US Department of State 

Dispatch, Vol 2, No 29, July 22, 1991

Title:

Group of Seven (G-7) Summit Declarations

Description: Texts of the economic, political and arms control declarations issued at the close of the London Economic Summit, London, England Date: Jul 17, 19917/17/91 Country: Canada, France, Germany, Italy, Japan, United Kingdom, United States, USSR (former), Israel, Iraq, South Africa, Hungary, Poland, Romania, Czechoslovakia (former), Yugoslavia (former), Egypt Subject: Trade/Economics, International Organizations, Resource Management, EC, Environment, Narcotics, Immigration, Arms Control, Nuclear Nonproliferation [TEXT]
Building World Partnership
1. We, the Heads of State and Government of the seven major industrial democracies and the representatives of the European Community, met in London for our 17th annual Summit. 2. The spread of freedom and democracy which we celebrated at Houston has gathered pace over the last year. Together the international community has overcome a major threat to world peace in the Gulf. But new challenges and new opportunities confront us. 3. We seek to build world partnership, based on common values, and to strengthen the international order. Our aim is to underpin democracy, human rights, the rule of law and sound economic management, which together provide the key to prosperity. To achieve this aim, we will promote a truly multilateral system, which is secure and adaptable and in which responsibility is shared widely and equitably. Central to our aim is the need for a stronger, more effective UN system, and for greater attention to the proliferation and transfer of weapons.
Economic Policy
4. Over the last year, some of our economies have maintained good growth, while most have slowed down and some gone into recession. But a global recession has been avoided. The uncertainty created by the Gulf crisis is behind us. We welcome the fact that there are now increasing signs of economic recovery. Progress has been made too in reducing the largest trade and current account imbalances. 5. Our shared objectives are a sustained recovery and price stability. To this end, we are determined to maintain, including through our economic policy coordination process, the medium-term strategy endorsed by earlier Summits. This strategy has contained inflationary expectations and created the conditions for sustainable growth and new jobs. 6. We therefore commit ourselves to implement fiscal and monetary policies, which, while reflecting the different situations in our countries, provide the basis for lower real interest rates. In this connection, continued progress in reducing budget deficits is essential. This, together with the efforts being made to reduce impediments to private saving, will help generate the increase in global savings needed to meet demands for investment. We also welcome the close cooperation on exchange markets and the work to improve the functioning of the international monetary system. 7. We will also, with the help of the Organization for Economic Cooperation and Development (OECD) and other institutions, pursue reforms to improve economic efficiency and thus the potential for growth. These include: a) greater competition in our economies, including regulatory reform. This can enhance consumer choice, reduce prices and ease burdens on business. b) greater transparency, elimination or enhanced discipline in subsidies that have distorting effects, since such subsidies lead to inefficient allocation of resources and inflate public expenditure. c) improved education and training, to enhance the skills and improve the opportunities of those both in and out of employment, as well as policies contributing to greater flexibility in the employment system. d) a more efficient public sector, for example through higher standards of management and including possibilities for privatisation and contracting out. e) the wide and rapid diffusion of advances in science and technology. f) essential investment, both private and public, in infrastructure. 8. We will encourage work nationally and internationally to develop cost-effective economic instruments for protecting the environment, such as taxes, charges and tradeable permits.
International Trade
9. No issue has more far-reaching implications for the future prospects of the world economy than the successful conclusion of the Uruguay Round. It will stimulate non-inflationary growth by bolstering confidence, reversing protectionism and increasing trade flows. It will be essential to encourage the integration of developing countries and Central and East European nations into the multilateral trading system. All these benefits will be lost if we cannot conclude the Round. 10. We therefore commit ourselves to an ambitious, global and balanced package of results from the Round, with the widest possible participation by both developed and developing countries. The aim of all contracting parties should be to complete the Round before the end of 1991. We shall each remain personally involved in this process, ready to intervene with one another if differences can only be resolved at the highest level. 11. To achieve our objectives, sustained progress will be needed in the negotiations at Geneva in all areas over the rest of this year. The principal requirement is to move forward urgently in the following areas taken together: a) market access, where it is necessary, in particular, to cut tariff peaks for some products while moving to zero tariffs for others, as part of a substantial reduction of tariffs and parallel action against non-tariff barriers. b) agriculture, where a framework must be decided upon to provide for specific binding commitments in domestic support, market access and export competition, so that substantial progressive reductions of support and protection may be agreed in each area, taking into account non-trade concerns. c) services, where accord on a general agreement on trade in services should be reinforced by substantial and binding initial commitments to reduce or remove existing restrictions on services trade and not to impose new ones. d) intellectual property, where clear and enforceable rules and obligations to protect all property rights are necessary to encourage investment and the spread of technology. 12. Progress on these issues will encourage final agreement in areas already close to conclusion, such as textiles, tropical products, safeguards and dispute settlement. Agreement to an improved dispute settlement mechanism should lead to a commitment to operate only under the multilateral rules. Taken all together, these and the other elements of the negotiations, including GATT rule-making, should amount to the substantial, wide-ranging package which we seek. 13. We will seek to ensure that regional integration is compatible with the multilateral trading system. 14. As we noted at Houston, a successful outcome of the Uruguay Round will also call for the institutional reinforcement of the multilateral trading system. The concept of an international trade organization should be addressed in this context. 15. Open markets help to create the resources needed to protect the environment. We therefore commend the OECD's pioneering work in ensuring that trade and environment policies are mutually supporting. We look to the General Agreement on Tariffs and Trade (GATT) to define how trade measures can properly be used for environmental purposes. 16. We are convinced that OECD members must overcome in the near future and, in any case, by the end of the year, remaining obstacles to an agreement on reducing the distortions that result from the use of subsidized export credits and of tied aid credits. We welcome the initiative of the OECD in studying export credit premium systems and structures and look forward to an early report.
Energy
17. As the Gulf crisis showed, the supply and price of oil remain vulnerable to political shocks, which disturb the world economy. But these shocks have been contained by the effective operation of the market, by the welcome increase in supplies by certain oil-exporting countries and by the actions coordinated by the International Energy Agency (IEA), particularly the use of stocks. We are committed to strengthen the IEA's emergency preparedness and its supporting measures. Since the crisis has led to improved relations between producers and consumers, contacts among all market participants could be further developed to promote communication, transparency and the efficient working of market forces. 18. We will work to secure stable worldwide energy supplies, to remove barriers to energy trade and investment, to encourage high environmental and safety standards and to promote international cooperation on research and development in all these areas. We will also seek to improve energy efficiency and to price energy from all sources so as to reflect costs fully, including environmental costs. 19. In this context, nuclear power generation contributes to diversifying energy sources and reducing greenhouse gas emissions. In developing nuclear power as an economic energy source, it is essential to achieve and maintain the highest available standards of safety, including in waste management, and to encourage cooperation to this end throughout the world. The safety situation in Central and Eastern Europe and the Soviet Union deserves particular attention. This is an urgent problem and we call upon the international community to develop an effective means of coordinating its responses. 20. The commercial development of renewable energy sources and their integration with general energy systems should also be encouraged, because of the advantages these sources offer for environmental protection and energy security. 21. We all intend to take a full part in the initiative of the European Community for the establishment of a European Energy Charter on the basis of equal rights and obligations of signatory countries. The aim is to promote free and undistorted energy trade, to enhance security of supply, to protect the environment and to assist economic reform in Central and East European countries and the Soviet Union, especially by creating an open, non-discriminatory regime for commercial energy investment.
Central and Eastern Europe
22. We salute the courage and determination of the countries of Central and Eastern Europe in building democracy and moving to market economies, despite formidable obstacles. We welcome the spread of political and economic reform throughout the region. These changes are of great historical importance. Bulgaria and Romania are now following the pioneering advances of Poland, Hungary and Czechoslovakia. Albania is emerging from its long isolation. 23. Recognizing that successful reform depends principally on the continuing efforts of the countries concerned, we renew our own firm commitment to support their reform efforts, to forge closer ties with them and to encourage their integration into the international economic system. Regional initiatives reinforce our ability to cooperate. 24. All the Central and East European countries except Albania are now members of the International Monetary Fund (IMF) and the World Bank. We welcome the steps being taken by those countries that are implementing IMF-supported programmes of macro-economic stabilization. It is crucial that these programmes are complemented by structural reforms, such as privatizing and restructuring state-owned enterprises, increasing competition and strengthening property rights. We welcome the establishment of the European Bank for Reconstruction and Development (EBRD), which has a mandate to foster the transition to open, market- oriented economies and to promote private initiative in Central and East European countries committed to democracy. 25. A favourable environment for private investment, both foreign and domestic, is crucial for sustained growth and for avoiding dependence on external assistance from governments. In this respect, technical assistance from our private sectors and governments, the European Community and international institutions should concentrate on helping this essential market- based transformation. In this context, we emphasize the importance of integrating environmental considerations into the economic restructuring process in Central and Eastern Europe. 26. Expanding markets for their exports are vital for the Central and East European countries. We welcome the substantial increases already made in exports to market economies and we undertake to improve further their access to our markets for their products and services, including in areas such as steel, textiles and agricultural produce. In this context, we welcome the progress made in negotiating Association Agreements between the European Community and Poland, Hungary and Czechoslovakia, as well as the Presidential Trade Enhancement Initiative announced by the United States, all of which will be in accordance with GATT principles. We will support the work of the OECD to identify restrictions to East/West trade and to facilitate their removal. 27. The Group of Twenty-four (G24) process, inaugurated by the Arch Summit and chaired by the European Commission, has mobilised $31 billion in bilateral support for these countries, including balance of payments finance to underpin IMF-supported programmes. Such programmes are in place for Poland, Hungary and Czechoslovakia. We welcome the contributions already made for Bulgaria and Romania. We are intensifying the G24 coordination process and we reaffirm our shared willingness to play our fair part in the global assistance effort.
The Soviet Union
28. We support the moves towards political and economic transformation in the Soviet Union and are ready to assist the integration of the Soviet Union into the world economy. 29. Reform to develop the market economy is essential to create incentives for change and enable the Soviet people to mobilise their own substantial natural and human resources. A clear and agreed framework within which the centre and the republics exercise their respective responsibilities is fundamental for the success of political and economic reform. 30. We have invited President Gorbachev to meet us for a discussion of reform policies and their implementation, as well as ways in which we can encourage this process. 31. We commend the IMF, World Bank, OECD and EBRD for their study of the Soviet economy produced, in close consultation with the European Commission, in response to the request we made at Houston. This study sets out many of the elements necessary for successful economic reform, which include fiscal and monetary discipline and creating the framework of a market economy. 32. We are sensitive to the overall political context in which reforms are being conducted, including the "New Thinking" in Soviet foreign policy around the world. We are sensitive also to the importance of shifting resources from military to civilian use. 33. We are concerned about the deterioration of the Soviet economy, which creates severe hardship not only within the Soviet Union but also for the countries of Central and Eastern Europe.
The Middle East
34. Many countries have suffered economically as a result of the Gulf crisis. We welcome the success of the Gulf Crisis Financial Coordination Group in mobilising nearly $16 billion of assistance for those countries suffering the most direct economic impact of the Gulf crisis and urge all donors to complete disbursements rapidly. Extensive assistance is being provided by Summit participants for the Mediterranean and the Middle East, as well as by the IMF and World Bank. 35. We believe that enhanced economic cooperation in this area, on the basis of the principles of non-discrimination and open trade, could help repair the damage and reinforce political stability. We welcome the plans of major oil exporting countries for providing financial assistance to others in the region and their decision to establish a Gulf Development Fund. We support closer links between the international financial institutions and Arab and other donors. We believe this would encourage necessary economic reforms, promote efficient use of financial flows, foster private sector investment, stimulate trade liberalization and facilitate joint projects e.g., in water management, which would draw on our technical skills and expertise.
Developing Countries and Debt
