U.S. DEPARTMENT OF STATE DISPATCH
VOLUME 5, NUMBER 19, MAY 9, 1994
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
 
ARTICLES IN THIS ISSUE:
1.  U.S. Pledge to South Africa:  Building Upon a Newfound Freedom--
President Clinton, Vice President Gore
2.  U.S. Security Policy in Korea--Secretary of Defense William Perry
3.  Promoting Democracy  and Prosperity in Central Asia--Acting
Secretary Talbott
4.  Fact Sheets:  Central Asian Republics
5.  Fact Sheet:  Georgia
 
 
 
 
Article 1:
 
U.S. Pledge to South Africa:  Building Upon a Newfound Freedom
President Clinton, Vice President Gore
 
Statements at event following South African elections, Washington DC,
May 5, 1994
 
President Clinton.  Thank you very much.  Ladies and gentlemen, welcome
to all of you.  Last week we watched with wonder as the citizens of
South Africa went to the polls--as voters lined up for miles and miles,
coming on crutches and in wheelchairs, waiting patiently, crossing the
countryside to exercise their franchise--to create a new nation
conceived in liberty and empowered by their redemptive suffering.
 
I have just spoken with President-elect Mandela and with President de
Klerk.  I congratulated Mr. Mandela on his victory and told President de
Klerk that he clearly deserves tremendous credit for his leadership.
Their courage, their statesmanship--along with the leadership of Chief
Buthelezi and others--has made this transition smoother than many
thought possible.
 
South Africa is free today because of the choices its leaders and people
made.  Their actions have been an inspiration.  We can also be proud of
America's role in this great drama.  Because those of you here today and
many others have helped to keep freedom's flame lit during the dark
night of apartheid, Congress enacted sanctions to help squeeze
legitimacy from the apartheid regime.  Students marched in solidarity.
Stockholders held their companies to higher ethical standards.
America's churches--both black and white--took up the mantle of moral
leadership.  And throughout the fight, American civil rights leaders
here helped to lead the way.  Throughout, South Africa's cause also has
been an American cause.  Last week's miracle came to pass in part
because of America's help.  Now we must not turn our backs.
 
Let me begin by saying that we all know South Africa faces a task of
building a tolerant democracy and a successful market economy; and that
enabling the citizens of South Africa to reach their potential,
economically is critical to preserving the tolerant democracy.  To show
that reconciliation and democracy can bring tangible benefits, others
will have to help.  I'm convinced that South Africa can become a model
for the entire continent.  And America must be a new and full partner
with that new government, so that it can deliver on its promise as
quickly as possible.
 
We've already begun.  Over the past year, the United States sent experts
to South Africa to help them negotiate the new constitution.  We
provided considerable assistance to help their elections work.  We
lifted sanctions.  We sent two trade and investment missions to lay the
groundwork for greater economic cooperation.  And we had a very fine
American delegation of election observers there during the recent
elections.  I'd like especially to thank the leader of that delegation,
the Rev. Jesse Jackson, for his outstanding contributions to the success
of the South African elections.  Thank you, sir.
 
Today I am announcing a substantial increase in our efforts to promote
trade, aid, and investment in South Africa.  Over the next three years
we will provide and leverage about $600 million in funds to South
Africa.  For this fiscal year, we have increased assistance from $83
million to $143 million.  Along with guarantees and other means, our
resources--which will be mobilized for next year--will exceed $200
million.
 
Through the programs of 10 U.S. Government agencies, we will work with
South Africans to help meet the needs which they identify--to build
homes and hospitals, to provide better education, and to promote good
governance and economic development.
 
I'm writing to the leaders of the other G-7 countries and asking them to
join us in expanding assistance to South Africa.  And we urge the
international financial institutions, such as the World Bank, to do the
same.
 
