US Department of State 

Dispatch, Vol 3, No 19, May 11, 1992

Title:

Achieving National Consensus on the FREEDOM Support Act

Armitage Source: Richard L. Armitage, Deputy Coordinator for Assistance to the Commonwealth of Independent States Description: Statement before the Subcommittee on Foreign Operations of the Senate Appropriations Committee, Washington, DC Date: May, 6 19925/6/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Papua New Guinea, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Development/Relief Aid, Trade/Economics, Arms Control, Science/Technology [TEXT] I am very grateful for the opportunity to appear before this particular subcommittee, whose work is so central to the successful conduct of foreign policy. I have benefited from your wisdom and advice in previous incarnations and will, no doubt, so benefit again. Permit me at the outset to identify, as I see it, the nub of the challenge we Americans now face in the wake of communism's collapse. Our central task is to unite--in an election year which finds many Americans worried about their own economic prospects--behind a strategy designed to bury forever the Cold War; a game plan which can survive the turbulence of a partisan political campaign and prevail as a matter of bipartisan national consensus irrespective of November's verdict. It seems to me that the beginning of wisdom in this matter is to have a sense of the parameters likely to beset by the American people for this endeavor. The members of this subcommittee are far more expert than I on this score, but, for what it is worth, I believe that Americans, in general, would agree on the following: -- That the downfall of communism does, indeed, represent, as President Bush has said, "a defining moment of history;" -- That having won the Cold War at a cost of tens of thousands of lives and trillions of dollars, we should not simply turn our backs on 280 million people who are willing to bury communism once and for all; -- That this predisposition to help stems partly from genuine, humanitarian impulses and partly from the sense that it will [be] less expensive for us in the long run if former enemies actually become allies; and -- That this country is in no position to embark on an open-ended foreign aid program designed to use taxpayer funds to compensate for 70 years of communist malfeasance and mismanagement. I believe that within these parameters we can achieve a strategic consensus that transcends partisan politics here in this country. I believe that the FREEDOM [Freedom for Russia and the Emerging Eurasian Democracies and Open Markets] Support Act announced by the President 5 weeks ago encapsulates this consensus. I believe the FREEDOM Support Act should be enacted prior to the arrival of [Russian] President [Boris] Yeltsin on June 16. Each of you has read this bill. With the aid of your capable committee staff you have parsed it line-by-line. You have undoubtedly found language you could have drafted better. No doubt, you have uncovered provisions you would have written differently. I will be very frank with you. There are many things contained in the FREEDOM Support Act which we could--and if necessary, will--accomplish without the formal authorization that would be conveyed by its passage. But to proceed very far into this process without your explicit, conscious, and willing collaboration would rob us of the single greatest accomplishment we could attain: the creation of a national strategic consensus that will transcend the vicissitudes of partisan political fortunes. Let's be clear about what it is we want, both as a general matter and in terms of the FREEDOM Support Act. We want to pre-empt a new Cold War and bury the old one by channeling the creative energies of our former enemies away from trying to sustain an economy dominated and driven by the production of military weaponry and equipment. The process of helping to wean our prospective allies away from a command economy devoted to militarism will take years and decades. Even though our own security will be decisively affected by the outcome of this process, our ability to shape the outcome through expenditures of public funds is finite. We can help, and we can make a difference, but only in concert with the other industrial democracies and only by making the way clear for the American private sector to become, if it chooses, fully engaged. I would hasten to add that we will not wean away from authoritarianism, statism, or militarism anyone who does not wish to be so weaned. I cannot imagine any sustained Western assistance effort to any state resisting the imperatives of democratization and economic reform. This will entail great sacrifice and great patience in the new independent states. Setbacks and temporary back-tracking are inevitable. In the end, however, no matter how unfair this may seem, it is the victims of communism's rapacity who bear the burden of achieving success or failure. Russia is not ours to win or lose.
Key Features of the Act
Instead of reciting the provisions of the FREEDOM Support Act, I would like simply to highlight those features of it which strike me as key. In terms of our own security, it would authorize a broader use of the $500 million appropriated last fall to the Department of Defense for denuclearization and the transport of humanitarian aid. The act would authorize the use of these funds for demilitarization, defense conversion, the withdrawal and relocation of military forces, and non-proliferation. It would authorize the establishment of a science and technology center in Ukraine comparable to the one being established in Moscow. These centers will seek to employ, for peaceful purposes, weapons scientists who might otherwise contribute to the proliferation of the systems and devices they have created. These activities will have direct and measurable effects on our national security. Our longer term objective, however, is to help foster the development of economies no longer dependent on military spending. US involvement in this transformation presents unparalleled opportunities for American businesses and workers to benefit by helping Russians and others develop in environmentally sound ways what may well be the world's largest untapped market, one based on an extraordinarily impressive repository of human talents and natural resources. We want American companies to be able to compete all across the Eurasian landmass. Not only can we develop markets for US exports, but, in partnership with indigenous enterprises, we can develop alternatives to military production--alternatives which redirect the enormous talents of Russians, Ukrainians, and others toward peaceful, productive purposes. We are working hard with the governments of these new states to create laws and procedures which will facilitate and protect trade and investment. Although we cannot force US businesses to compete with others to profit from these emerging opportunities, we can make it easier for them to do so. The FREEDOM Support Act would authorize: -- Expanded increases in export and investment guarantees and insurance through the Export-Import Bank (Eximbank) and the Overseas Private Investment Corporation (OPIC). Additional US exports mean additional US jobs; -- Support for continued US food exports under the Commodity Credit Corporation; -- The removal of Cold War obstacles and bars to US investment; -- The creation of a resident program of US business advisers through "America Houses" and American business and management centers; and -- US participation in international efforts to stabilize the ruble and make IMF [International Monetary Fund] loans available, all subject to continuing democratization and reform. The FREEDOM Support Act also calls upon the United States to provide cost- effective technical assistance in the form of people-to-people know-how for the creation of democratic institutions and free markets. I will return to a more detailed account of our technical assistance initiatives, but permit me to say that none of this adds up to an old-style foreign aid program. All of it encourages, but, ultimately, depends upon the leaders and citizens of these new states reforming in ways which attract international partners who will work with them to convert military-based economies to ones which are peaceful and productive. Nothing in this act commits the US taxpayer to massive, up-front capital investments in infrastructure projects. The FREEDOM Support Act is not a $24 billion foreign aid bill. In sum, the FREEDOM Support Act provides a sound basis for a national consensus in the face of communism's collapse. It strikes balances in four areas by: -- Reflecting the inclination of the American people to be helpful, for reasons rooted in our own national security, but fiscally prudent in support of reformers in the new states; -- Codifying a dynamic balance between reform in the new states and assistance from the United States; -- Establishing an international division of labor among the industrial democracies for macroeconomic support; all of which is contingent on sustained reform processes in the new states; and -- Targeting official US technical assistance at democratization and the opening of opportunities for our private sector. Although humanitarianism runs strong and deep in this country, I believe it is important for Americans, Russians, Ukrainians, Armenians, and others to understand that our approach has nothing to do with charity or giveaways. In concert with private voluntary organizations, we are, indeed, engaged in humanitarian activities designed to help these new states preserve social safety nets for the elderly, for children, and for the infirm during a period of great upheaval. The peoples of these new states are, however, eager to provide for themselves and anxious to get on with the business of building democracies and free economies. With this in mind, I would like to describe our approach to technical assistance.
US Technical Assistance Programs
Although we had to focus at the outset on meeting humanitarian needs, we also saw a requirement to provide the expertise and know-how required to help those in need today to be able to help themselves tomorrow. As we provide food and medicine, we must also help create the infrastructure of a democratic, free-market society. This is exactly what we are doing. While Operation Provide Hope, the President's medical initiative, the USDA [US Department of Agriculture] grant food aid, and other emergency programs are underway, we are also working on developing and implementing technical assistance programs. These programs represent our effort to teach the fishermen to fish rather than providing the fish. Through these programs, we hope to create, or recreate, the indigenous capacity to carry forward in a prosperous, democratic society. I am quite proud of our progress to date in this area. Our humanitarian assistance has received quite a lot of press coverage, and I am happy about that. But our technical assistance programs have gone relatively unnoticed, to date. Let me cite a few examples of the programs that are moving ahead quickly. -- We have already sent two defense conversion advisers to Nizhniy Novgorod and will be sending two more to Kharkov by the middle [of] this month; --We have placed a housing adviser in Moscow and expect to have long-term advisers in Moscow , Yekaterinburg, Novosibirsk [Russia], Alma-Ata [Kazakhstan], Kharkov [Ukraine], and Yerevan [Armenia] by the end of August; -- Our energy efficiency teams have completed audits in six cities and will be installing energy-saving equipment in district heating plants before the onset of winter; -- The Norfolk/Moscow Children's Health Center partnership will begin its first activities later this month; -- The first agricultural extension team will arrive in Armenia in June; -- Our first wholesale market teams will arrive in Moscow and Kiev in mid- May; and -- The first batch of loaned executives under the USDA program are due to go out in June. As you can see, we have made considerable progress in beginning to implement our initial technical assistance programs. We will continue to have these programs come on line as quickly and effectively as possible. We are pushing all agencies to implement their programs as a matter of top priority. This does not mean that we are not thinking through each of the programs, but that we are driving the process as quickly and as prudently as we can. Placing Americans on the ground to help promote reform strengthens the position of today's democratic leaders and shapes the thinking of coming generations of leaders; it also creates a new foundation for enduring political and economic ties. We firmly believe that we can best support our diplomatic efforts by having in place assistance programs that are visible. Technical assistance should be aimed at creating conditions in which the private sector can thrive. This paves the way for increased private investment--the real engine of growth for these new market economies. We will devote significant resources to programs that will promote US trade and investment which, in turn, will help restart these crippled economies and transfer know-how and resources.
US Private Sector Investment.
An extremely important part of the US Government technical assistance program focuses on fostering US private sector investment and participation in the privatization of the economies in the NIS [new independent states]. The US Government offers a range of programs to provide incentives for potential US investors. Among the most effective of these programs are those run by OPIC, Eximbank, and the Trade Development Program. Each of these entities is in the process of implementing programs newly developed for the new independent states. The most important factor in encouraging Western investment is the commitment of the new governments to put in place the legislation and regulations which create an environment acceptable to Western investors. US Government activities through the Trade Development Program provide funding for feasibility studies for potential US investment projects. The Eximbank provides credits for US companies interested in investing in the former Soviet Union. OPIC provides insurance and financing coverage that increases the incentive for US business participation. In addition, the Department of Commerce is planning and executing a series of programs updating East European data bases of potential investors and companies in the host country to cover the NIS and providing internships for managers of NIS companies in American companies through the Special American Business Initiative. The managers are provided a 3-6 month internship at appropriate host US companies, and the US Government pays the airfare and a small stipend for each NIS intern, while the host American company pays other costs, including insurance and training. This program has been expanded to include scientists from the NIS who will intern with American scientific and research companies. Finally, the decision of Congress to repeal the Byrd-Stevenson restrictions in the FY 1992 continuing resolution will prove critical in removing obstacles to Eximbank's provision of export credits essential to encouraging US trade and investment in the NIS. The participation of Eximbank is a crucial part of the overall focus and the ultimate success of our assistance program. In designing our technical assistance programs, we seek to promote "islands of success" that can serve as models for cities and regions in the new independent states. Our choice of target areas for our programs will depend, in part, on the local leadership's commitment to reform. By concentrating our efforts--both geographically and by sector--we can demonstrate that leaders who support democracy and market reform can deliver. In particular, we are concentrating technical assistance on eradicating the underlying causes of current shortages such as production, distribution, and transportation bottlenecks. At the Washington Coordinating Conference in January [1992], all agreed that each donor should focus on areas where it has a comparative advantage. US technical assistance will focus primarily on the private sector, with emphasis placed on needs which are critical and returns can be quickly achieved. This includes agriculture and food distribution, energy efficiency and oil and gas extraction, and restarting the pharmaceutical industry.
US Strategic Interests.
US assistance must focus on our strategic interests: dismantling weapons of mass destruction, converting the defense industry to civilian production in the private sector, and combating the "brain drain" of scientists who could proliferate nuclear, biological, and chemical weapons. In this connection, permit me to mention briefly the science and technology centers we are establishing in Russia and Ukraine. These centers will serve as clearinghouses for projects to help weapons scientists and engineers redirect their talents to peaceful, civilian pursuits. Later this month, the founding members--United States, Japan, the European Community, and Russia--will sign the agreement establishing the International Science and Technology Center in Russia. At that time, the members of the initial governing board will also meet informally for the first time. The board will discuss the expansion of board membership, approve a site for the center, and adopt project proposal format and guidelines. We will publicize the proposal guidelines and format as soon as possible so that we can solicit high-quality, well-focused project proposals from government agencies and private and non-profit firms. We have already received close to 200 unsolicited proposals. We have identified senior executive staff for the international center, and those candidates will be part of these meetings in Moscow. Because of the urgency of the center's mission, we are taking action to have it operational by June. We are also moving quickly to establish a separate independent science and technology center in Ukraine. Robert Gallucci will be heading a US delegation which will travel to Kiev again this month for substantive negotiations on an international agreement establishing this center. Representatives of other nations, including Japan and Canada so far, plan to participate in these negotiations as founding members. We expect the center in Ukraine to be open by early summer. As part of our overall assistance program, the Administration proposes to establish an independent Eurasia Foundation for Democracy, Free Enterprise, and Training in Leadership and Management. This foundation would promote and strengthen market economies and institutions concerned with representative government and the protection of human rights. Working with US private voluntary and non-governmental organizations, the foundation will provide help in privatization and management training.
Central Asia.
In the meantime, we must not miss this opportunity to consolidate our democratic and market values in the new independent states of Eurasia. As the President stated in his opening remarks to the [Washington] coordinating conference, we must ". . . commit ourselves, individually and collectively, to an opportunity that may not come our way again in our lifetime. The prospect that our former adversaries may become our friends and our partners--this is in the national interest of every country. . . ." The most important contribution the US Government can make to enabling the former Soviet Union to shift a significant portion of its resources from defense to civilian production is to encourage the flow of American private capital and know-how into the former Soviet Union. The transition of the economies of these new states from command to market will require that state-owned enterprises--and especially defense facilities--restructure their operations to focus on production of civilian goods for which there is a clear market either domestically or internationally. In addition to the funding required for such a shift, technical assistance will also be needed in areas such as marketing, accounting, management, and production efficiency. The US Government is undertaking several projects to address these needs. The first, which I alluded to briefly in my overall description of the program, involves the placement of defense conversion advisers--retired US executives from defense-related fields--into several key cities. These executives will serve as advisers to the local governments and to factory managers on issues related to defense conversion and investment promotion. The first two teams of advisers will go to Nizhny Novgorod, Russia, and Kharkov, Ukraine; they will be in place by the middle of May. We are in the process of selecting additional cities for advisers, including one in Central Asia. In addition to the advisers, the US Government will be establishing Western-style business centers in several cities throughout the new independent states to provide facilitation services for American businessmen. We will also be calling on several existing USAID [US Agency for International Development] contracts with American accounting and consulting firms to provide assistance in discreet activities relating to privatization, such as asset valuation and management consulting. Another fundamentally important area requiring major reform is the financial sector and, especially, the banking systems of the new states. Without a capability for Western businesses to transfer hard currency into and out of these places, commercial promotion efforts will meet only minimal success. We are addressing this issue through an activity with the Department of Treasury aimed at providing advisers to the central banks and ministries of finance in several of the new republics. These advisers will provide assistance in areas including budget management, banking reform, and tax policy. In the general area of privatization, we have begun discussions with the International Finance Corporation to support auctions of small- and medium-sized retail facilities in several cities throughout the new independent states. These auctions will be modeled after the very successful auction effort recently completed in Nizhny Novgorod, which has already transferred 50 retail enterprises from state to private ownership.
Conclusion
I would like to conclude by reiterating my gratitude for having been afforded the opportunity to appear before this body. I cannot overstate my strong belief that passage of the FREEDOM Support Act is absolutely essential. We need to chart a basic course for a journey of many miles and many years. We need to do it together, because this journey will see Presidents and Congresses, Republicans and Democrats, come and go. I believe the FREEDOM Support Act charts a course which the American people support. Its passage will not only codify our own national consensus, but it will make it clear to the leaders and peoples of the new independent states that democracy and economic reform are the prerequisites for a lasting partnership.(###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Strong Foundation Laid for Expanded US-Ukraine Cooperation