36. Developing countries are playing an increasingly constructive role in the international economic system, including the Uruguay Round. Many have introduced radical policy reforms and are adopting the following principles: a) respect for human rights and for the law, which encourages individuals to contribute to development; b) democratic pluralism and open systems of administration, accountable to the public; c) sound, market-based economic policies to sustain development and bring people out of poverty; We commend these countries and urge others to follow their example. Good governance not only promotes development at home, but helps to attract external finance and investment from all sources. 37. Our steadfast commitment to helping developing countries, in conjunction with a durable non-inflationary recovery of our economies and the opening of our markets, will be the most effective way we have of enhancing prosperity in the developing world. 38. Many of these countries, especially the poorest, need our financial and technical assistance to buttress their own development endeavours. Additional aid efforts are required, to enhance both the quantity and the quality of our support for priority development issues. These include alleviating poverty, improving health, education and training and enhancing the environmental quality of our aid. We endorse the increasing attention being given to population issues in devising strategies for sustainable progress. 39. Africa deserves our special attention. Progress by African governments towards sound economic policies, democracy and accountability is improving their prospects for growth. This is being helped by our continued support, focused on stimulating development of the private sector, encouraging regional integration, providing concessional flows and reducing debt burdens. The special Programme of Assistance for Africa, coordinated by the World Bank and providing support for economic reform in over 20 African countries, is proving its worth. We will provide humanitarian assistance to those parts of Africa facing severe famine and encourage the reform of United Nations structures in order to make this assistance more effective. We will also work to help the countries concerned remove the underlying causes of famine and other emergencies, whether these are natural or provoked by civil strife. 40. In the Asia-Pacific region, many economies, including members of the Association of South-East Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC), continue to achieve dynamic growth. We welcome the efforts by those economies of the region which are assuming new international responsibilities. Other Asian countries, which are strengthening their reform efforts, continue to need external assistance. 41. In Latin America we are encouraged by the progress being made in carrying out genuine economic reforms and by developments in regional integration. We welcome the continuing discussions on the Multilateral Investment Fund, under the Enterprise for the Americas Initiative which, together with other efforts, is helping to create the right climate for direct investment, freer trade and a reversal of capital flight. 42. We recognize with satisfaction the progress being made under the strengthened debt strategy. Some countries have already benefited from the combination of strong adjustment with commercial bank debt reduction or equivalent measures. We encourage other countries with heavy debts to banks to negotiate similar packages. 43. We note: a) the agreement reached by the Paris Club on debt reduction or equivalent measures for Poland and Egypt, which should be treated as exceptional cases; b) the Paris Club's continued examination of the special situation of some lower middle-income countries on a case by case basis. 44. The poorest, most indebted countries need very special terms. We agree on the need for additional debt relief measures, on a case by case basis; for these countries, going well beyond the relief already granted under Toronto terms. We therefore call on the Paris Club to continue its discussions on how these measures can best be implemented promptly. 45. We recognize the need for appropriate new financial flows to developing countries. We believe the appropriate way to avoid unsustainable levels of debt is for developing countries to adopt strengthened policies to attract direct investment and the return of flight capital. 46. We note the key role of the IMF, whose resources should be strengthened by the early implementation of the quota increase under the Ninth General Review and the associated Third Amendment to the Articles of Agreement.
Environment
47. The international community will face formidable environmental challenges in the coming decade. Managing the environment continues to be a priority issue for us. Our economic policies should ensure that the use of this planet's resources is sustainable and safeguards the interests of both present and future generations. Growing market economies can best mobilise the means for protecting the environment, while democratic systems ensure proper accountability. 48. Environmental considerations should be integrated into the full range of government policies, in a way which reflects their economic costs. We support the valuable work in this field being undertaken by the OECD. This includes the systematic review of member countries' environmental performance and the development of environmental indicators for use in decision-making. 49. Internationally, we must develop a cooperative approach for tackling environmental issues. Industrial countries should set an example and thus encourage developing countries and Central and East European nations to play their part. Cooperation is also required on regional problems. In this context, we welcome the consensus reached on the Environmental Protocol of the Antarctic Treaty, aimed at reinforcing the environmental preservation of this continent. We note the good progress of the Sahara and Sahel Observatory as well as the Budapest Environmental Centre. 50. The UN Conference on Environment and Development (UNCED) in June 1992 will be a landmark event. It will mark the climax of many international environmental negotiations. We commit ourselves to work for a successful Conference and to give the necessary political impetus to its preparation. 51. We aim to achieve the following by the time of UNCED: a) an effective framework convention on climate change, containing appropriate commitments and addressing all sources and sinks for greenhouse gases. We will seek to expedite work on implementing protocols to reinforce the convention. All participants should be committed to design and implement concrete strategies to limit net emissions of greenhouse gases, with measures to facilitate adaptation. Significant actions by industrial countries will encourage the participation of developing and East European countries, which is essential to the negotiations. b) agreement on principles for the management, conservation and sustainable development of all types of forest, leading to a framework convention. This should be in a form both acceptable to the developing countries where tropical forests grow and consistent with the objective of a global forest convention or agreement which we set at Houston. 52. We will seek to promote, in the context of UNCED: a) mobilisation of financial resources to help developing countries tackle environmental problems. We support the use of existing mechanisms for this purpose, in particular the Global Environment Facility (GEF). The GEF could become the comprehensive funding mechanism to help developing countries meet their obligations under the new environmental conventions. b) encouragement of an improved flow of beneficial technology to developing countries, making use of commercial mechanisms. c) a comprehensive approach to the oceans, including regional seas. The environmental and economic importance of oceans and seas means that they must be protected and sustainably managed. d) further development of international law of the environment, drawing inter alia on the results of the Siena Forum. e) the reinforcement of international institutions concerned with the environment, including the United Nations Environment Programme (UNEP), for the decade ahead. 53. We support the negotiation, under the auspices of UNEP, of an acceptable framework convention on biodiversity, if possible to be concluded next year. It should concentrate on protecting ecosystems, particularly in species-rich areas, without impeding positive developments in biotechnology. 54. We remain concerned about the destruction of tropical forests. We welcome the progress made in developing the pilot programme for the conservation of the Brazilian tropical forest, which has been prepared by the Government of Brazil in consultation with the World Bank and the European Commission, in response to the offer of cooperation extended following the Houston Summit. We call for further urgent work under the auspices of the World Bank, in cooperation with the European Commission, in the framework of appropriate policies and with careful attention to economic, technical and social issues. We will financially support the implementation of the preliminary stage of the pilot program utilising all potential sources, including the private sector, non- governmental organisations, the multilateral development banks, and the Global Environmental Facility. When details of the programme have been resolved, we will consider supplementing these resources with bilateral assistance, so that progress can be made on the ground. We believe that good progress with this project will have a beneficial impact on the treatment of forests at UNCED. We also welcome the spread of debt for nature exchanges, with an emphasis on forests. 55. The burning oil wells and polluted seas in the Gulf have shown that we need greater international capacity to prevent and respond to environmental disasters. All international and regional agreements for this purpose, including those of the International Maritime Organisation (IMO), should be fully implemented. We welcome the decision by UNEP to establish an experimental centre for urgent environmental assistance. In the light of the recent storm damage in Bangladesh, we encourage the work on flood alleviation under the auspices of the World Bank, which we called for at the Arch Summit. 56. Living marine resources threatened by over-fishing and other harmful practices should be protected by the implementation of measures in accordance with international law. We urge control of marine pollution and compliance with the regimes established by regional fisheries organisations through effective monitoring and enforcement measures. 57. We call for greater efforts in cooperation in environmental science and technology, in particular: a) scientific research into the global climate, including satellite monitoring and ocean observation. All countries, including developing countries, should be involved in this research effort. We welcome the development of information services for users of earth observation data since the Houston Summit. b) the development and diffusion of energy and environment technologies, including proposals for innovative technology programmes.
Drugs
58. We note with satisfaction progress made in this field since our Houston meeting, notably the entry into force of the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychiatric [sic] Substances. We welcome the formation of the United Nations International Drugs Control Programme (UNDCP). 59. We will increase our efforts to reduce the demand for drugs as a part of overall anti-drug action programmes. We maintain our efforts to combat the scourge of cocaine and will match these by increased attention to heroin, still the principal hard drug in Europe and Asia. Enhanced cooperation is needed both to reduce production of heroin in Asia and to check its flow into Europe. Political changes in Central and Eastern Europe and the opening of frontiers there have increased the threat of drug misuse and facilitated illicit trafficking, but have also given greater scope for concerted Europe-wide action against drugs. 60. We applaud the efforts of the "Dublin Group" of European, North American and Asian governments to focus attention and resources on the problems of narcotics production and trafficking. 61. We commend the achievements of the task-forces initiated by previous Summits and supported by an increasing number of countries: a) We urge all countries to take part in the international fight against money laundering and to cooperate with the activities of the Financial Action Task Force (FATF). We strongly support the agreement on a mutual evaluation process of each participating country's progress in implementing the FATF recommendations on money laundering. We endorse the recommendation of the FATF that it should operate on a continuing basis with a secretariat supplied by the OECD. b) We welcome the report of the Chemical Action Task Force (CATF) and endorse the measures it recommends for countering chemical diversion, building on the 1988 UN Convention against drug trafficking. We look forward to the special meeting in Asia, concentrating on heroin, and the CATF meeting due in March 1992, which should consider the institutional future of this work. 62. We are concerned to improve the capacity of law enforcement agencies to target illicit drug movements without hindering the legitimate circulation of persons and goods. We invite the Customs Cooperation Council to strengthen its cooperation with associations of international traders and carriers for this purpose and to produce a report before our next Summit.
Migration
63. Migration has made and can make a valuable contribution to economic and social development, under appropriate conditions, although there is a growing concern about worldwide migratory pressures, which are due to a variety of political, social and economic factors. We welcome the increased attention being given these issues by the OECD and may wish to return to them at a future Summit.
Next Meeting
64. We have accepted an invitation from Chancellor Kohl to hold our next Summit in Munich, Germany in July 1992.
Strengthening the International Order
1. We, the leaders of our seven countries and the representatives of the European Community, renew our firm commitment to the ideal of a peaceful, just, democratic and prosperous world. The international community faces enormous challenges. But there is also reason for hope. We must reinforce the multilateral approach to the solution of common problems and work to strengthen the international system of which the United Nations, based on its charter, remains so central a part. We call on the leaders of other nations to join us in that cause. 2. It is a matter for hope and encouragement that the UN Security Council, with the backing of the international community, showed during the Gulf crisis that it could fulfill its role of acting to restore international peace and security and to resolve conflict. With the East-West confrontation of the last four decades behind us, the international community must now build on this new spirit of cooperation not only in the Middle East but wherever danger and conflict threaten or other challenges must be met. 3. We believe the conditions now exist for the United Nations to fulfill completely the promise and the vision of its founders. A revitalized United Nations will have a central role in strengthening the international order. We commit ourselves to making the United Nations stronger, more efficient and more effective in order to protect human rights, to maintain peace and security for all and to deter aggression. We will make preventive diplomacy a top priority to help avert future conflicts by making clear to potential aggressors the consequences of their actions. The UN's role in peacekeeping should be reinforced and we are prepared to support this strongly. 4. We note that the urgent and overwhelming nature of the humanitarian problem in Iraq caused by violent oppression by the government required exceptional action by the international community, following UNSCR 688. We urge the United Nations and its affiliated agencies to be ready to consider similar action in the future if the circumstances require it. The international community cannot stand idly by in cases where widespread human suffering from famine, war, oppression, refugee flows, disease or flood reaches urgent and overwhelming proportions. 5. The recent tragedies in Bangladesh, Iraq, and the Horn of Africa demonstrate the need to reinforce UN relief in coping with emergencies. We call on all Member States to respond to the secretary general's appeal for voluntary contributions. We would like to see moves to strengthen the coordination, and to accelerate the effective delivery, of all UN relief for major disasters. Such initiatives, as part of an overall effort to make the United Nations more effective could include: a) the designation of a high level official, answerable only to the UN Secretary General, who would be responsible for directing a prompt and well-integrated international response to emergencies, and for coordinating the relevant UN appeals; and b) improvements in the arrangements whereby resources from within the UN system and support from donor countries and NGOs can be mobilised to meet urgent humanitarian needs in time of crisis. The United Nations would then be able to take the early action that has sometimes been missing in the past. The United Nations should also make full use of its early warning capacity to alert the international community to coming crises and to work on the preparation of contingency plans, to include the question of prior earmarking of resources and material that would be available to meet these contingencies. 6. Since we last met the world has witnessed the invasion, occupation and subsequent liberation of Kuwait. The overwhelming response of the international community in reversing the forcible annexation of one small nation was evidence of the widespread preference for: -- taking collective measures against threats to the peace and to suppress aggression, -- settling disputes peacefully, -- upholding the rule of law, and -- protecting human rights. These principles are essential to the civilised conduct of relations between states. 