Next week, I'm also sending an official delegation to South Africa for
President Mandela's inauguration.  Vice President Gore will lead the
trip, along with Mrs. Gore.  They'll be joined by the First Lady,
Secretary Brown, Secretary  Espy, and many others, including those here
in the audience today.
 
We are taking these actions because we have important interests at stake
in the success of South Africa's journey.  We have an economic interest
in a thriving South Africa that will seek our exports and generate
greater prosperity throughout the region.  We have a security interest
in a stable, democratic South Africa working with its neighbors to
restore and secure peace.  We have a clear moral interest.  We have had
our own difficult struggles over racial division, and still we grapple
with the challenges of drawing strength from our own diversity.  That is
why the powerful images of South Africa's elections resonated so deeply
in the souls of all Americans.
 
Whether in South Africa or America, we know there is no finish line to
democracy's work.  Developing habits of tolerance and respect, creating
opportunity for all our citizens-- these efforts are never completely
done.  But let us savor the fact that South Africa now has the chance to
begin that noble and vital work.
 
Thirty-three years ago, Albert Luthuli became the first of four South
Africans to win the Nobel Peace Prize.  As he accepted the award, he
described his people as, and I quote,
 
"living testimony to the unconquerable spirit of mankind.  Down the
years they have sought the goal of fuller life and liberty, striving
with incredible determination and fortitude."
 
Today, that fortitude and the strivings of generations have begun to
bear fruit.  Together, we must help all South Africans build on their
newfound freedom.  Thank you very much.
 
And now I'd like to ask the Vice President to come forward to make some
acknowledgments and some remarks and to talk a little about the historic
trip that the American delegation he will lead is about to make.   Mr.
Vice President.
 
 
 
Vice President Gore.  Thank you very much, Mr. President.  May I begin
by acknowledging the presence of the delegation, which will be
accompanying the First Lady and Tipper and me to South Africa.  You know
from listening to conversations among the three of us that we're very
excited about this trip.  It is one of the great moments in history.
 
The last pillars of apartheid are crumbling, and three centuries of
injustice are coming to a close.  Many have brought about this moment,
and we are very excited, as I mentioned,  about the opportunity to
witness this transformation.
 
May I acknowledge Secretary Espy, who is going to be joining us in the
delegation; your National Security Adviser, Mr. President, Tony Lake,
who has worked tirelessly in the last 16 months and in other capacities
prior to this Administration to help bring about this moment; and
Ambassador Talbott of the State Department and his colleague, George
Moose, from the State Department.  Mr. Ambassador, thank you for the
State Department's outstanding role in bringing this about.
 
There are others who are present that I would like to mention.  The
President has already mentioned the Rev. Jesse Jackson in his role as
the leader of the election-monitoring group.  Some of you here may not
know that, while there, he received special recognition and thanks for
the manner in which he and the delegation he led contributed to this
outstanding event, and played a considerable and important role in
helping to guarantee and ensure the integrity of this important moment
in history.
 
Director Carol Bellamy of the Peace Corps is here; Administrator Brian
Atwood of USAID; Ruth Harkin, President of OPIC; Ambassador Harry
Schwarz, who will be coming to the podium in a moment; ANC
Representative Kingsley Makhubela, who will also be coming to the podium
in just a moment; and other distinguished guests, including the members
of the Presidential delegation, composed of extraordinary individuals
who contributed in a very personal way to the magnificent transformation
taking place in South Africa.
 
Each of you here today can be proud of the role that you played in
dismantling apartheid.  You led the way in one of the great moral
struggles of this century.
 
May I say that you will be getting calls today--we could not call you
earlier--inviting you to a gathering at our residence on Saturday night-
-those of you who can come--for the delegation prior to the departure
for South Africa.  I hope that all of you will be able to come and join
us on that occasion.
 
There are a number of Members of Congress who were extremely
instrumental in raising the level of awareness in America to the horrors
of apartheid.  Unfortunately, due to key votes scheduled today on
Capitol Hill, these members could not join us for this event, but they
deserve special recognition for their role in bringing us to the
threshold of new era in South Africa.
 