Baker Kravchuk Source: Secretary Baker, Ukrainian President Kravchuk Description: Remarks at a luncheon in honor of President and Mrs. Kravchuk, Washington, DC Date: May, 7 19925/7/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Ukraine Subject: Democratization, Human Rights, State Department [TEXT]
Secretary Baker:
Mr. President, Mrs. Kravchuk, Foreign Minister Zlenko, and distinguished guests, Susan and I are honored to welcome you to the Department of State and to the Benjamin Franklin Room on this very special occasion--the first official visit by the freely elected President of an independent Ukraine. Your visit marks an important moment in the rapidly evolving relations between Ukraine and the United States. Our agenda is a full one, as befits discussions between nations that share a commitment to democracy and a commitment to human rights and to world peace. We have concluded several important agreements, including ones to promote trade and investment between our two countries. But more than this, we have laid a strong foundation for expanded cooperation on a wide range of security, political, and economic issues that will serve the interests of our peoples and the international community at large. In short, Ukraine and the United States have begun to forge a partnership for peace. This will not be the imperfect peace of the Cold War, uneasily maintained in a divided Europe--maintained by the balance of terror. Rather, we must create what President Bush has called a democratic peace: a lasting peace, based upon shared democratic values such as the rule of law, the protection of human rights, and the free market. Your visit constitutes a cornerstone for the democratic peace that we hope to build together. I'm told that the Ukrainian national anthem begins with the moving words, "Ukraine has not yet died." Ukraine today is most assuredly--and vibrantly- -alive. You have taken your rightful place in the community of nations. You have put decades of totalitarian rule behind you, and you have begun to chart an independent and democratic destiny. And by bold and broad-ranging reforms, you have the opportunity to bring prosperity again to your gifted people and your rich lands. The philosopher Montesquieu--whose thought inspired Benjamin Franklin and America's other Founding Fathers--once wrote, "Countries are well cultivated, not as they are fertile, but as they are free." Countries that are both fertile and free--like Ukraine and the United States--are, indeed, fortunate. God has been generous to both our nations with nature's bounty, and, yet, Ukraine endured a cruel "harvest of sorrow" at the hand of totalitarianism. So, together, we must never forget how very precious freedom's harvest is. And together, we must reap the full benefits of a democratic peace for ourselves and for generations of Ukrainians and Americans to come. So, ladies and gentlemen, please join me in a toast to President and Mrs. Kravchuk, to a free and independent Ukraine, to its rich past--and to its even richer future.
President Kravchuk:
Mr. Secretary, Mrs. Baker, ladies and gentlemen, friends, I am very pleased that we could find time in our very tight schedule to meet with you in such [an] informal atmosphere. This enables me to give a preliminary assessment of some results of our visits and talks and share my thoughts and feelings about the first days of [my] stay in your country. To start with--and I hope and I think other members of our delegation will agree with me--the major and most significant result is that we will lay the necessary contractual and legal foundation for a further development of our bilateral relations in the political, economic, and humanitarian fields and raise them to a qualitatively new, higher level. With special pleasure, I would like to emphasize that, today, Ukraine and the United States made extremely important and--without exaggeration-- unprecedented steps toward mutual trust. I am speaking about our joint actions for strengthening international security and providing the necessary conditions for the activity of our diplomatic and consular institutions. Without underestimating the significance of the recently signed agreements, I wish to say that I was especially impressed by the spirit of mutual respect, sincerity, and openness which persisted [in] our relations with President Bush, and you, Mr. Secretary, and other members of the US Administration. Today, we can indicate that the mutual aspiration of our governments and peoples is to solve all problems in a civilized manner and in the spirit of equality and constructive cooperation. Taking this opportunity, I would like to assure you and all present here that the foreign policy of the independent Ukrainian state will be devoted to a practical implementation of these goals to the advancement of good and mutually beneficial relations with all countries of the world with a special emphasis on relations with the United States. That is why I would suggest to raise this toast to the new nature of relationships between Ukraine and the United States of America--to the friendship between our peoples. To your health, Secretary of State and Mrs. Baker, to the health of everybody present. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Declaration on US-Ukrainian Relations: Building a Democratic Partnership