7. We express our support for what the countries of the Gulf and their neighbours are doing to ensure their security in future. We intend to maintain sanctions against Iraq until all the relevant resolutions of the Security Council have been implemented in full and the people of Iraq, as well as their neighbours, can live without fear of intimidation, repression or attack. As for the Iraqi people, they deserve the opportunity to choose their leadership openly and democratically. We look forward to the forthcoming elections in Kuwait and to an improvement of the human rights situation there and in the region. 8. We attach overriding importance to the launching of a process designed to bring comprehensive, just and lasting peace between Israel and her Arab neighbours, including the Palestinians. Such a peace should be based on UN SCRs 242 and 338 and the principle of territory for peace. We support the concept of a peace conference starting parallel and direct negotiations between Israel and representative Palestinians on the one hand and Israel and the Arab states on the other. We confirm our continuing support for the current American initiative to advance the peace process, which we believe offers the best hope of progress towards a settlement. We urge all the parties to the dispute to adopt reciprocal and balanced confidence-building measures and to show the flexibility necessary to allow a peace conference to be convened on the basis set out in this initiative. In that connection we believe that the Arab boycott should be suspended as should the Israeli policy of building settlements in the occupied territories. 9. We take note with satisfaction of the prospects opened by the restoration of security in Lebanon. We continue to support efforts by the Lebanese authorities to achieve the implementation of the Taif process, which will lead to the departure of all foreign forces and the holding of free elections. 10. We express our willingness to support the development of economic cooperation among the countries of the Middle East on the basis of liberal policies designed to encourage the repatriation of capital, an increase in investment and a decrease in obstacles to trade. Such policies should be accompanied by comprehensive long- term efforts to bring about more stability for the Middle East and the Mediterranean. 11. We welcome the further substantial progress in reform, both political and economic, achieved in the countries of Central and Eastern Europe during the last year and recognise that these gains will need to be maintained through a difficult period of economic transition, including through regional initiatives. We have a strong interest in the success of market reforms and democracy in Central and Eastern Europe and we commit ourselves to full support for these reforms. We also take note of the progress of Albania towards joining the democratic community of nations. 12. Our support for the process of fundamental reform in the Soviet Union remains as strong as ever. We believe that new thinking in Soviet foreign policy, which has done so much to reduce East/West tension and strengthen the multilateral peace and security system, should be applied on a global basis. We hope that this new spirit of international cooperation will be as fully reflected in Asia as in Europe. We welcome efforts to create a new union, based on consent not coercion, which genuinely responds to the wishes of the peoples of the Soviet Union. The scale of this undertaking is enormous: an open and democratic Soviet Union able to play its full part in building stability and trust in the world. We reiterate our commitment to working with the Soviet Union to support their efforts to create an open society, a pluralistic democracy and a market economy. We hope the negotiations between the USSR and the elected governments of the Baltic countries will resolve their future democratically and in accordance with the legitimate aspirations of the people. 13. It is for the peoples of Yugoslavia themselves to decide upon their future. However the situation in Yugoslavia continues to cause great concern. Military force and bloodshed cannot lead to a lasting settlement and will only put at risk wider stability. We call for a halt to violence, the deactivation and return of military forces to barracks and a permanent cease-fire. We urge all parties to comply with the provisions of the Brioni agreement as it stands. We welcome the efforts of the European Community and its member states in assisting in the resolution of the Yugoslav crisis. We therefore support the dispatch of EC monitors to Yugoslavia, within the framework of the CSCE emergency mechanism. We will do whatever we can, with others in the international community, to encourage and support the process of dialogue and negotiation in accordance with the principles enshrined in the Helsinki Final Act and the Paris Charter for a new Europe, in particular respect for human rights, including rights of minorities and the right of peoples to self-determination in conformity with the Charter of the United Nations and with the relevant norms of international law, including those relating to territorial integrity of states. The normalization of the present situation will allow us to contribute to the indispensable economic recovery of the country. 14. We welcome the positive developments in South Africa, where the legislative pillars of apartheid have at last been dismantled. We hope that these important steps will be followed by the de facto elimination of apartheid and improvement in the situation of the most impoverished among the population of South Africa. We hope that negotiations on a new Constitution leading to non-racial democracy will begin shortly and will not be disrupted by the tragic upsurge of violence. All parties must do all that is in their power to resolve the problem of violence. We are concerned that the foundation for a new non-racial South Africa will be undermined by mounting social problems and declining economic prospects for the majority of the population, which have contributed to the violence. There is an urgent need to restore growth to the economy to help reduce inequalities of wealth and opportunity. South Africa needs to pursue new economic, investment and other policies that permit normal access to all sources of foreign borrowing. In addition to its own domestic efforts, South Africa also needs the help of the international community, especially in those areas where the majority have long suffered deprivation: education, health, housing and social welfare. We will direct our aid for these purposes. 15. Finally, we look for further strengthening of the international order by continued vigorous efforts to deter terrorism and hostage taking. We call for the immediate and unconditional release of all hostages wherever they may be held and for an accounting of all persons taken hostage who may have died while being held. We welcome the undertakings given by governments with an influence over hostage holders to work for the release of hostages and urge them to intensify their efforts to this end. We extend our sympathy to the friends and relations of those held. We reaffirm our condemnation of all forms of terrorism. We will work together to deter and combat terrorism by all possible means within the framework of international law and national legislation, particularly in the fields of international civil aviation security and the marking of plastic explosives for the purpose of detection. 16. This forum continues to provide an invaluable opportunity for representatives from Europe, Japan and North America to discuss the critical challenges of the coming years. But we cannot succeed alone. We call on the leaders of the other nations to join us in our efforts to make a practical and sustained contribution to the cause of peace, security, freedom and the rule of law, which are the preconditions for trying to bring about greater justice and prosperity throughout the world.
Declaration on Conventional Arms Transfers and NBC Non- Proliferation
1. At our meeting in Houston last year, we, the Heads of State and Government and the representatives of the European Community, underlined the threats to international security posed by the proliferation of nuclear, biological and chemical weapons and of associated missile delivery systems. The Gulf crisis has highlighted the dangers posed by the unchecked spread of these weapons and by excessive holdings of conventional weapons. The responsibility to prevent the re-emergence of such dangers is to be shared by both arms suppliers and recipient countries as well as the international community as a whole. As is clear from the various initiatives which several of us have proposed jointly and individually, we are each determined to tackle, in appropriate fora, these dangers both in the Middle East and elsewhere.
Conventional Arms Transfers
2. We accept that many states depend on arms imports to assure a reasonable level of security and the inherent right of self- defence is recognized in the UN Charter. Tensions will persist in international relations so long as underlying conflicts of interest are not tackled and resolved. But the Gulf conflict showed the way in which peace and stability can be undermined when a country is able to acquire a massive arsenal that goes far beyond the needs of self defence and threatens its neighbours. We are determined to ensure such abuse should not happen again. We believe that progress can be made if all states apply the three principles of transparency, consultation and action. 3. The principle of transparency should be extended to international transfers of conventional weapons and associated military technology. As a step in this direction we support the proposal for a universal register of arms transfers under the auspices of the United Nations, and will work for its early adoption. Such a register would alert the international community to an attempt by a state to build up holdings of conventional weapons beyond a reasonable level. Information should be provided by all states on a regular basis after transfers have taken place. We also urge greater openness about overall holdings of conventional weapons. We believe the provision of such data, and a procedure for seeking clarification, would be a valuable confidence and security building measure. 4. The principle of consultation should now be strengthened through the rapid implementation of recent initiatives for discussions among leading arms exporters with the aim of agreeing a common approach to the guidelines which are applied in the transfer of conventional weapons. We welcome the recent opening of discussions on this subject. These include the encouraging talks in Paris among the Permanent Members of the UN Security Council on 8/9 July; as well as ongoing discussions within the framework of the European Community and its Member States. Each of us will continue to play a constructive part in this important process, in these and other appropriate fora. 5. The principle of action requires all of us to take steps to prevent the building up of disproportionate arsenals. To that end all countries should refrain from arms transfers which would be destabilising or would exacerbate existing tensions. Special restraint should be exercised in the transfer of advanced technology weapons and in sales to countries and areas of particular concern. A special effort should be made to define sensitive items and production capacity for advanced weapons, to the transfer of which similar restraints could be applied. All states should take steps to ensure that these criteria are strictly enforced. We intend to give these issues our continuing close attention. 6. Iraqi aggression and the ensuing Gulf war illustrate the huge costs to the international community of military conflict. We believe that moderation in the level of military expenditure is a key aspect of sound economic policy and good government. While all countries are struggling with competing claims on scarce resources, excessive spending on arms of all kinds diverts resources from the overriding need to tackle economic development. It can also build up large debts without creating the means by which these may be serviced. We note with favor the recent report issued by the United Nations Development Programme (UNDP) and the recent decisions by several donor countries to take account of military expenditure where it is disproportionate when setting up aid programmes and encourage all other donor countries to take similar action. We welcome the attention which the managing director of the International Monetary Fund (IMF) and the President of the World Bank have recently given to excessive military spending, in the context of reducing unproductive public expenditure.
Non-Proliferation
7. We are deeply concerned about the proliferation of nuclear, biological and chemical weapons and missile delivery systems. We are determined to combat this menace by strengthening and expanding the non-proliferation regimes. 8. Iraq must fully abide by Security Council Resolution 687, which sets out requirements for the destruction, removal or rendering harmless under international supervision of its nuclear, biological, and chemical warfare and missile capabilities; as well as for verification and long-term monitoring to ensure that Iraq's capability for such weapon systems is not developed in the future. Consistent with the relevant UN resolutions, we will provide every assistance to the United Nations Special Commission and the International Atomic Energy Agency (IAEA) so that they can fully carry out their tasks. 9. In the nuclear field, we: -- Re-affirm our will to work to establish the widest possible consensus in favor of an equitable and stable non- proliferation regime based on a balance between nuclear non- proliferation and the development of peaceful uses of nuclear energy. -- Reaffirm the importance of the nuclear Non-Proliferation Treaty (NPT) and call on all other non-signatory states to subscribe to this agreement; -- Call on all non-nuclear weapon states to submit all their nuclear activities to IAEA safeguards, which are the cornerstone of the international non-proliferation regime; -- Urge all supplier states to adopt and implement the Nuclear Suppliers Group guidelines; We welcome the decision of Brazil and Argentina to conclude a full- scope safeguard agreement with the IAEA and to take steps to bring the Treaty of Tlatelolco into force, as well as the accession of South Africa to the NPT. 10. Each of us will also work to achieve: -- Our common purpose of maintaining and reinforcing the NPT regime beyond 1995; -- A strengthened and improved IAEA safeguards system; -- New measures in the Nuclear Suppliers Group to ensure adequate export controls on dual-use items. 11. We anticipate that the Biological Weapons Review Conference in September will succeed in strengthening implementation of the convention's existing provisions by reinforcing and extending its confidence-building measures and exploring the scope for effective verification measures. Each of us will encourage accession to the convention by other states and urge all parties strictly to fulfill their obligations under the convention. We each believe that a successful Review Conference leading to strengthened implementation of the BWC, would make an important contribution to preventing the proliferation of biological weapons. 12. The successful negotiation of a strong, comprehensive, and effectively verifiable convention banning chemical weapons, to which all states subscribe, is the best way to prevent the spread of chemical weapons. We welcome recent announcements by the United States which we believe will contribute the swift conclusion of such a convention. We hope that the negotiation will be successfully concluded as soon as possible. We reaffirm our intention to become original parties to the convention. We urge others to become parties at the earliest opportunity so that it can enter into force as soon as possible. 13. We must also strengthen controls on exports which could contribute to the proliferation of biological and chemical weapons. We welcome the measures taken by members of the Australia Group and by other states on the control of exports of chemical weapons precursors and related equipment. We seek to achieve increasingly close convergence of practice between all exporting states. We urge all states to support these efforts. 14. Our aim is a total and effective ban on chemical and biological weapons. Use of such weapons is an outrage against humanity. In the event that a state uses such weapons each of us agrees to give immediate consideration to imposing severe measures against it both in the UN Security Council and elsewhere. 15. The spread of missile delivery systems has added a new dimension of instability to international security in many regions of the world. As the founders of the Missile Technology Control Regime (MTCR), we welcome its extension to many other states in the last two years. We endorse the joint appeal issued at the Tokyo MTCR meeting in March 1991 for all countries to adopt these guidelines. These are not intended to inhibit cooperation in the use of space for peaceful and scientific purposes. 16. We can make an important contribution to reducing the dangers of proliferation and conventional arms transfers. Our efforts and consultations on these issues, including with other supplier countries, will be continued in all appropriate fora so as to establish a new climate of global restraint. We will only succeed if others, including recipient countries, support us and if the international community unites in a new effort to remove these threats which can imperil the safety of all our peoples. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

