US Department of State 

Dispatch, Vol 3, No 6, February 10, 1992


Foreign Affairs Budget Request For Fiscal Year 1993

Baker Source: Secretary Baker Description: Statement before the Senate Foreign Relations Committee, Washington, DC Date: Feb, 5 19922/5/92 Category: Speeches, Testimony, Statements Region: Whole World Country: Kuwait, Iraq, Russia, USSR (former) Subject: Regional/Civil Unrest, North America Free Trade, Democratization, Arms Control, Trade/Economics, Mideast Peace Process, CSCE, United Nations, Development/Relief Aid, State Department, International Organizations, Narcotics, Refugees, Security Assistance and Sales [TEXT] Mr. Chairman, it is a privilege to appear before this committee to testify on behalf of our foreign affairs funding proposal for FY [fiscal year] 1993.
A Year of Transformation
Mr. Chairman, just a year ago this week, I presented our FY 1992 budget to this committee. Since then, we have lived through a dramatic year, a year of fast-paced change, a year that marks the end of one era and the birth of another, a year that our children and grandchildren will read about in their history books: -- It was the year an unprecedented American-led coalition reversed Iraqi aggression, restored Kuwait's legitimate government, and ensured that we would not be held hostage to a dic-tator's ambitions. -- It was the year that our investment in peace-making began to pay dividends around the world, as old adversaries in El Salvador, Cambodia, and Southern Africa started bridging decades of mistrust. -- It was the year that even in the Middle East--scene of decades of war, bitterness, and hate--we saw ancient enemies sit down to talk: only a first step, but a vitally important one on the road to peace. The United States can be proud of our role in this historic breakthrough. -- It was the year we began negotiating a North American Free Trade Agreement--an agreement that will eventually create the world's largest market, with annual production of $6 trillion and more than 360 million people. -- But, above all, it was the year that Stalinism and the Soviet Union collapsed, and a dozen new states struggled to take their place in the community of democratic nations. Mr. Chairman, the meeting between President Bush and [Russian] President Yeltsin last weekend made this shift formal in the Camp David Declaration: The Cold War has ended, and we now have a chance to forge a democratic peace, an enduring peace built on shared values--democracy and political and economic freedom. The triumph of these values in Russia and the other new independent states will be the surest foundation for peace--and the strongest guarantee of our national security--for decades to come.
But Challenges Remain
Mr. Chairman, the world is a more promising and better place today than it was a year ago. The dramatic events we have witnessed and shaped are cause for optimism. But that optimism should not--and must not--blind us to the challenges remaining. Those challenges are real. Let me mention just a few: -- Proliferation of weapons of mass destruction remains a deadly menace to international peace. Revelations about Iraq's advanced nuclear program and the specter of a buyer's market in Soviet nuclear know-how drive home a clear lesson: Only by constant, concerted vigilance--the sort of vigilance that brought us victory in the Cold War --can we ensure our national and international security. -- Regional conflicts have abated--but not everywhere, and not at the same pace. India and Pakistan, for example, have just begun the daunting process of reconciliation. Peace-making--no more so than in the Middle East--is painfully protracted. Peace-keeping in El Salvador, Cambodia, and elsewhere will be expensive. We and the world community must be persistent in our support of both. -- Opening markets to American goods and services presents a particularly complex challenge. Bilaterally, we must negotiate to ensure that our goods and services are not shut out of individual foreign markets. Regionally, we must maintain momentum toward the promise of a North American Free Trade Zone. And globally, we must take the lead to ensure that the Uruguay Round succeeds and trade barriers come down worldwide. -- And, Mr. Chairman, let us not forget the task of consolidating democratic values. The victory of democracy has not been universal, and it is certainly not inevitable. -- In much of the world, representative government and rule of law remain fragile or a distant dream. We must remember that the United States is more than the greatest democracy in the world: We are the spokesman for the democratic community everywhere. None of these challenges can be met by wishful thinking; none will disappear if we close our eyes. But I am convinced that we can forge an effective policy in pursuit of our interest in a free, prosperous, and peaceful world. This holds especially true of the greatest challenge confronting us today: helping the new states of the former Soviet Union find their place as peaceful, democratic, and prosperous members of the world community. How we address this challenge will, I believe, shape world events through the next century. But, Mr. Chairman, I believe that we have at hand a tool to meet this challenge--a tool that augments our bilateral diplomacy and enhances our influence. It is a tool that helped us to victory over Iraq. And, it is the tool that will loom ever larger in our foreign policy as we leave containment behind.
From Containment To Collective Engagement
That tool is collective engagement: nations taking concerted action to pursue common interests and solve common problems. Over the last few weeks alone, I have seen this concept in action around the world: -- In Prague, I met with the other 47 members of the Conference on Security and Cooperation in Europe to continue its worthy work as the conscience of a continent, helping build democracy from Vancouver to Vladivostok; -- In Moscow, I met with three dozen ministers as the Mideast peace talks took on a new multilateral dimension in recognition of the international community's interest in bringing peace to this troubled region; -- In New York, the President joined with 14 other leaders and UN Secretary General Boutros Ghali to chart a new course for the UN Security Council--a body just now emerging into full maturity as a forum for international consensus-building and common action; and -- In Washington, perhaps most extraordinarily of all, 54 nations and international organizations joined together in a Coordinating Conference to divide labors and help meet emergency humanitarian needs in the former Soviet Union.
A Second Coalition
Mr. Chairman, that conference forged a new coalition, a coalition no less important than the one that freed Kuwait: -- A coalition to support democracy in the new states of the former Soviet Union; -- A coalition to help struggling peoples through the painful transition to a market economy; -- A coalition to combat an immediate, very human emergency; and, above all, -- A coalition to provide hope in hard times--hope for a better future, not just for the peoples of the new independent states but for the world at large.
The Promise
Many of those extending a helping hand at the Coordinating Conference were once, like ourselves, old adversaries of the Soviet Union. Some were once dominated by Stalinism. But all were united in common appreciation of the extraordinary promise attending the collapse of totalitarianism in the Soviet Union. This promise would have been unimaginable even a few years ago: -- The prospect of close to 300 million people waking from an over 70-year nightmare of totalitarian rule and charting their own democratic destiny; -- The possibility of 12 new countries converting from a crippling command economy to vibrant free markets; -- And, perhaps most importantly, the real hope of putting the world's nightmare of nuclear confrontation behind us.
Common Interest, Concerted Action, American Leadership
As I noted in my address to the Coordinating Conference: Global problems demand global solutions. And so it was at the conference: Not just America and its European allies, but countries from Eastern Europe, the Far East, Latin America, and the Persian Gulf sat down together to compare assessments and plot plans of action to help meet humanitarian needs. This coalition, like the one that achieved victory in the Gulf, is firmly rooted in the principle of responsibility-sharing. This does not mean totaling up a bill, then splitting the check. It means marshalling resources- -financial, technical, and human--from all interested parties, private and public, in support of a common goal. Working with other key international players--especially the G-7 countries, the European Community, and NATO-- we can achieve together what we could never reach alone. And this coalition, like the one we forged during the Gulf crisis, requires America once again to demonstrate leadership. Just as we led the alliance that won the Cold War, we must now help lead the coalition to win the peace. For America's part, Mr. Chairman, our effort is well underway: -- Last week, an international "contact" team met in Minsk with representatives of the new states to discuss the action plans of the Coordinating Conference and to accelerate the process of international cooperation to deal with the global emergency. -- Operation Provide Hope--a major, short-term airlift of emergency humanitarian assistance--begins next week. Aircraft of the US Air Force will fly urgently needed food and medical supplies to each of the 12 new independent states where it is safe to do so. -- Over the next 3 months alone, we will provide wheat, dairy products, baby food, cooking oils, meat, antibiotics, and other medicines to those most at risk: the old, the young, and the sick. -- And we have appointed Ambassador Richard Armitage, a veteran trouble- shooter, to serve as US Operational Coordinator. This and other aid to the new states is no substitute for tough domestic reforms. These new states need to maintain their commitment to economic and political reform. We know that. So do the leaders and peoples of these new states. But I am convinced that international help can play a critical role in helping meet this emergency and in helping reform.
The Risk