Baker Kravchuk Source: Secretary Baker, Ukrainian President Kravchuk Description: Declaration released by the White House, Office of the Press Secretary, Washington, DC Date: May, 6 19925/6/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Ukraine Subject: Arms Control, Trade/Economics, Security Assistance and Sales, Science/Technology [TEXT] Today's talks mark a historic step in the development of relations between our two great nations. For the first time, an American President has met with the freely elected President of a sovereign Ukraine. The Ukrainian people are now building their own state, one whose independence and commitment to democracy can make a vital contribution to the creation of a new Europe truly whole and free. The United States places special importance on the consolidation of Ukraine's democracy and independence. Toward this end, we are agreed that we must work together as friends and partners for the mutual benefit of both our peoples and in the interests of international peace and stability. Politically, we will strive to protect and promote the values that bind us together in the democratic community of nations, including free and fair elections, freedom of emigration, the rule of law, and respect for human rights--including the rights of all minorities, regardless of their nationalities and beliefs. The United States takes special note of Ukraine's commitment to establish its independence in full accordance with these principles and its efforts to build a just and stable society where fundamental freedoms of all peoples are guaranteed. Economically, we will work to advance the values of economic freedom without which democracy and prosperity cannot flourish. Ukraine will accelerate efforts to move toward a market economy through appropriate macroeconomic stabilization policies and structural/microeconomic reforms to promote recovery, market development, and growth. The United States, through its technical assistance programs in areas like defense conversion and food distribution, will help Ukraine in these efforts and encourage the international community to do likewise. Together, we will take steps to promote free trade, investment, and economic cooperation between our two countries and peoples as well as within the world economy at large. A critical feature of this cooperation will be a special effort by Ukraine to lower barriers to trade and investment in order to allow greater access for American firms. Ukraine and the United States will establish joint business development committees to achieve this objective and build a foundation for expanded commerce. We have concluded a trade agreement which will confer most-favored-nation tariff treatment on Ukraine and an OPIC [Overseas Private Investment Corporation] agreement to make available investment insurance for American firms investing in Ukraine. We have also agreed to expedite negotiations on bilateral investment and tax treaties that will further promote private trade and investment as well as on cooperation in shipping and civil aviation. In the area of security, the United States and Ukraine will cooperate to promote a democratic peace across Europe. We are agreed that international security can no longer be achieved through the efforts of individual states to acquire ever-increasing amounts of weaponry. Rather, security must be based on reduced levels of armaments among all nations and on a multilateral commitment to uphold shared principles, especially democracy, the inviolability of borders and territorial integrity, and peaceful resolution of disputes. Working together in multilateral institutions like CSCE [Conference on Security and Cooperation in Europe] and the North Atlantic Cooperation Council will be an important means of promoting these goals and values throughout the new Europe. Also important will be the development of a regular, bilateral dialogue on questions of peace and security that would address questions of common interest. We will use bilateral military and defense contacts to provide advice and assistance in the development of civil- military institutions. As a matter of special urgency and concern, we also will work actively to prevent the proliferation of weapons of mass destruction and associated technologies. In this regard, the United States applauds Ukraine's leadership, manifested in its agreement to ratify and implement the START [Strategic Arms Reduction Treaty] and CFE [Conventional Armed Forces in Europe] treaties and its commitment to renounce nuclear weapons and join the Non-Proliferation Treaty as a non-nuclear weapons state at the earliest possible time. Consistent with these commitments, Ukraine reaffirms its decision to complete the removal of all tactical nuclear weapons from its territory by July 1, 1992, and all remaining nuclear weapons in accordance with her relevant agreements and during the 7-year period of time as provided by the START Treaty and in the context of the statement of the Verhovna Rada (parliament) on the nuclear status of Ukraine. The United States will assist Ukraine in these efforts by utilizing a portion of the $400 million appropriated by the US Congress. The United States will also allocate part of this $400 million for the establishment of an International Science and Technology Center in Ukraine. This center will help former weapons scientists and engineers in developing long-term civilian career opportunities that will strengthen Ukraine's scientific research and development capacity. In addition, the United States will continue its support of Ukrainian and international efforts aimed at minimizing the tragic aftermath of the Chernobyl catastrophe. By agreeing to cooperate to advance these common political, economic, and security interests, the United States and independent Ukraine have laid the foundation for a strong and special partnership. For, while relations between our governments may be new, the ties that connect our peoples are deep and long-standing. We will seek to broaden these contacts through expanded people-to-people exchange programs such as the Peace Corps agreement we have signed to provide Ukraine with assistance in small business development and other areas such as education. Working together and with others who share our principles, we will expand this partnership in pursuit of an enduring, democratic peace that can fulfill the aspirations of our two nations and the entire world. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Fact Sheet: Ukrainian President Visits Washington, DC, May 5-7, 1992

PA Source: Office of Public Communication, Bureau of Public Affairs Date: May, 11 19925/11/92 Category: Fact Sheets Category: Country Data Region: Eurasia Country: Ukraine Subject: Democratization, Human Rights, Trade/Economics, History [TEXT] Ukrainian President Leonid M. Kravchuk made his first official visit to Washington, DC, May 5-7, 1992. He met with President Bush, Secretary Baker, Secretary of Defense Cheney, and other government officials. They discussed the full range of political, economic, and security issues between the two countries.
US-Ukrainian Relations
On December 25, 1991, the United States officially recognized the independence of Ukraine. The United States moved quickly to establish diplomatic relations, upgrading its consulate in Kiev to embassy status. The success of the political and economic reforms being undertaken in Ukraine is of vital importance to the United States. President Bush has pledged to support its transition to a free, democratic society and efforts to develop free market institutions. Speaking in Kiev in December 1991, Secretary Baker praised Ukraine as being "at the forefront of those republics that are embracing those principles and values" laid down by President Bush as guidelines for recognition: self-determination, respect for borders, support for democracy, safeguarding of human rights, and respect for international law. The United States has received assurances from Ukraine that it will adhere to responsible security policies and democratic principles. To assist Ukraine in the process of transition to a free market economy, the United States is part of an international effort to provide technical and financial assistance. US initiatives also have included efforts through Operation Provide Hope to provide emergency humanitarian aid in the form of shipments of food, clothing, and medical supplies. In the area of arms control, the United States and Ukraine have discussed the importance of enhancing stability for both sides by assuring ratification of the Strategic Arms Reduction Treaty (START) and the Conventional Armed Forces in Europe (CFE) Treaty. Secretary Baker has praised Ukraine's decision to remain part of a single, unified command pending transfer of all nuclear weapons from its territory. The United States has dispatched experts to consult on issues of nuclear weapons safety and dismantlement. The Freedom for Russia and the Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act proposed by President Bush on April 1, 1992, would expand the range of US assistance. The act would authorize funds for projects relating to demilitarization, defense conversion, non-proliferation, relocation of Soviet forces, and the development of increased trade and investment opportunities. It would establish an international science and technology center in Ukraine, similar to one already designated for Russia, to assist scientists and engineers in the development and funding of non- military projects. It also would authorize the United States to continue its role in the multilateral aid and currency stabilization program currently being organized by the International Monetary Fund (IMF), the World Bank, and the Group of 7 industrialized countries. Although initially aimed at Russia, the program eventually will be extended to Ukraine as it consolidates its reform program.
Consolidating Democracy
Following free elections held on December 1, 1991, Leonid M. Kravchuk was elected President of Ukraine. A referendum on independence was approved by more than 90% of the voters, winning majorities even in areas with large numbers of ethnic Russians. By agreement on December 8, 1991, the former Soviet republic became a member of the Commonwealth of Independent States. Political groupings in Ukraine include former communists, Rukh/Narodna Rada nationalists (the largest and best organized of the popular fronts), and a new opposition group, "New Ukraine," combining economic reformers and environmentalists. The Government of President Leonid Kravchuk is committed to continuing the process of reform necessary for economic recovery and full democratization. Ukraine has stated its intention to observe and implement the provisions of the CFE and START Treaties. It has indicated its willingness to transfer all tactical nuclear weapons on its soil to Russia by July 1, 1992, and all strategic nuclear weapons by 1994. Ukraine joined the United Nations in 1945 as one of the original members, following a compromise with the Soviet Union, which had asked for seats for all 15 republics. On January 31, 1992, Ukraine joined the Conference on Security and Cooperation in Europe (CSCE), and on March 10, 1992, it became a member of the North Atlantic Cooperation Council (NACC). Through contacts with the countries of the West, Ukraine seeks to increase consultation and cooperation in areas such as defense planning; the conversion of defense production to civilian purposes; and scientific, economic, and environmental issues.
Economic Conditions
Ukraine is important as an agricultural and industrial region. It is a major producer of grain and sugar and possesses a broad industrial base, including much of the former USSR's space industry. Although oil reserves are largely exhausted, it has important energy sources, such as coal and natural gas, and large mineral deposits. This year, Ukraine has liberalized prices and introduced a privatization plan designed to move toward a free market economy. Fuel, electricity, and food shortages have affected the country, in large part due to deficiencies in the country's transport system. Faced with these problems, Ukraine welcomes technical and financial assistance from the international community to rebuild its agricultural and industrial sectors. A farmer-to-farmer program to increase farm production and income will provide training in US-style farm technology and agricultural cooperatives. Projects currently are underway to upgrade oil and gas pipelines, modernize sugar mills and sugar refineries, and upgrade coal and electricity production. On April 27, 1992, Ukraine became a member of the IMF and the World Bank. Subject to approval by the IMF of a comprehensive economic reform program, it will be eligible for IMF and World Bank assistance. (###)
Principal Government Officials
President: Leonid M. Kravchuk Foreign Minister: Anatoliy Zlenko Capital: Kiev
Ukraine at a Glance
Ukraine's population of 52 million traces its origins to the 9th-century Rus. In 1392, the Grand Duke of Lithuania seized the territory of Ukraine, and, in 1569, Lithuania merged with Poland. Ukrainian peasants who fled Polish efforts to force them into serfdom came to be known as Cossacks and earned a reputation for a fierce fighting spirit. In 1667, Ukraine was partitioned between Poland and Russia. In 1793, it was reunited as part of the Russian Empire. Despite a proclamation of independence in 1917, Ukraine was incorporated into the Soviet Union in December 1919. Between the two World Wars, a nationalist movement remained active and, unsuccessfully, attempted to restore an independent republic after the German invasion in 1941. During the war, Ukraine and its capital, Kiev, were heavily damaged. On August 24, 1991, Ukraine declared its independence. The territory of Ukraine is 233,080 square miles, slightly larger than that of France. It is primarily a vast plain bounded by the Carpathian Mountains in the southwest and by the Black Sea and the Sea of Azov in the south. The Dnieper River has long been a trade route linking the Baltic coast countries with the Black and the Mediterranean Seas. Ukraine is a land rich in natural resources. It has a major ferrous metal industry, producing cast iron, steel, and steel pipe. Its chemical industry produces coke, mineral fertilizers, and sulfuric acid. Its manufactured goods include metallurgical equipment, diesel locomotives, and tractors. Conservation of natural resources is a high priority. Ukraine established its first nature preserve, Askanyia-Nova, in 1921 and has a program to breed endangered species. As of January 1990, the population of the Ukraine was 51.8 million, about 18% of the population of the former USSR. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