G-7 Agreement on Multilateral Issues

Description: Opening statement during a press briefing, London, England Date: Jul 16, 19917/16/91 Category: Speeches, Testimony, Statements Country: Iraq, USSR (former), Bangladesh Subject: Mideast Peace Process, United Nations, Trade/Economics, Arms Control [TEXT] On behalf of President Bush and the entire American delegation, let me begin by thanking [British] Prime Minister [John] Major, Foreign Minister [Douglas] Hurd, and all of their colleagues for the fine hospitality and excellent work that has gone into putting together this series of very productive meetings. Foreign Minister Hurd, of course, has already released the political and non-proliferation declarations, and he has presented to you the Chairman's statement in some detail. But let me highlight just a couple of points. First, we have issued separately a declaration on non- proliferation. As the world's continuing problems with Iraqi weapons programs remind us daily, the proliferation of weapons is a problem that we must all work together to solve. We think that today's statement builds constructively on President Bush's initiative and builds constructively on what was a very successful meeting last week in Paris. Second, the seven [Group of 7 (G-7)] made clear that they attach overriding importance to launching a process designed to bring comprehensive, just, and lasting peace and reconciliation between Israel, the Arab states, and the Palestinians. The declaration supports the concept of a peace conference, starting parallel and direct negotiations between Israel and representative Palestinians on the one hand, and Israel and the Arab states on the other. Our G- 7 partners have confirmed their continuing support for our current initiative to advance the peace process which we collectively believe offers the best hope of progress toward a settlement. Third, the seven are agreed on the need for a high-level official to direct and coordinate UN emergency and disaster relief efforts. With the recent tragedies in Bangladesh, in Iraq, and the Horn of Africa, we hope that such a streamlined mechanism will greatly facilitate the international community's efforts not only to cope with but, indeed, to prevent such tragedies. Fourth, as you know, tomorrow the leaders will meet with [Soviet] President [Mikhail] Gorbachev. Our common aim is to support the political and economic transformation of the Soviet Union in their effort to build multi-party democracy and a free market economy. That transformation, as we have said before, will take time, and it will be difficult. So we see tomorrow's meeting not as a one-shot event but as another step in an engagement that will extend far into the future. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