I spoke earlier of the promises associated with the break-up of the Soviet Union. Let me now speak bluntly of risks. The newly independent states are struggling bravely to create new societies based upon representative and accountable government, the rule of law, and the free market. But they do so burdened by the wreckage left by over 70 years of political and economic misrule. The temptations of ethnic conflict and authoritarian rule remain strong. And, despite dramatic progress on arms control, nearly 30,000 nuclear weapons remain stationed in the states of the former Soviet Union. So, as we move ahead with helping overcome the humanitarian emergency, we must also help the new states guarantee the security of nuclear weapons, eliminate large numbers of them, and safeguard against proliferation of weapons and technologies of mass destruction. In this regard, I visited Russia, Ukraine, Kazakhstan, and Byelarus in December to discuss the need for these new governments to commit to and implement responsible security policies. We sent the Under Secretary for International Security Affairs, Ambassador [Reginald] Bartholomew, to visit the former Soviet Union last month to discuss issues of nuclear command and control, weapons destruction and dismantlement, and non-proliferation more generally. I also had productive discussions with President Yeltsin last week in Moscow, and President Bush had productive discussions at Camp David. I will be following up when I go to Moscow next week. The assurances we have received through this high-level dialogue have been very positive, and we look forward to continuing them in the future. As we move forward: -- We must ensure that the new states meet their pledge to keep nuclear weapons under single unified control. -- We must go forward with the destruction of tactical nuclear weapons resulting from President Bush's dramatic initiative of September 27. We are helping the new states accelerate the dismantling of nuclear weapons. -- We must see that the new states honor their commitment to implement the START [Strategic Arms Reduction Treaty], CFE [Conventional Armed Forces in Europe], and non-proliferation treaties. -- We must help the new states of the former Soviet Union fashion effective export controls. President Yeltsin's announced intention to adopt legislation regulating dual-use technology is most welcome. -- We must develop specific proposals for scientific cooperation aimed at reducing incentives for scientists to transfer their expertise to would-be proliferators. We will shortly name a senior State Department official to coordinate this effort. -- And, of course, we ourselves should ratify the START Treaty. Mr. Chairman, I cannot over-emphasize this last point. START remains a critical element in our relationship with the new states. First, the START verification regime increases transparency and openness at a time of turbulence and change. Second, START creates a legally binding regime which creates obligations that will make it easier for us to lock in substantial and stabilizing reductions. Third, START provides a sound structure and ground rules within which further reductions can be quickly achieved. Finally, START encourages Ukraine, Byelarus, and Kazakhstan to seek a non-nuclear future. I do not wish to strike a note of alarm. Indeed, like the leaders and peoples of the new states themselves, I am full of hope for a better future for them and us. But I must still stress: The belief that the world is safe enough to suffer a little American neglect is just plain wrong. This Administration believes-- and our budget assumes--that American leadership remains a necessity, not a luxury.
Overview of Our Funding Request
Mr. Chairman, in FY 1993, we seek $22.1 billion in discretionary budget authority for international affairs and $20.6 billion in outlays. This compares with FY 1992 figures of $22.2 billion in requested, or enacted, budget authority, and $20.1 billion in outlays. Our request is within the limits on budget authority and outlays set by the Budget Enforcement Act of 1990. As Secretary of State, I am daily faced by the challenges confronting the United States around the world. But I am also a public servant acutely aware of my duty to husband the taxpayer's dollars during a period of economic hardship here at home. This budget reflects both these facts. It is a lean budget for lean times. But this is also a flexible budget, one that reflects the changed international environment in which we live. I would like to highlight two initiatives before moving on to a more general overview.
Aid to the New Independent States
Aid to the states of the former Soviet Union is the centerpiece of our budget request. We seek $620 million in new appropriations for fiscal years 1992 and 1993: -- $500 million for a special humanitarian and technical assistance account to meet emerging humanitarian and special assistance needs; -- $100 million in Economic Support Funds to promote democratic reforms, economic restructuring, and defense conversion; -- $10 million in Development Assistance targeted at the poorer republics; and -- $10 million in PL 480 Food for Peace for a "Farmer-to-Farmer" technical assistance program. Combined with $860 million in funds available under existing legislation and $3.75 billion in CCC [Commodity Credit Corporation] export guarantees, our proposal will provide more than $5 billion in much-needed help to the new states.
Support for International Organizations and Multilateral Peace Efforts
In peace-keeping, as with our help for the republics of the former Soviet Union, we intend to "put our money where our mouth is." We seek to reinforce the new solidarity of the United Nations that was first displayed during the Gulf crisis and to support its key role in defusing regional conflicts. We, therefore, propose $350 million as an amendment to the FY 1992 budget and $350 million in the FY 1993 budget to support our fair share of new and expected peace-keeping activities in Cambodia, El Salvador, Africa, the Mideast, and, perhaps, Yugoslavia. We consider these funds nothing less than an investment in peace. We also propose to make a third installment of $115 million on arrearages we owe to the United Nations and other international organizations, and we are requesting advance appropriations for FY 1994 and FY 1995 to ensure continued payment of arrearages. In addition, we also believe it is critical that we meet our commitments for the IMF [International Monetary Fund] quota increase. In combination with other member states, this would provide the increase in the IMF capital base that is necessary for this institution to take a leading role in fostering economic restructuring in Russia and the other new independent states. Let me now turn to other areas of the budget.
Foreign Assistance
Foreign assistance remains an essential tool in advancing US interests in the 1990s. It permits timely, flexible support for our interests in political pluralism, free market economic development, peace-making, and strong alliances. Total foreign assistance will decline $465 million in FY 1993, from our FY 1992 request level of $16.3 billion to $15.8 billion. Salient features of our bilateral assistance program for FY 1993 include: -- An 11% decrease in military assistance from $4.7 billion to $4.2 billion, reflecting lessening international tensions. Israel and Egypt will receive about 70% of all military assistance; the balance will go to other allies, including Portugal, Turkey, Greece, and the Andean countries. -- A $100 million cut in Economic Support Funds from $3.2 billion to $3.1 billion. Israel and Egypt will receive about 65% of all funds under this program. Other major recipients include the states of the former Soviet Union, El Salvador, Nicaragua, and the Andean countries. -- A $50 million increase in assistance to Eastern Europe from $400 million to $450 million, with a focus on strengthening democratic institutions and the free market. -- Roughly constant development assistance at $2.5 billion, including the Development Fund for Africa. We expect to provide assistance to 70 countries with programs emphasizing sustainable, broad-based economic growth. -- A special $100 million Capital Projects Fund to help recipient countries invest in infrastructure. -- A $25 million Asian Environmental Initiative to address the serious environmental problems that constrain Asian economic growth. -- $1.3 billion in food assistance under the PL 480 program aimed at helping the needy around the world and developing future markets for US agricultural products. -- $286 million under the Enterprise for the Americas Initiative (EAI) to reduce debt owed the United States by countries undertaking economic liberalization--an investment in the future of a fast-growing market for American exports.
Multilateral Development Institutions
For FY 1993, we request $1.8 billion for multilateral development institutions that foster economic reform and growth in developing countries. This includes $100 million for the EAI Multilateral Investment Fund to be administered by the Inter-American Development Bank; the Fund will offer technical advice and financial support to countries liberalizing their investment regimes. We also propose a new, 4-year replenishment for the Asian Development Fund, with an initial installment of $170 million in 1993.
Voluntary Contributions
We also request $257 million in voluntary contributions to international organizations, such as the UN Development Program ($124 million) and the UN Children's Fund ($60 million) during FY 1993.
Refugee Programs
The United States has long played an important, even critical role in addressing the plight of the world's refugees -- nowhere more evident in 1991 than in our timely assistance to the Kurds. Our FY 1993 request includes $550 million for Migration and Refugee Assistance and $20 million to replenish the Emergency Refugee and Migration Assistance Fund. For our refugee programs overseas, we seek $265 million to assist international efforts to provide protection, care, [and] resettlement and repatriation assistance to refugees. To finance our refugee admission and resettlement program, we seek $208 million. This will cover the expenses of an estimated 122,000 refugees planned for admission into the United States. Finally, continuing a program begun in 1973, we propose $50 million to support refugee resettlement in Israel.
War on Drugs
In FY 1993, we request about $580 million for international counter- narcotics programs to combat the flow of illegal drugs into the United States--a top national priority; $173 million will fund activities of the Bureau of International Narcotics Matters, such as law enforcement programs in Latin America and Asia and the counter-narcotics air wing; $250 million in Economic Support Fund assistance will help Colombia, Peru, and Bolivia revitalize their legal economies and create alternatives to coca cultivation. FMF [Foreign Military Financing], USAID [US Agency for International Development], and USIA [US Information Agency] programs round out the international affairs counter-narcotics package.
Investing in Diplomacy
The collapse of the Soviet Union has produced a once-in-a-century opportunity to advance American interests and values throughout the world. One of our top priorities will be opening new embassies in the former Soviet Union and expanding our presence in the Baltics and Cambodia. Just this last month, we've opened embassies in Kiev, Alma-Ata, Minsk, Bishkek, and Yerevan. As we seek to meet these opportunities, we must also implement the Immigration Act of 1990; provide consular services to Americans abroad; train our officers to speak new languages and understand emerging issues; and continue our long-deferred program to repair, update, or replace our diplomatic and consular facilities. In FY 1993, we seek $2.1 billion for State Department operations--an increase of $115 million over the current year. Additionally, we request $600 million for our Foreign Buildings Program. Of this total, $140 million will go to complete construction of modern and secure facilities in Moscow--an important step in putting this lingering problem behind us.
Public Diplomacy
American public diplomacy was at the cutting edge of American policy toward the revolutions of Eastern Europe and the former Soviet Union. In FY 1993, we request $1.1 billion for the United States Information Agency, which plans to expand its activities in the states of the former Soviet Union and in Cambodia. We also seek $220 million for the Board for International Broadcasting.
Peace Corps
In FY 1993, we request $218 million for the Peace Corps. This will support high-priority activities in Central and Eastern Europe and up to 500 volunteers in the republics of the former Soviet Union without causing a lessening of our efforts elsewhere.
Mr. Chairman, after this quick tour of our foreign affairs budget, I would like to return to an observation I made at the very beginning of these remarks: We are moving into a new era. It is an age so new that it has yet to acquire a name. We enjoy the unique opportunity to help shape this new era and to define it for generations to come. Will it be known as the Era of Neo-Isolationism? The Second Age of Protectionism? The Era of Proliferation? The Age of Dirty Little Wars? Or will it be known as the Era of Prosperity, the Age of Democracy, the Long Peace? The choice, in so many ways, is ours. (###)
Dispatch, Vol 3, No 6, February 10, 1992 Title:

US Effort To Halt Weapons Proliferation In the Former Soviet Republics

Bartholomew Source: Reginald Bartholomew, Under Secretary for International Security Affairs Description: Statement before the Senate Armed Services Committee, Washington, DC Date: Feb, 5 19922/5/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former), Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Security Assistance and Sales, Arms Control [TEXT] I am happy to come before this committee to talk about the questions of nuclear weapons and non-proliferation as they relate to the former Soviet Union. The events of August 19 opened up unprecedented prospects for reductions in nuclear weapons. They also created new concerns about the security and control of nuclear forces throughout the disintegrating Soviet empire, as well as potential proliferation among the new states and to third countries. From the outset, the Administration has undertaken a high priority campaign to address these concerns and take advantage of these opportunities, beginning with President Bush's September 27 initiative. As the United States moved quickly to meet this new challenge, our objectives were: -- To build on the new spirit and the new needs in the former Soviet Union to move rapidly to reduce substantially the number of nuclear weapons. This was the leading edge of a broader effort to help reformers overcome the excessive militarization of the former Soviet society and industry. -- At the same time, we wanted to ensure that all former Soviet nuclear weapons remain under single unified secure control and prevent the emergence of more independent nuclear states out of the dissolution of the Soviet Union. -- To rapidly enhance the security of the nuclear weapons of the former Soviet Union, particularly the smaller, easily transportable, widely dispersed tactical weapons. This is where there was the greatest potential for loss of control or for weapons falling into the hands of third parties. -- To take steps to ensure that these weapons were quickly disabled and consolidated and to put in motion a process to dismantle large numbers of them. We wanted to quickly reduce the potential for accidents, miscalculation, or loss of control in a new and fluid situation. -- And to prevent proliferation of weapons of mass destruction and missiles to deliver them through the transfer of equipment, technology, and expertise to third countries. President Bush's September 27 initiative was designed in large measure to meet just these objectives and concerns. You will recall that he unilaterally announced that the United States would: -- Eliminate its entire worldwide inventory of short-range nuclear missile warheads and nuclear artillery shells; -- Withdraw all tactical nuclear weapons from ships and attack submarines, destroying some and consolidating the remainder; -- Stand down from alert our strategic bombers and those ICBMs [intercontinental ballistic missiles] scheduled for elimination under START [Strategic Arms Reduction Treaty]; [and] -- Cancel the programs for a mobile Peacekeeper ICBM and a small mobile ICBM and a new missile for strategic bombers. He also proposed to begin discussions to explore cooperation on: -- The safe and environmentally responsible storage, transportation, and destruction of nuclear weapons; -- The safety and security of nuclear weapons; [and] -- Nuclear command and control. Our intent was to rapidly set in motion a process of destruction of nuclear weapons that had been made unnecessary by the political transformation of the landscape, without the time-consuming process of traditional negotiations. Instead, the President called on the Soviet leadership to take equally bold steps. We wanted to move much more quickly than would be possible with traditional negotiations, to seize the new opportunity presented by the dramatic transformation of the former Soviet Union, and to challenge the new leaders to work with us in a completely different way than their predecessors had. Two weeks ago, President Bush announced further unilateral steps to halt a number of strategic programs, including the production of the B-2, the small ICBM, the high-yield Trident warhead, the Peacekeeper missile, and the advanced cruise missile, and made a proposal for further substantial reductions beyond START. President Yeltsin responded with some unilateral steps of his own, plus proposals for further reductions and a joint system of strategic defense. So the process that began last September continues to yield dramatic results. Immediately after the President's September 27 initiative, I led an inter- agency delegation to Moscow to explicate and expand on the US approach, to advance the US agenda outlined above, and to facilitate a fast, positive response. At the urging of the United States, for the first time, the Soviet side included representatives of the four republics with nuclear weapons on their territory--Russia, Ukraine, Byelarus, and Kazakhstan--and their participation was most welcome. Our basic mission was to get across to all concerned, including the republics, a full understanding of the steps the President was taking, our firm stance on the need for secure and unified control of all nuclear weapons, and the need for a prompt Soviet response that included massive elimination of Soviet nuclear weapons, particularly tactical nuclear weapons. I recall that the senior officials I met with at that time asked repeatedly if the steps President Bush had announced were truly unilateral and would be carried out no matter what. I assured them that this was the case, explained why we believed that, in the new circumstances created by the events of August, complementary unilateral steps were the fastest and best way to proceed in the direction we both wanted to go, and urged them to take comparable steps with their own nuclear forces. While we were in Moscow, on October 5, Gorbachev made his response. As we had hoped, he made a commitment to eliminate all Soviet tactical nuclear missile warheads and nuclear artillery shells and nuclear land mines, and remove all tactical nuclear weapons from ships and submarines and air-defense missiles, destroying a portion and consolidating the remainder, and take other steps. Gorbachev's response broke open the way to rapid progress across the entire agenda we had been pushing. We invited a delegation of senior diplomatic and military officials to come to Washington in November to discuss in detail the implementation of the commitments Presidents Bush and Gorbachev made. Again, we wanted a combined delegation, including all four republics, and all four were represented. At these meetings, the United States made a major push for the Soviets to disable and to consolidate, in secure locations, the widely dispersed tactical nuclear weapons that posed the greatest danger as the Soviet Union disintegrated before our eyes. US experts presented detailed briefings on US organizations and procedures and systems for ensuring the safety and security of nuclear weapons, on how weapons could be quickly disabled, and on our approach to dismantling. We also gave similarly detailed briefings on the US nuclear command and control arrangements. The initial response of the senior Soviet military and political officials was not enthusiastic. There was agreement that as a technical matter, weapons could be rapidly disabled, but they made no commitment to do so. There was a general reluctance to engage with us across the board or to describe their systems and procedures in the detail that we described ours. We did agree on the need to follow up in Moscow, and in an effort to prime the pump, we gave them a detailed list of questions that our experts wanted to discuss with their experts. Late last year, in the Soviet Nuclear Threat Reduction Act of 1991 (the Nunn-Lugar act), Congress authorized $400 million for the purpose of US assistance in dismantling nuclear and chemical weapons of the former Soviet Union and stemming proliferation. This showed the extent to which concern about nuclear safety and dismantling was widely shared. It provided an additional potential tool to help accelerate the process of dismantling and enhance its safety. Secretary Baker raised the nuclear issue to the top of the agenda of his trip to the republics in December by urging political leaders of the new states to give political direction to their military and diplomatic authorities to engage with us on the safety and security of nuclear weapons. The newly independent states, after all, have the same interest we do in the safety and security and dismantling of nuclear weapons. In late December, President Bush wrote to all four presidents, proposing to send a senior delegation of high-level officials accompanied by experts in early January to discuss practical steps on nuclear safety, security, disabling, and destruction, as well as controls to prevent proliferation, and how the US could be of assistance. Attached to that letter was a detailed agenda of the issues we wished to discuss--command and control; safety, security, and disabling of tactical nuclear weapons; accelerated destruction of tactical nuclear weapons; accelerated deactivation of strategic forces; START, CFE [Conventional Armed Forces in Europe], and NPT [Non- Proliferation Treaty] agreements; and export controls, including arms transfers. That brings me to the recent January trip, where, as you will see, we found that the new states are moving very much in the direction we have been pushing since September. My delegation included senior interagency policy officials, and experts in nuclear weapons and in non-proliferation. We went to Moscow, Kiev, Minsk, and Alma-Ata and addressed the full agenda outlined in the President's letter. Let me describe where we stand today, and what lies before us, on this effort to disable and consolidate and dismantle Soviet nuclear weapons and prevent proliferation.