US-Ukrainian Agreements

PA Source: Office of Public Communication, Bureau of Public Affairs Date: May, 6 19925/6/92 Category: Fact Sheets Category: Country Data Region: Eurasia Country: Ukraine Subject: Trade/Economics, International Law, Science/Technology, Democratization, Media/Telecommunications, Environment, Development/Relief Aid, Resource Management, State Department [TEXT] Fact sheets released by the White House, Office of the Press Secretary, Washington, DC, May 6, 1992.
Agreement on Trade Relations Between the United States and Ukraine
The trade agreement signed by President Bush and Ukrainian President Leonid Kravchuk provides for reciprocal most-favored-nation (MFN) tariff treatment to the products of each country. A trade agreement was originally concluded with the Soviet Union in June 1990 and approved by the [US] Congress in November 1991. The United States and Ukraine recently reached agreement on technical adjustments to that agreement to reflect the establishment of an independent Ukraine. Congressional reapproval is not required. The agreement will permit Ukrainians to export goods to the United States at substantially lower tariff rates. We expect that this agreement will create commercial opportunities for emerging Ukrainian enterprises and promote the development of a market-based economy in Ukraine, and at the same time will lay the ground for enhanced opportunities for US business. In addition to providing MFN for both parties, the agreement: -- Provides improved market access and non-discriminatory treatment for US goods and services in Ukraine and also calls for step-by-step provision of national treatment for US products and services; -- Facilitates business by allowing free operation of commercial representations in each country and by per- mitting companies to engage and serve as agents and consultants and to con- duct market studies; and -- Offers strong intellectual property rights protection by reaffirming commitments to the Paris Convention and the Universal Copyright Convention; obligating adherence to the Berne Convention for the Protection of Literacy and Artistic Works; providing copyright protection for computer programs and data bases and protection for sound recordings; giving product and process patent protection for virtually all areas of technology; and providing comprehensive coverage of trade secrets.
US-Ukraine OPIC Agreement
President Bush and Ukrainian President Kravchuk signed the US-Ukraine Overseas Private Investment Corporation (OPIC) agreement today. Under this agreement, OPIC will mobilize US private capital, technology, and know-how for investment in Ukraine. These investments will support Ukraine's transition to a free market economy while creating American jobs, increasing US exports, and enhancing US global competitiveness. OPIC is a US Government agency that operates in more than 120 developing countries and emerging economies throughout the world. This agreement will enable OPIC to provide investment insurance, project financing, and a variety of investor services to US private investors for sound business projects in Ukraine. -- Investment insurance will be available against the risks of expropriation, political violence, and currency inconvertibility. In addition to equity investment, loans, leases, bid and performance bonds, contract settlement, and in-country assets may be insured. -- Project financing will take the form of direct loans to projects involving smaller US businesses and cooperatives and US Government loan guarantees for larger projects. As part of the FREEDOM [Freedom for Russia and the Emerging Eurasian Democracies and Open Markets] Support Act, the Bush Administration has proposed that OPIC be authorized to offer equity financing for projects in Ukraine and elsewhere in the new independent states that replaced the USSR. -- Investor services include investment missions, an on-line joint venture matching service, one stop for investment climate information, finance packaging and sourcing, business planning, pre-feasibility studies, and other advisory and consulting services. All of OPIC's insurance and guaranty obligations are backed by the full faith and credit of the United States of America, as well as by OPIC's own substantial reserves, which stood at over $1.6 billion at the end of FY 1991. OPIC, which has its roots in the Marshall Plan for the rebuilding of Western Europe after World War II, began operations in 1971. It has earned a net positive income for every year of operations, and its FY 1991 operations reduced the federal deficit by over $150 million.
Science and Technology Center in Ukraine
President Bush and Ukrainian President Kravchuk have agreed to establish a science and technology center in Ukraine. The center will serve as a clearinghouse for projects that will provide opportunities for weapons scientists and engineers in Ukraine, including those specializing in the area of ballistic missile design and production, to redirect their talents to peaceful civilian work. The United States already has committed $10 million to the Ukraine Science and Technology Center from the $400 million appropriated under the Soviet Nuclear Threat Reduction Act of 1991 for assistance in eliminating weapons of mass destruction of the former Soviet Union. Other nations also have indicated an interest in participating in the center's operation and in providing a significant financial contribution. Ukraine will host a meeting in Kiev later this month when representatives of the United States and other prospective founding members will negotiate an agreement to establish the center and discuss projects that could be funded by the center. Presidents Bush and Kravchuk agreed that every effort should be made to have the center operational early this summer.
Technical Assistance
Support for Democratic Reform
Democracy Program. The United States will provide funding for the International Republican Institute and the National Democratic Institute for programs on political party building and civic education programs in Ukraine. Rule of Law Program. This program will strengthen the judiciary branch by providing opportunities for judges to participate in workshops and gain first-hand experience in the operation of an independent judiciary. It will host three judges from Ukraine for 1 month in Washington, DC, in July. The United States also has offered to host a judicial conference in Kiev at the end of May to bring together judges from the United States, Europe, and Canada for a discussion of judicial reform with the Justice Ministry. American Bar Association Program. The United States will fund ABA programs which assist in the elaboration and implementation of a new legal system. This includes: -- Teams of long-term resident advisers to train judges, assist in law school curriculum development, and conduct seminars for parliamentarians on constitutional law; and -- Short-term legal resource advisers who will travel to Ukraine to assist with the drafting and implementation of new laws and regulations on a range of issues from constitutional reform, division of responsibilities between state and local governments, criminal law, and legal reform. Independent Media. The United States will fund on-the-ground assistance toward the establishment of a news distribution system and independent broadcasting stations, as well as exchanges through Internews and the Independent Media Fund. Government-to-Government Experts Exchanges. USIA [US Information Agency] will expand its International Visitors Program to provide opportunities for Ukrainian policymakers to visit the United States to gain practical insights into the functioning of government and business at national, state, and local levels.
Support for Economic Reform
Emergency Response Legal Assistance. The United States will fund an ABA program to provide advice to Ukraine on legal issues concerning economic reform and establishment of commercial legislation and regulatory regimes. Financial Sector Advisers Program. The United States, led by the US Department of the Treasury, is initiating a program to place advisers in the Ukrainian Ministry of Finance to provide expertise on economic reform, creation of a new currency, tax policy, and budget management. The United States currently is reviewing possibilities for placing financial and banking advisers in the Ukrainian Central Bank. The IRS Tax Administration Advisory Service Program. This program will assist Ukraine in the development of effective tax systems, from legislation to efficient tax collection mechanisms. Privatization. The Government of Ukraine can draw on the expertise of US accounting and consulting firms for assistance on privatization, through the US-funded privatization umbrella project. In addition, if a city in Ukraine expressed strong support for privatization, the United States and the International Financial Corporation could undertake a privatization auction modeled on the successful auction in Nizhniy Novgorod. Health Partnership Program. The United States will support the establishment of a long-term health partnership program between a health center in the United States and one in Ukraine. Defense Conversion Resident Advisers. The United States has placed three long-term defense conversion advisers in Kharkov. They will assist the local government in identifying and removing barriers to Western investment, assist local defense enterprise managers in adopting Western management and marketing practices, serve as catalysts for US business, and alert the United States to programs which may be most productive in assisting the conversion process (OPIC, TDP [Trade Development Program] Eximbank, management training, privatization.) Farmer-to-Farmer Program. The United States is funding a program to send American agribusiness advisers to Ukraine in 1992. They will assist Ukraine in acquiring Western agribusiness expertise and technologies, with particular focus on improving the food processing and distribution systems. USDA Wholesale Markets Program. Since December 1990, the US Government has been working with authorities in Ukraine to develop wholesale markets in Kiev both as a boost to market reform and as a means to increase the efficiency of food distribution. Energy Efficiency Program. The United States has developed a multi-faceted energy efficiency program to assist Ukraine in better utilizing and conserving its scarce energy resources. In April, an audit of the Kiev district heating system was conducted and will be followed up with the installation of equipment to increase Kiev's energy efficiency. Other elements of the Energy Efficiency Program--nuclear power plant safety; improvements of coal, gas, oil, and electricity production and delivery systems; and strategic planning--will also be made available to Ukraine. Housing Resident Adviser Program. The United States will place two resident housing advisers in Kharkov by the end of August to provide expertise to private indivi-duals and public sector institutions to develop a private sector housing market. Business Centers. The United States plans to locate an American business center in Kiev to facilitate expanded commercial relations between American and Ukrainian businessmen. The center will provide advice on local business opportunities, translation services, and seminar and conference facilities. Business Development Committees. The United States and Ukraine have agreed to establish a joint Business Development Committee to promote expanded commercial relations by identifying and then helping to remove barriers to bilateral trade and investment. Eurasia Foundation. The Eurasia Foundation will provide a forum for cultural exchange and learning and a mechanism for on-the-ground expertise in the areas of management training and privatization. Peace Corps. The new Peace Corps agreement will allow the Peace Corps to launch--by the end of 1992--a 60-volunteer program focused primarily on small business development and the environment. SABIT Programs. Through two separate Special American Business Internship and Training (SABIT) programs--one for management and a second for scientists--the US Department of Commerce will provide the opportunity for Ukrainian managers and scientists to work in American businesses for 3- to 6-month periods. International Executive Services Corps (IESC). The IESC, which is in the process of establishing a permanent presence in Ukraine through a regional office in Kiev, will provide quick response, in-depth know-how to local business and government managers through its network of more than 13,000 retired US executives. The IESC has already sent management experts to Kharkov and Tlumach.
Agreement Regarding Humanitarian and Technical Economic Cooperation
Fact sheets released by the Office of the Assistant Secretary/Spokesman, Washington, DC, May 7, 1992 This agreement provides certain important legal protections in connection with the assistance program contemplated by the United States for Ukraine. In particular, the agreement provides for a series of customary arrangements, including: -- Tax and customs exemptions for US personnel and property involved in the assistance program; -- Immunity for personnel involved in providing assistance from the criminal jurisdiction of local courts and from the civil jurisdiction of those courts for official acts; and -- Standard procedures needed for inspections and audits under the assistance program as well as commitments by Ukraine to utilize items for the purposes for which furnished. It is contemplated that more specific agreements may be negotiated in connection with the provision of assistance under particular projects, but this agreement provides the essential foundation and framework for cooperation between the two countries in this area.
Agreement on Cooperation in Environmental Protection
This agreement provides a framework for environmental cooperation between the United States and Ukraine. For nearly 20 years, Americans and Ukrainians cooperated on environmental issues under the auspices of the US-USSR Environmental Agreement signed 20 years ago. Today's signing of this agreement with independent Ukraine recognizes the need for a new framework which reflects our emerging bilateral partnership and allows the United States and Ukraine to build on earlier achievements in environmental protection. Under this agreement, the United States and Ukraine would cooperate on a wide variety of environmental problems including air, soil, and water pollution; control of toxic substances; monitoring of environmental quality; radiation exposure and monitoring; and environmental emergencies. Ukraine has significant environmental problems, but it also has a political leadership with a strong interest in solving these problems and a considerable base of knowledge in the field of environmental protection. This agreement will encourage the growth of cooperation in this vital area and make possible the development of initiatives which will benefit the people of both nations.
Memorandum of Understanding on Unrestricted Diplomatic Travel
Before the dissolution of the USSR, travel by American and Soviet diplomatic and consular officials was severely restricted. Many areas in the USSR, including areas in Ukraine, were closed to travel by foreign diplomats. As a reciprocal measure, the United States closed areas of the United States to travel by Soviet diplomats. Even when diplomats were traveling to "open" areas, they were required to request permission in advance. With the signing of this memorandum of understanding, the United States and Ukraine signify their intention to do away with these travel restrictions. Diplomats will no longer have to file a request for permission to travel, and the system of closed areas will be eliminated. Military bases, sensitive installations, or other facilities normally closed to the public in all countries will not, of course, be open to travel by diplomats. Unimpeded travel is essential if diplomats are to carry out their duties effectively. The removal of these travel restrictions is an indication of the desire of both the United States and Ukraine to establish a relationship based on mutual trust and a sense of partnership. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Peace Corps Program for Ukraine