International Monetary Fund

Date: Jul 22, 19917/22/91 Category: Policy Briefs (Gist) Subject: Trade/Economics, International Organizations [TEXT]
Background
The International Monetary Fund (IMF) was established in December 1945 to help reverse protectionist trade policies and competitive exchange rate devaluations that damaged the world economy in the 1930s. It has headquarters in Washington, DC.
Membership
The IMF provides a permanent forum for its 155 members to cooperate on international policies to promote sustainable growth in the world economy. IMF membership is a prerequisite to membership in the World Bank, and the two institutions work closely. In 1990 and early 1991, Bulgaria, Czechoslovakia, Namibia, and Mongolia joined the IMF, and Switzerland's application was approved (Swiss entry depends on domestic ratification). The Soviet Union is not an IMF member.
Funding
Each member contributes to the IMF's general resources according to its quota, expressed in Special Drawing Rights (SDRs), generally based on its relative economic and financial importance in the world economy.1 Quotas, in turn, determine IMF voting shares and access to Fund resources. At its May 1990 meeting, the IMF's Interim Committee agreed to a 50% increase in quotas to about SDR 137 billion. The United States will retain the largest quota, with more than 19% of total quota shares. Japan and Germany will share second place with about 6% each, and the United Kingdom and France will share the next position with about 5.5% each. Implementation of the quota increase is linked to ratification of an amendment to the Articles of Agreement to allow suspension of voting and related rights of members that fail to fulfill their obligations to the Fund.
Operations
The IMF has regulatory, surveillance, and financial functions that apply equally to all members. It conducts regular reviews of national economies and the world economy; advises members on sound economic policies; and seeks to ensure compliance with IMF rules to eliminate exchange restrictions and maintain orderly exchange rate arrangements. The Fund cooperates with the General Agreement on Tariffs and Trade (GATT) and the Bank for International Settlements (BIS). The IMF also provides adjustment assistance to members facing balance-of-payments difficulties. In response to the developing country debt crisis in the 1980s, the IMF created new facilities and medium-term financing arrangements designed to support members' economic adjustment efforts. IMF programs stress sound fiscal and monetary policies, appropriate interest and exchange rates, and reliance on market forces. Under the strengthened international debt strategy endorsed in 1989, the IMF renewed its efforts to help debtor countries pursue market-oriented policies by supporting debt and debt service reduction operations negotiated between commercial bank creditors and reforming debtor countries. Particular emphasis has been given to measures to encourage new foreign investment and repatriation of flight capital. To date, eight countries (Chile, Costa Rica, Mexico, Morocco, Nigeria, Philippines, Uruguay, and Venezuela) have negotiated IMF arrangements with special Fund resources to support debt and debt service reduction operations. Most countries undertake IMF-supported adjustment programs because they face unsustainable external and internal economic imbalances and reduced access to international credit. IMF financial and technical assistance allows adjustment in a more orderly manner than would be possible otherwise. Economic policy reforms also improve a member's access to new bank loans and official donor assistance. Developing countries have borrowed primarily from the Fund in recent years. In 1990, new loan commitments totaled more than SDR 2 billion. Drawings on IMF loans were SDR 4.3 billion, compared with SDR 3.5 billion in 1989. However, aggregate general credit outstanding fell slightly from SDR 22.3 billion in late 1989 to SDR 20.7 billion in late 1990. Fund disbursements and credit outstanding are expected to increase significantly in 1991 and subsequent years in response to rising demands on IMF resources to support economic adjustment efforts. The IMF adopted a series of modifications to its lending policies in November 1990 to respond to the financial effects of the Persian Gulf crisis. One provision allowed members to draw on IMF resources to offset the effects of increased oil import costs. Under this provision, more than SDR 2 billion were disbursed in balance- of-payments assistance during January-May 1991. Arrears to the Fund grew rapidly in the 1980s, totaling SDR 3.4 billion in late 1990. At its May 1990 session, the Interim Committee endorsed a strengthened arrears strategy consisting of incentives to reward sound economic performance and measures to discourage accumulation of arrears. Under the new approach, an existing arrears country will be able to earn "rights," based on sustained economic performance under a Fund-monitored program, toward extraordinary financing to settle its arrears. Strengthened remedial measures will include suspension of voting and representation rights of member countries which do not fulfill their Fund obligations.
US Policy and the IMF
The United States strongly supports the IMF and its central role in the international financial system. IMF activities complement a key US foreign policy objective: maintenance of a stable, open world trade and payments system. The IMF assists less developing debtor countries and plays an important role in helping East European countries restructure their economies on a more market-oriented basis. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

The World Bank

Date: Jul 22, 19917/22/91 Category: Policy Briefs (Gist) Subject: Trade/Economics [TEXT]
Background
The 155-country World Bank provides advice on long-term finance and policy issues to developing countries. It promotes economic growth and works to raise living standards by investing in productive projects and by promoting the adoption of sustainable economic and financial policies. Although the Bank traditionally has financed infrastructure such as roads and power facilities, it also "invests" in people by expanding opportunities for education, health care, and housing. The World Bank also emphasizes agriculture and rural development, and, more recently, it has provided structural adjustment loans to help countries grow out of their financial problems through market-oriented and institutional reforms. Its multilateral character and professional expertise put it in a strong position to advise countries undertaking these programs.
The World Bank Group: Funding
The World Bank Group comprises four funding institutions: -- The
International Bank for Reconstruction and Development (IBRD)
obtains most of its resources from borrowing in private capital markets, backed by its member governments' guarantees. Despite the economic difficulties facing many IBRD borrowers, most maintain excellent repayment records. The IBRD's superior financial reputation keeps the cost of borrowing low. It regularly earns a profit, which it uses to improve its financial position and finance new loans. Founded in 1945, the IBRD lends at market-related rates of interest to countries at more advanced stages of development. In its 1990 fiscal year, the IBRD made loan commitments valued at $15.2 billion to 37 countries. Cumulative lending at the end of FY 1990 was $187 billion. -- The
International Development Association (IDA)
finances most of its lending operations from direct contributions from developed country members. Donors agreed to a 3-year replenishment of $14.6 billion in December 1989. The IDA was established in 1960 to provide credits on concessional terms to the poorest countries--those that cannot afford alternative financing. It committed $5.5 billion to 52 countries in FY1990. Total IDA credits since its founding amounted to $58 billion at the end of FY 1990. --
International Finance Corporation (IFC)
funding comes from members' subscriptions (contributions) and from borrowings. An increase in the IFC capital base is currently under consideration. Since its establishment in 1956, the IFC has sought to mobilize resources for private sector development. In FY 1990, the IFC invested $2.2 billion in loans and equity capital to private businesses in 39 developing countries. -- The
Multilateral Investment Guarantee Agency (MIGA)
is funded from members' subscriptions. The MIGA, which began operating in June 1988, insures private foreign investment in developing countries against non-commercial risks such as expropriation, civil strife, and inconvertibility.
Burden-sharing
The United States is the largest contributor to the World Bank, with about 18% of IBRD subscriptions. Only 3% of the current US capital subscription requires a direct budgetary outlay. The IBRD has the added advantage of leveraging the money actually paid in by borrowing in private capital markets. In FY 1990 for example, the IBRD lent $217 for each dollar of capital paid in by the US government. The US share of the latest IDA replenishment is 21.6%. For each dollar the United States contributes to the IDA, other countries contribute about four. The US share of IFC capital is 24%.
US Interest
The US position as a world leader depends on an open and growing economy based on economic and political freedom. The World Bank has proved to be a cost-effective instrument for promoting the US interest in integrating the developing countries into the international trade and financial system. It reinforces the US aid program by providing substantial assistance in many countries where the United States has important political and security interests. The Bank helps to meet US humanitarian and environmental concerns by assisting in alleviating poverty, encouraging sound environmental policies, and rebuilding countries affected by natural disasters. It also serves US commercial interests by expanding markets for US exports and financing the purchase of US goods and services.
The Future
As it builds on its traditional strengths in the design and financing of sound investment projects, the World Bank also must remain flexible to respond to the changing needs of borrowers. Measures to support economic growth will continue to be at the center of its lending program. The Bank will be called upon to promote private sector development, to catalyze capital flows, and to ensure that all resources are used in an effective and environmentally sustainable manner. In 1990, the World Bank launched a new Global Environment Facility, in conjunction with the UN Development Program and the UN Environment Program. The facility, to be funded by $1.2 billion in direct donor contributions, co-financing, parallel finances, and the Bank's retained earnings, will provide grants or concessional loans to developing countries to assist them in implementing programs that help protect the global environment. The World Bank, in support of the Brady Plan (an international debt strategy of the US Treasury Secretary), is designing programs to help major debtor countries undertaking structural economic reforms to improve their efficiency and productivity. The United States has asked the Bank and private lenders to support countries undertaking serious growth-oriented, self-help efforts. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

European Bank for Reconstruction and Development

Date: Jul 22, 19917/22/91 Category: Policy Briefs (Gist) Region: Europe, E/C Europe, Eurasia, North America, MidEast/North Africa Country: Australia, Austria, Belgium, Bulgaria, Canada, Cyprus, Czechoslovakia (former), Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Liechtenstein, Luxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey, United States, USSR (former), Yugoslavia (former) United Kingdom Subject: Trade/Economics, Democratization [TEXT] French President Mitterrand proposed the creation of a development bank for the nations of Central and Eastern Europe in a speech to the European Parliament in November 1989. The member countries of the European Community endorsed the proposed bank in December. After negotiations eventually involving 42 participants, the Articles of Agreement for the European Bank for Reconstruction and Development (EBRD) were signed on May 29, 1990, in Paris. The EBRD formally came into existence on March 28, 1991, when members representing at least two-thirds of total capital subscriptions had deposited their instruments of ratification, acceptance, or approval. The inaugural meeting of the Board of Governors took place on April 15, 1991.
Structure
The EBRD's principal decision-making body is the 23-member Board of Directors, 11 appointed from the EC and its member states and 12 appointed by non-EC countries. Some major policy decisions will be referred to the Board of Governors, comprising the finance ministers or their designates from each of the member countries. Former French Presidential Adviser Jacques Attali, who chaired the negotiations, is the president of the EBRD. He is supported by five vice presidents and staff. The headquarters of the bank are in London.
Membership
The bank's 41 member shareholders are: Australia, Austria, Belgium, Bulgaria, Canada, Cyprus, Czechoslovakia, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Liechtenstein, Luxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey, UK, United States, USSR, Yugoslavia, European Community, and European Investment Bank.
Principal Features
The EBRD was created in order to promote the development of open market-oriented economies and private entrepeneurial initiative, and to support the transition to pluralism and multi-party democracy in the countries of Central and Eastern Europe (Bulgaria, Czechoslovakia, Hungary, Poland, Romania, and Yugoslavia) and the USSR that will borrow from the bank. The EBRD's total capital is set at 10 billion European currency units (ECU), about $11.7 billion, with 30% paid-in and the remainder callable. The US, with 10% of the bank's capital, is the single largest shareholder. The EC and its member countries together hold 51% of the EBRD's capital. Japan and the four largest West European countries each hold 8.52%. The USSR holds 6% and the other Central and East European countries 5.95%. At least 60% of the EBRD's resources must be devoted to the private sector, including state-owned firms moving to private ownership and control. The balance will be available for infrastructure and environmental projects supporting private sector development and for loans to state-owned enterprises operating competitively. The EBRD is the only multilateral development bank that specifies environmental objectives in its charter. The Board of Directors, as one of its first acts, approved operational guidelines to ensure that environmental considerations are factored into to the EBRD's operations. The United States is encouraging the bank to take further steps to ensure effective public participation in consideration of environmental impact statements. The USSR agreed to limit its borrowing for an initial 3-year period to the level of its paid-in capital (about $216 million). Operations in the USSR will be confined to the private sector, including privatization, and to helping enterprises operating competitively and moving to a market orientation. Any change in the USSR's borrowing status requires the agreement of 75% of the member countries representing at least 85% of voting power. The bank's capital is denominated in ECU. Capital subscriptions can be made in ECU, US dollars, or Japanese yen with the exchange rate for the dollar and yen set at the average over the period October 1989 through March 1990.
Operations
The EBRD's Board of Directors has already approved many of the bank's regulations, legal agreements, and operating guidelines. The staff has begun developing country strategies for lending in each of the borrowing members. These country strategies will be reviewed and endorsed by the Board of Directors. Lending operations began in April 1991 and some of the first loans will be made to co-finance projects being developed by the World Bank and other established financial institutions.(###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