Now the hard work of nurturing democracy and strengthening free market
reform begins.  South Africa faces a challenge more daunting than
dismantling apartheid--the challenge of building a nonracial democracy
and a culture of tolerance.
 
As President Clinton has made abundantly clear, the United States of
America will help.  We will be there doing our part.  Our work there is
part of President Clinton's larger strategy of enlarging the world's
community of free-market democracies in Africa and elsewhere.
 
I will have an opportunity, along with several members of the
delegation, to talk to the leaders of other nations in Africa that are
in various stages of the transition to free-market democracies.  I'll be
visiting Namibia and Benin, as well as Cape Verde, on the way back from
the inaugural events.
 
Even as we focus today on assistance to South Africa, we are mindful of
the importance of encouraging development throughout Southern Africa and
beyond.  South Africa's successful transformation will support these
goals and give hope to all who love freedom.  The monumental
statesmanship demonstrated by President-elect Mandela and President F.W.
de Klerk provides a shining example to help restore peace in nations
like Mozambique, Bosnia, Haiti, Rwanda, Angola, Burundi, and elsewhere.
 
As President-elect Mandela said following the four days of voting, the
people of South Africa have been victorious; they have won.  He also
spoke to those around the world who believe in the struggle for justice
and democracy and self-government.  And in eloquent words he said this
is your victory, too.
 
On a personal note, I thought back to the Sunday morning--U.S. time--not
that many years ago, when Nelson Mandela was released from prison.  Our
youngest child was the only one awake, and I was watching the
television, literally transfixed by the scene unfolding in South Africa.
It occurred to me as a parent that--for all the times when parents have
to explain terrible, unjust horrors and tragedies in the world, and
watch children contort their faces as they absorb the news that there
are terrible things in this world they're growing up in--this was a
moment, as this inauguration will be a moment, when parents around the
world had the joy of being able to explain to their children the deeper
meaning of an event that transcends the ordinary, lifts the human
spirit, and gives us all hope that the greater capacities that lie
within the human heart can find expression in ways that reshape our
world and link the horizons and give us the opportunity for a much
brighter future.
 
On practical matters, the $600-mil-lion trade and investment package
that the President announced today is the culmination of close
cooperation and commitment between the Congress and 10 executive
agencies.  It also continues and builds on the work initiated last fall
by Commerce Secretary Ron Brown, when he led a very successful trade and
investment mission to South Africa.
 
Brian Atwood and the U.S. Agency for International Development also
deserve special recognition for creatively expanding the size and
content of their investment programs.  For the first time, USAID will be
working with the South African Government to support its development
priorities.I'm particularly pleased in this regard to be speaking at the
USIA-sponsored conference on June 3 in Atlanta to promote business and
educational exchanges between the U.S. and South Africa--June 3 and 4 in
Atlanta.  OPIC President Ruth Harkin also led a major business
investment mission to South Africa and announced three U.S.-South
African ventures that could pump millions of dollars into the country's
disadvantaged community.
 
Other agencies that have played leading roles in developing our robust
economic package for South Africa include the Peace Corps--and I
acknowledged Carol Bellamy earlier--the Trade and Development Agency,
Eximbank, the U.S. Trade Representative, and the Treasury and Defense
Departments.
 
In closing--before asking our two guests to join us--in the past week,
we witnessed this extraordinary historic event, but we should not
forget, as Harry Truman once said, that people make history and not the
other way around.
 
