could. We do not intend to engage in what some have referred to as pressure. We intend to reason, to cajole, to plead, and to offer our good offices to see if we can seize this opportunity and make progress for peace. Q. Mr. Baker, you are interested in the Palestinian-Israeli dialogue. There are Palestinians who are facing major problems in the occupied territories, both in the sense that political discourse is not allowed--it is illegal to have any kind of political meetings- -and economic problems are very difficult with more than 120,000 people out of work. Will you nudge or cajole or plead with the Israelis to legitimize political discourse, including legitimizing support or sympathy with the Palestine Liberation Organization (PLO)? Secretary Baker. Including what? Q. Would you encourage them to legitimize political discourse, including sympathy or support or membership of the PLO, which is illegal now? And secondly, would you encourage them to ease the economic strain on the Palestinians in the occupied territories? Secretary Baker. Certainly we would like to see the economic strain and burden eased. Certainly we could like to see--being people who believe as strongly as we believe in democracy and knowing that Israel is the only real democracy now in the region-- we would like to see freedom of expression; we would like to see democratic principles permitted to flourish. We have our problems with the PLO, as you know. We used to have a dialogue with the PLO. That dialogue is terminated. We think the PLO made a substantial error in supporting Saddam Hussein in his brutal invasion and suppression of an Arab nation. Foreign Minister Levy. [Foreign Minister Levy's remarks as translated.] With your permission I would like to add to the question which was put to you here. Israel aspires to see to it that the Arab population in Judea, Samaria, and Gaza may have the benefit of the freedom, of true freedom, which Israel only has in this part of the world. In other words, we would like to enable this population to improve its economic situation, just as Israel makes it possible for the Arab population to do. All of these aspirations can be realized. This can be done and the affairs of the population can be managed by the population itself. Israel has proposed this, and continues to do so, provided of course, the population we are referring to behaves in keeping with what such an approach would require. When this population is incited to lash out against Israel, to wreak destruction, to kill people, to commit murders, as you saw with your own eyes just yesterday in that heinous and barbarous act, the slaughter of women, innocent women without protection, in a manner which is unspeakable, and in fact cannot even be compared with what an animal would do because no animal would commit such a murder. When such a population then is incited to such deeds, and to murder of fellow Arabs as well--in fact 500 men and women were killed in this manner, barbarously--when anyone thinks that on the one hand such tactics can be adopted, terrorist tactics coupled with destruction, while on the other hand benefiting from full rights--this does not even exist in the world to come. It simply cannot be. So that Israel cannot but adopt measures designed to protect its own security and the security of its population. Our desire is to see a different era open--an era in which this population no longer follows the incitement of these terrorists, of these wreakers of destruction who have led them into an impasse-- who have led the population into a road which spells no hope. If, indeed, they decide to follow the course of peace, and we do, indeed, offer the course of peace to them--we strive for peace--and we have reiterated this point--we have repeatedly reiterated the peace initiative of the government of Israel in 1989. If they are responsive to this, they will discover that Israel is at the forefront of those who have offered this population the possibility of taking part in determining their own fate. No one proposed this before Israel did--no one, not the British, certainly not the Jordanians, and we are in fact interested in resolving the problem. We will not give in. We will not be brought to our knees by terrorism. We will stand firm. We will stand up to any attempt to lash out against our citizens, and against that population itself, while at the same time holding out our hand to them, offering them freedoms and liberties and the possibility of managing their own affairs--the affairs of the population--sitting around the same table and discussing this peacefully, not in a manner which is marked by murder and destruction. Therefore, the option is open to this population--the option to choose to respond to this population--the option to choose to respond to this initiative at long last. It is time that this came to pass, just as my friend, the Secretary of State Mr. Baker said, we find ourselves following two parallel courses--two lines of action- -both of which offer a definite hope of making progress toward peace. As far as Israel is concerned, peace is the greatest victory of all. To date, there was a refusal among the Arab states to talk face-to-face with Israel about peace. I am pleased that they are beginning to show signs of change, and we will have to work together, patiently and courageously, with a sense of faith and hope in order to move towards the goal which is best for all of us--peace in this region. Q. Mr. Foreign Minister, are you speaking of the beginning of a change on the Arab side? From the standpoint of Israel have you drawn encouragement from anything Mr. Baker told you about positions expressed by the Arab states where he visited? Is there any change which shows a direction toward Israel? A move to Israel? Foreign Minister Levy. The discussions which we had this evening first of all from the standpoint of both nations, were frank ones, open ones, and constructive ones. We share a common interest--the United States and Israel. The United States in this regard does not have any interest which runs counter to the need to coordinate with Israel and to agree with Israel on the measures being taken, and we appreciate this deeply. What we have heard--and we will, of course, keep discussing this and working on this--certainly shows encouraging signs which we did not see until now. If we do succeed in continuing to cooperate in reinforcing this direction, we will together succeed, with the nations of this region, in coming closer to those goals which seemed so far away until recently. We will have to continue working in that direction, but we are closer than we were just yesterday. Q. Mr. Secretary, did you hear any new thinking tonight from Foreign Minister Levy, and do you think that if what Israel offers is the May 1989 Shamir plan, that that will be sufficient for the Arab states--that that will be sufficient political cover for them--to then go ahead with some of the measures you've been talking about with them? Secretary Baker. Let me say, I think it's important to recognize that all parties should avoid retreating into stating final positions as being non-negotiable demands. We should move--if I can borrow a phrase--to new thinking and away from old thinking. As I mentioned, the sense I got on my trip was that there is a chance for new thinking. I think you just heard the minister say he was somewhat encouraged by what he heard, and maybe we have a chance now for some new thinking in both directions. It is not--we will not make progress on either track frankly, either, if one side or the other says we do not move until after the other side moves. And I did not detect that attitude or position here tonight. And so to answer your question, I remain cautiously optimistic that maybe we can capitalize on what has been a very significant event in the region, and in the aftermath of this war, maybe we can begin to grapple with this issue--these issues--and move toward peace, which is the best guarantee of security for the region. Q. Would you just answer my question on the May 1989 plan? Secretary Baker. The May 1989 plan--I expressed to the minister our pleasure that the government of Israel--that the cabinet of the government of Israel--reconfirmed that plan. As you know, we worked very hard for a period of 14 months to implement that proposal; came very, very close; we didn't quite make it at the last minute, but there are many features, and many elements of that proposal that we view very favorably. We think there are elements of that proposal with which the parties can work. Q. Mr. Secretary, I'm wondering if you feel on this trip, that not enough of the flexibility that you mentioned is expressed. I wanted to know what is the commitment of this Administration to keep coming back to the region and keep trying it again and again, or is this like take or leave it--I mean this is an exploratory visit-- are we in a take it or leave it situation if the parties don't do enough for throwing up our hands. That's one point, and the second question is, can you tell us-- Secretary Baker. Let me answer the first one, then you ask the second one, OK? We are certainly not in a take it or leave it. As I just said, we do not come with a particular, specific blueprint. We come with some ideas. We hope we'll hear some ideas. I think we've heard some ideas in the first couple of days. I believe we've heard some ideas here this evening. We cannot impose peace. There will not be peace in the region unless the parties themselves conclude that they want peace and are willing to do the hard, nitty- gritty work that's involved in getting there. For our part, the United States is willing to do the hard, nitty-gritty, repetitive work that will clearly be involved if we're going to make progress on his very, very difficult problem. Q. The support that this Administration has shown until now for Soviet Jewish immigration is known here, and I was wondering if you could say definitively that any future assistance, be it in housing guarantees or other forms of assistance, would be totally unlinked to progress in the peace process or totally divorced from any movement that you have been speaking of? Secretary Baker. We have not linked aid to progress on the peace process, and I told the minister tonight that there's one thing of which he and the government of Israel should be very, very sure, and that is that the commitment of the United States to the security of Israel is firm. That will not change; that will not waiver. We are willing to work very, very hard. We think and hope that we can serve as a catalyst, and particularly in the aftermath of what has just taken place in connection with this war.