European Community

Date: Jul 22, 19917/22/91 Category: Focus on Emerging Democracies Region: Europe Country: Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, United Kingdom Subject: Trade/Economics, EC [TEXT] The European Community (EC) was established in 1957 by the Treaty of Rome. Currently there are 12 members: Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and UK. The EC's primary goal is increased economic and political integration among its members. A major step toward that goal is the creation of a single, integrated market by the end of 1992. In December 1990, the EC also decided to begin the process of seeking economic-monetary and political union.
EC Institutions and Presidency
Major EC institutions are the EC Commission, the Council of Ministers, the European Parliament, and the Court of Justice. The Commission, made up of 17 members appointed by common agreement of the 12 governments, has primary responsibility for initiating and implementing EC policy in areas that fall under EC treaties (for example, the internal market, external trade, and agricultural policy). The Council of Ministers, representing the member states, occupies the preeminent position in the current institutional power balance and decides on the Commission's proposals. The Parliament, the only EC institution that directly represents European citizens, has significant power over budgetary matters and can amend or reject certain legislation approved by the Council. The Court, which has a role similar to that of the US Supreme Court, is the final authority on the interpretation of EC laws. Every January and July, the presidency of the Council of Ministers rotates. The presidency country presides at all meetings of the 12 member states and serves as spokesman in dealing with third countries on inter-governmental matters, including efforts to coordinate the foreign policies of the member states. This foreign policy coordination process, known as European Political Cooperation, is one of seeking consensus for joint action by the 12 members on international political issues, such as the Gulf crisis and refugee aid, the Middle East peace process, South Africa, Central America, and the Conference on Security and Cooperation in Europe. The EC has taken increasing responsibility in areas such as environmental and narcotics policy, formerly reserved to individual members. Since mid-1989, the EC has played a key coordinating role for Western assistance to Central and Eastern Europe.
European Integration
In December 1990, the EC convened two intergovernmental conferences to discuss deeper integration, in part via revisions to the Treaty of Rome. The EC is expected to establish a single European Central Bank and a single currency by the end of the decade, although all 12 member countries may not enter the new arrangements at once. Proposals under debate for greater political integration include a common foreign and security policy, extension of majority voting to political as well as trade issues, and greater powers for the European Parliament.
EC Economy
As a result of German unification on October 3, 1990, the population of the EC is now roughly 344 million. In 1989, the EC had a population of 326 million, a gross national product of $4.8 trillion (almost that of the US), and an average per capita GNP of $14,850. The EC is the world's largest trading entity. Its total foreign trade in 1989 was $962 billion, which is about 16% of world commerce. An important aspect of the EC's economy is its Common Agricultural Policy (CAP), a complicated system of price supports, subsidies, and protection that consumes almost two-thirds of the EC budget. The Community is more than self-sufficient in many agricultural commodities.
US-EC Relations
The United States has an important economic relationship with the EC and growing ties in other areas. The European Community is the United States' largest trading partner. Total US-EC trade was $172 billion in 1989 and $190 billion in 1990. In 1990, US imports from the EC represented 19% of total imports. US exports to the EC were 25% of total exports. In 1990, the US trade surplus with the European Community rose to $6 billion, up from almost $1.5 billion in 1989 (the first trade surplus year since 1982). The United States and the Community are each other's most significant source of direct investment. By the end of 1989, the Community had $235 billion invested in the United States, and the United States had about $150 billion in the EC. The United States supports the EC's plan to develop an integrated market by the end of 1992. It is in the interest of the EC and the United States that the program be implemented in an open fashion without new trade barriers. The United States holds regular meetings with the Community to discuss various aspects of the 1992 program and to resolve trade differences, many concerning agriculture. In its negotiations with the Community on trade and investment issues, the US Government works to ensure that American interests are not discriminated against in post-1992 Europe. The global reform of agricultural policies, including the CAP, remains an important US objective and a major task of the current round of multilateral trade negotiations. The United States cooperates with the EC to mobilize economic and financial support for Central and Central and Eastern Europe. The United States has long discussed foreign and trade policy issues on an ad hoc basis with the Commission, through the EC presidency country, the EC troika (the current presidency country and its immediate predecessor and successor), meetings with the EC-12, and with the EC Commission. These arrangements were formalized by the US-EC Declaration of November 23, 1990. As agreed in the declaration, the US president meets twice annually with the head of state or government of the presidency country and the president of the EC Commission. The secretary of state meets twice annually with the EC foreign ministers and in practice several more times with the presidency or troika foreign ministers. The secretary also meets twice annually, along with some cabinet colleagues, with the EC Commission. Discussions include a broad range of issues: bolstering international peace and security in areas such as the Gulf, the Middle East, and Central America; the Uruguay Round and other international trade issues; supporting the emerging democracies of Eastern and Central Europe; and science and technology. The EC cooperated closely with the United States during the Persian Gulf crisis. The EC and its member states swiftly condemned the Iraqi invasion of Kuwait and imposed sweeping economic sanctions on Iraq, including an embargo on trade and a freeze on Iraqi assets. The EC and its member states provided generous financial support to the frontline states. EC members consistently supported the various UN Security Council Resolutions on the Gulf crisis. The Community has moved actively to relieve the plight of Kurdish and other refugees. Its members are providing some $180 million in refugee aid, and several have sent military units to protect the refugees and deliver the aid on the ground.
Relations With Other Countries
EC countries have long-standing political and economic ties with the countries of Central and Eastern Europe. However, the EC established diplomatic relations with most East European governments only in 1988. It provides significant economic assistance to the emerging East European democracies and has eased access to its markets for them. A European Bank for Reconstruction and Development (in which the United States is an active member) has been established to assist economic recovery and reform in Central and Eastern Europe. The EC and the six- country European Free Trade Association plus Liechtenstein agreed to negotiate a closer relationship, to be known as the European Economic Area. The Community has placed priority on improving relations. The Lome Convention, a framework for EC development cooperation with 68 African, Caribbean, and Pacific countries, was established in 1975. In 1990, a new 10-year agreement was signed to provide aid to development projects, free access to EC markets for almost all manufactured imports from those countries, and incentives to promote European investment in developing countries. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

The G-24 and Aid to Eastern Europe

Date: Jul 22, 19917/22/91 Region: E/C Europe Country: Czechoslovakia (former), Bulgaria, Poland, Yugoslavia (former), Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States Subject: Development/Relief Aid [TEXT]
Background
President Bush and the other leaders at the Paris economic summit meeting in July 1989 agreed on the need to coordinate Western assistance in support of political and economic changes in Poland and Hungary. The European Community (EC) Commission, which was chosen to coordinate the process, has convened a series of meetings of 24 interested countries known as the G-24. In July 1990, the G- 24 extended coordinated assistance to Czechoslovakia, Bulgaria, and Yugoslavia. Romania became eligible in January 1991. Representatives from the International Monetary Fund (IMF), the World Bank, the Paris Club (official bilateral creditors), the Organization for Economic Cooperation and Development (OECD), the European Bank for Reconstruction and Development, the Bank for International Settlements, and the European Investment bank, attend the official (high-level) and ministerial meetings. At its first meeting in August 1989, the G-24 established working groups on food aid, management training, environmental issues, market access/trade, and investment. The G-24 has agreed not to duplicate the work of international organizations and to coordinate its activities with them.
Structure
The EC Commission functions as the secretariat to the G-24. After consultation with key participants, the EC sets the dates and agenda for the working group, high-level, and ministerial meetings. Working group participation is open to all interested G-24 members and involved international organizations. In June 1991, the G-24 decided to invite recipient countries to participate in the meetings of the working groups. Working group participants discuss proposed and ongoing projects, provide updates on bilateral activities, and share information obtained from visits and discussions in recipient countries. Periodic meetings of senior officials and ministerial-level meetings give policy direction to the G-24.
Accomplishments
The G-24 process has been very successful in mobilizing substantial commitments to the countries of Eastern Europe. By June 1991, total pledges exceeded $31 billion, of which $7 billion is grant assistance. Major contributors are Germany, Japan, the EC, and the United States. The United States has provided $944 million in grants and more than $1 billion in other assistance in FY 1990- 91. G-24 activities have included: -- The funding under US leadership of the $1-billion Polish exchange stabilization fund; -- Provision of about $3 billion in supplementary balance-of- payments financing to Czechoslovakia, Bulgaria, Hungary, and Romania; -- Delivery of food aid, including a US commitment of more than $250 million, and the use of generated local counterpart funds to supply credit for projects involving small farmers, water supply, telephones, and rural banking; and -- Joint or co-financed projects such as the Budapest Regional Center for the Environment and US sector grants that complement World Bank structural adjustment loans. Working groups continue to make progress. Food aid programs have been largely implemented, and technical assistance programs in agriculture are under discussion. Training and environment projects are being developed, evaluated, and implemented in cooperation with the countries of Eastern Europe. The EC has increased coordination with other international institutions involved in the reforming countries. The IMF, the World Bank, the International Labor Organization, and the OECD are using their expertise in the region and are cooperating with the G-24 to guarantee the most efficient assistance operation.
Policy on Reforms
G-24-coordinated assistance is dependent on progress toward implementation of the rule of law, respect for human rights, and the development of a market economy. This conditionality has distinguished the G-24 from other assistance efforts and has helped to support economic and political reforms in Eastern Europe.
G-24 Countries
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.(###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