Courageous men and women in Africa, in America--many of them here today,
helped topple apartheid.  The challenges ahead require continued hard
work.  To reiterate President Clinton's words, we pledge to help all
South Africans build upon their newfound freedom. (###)
 
Materials relating to the election in South Africa will be printed in
Dispatch Supplement Vol. 5, No. 3.(###)
 
 
 
 
ARTICLE 2:
 
U.S. Security Policy in Korea
Secretary of Defense William Perry
Address to the Asia Society, Washington, DC, May 3, 1994
 
Today I would like to talk to you about my recent trip to Korea, and, in
particular, to try to answer the critical question that was often posed
to me on this trip and since this trip--that is, how is it possible to
achieve a nuclear-free Korean Peninsula without creating an unacceptable
risk of war?
 
To achieve that objective, I believe we must focus on two critical
efforts.  The first is a diplomatic effort.  We must make every
diplomatic move to convince North Korea that a non-nuclear Korean
Peninsula is in everyone's interest and, in particular, in North Korea's
interest.  And North Korea must understand that the world community is
united in this goal.  The second effort is for the United States and
South Korea to be fully prepared to defend South Korea should the North
Koreans take a rash action.  North Korea must understand that starting a
war would not only be rash, it would be self-destructive.
 
Today North Korea threatens the peace and stability of Northeast Asia,
which holds the world's fastest-growing economies.  By the first years
of the next century, East Asia and the Pacific will likely account for
about one-third of the world's economic activity, and the markets
created by this region's economies are increasingly important to the
economic health of the United States.
 
Last year, our trade with the Asia-Pacific region amounted to over $370
billion--40% greater than the U.S. trade with Europe--and almost 3
million American jobs depend upon this trade.  The growth of Japan,
South Korea, China, Hong Kong, and Taiwan since the Second World War has
been nothing short of phenomenal.  But the foundation of sustained
economic growth anywhere is peace and stability, and it is very clear
that Northeast Asia's peace and stability has been largely the result of
America's military strength and its commitment to the region.  The key
to that commitment is the U.S. security relationship with South Korea
and with Japan.  The biggest threat to the peace and stability of that
region today emanates from North Korea.
 
The Threat
 
Conventional Forces.  North Korea has an unreasonably large conventional
military force, which we estimate consumes about 25% of its gross
domestic product, thereby keeping its citizens impoverished.  If you
compare the 25% that North Korea invests in its military with the 3%
invested by the United States, South Korea, and West European countries
and the 1% invested by Japan, you get a very clear picture of why the
people in North Korea live in economic deprivation.
 
Two-thirds of North Korea's million-man army is based within 60 miles of
the DMZ, and much of this force is less than 50 miles from Seoul.  This
army has thousands of tanks and artillery pieces.  It has built large
tunnels under the DMZ and has established a very large complement of
special operation forces.  For decades, this excessive military force
has threatened its neighbor in the south, and, in the last few years,
North Korea has increased both the size and the forward deployment of
these forces.  But notwithstanding this build-up, there can be no doubt
that the combined forces of  the Republic of Korea and the United
States could decisively defeat any attack from the North.
 
The deterrent value of U.S. and South Korean military forces has
maintained the peace on the Korean Peninsula for four decades and
continues to maintain it today.  Indeed, I believe there is no danger of
an imminent military confrontation in Korea.  However, during the last
few years a new development has emerged--a major North Korean nuclear
weapons program.  This program could very well threaten the stability on
the Korean Peninsula today.
 
The Nuclear Program.  In discussing this nuclear program, it is
important to be clear about what we know and what we don't know about
it.  While many elements of this program are still unknown, we do know
with certainty that the North Koreans have an operational 25-megawatt
nuclear reactor; they have under construction a second, 200-megawatt
reactor; they have a large reprocessing plant for separating plutonium
from reactor spent fuel; they have radio-chemistry laboratories; and
they have a high- explosive testing facility, all located in Yongbyon.
We also know that when the 200-megawatt reactor is completed in a few
years, it will have the potential to produce enough material for 10-12
nuclear bombs a year.
 