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Two-Track Approach Toward Peace in the Middle East

Baker, Shara Source: Secretary Baker, Syrian Foreign Minister Farouk Shara Description: Joint news conference, Damascus, Syria Date: Mar 14, 19913/14/91 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Israel Subject: Mideast Peace Process [TEXT] Secretary Baker. I will start by telling you that in the meeting last night with President Assad and Minister Shara, we covered a number of different topics and subjects. Of course, we discussed in detail the four broad issue areas that I have been discussing during the course of my trip in the region, and I will continue to discuss as we move on now to Moscow. Those four issue areas being regional security in the Gulf; arms control and proliferation; economic cooperation; and the Arab-Israeli conflict. We also talked about hostages; we talked about Lebanon and the importance of implementing in both letter and spirit the Taif agreement. We talked, as well, about terrorism. With respect to the question of the Arab-Israeli conflict, I think that the minister would agree with me that we find ourselves in agreement with respect to sharing a commitment to seek a comprehensive settlement based on UN Security Council Resolutions 242 and 338. We find ourselves in agreement with respect to the fact that there is, we think, a window of opportunity now in the aftermath of the Gulf crisis that should be seized, if at all possible--a window of opportunity which could make it possible for us to make significant progress in resolving the Arab-Israeli conflict. I sense a very serious intent on the part of the Syrian government to pursue an active peace process and to continue to work toward that end with the coalition countries that worked together to reverse Saddam Hussein's aggression. Q. Mr. Secretary, after the Gulf crisis has ended, now there is determination by the international community to implement UN resolutions regarding the Arab-Israeli conflict, as the Italian foreign minister said here a few days ago, that there should be no double standard in dealing with this issue. What are you going to do as the United States on this respect? Secretary Baker. I agree that there should be no double standard, and I would submit to you that, indeed, there is not. The United States, as evidenced by the activity in which I have been engaged over the past 4 or 5 days, is going to be very vigorous in attempting to use whatever influence and good offices it might have to pursue a comprehensive settlement based on those UN Resolutions, 242 and 338. Q. Mr. Secretary, after Saudi Arabia, you said you had heard "new thinking" from some of the Arab leaders you had met with on the peace process. After talks here, you said you are leaving with a sense that the Syrians want to proceed with things. But, do you have a sense of new thinking here by the Syrian government on how to break the deadlock in the Arab-Israeli conflict? Secretary Baker. I have a sense, as I have just mentioned, that the Syrian government agrees with the US government and other governments that there is now a window of opportunity--that we should all be very active in trying to capitalize on that. But, that's not to say that we don't all realize the difficulties of this problem. It is very intractable. It has been there a long, long time, and I sense a desire, frankly, on the part of the Syrian government to pursue an active peace process and an active role in that process. That sense is pretty much the same as the sense that I had in the meeting in Riyadh with the eight Arab countries that formed part of the coalition that fought the Gulf war. Q. Minister Shara, is there any change on the hostage situation? Do you see any progress with the release, the freedom for the Dawa prisoners? Does that change the situation? Have you had any recent talks that might indicate that that problem would be set behind? Minister Shara? Minister Shara. What was our question, please? Q. On the hostages, sir, have our--had any recent information that would suggest that there might be progress toward freedom for all Western hostages, particularly now that the Dawa prisoners no longer are being held? Minister Shara. Well, we have the feeling that the hostage issue has to be resolved, and we would exert maximum effort to help in securing the release of all the foreign hostages in Lebanon and we are not pessimistic that this will happen. Q. Mr. Secretary, are you satisfied with Syrian progress on the issue of terrorism, or do you still feel it is necessary for Syria to do more to be removed from the terrorist list? Secretary Baker. We still have some differences on this issue, differences that we discussed last night. We would like to resolve this problem, and I am confident that the Syrian government would like to resolve the problem. I do believe that there has, as I said in Washington, that there has been progress. We hope that there can be some further progress, and we intend to continue the dialogue which we have had on this issue to see if we can make further progress. Minister Shara. Let me try and add to, or just to clarify what Secretary Baker has said. Well, the difference on terrorism is not on our joint desire and will to combat terrorism, but the difference is on the definition of terrorism--what is terrorism and what is not terrorism. Q. Mr. Secretary, what if Israel refused to implement Security Council resolutions concerning the Middle East crisis, and what would be the US position toward--particularly after Mr. Bush said that we are going for peace with the same force as we went for the war. Secretary Baker. Well, I don't think we ought to assume that countries, particularly countries that are directly involved will not be participating actively in the search for peace during this window of opportunity that has been presented. I am quite confident that they will be. The sense that I got from my trip to Israel of a day or so ago was that that government shares a strong desire for peace and so I can't accept the hypothesis of your question. But let me say that the President was very clear in the statement that he made to the US Congress, and I had just said it again here today that the US policy position is that we support and will actively work for a comprehensive settlement based on 242 and 338. Q. Mr. Secretary, can you please tell me why the United States has not dealt with or talked with the Iraqi opposition which has just been meeting in Beirut, even though the Turks have and the British have? Are we, are your people authorized to talk with the Iraqi opposition that is [inaudible] together? Secretary Baker. The question of what government Iraq ends up with in the aftermath of this crisis is a matter for, and we have said, for the Iraqi people to determine. Now, I don't want to comment any further beyond saying that. Q. Mr. Secretary, is Syria still receiving missiles from North Korea, and, Mr. Secretary, did this come up in your talks? Secretary Baker. There is, in our opinion, there has been recently a delivery of Scud missiles to Syria. We discussed at quite some length the importance of addressing the question of weapons of mass destruction and the instruments of delivery, therefore. I thought I'd make that clear. Q. Minister Shara, would you comment on that question, please? Why is Syria continuing to seek additional supplies of those types of weapons against which Syria fought so recently with Iraq? Foreign Minister Shara. Well, Syria is still in a state of war with Israel, and Israel has so many missiles and so many different types of mass destruction weapons. Yes, a just and comprehensive peace would solve all these problems. We aspire, of course, to see our region free of all mass destruction weapons. Q. Mr. Secretary, don't you find it significant that countries that subscribe to 242 and 338 on the record in the Security Council in 1967 and 1973 are talking to you about 242 and 338? What has progressed here? Israel, Syria, they all agreed on the UN resolutions. Is there some new interpretation of it? Did you find a new sense of willingness to go further? What is it that makes it significant? Secretary Baker. I think that what makes the situation perhaps significant today, and as I've made very clear as we left on this trip, we are dealing with perhaps the most intractable problem I think that there is, and we ought not to let expectations get out of control. This is very early in the process of trying to address this problem in the aftermath of the war, and what is significant is that there has been a change in the region as a consequence of what has happened in the Gulf, and I think that all countries involved on all sides really want to try to seize this opportunity, if possible, to make progress. It's going to take that kind of an attitude if there is going to be peace in the region. I want to say one more time that the United States sees its role as that of a catalyst. We believe there is some enhanced credibility here as a consequence of what has happened in the Gulf. We say that with a total absence of arrogance, as I pointed out in Israel. But, nobody can impose peace in the Middle East, if the parties to the conflict don't really want real, true reconciliation. And I think, in the aftermath of this Gulf war, that there is a better chance than there has been before that the parties will want real reconciliation. Q. You say better chance, but are you ready to say--you've met with the foreign ministers of nine Arab countries only one of which has accepted Israel. Can you, as you end this trip, say there are others that now will accept Israel, or do you sense-- Secretary Baker. I don't understand the question-- Q. Well, there's only one Arab country at peace with Israel-- Secretary Baker. There is one Arab country at peace with Israel, and we need to move the process forward so that there is a complete peace between Arabs and Israelis, and you've got to take it a step at a time. You have to crawl before you walk, and you have to walk before you run, and we've been at it for maybe 5 or 6 days, and it's a little bit premature to be, it seems to me, suggesting that somehow there is no opportunity here because we haven't had instant peace. Let's work at this. This is extraordinarily difficult, and I think, if I can say this, I think it's reasonably significant that the Foreign Minister of Israel made the statement that he made in the aftermath of our visit there, that the Prime Minister said what he said. I think it's reasonably significant that you find the degree of agreement that exists here between the United States and Syria on approaching this issue and between the United States and eight Arab countries. Now, maybe you don't think that's progress, and maybe it isn't. Maybe the wheels will come off tomorrow. Let's give it a chance. We're not going to get there if we're not willing to work at it--the United States is willing to work at it, and see if we can serve as a catalyst to peace. Q. [Inaudible]--that you are going to use your influence and your good offices with Israel, do you think this will work? Secretary Baker. Well, I hope so. We certainly believe that we, as a strong ally of Israel through the years, should have the ability at least to reason with Israel, help Israel to understand-- which I think they probably already understand--nobody benefits more from true reconciliation and true peace than does Israel. Q. Since you saw Prime Minister Shamir, could you tell us whether or not you saw any evidence of new thinking on the Prime Minister's part? Secretary Baker. Well, I think you heard what the Prime Minister's press spokesman said in the aftermath of our meeting, and I really do believe that the Prime Minister is willing to, again, work actively in the aftermath of this crisis to seek peace. Q. [Inaudible]--that showed that there was perhaps more convergence than you've seen before? Secretary Baker. I'm not going to get into the specifics and the details. It's premature to do that. I think that the government of Israel is strongly interested in moving rapidly and actively toward peace. I certainly hope that's the case. I hope that's the case with the Arab parties to the conflict. Q. You seem to have better relations with the Arab governments in the region as a consequence after the war, but what about the people in the Arab countries, considering that most of the governments aren't democratically elected--surely the government might have better relations but the people--[inaudible]. Secretary Baker. That was a question that was asked on August 3, if you recall: the region was going to go up into flames, that things were going to totally fall apart on the street. It didn't happen, did it? It didn't happen to anywhere near the extent or degree that was predicted. And I certainly don't think that it's going to happen in the aftermath of a successful stand against aggression by eight Arab countries and a coalition of other countries around the world. Q. Just by definition, do you think that there is a difference between Iraq's occupation of Kuwait and Israel's occupation of the Syrian and Palestinian lands [inaudible]. Secretary Baker. Do I see a difference there? I see a difference there. I see a difference in how it came about, certainly. Foreign Minister Shara. I will comment on that question. I don't think that Secretary Baker is talking about the significance and the importance of using one standard, that is the UN Security Council resolutions which will resolve the Arab-Israeli conflict. I think he means the difference in the way that things are taking place, but the substance we are in full agreement that international [inaudible] and UN Security Council resolutions have to be abided by and to be implemented [inaudible]. And the Palestinian question, I can say that this double standard should not only be used and we are optimistic [inaudible]--that's why we are optimistic for the future. That's why we see a window of optimism and hope to give the momentum to the peace process in our region. Q. This window of opportunity you're talking about, does that have a limit; is there a deadline since we have to think ahead toward the next election cycle? Secretary Baker. We really don't know the answer to that. We don't know. We don't know how long the window might be open, and that's all the more reason why we think we ought to all work as actively as we can to try and take advantage of whatever time there is. We don't know. Q. You don't have a time set? Secretary Baker. We don't know. Foreign Minister Shara. Let me just say a couple of words-- that the visit of Secretary Baker to Damascus and the talks that he held yesterday with President Hafez al-Assad and myself were positive and constructive, and they will help all of us to work actively for a just and comprehensive settlement of the Arab- Israeli conflict and the Palestinian question. We are optimistic that this opportunity will be utilized in the proper manner, and we don't like to see the first Gulf crisis era as the same era in the past. That's why we will keep contacts, and there was agreement on keeping in touch and keeping these contacts in order to give a momentum to the peace process for the months to come. (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

US Policy and Funding Priorities in Latin America and The Caribbean for FY 1992

Aronson Source: Bernard W. Aronson, Assistant Secretary for Inter- American Affairs Description: Statement before the Subcommittee on Western Hemisphere Affairs, House Foreign Affairs Committee, Washington, DC Date: Mar 5, 19913/5/91 Category: Speeches, Testimony, Statements Region: South America, Central America Country: Mexico, Guatemala, El Salvador, Nicaragua, Panama, Brazil, Colombia, Peru, Bolivia, Chile, Argentina, Uruguay Subject: Trade/Economics, Narcotics, Security Assistance and Sales, North America Free Trade [TEXT] I am pleased to be here this morning to share with you and the subcommittee my perspective on the state of our hemisphere and US policy. I want to discuss the Administration's policy priorities with regard to Latin America and the Caribbean and to present our security assistance request for fiscal 1992. We want to work with the Congress to achieve five basic objectives in this hemisphere: consolidating democracy and advancing human rights; encouraging economic reform and development in which the poor will benefit; promoting regional peace; ridding the hemisphere of the scourge of drugs; and cooperating with the nations of this hemisphere on a post-Cold War agenda of safeguarding our environment and stopping the spread of missile and nuclear weapons technology around the world. The opportunity to achieve these objectives is great. In the last decade, voters led a political revolution throughout the Americas, burying a tradition of dictatorship through the peaceful act of going to the polls. In this decade, the leaders they elected are driving an economic revolution of equally far-reaching consequence. Revolution is a strong word, but it is no exaggeration. When Argentina sells its state airline and telephone company to private companies, that's revolutionary. When Mexico cuts its tariffs from over 100% to an average of 10%, that's revolutionary. And when Jamaica opens its largest export industry--tourism--to private investment, that's revolutionary. These are but three examples of a sharp turn to a new economic philosophy that sees opportunity, not danger, in economic freedom and full participation in the competitive international marketplace. This revolution is widespread, but it hasn't yet succeeded. In many cases, it involves a political struggle against the entrenched elites that benefit from the privileges of the old, protected economic system. Let there be no doubt that we have a profound interest in its success. A democratic hemisphere with modern, open economies will be a stable hemisphere. It will be a hemisphere that fulfills the promise of human rights, not just as people vote in elections but as they make free choices in the marketplace. It will be a hemisphere of social justice, where greater economic freedom leads to a broad- based prosperity. And it will be a hemisphere that offers increased opportunity for American workers and businesses. Right now, about 13% of our exports--$47 billion in 1989--go to Latin America and the Caribbean. If you doubt that successful economic reform in Latin America can make a difference to the US economy, just look at Mexico, a country leading the way in economic reform, where our exports have doubled between 1986 and 1989. To help this economic revolution succeed, and to achieve our broader objectives in this hemisphere, we need the help of Congress. Reauthorization of fast-track negotiating authority for free trade agreements is essential, not just for the North American Free Trade Agreement with Mexico and Canada, but also for the President's vision of an entire hemisphere free of trade barriers. The Enterprise for the Americas Initiative offers more than the vision of free trade--it encourages the free flow of international investment and offers new opportunities for debt reduction and environmental protection. To make these investments and debt initiatives possible, we urge Congress to pass the Enterprise for the Americas Initiative act. As we ask the Andean nations to stop the supply of cocaine, we need to respond to their need for greater export opportunities. The Andean trade preferences act is a key component of the war on drugs, and I urge you to support its passage. Our foreign assistance request is the absolute minimum we need to help our democratic partners to reach the political and security goals we have in common, and we need your help in securing its approval in Congress. I want to underscore one central point: we stand to benefit from a period of nearly unprecedented opportunity in this hemisphere. Democracy is strong. Economic policy is on the right track. Nations want to cooperate with us in the war on drugs. We have ended the rancorous debate over Central America that distanced us from our neighbors and divided us at home. This hemisphere is turning to the democratic processes and free market policies the United States has long espoused. The question before us is whether we can take yes for an answer. We owe it to our neighbors and to ourselves to respond with energy and creativity to the extraordinary opportunities before us.