Command and Control
By and large, this appears to be going in the direction we have urged since August, and the representations that we and others have made have had something to do with this. All four capitals describe a command and control system consistent with the Alma-Ata and Minsk accords. Use of nuclear weapons is in the hands of the Russian President and requires the agreement of the other three states where nuclear weapons are located- -Ukraine, Byelarus, and Kazakhstan--and consultations with all other Commonwealth states. The details of the nuclear command and control system are still being worked out, but it is fair to say that they have a system of unified control over all of the former Soviet weapons, as we have urged them to do. We also pushed hard in all four capitals on the need to resolve issues concerning command and control of conventional forces (Black Sea fleet, oaths, etc.) through negotiation, and not let this drag out as a source of dispute and undermine the central tasks of political and economic reform. We pushed for lower force levels--to avoid maintenance of forces out of proportion to the real security risk and the real domestic needs. In these areas, the states are working out their differences--over national forces versus Commonwealth forces, over the Black Sea fleet, and over oaths. They also say they are planning real reductions, but cite the need to move slowly and carefully because of the political sensitivities and financial costs involved, and need to minimize social dislocation.
Tactical Nuclear Weapons Disabling and Consolidation
This was the heart of our mission, and again the process that is now underway is very much along the lines we have urged since September. It has been generally agreed here and abroad that the major danger from nuclear weapons in the dissolution of the former Soviet Union comes from the wide dispersion of the smaller, easily transportable tactical warheads. As I have said, a main objective of my meetings in October and November in Moscow and Washington and in Secretary Baker's December trip to the four capitals was to push for rapid disabling and consolidation of these tactical nuclear weapons for dismantling. After some initial resistance by military and civilian officials of the former Soviet Union, a large-scale process is underway to do what we pushed for. We can take some satisfaction from this fact. As we understand it, all tactical nuclear weapons are now in Russia, Ukraine, and Byelarus. There are none remaining anywhere else in the former Soviet Union or abroad. The tactical nuclear weapons in Ukraine and Byelarus are no longer in the hands of operational units. Prior to movement, tactical nuclear weapons are disabled so that they cannot produce a nuclear yield. At storage sites prior to dismantling, these weapons are further disabled to the point that the process is difficult to reverse. By the end of January (which is to say by now), entire categories of tactical nuclear weapons were to be disabled and withdrawn to installations in Russia near dismantling facilities. The remaining tactical nuclear weapons will be disabled and withdrawn to Russia no later than July 1. All parties involved intend to beat this schedule if possible. This withdrawal of tactical nuclear weapons is taking place under agreements concluded between the new states. All concerned stress that all norms and standards for safe transportation of nuclear weapons are being observed. In sum, the authorities in the newly independent states are doing what we and others urged them last fall to do and have developed a plan and a schedule to disable weapons and withdraw and consolidate them for dismantling. Our experts' judgment is that the process is moving quickly, so there is not much we or others could do to accelerate it.
Actual dismantling of nuclear weapons will take place in Russia, with involvement by the other states concerned, under procedures that are now being worked out among these states. The schedule that former President Gorbachev gave us stretches out to the year 2000 to dismantle the tactical nuclear weapons (plus weapons to be eliminated under START plus weapons previously planned to be retired). The officials we talked to, including the acting Minister of Atomic Power and Industry, say they foresee problems meeting even that schedule without assistance. The problem is not industrial capacity to dismantle weapons; that is not the limiting factor. They say that the limiting factor is storage capacity for the plutonium and enriched uranium that results from the dismantling of nuclear weapons. Our experts discussed at some length this problem of storage of the fissile materials and the Russian ideas for resolving it. They have real questions about the solution the Russians are proposing, which is to build a new and very expensive facility for this purpose, but we explored with them a number of alternative ideas, and we plan to continue this process. I had with me in Moscow a team of experts on nuclear dismantling, and they remained behind in Moscow to continue their work while I traveled to the other three states. In addition to the storage problem, they discussed a range of possibilities for US assistance to enhance the safety and security of the former Soviet nuclear weapons and to accelerate their dismantling. Some involve use of US technology to enhance the security of Russian vehicles and containers for nuclear weapons transport and storage. We are planning to invite Russian experts to the United States for briefings and demonstrations of US safe and secure transportation and storage technologies, equipment, and facilities, and to observe the capabilities of US teams for quick response in event of a nuclear accident. We have asked to visit similar Russian facilities involved in transportation, storage, and dismantlement of nuclear weapons, to better assess other possibilities for US assistance to eliminate bottlenecks. We plan to move out rapidly on concrete proposals for assistance. Since our return to Washington, we are looking intensively at the ideas discussed in Moscow in order to complete the cost and feasibility analysis required for sensible recommendations and decisions. Let me describe some of the ideas we are looking at: -- Send to Russia a set of US containers for the safe transport and storage of nuclear weapons and materials, for their examination. This could lead to production of containers based on US technology for Soviet weapons and materials. -- Provision of US safe-secure rail cars that we no longer use, and assistance in converting them to Russian track gauge. -- Provision of Kevlar blankets to protect weapons in transit from small arms fire. -- Alternative ways to safely store plutonium recovered from Russian nuclear weapons. -- Ways to convert enriched uranium recovered from Russian nuclear weapons to reactor fuel. Needless to say, a prominent element in all of our discussions in Moscow was the ability of the United States to provide not only technical assistance but also the question of how best we might use the $400 million voted by Congress. Some of the above ideas would involve costs which could be covered by these funds. Once decisions are made, which we expect in a matter of days, we will approach the Russians with specific proposals for enhancing the safety and speed of dismantling and enhancing the security of former Soviet nuclear weapons. We will also consult with Congress, particularly this committee, on using US funds for this purpose, and on the conditions which are part of the legislation.
Strategic Forces