Fitzwater Source: White House Press Secretary Marlin Fitzwater Description: Statement released by the White House, Office of the Press Secretary, Washington, DC Date: May, 6 19925/6/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Ukraine Subject: Development/Relief Aid, Trade/Economics [TEXT] President Bush and Ukrainian President Leonid Kravchuk signed an agreement today establishing a Peace Corps program in Ukraine. The agreement is part of an extended Peace Corps initiative in the new independent states of the former Soviet Union. The focus of the Peace Corps program in Ukraine will be small enterprise development. The Peace Corps volunteers selected will have expertise in such areas as business planning, privatization, economics, management, and credit and banking. The Peace Corps will send 60 volunteers to Ukraine under the program this year. Fifty-eight of the volunteers will serve in municipalities, including regional centers, where they will work with Ukrainian colleagues to: -- Provide technical assistance in leasing, property appraisal, and land valuation to facilitate privatization efforts; -- Develop management and operations systems and financing programs through which local banks can extend credit to entrepreneurs; and -- Identify business sites and facilitate small business start-ups by assisting in their institutional development through training and advice to would-be business owners and managers. Two volunteers will assist the chairman of the new State Committee for the Promotion of Small Business and Entrepreneurship in formulating policy, providing policy analysis, and developing information systems. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Continued Aggression in Bosnia- Hercegovina

Kornblum Source: John C. Kornblum, US Permanent Representative to the CSCE Description: Statement to the plenary session of the Helsinki Follow-up Meeting of the Conference on Security and Cooperation in Europe (CSCE), Helsinki, Finland Date: May, 6 19925/6/92 Category: Speeches, Testimony, Statements Region: E/C Europe Country: Serbia-Montenegro, Bosnia-Herzegovina, Yugoslavia (former) Subject: Regional/Civil Unrest, Military Affairs, CSCE [TEXT] We are gathered together for the third time in 3 weeks to discuss the tragic situation in Bosnia-Hercegovina. This proud state is a microcosm of the problems which have torn apart the fabric of the former Yugoslav Republic. As my authorities have made clear from the beginning of the crisis, these problems have no single cause. There is no single guilty party, and there is no single solution to the disaster which has befallen the peoples of this proud and historic part of Europe. The United States renews in the strongest possible terms the demand that all parties to the conflict end the violence and work honestly and diligently to help the peace process begun by the European Community (EC) to succeed. All humanity is suffering from your actions. The killing must stop. Recognition of the complexity of the conflict does not relieve those guilty of aggression from responsibility for their acts. We have spent hundreds of hours over the past year debating events, assessing causes, and seeking to reach those who can stop the killing. There has been enough talking. We understand the nuances of the situation. We also understand that innocent persons continue to die. Historic cities and precious icons of Western culture continue to disintegrate in the rubble. Our task today is to focus attention on those who are primarily responsible for this tragedy. We must seek again to help end the violence by registering in the strongest terms our collective outrage at the callous disregard for CSCE commitments and standards of human decency displayed by those who continue to commit aggression. Amidst the complexities, one simple fact has emerged: The role of the leaders of Serbia and of the so-called Yugoslav National Army (JNA) remains constant. There is a repeated pattern of behavior. Each time another national link of the former Yugoslav state has been severed, Serbian and JNA leaders have resorted to force to pursue political ends. Each time a historic conflict has risen to the surface, the JNA, Serbian irregular forces, and Serbian resources have appeared on the scene. The goal has been to create political facts by force rather than negotiation. The United States expresses its deepest sympathy for all victims of this tragedy. We grieve for the many Serbian victims of the conflict. We bear no grudge against the Serbian nation or its people. To the contrary, our links to Serbia are long-standing. Tens of thousands of our citizens trace their heritage to Serbia. We have also honored the role played by Serbians as part of Yugoslavia's active participation in the CSCE process. Our concept of CSCE has always been inclusive rather than exclusive. The United States continues to believe that CSCE best serves the cause of peace by being a forum for judging behavior according to the standards established by the [Helsinki] Final Act. The CSCE is a place of dialogue. Violators should be able to take part in CSCE's ongoing tradition of review and recommendation. Despite this tradition, 3 weeks ago, my government was the first to suggest that Serbia should be suspended from participation in the CSCE if its role in the conflict continued. We did this because the severity of the violations of CSCE commitments had reached truly tragic levels. We believe that the CSCE should be heard. We could think of no stronger way of sending a direct message to the Serbian leadership. A shock treatment was required. For a time, it seemed that our message might have been heard. Last week, we witnessed several statements of good intention. We debated implications of a new state proclaimed by Serbia and Montenegro. My government reserved its ultimate position on the status of this new republic. But we agreed that, if Bosnia-Hercegovina could also participate in the dialogue by being admitted immediately to full CSCE membership, it would be useful to allow Serbian representatives to remain, despite the uncertain legal foundation for their presence here. But at the meeting of the Committee of Senior Officials on May 1, all participating states noted their collective determination to intensify consultations and detailed review of the situation in Bosnia-Hercegovina. We stated our express intention to utilize this review to impress upon those guilty of aggression our collective determination to bring it to a halt. This is our job here today. Actions since May 1 have earned the leaders of Serbia and the JNA our statement of censure. There can no longer be doubt about the clear, gross, and uncorrected violations of the Final Act committed by these leaders. The bombing of Sarajevo from the air, shelling from the mountains, and the hostage-taking of the President of Bosnia- Hercegovina by the JNA have raised the conflict to an even more severe level. While there are conflicting reports about who started the battles this weekend and while there are other armed forces in the area, the JNA is the preponderant military force. JNA and Serbian leaders have it within their power to make a positive contribution to peace. If they had taken their promises seriously, they would have begun long ago to help enforce a cease- fire [in] Bosnia-Hercegovina. Instead, a pattern of support for violence and the use of force has been intensified. Our responsibility for dealing with this situation is clear. The Helsinki Follow-up Meeting should continue the discussion of details of the Yugoslav crisis which my delegation proposed in working groups this week. Unfortunately, we were, in most cases, a lonely voice. Those who claim to support dialogue as CSCE's main tool should participate. Otherwise, this tool will become irrelevant. But this dialogue should also be put to practical use. We should continue to use this review as a foundation for collective action in the Committee of Senior Officials. In the CSCE meeting this afternoon, we should accept responsibility for the task which has been thrust upon us. We should demonstrate that the CSCE can, indeed, become the body for management of change which we wish it to be. If we fail to accept the challenge today, no fancy web of new structures and mechanisms, let alone visions of complex and mandatory legal procedures, can make up for our political timidity. At this afternoon's meeting, the United States will propose adoption of a statement which concludes, finally, that a pattern of clear, gross, and continuing violations of CSCE commitments has been established. Recent events leave no doubt about the existence of such severe violations. To step back from the responsibility of stating this simple fact would be to call into question the credibility of the entire process. This conclusion should be incorporated in a statement which includes the following demands: -- An immediate end to the violence and respect for a cease-fire by all parties; -- An immediate end to support for all paramilitary forces by the neighbors of Bosnia-Hercegovina; -- Immediate withdrawal from Bosnia-Hercegovina or submission to legitimate Bosnian governmental authority by the JNA; -- Provision of humanitarian aid to the population of Bosnia-Hercegovina and to refugees in the immediate area; -- Establishment of safe land, sea, and air corridors to assure that critical food and essential medical supplies, including those provided by humanitarian assistance donors, are allowed to reach populations at risk; and -- Honest participation in the peace process instituted by the European Community and strong support for the UN peace-keeping mission and the EC monitor mission. In this connection, the United States extends its deepest condolences to the Government of the Kingdom of Belgium on the death of a Belgian member of the EC mission. He was truly a servant of peace. Once this message has been formulated clearly, we must also take the next logical step. Simply repeating demands for action has not proven sufficient. A further shock treatment is needed. Words will not be enough. The time has come for participating states to demonstrate that they will not sit still in the face of aggression. We must go beyond our April 15 and May 1 statements and implement sanctions against Serbia. We continue to believe that suspension of participation in CSCE would constitute the clearest evidence of our determination. The old Yugoslavia has disappeared. The state which now lays claim to its name and to its seat in the CSCE can in no way be described as meeting CSCE standards or commitments. Until it does, we do not believe that even the provisional participation agreed [to] on May 1 is any longer justified. Serbian representatives should be excluded from all CSCE activities until we reach consensus that they should be readmitted. Hopefully, our message will be heard. Our review should continue, both at the follow-up meeting and at the meeting of the Committee of Senior Officials scheduled to take place before May 18. If matters improve, we should say so. If they do not, we should consider even more drastic action. These are tragic and disappointing days for those who believe in the principles of the CSCE. It has become clear that the end of military and ideological confrontation in Europe has not removed the danger of severe conflict. Each minute that the Yugoslav crisis continues is a tragedy for all of us. Each day of conflict weakens the vision which remains the main hope for lasting peace in Europe. We must not let that hope erode. We must not sit by while our principles are clearly and grossly violated. The CSCE cannot solve these problems alone. Its means are limited. But we are the keepers of the hopes and the values which can make us strong. This, too, is an important role. Let us not neglect it at this moment of crisis. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Situation in Bosnia-Hercegovina

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement released by the Office of the Assistant Secretary/Spokesman, Washington, DC Date: May, 4 19925/4/92 Category: Speeches, Testimony, Statements Region: E/C Europe Country: Serbia-Montenegro, Bosnia-Herzegovina, Yugoslavia (former), Slovenia Subject: Regional/Civil Unrest, Military Affairs, CSCE [TEXT] The United States is deeply concerned about the continued fighting in Bosnia, including in Sarajevo. Destruction to the city is enormous both in human and material terms. The United States condemns perpetrators of violence in Bosnia on all sides, including the Serbian side and the "Yugoslav" army, which clearly bear the heaviest blame for continued fighting in Bosnia and have the greatest responsibility for working to obtain a cease fire. We call on the JNA [Yugoslav National Army] and the Governments of Serbia-Montenegro to fully respect the territorial integrity of Bosnia- Hercegovina. The US condemns the JNA's seizure of Bosnian President [Alija] Izetbegovic against his will on Saturday. We note that active efforts by the United Nations and the European Community, as well as by our Ambassador in Belgrade, played a significant role in arranging his release. The United States is also dismayed that Bosnian armed forces engaged in actions in Sarajevo over the weekend which are not conducive to dialogue or negotiation. We especially condemn the attack on a JNA column departing Sarajevo on Sunday under a safe conduct agreement negotiated by UNPROFOR [UN Protective Force]. We strongly urge the Government of Bosnia- Hercegovina to exercise restraint and to abide by its agreements with UNPROFOR. We also strongly urge the Yugoslav military command to exercise restraint and avoid further actions contributing to a spiral of violence. We will continue to work closely with the European Community in support of its efforts to negotiate a peaceful settlement in Bosnia-Hercegovina.
GRAPHIC: The New Balkan States
CUTLINE:
On April 7, 1992, the United States recognized Bosnia and Hercegovina, Croatia, and Slovenia as sovereign and independent states. The United States has begun consultations to establish diplomatic relations with these states. The United States also has announced that it would continue to work with the European Community and its members states for the expeditious resolution of issues between Greece and the Republic of Macedonia, thus enabling formal recognition of the independence of the republic as well. On April 27, Serbia and Montenegro (the only two republics of Yugoslavia that had not declared themselves independent) announced the formation of a new state: The Federal Republic of Yugoslavia. The US Government has not yet recognized this formation. The boundaries that Bosnia and Hercegovina, Croatia, and Slovenia possessed as constituent republics of Yugoslavia now form their international boundaries. (Map to be printed in "Geographic Notes," Volume 2, Number 2, Summer 1992, available through the Government Printing Office.)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Narcotics Activities in Panama: Mutual Legal Assistance Treaty Needed