The Persian Gulf
Let me turn briefly to the Persian Gulf and this hemisphere's reaction to the crisis. We are heartened by the nearly uniform solidarity of the hemisphere to the crisis. Argentina provided two ships for the allied effort, and Honduras offered troops. Venezuela, Mexico, and Colombia all boosted oil production and exports to make up for the Persian Gulf production shortfall. Every country in the hemisphere except Cuba has supported the sanctions against Iraq-- even though for some it means real economic sacrifice. And even Cuba condemned Iraq's invasion of Kuwait. We have also enjoyed full cooperation in protecting against terrorist threats related to the Gulf situation.
The Caribbean
On February 7, I attended the inauguration of the first democratically elected Haitian president in recent memory. The atmosphere in Port au Prince was full of optimism, as Haiti joined the hemisphere's democratic mainstream. Under the auspices of the OAS [Organization of American States] and the UN, and with US financial support, some 200 election observers from 22 countries witnessed the Haitian election and helped guarantee its fairness. I am proud that insistent US support for democratization in Haiti, and financial support for the elections, contributed to this happy result. In the past year this support included an invitation to interim President [Ertha Pacal] Trouillot to meet with President Bush in Washington and a visit to Haiti by Vice President Quayle. I made three trips to Haiti myself. We are now committed to assisting President [Jean-Baptiste] Aristide in consolidating democracy and improving the lot of the Haitian people. The task is daunting. The poorest country in the hemisphere, Haiti's needs for both human and infrastructure development are enormous. Its infant mortality rate of 12% is twice the region's average, while the percentage of secondary school age population actually enrolled--17%--is one-third the hemisphere's average. Sound growth-inducing policies and well-targeted social investments can, however, move Haiti rapidly forward. At President Aristide's request, we also are re-examining the sensitive issue of Haitian migration to the United States. The island nations of the Caribbean are among our closest neighbors and best friends. Most of them are poor, with a narrow economic base. This leaves them vulnerable to sudden changes in the world economy and, most dangerously, to exploitation by drug traffickers. Through the Caribbean Basin Initiative and the Enterprise for the Americas Initiative, we want to help these nations diversify their economies through expanded trade and investment. In most of the Caribbean, democracy and respect for human rights have quietly flourished for a quarter century. The exceptions to this trend remain Suriname and, of course, Cuba. We deplore the December military coup in Suriname that overthrew a democratically elected government. We urge the interim government in Paramaribo to keep its pledge to hold free and fair elections on May 25, to make them open to full international observation, and to respect the results. OAS Secretary General [Joao] Baena Soares also has insisted that the present government guarantee the observers' autonomy in carrying out their mission. We are also concerned about indications that Suriname is serving as a transit point for cocaine shipments to Europe and, more recently, the US. This hemisphere will not tolerate another drug dictatorship. In Cuba, where a Marxist dictator makes all the decisions, there is little consideration of democratic reform, and human rights are systematically denied. Defenders of human rights are routinely intimidated or arrested for exercising their basic right of free speech. One example is Samuel Martinez Lara, the leader of the Cuban Human Rights Party. He was jailed for nearly a year without charges, then last month was accused of "non-violent rebellion" and sentenced to 3 years' probation. Even after the wave of democracy that swept Eastern Europe, the Cuban government has rejected international calls for a plebiscite. As Cuba's former allies in Eastern Europe have turned to democracy and economic freedom, they have limited their economic relationship with Cuba. Aid from Eastern Europe is almost non- existent; trade once amounting to 15% of Cuba's total trade is less than half its previous level. Soviet oil deliveries fell by 20% from 1989 to 1990 and will remain at 1990 levels this year; aid and technical assistance will be reduced. In an interview on February 14, Fidel Castro described the impact on Cuba's economy of changes in Eastern Europe and the Soviet Union as catastrophic. The Soviets have urged Cuba to adopt economic reform in order to compensate for reduced trade and aid; to date, this advice has fallen on deaf ears. Castro's response has been extensive rationing, sending people from the cities to do farm labor, replacing farm machinery with animals, and importing hundreds of thousands of bicycles. The Cuban government's behavior has isolated Cuba--from Cuba's former allies, from the rest of the hemisphere, and from the United States. We would like to see a change in our relationship with Cuba, and I believe that change must come. Our relations with the Soviet Union improved because the Soviet Union committed itself to new thinking in foreign policy and undertook economic and political reform. The critical question is, when will the Cuban government see that reform--both political and economic--is inevitable? Our hope, like that of many Cubans, is that democratic change will come soon and peacefully.
Mexico
Nowhere in the hemisphere are the prospects for a closer, more cooperative bilateral relationship brighter than in Mexico. President Carlos Salinas has embarked on a bold course of economic reform. We should assist and encourage his efforts. The Salinas administration has reduced tariffs, privatized state-owned companies, and announced its readiness to negotiate a free trade agreement with the United States and Canada. A North American Free Trade Agreement is an important goal of this Administration. It will and already has given momentum to the entire hemisphere's drive to lower trade barriers. Already, Argentina, Brazil, Uruguay, and Paraguay are negotiating a common market for the southern cone. Already, the Andean nations have established an ambitious plan for regional economic liberalization. If Congress fails to approve fast track negotiating authority, it will send a crushing, negative signal to the entire hemisphere at a time when our neighbors, after a decade of stagnant growth rates, are moving aggressively to remove barriers to global trade and investment. A North American Free Trade Agreement will spur growth in both the US and Mexico, and it will help make both economies more competitive vis-a-vis the rest of the world. Free trade with Mexico also means jobs--not jobs lost but jobs gained. According to US Department of Commerce estimates, every $1 billion we add to US exports creates 25,000 new jobs for American workers. In 1990, we exported nearly $30 billion in goods to Mexico, double our exports of only 4 years ago. According to that estimate, those increased exports would translate into 375,000 new jobs. But our interests with Mexico go far beyond trade. I can tell you today that our relations with Mexico are stronger across the board than they have been in many years. To cite just one key example, our cooperation in the war against drugs has never been better. We have established the Northern Border Response Force, we are cooperating on patrol flights by US P-3 aircraft, and we have provided helicopters to Mexico to bolster interdiction efforts. We have seen significant progress in marijuana and opium poppy eradication. Most of Mexico's naval operations and 25% of its army personnel are devoted to counter-narcotics activity.
Central America
Central America has made great progress in the last decade and has great opportunity ahead. Elected governments that took the reins of power from military juntas at the beginning of the last decade have been replaced, peacefully and quietly, by new democratic successors. Elections and dialogue have shown the way to ending military conflict. Full regional peace, once achieved, will allow Central Americans to devote their energies once again to the 20-year-old dream of economic integration. This time, the effort will be led by governments that see strength, not danger, in full participation in the competitive world economy. The Central American republics have a common historical identity dating from their independence in 1821. They think in regional terms, and in our day we see that they prefer to address problems through common regional approaches. From Washington, we all see that the crisis atmosphere of the 1980s is past, but we cannot allow this to draw our attention away from this region. Instead, our foreign policy must seize today's opportunities and build on the progress already made. We will keep our focus on Central America, and we want to keep our friends around the world involved as partners in the region's development. During the past year, the Administration has been working to foster an international partnership--the Partnership for Democracy and Development (PDD) in Central America. The objective of the PDD is to pool the energies of the governments of the 24 OECD [Organization of Economic Cooperation and Development] nations, the six Central American countries, Colombia, Mexico, Venezuela, and representatives of key international institutions in a common effort to support democracy, peace, and economic development in Central America. This concept is receiving strong support from key European and Far Eastern nations as well as from our Central American neighbors themselves. I will be going to San Jose, Costa Rica, on April 10, along with representatives of the countries I just mentioned, to participate in the partnership's organizational meeting.
Guatemala.
The recent elections in Guatemala and the inauguration of President Jorge Serrano are clear signs of progress and hope. This marks the first time in Guatemala in 40 years that the candidate of an opposition party has been elected in a free, honest vote and allowed to assume office peacefully. During the [Vinicio] Cerezo administration, Guatemala's failure to effectively pursue the investigation of the murder of an American citizen, Michael Devine, made it necessary to suspend security assistance in December 1990. Earlier, other failures to prosecute human rights cases led us to recall our ambassador in March 1990. In contrast, the first signals from President [Jorge] Serrano--starting in his inaugural address, when he warned the security forces that their human rights violations would no longer be met with impunity--tell us that Guatemala has a president who is firmly committed to establishing civilian authority over security forces and instituting broad respect for human rights and the rule of law. President Serrano's economic policies show similar promise, and we are engaged in an active dialogue with him and his government to help him meet these important goals.