Russian authorities gave us information on missiles and submarines they have already deactivated pursuant to Gorbachev's October 5 commitments. Some 600 missiles have been taken off alert, of which about 220 have been deactivated--the missiles and warheads have been removed from their launchers--and our independent information is consistent with this. As for their future plans, they intend to use the START reductions to eliminate all strategic forces from Ukraine, Byelarus, and Kazakhstan. Specifically, all 176 ICBMs will be out of Ukraine by the end of 1994, and all 104 ICBMs will be out of Kazakhstan by the end of the 7-year reduction period. This means they will eliminate modern SS-18s and SS-24s that they had planned to keep. Byelarus also wants the ICBMs on its territory withdrawn but has not yet worked out a timetable to do it. At each stop we pressed them on the idea, first put forward by President Bush in his September 27 initiative, to deactivate now the ICBM forces that will be eliminated under START, by removing and disabling the warheads, and removing the missiles from the launchers. During the trip, we received no response from the Russians; they said they were considering the idea. We found support in the other states. Since then, President Yeltsin has stated that they will remove from operational readiness the systems to be eliminated under START within 3 years, so we are making progress on this.
Each capital confirmed the commitment in the Alma-Ata declaration to fulfill all international obligations stemming from the treaties and agreements of the former Soviet Union. On START, we outlined certain principles that guide our approach to implementation of arms control treaties generally and to START in particular: -- It is not necessary to use the same legal approach for all treaties; each should be resolved on its own merits on a case-by-case basis. -- We want to set down in legal documents an approach that assigns appropriate responsibilities to the relevant states. -- The approach to ratification and implementation should fit with the unified command and control arrangement that has been worked out for the nuclear weapons of the former Soviet Union. -- The approach should fit with the obligations that the states assume under the NPT. -- The solution should reflect a consensus of all four states; they should be comfortable with the approach. The four states are considering among themselves a solution in which Russia would ratify START and exchange ratification instruments with us. Ukraine, Byelarus, and Kazakhstan would seek parliamentary approval of START, and conclude a quadripartite agreement with Russia that would provide for implementation. We told all four that we want to look at this approach in detail. We expect that they will resolve this among the four along the lines described to us, and we then will be in a position to come to the Congress with a plan for implementing START. As for CFE, all four states (as well as the other newly independent states with territory in the ATTU [Atlantic to the Urals]) are moving to ratify the CFE Treaty, and all will participate in the NATO high-level working group process in Brussels. The four states are now engaged in a process of apportioning the rights, limits, and obligations that would have applied to the former Soviet Union. The biggest issue here is the allocation of the treaty-limited equipment among the four. They are actively pursuing that, and all expect entry into force no later than July 2. On the Non-Proliferation Treaty, Russia will succeed the USSR as a nuclear weapons state, assuming the former Soviet Union's rights and obligations. Ukraine and Byelarus confirmed their intention to join the NPT as non- nuclear weapon states, and are in the process of drafting instruments of accession. Kazakhstan confirmed that all nuclear weapons will be removed from its territory by the end of the 7-year START reductions period but has not yet moved to accede to the NPT as a non-nuclear weapons state. At each capital, we emphasized that the temporary presence on their soil of nuclear weapons under the joint command and control arrangements now in place would not preclude joining the NPT as a non-nuclear weapons state and urged speedy accession as a non-nuclear weapons state. We did not get into a detailed discussion of defense and space and the ABM [Anti-Ballistic Missile] Treaty on this trip; we did have an extensive exchange on this issue in our November meeting. Since the trip, President Yeltsin has made his proposal, which represents a much different approach to strategic defenses from that of his predecessors. The Administration is reviewing what Yeltsin had to say and considering how best to proceed.
Non-Proliferation, Export Controls, and Arms Transfers
We raised the issue of non-proliferation and export controls at each of our stops. We provided a briefing and left behind written materials on the international non-proliferation regimes and on US export control practices. Our basic message was that each of the newly independent states needs to make a clear commitment to international non-proliferation norms and to put in place an effective export control system. We urged Russia to reaffirm the NPT commitments of the former Soviet Union, and the others to adhere to the NPT as non-nuclear weapons states. We asked all the republics to declare their willingness to observe the guidelines of the MTCR [Missile Technology Control Regime], to place controls on the CW [chemical weapons]-related items listed by Australia Group, and to strictly control conventional arms transfers. We urged all four states to move rapidly to put into place the necessary legal basis for export controls, in view of the dissolution of the former Soviet control system and the incentives for exports created by the difficult transition now underway to a market economy. And we stressed the need for enforcement measures and to provide adequate resources to the export control administration. In Russia, officials emphasized the basic continuity in personnel and expertise derived from the former Soviet system. While there are no new laws in place, and it remains unclear whose in charge, they were confident of their ability to prevent undesirable exports, based on informal arrangements and "healthy inertia" on the part of exporters. They were interested in the legal basis for our control system, because they were in the process of drafting their own national export control legislation. Subsequent to our trip, President Yeltsin publicly announced that Russia will put in place export control laws, including controls on dual-use technologies. The Russians told us that Russia would continue the Soviet NPT obligations, including the depository function, and was reviewing its position on full- scope safeguards as a requirement for nuclear supply. They indicated interest in cooperating in regional non-proliferation efforts in South Asia and on the Korean Peninsula. On MTCR, Russia reaffirmed the Soviet Union's 1990 summit commitment to observe the MTCR guidelines, and indicated that the question of full membership in the regime remained under review. In the other three republics, organization of relevant government ministries is still at an early stage, and there is a lack of expertise on non- proliferation and export control issues. In Kiev, Minsk, and Alma-Ata, we described control systems and gave them extensive documentation on international norms and the US system. We plan to follow up with additional meetings with all 11 CIS [Commonwealth of Independent States] member states on non-proliferation, export controls, and arms transfers. In every capital, we stressed the common interest in ensuring that transfers of conventional weapons do not exacerbate instability, particularly now that there may be economic pressures to export arms. We specifically cited Iran and the need not to build another Iraq. We received a positive response in each capital. The Russians specifically said they would continue the Soviet Union's commitment to the conventional arms transfer guidelines issues at the October 1 five-power meeting in London. Finally, the danger that former Soviet scientists could make their skills available to countries seeking weapons of mass destruction is a serious concern. This concern is shared by the Government of Russia, which has recently reaffirmed its own commitment to international non-proliferation norms, and by the other newly independent states. We urged Russia and the other newly independent states to place criminal sanctions on individuals or companies who provide assistance to irresponsible foreign nuclear or chemical weapons programs, or missile programs. This would parallel laws and regulations currently in force in the United States. The President discussed with President Yeltsin ways to develop and coordinate peaceful projects designed to provide alternative employment for former Soviet weapons scientists. This issue, too, is under intense consideration within the Administration, and we expect to have concrete proposals in a matter of days.(###)
Dispatch, Vol 3, No 6, February 10, 1992 Title:

Country Profile: Venezuela

PA Source: Office of Public Communication, Bureau of Public Affairs Date: Feb, 10 19922/10/92 Category: Country Data Region: South America Country: Venezuela Subject: Trade/Economics, Resource Management, Democratization, Cultural Exchange, Regional/Civil Unrest [TEXT]
Official Name: Republic of Venezuela
Area: 9 million sq. km. (352,143 sq. mi.); about the size of Texas and Oklahoma combined. Cities: Capital--Caracas (metropolitan area pop. est. 4 million). Other major cities--Maracaibo, Valencia. Terrain: Varied. Climate: Varies from tropical to temperate, depending on elevation.
Nationality: Noun and adjective--Venezuelan(s). Population (1991 est.): 20 million. Annual growth rate: 2%. Ethnic groups: Spanish, Italian, Portuguese, Arab, German, Amerindian, African. Religions: Roman Catholic 96%, Protestant 2%. Languages: Spanish (official), Indian dialects spoken by some of the 200,000 Amerindians. Education: Years compulsory--9.Literacy--87%. Health: Infant mortality rate--36/1,000. Life expectancy--70 yrs. Work force (about 7 million): Industry and commerce--35%. Services--26%. Agriculture--6%.
Type: Republic. Independence: July 5, 1821. Constitution: January 23, 1961. Branches: Executive--president (head of government and chief of state) and Council of Ministers (cabinet). Legislative--bicameral congress (201-member Chamber of Deputies, 49- member Senate). Judicial--18-member Supreme Court. Subdivisions: 20 states, 2 federal territories, 1 federal district, and a federal dependence (72 islands). Political parties: Democratic Action (Accion Democratica--AD), Social Christian (Comite Organizador Politico pro Elecciones Independientes-- COPEI), and the Movement to Socialism (Movimiento al Socialismo--MAS) are the major parties in the Venezuelan congress. A number of smaller parties also are represented in the legislature. Flag: Three horizontal bands--yellow, blue, and red, with semicircle of seven stars in the middle of the blue band.
GDP (1991 est.): $54 billion. Real GDP growth rate (1991 est.): 9%. GDP per capita (1991 est.): $3,000. Avg. inflation rate (1991 est., Caracas metropolitan area): 35%. Natural resources: Petroleum, natural gas, coal, iron ore, gold, other minerals, hydroelectric power, bauxite. Agriculture (about 6% of GDP): Products--rice, coffee, corn, sugar, bananas, and dairy, meat, and poultry products. Industry (about 17% of GDP): Types--petrochemicals, oil refining, iron and steel, paper products, aluminum, textiles, transport equipment, consumer products. Trade (1991 est.): Exports--$16 billion ($10 billion to the US): petroleum ($13 billion), iron ore, coffee, steel, aluminum, cocoa. Major markets--US, Germany, Brazil, Japan, Canada, Sweden. Imports--$7 billion (about $5 billion from the US): machinery and transport equipment, manufactured goods, chemicals, foodstuffs. Major suppliers--US, Germany, Japan, France, Canada, Italy, Brazil. Fiscal year: Calendar year. US assistance (1991 est.): International Military Education and Training (IMET)--$389,000. Narcotics assistance--$1 million.
Principal Government Officials
President--Carlos Andres Perez Foreign Minister--Armando Duran Ambassador to the United States--Simon Alberto Consalvi Ambassador to the United Nations--Diego Arria Alicetti Ambassador to the OAS--Guido Grooscors (###)
Dispatch, Vol 3, No 6, February 10, 1992 Title:

US Condemns Venezuelan Coup Attempt

Bush Source: President Bush Description: Statement by President Bush upon departure from the White House to Florida Date: Feb, 4 19922/4/92 Category: Speeches, Testimony, Statements Region: South America Country: Venezuela Subject: Trade/Economics, Resource Management, Democratization, Cultural Exchange, Regional/Civil Unrest [TEXT] I just want to say a quick word in support of democracy in Venezuela. I talked to [Venezuelan President] Carlos Andres Perez this morning about 2:30--maybe a little later--and then to President Gaviria of Colombia about 30 minutes later, and I assured them--both of them--that the United States supports democracy in Venezuela and elsewhere in this hemisphere and that this military coup attempt against President Carlos Andres Perez is firmly condemned by the United States. President Perez indicated he thought things were under control, but I just want--wanted--him to know how strongly we feel about support for him here--support for democracy. He's one of the great democratic leaders in our hemisphere, and to have this outrageous, illegal military coup certainly should be condemned by all countries, not just in our hemisphere. I told President Gaviria of Colombia essentially the same thing. I'm just hopeful that their reports [of] having the matter under control are valid. In any event, let there be no mistake: The United States condemns the abortion of democracy in this hemisphere or anyplace else. (###)
Dispatch, Vol 3, No 6, February 10, 1992 Title:

Gist: Enterprise for the Americas Initiative

PA Source: Office of Public Communication, Bureau of Public Affairs Description: Summary of US Foreign Policy Date: Feb, 10 19922/10/92 Category: Policy Briefs (Gist) Region: Central America, Caribbean, South America Country: Venezuela Subject: Trade/Economics, OAS [TEXT]
On June 27, 1990, President Bush announced the Enterprise for the Americas Initiative, a major initiative to help forge a genuine partnership of free market reform to promote economic growth and political stability in Latin America and the Caribbean. At that time, he noted that "prosperity in our hemisphere depends on trade, not aid," and that "the future of Latin America lies with free government and free markets." Over the last decade, countries in Latin America and the Caribbean have confronted an economic crisis that also has affected the United States. As many of these countries have reduced imports, postponed investment, and struggled to service foreign debt, the United States has lost trade, markets, and investment opportunities. A new generation of democratically elected leaders in the region has made progress in coping with this crisis. Their countries are beginning to move away from excessive government control and toward greater reliance on free market forces. The Enterprise for the Americas Initiative supports the efforts of these leaders, increasing the prospects for prosperity throughout the hemisphere. The foreign ministers of the hemisphere endorsed the EAI at the meeting of the General Assembly of the Organization of American States in Santiago, Chile, June 3-8, 1991. They approved a resolution declaring it a positive new approach to trade, investment, and external debt.
The Initiative's Three Pillars
The initiative rests on three pillars through which the United States can support economic reform and sustained growth: -- Expanding trade by working with the countries of the region through the Uruguay Round of the General Agreement on Tariffs and Trade and by entering into free trade agreements with the ultimate goal of a hemisphere- wide free trade system; -- Promoting investment in the region and helping countries compete for capital by reforming policies that have discouraged private investment; -- Building on successful US efforts to ease debt burdens and to increase incentives for reform by offering additional debt measures. As part of this approach, the United States would support natural resources management as a key element of protecting the environment and building a strong future for the hemisphere.
The Enterprise for the Americas Initiative envisions a hemisphere-wide free trade system. To achieve this long- range goal, the United States works to develop more productive partnerships with its neighbors in the hemisphere. First, it remains committed to the multilateral trading system and to the success of the Uruguay Round. The EAI and the Uruguay Round complement each other; a successful round could facilitate trade negotiations in the hemisphere. Second, the United States, Canada, and Mexico are conducting free trade negotiations, made possible by congressional action on May 23-24, 1991, granting the executive branch "fast track authority" to negotiate trade agreements. Third, the United States has negotiated framework agreements on trade and investment with those countries and groups of countries that wish to work toward freer trade in the hemisphere. Sixteen trade and investment framework agreements have been signed, covering 31 countries in the hemisphere.
Legislative Proposal
On September 14, 1990, President Bush sent to Congress a legislative proposal to implement the investment, debt, and environmental elements of the initiative. Congress approved some elements in October 1990, with passage of the EAI portion of the Agricultural Trade Development and Assistance Act, which authorized reduction of PL 480 (food aid) concessional debt.
On December 9, 1991, a group of donor countries agreed to establish a $1.5-billion multilateral investment fund (MIF) for Latin America and the Caribbean as part of the EAI, to be administered by the Inter-American Development Bank (IDB). The United States, Japan, Canada, several European, and many Latin American countries have pledged support to the fund. The President is seeking authorization for a US Government contribution of $100 million annually over 5 years. An official document bringing the MIF into force is expected to be signed in early 1992. Disbursement from the fund would encourage market-oriented investment policy initiatives and reforms and finance technical assistance for privatization efforts, business infrastructure, and worker training and education programs. The fund would complement country reforms undertaken as part of a new IDB lending program for nations that take significant steps to remove barriers to investment. Debt and Environment. The legislation establishes a facility to administer debt reduction for countries meeting investment reform and other policy conditions. Latin American and Caribbean countries can qualify if they, as appropriate, have: -- An International Monetary Fund program or the equivalent; -- World Bank structural or sectoral adjustment loans; -- Undertaken major investment reforms in conjunction with an IDB loan or are implementing more liberal investment rules; -- Negotiated satisfactory financing programs with commercial banks. The Secretary of the Treasury leads a US Government inter-agency process that determines country eligibility based on these criteria. This group makes decisions on the extent of debt reduction on eligible concessional obligations of qualifying countries, currently limited to PL 480 debt. If authorized by Congress, it also would determine reductions of other concessional debt (USAID), as well as Export-Import Bank and Commodity Credit Corporation obligations. These would be made to facilitate debt-for- equity, debt-for-nature, or debt-for-development swaps. During 1991, agreements under the EAI were signed with Chile, Bolivia, and Jamaica, reducing their concessional debt to the United States substantially. The United States will seek an environmental agreement with each eligible country that will allow it to make interest payments in local currency on new obligations resulting from debt reduction. To date, environmental agreements have been signed with Bolivia and Jamaica. One with Chile is imminent. These interest payments will be deposited in an Environmental Fund to support environmental projects. The Fund would be managed by an environmental commission made up of members from the US Government, the debtor government, and non-governmental groups from that country.
Key Components Of Trade Vision
-- Progress in the General Agreement on Tariffs and Trade and the North American Free Trade Agreement negotiations. -- Cooperation on trade liberalization issues through trade and investment councils. -- Active liberalization of trade and investment policies in Latin America and the Caribbean. -- As markets in Latin America and the Caribbean grow and liberalize, gradual incorporation into a growing hemispheric system of free trade. (###)