Smith Source: R. Grant Smith, Principal Deputy Assistant Secretary for International Narcotics Matters Description: Statement before the Subcommittee on Terrorism, Narcotics and International Operations of the Senate Foreign Relations Committee, Washington, DC Date: May, 6 19925/6/92 Category: Speeches, Testimony, Statements Region: Central America Country: Panama Subject: Narcotics, International Law [TEXT] Thank you for giving us the opportunity to discuss the status of trafficking and counter-narcotics activities in Panama and to brief you on the proposed mutual legal assistance treaty. We welcome this forum.
Noriega's Legacy
Before getting into a discussion of how things stand in Panama today, it would be useful to review where Panama was only 2 1/2 years ago. The [Manuel] Noriega regime sanctioned drug trafficking and money-laundering. The recent verdict in Miami proves that Noriega himself was an active participant in these activities. And the corruption was not just at the top-- it permeated every level of government. In the months before the US military action, the regime's contempt for Panama's drug laws became so pronounced that all of the elements needed to set up a cocaine processing lab were found in a government office building by US forces during Operation Just Cause. In December 1989, Panama's new government took office. At that time, the government consisted only of President Endara and his two vice presidents. They had no cabinet, no functioning bureaucracy, and in many cases, no desks or office equipment in the looted shells of government buildings. The Endara Administration also inherited a heavy foreign debt burden, high unemployment, and a bloated public sector.
Accomplishments of the Endara Government
Today, 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. Economic recovery is well underway--Panama's GDP [gross domestic product] grew by 9.3% in 1991 and 4.6% in 1990. 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.
Narcotics Trafficking
Like all of the other hurdles the Endara Government has faced, the struggle against illegal narcotics trafficking has not been easy. Panama's proximity to Colombia, the major cocaine-producing nation, makes it an attractive target for the traffickers who use Panamanian land, air, and sea routes. The government's inability to patrol adequately its extensive coast line (similar in length to the east coast of the United States), its lack of adequate radar coverage, and a weak inventory of enforcement resources are also vulnerabilities. Panama's role as a commercial and financial crossroads to the world and its dollar economy make it highly attractive to drug money- launderers. Despite these problems, Panama has made progress in the war on drugs. Its achievements are a direct result of the Panamanian Government's political will. Having suffered through a narco-dictatorship, this government is committed to the war on drugs. It cooperates with us in fighting the traffickers instead of cooperating with the traffickers. Panama is taking important steps to counter narcotics trafficking. Interdictions have increased substantially: In 1991, Panamanian authorities seized nearly 10 metric tons of cocaine, double the amount seized the previous year (itself a record) and almost twice what was seized in the entire 10 years before that. Marijuana seizures were up from 100 kg [kilograms] in 1990 to over 9,800 kg in 1991. Activities for 1992 have kept pace. In the first quarter of this year, over 700 kg of cocaine have been seized, and over 200 drug-related arrests have been made. These figures include seizures and arrests from five operations carried out by the anti-narcotics section of the Judicial Technical Police in March and April. All five of these operations were independently planned and carried out and demonstrate the increasing professionalism and effectiveness of Panama's police and their growing competence as partners in the war on drugs. In the past months, Panamanian customs found and confiscated two shipments containing $10 million in cash entering Panama illegally. There are other indications that Panama is taking its anti-narcotics responsibilities seriously. New personnel have replaced most Noriega holdovers in narcotics control agencies in Panama, which helps to ensure integrity. The Maritime Service is benefiting from increased training and joint operations with our Coast Guard. It has begun to plan and conduct independent operations. Demand reduction activities are underway with the enthusiastic support of Panama's private sector. The Legislative Assembly has created an ad hoc narcotics committee. It is considering draft legislation to strengthen Panama's narcotics laws. The committee's staff is discussing the draft bill with the attorney general's office. Among other things, the bill provides for stiffer sentences for drug offenses, creates procedures for the civil forfeiture of drug proceeds, and establishes statutory procedures for drug destruction.
Narcotics Money-Laundering
Narcotics money-laundering through Panamanian banks and the Colon Free Zone continues to be Panama's most serious narcotics control problem. We have no accurate figures on how much money was laundered under the former regime or how much is being laundered now; thus, it is impossible for us to make quantitative comparisons of money-laundering levels in Panama. Our experts believe that peak volumes of money-laundering occurred in the mid-1980s under the Noriega regime. By the end of 1989, however, money-laundering had declined significantly along with all other economic activity in Panama. In 1990, the volume of money-laundering may have increased to the comparatively low levels which existed immediately prior to Operation Just Cause. Money-laundering may have picked up further in 1991 as economic and banking activity which could disguise it also picked up. Panama's Government has taken a number of progressive steps to counter drug money-laundering. The Panamanian Supreme Court has upheld the attorney general's authority to subpoena bank records and to freeze bank accounts when related to an ongoing criminal investigation. Since late December 1989, the Government of Panama has frozen several hundred bank accounts associated with suspected drug money-laundering. The funds from many of these accounts remain frozen, although some of the accounts have been unfrozen due to a lack of evidence, lack of funds in the account, and loopholes in Panama's laws. The initial freezing of some of the funds disrupted narcotics money-laundering patterns. During this period, the drug secretary's office has provided to the US Department of Justice and other US law enforcement agencies substantially all bank account documents requested for use in US Government prosecutions in five large (over 100 bank accounts) and six small (under 10 accounts) narcotics or narcotics money-laundering requests. The National Banking Commission (CBN) has implemented a series of regulations requiring banks to maintain currency transaction records (CTRs) and to identify customers in transactions of $10,000 or more. Bank inspectors report that compliance with these regulations is good, although their review of the CTR forms has been limited. The CBN recently initiated a new regulation that requires banks to submit monthly reports to the banking commission reconciling their cash activities. In addition, the CBN and the attorney general's office have pledged to assist each other in pursuing money-laundering transactions. This accord has not yet led to significant practical cooperation. This is partly because the CBN has not yet fully developed mechanisms to pursue suspicious activities in a way that law enforcement authorities can use. In addition, it is because of a lack of trained personnel and other resources in the attorney general's office. We understand the Government of Panama is taking steps to improve coordination.
US-Panama Cooperation
Despite these strong measures, much remains to be done on the counter- narcotics front in Panama. The Government of Panama's limited resources are restricting its ability to fight drug-trafficking and money-laundering. Panama lacks trained personnel to implement its statutes and decrees. Its law enforcement agencies remain plagued by a need for modern equipment. Our program is designed to address these needs. In addition to the mutual legal assistance treaty which is before you today, the United States and Panama have signed other important law enforcement agreements, including an agreement for the control of essential chemicals, a ship-boarding procedures agreement, and the ship-rider agreement. Under the latter, the United States and Panama have jointly patrolled Panama's coast and [are] taking cooperative law enforcement actions against traffickers The United States is providing critically needed training and commodities to Panamanian officials: -- The Justice Department's ICITAP [International Criminal Investigative Training Assistance Program] program has provided over 5,000 weeks of student training for national police, Technical Judicial Police, judiciary officials, and officials from the attorney general's office, customs, and Maritime Service, using Foreign Assistance Act funds. -- ICITAP is helping the Panamanian police develop and implement procedures to store and destroy seized drugs. -- The US Coast Guard trained 71 Panamanian maritime officials, using INM [US Department of State's Bureau of International Narcotics Matters] funds. -- An excess Coast Guard cutter was donated to Panama's Maritime Service, and the Navy donated an excess 58-foot minesweeper. In addition, INM funds purchased a Boston Whaler for the service. -- US Customs has trained 19 Panamanian officials on basic drug enforcement training. -- DEA [US Drug Enforcement Agency] has trained 27 special anti-narcotics police with INM funding. -- USAID [US Agency for International Development] and USIS [US Information Agency] funded a trial advocacy and court administration program for approximately 200 prosecutors, defense bar lawyers, and judicial officials. -- Several US Government agencies cooperated to provide anti-money- laundering training, seminars, and workshops to bank officials and officials from the banking commission, Technical Judicial Police, the attorney general's office, and the judiciary. US Government agencies are taking other measures to enhance Panama's counter-narcotics abilities. USAID is providing Foreign Assistance Act funding, approximately $250,000 over 2 years to fund drug demand reduction and awareness programs. The US Southern Command set up a Tactical Analysis Team to provide intelligence analysis and sup- port for the embassy, including joint US-Panamanian operations. DEA and Customs conduct joint operations with Panamanian law enforcement institutions to interdict illegal narcotics. US legal experts are providing technical assistance to the Government of Panama to strengthen their narcotics statutes. We are also working to get the Panamanian Government linked into the Caribbean Basin Radar Network. The State Department's Bureau of International Narcotics Matters is providing Panama with $660,000 this year for counter-narcotics equipment and training (provided by DEA, Customs, and the Coast Guard). Last year, we provided over $690,000. By mutual agreement, some of these funds will be used to establish a Joint Information Collection Center (JICC) to process intelligence about suspected narcotics activities in Panama. A temporary JICC location has been identified, and equipment is being shipped for it. Also, the Panamanian Cruz Blanca, a private sector demand reduction organization, received INM money for programs to increase public awareness about drug abuse and to rehabilitate drug users.
Need for Additional Actions
Our efforts in Panama and those of their government must be sustained for a long time to come. In spite of our progress, many problems remain. Security in the Colon Free Zone and in Panama's commercial airports must be improved. Enforcement agencies--particularly the Maritime Service with its dearth of operating vessels--require additional funding. Existing statues must be strengthened. Much more must be done to combat drug money-laundering. In addition, Panama should ratify the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. By following the lead of its Latin neighbors in ratifying this convention, Panama would establish an additional legal basis for asset forfeiture and seizure. The absence of this authority is a handicap for Panama in its counter-narcotics efforts. We have urged Panama to ratify this convention; however, the Government of Panama has indicated it will wait to have the mutual legal assistance treaty in place before presenting the UN convention to the [Legislative] Assembly.
Mutual Legal Assistance Treaty
Since our first mutual legal assistance treaty [MLAT] entered into force with Switzerland in 1977, our MLATs have become an increasingly important tool in the US war on crime, in particular, transnational crimes such as narcotics trafficking, terrorism, money-laundering, and export control violations, which require the close cooperation of law enforcement authorities throughout the world. The proliferation of bilateral mutual legal assistance treaties in recent years reflects the considered judgment and determination of the United States, as well as of our treaty partners, to enhance cooperation in legal assistance and to devise the most efficient and expeditious methods possible within our respective legal systems to facilitate the investigation and prosecution of crime as well as to support related proceedings. On several occasions, most recently in April, we have appeared here to discuss mutual legal assistance treaties being considered by the Senate. On those occasions, we provided the Senate with information about the basic elements of MLATs. Rather than repeat that information here, we refer you to our earlier testimony.
US-Panama MLAT
We are all aware that Panama's status as a major financial center for Latin America has made it a prime target for the laundering of drug money and funds generated by other illegal activity. Expeditious access to bank records and admissible evidence about financial transactions and entities in Panama is, therefore, a high priority for US law enforcement authorities. Currently, there is no standard legal mechanism in place between Panama and the United States for the exchange of evidence relating to a broad spectrum of criminal activity. The United States has been successful in gaining access to financial information in Panama under Panamanian Law 23, but such access is limited to narcotics-related investigations and prosecutions. To address some of the gaps in our counter-narcotics cooperation with Panama, we negotiated a mutual legal assistance treaty. The Congress strongly urged us to complete this treaty in a May 1990 conference committee report. It recommended that a portion of Panama's FY 1990-91 assistance be withheld pending "significant progress toward concluding an MLAT." We began our MLAT negotiations with the Endara Administration in the spring of 1990. The negotiations were difficult, lasting over a year, but we secured a treaty which US and Panamanian agencies agree advances the law enforcement interests of both countries. The Government of Panama takes this treaty very seriously. Last July, President Endara called the Legislative Assembly out of recess for a special session solely to consider this treaty. The assembly rapidly ratified the treaty at that session. Further, in anticipation of bringing the treaty into force, the Government of Panama has established and staffed an office within the Ministry of Government and Justice that will be responsible for implementing the treaty. Although the cooperation we are receiving from Panama without this treaty is good, the methods we must now employ to make law enforcement requests are cumbersome and time-consuming. Thus, a number of US criminal investigations are being delayed pending our ratification of the MLAT. There, currently, are dozens of pending US investigations which would benefit greatly from faster access to the types of information we could request under this MLAT. Once the MLAT enters into force, it will increase our existing law enforcement cooperation and will make it more efficient. It will establish a mechanism for the appropriate governmental authorities of each country to provide to their counterparts information and evidence for use in criminal investigations and legal proceedings in a form admissible in our courts. The US-Panama MLAT is modeled closely on the MLAT between the United States and The Bahamas. US and Panamanian negotiators found, however, that certain areas of the proposed treaty warranted augmentation or further explanation in order to ensure that the MLAT's provisions could be fully and effectively implemented under the legal systems of both countries. These understandings about the scope and meaning of the treaty's provisions, which were viewed as supplements to the basic articles of the MLAT, are set forth in the annex. The first article of the annex is intended to supplement and clarify the meaning of Article 2, which specifies which offenses are covered by the treaty. Article 2 provides that assistance under the MLAT is available in connection with all serious offenses that are crimes in both countries. In addition, certain offenses were deemed important enough to cooperative law enforcement objectives to merit specific enumeration in the text of the treaty and further explanation in the annex. Article 1 of the annex reaffirms the commitment made by both countries to the 1961 Single Convention on Narcotic Drugs and the 1972 protocol thereto. The article also clarifies that the treaty covers offenses involving the potential for violence (such as bank robbery, extortion, and crimes related to terrorism), as well as offenses in which violence or injury actually occurs. Fraud is described broadly in the annex to reach crimes which the basic dual criminality provision might not cover, such as securities fraud, mail and wire fraud, and fraud against the government. The annex also includes provisions relating to the exchange of currency transaction information. Both the United States and Panama have imposed legal requirements on their financial institutions to keep records of large currency transactions and to provide law enforcement authorities with access to that information. The second section of the annex makes explicit that the parties can use the MLAT as a mechanism for providing and obtaining this information for use in criminal investigations and prosecutions. The annex specifically confirms that although "pure tax" matters are not covered by the MLAT, tax offenses related to monies generated by criminal activity otherwise covered by the MLAT do fall within its scope. Section 3 of the annex reaffirms the understanding of the negotiators that when the treaty enters into force, each party will have the necessary legal authority to fully implement all of its provisions. Panamanian negotiators assured us that the treaty, upon entry into force, would be the law of the land in Panama. As such, it would serve as implementing legislation in any areas not already covered by existing Panamanian law, and it would give Panamanian authorities any additional necessary affirmative power to act to carry out its provisions. This treaty is critically important to advance the law enforcement interests of both the United States and Panama. The Administration believes that the MLAT will significantly augment the law enforcement tools needed to assist in the prosecution of a wide variety of modern criminals, including members of drug cartels, "white collar" criminals, and terrorists. Panama recognizes that and ratified the MLAT almost a year ago. We appeal to the US Senate to act quickly so that the treaty can enter into force as soon as possible. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Cuba: Human Rights Trials