El Salvador
Voters in El Salvador will go to the polls on March 10 to elect all 84 members of the Legislative Assembly, plus mayors and municipal council members in all 262 municipalities. Twenty-four seats were added to the Legislative Assembly as the result of an agreement among the full range of Salvadoran political parties. Twenty of these seats will be filled by at-large candidates running on national lists--this should help smaller opposition parties to win seats. This will be the seventh election since an era of democratic reform began in El Salvador in 1979. The people of El Salvador alone deserve the credit for this achievement, and for the broad political space beginning to be enjoyed by people of all points of view. But we should be proud of our role--consistent US support for the democratically elected governments of the late President Jose Napoleon Duarte and President Alfredo Cristiani has been an important factor in the expansion of democracy in El Salvador. Like previous elections in El Salvador, this election will take place under the microscope of international observation. The OAS, to its great credit, is leading the observation effort with over 120 observers deployed in El Salvador's 14 departments, including those where military conflict has been most intense. I would note as well that last year El Salvador's economy-- despite the systematic destruction and violence wreaked upon it by the FMLN [Farabundo Marti National Liberation Front]--enjoyed positive real growth and one of the lowest inflation rates in the hemisphere. That is a tribute to the reform policies of the Cristiani government, but bipartisan US support for economic reform-- steady, patient, continuing--also contributed significantly to this achievement. Over a year ago, the world was shocked by the brutal murder of six Jesuits, their housekeeper and her daughter in San Salvador. Even though nine Salvadoran officers and enlisted personnel were arraigned in this case--and four others have been charged with obstructing justice--the armed forces have not fully cooperated in the investigation. The government of El Salvador knows that the disposition of this case will deeply influence our future relationship.
Nicaragua.
At the same time, under the auspices of the United Nations, negotiations between the government of El Salvador and the FMLN aimed at bringing an end to El Salvador's decade-long civil conflict continue. The US fully supports these negotiations and hopes that the international community will energetically support a prompt, negotiated solution to El Salvador's civil war. There are many obstacles in the path of a lasting peace and sustained democratic rule in El Salvador, but I am still optimistic that this is the year for peace in El Salvador. In Nicaragua, the democratically elected government of Violeta Chamorro will soon celebrate its first anniversary. Nicaraguans still bear the heavy burden of a decade of Sandinista misrule--high inflation, unemployment, a bloated and costly collection of bureaucracies and state enterprises, and deep social division. But President Chamorro has brought a new spirit of optimism with her tireless effort to heal old wounds and the promise of thorough economic reform. She already has several achievements to her credit--the war is ended, the resistance peacefully demobilized, the state's foreign trade monopoly is abolished, wasteful subsidies have been eliminated, confiscated properties are being returned, and the army has been reduced by over 50%, to name just a few. National reconciliation is moving forward despite the tragic assassination of Enrique Bermudez and the killing of some 40 former Resistance fighters over the past year. We join with President Chamorro in condemning such violence and urging those responsible to end the last vestiges of political polarization and join in the effort to move the country toward greater individual freedom and economic well-being. Our aid programs are playing a significant role. Working with $30 million in funds we provided, the International Commission of Verification and Assistance--directed by the OAS and the UN--has helped some 90,000 former combatants and family members of the Nicaraguan Resistance to return to civilian life. Since Mrs. Chamorro's election, we have pledged $537.1 million in economic assistance to Nicaragua. Of that total, $35.1 million was in immediate emergency assistance. A $300 million assistance package was approved for fiscal 1990, and an additional $202 million for fiscal 1991. Since April 1990, the United States has signed agreements obligating $289.4 million of the 1990 aid package, of which $155.1 million has been disbursed. Of the 1990 funds, $128 million have been set aside to provide balance-of- payments assistance in support of Nicaragua's economic stabilization and structural reform. An additional $50 million has been set aside for the international effort to clear Nicaragua's IDB [Inter-American Development Bank] and World Bank debt arrearages; $47 million has been allocated for the repatriation of the ex- Resistance and refugees; and $75 million is being used for long- term development projects, to generate immediate jobs, to provide new textbooks for the public school system, and for emergency medical supplies.
Panama
Panama is another Central American democracy emerging from a debilitating period of dictatorship. We are working closely with President Endara and his government to strengthen democracy and spur economic recovery. Under President [Guillermo] Endara's administration and with US assistance, Panama's economy grew last year at an annual rate of nearly 4%, among the highest in the region. To assist the recovery, we are providing Panama with some $452 million in economic aid and $500 million in loans and guarantees for fiscal 1990 and 1991, the largest aid package in the hemisphere and the third largest in the world. The United States also made immediately available to the new democratic government some $430 million in Canal fees which was held in escrow for the government of Panama during the last 2 years of the [Manuel] Noriega regime. Part of our aid is repairing war damage, providing new housing for the residents of the Chorillo neighborhood in Panama City, which was destroyed by the fleeing Noriega forces during Operation Just Cause. Other aid has been used for the health care system, public works, and to provide new credit for the private sector. Panama is committed to transform the former corrupt, Noriega-dominated Panama Defense Forces into a civilian-led national police. Most officers above the rank of captain have been replaced. Thirteen million two hundred thousand dollars of our aid is devoted to an extensive police training program administered by the Justice Department's International Criminal Investigative and Training Assistance Program. The first class of police trainees at the newly established US-supported police academy graduated last February 22. At the end of this decade, Panama will assume full control of the canal and its operations, as provided in the 1979 treaties. Last September, in accord with the treaties, the first Panamanian citizen, Gilberto Guardia, was installed as Administrator of the Panama Canal Commission. Panamanian participation in the canal workforce has grown to 86%. It is fashionable to denigrate the achievements of Panama's new democratic government--measuring it against a standard of perfection instead of how far it has come from where it began. But a little over 1 year since American forces bravely liberated Panama in Operation Just Cause, Panama is free; honest and open elections for National Assembly seats have been held; the economy is growing, and unemployment has been reduced by 10 full percentage points; civilians--not the military--make political decisions; the country successfully restructured its official bilateral debt at the Paris Club and is moving to regularize its financial relations with the World Bank, IMF [International Monetary Fund], and Inter- American Development Bank; tough statutes have been enacted on money laundering; the Panama Canal treaties are being implemented; and Panama has been welcomed into the Central American regional economic and political summit talks. The United States can be proud of the role it has played in the liberation of Panama.
South America
The democratic governments of South America today are eager to define their new role in a post-Cold War world and their relationship to the United States, and need our continued support. The large countries of South America--notably Brazil and Argentina--are increasingly important global actors. Democratic Chile will also assert itself on the international stage in the period ahead. We hope to strengthen our cooperation with these countries in key areas such as curbing nuclear proliferation and supporting regional stability elsewhere in the world. Argentina, Brazil, and Peru are still grappling with serious inflationary pressures and a daunting array of related economic problems. These problems derive from the ingrained statist and protectionist economic model which resulted in the region's poor growth record during the 1980s. Most countries in the region have begun to pursue market-oriented and private-sector driven policies. Some, such as Chile, Bolivia, Colombia and Mexico, have made significant progress and achieved deep structural changes. Although reform often carries short-term social costs, these costs pale in comparison to the prospect of repeating another "lost decade" under the old economic policies. The new thinking is taking hold, and in key countries investor confidence is beginning to return.
Brazil
Brazil, President Fernando Collor [de Mello], the first directly elected president in 29 years, has embarked on a bold economic reform program designed to break Brazil's inflationary spiral and liberalize economic and trade policy. Much remains to be done, including reduction of the government's deficit and privatizing state industries, in order to reduce Brazil's high inflation. We are working closely with the Collor government to improve our cooperation in scientific research. We are also working to address the problem of controlling the spread of technologies with potential military applications. The survival and preservation of Brazil's Amazon region is an important environmental concern. In April 1989, the government of Brazil introduced a program called "Our Nature" to preserve the Amazon; it included suspension of certain tax incentives that encouraged deforestation. When President Collor took office, he eliminated those tax incentives permanently. His government is moving aggressively to create guidelines and zoning regulations for land use, with an emphasis on the Amazon. As a further sign of President Collor's commitment to work with the international community to address environmental concerns, Brazil will host the 1992 UN Conference on Environment and Development. The Agency for International Development has also recently initiated a new cooperative program with Brazil to address problems related to the issue of global climate change. Narcotics Control. In the struggle against narcotics, the United States continues to assist the signatories of the Declaration of Cartagena in their efforts to reduce production, improve interdiction, control precursor chemicals, and stop money laundering. Just 2 months after Cartagena, Attorney General [Richard] Thornburgh joined some 20 other ministers of justice in an OAS-sponsored meeting in Ixtapa, Mexico to give region-wide application to the Cartagena principles. With full support from the Administration, the OAS has developed the world's toughest model standards on the export and import of precursor chemicals. Our Justice Department is helping OAS experts to draft comprehensive model codes to curb money laundering in the hemisphere.
Colombia
In Colombia, President [Cesar] Gaviria, like his predecessor, has shown great political courage in dealing with the problems of violent drug traffickers and insurgency. In 1990, Colombia seized over 50 tons of cocaine, destroyed over 200 cocaine labs, and arrested over 7,000 suspects on trafficking charges. In the first 2 months of this year, about 12 metric tons of cocaine were seized. Last month, President Gaviria came to Washington for a working visit with President Bush and signed an agreement that will help our two governments share evidence in narcotics investigations. No nation has shown more courage or commitment in the war against narco-trafficking or paid a greater price than Colombia. We are also encouraged by recent successes in negotiating a peaceful end to Colombia's guerrilla insurgencies. We support the initiative of President Gaviria to offer dialogue to the EPL [People's Liberation Army] and FARC [Revolutionary Armed Forces of Colombia] guerrillas and hope they respond affirmatively. Peru. President [Alberto] Fujimori of Peru faces the triple scourges of an entrenched, brutal guerrilla war, powerful cocaine trafficking organizations, and now pandemic cholera. In the past, anti-narcotics programs in Peru have suffered from a lack of firm policy guidance, but President Fujimori is working on comprehensive approaches to stop drug trafficking and provide economic alternatives for peasants now dependent on the cocaine economy. We are funding a $27.9-million Upper Huallaga Valley special project to provide agricultural services and community development support to ex-coca farmers who switch to alternate crops. The Fujimori government has courageously sought to address the economic and debt crises it inherited. It needs and deserves the international community's continued support as it moves forward on the path of economic reform.
Bolivia.
Bolivia, the region's second largest producer of coca leaves, is making steady, progress toward its commitment to reduce and eventually eliminate illicit coca production. Nevertheless, the threats of corruption and growing terrorism remain of serious concern. In 1990, the US provided $45.5 million to Bolivia for basic economic reform and for alternative development projects. For the past 3 years, an AID-funded project has provided irrigation to the arid and poor Cochabamba high valleys to eliminate the population's need to earn extra income through seasonal work in the Chapare coca region. Before the program started, surveys showed that up to 75% of the available men migrated from the high valleys to the Chapare for temporary work. This year, almost none have left. Other projects we fund have employed over 100,000 laborers in road building and other community development work. Five years ago, Bolivia faced a 25,000% inflation rate; today, its inflation is lower than ours--a testament to Bolivia's steadfast commitment to sound economic policy.
Chile
In the Southern Cone, our relations with the new democratic government of Chile continue to expand and strengthen. In his December visit to Chile, President Bush addressed a joint session of the Chilean Congress and supported Chile's democratic transition and pace-setting free-market policies. In many ways, Chile is emerging as a model for Latin America--a model of democratic consolidation and national reconciliation and a model of economic reform that produces real gains, as Chile's steady record of growth and new investment demonstrates. Chile has expressed interest in a free trade agreement similar to the one being negotiated with Mexico. We have restored GSP [generalized system of preferences] benefits to Chile, lifted sanctions imposed on the previous regime, and made progress in bilateral trade and investment issues. We are concerned, however, about the escalation of terrorism against US interests in Chile.