GATT and the International Trading System

Date: Jul 22, 19917/22/91 Category: Policy Briefs (Gist) Country: Zimbabwe, Czechoslovakia (former), Bulgaria, Yugoslavia (former), USSR (former), Romania Subject: Trade/Economics [TEXT]
Background
The General Agreement on Tariffs and Trade (GATT), which entered into force in 1948, sets rules for international trade and provides a forum for multilateral trade negotiations. The United States is among the founding members and a chief author of the GATT. It now has 102 members, known as contracting parties, which account for almost 90% of world trade. An additional 28 countries apply GATT rules. International trade has grown in volume, importance, and complexity since the inception of the GATT. This growth has occurred partly as a result of a consensus among GATT members that the world's economic welfare depends on freer trade, without the risk of escalating tariff wars. Seven rounds of multilateral negotiations under the GATT have succeeded in reducing average tariffs in the industrial countries from more than 40% in the early 1950s to less than 5% today. The 1974-79 Tokyo Round established additional international agreements (codes) on rules of conduct in non-tariff areas: use of subsidies and countervailing duties, technical barriers to trade (standards), import licensing procedures, anti-dumping actions, government procurement, customs valuation, and trade in bovine meat, dairy products, and civil aircraft.
Uruguay Round
The eighth and current series of negotiations, the Uruguay Round, began in 1986 in Punta del Este, Uruguay. It is the most comprehensive round of multilateral trade negotiations ever attempted. Issues that have been discussed for the first time include trade in services, foreign investment, and protection of intellectual property (patents, trademarks, and copyrights). Fifteen negotiating groups were established to deal with the various issues. The Uruguay Round originally was scheduled to conclude in Brussels in December 1990. Although progress was made in many important areas, critical issues, especially reform in agriculture, remain to be agreed. Therefore, the round has been extended in order to provide more time to reach a successful conclusion. Negotiations are now in their final and critical stage.
US Policy
The top US trade priority is successful conclusion of the Uruguay Round, which could result in more than $4 trillion of global economic expansion during the next 10 years. Failure of the round could produce an increase in unilateral protectionist measures by many countries. Increasing protectionism would slow the world's economic growth and retard the development of emerging democracies in Central America and Central and Eastern Europe. The United States has made it clear that, at a minimum, it wants comprehensive reform of agricultural trade, expanded market access for goods and services, meaningful disciplines in the "new areas" (intellectual property, services, and investment), and more complete integration of developing countries into the global trading system. A top priority for the United States is agreement on new market-oriented rules to reduce, and, ultimately, to eliminate the numerous government measures which distort world trade in agriculture. The United States has taken the position that fundamental agricultural reform can only be achieved through the negotiation of specific commitments to reduce barriers to market access, export subsidies, and trade-distorting internal supports and through an agreement to avoid using sanitary and phytosanitary (plant health) measures to restrict trade. The United States expects the final Uruguay Round package to include agreements in the new areas of services, trade-related investment measures, and protection of intellectual property. The US objective in services is to allow services providers (such as architects) to operate in foreign markets and compete like local firms. The United States seeks to eliminate or restrict foreign investment rules which have trade-distorting effects or which put foreign investors at a competitive disadvantage with local firms. US goals on intellectual property include higher standards of protection, effective enforcement of those standards, and an effective dispute settlement mechanism. The Uruguay Round, like previous rounds, includes a challenging set of negotiations on market access--tariffs and non- tariff measures restricting trade. The United States has offered to cut its tariffs by more than 40%, exceeding the 33% target set for the round. The United States continues to pursue its proposal to slash tariffs to zero in nine important, heavily traded sectors: electronics, pharmaceuticals, wood products, steel, paper, non- ferrous metals, construction materials, fish, and beer. Improved market access would result from successful negotiations to reduce barriers to trade in tropical products and natural resource-based products and to integrate textiles into a strengthened system of GATT rules. The United States hopes to gain agreement on improved GATT rules for tighter discipline on subsidies and trade restrictions for balance-of-payments reasons, stronger dispute settlement procedures, and greater commitment by developing countries to GATT rules. The US government has pressed its goal of achieving one set of rules for all GATT members including developing countries, which now account for more than $500 billion in trade.
US Policy on MFN
The United States grants unconditional most-favored-nation (MFN) trade treatment to most of its trading partners. In most cases, countries are entitled to receive MFN treatment from the United States by virtue of their membership in the GATT. MFN status is may also be the result of a bilateral treaty. In a few cases, conditional MFN treatment must be granted, and a bilateral commercial agreement or treaty is required. Exports from countries granted MFN treatment are subject to duty at the lowest available non-preferential rates, i.e., those listed under "Column I" of the US tariff schedule. Imports from countries not granted MFN treatment are assessed substantially higher duties under "Column II" of the US tariff schedule. The only countries not receiving MFN treatment from the United States are Afghanistan, Albania, Bulgaria, Cambodia, Cuba, Laos, North Korea, Romania, the Soviet Union, and Vietnam. MFN treatment had been withdrawn from most communist countries under the Trade Expansion Act of 1951, which denied MFN treatment to any country under the control of the "world communist movement." The Trade Act of 1974 set new conditions for granting MFN treatment to non-market economy (communist) countries. First, a non-market economy must satisfy or receive a presidential waiver of the freedom of emigration criteria contained in Title IV of the 1974 act. The President may grant a 1-year waiver of the application of the freedom of emigration provisions of the act (the Jackson-Vanik amendment), if he determines that extension of the waiver would substantially promote freedom of emigration. The President also may find a country in compliance with the amendment (thus making a waiver unnecessary) by virtue of its emigration law and practices. The President can withdraw MFN status at any time if he determines that a country no longer satisfies the Title IV provisions. Second, once these conditions have been met or waived, Title IV also requires conclusion of a bilateral commercial agreement before MFN status is granted. Among the specific issues that must be addressed in such agreements are reciprocal granting of MFN treatment, safeguards, trade promotion, and adequate protection of intellectual property rights. These agreements have a renewable term of 3 years. As of June 1991, China, Czechoslovakia, Hungary, Mongolia, Poland, and Yugoslavia had MFN status. Poland and Yugoslavia are exempt from the provisions of Title IV. In February 1990, the President certified Hungary to be in compliance with the emigration criteria under the Jackson-Vanik amendment. The United States has negotiated a bilateral commercial agreement that would grant MFN treatment to the Soviet Union. The President has waived the Jackson-Vanik amendment for the Soviet Union but has not submitted the trade agreement to Congress for ratification. Under the waiver the Soviet Union also can have access to US commodity credit facilities to finance imports of US agricultural products. The President has issued a Jackson-Vanik waiver for Czechoslovakia, and a trade agreement has been concluded. Czechoslovakia has had MFN treatment under this agreement since November 1990. Bulgaria also has been issued a Jackson-Vanik waiver. A trade agreement signed in April 1991 has been submitted to Congress for ratification. Romania has requested that MFN treatment be restored; it was lost in 1988 when the Ceausescu government renounced MFN treatment tied to the continued observance of the Jackson-Vanik conditions. At this point, no consideration has been given to a Jackson-Vanik waiver for Albania.
FUNDAMENTALS OF GATT
Most-Favored-Nation (MFN) Status
. GATT members must extend to all other members the most favorable treatment granted to any trading partner. This non-discriminatory treatment ensures that any tariff reduction or other trade concession is automatically extended to all GATT parties, multiplying its liberalizing effects. The GATT allows some exceptions, primarily for customs unions such as the European Community and free-trade areas such as the US-Canada Free Trade Agreement.
National Treatment.
GATT members must give imported goods treatment equal to that accorded domestic goods in domestic markets. Any restrictions applied to imported products also must apply to like domestic products.
Protection Through Tariffs
. The GATT generally prohibits quantitative restrictions or quotas. Contracting parties must, to the extent possible, provide protection solely by means of tariffs, which are transparent and subject to negotiation in the GATT.
Dispute Settlement.
Parties may challenge trade actions of other parties that may be inconsistent with the GATT. GATT members decide whether to accept by consensus the resulting findings of a panel of trade experts. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