Fact Sheet: Panama 2 Years After Operation Just Cause

PA Source: Office of Public Communication, Bureau of Public Affairs Date: Feb, 10 19922/10/92 Category: Fact Sheets Region: Central America Country: Venezuela Subject: Trade/Economics, Regional/Civil Unrest, Democratization, Human Rights, Narcotics, Environment, Resource Management [TEXT] Panama has made great strides since December 20, 1989, when President Bush ordered US forces into the country. The new Panamanian Government assumed power on December 20, having been denied office by Manuel Noriega after winning the May 1989 elections. It consisted of only President Endara and his two vice presidents, with no cabinet, no functioning bureaucracy, and, in many cases, no desks or office equipment in the looted shells of government buildings. The Endara Administration inherited a heavy foreign debt burden, high unemployment, and a bloated public sector. Two years after Operation Just Cause, Panama is free and democratic. The print and electronic media, representing various ideologies, is open and critical and operates without fear of intimidation. The current government was chosen in honest and fair elections. Vigorous competition among political parties has replaced the repression of the military era. A new civilian-controlled police is being trained to replace the military force which ruled and looted Panama. The government is committed to the fight against illegal drug-trafficking. Economic confidence is returning, while unemployment has been cut in half. Panama has joined Central American efforts to achieve political and economic integration and has normalized relations with all other Latin American nations.
Economic Progress and Outlook
Panama has made progress toward economic recovery. The Government of Panama estimates that GDP grew at least 4.6% in real terms in 1990 and another 6.1% in 1991--far more robust than global trends. Inflation in Panama's dollar-based economy is less than 2% annually. Unemployment, more than 35% right after Operation Just Cause, had dropped to less than 16% by late 1991. Exports increased by 8.4% in 1990. The volume of trade through the Colon Free Zone reached an all-time record of $5.8 billion in 1990; projected 1991 figures show large increases, with imports and re- exports up 33.9% and 23.6%, respectively, over 1990. The banking system has been strengthened by capital repatriation; deposits have increased by almost 21%, to more than $4 billion. Trade and construction have shown a strong recovery, as have most other sectors. The Endara Government won Legislative Assembly approval for, and strictly adhered to, balanced budgets in 1990 and 1991. Increased government revenues and tight expenditure controls have lowered the current public sector deficit from 11.5% of GDP in 1989 to less than 3%. The government also privatized the national airline. The country's greatest resource is the canal and its related properties, providing $80 million per year in direct revenues to the Government of Panama and more than $200 million in salaries to Panamanians employed by the Panama Canal Commission. The United States is committed to implementing the Panama Canal Treaties, and the first Panamanian Administrator of the Panama Canal was appointed in September 1990. Although the Government of Panama has completed some of the initial preparation for the turnover of the canal in 1999, it now must begin careful planning to ensure a successful outcome. In November 1991, Panama concluded negotiations with the International Monetary Fund, World Bank, and Inter-American Development Bank for a reform program which will encourage long-term economic growth. This opened the door for new lending. Panama has remained current on interest payments to the international financial institutions since April 1990 and completed its agreements with these institutions in early 1992, including the payment of outstanding arrears.
Creation of a New Police Force
With US assistance, Panamanian authorities have made steady progress in changing the Panama Defense Forces into a professional, civilian law enforcement agency. Civilians now direct the national police and the investigative service known as the Technical Judicial Police. The US Department of Justice's International Criminal Investigative Training Assistance Program (ICITAP) provides non-lethal equipment--such as police cars, uniforms, and communications equipment--and training in civilian law enforcement. Its FY 1990-91 assistance program totaled $13.2 million, and ICITAP plans to spend another $10 million annually in Panama beginning in FY 1992. A new police academy assisted by ICITAP will train 750 to 1,250 new recruits each year, all of whom will be high school graduates. Panama is amending its constitution to abolish its armed forces, joining Costa Rica as one of only two demilitarized Central American nations. A national plebiscite will be held on this amendment in August 1992.
Administration of Justice
One of the most difficult problems that Panama faces is the administration of justice. Prisons are overcrowded, with conditions well below minimum standards. There is a shortage of judges, prosecutors, public defenders, and investigative personnel, and caseloads continue to increase. The Endara Government is addressing these problems. New judges and court officers have been appointed to begin clearing the backlog of cases in the Panama City area. Judicial officials visit jails to review cases, set trial dates, and issue writs of release for individuals whose sentences are nearing completion or who have been held for long periods without trial. Pre-trial detainees in prison have dropped from 91% of the prison population in 1990 to about 80% today; new judicial reforms allow alternatives to preventive detention for many prisoners. In March 1991, the United States and Panama began a 5-year, $12-million project to improve the court system. The program mainly aims to improve the performance and coordination of judges, prosecutors, and public defenders in criminal investigations and trials. Panama has asked for US assistance in improving its corrections system. After expected US congressional approval, ICITAP will provide more than $600,000 in FY 1992 to help rectify the corrections system.
Counter-narcotics Cooperation
The Endara Government has moved to improve narcotics control, although transshipment of drugs and essential chemicals through Panamanian territory remains a problem. Panama and the United States have signed a Mutual Legal Assistance Treaty: the latest demonstration of the Endara Government's commitment and cooperation on counter-narcotics. Panama has signed other agreements with the United States, including a Chiles Amendment agreement on counter-narcotics cooperation, a ship-boarding procedures agreement, a bilateral narcotics control agreement, and an agreement allowing joint patrols of Panama's coasts for training and enforcement purposes. The Endara Government also has taken steps to combat money laundering. Within 2 months of taking office, it issued regulations requiring banks to record cash transactions in excess of $10,000. The government now also requires banks to record all "near-cash" transactions in excess of $10,000. Panama's Attorney General has provided bank records for six ongoing money laundering investigations of more than 400 accounts in 12 banks. Vice President Ford has stated that Panama will shut down any bank proved to be involved in money laundering.
Natural Resources Management
An $18-million project will improve management of the Panama Canal watershed, strengthen the National Resources Institute's capacity to manage 14 national parks and reserves, and improve land-use zoning within the canal watershed area. The project also includes funding for a debt-for- nature swap which will capitalize a new conservation foundation in Panama and provide income to finance natural resources activities.
Panama is firmly established in the world community of democracies. Like many other nations in this hemisphere which have emerged from dictatorships, Panama works to overcome the difficulties of establishing democratic institutions, a sound economy, a fair judicial system, and a smoothly functioning government. The people of Panama have made great progress toward democracy and economic recovery, and there is good reason to expect that Panama will succeed in achieving these.
US Economic Assistance To Support Democracy and Economic Recovery
In 1990, Congress approved $451 million in emergency supplemental economic assistance to Panama to be used in fiscal years 1991 and 1992. As of the end of January 1992, $368 million of the $451 million (82%) in Economic Support Funds had been disbursed: -- $40 million for emergency relief, including homes for 2,724 families displaced by fleeing Noriega forces during Operation Just Cause; 89 projects in areas such as small-scale public works, school repairs, reforestation, and park protection; and loans to 251 small businesses that were looted after Operation Just Cause; -- $113 million for economic recovery activities, including medium-term credit for private investment; -- $72 million for Panamanian Government investments in agriculture, health, education, and infrastructure; -- $13 million for initiation of long-term development activities and program support; and -- $130 million to help clear international financial institution arrears. Still to be disbursed is $42 million for more government investments. About $41 million remains to be disbursed for ongoing longer-term development activities, including police training, justice administration improvement, and environmental protection and natural resource management. These funds are being disbursed as the projects are implemented. (###)
Dispatch, Vol 3, No 6, February 10, 1992 Title:

Fact Sheet: Who Belongs to What

PA Source: Office of Public Communication, Bureau of Public Affairs Date: Feb, 10 19922/10/92 Category: Fact Sheets Region: Whole World Subject: International Organizations, OAS, NATO, CSCE, EC, ASEAN [TEXT] Membership by country in selected international organizations.
APEC (Asia-Pacific Economic Cooperation)
Australia, Brunei, Canada, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, United States
Arab League
Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, Yemen
Arab Maghreb Union
Algeria, Morocco, Tunisia, Libya, Mauritania
ASEAN (Association of South East Asian Nations)
Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand
Cairns Group
Argentina, Australia, Brazil, Canada, Chile, Colombia, Hungary, Indonesia, Malaysia, New Zealand, Philippines, Thailand, Uruguay
CIS (Commonwealth of Independent States)
Armenia, Azerbaijan, Byelarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan
COCOM (Coordinating Committee for Multilateral Export Controls)
Australia, Belgium, Canada, Denmark, France, Germany, Greece, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal, Spain, Turkey, United Kingdom, United States
Common Market
--See European Community
Council of Europe
Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Portugal, San Marino, Spain, Sweden, Switzerland, Turkey, United Kingdom
CSCE (Conference on Security and Cooperation in Europe)
Albania, Armenia, Austria, Azerbaijan, Belgium, Bulgaria, Byelarus, Canada, Cyprus, Czechoslovakia, Denmark, Estonia, Finland, France, Germany, Greece, the Holy See, Hungary, Iceland, Ireland, Italy, Kazakhstan, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Spain, Sweden, Switzerland, Tajikistan, Turkey, Turkmenistan, Ukraine, United Kingdom, United States, Uzbekistan, Yugoslavia
EC (European Community)
Belgium, France, Denmark, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, United Kingdom
EFTA (European Free Trade Association)
Austria, Finland, Iceland, Norway, Sweden, Switzerland
GCC (Gulf Cooperation Council)
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
Group of 5
France, Germany, Japan, United Kingdom, United States
Group of 7
Canada, France, Germany, Italy, Japan, United Kingdom, United States
Group of 15
Algeria, Argentina, Brazil, Egypt, India, Indonesia, Jamaica, Malaysia, Mexico, Nigeria, Peru, Senegal, Venezuela, Yugoslavia, Zimbabwe
Group of 24
--Same members as OECD
NATO (North Atlantic Treaty Organization)
Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Turkey, United Kingdom, United States
Nordic Council
Denmark, Finland, Iceland, Norway, Sweden
OAPEC (Organization of Arab Petroleum Exporting Countries)
Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates
OAS (Organization of American States)
Antigua and Barbuda, Argentina, The Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba (participation suspended), Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Christopher-Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, United States, Uruguay, Venezuela
OAU (Organization of African Unity)
Algeria, Angola, Benin, Botswana, Burkina, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo, Cote d'Ivoire, Djibouti, Egypt, Equatorial Guinea, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, Sudan, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zaire, Zambia, Zimbabwe
OECD (Organization for Economic Cooperation and Development)
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
OIC (Organization of the Islamic Conference)
Afghanistan, Algeria, Bahrain, Bangladesh, Benin, Brunei, Burkina Faso, Cameroon, Chad, Comoros, Cyprus, Djibouti, Egypt, Gabon, The Gambia, Guinea, Guinea-Bissau, Indonesia, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Malaysia, Maldives, Mali, Mauritania, Morocco, Niger, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Senegal, Sierra Leone, Somalia, Sudan, Syria, Tunisia, Turkey, Uganda, United Arab Emirates, Yemen
OPEC (Organization of Petroleum Exporting Countries)
Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela
WEU (Western European Union)
Belgium, France, Germany, Italy, Luxembourg, Netherlands, Portugal, Spain, United Kingdom (###)