Argentina.
Perhaps nowhere in the region has the shift in foreign policy emphasis been clearer than in Argentina under President Carlos Menem. Argentina has renewed diplomatic relations with the United Kingdom and contributed naval vessels to the Gulf coalition. Just before President Bush's South America trip on November 28, 1990, Presidents Menem and Collor announced that they will place all their nuclear facilities under International Atomic Energy Administration safeguards and work to bring the Treaty of Tlatelolco, the Latin American non-proliferation treaty, into force. This agreement is a major step forward, and it could be a model for similar agreements elsewhere in the world. On the economic front, privatizations of the national telephone company (Entel) and airline (Aerolineas Argentinas) are beginning to reverse state domination of the economy. Politically, it is clear after the failed military revolt last December that the Argentine people have no desire to return to authoritarian rule.
Uruguay.
President Bush also visited Uruguay on his five-nation tour of South America, underscoring our support for democracy and for President [Luis Alberto] Lacalle's efforts to create a more open, market- oriented economy and spelling out the benefits to be derived from the Enterprise for the Americas Initiative. Uruguay, as a middle- income developing country, is not eligible for some kinds of US assistance, but we have provided some security assistance to enhance Uruguay's ability to interdict drugs. We also made a surplus food grant last year, the sale of which provided about $2.8 million for Uruguay's Social Investment Fund. To their credit, both Uruguay and Brazil adhered with great integrity to UN economic sanctions against Iraq, despite the serious cost.
Paraguay.
In Paraguay, President Rodriguez is steadily, courageously leading his nation--so long locked into dictatorship--into the mainstream of the hemisphere's democracies. The US has reinstated GSP benefits, contingent on the reform of labor practices, including the right to organize. We also are providing, through the National Endowment for Democracy, money to train observers for the May 1991 municipal elections, the first such vote in Paraguay's history. Finally, Paraguay has joined its Southern Cone neighbors in negotiations for a common market and in negotiating a joint framework agreement with the United States under the Enterprise for the Americas Initiative.
The Enterprise for the Americas Initiative
When I began my statement, I discussed a revolution in economic thought and policy in this hemisphere--a sharp turn away from statist, protectionist policy and toward economic freedoms. For the poor of this hemisphere, for those who want to see democracy succeed, for those who look to participate in the economy of the Americas, this change in thinking represents a profound opportunity, and its impact can be far greater than any amount of aid we would extend. President Bush got a strong sense of this new thinking in February 1990 when he went to the Andean drug summit in Cartagena, Colombia. The presidents he met gave him an emphatic message--more than aid, they want their citizens to have the opportunity to sell their goods in the world economy, including the US market. On the flight home from Cartagena, President Bush told his advisers that we owe our neighbors a bold response. Within 4 months, on June 27, 1990, the Enterprise for the Americas Initiative (EAI) was born. In its spirit, it is an offer of partnership among countries eager to forge ahead with economic reform. It is based not on dependency and aid, but on concerted action to free our economies from restrictions that have helped economic elites and stifled the poor and the industrious. It offers a vision of free trade throughout the Americas. The programs of EAI promote prosperity through trade and investment liberalization and debt relief, with a new emphasis on environmental protection. EAI offers the most to those that are doing the most to reform. We are encouraging other nations, especially Japan, to pursue similar objectives for the region. We hope that Japan and the European Community will contribute to a proposed EAI Multilateral Investment Fund to be administered by the Inter-American Development Bank. The fund would provide $300 million in grants annually over the next 5 years to support comprehensive reforms in investment policy, privatization, and human capital needs. Since the EAI was launched, we have negotiated framework agreements with five countries, and discussions are underway with nine others. These agreements establish principles for cooperation on trade and investment, and can set the framework for negotiating free trade agreements. We trust that the Congress will provide the President the authority necessary to move ahead in expanding free trade in this hemisphere. We are also working with the Inter-American Development Bank on a new program that will provide lending to support countries that removing impediments to international investment. I also urge the Congress to take rapid action on the remaining portions of the debt element of the EAI. We are moving forward quickly with debt reduction agreements on PL 480 programs under the authority granted by the 1990 farm legislation. We still need authority for debt reduction agreements on concessional debt administered by AID, and for debt-for-equity and debt-for-nature swaps relating to Commodity Credit Corporation and Export-Import Bank programs. The Latin American region today is in a position to launch self-sustaining growth within a democratic and stable political framework. There is nothing automatic nor guaranteed about continued progress, but it is certain that the programs of the EAI provide powerful leverage to continue economic reforms.
Overview of Budget Request
The Administration's request for assistance for Latin America and the Caribbean for fiscal 1992 balances the vital interests of the United States, the need to meet the challenges that the region poses, and the reality of ever-increasing fiscal constraints. For fiscal 1992 we are requesting $1.52 billion for economic and anti-narcotics assistance and $280.2 million for security aid. This represents an increase of $104 million, or 6% over levels requested for fiscal 1991. The total requested, $1.799 billion, accounts for less than 17% of our worldwide assistance request, a modest sum considering the importance of the region to the United States.
Security Assistance
At this point, I would like to address the security assistance component of our request. In fiscal 1992, we have requested $713.9 million in economic support funds (ESF) and $280.2 million for military assistance (FMF and IMET), totaling $994.1 million, or 12.1% of the requested worldwide security assistance. In addition, AID has targeted $406 million in development assistance with special emphasis on job creation to benefit the poor, primary health care, education, strengthening of democratic institutions, and preserving the environment. Of the sum requested for military assistance, $13.75 million will go to the International Military Education and Training (IMET) program. In past years, this popular program has provided professional and technical training to Latin American military officers and non-commissioned officers. Through well-structured courses, this program gives the future military leaders of our region important training in human rights and civil-military relations. In the hope that we can build on the successes of the past, we are requesting IMET programs in virtually all countries in Latin America and the Caribbean with which we maintain diplomatic relations. This year, thanks to the initiative of friends in the Congress, we have a revision in the fiscal 1991 IMET legislation which enables us to include civilian officials in our IMET training programs. Effective civilian control of the military will become reality only when there are enough well-trained civilians who can play leading roles in defense programs and budgets, strategic planning, force structure management, and of course the management of the US military assistance programs. We are working to make IMET-funded courses for civilians begin within the next few weeks. Of the $266.4 million in Foreign Military Financing (FMF) that we have requested, $137 million will support the Andean counter- narcotics strategy in Bolivia, Colombia, and Peru. It also includes $5 million for Ecuador. A total of $108.9 million in FMF will support the key democratic countries in Central America. This leaves only a request for $15.5 million in FMF outside the Andes and Central America. Of that amount, $11.9 million is for the drug- threatened Caribbean. The remaining $3.5 million will go toward reinforcing civil-military relations in Argentina, Chile, Paraguay, and Uruguay. We have taken steps to ensure that our security assistance, including that provided to fight narcotics trafficking, supports our key policy objectives in the region. Together with the Defense Department, the Drug Enforcement Administration, and other agencies, we have developed a human rights training program which will be administered to our officials, both military and civilian, before they assume duties related to the implementation of our counter-narcotics and military assistance programs in our embassies. The training will provide our personnel with a thorough understanding of human rights law and policy, as well as information about the human rights situation in the country to which they will be assigned. Our security assistance has helped us make progress in the drug war in the first year of the Andean strategy. We have helped Colombia to maintain its vigorous campaign against narcotics traffickers, yielding a 37% increase in seizures over the previous year. Accomplishments include the seizure of over 50 metric tons of cocaine, the destruction of over 300 processing labs, and 7,000 arrests. Colombian police also have eradicated virtually all marijuana cultivation in traditional growing areas. The government has dealt severe blows to the leadership structure of the Medellin cartel by keeping drug kingpins, such as Pablo Escobar, constantly on the run. Colombia extradited 14 drug suspects to the United States in 1990; the total extradited since August 1989 is 26. Three other major traffickers have surrendered under President Gaviria's amnesty decrees which guarantee confessing traffickers a shortened sentence and no extradition. However, Colombian security forces continue to pay a heavy price. In the last year, over 400 national policemen have died at the hands of the traffickers. Our narcotics-related security assistance has yielded good results in Bolivia as well. Coca eradication during the year reached a record level of over 8,000 hectares, making possible a net reduction in the amount of coca cultivation for the first time. Joint police, air force, and navy task forces have expanded counter- narcotics operations, disrupting trafficking patterns. A major narco-trafficker was arrested, along with his lieutenants, planes, laboratories, and other personal assets, in a combined operation. In Peru, President Fujimori has expressed his government's commitment to fight narcotics trafficking. Though concrete actions have, until recently, been limited, we are beginning to see promising signs. There are increasing reports of effective Peruvian military and police coordination against traffickers in the Upper Huallaga Valley. In addition, the Peruvian air force has forced down two planes in the Upper Huallaga Valley, both laden with narcotics. President Fujimori has proposed an innovative, comprehensive agreement, integrating alternative development and law enforcement, which should provide a solid framework for our future counter-narcotics cooperation. Negotiations should conclude shortly. We, thus, are hopeful that our two governments will soon be jointly working effectively against narcotics production and trafficking. Our focus is fighting narcotics, not insurgency, notwithstanding the evidence of collusion between narco- traffickers and guerrilla groups in Colombia and Peru. Our assistance is in all instances channeled through the civilian governments. While our preference is to work with established police forces, we have seen that these units are often not trained or equipped to engage the paramilitary forces of narcotics traffickers in remote and dangerous areas. Thus, we believe that specially trained military units can bring a significant resource in the war on drugs, if properly coordinated and directed by civilian authorities. I want to stress that our military trainers will be limited in number and will not become directly involved in counter-narcotics operations. As their title conveys, they will only train.
Conclusion
I have submitted this detailed statement to give you a full picture of the challenges and opportunities we face in this hemisphere. I am optimistic about the future of the Americas, and I believe our policies respond to our interests and to our neighbors' concerns. Moreover, I am confident that we are delivering a dollar's worth of good for US interests for every dollar we spend in the region. My staff and I look forward to working with all of you to make our policies and programs a success. (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Debt and Growth in Latin America and the Caribbean

Date: Mar 18, 19913/18/91 Category: Policy Briefs (Gist) Region: Central America, South America, Caribbean Subject: Trade/Economics [TEXT]
Background
The United States is encouraging major international efforts to help relieve Latin America's severe debt and to promote economic growth in the region. Latin America experienced a deep recession in the 1980s. After vigorous expansion in the 1970s, during which annual per capita growth averaged 3.6%, per capita gross domestic product (GDP) fell 8.3% between 1981 and 1989. These statistics, compiled by the UN Economic Commission for Latin America and the Caribbean, mask wide variations from country to country. Per capita GDP of oil-exporting countries declined more than 14% during the period, while oil-importing countries experienced a cumulative decline of 4.8%. Only Colombia, Chile, Barbados, and the Dominican Republic enjoyed per capita growth.