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement by Department Spokesman Margaret Tutwiler, Washington, DC Date: May, 1 19925/1/92 Category: Speeches, Testimony, Statements Region: Caribbean Country: Cuba Subject: Human Rights [TEXT] We are deeply concerned to learn of the pending trials of Cuban human rights activists Yndamiro Restano and Maria Elena Aparicio on the charge of rebellion. Both have been detained without charge since December. Though Cuban authorities claim that Restano, leader of the dissident Harmony Movement (MAR), sought to incite the Cuban people to civil disobedience and urged sabotage against the Cuban state, he has advocated only peaceful, democratic reform through a process of gradual change involving all sectors of Cuban society. He has never espoused violence but, rather, has advocated peaceful change. They are requesting a 12-year prison term against him. Aparicio faces an 8-year prison term. We call on the Cuban Government to listen to the appeals of well-meaning Cubans like Yndamiro Restano and Maria Elena Aparicio who seek a voice in deciding the future of their country. We ask Cuba to free these and other proponents of peaceful reform so that they can contribute to the building of a stable and prosperous Cuba. We also call for the release of Sebastian Arcos, vice president of the Cuban Committee for Human Rights, who has been detained without charge since mid-January. We understand that Cuban authorities also seek to try him on the charge of rebellion, although he, too, has advocated only peaceful, democratic change in Cuba. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Political and Economic Implications of the African Drought

Davidow Source: Jeffrey Davidow, Acting Assistant Secretary for African Affairs Description: Statement before the Subcommittee on Africa of the House Foreign Affairs Committee and the Select Committee on Hunger, Washington, DC Date: May, 6 19925/6/92 Category: Speeches, Testimony, Statements Region: Subsaharan Africa Country: South Africa, Zambia, Zimbabwe, Namibia, Mozambique, Malawi, Angola, Botswana, Lesotho, Swaziland Subject: Trade/Economics, Development/Relief Aid, Environment [TEXT] I appear before you today because of a sadly familiar story on the African continent--a devastating drought, failed harvests, and the specter of famine. The suffering in large parts of Southern Africa today, and the even greater hardships possible in the months ahead, are discouraging for a region with so much promise. In addition to the clear human tragedy, this drought also holds potentially serious political and economic implications for a region which has many of the best prospects for development on the African continent. The move toward peace, justice, and stability in Southern Africa in recent years has been heartening, making the current drought-induced crisis even more tragic and troubling. In several Southern African countries--South Africa, Zambia, Zimbabwe, and Namibia--nascent democracies are coming to grips with extremely difficult economic decisions essential to their future prospects and prosperity. A complicated peace process is moving forward-- albeit slowly--in Angola. Though Mozambique is still devastated by war, peace negotiations have begun. Fragility characterizes all of these very encouraging developments. In South Africa, negotiations are proceeding and hold promise for the establishment of a non-racial interim government within the year, fully transforming the former apartheid system and ending international isolation. However, a political settlement will need to be strongly rein- forced by economic growth if it is to succeed. Whatever government emerges from the current negotiations will face the challenge of restoring economic growth while simultaneously addressing the inequities of more than 4 decades of apartheid. Currently, the South African economy has adequate resources to meet the food import requirements generated by the drought through commercial means. However, these expenditures, roughly $1 billion, will come at the expense of essential outlays for the socio- economic needs of South Africa's own poor majority. Furthermore, South Africa has usually been the most important source of grain exports to its neighbors. This year, it will not have any surplus to supply them. Already in South Africa, we are seeing the migration of farm workers, displaced by crop failures, from the land to the towns and cities. As their rural jobs disappear and they are unable to feed their families, these newly unemployed will create additional strains on housing and social programs and could push urban crime rates even higher. One estimate of 100,000 displaced farmworkers is probably low, but it suggests that the impact of this drought could last well beyond the next harvest. In Zimbabwe, the Mugabe Government's commitment to a free-market oriented restructuring of its economy is being seriously challenged by the drought. The international community enthusiastically welcomed the government's 1991 decision to encourage foreign investment, develop export industries, eliminate parastatal subsidies, and reduce non-productive civil servant employment. The government's resolve remains firm, but the targets of the multi-billion- dollar 5-year economic reform program have been eroded by the drought. The food import bill already exceeds $400 million; export industries such as sugar and cotton have been crippled, with the ripple effect felt especially hard in the agro-industrial sector. Instead of 5% growth, the IMF [International Monetary Fund] recently forecast economic contraction of 8% or 9%, and warned of inflation approaching 50%. Building on the dissatisfaction and pain implicit in the serious economic restructuring program, the political opposition is criticizing the government for its response to the drought. This could have implications for future policy decisions. In Zambia, a new government, democratically elected after 18 years of one- party rule, could be a model for the region. However, the government must forcefully confront the economic wreckage left by its predecessor. Here, again, hard economic decisions must be and are being made. Sacrifices are being accepted against the promise of future growth and increased prosperity. The government is still enjoying a honeymoon period but must produce results to demonstrate that democracy is preferable to the one- party system it replaced. Under the best of conditions, the challenge would be a difficult one. The drought threatens to make it insurmountable. In Angola, the 16-year civil conflict has ended, and multi-party democratic elections are scheduled for September 29-30. The strife has left the economy devastated and has nearly destroyed the country's socio-economic base. Commitment to the peace process is strong, but implementation is fragile, requiring constant intervention by interested outsiders. Insuf- ficient food production has been a recurring problem throughout Angola due to both weather and the dislocations and uncertainty caused by a long war. Though it is less affected by the drought than other Southern African countries, it cannot afford additional demands on its social fabric. Mozambique remains under siege. War has already driven well over1 million Mozambicans out of the country. Drought will only add to the disaster. It could also undermine the drawn-out negotiating process in Rome, which has recently made some significant progress and holds the only real promise for a cease-fire and peace within the year. When Assistant Secretary [for African Affairs Herman J.] Cohen met recently with Mozambique's President [Joaquim Alberto] Chissano and RENAMO [Mozambique National Resistance] leader [Alphonso] Dhlakama, he urged both men to support efforts to permit food distribution in all areas of the country. The Mozambican Government has indicated its willingness to cooperate with food deliveries, including behind battle lines. To date, however, RENAMO has not fully supported such relief efforts and has blocked some deliveries. We will continue to urge both sides to address the humanitarian priorities in this crisis. Namibia historically imports a large percentage of its food needs from other countries in the region, which are now unable to meet those needs. In addition, this new democracy is suffering near total crop failure, water shortages, and malnutrition. The most vulnerable groups--children and subsistence farmers--are the hardest hit and will need supplemental assistance. As in much of the region, cattle are dying in record numbers, and people are becoming desperate. The government is also faced with the rising expectations of a newly enfranchised population. The limited wealth of those who live off the land has been greatly eroded. With high unemployment and the need to reintegrate demobilized soldiers and exiles, the drought is a tough new burden for the government. In Malawi, a landlocked country which currently hosts the largest refugee population in Africa, competition between the local population and the refugees over food resources could provoke overt confrontation. Malawi's hospitality toward refugees has been one of the only bright spots in its human rights record. Since the most severely affected districts also have the largest numbers of refugees, this record of co-existence could be in jeopardy. Botswana, Lesotho, and Swaziland which, along with Namibia and South Africa, make up the South African Customs Union, typically meet sub- stantial proportions of their food needs through imports from South Africa. This year, they will still rely on South Africa to sell them imported grain, but subsistence farmers and those whose limited income will put high- priced imported grain out of reach, will need assistance. Botswana's democratic tradition, and the positive democratic trends we are witnessing in Lesotho and Swaziland, could be tested if the governments prove unable to respond to their peoples' needs. Regional cooperation will be essential in any effective response to the drought. Fortunately, regional cooperation is not a new concept in Southern Africa. The 10 nations of SADCC, the Southern African Development Coordination Conference, have an organizational structure which, among other things, promotes cooperation on food and transportation issues. Through the years, the United States, through USAID's Southern Africa regional program, has worked closely with SADCC. Furthermore, all the nations of the region have maintained essential commercial relations with the Republic of South Africa, even though they maintained their political distance. That cooperation is even more important now as unprecedented quantities of grain and other supplies for South Africa and its neighbors threaten to clog the ports and vital transportation routes to the interior. We have already seen some impressive steps in cooperation and coordination, such as establishment of a regional transportation unit in Johannesburg, with representatives from Botswana, Malawi, Zambia, and Zimbabwe sitting with their South African counterparts. On the bilateral side, humanitarian considerations have resulted in political-level contacts, such as the visit to South Africa of Zimbabwe's transport minister. These contacts must be continued and intensified if the necessary political cooperation is to be maintained through the long months until the next harvest. SADCC is also playing an important role in focusing international attention on the drought. In conjunction with the United Nations, SADCC will jointly sponsor an international conference where donor nations will be asked to respond to the burgeoning humanitarian crisis. In sum, prospects for the most viable, self-sustaining, regional economy in Africa are at serious risk. While the crisis holds the promise of promoting regional integration, political and economic progress could falter if critical needs are not met by a substantial donor response. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Malawi: US Concerns