Refugee Situation in Liberia

Lyman Source: Princeton N. Lyman, Director, Bureau for Refugee Programs Description: Statement before the Subcommittee on Africa of the House Foreign Affairs Committee, Washington, DC Date: Jul 16, 19917/16/91 Category: Speeches, Testimony, Statements Region: Subsaharan Africa Country: Liberia, Sierra Leone Subject: Regional/Civil Unrest, Refugees [TEXT] I greatly appreciate the opportunity to discuss, today, refugee issues relating to the conflict in Liberia. As you know, the Liberia crisis has resulted in mass movements of people across West Africa. Today, close to 600,000 Liberians are counted as refugees outside their country. At least an equal number have been uprooted within Liberia. In addition, almost 100,000 Sierra Leoneans have been forced to flee Liberian rebel incursions into their country. I would like to talk briefly about both refugee populations, the US and international humanitarian response for these groups, and our thinking about future needs in the region.
Liberian Refugee Assistance
Liberia today has the dubious distinction, along with Ethiopia, of being the second largest generator of refugees on the African continent after Mozambique. Throughout 1990 and into 1991, armed conflict, fear of ethnic reprisals, and hunger forced originally over 750,000 Liberians out of their country. The bulk of them fled to the three neighboring states. Today, there are an estimated 227,500 Liberian refugees in Cote d'Ivoire and 342,000 in Guinea; there were an estimated 125,000 in Sierra Leone until, as I will discuss later, National Patriotic Front of Liberia forces invaded in March of this year. Today, only about 10,000 Liberians are receiving assistance as refugees inside Sierra Leone. While these three countries have borne the brunt of the Liberian refugee crisis, other countries also have felt the impact. Ghana hosts at least 6,000 Liberian refugees, while Nigeria, the Gambia, Mali, and others have also hosted some, though smaller, numbers. Liberians continue to move out of their country--albeit at a very much diminished rate. It is worth pointing out that this crisis also has generated movements of people not termed refugees. West African countries also have had to cope with transiting third country nationals fleeing Liberia as well as, in some cases, the return of thousands of their own nationals who had lived and worked in Liberia. Not surprisingly, these large-scale movements of people across many countries made the coordination of relief initially very difficult. For example, since West Africa as a region had not recently been a heavy generator of refugees, the [Office of the] UN High Commissioner for Refugees (UNHCR) was not strongly staffed there prior to the crisis--nor was the World Food Program, another major refugee relief player. The needs of other non-refugee affected groups--the affected refugee hosts, the internally displaced, the uprooted third country nationals--do not fall squarely under the purview of any one UN agency. Relief activities were initially hampered by poor overall UN coordination, a lack of private voluntary organizations to implement assistance programs, sluggish other donor response, and poor transport and communications networks, (particularly in Guinea and Sierra Leone). Despite the initial difficulties, I can now report that the relief system for Liberian refugees has largely moved beyond the emergency phase and is comparatively well in hand. UNHCR and the World Food Program, in conjunction with UNICEF [UN International Emergency Children's Fund], the League of the Red Cross and Red Crescent Societies, national Red Cross Societies and PVOs [private voluntary organizations], including Medecins Sans Frontieres, have, in large part, helped refugees address such emergency needs as clean water supply, food, access to vaccinations and medical care, and shelter. Problems certainly remain. More clean water is needed; food deliveries need to be more reliable; nutritional monitoring should be more regularized; not all refugees have uncrowded, adequate shelter; children's education has been interrupted; life is far from normal. But reports from the field indicate that basic life-support needs are being met. I should say, at this point, that the Liberian refugees' ability to survive, especially in the early phases of the emergency, is due, in large part, to the generosity of their neighbors. Liberians in Cote d'Ivoire and Guinea, as many of you know, are living in local communities and not in camps. Host populations have shared their homes, food, water supply, medical facilities, and other resources with them. While the international community can never fully repay these people for their generosity, they are accruing some benefits from ongoing relief activities. In the forest region of Guinea, for example, a concerted borehole drilling campaign is being initiated for the first time; roads to remote villages are being improved; schools are receiving additional supplies in compensation for refugee access to classrooms; and health monitoring activities have increased. Refugees share their food rations with their local hosts, and some refugees are helping their hosts work the fields.
Donor Contributions and UN Coordination
Improvements over the last year have also been due, in large part, to our ability to mobilize UN and other donor resources for assistance. In addition, we believe our persistence in pushing the UN system to mobilize and coordinate has had a significant impact as well. The US Government has committed to date over $130 million to the Liberian relief effort. The bulk of this--$112 million-- comes in food, with much of the remainder coming as cash contributions from my Bureau and from USAID's [US Agency for International Development] Office of US Foreign Disaster Assistance. The Bureau for Refugee Programs has contributed over $12 million for emergency assistance. This includes $5.5 million in earmarked contributions to UNHCR, $3 million to UNICEF, $2 million to the League, $1.2 million to [the] ICRC [International Committee of the Red Cross] and smaller amounts to PVOs such as the International Rescue Committee and the Adventist Development and Relief Agency. These contributions come over and above our regular, annual contributions to international organizations which, to date, in Fiscal Year 1991 amount to $50 million for UNHCR and $18.5 million to ICRC for their Africa programs. The Bureau also has called upon the services of the Centers for Disease Control in Atlanta to carry out a nutritional assessment in Guinea and to assess refugee health care programs throughout the region. We also have worked--and will continue to work--to sensitize other donors to needs in West Africa. While other countries have had a tendency to perceive the Liberia crisis as a US problem, we have vigilantly pursued a multilateral response. The EC [European Community], Nordic countries, and Canada have responded particularly well. In addition, I think it is worth pointing out that our financial and hortatory efforts to keep the UN system energized to address the Liberia problem have shown results. A multi-agency assessment of conditions throughout Liberia recently took place. We are not completely satisfied with UN performance--we have not been successful in getting a UN regional coordinator assigned to this problem, for example--but communication among agencies in the field now appears to be working well. We continue to see a role for the US Government in keeping the UN system's shoulder to the wheel.
New Crisis in Sierra Leone
Before discussing what we see as the next requirements for the refugee assistance program--that is, the need for increased refugee self-sufficiency programs and planning for repatriation --let me first address the "new" emergency generated by the March NPFL [National Patriotic Front of Liberia] incursion into Sierra Leone. The invasion of Sierra Leone by [Charles] Taylor's troops disrupted a relief program for an estimated 125,000 Liberian refugees and uprooted hundreds of thousands of Sierra Leoneans. An estimated 107,000 people fled into Guinea--about 97,000 Sierra Leoneans and 10,000 Liberians. The relief systems established in Guinea for the existing Liberian refugee population were able to respond rather quickly to the needs of new arrivals. Additional vaccines and medical supplies were brought into the impacted area. Food, already stocked nearby, was distributed on an emergency basis; equipment was on hand to initiate the digging of new wells; and emergency shelters went up quickly. Severe diarrhea, due to a lack of clean water, was the most serious initial problem. The UN system is addressing that need now. [The] UNHCR is now opening a new sub-office in the impacted area and has revised its budget to assure that the needs of this new population are addressed. My Bureau has recently provided funds to the International Rescue Committee to shore up health and sanitation programs for the new arrivals. Inside Sierra Leone, the NPFL invasion forced the termination of Liberian relief programs throughout the eastern portion of the country. A period of chaos ensued where thousands of Liberians surged toward Freetown, while others moved north to Guinea or back into Taylor-held areas of Liberia. Relief agencies set up a series of make-shift, temporary relief sites before finally establishing a single refugee camp just outside of Freetown. Many Liberians, however, have chosen not to remain in Sierra Leone. They have left out of a fear of retribution, a desire to avoid a refugee camp setting, and because the Liberian interim government has encouraged them to come home. Our embassy in Liberia has reported that at least 20,000 have returned from Freetown to Monrovia by boat since March. While the picture in Sierra Leone is still not entirely clear, initial reports indicate that there are at least 90,000 people displaced inside the country with hundreds of thousands affected by the insecurity. In addition to those who fled to Guinea, we have initial reports that some 12,000 Sierra Leoneans have crossed into Taylor-held areas of Liberia seeking refuge. The UN system is incorporating these refugees into its plans for a Liberia-wide UN- led relief program. The invasion of Sierra Leone by NPFL forces has heightened anxieties throughout the region about the perceived national security risk that the presence of thousands of Liberian refugees may pose. There are some signs that generosity toward refugees is waning not only in Sierra Leone but in Guinea and Cote d'Ivoire, as well. We continue to stress to both UNHCR and host countries our interest in seeing first asylum maintained for refugees. While we are hopeful that repatriation will be the ultimate solution for these refugees, we would not want to see repatriation begin simply because conditions in asylum countries have grown inhospitable.
Self-Sufficiency Activities and Repatriation
For the remainder of 1991, we would hope to see the relief agencies, with host country concurrence, begin to work on more self-sufficiency activities for refugees. We have in mind income- generating activities for refugee women and enlarged agricultural programs, as well as improved primary education programs. To this end, we are financing PVO activities that complement UNHCR programming in education and agriculture. These are relatively modest interventions, designed not to root refugees in their host countries but rather to enlarge their resource base and give them something to bring home--be it new skills, cash, seeds/tools, or crops. In the long run, we hope these activities will not only improve refugees' quality of life but also make refugees less of a burden on their hosts and the international community. While relief agencies are beginning to focus on self- sufficiency activities in asylum countries, there is also much discussion about repatriation to Liberia. The interim Government of Liberia has been active in repatriating Liberians to Monrovia on a small scale. In addition, there are numerous reports of refugees moving freely between their asylum country and Taylor-held Liberia. Medecins Sans Frontieres/Belgium, based on its cross- border relief activities from Cote d'Ivoire into Liberia, reports that the population of Nimba County is growing. Local missionaries in the forest region report that refugees, largely from the Gio tribe, are moving back from Guinea. UNHCR is establishing a small anticipatory presence in Liberia. Once there are guarantees of peace and security throughout Liberia, we would envision a large-scale UNHCR-organized repatriation program. We do not believe that conditions are yet ripe for massive returns, but are coordinating closely with our colleagues working on conflict resolution. When conditions are ripe, my Bureau will be prepared to consider a significant financial contribution to UNHCR for its repatriation activities. (###)
US Department of State Dispatch, Vol 2, No 29, July 22, 1991 Title:

US Arrearage Payments to UN Organizations

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Washington, DC Date: Jul 12, 19917/12/91 Category: Speeches, Testimony, Statements Subject: United Nations [TEXT] In fulfillment of President Bush's personal commitment to repay US arrearages to the United Nations and other international organizations over a 5-year period, the United States has paid $57.9 million this week. The United States also has paid to the United Nations $18.5 million for the UN-Iraq-Kuwait Observer Mission (UNIKOM), representing the full US assessment. Additionally, we paid $24.3 million toward US peacekeeping arrearages. The Congress, recognizing the emerging importance of the United Nations, appropriated the funds for these arrearage payments in the fiscal [year] 1991 State Department appropriations bill. The President and the Secretary of State have urged Congress to include funds for the second arrearage payment in the fiscal 1992 funding bill now under consideration. In calendar [year] 1990, the United States paid its full assessment of $1.2 billion to the United Nations, its agencies, and other international organizations, including $88.8 million for UN peacekeeping operations, and voluntary contributions for other UN organizations such as UN International Children's Emergency Fund (UNICEF), and $112 million for UN refugee programs.
US Calendar 1990 Payments ($millions)
[TEXT] UN New York $302.6 Other organizations 407.9 UN peacekeeping 88.8 UN refugee programs 112 Voluntary contributions 274 The President's budget request for the UN, its agencies, other international organizations, and UN peacekeeping activities for fiscal 1992 (calendar 1991 assessments) is $1.3 billion. Note: Current (calendar 1991) US dues are not reflected in arrearage amounts. Under the US Congressional appropriations process, funds cannot be paid until Congress makes them available after each fiscal year begins on October 1.
Overview of US Payments (dollars in thousands)
[TEXT] Organization Arrearage Payment Arrearage Balance* Current Dues United Nations $36,144 183,399 260,935** International Civil Aviation Organization 331 1,234 9,811 International Labor Organization 4,979 20,796 49,398 UN Industrial Development Organization 2,515 12,761 20,839 World Health Organization 4,262 21,628 78,277 World Meteorological Organization 427 1,711 8,182 Inter-American Institute for Cooperation on Agriculture 922 4,680 15,201 Organization of American States 6,309 32,018 42,989 Pan American Health Organization 2,147 10,891 44,215 South Pacific Commission 81 322 1,124 Customs Cooperation Council 96 383 2,762 General Agreement on Tariffs and Trade 358 1,432 8,524 International Wheat Council 52 211 375 UN Interim Force in Lebanon 24,155 103,565 46,606 UN Disengagement Observer Force 193 772 11,686 18 other organizations 231 924 3,474 *Amounts are subject to variations in exchange rates and other adjustments. Final accounting will be taken in last year of 5-year re-payment plan to ensure all arrears are paid as planned. **$261 million reflects the "full funding" level for the calendar 1991 US assessment (25%) of $271.6 million LESS $10.6 million for legislative/policy withholdings.(###)