Debt-Related Problems
Severe debt complicates future economic growth in Latin America. In 1989, Latin America's external debt totaled $417 billion, about 40% of the total indebtedness of all developing countries. Payments to service these obligations absorbed about 30% of export earnings (this ratio would be higher except for substantial arrears built up by some countries). Although debt is a major problem and debt service a heavy burden to Latin America's developing countries, inappropriate domestic policies have been the principal constraint on economic growth. Lack of confidence, the result of policies such as overvalued exchange rates, price controls, inflation induced by government spending, and over-regulation, has hindered domestic savings and investment, discouraged foreign investment, and led to huge capital flight (now estimated to be at least $240 billion since 1977). For many Latin American countries, increasing external debt allowed them to neglect economic reform and avoid policies to attract foreign investment. The borrowed money, therefore, often did little to improve competitiveness and long-term growth potential. External economic developments, such as high interest rates in the early 1980s, commodity price fluctuations, and the recent sharp rise in oil prices, have made the resulting deficits much worse. In March 1989, the United States announced several proposals to strengthen the international debt strategy. The principal proposal, known as the Brady Plan, encourages voluntary, negotiated debt and debt-service reduction with commercial creditors as a complement to new bank lending, domestic and foreign investment, and return of flight capital in middle-income debtor countries. Mexico, Costa Rica, Chile, Uruguay, and Venezuela have reached Brady Plan agreements with commercial banks to restructure and reduce their external commercial debt. These measures support policy changes needed for sustained growth and improved living standards for the people of Latin America and the Caribbean.
Economic Stabilization and Structural Adjustment
Debt problems have forced governments to realize that they cannot sustain large fiscal deficits indefinitely through excessive borrowing or monetary expansion. Recognition is growing in Latin America that private initiative and private saving and investment must be stimulated if sustained growth is to be realized. As a consequence, most countries in the region now are making economic adjustment supported by international financial institutions and creditor countries, including the United States. In the last few years, many Latin American governments have begun to move away from the excessive government control, market intervention, and import substitution strategies that they have relied upon for decades. Most have begun to adopt more realistic exchange rates, expand exports, and address the persistent problem of inflation, which exceeded 1000% in countries such as Argentina, Peru, and Brazil in 1989. Of even greater importance for the longer term, most governments in the region are beginning to lower structural barriers to growth. They have taken steps to reduce price controls and subsidies, liberalize trade, attack excessive regulation and bureaucratic controls, and improve the investment climate, including removing some restrictions on foreign private investment. For example, Chile, Mexico, and Bolivia have made significant strides toward more market-oriented economies and more open trading. New governments in El Salvador and Honduras have shown their commitment to market-oriented policies. Nicaragua and Peru, two of the countries most burdened by debt, excessive government spending, and economic mismanagement, have taken the first steps toward restructuring and opening their economies. Other countries have recognized the heavy burden of inefficient and highly subsidized public enterprises that siphon domestic savings and often increase external indebtedness. Chile and Mexico, among others, have made progress in transferring government-owned industries to private ownership. In June 1990, President Bush announced the Enterprise for the Americas Initiative to support economic reform in Latin America and to forge a partnership with the new leadership in the region that understands that the future for Latin America lies with free government and free markets. The initiative, most of which still must be approved by Congress, seeks to increase trade through bilateral framework agreements that will lead to free trade agreements within regions and with the United States; promote investment by funding efforts to implement market-oriented investment reforms and privatization; and ease the debt burden by reducing the debt owed to the US government for countries that adopt strong economic and investment reform programs. Latin American and Caribbean leaders have greeted enthusiastically the President's initiative.
International Efforts To Encourage Growth
The International Monetary Fund (IMF) and the World Bank provide financing to encourage new commercial debt reduction agreements and to assist debtors in pursuing fundamental economic reform. Since 1986, the IMF has established a compensatory and contingency financing facility to help countries continue reform in the face of external economic shocks and two special facilities to support structural adjustment in low-income countries. The World Bank has taken an increasingly important role in stimulating sustainable economic growth in debtor countries through policy- based, fast-disbursing loans. The United States is encouraging market-based reform through the Enterprise for the Americas Initiative, bilateral and multilateral economic assistance, the strengthened debt strategy, and continued efforts to achieve free trade and open markets. The United States is by far the largest contributor of development assistance to the region, averaging more than $1 billion annually over the last few years. The Caribbean Basin Initiative (CBI) gives Central American and Caribbean countries improved US trade opportunities, which have helped create jobs in countries with sound economic policies. The United States has supported increases in World Bank and Inter-American Development Bank resources to advance economic adjustment and growth in the region. The United States remains committed to open world markets through multilateral trade negotiations.
Further Information
For the origin of debt-related problems, as well as US policy regarding debt and growth in the region, see the Gists on "Third World Debt" and the "Enterprise for the Americas Initiative," US Department of State Dispatch, September 24, 1990, Vol. 1, No. 4. (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Fact Sheet: Albania

Date: Mar 18, 19913/18/91 Category: Fact Sheets Region: E/C Europe Country: Albania Subject: Democratization, History, Trade/Economics [TEXT] US-Albanian Relations. Albanian Foreign Minister Muhamet Kapllani and Assistant Secretary Raymond Seitz signed a Memorandum of Understanding on March 15 resuming diplomatic relations between the United States and Albania (see p. 198). The Foreign Minister also met with Acting Secretary of State Robert Kimmitt, Members of Congress, and other US officials. The US seeks to support the movement toward democratic and economic reform in Albania and to expand relations in the cultural and economic fields. Relations between the United States and Albania ended in June 1939, when Italy took over the conduct of Albanian foreign affairs. In 1945, an informal US mission was sent to Albania to study the possibility of establishing relations with the National Liberation Front (NLF) regime. However, the regime refused to recognize the validity of prewar treaties and increasingly harassed the US mission, which was withdrawn in November 1946. The United States had no contact with the Albanian government between 1946 and 1990.
Location and Population.
Albania, one of the smaller countries in Europe, is located on the Adriatic Sea and borders Yugoslavia and Greece. Ninety-six percent of the 3 million inhabitants are ethnic Albanians.
Background
Prior to the 20th century, Albania was a nation subject to foreign domination except for a brief period of independence from 1443 to 1478. The Albanians declared independence from the Ottoman Turks in 1912. After the upheaval of World War I, Albania was reestablished as an independent state largely through the efforts of President Woodrow Wilson at the Paris peace conference, and remained independent until Mussolini invaded the country in 1939. After Italy's surrender in 1943, German troops occupied the country and were challenged by the communist-led NLF, which gained control in November 1944. Yugoslav communists were instrumental in establishing the Albanian communist party in November 1941, and the NLF regime became a virtual satellite of Yugoslavia until the Tito-Stalin break in 1948. Albania's hard-line communism led to growing difficulties with the Soviet Union under Krushchev and came to a head in 1961 when the Soviet leaders openly denounced Albania at a party congress. The two broke diplomatic relations later that year. However, Albania continued its charter membership in the Warsaw Pact until the 1968 invasion of Czechoslovakia. China emerged as Albania's staunch ally and primary source of economic and military assistance. But this close relationship faltered during the 1970s when China decided to seek a rapprochement with the United States. After years of rocky relations, an open split came in 1978, when the Chinese government ended its aid program and terminated all trade. Although the two renewed trade in 1983, diplomatic relations are cool and inactive. In the late 1970s, after the break with the Chinese, the Albanians sought closer economic and cultural ties to Western Europe in an attempt to find alternative markets for their former exports to China. Since then, ties generally improved with selected Western states--such as Italy and Greece--but Albania has continued to pursue an independent foreign policy.
Political Conditions
Albania is scheduled to hold its first multi-party elections since 1945 on March 31, 1991, with a run-off round on April 14. This election will choose members for the 250-seat People's Assembly, the unicameral legislative body. According to the current constitution, adopted in 1976, the People's Assembly is the supreme organ of government. In practice, however, the assembly has met only a few days each year to ratify actions taken in its name by the presidium of the assembly, the chairman of which is the head of state. The Albanian Party of Labor, which has about 125,000 members, was the only legally functioning party in Albania until the government decision on December 11, 1990, to permit the formation of other parties to compete in the legislative elections. Several new parties have been registered, including the Democratic Party, the Republic Party, and the Ecology Party. Bowing to the wishes of several newly formed parties, the government delayed the elections from February 10 to March 31. In late December, the government authorized the publication of independent newspapers, and both the Democratic and Republic parties are now publishing their own newspapers. The government also has announced its support for limited economic reform and has released a number of political prisoners. President Alia announced on March 12 that about 200 prisoners believed to be held on political grounds would be released this month. Demonstrations in support of a faster pace of reform, as well as demonstrations in support of the policies of former leader Enver Hoxha, continue in Albania's major cities. A large number of Albanians, dissatisfied with economic and political conditions, have sought to leave the country by entering Yugoslavia or Greece, or by sea to Italy.
Economy
As the poorest country in Europe, Albania's development lags behind other countries of the region. The Stalinist-type economy operates on the principles of central planning and state ownership of the means of production. In recent years, Albania has implemented limited economic reforms to stimulate its lagging economy, although they do not go nearly so far as current reforms in the USSR and Eastern Europe. Attempts at self-reliance and a policy of not borrowing from international lenders have greatly hindered the development of a broad economic infrastructure. Albania, however, possesses considerable mineral resources and is largely self- sufficient in food. Numerical estimates of Albanian economic activity are subject to an especially wide margin of error because the government has not publicly released data and has pursued a policy of diplomatic isolation.
Foreign Policy
Albania has moved away from its virtually total diplomatic isolation, motivated, in large part, by the government's desire to improve its flagging economy. Recently, Albania has participated as an observer in meetings of the Conference on Security and Cooperation in Europe (CSCE) and has participated in ministerial- level meetings furthering Balkan cooperation. It resumed relations with the Soviet Union in 1990. (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Country Profile: Albania

Date: Mar 18, 19913/18/91 Category: Country Data Region: E/C Europe Country: Albania Subject: Trade/Economics, History, International Organizations [TEXT] Official Name: People's Socialist Republic of Albania
Geography
Area: 28,750 sq. km. (11,100 sq. mi.); slightly larger than Maryland. Cities: Capital--Tirane. Other cities--Durres, Elbasan, Vlore, Korce, Shkoder. Terrain: 77% mountainous, 23% fertile river valleys and coastal lowlands. Climate: Mediterranean along coast, and varied temperate inland. People Nationality: Noun and adjective--Albanian(s). Population (1990): 3.2 million. Annual growth rate: 1.9%. Density: 111 per sq. km. (288 per sq. mil.); rural 66%, urban 33%. Ethnic groups: Albanian (Gegs and Tosks) 90%, Greeks 8%, other 2%. Religions: Albania claims to be the world's first atheist state; all churches and mosques were closed in 1967 and religious observances prohibited; pre-1967 estimates of religious affiliation: Muslim 70%, Albanian Orthodox 20%, Roman Catholic 10%.