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement, Washington, DC Date: Apr, 30 19924/30/92 Category: Speeches, Testimony, Statements Region: Subsaharan Africa Country: Malawi Subject: Human Rights, Environment, Development/Relief Aid [TEXT] US Assistant Secretary of State for African Affairs Herman Cohen met with Malawi Minister of State John Tembo and other senior government officials April 29. They discussed matters relating to human rights, refugees, and the severe drought now affecting Malawi and all of Southern Africa. Assistant Secretary Cohen expressed appreciation for the manner in which Malawi has received 1 million refugees from Mozambique and has sought to contribute to a solution to the civil war in that country. He pledged that the United States will assist Malawi in combating the effects of the drought. He also expressed deep concern over violations of human rights in Malawi, in particular the recent government actions against the Catholic Church over the Malawi bishops' pastoral letter, the arrest and imprisonment of pro- democracy advocate and labor leader Chakufwa Chihana, and the expulsion of two Catholic clergymen. He called on the Malawi Government to open up the political process and restore constitutionally guaranteed freedoms and allow its citizens the right to freely criticize their government. (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

Feature: Geographer's Office Keeps Department Up to Date

PA Source: Office of Public Communication, Bureau of Public Affairs Date: May, 11 19925/11/92 Category: Features Region: North America Country: United States Subject: State Department, Science/Technology [TEXT] The fall of communism in Europe and Eurasia has put the spotlight on the Department of State's Office of the Geographer, which keeps the State Department up to date on new place names and boundaries. The office, part of the Bureau of Intelligence and Research (INR), handles geographic issues for the bureau and does all cartography for the Department of State. "The dramatic changes brought about by the crumbling of the Soviet Union have kept us especially busy as we update many of our maps to reflect those changes," said Bradford Thomas, an international boundary specialist and head of the Cartography Division of the Geographer's Office. Since its inception in the 1920s, the office's size and function have varied greatly. World War II dramatically increased the Department's demand for cartographic information, which led to a growth in staff. But, when the Central Intelligence Agency (CIA) was established in 1947, many of the office's research duties were transferred to the new agency, along with most of the personnel. However, duties related to boundaries stayed at the State Department. Until the 1980s, the Office ofthe Geographer dealt primarily with boundary and law-of-the-sea issues. Since then, the office has been given expanded responsibilities and now has 2 divisions and 15 employees. The Cartography Division analyzes boundary and territorial disputes, some of which affect political situations. The division also produces maps and graphics for State Department publications and provides guidance on international boundary depiction and correct foreign name usage to other State Department offices and to all federal agencies that make maps. It also produces--often on short notice--most of the maps used for the Department of State's formal publications and briefing papers. Such products have become easier to complete since 1985, when computer- assisted cartography was introduced. The computerized mapping system permits the cartographers to construct a map on any of 22 basic projections, store it in memory, and use it later to produce a new, modified map. The division uses a network of personal computers running AUTOCAD (a computer drafting program) and two programs that generate basic map data files. One program, written in-house, is used for quick, generalized maps. The other, a version of the CIA's Computer Aided Mapping (CAM) program, is used for more detailed maps. Both programs use subsets of the CIA's World Data Bank II. The Global Issues Division briefs senior policy-makers within the State Department and prepares analyses of such issues as refugees and international migration, labor, global environmental problems, and activities of the United Nations and other international organizations. William Wood, Director of the Geographer's office, explains the perspective that his office takes: "When looking at global issues, some of the most pressing are deeply entrenched poverty, rapid population growth, and environmental degradation, which affect regional stability." Mr. Wood notes that problems tied to these trends will become worse in many low-income regions over the next decade and are unlikely to be resolved. He adds, "these three factors often have significant influences on many current, violent conflicts over ethnic, territorial, and boundary disputes." Although most of the office's products are intended for Department or US Government use, some are available to the public. The Cartography Division produces maps for sale, including the Foreign Service Post maps, which the public may purchase through the National Technical Information Service, US Department of Commerce, 5285 Port Royal Rd., Springfield, VA. 22161, (tel: 703-487-4650). Also available is the quarterly series Geographic Notes. It includes studies of current international issues from a geographic perspective, such as boundary, sovereignty, and territorial disputes; perspectives on maritime, migration, and refugee issues; coverage of resource conflicts and environmental issues; official updates of changes in foreign geographic names and international boundary designations; and coverage of political and economic issues. Subscriptions are available through the Superintendent of Documents. (See inside back cover for order form.) Boundary specialist Bradford Thomas also is Vice Chairman of the US Board on Geographic Names, which was created in 1890 to provide uniform name usage on all US Government maps and publications. The board has nine members; one each from the Departments of Agriculture, Commerce, Defense, Interior, and State; CIA; Government Printing Office; Library of Congress; and US Postal Service. Foreign names first became a major concern of the board during World War II. They are once again center stage as the board and the Geographer's Office update information on the former Soviet and Yugoslav republics. "The board traditionally receives little attention. However, since the fall of 1991, it has worked at breakneck pace to keep abreast of the new states established after the dissolution of the Soviet Union," Thomas explained. Regional contingencies make it even more critical that accurate, uniform place names be available to agencies reporting on these places and situations. The board recently formed a new working group to address the problems of conventional names used for the former USSR. A monthly publication, the Foreign Names Information Bulletin (which can be purchased through the Defense Mapping Agency at 1-800-826-0342 or DMA/CSC Washington, DC 20315-0020, Attention: PMSR), has been created to disseminate such information more quickly. Research on foreign name changes for the board is done by 30 geographic and linguistic specialists of the Defense Mapping Agency. The board accepts a name in the native language if it uses the Roman alphabet. Otherwise, the name is transliterated into Roman letter spelling. When a country changes the name of a city, province, or other major geographic feature, the shift is accepted by the board, provided official documentation is available. In the case of changes in country name, some of which can be politically sensitive and controversial, Thomas seeks the clearance of the Department's desk officers. Sometimes, as in the case of Burma's change to Myanmar, the board, on advice of the Department's desk, does not accept the change. --Linda Voelpel Crutchfield Dispatch Staff (###)
Dispatch, Vol 3, No 19, May 11, 1992 Title:

US-Ukraine Trade and Investment Agreements

PA Source: Office of Public Communication, Bureau of Public Affairs Date: May, 11 19925/11/92 Category: Focus on Emerging Democracies Region: Eurasia Country: Ukraine Subject: Trade/Economics, State Department [TEXT]
US-Ukraine Trade and Investment Agreements
On May 6, 1992, President Bush and Ukrainian President Leonid Kravchuk signed agreements aimed at strengthening economic ties between the two countries. The US-Ukraine Trade Agreement provides reciprocal most- favored-nation (MFN) tariff treatment to the products of both countries. In addition to the MFN provisions, it will improve market access for US products and services, allow companies to engage agents and consultants and to conduct market studies, and offer substantial intellectual property rights protection. A second agreement will authorize the Overseas Private Investment Corporation to provide guarantees to US companies which decide to invest in Ukraine. These guarantees will include investment insurance against risks of expropriation, political violence, and currency inconvertibility; project financing either as direct loans to smaller businesses or US Government loan guarantees for larger projects; and a variety of services designed to stimulate US investment in Ukraine and create commercial opportunities for both US and Ukrainian enterprises. An additional agreement on humanitarian and technical economic cooperation provides legal protection for US personnel and property involved in assistance programs, such as tax and customs exemptions and immunity from criminal and civil jurisdiction of local courts. The Administration also announced plans to locate an American business center in Kiev to facilitate expanded commercial relations between American and Ukrainian businesses. The center will provide advice on local business opportunities, translation services, and conference facilities.
Opening of Ukrainian Embassy In Washington, DC
On May 5, 1992, President Leonid Kravchuk and Secretary Baker officiated at the opening of the Embassy of Ukraine in Washington, DC. The embassy is located at 2001 L St., NW, Suite 200, Washington, DC, 20036, tel. 202-452- 0939. Mr. Oleg Belorus has been designated as ambassador.
President Nominates US Ambassador to Ukraine
President Bush has announced his intention to nominate Mr. Roman Popadiuk as US ambassador to Ukraine. Mr. Popadiuk has been Deputy Press Secretary to the President for Foreign Affairs since 1989. The nomination requires Senate confirmation. The US Embassy currently operates from offices at Vul. Yuriy Kotsu- binskoho 10, Kiev, tel. (044) 244-7349. Ms. Natalie Jaresko is the economic attache. (###)