Government
Type: Communist. Constitution: 1976. Branches: Executive--President of the Presidium of the Peoples Assembly (chief of state); chairman, Council of Ministers (head of government). Legislative--unicameral Peoples Assembly (Kuvendi Popullor). Judicial--supreme court; regional and district courts. Subdivisions: 26 districts (rrethe). Political parties: Albanian Workers Party, Democratic Party, Republican Party, Ecology Party. Suffrage: Universal and compulsory over 18. Elections: Scheduled for March 31, 1991. Defense (1986): 10.9% of budget. National holiday: Liberation Day, November 29. Flag: Black, two-headed eagle centered on a red field; above the eagle is a red star outlined in yellow.
Economy
GNP (1989 est): $3.8 billion. Per capita income (1989 est): $1,200. Natural resources: Oil, gas, coal, chromium, copper, timber, and nickel. Agriculture: Arable land per capita among the lowest in Europe; 60% of work force engaged in farming; produces wide range of temperate-zone crops and livestock; claims self-sufficiency in grain output. Products--wheat, corn, potatoes, sugar beets, cotton, tobacco. Industry: Types--food processing, textiles and clothing, lumber, oil, cement, chemicals, basic metals, hydropower. Trade (f.o.b. 1987 est.): Exports--$378 million: asphalt, bitumen, petroleum products, metals and metallic ores, electricity, oil, vegetables, fruits, tobacco. Imports--$255 million: machinery, machine tools, iron and steel products, textiles, chemicals, pharmaceuticals. Major partners--Yugoslavia, Czechoslovakia, Romania, Italy, Poland, Germany, France, Greece, Bulgaria, Hungary. Official exchange rate (1986): 8 leks=US $1. Fiscal year: Calendar year.
Membership in International Organizations
UN and some of its specialized and related agencies, including the International Atomic Energy Agency (IAEA), International Telecommunications Union (ITU), World Health Organization (WHO), Food and Agriculture Organization (FAO), Universal Postal Union (UPU), and World Meteorological Organization (WMO). (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Memorandum of Understanding Between the United States and Albania

Date: Mar 15, 19913/15/91 Category: Fact Sheets Region: E/C Europe Country: Albania Subject: International Law, State Department [TEXT] The Government of the United States of America and the Government of the People's Socialist Republic of Albania, as a result of discussions of their representatives and considering that the Governments have re-established diplomatic relations effective this date, have agreed as follows:
Article I
1. The Governments shall conduct their diplomatic relations in accordance with the Charter of the United Nations, signed at San Francisco on June 26, 1945, and the Vienna Convention on Diplomatic Relations, signed at Vienna on April 18, 1961, to which both Governments are parties. The Governments shall exchange diplomatic representatives with the rank of Ambassador Extraordinary and Plenipotentiary, as soon as the necessary administrative and legal arrangements in the sending State so permit. 2. The two Governments shall provide all necessary assistance for the early establishment, and performance of the functions, including consular functions, of diplomatic missions in their respective capitals, in accordance with international law and practice. Such assistance shall include, inter alia, consent to the use of wireless transmitters including the use of satellite links, by the respective Embassies for purposes of official communication, subject to compliance with the laws and regulations of the receiving State. Such laws and regulations shall, however, be applied so as to give full effect to the consent hereby recorded. 3. The Governments affirm their intent to respect the fundamental principles on which diplomatic intercourse is based, including, inter alia, the principle of inviolability of the premises of the diplomatic mission. 4. The two Governments shall extend the privileges and immunities of diplomatic agents, as defined in the Vienna Convention on Diplomatic Relations, to those members of their respective administrative and technical staffs of the diplomatic missions accredited to Washington and Tirana, as well as their families. The stated privileges and immunities will not be accorded to persons who are nationals or permanent residents of the receiving State. 5. The two Governments intend to hold discussions on the conduct of consular relations at the earliest practicable time. Until such time, the two Governments agree to the following interim practical arrangement: If a citizen of the sending country is arrested or detained in any manner, the authorities of the receiving country shall, within 72 hours, notify the designated representative of the sending country of the arrest or detention of the person and permit within 24 hours of such notification access by a representative of the sending country to the citizen who is under arrest or detained in custody.
Article II
The two Governments intend to promote relations in economic, cultural and other fields.
Article III
The Treaty of Naturalization signed at Tirana on April 5, 1932, shall terminate upon the entry into force of this Memorandum of Understanding. In this connection, the Government of the United States of America notes that the statement made in paragraph 2 of the diplomatic note delivered on June 23, 1922, by the American Commissioner in Tirana to the President of the Council and Minister of Foreign Affairs of Albania concerning the "interpretation and application of laws affecting naturalization in the United States" has for a number of years ceased to be an accurate representation of United States law.
Article IV
Following the re-establishment of relations, the two Governments, upon the request of either side, shall enter into negotiations for the prompt settlement of claims and other financial and property matters that remain unresolved between them, each Government being entitled to raise during such negotiations the matters it wishes to be addressed.
Article V
This Memorandum of Understanding shall enter into force upon signature. Done at Washington, in duplicate, in the English and Albanian languages, this 15th day of March, 1991. For The Government Of The United States: Raymond Seitz For The Government Of The People's Socialist Republic Of Albania: Muhamet Kapllani
Joint Communique, March 15, 1991 [Box]
The Government of the United States of America and the Government of the People's Socialist Republic of Albania, following consultations between their duly authorized representatives, and having confirmed their commitment to the principles of equality, mutual respect, and mutual benefit, have decided to re-establish diplomatic relations with effect from March 15, 1991, and subsequently to exchange diplomatic missions at the level of Ambassador. (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

International Women's Day

Bush Source: President Bush Description: Letter from President Bush delivered to the UN Commission on the Status of Women by Ambassador Juliette Clagett McLennan, US Representative to the Commission, Vienna, Austria Date: Mar 8, 19913/8/91 Category: Speeches, Testimony, Statements Subject: Human Rights [TEXT] Barbara and I are delighted to send warm greetings to the members of the UN Commission on the Status of Women on the occasion of the International Women's Day. We welcome the opportunity to reaffirm the professed purpose of your organization, which is to uphold fundamental human rights, the dignity and worth of the human person, and the equal rights of men and women. This is an important session of the commission because it addressed the specific problems of those women around the world who are most in need of help: women who are displaced, women with disabilities, women who are refugees or migrant workers, and women who are single parents. In determining how best to assist those with particularly dire needs, we lend our support to policies that foster self-sufficiency and equal opportunity. We are pleased that many of the recommendations made by your commission also seek to make women full and active partners in decisions that directly affect their lives and those of their families. The United States remains committed to advancing the status of women, both at home and throughout the world. I applaud the worthy goals of your organization, as well as your efforts to develop programs and policies that offer women greater opportunities to participate freely in the social, political, and economic mainstream. On this International Women's Day, I send best wishes for a productive 35th session. GEORGE BUSH (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Displaced Persons in the Middle East

Date: Mar 18, 19913/18/91 Category: Fact Sheets Region: MidEast/North Africa Country: Iran, Syria, Jordan, Turkey Subject: Refugees, Development/Relief Aid [TEXT] Post-war displaced persons outflows in the Middle East continue to be steady but not large. Foreign nationals arriving in the asylum states (Iran, Turkey, Syria, and Jordan) are mainly, but not exclusively, Egyptians and Sudanese. In early March, the League of Red Cross and Red Crescent Societies (LICROSS) reported that about 2,000-2,500 Egyptians returned to Egypt daily; probably not all of these were from the asylum states. The International Organization for Migration (IOM) stated that most of its repatriation caseload in Iran was Sudanese. Small but steady numbers of Iraqis were entering Turkey, while increasing numbers of Iraqis, Iranians, and third-country nationals were crossing into Iran. Syria received very few displaced persons. Because of ongoing civil unrest, an area of obvious and immediate concern is the potential for substantial numbers of refugees arriving at the Kuwait-Iraq border. Efforts are underway to assess their numbers and condition. The revised UN Plan of Action does not provide for a relief presence on the Kuwait-Iraq border; the International Committee of the Red Cross (ICRC) is assessing the situation and will respond. Given the current civil unrest inside Iraq, officials of both the asylum states and international relief organizations remain concerned about the possibility of large migrations of displaced persons. Preparations and improvements of camp facilities continue in the asylum states. Both the United Nations and ICRC are holding stockpiled materials for deployment in the region if needed.
Private Contributions
The following organizations are accepting private contributions. UN Disaster Relief Office (UNDRO)--covers UNDRO, World Food Program, UN Children's Fund, UN Development Program, UN High Commissioner for Refugees Address: Phillippe L. Boulle, Director, UNDRO, Room S-2935, New York, NY 10017 Phone: (212) 963-5704 Earmark contribution: Fund for Displaced Persons in the Gulf American Red Cross--covers ICRC and LICROSS Address: American Red Cross, PO Box 37243, Washington, DC 20013 Phone: (202) 639-3314 Earmark contribution: Middle East International Response US Association for International Migration--covers IOM Address: USAIM, 1750 K Street, NW, Suite 1110A, Washington, DC 20006 Phone: (202) 862-1826 Earmark contribution: IOM Airlift (###)
US Department of State Dispatch, Vol 2, No 11, March 18, 1991 Title:

Focus on Central and Eastern Europe: Overview of US Assistance

Date: Mar 18, 19913/18/91 Category: Focus on Emerging Democracies Region: E/C Europe Subject: Trade/Economics, Development/Relief Aid [TEXT]
US Assistance to Central and Eastern Europe
In response to the revolutions of 1989 in Central and Eastern Europe, the US government has mounted a far-reaching program of regional assistance. In December 1989, President Bush designated Deputy Secretary of State Lawrence S. Eagleburger as Coordinator of US Assistance to Central and Eastern Europe. The President also appointed Treasury Deputy Secretary John E. Robson and Council of Economic Advisers Chairman Michael J. Boskin to be deputy coordinators. Ambassador Robert L. Barry is Mr. Eagleburger's Special Adviser for East European Assistance. There are now more than 30 US government agencies involved in this effort. The US government, however, cannot by itself provide all of the assistance that is needed. It cannot transfer the entrepreneurial energy or professional skills required to ensure the transition to a market economy. That is the role of private business. There is also a role for US trade unions, non- governmental organizations (NGOs), and private voluntary organizations (PVOs). This edition of Focus outlines the steps that businesses, NGOs, PVOs, and other private organizations could take to become involved in the ongoing assistance program for Central and Eastern Europe. It also provides the addresses and telephone numbers of relevant US government offices and other related offices that are resources for the private sector.
NGOs, PVOs, and Others
Priorities and policies for US assistance to Central and Eastern Europe are set by the Department of State's Office of the Coordinator of East European Assistance (see Dispatch Vol. 2, No. 5 for a summary of those policies and priorities). The US Agency for International Development (USAID) receives most of the money appropriated for assistance to the region and is responsible for implementing projects with those funds. Most of these projects are open for competitive bidding by the private sector, although a small amount of money is transferred to US government agencies that have expertise in particular priority areas. For example, the Department of the Treasury will be directing technical-assistance projects in the financial sector. Projects are being developed in several categories of assistance ranging from humanitarian assistance to help in setting up a private banking system. USAID will be releasing requests for proposals and requests for applications for these projects, which will be advertised in the Commerce Business Daily or other appropriate channels. There may be questions regarding particular programs that are identified in the legislation or referred to in legislative reports. If there are questions as to whether or not a project will be implemented in a particular area, NGOs, PVOs, and others should contact USAID's Office of European Affairs (202-647-3853) or the Office of the Special Adviser for East European Assistance to the Deputy Secretary of State (202-647-0695) for clarification and advice. Personnel in those offices can say whether or not there will be projects in particular areas and how to get more information if necessary.
US Business
For the most part, funds appropriated for assistance to Central and Eastern Europe cannot be used for purely commercial ventures. Rather, they are intended for use in providing technical assistance and other help to establish the conditions under which free-market enterprises can flourish. In this way, the US government seeks to prepare the way for US private-sector investment in Central and Eastern Europe. There are several sources of governmental and non- governmental information and possible funding of which US businesses interested in the region should be aware. The Departments of Commerce and Agriculture provide information about the economic/commercial climates and business opportunities in Central and Eastern Europe. They also sponsor trade missions and seminars and participate in trade fairs in the region. US firms interested in becoming active in Central and Eastern Europe should also contact the Overseas Private Investment Corporation, the Export-Import Bank, and the Trade and Development Program. US businesses should make the Eastern Europe Business Information Center (EEBIC) in the Department of Commerce their initial point of contact when considering trade and investment in Central and Eastern Europe. The EEBIC provides the business community with "one-stop shopping," serving as the clearinghouse for information on economic/commercial conditions and market opportunities in the region and on all US government programs that support the activities of US private enterprise there. The EEBIC also publishes the Eastern Europe Business Bulletin, a bimonthly newsletter on business opportunities in Central and Eastern Europe. For country policy guidance, US companies should contact the Commerce Department's Eastern Europe Division. Overseas, Commerce's US and Foreign Commercial Service offers trade- promotion information and advocacy on behalf of US firms from all US embassies in Central and Eastern Europe, except Sofia, Bulgaria, where the Department of State offers similar services. The Department of State's country officers in the Bureau of European Affairs, the Bureau of Economic and Business Affairs, and the Office of the Special Assistant to the Secretary/Coordinator for International Labor Affairs can provide additional information. Those businesses involved in the telecommunications sector should contact the Communications and Information Policy Bureau of the Department of State, the Federal Communications Commission, and the National Telecommunications and Information Administration of the Department of Commerce. Below is a description of private organizations and US government agencies most directly involved in supporting US business in Central and Eastern Europe.
Enterprise Funds
Under the Support for East European Democracy (SEED) Act of 1989, the Congress authorized $300 million for the establishment of two enterprise funds for Hungary and Poland. In November 1990, President Bush announced the creation of a similar fund for Czechoslovakia that would be capitalized at $60 million over a multi-year period. The Polish-American Enterprise Fund (authorized at $240 million) and the Hungarian-American Enterprise Fund ($60 million) promote the development of the private sector in those two countries. Funds are provided through grants, loans, equity investments, and support for training and technical assistance. The two funds invest primarily in Polish-owned or Hungarian-owned companies, Polish-American or Hungarian-American joint ventures, and occasionally in subsidiaries or affiliates of US companies with business operations in Poland or Hungary. The funds focus on small and medium-sized companies. US businesses interested in obtaining capital from the funds should be prepared to submit proposals of no more than 3-5 pages. After an initial review, a more detailed business plan may be required. Details and financing arrangements for a Czechoslovak- American Enterprise Fund are being prepared. The new fund is expected to be similar to its Hungarian and Polish counterparts. Addresses and telephone numbers of the funds are below. Overseas Private Investment Corporation (OPIC) OPIC is a self-sustaining US government agency whose purpose is to promote economic growth in developing countries and emerging democracies by encouraging US private investment in those nations. By doing so, OPIC can help American companies remain competitive in the international marketplace. OPIC assists US investors through two principal programs: -- Financing investment projects through direct loans and/or loan guarantees and -- Insuring investment projects against a broad range of political risks. As part of new US initiatives toward Central and Eastern Europe in 1989, Congress authorized OPIC to operate in Hungary and Poland. Subsequently, OPIC has begun to operate in Czechoslovakia and the eastern region of Germany. OPIC has been in Yugoslavia since 1973. OPIC suspended its operations in Romania in 1987 due to worker-rights concerns and has not yet reopened. Work has begun on a bilateral agreement with Bulgaria. OPIC conducts investment missions for US companies to look at investment opportunities. In November 1989, OPIC led a mission of 29 US companies to Poland. During 1990, more than 80 US companies participated in OPIC missions to the eastern region of Germany, Hungary, and Poland. Since October 1989, more than 200 US firms have registered for OPIC investment insurance or financing for projects in Central and Eastern Europe. In addition to investment missions, OPIC also works closely with other US government agencies to provide conferences to encourage US business involvement in Eastern Europe. OPIC also helps ensure that it is supporting the enterprise funds wherever appropriate.
US Trade and Development Program
The Trade and Development Program (TDP) is an agency of the US government's International Development Cooperation Agency. TDP promotes US exports for major development projects in middle-income and developing countries by funding feasibility studies, consultancies, training programs, and other project- planning services. In Central and Eastern Europe, TDP assists US firms by identifying major development projects that offer large export potential and by funding US private-sector involvement in project planning. This should position US firms for follow-on contracts when these projects are implemented. TDP invites Central and East European governments to apply for grant assistance for planning studies of major public-sector projects. Such projects should include plans to allocate substantial resources for foreign goods and services. Official requests for TDP assistance may be made directly to TDP in Washington by the appropriate foreign local government agency or ministry, or through a US embassy. If TDP approves the request for assistance, US firms are asked to conduct the study under competitive bidding by the foreign government agency. While TDP makes direct payment to the contractor selected, these studies are implemented under the control and direction of the foreign government agency. Studies are given to the foreign government for further action. Any projects resulting from these studies are competitively bid by the foreign government.
Export-Import Bank of the United States
The Export-Import Bank (Eximbank) is an independent US government agency that helps the American business community export goods and services by offering financing support. Through a wide variety of loan-guaranty and insurance programs, the Eximbank has supported more than $200 billion in US exports since 1934. Eximbank programs for US businesses interested in Central and East European markets include short- and medium-term trade- credit insurance and medium- and long-term loans and guaranties for financing US exports to the region. The Eximbank aims to increase its activities in Central and Eastern Europe. Its programs support export sales to Czechoslovakia, Hungary, and Yugoslavia, and its short- and medium-term insurance programs and medium- term loan-and-guaranty programs assist Poland.
Contact List
Agency for International Development (USAID) Office of European Affairs Bureau for Europe and Near East Washington, DC 20523-0019 Tel: (202) 647-3853 Citizens Democracy Corps 10th Floor 1815 H Street, NW Washington, DC 20006 Tel: (202) 872-0933; Fax: (202) 872-0923 Department of Agriculture Foreign Agricultural Service Room 4071, South Building Washington, DC 20250 Tel: (202) 447-6301 Department of Commerce East European Business Information Center (EEBIC) Office of Eastern Europe and Soviet Affairs Room 6043 14th and Constitution Avenue, NW Washington, DC 20230 Tel: (202) 377-2645; Fax: (202) 377-4473 Eastern Europe Division Office of Eastern Europe and Soviet Affairs Room 3413 14th and Constitution Avenue, NW Washington, DC 20230 Tel: (202) 377-4915; Fax: (202) 377-4098 Department of Energy Office of International Affairs and Energy Emergencies Room 7C-016 1000 Independence Avenue, SW Washington, DC 20585 Tel: (202) 586-5800 Department of Labor Office of International Affairs Room S2235 200 Constitution Avenue, NW Washington, DC 20210 Tel: (202) 523-6043 Department of State Office of the Special Adviser for East European Assistance to the Deputy Secretary of State Room 7220 Washington, DC 20520 Tel: (202) 647-0695; Fax: (202) 647-0414 Office of Commercial, Legislative, ∧ Public Affairs Bureau of Economic and Business Affairs Room 6822 Washington, DC 20520 Tel: (202) 647-1683; Fax: (202) 647-5713 Office of Private Sector Liaison International Communications ∧ Information Policy Bureau Room 6313 Washington, DC. 20520 Tel: (202) 647-5791 Office of the Special Assistant to the Secretary/Coordinator for International Labor Affairs Room 7538 Washington, DC 20520 Tel: (202) 647-3662 Environmental Protection Agency International Cooperation Division 800 West Tower 401 M Street, SW--A-106 Washington, DC 20460 Tel: (202) 475-8597 Export-Import Bank of the United States 811 Vermont Avenue, NW Washington, DC 20571 Tel: (202) 566-8813; Fax: (202) 566-7524 Federal Communications Commission Office of International Communication Room 658 1919 M Street, NW Washington, DC 20554 Tel: (202) 632-0935; Fax: (202) 632-0929 Hungarian-American Enterprise Fund 535 Madison Avenue New York, NY 10022 Tel: (212) 339-8340; Fax: (212) 339-8359 3314 P Street, NW Washington, DC 20007 Tel: (202) 342-2590; Fax: (202) 342-1707 National Telecommunications and Information Administration Office of International Affairs Herbert Hoover Building--Room 4720 14th Street ∧ Constitution Ave., NW Washington, DC 20230 Tel: (202) 377-1304; Fax: (202) 377-1865 Overseas Private Investment Corporation (OPIC) Manager of Public Affairs 1615 M Street, NW Washington, DC 20527 Tel: (202) 457-7093; Fax: (202) 223-3514 Peace Corps Office of International Research and Development Room 7116 1990 K Street, NW Washington, DC 20526 Tel: (202) 606-3547 (Bulgaria/Romania) (202) 606-3606 (Czechoslovakia, Hungary, and Poland) Polish-American Enterprise Fund 535 Madison Avenue New York, NY 10022 Tel: (212) 339-8330 Small Business Administration Office of International Trade 409 Third Street, SW Washington, DC 20416 Tel: (202) 205-6720 US Information Agency (USIA) The President's Eastern European Initiative Room 753 301 Fourth Street, SW Washington, DC 20547 Tel: (202) 619-5066 US Trade and Development Program (TDP) Regional Director for Central and Eastern Europe SA-16, Room 309 Washington, DC 20523-1602 Tel: (703) 875-4357; Fax: (703) 875-4009 (###)