The most reasonable explanation for this known collection of facilities
is a nuclear weapons program, and this program has now reached a
critical juncture.  The 25-megawatt nuclear reactor has, as we speak, a
load of spent fuel that if reprocessed after being removed from the
reactor would provide enough plutonium for four or five nuclear bombs.
The reactor has recently been shut down--a preliminary step needed to
cool the core sufficiently to conduct a refueling operation.
 
North Korea has declared that they intend to discharge and then refuel
the reactor, and they have invited the IAEA--the International Atomic
Energy Agency--to be present during this process.  We believe it is
critically important for the IAEA to be present at the unloading of the
reactor and to conduct the necessary procedures to provide safeguards
that the spent fuel from the reactor is not diverted to a nuclear
weapons program.  So we welcome this offer by the North and hope it is
serious.  Talks are now underway between North Korea and the IAEA to
determine whether North Korea will permit the IAEA to be not only
present but to conduct the inspections they believe are necessary to
provide safeguards.
 
We understand that the technology and the operating history of the 25-
megawatt reactor make it technically necessary to do the refueling very
soon, but, at the same time, it is our top priority to be sure that this
refueling does not lead to diversion of the spent fuel to reprocessing
into weapons-grade plutonium.  It is equally important that this not
become a source of new uncertainty about the use of spent fuel.  We know
that the last time the 25-megawatt reactor was unloaded, it was done
without any outside, independent observation.  We don't know how much
was unloaded or what they did with the fissile material.  We can only
estimate how much was unloaded and speculate whether or not it was
diverted to a bomb program.
 
The Director of Central Intelligence, James Woolsey, has estimated that
the plutonium from this last unloading already may have been used to
build at least one nuclear device.  We do not want this uncertainty to
multiply with the present refueling.  Observation of refueling is a most
important first step in containing the North Korean nuclear program
because it assures us that the fuel is not reprocessed and that it stays
under international observation.
 
But we need to go further than simply containing this nuclear program.
We want to achieve a nuclear-free Korean Peninsula through
implementation of the South-North Denuclearization Accord, which was
reached last year, and through a determination of what happened to fuel
that was removed when the reactor was shut down previously in the
absence of outside monitoring.  No doubt this will be a long, hard
process that will take both steadiness and determination on our part.
 
Other Factors.  Looking beyond this nuclear program, we must take into
account North Korea's other activities.  We know that they're building
ballistic missiles of increasing range and can already launch Scud
missiles against virtually any target in South Korea, and they are
developing longer range missiles that could strike targets in Japan,
China, Russia, and other countries in the region.  Compounding our
concern is North Korea's history of exporting weapons technology,
including ballistic missiles, to regions of instability around the
world.  As Tony Lake has noted,
 
North Korea has become one of the foremost merchants of such weapons.
It has sold Scud missiles to Syria and Iran, and it is actively
marketing its next generation of ballistic missiles.
 
In short, if North Korea develops nuclear weapons, we face a greatly
increased danger that other hostile, rogue states around the world soon
will have them also.
 
Finally, the ruling regime of North Korea has used extreme, even shrill
rhetoric--including a recent infamous threat to turn Seoul into a "sea
of fire."  We do not take every extreme North Korean figure of speech
literally, but it would be imprudent not to take seriously the threat
posed by North Korea's large conventional forces, its nuclear weapons
program, and its harsh rhetoric.  We must also take seriously its stated
intention of effecting a reunification of Korea on the North's terms in
1995.
 
The Response
 
How the United States and its allies in the international community
respond to the challenge posed by the North Korean nuclear program will
be very important not only for the future security of Asia but, indeed,
for the entire world.  Our response to this challenge now will be a
benchmark for responding to possible similar challenges in the future.
 
There are basically three ways that the United States and its allies can
deal with the threat posed by North Korea's nuclear program.  First, and
quite obviously, we could do nothing; second, we could apply military
pressure; and third, we could pursue a strategy to persuade North Korea
that it is in their best interest to give up their nuclear weapons
program.
 
The first option truly is untenable.  Whatever dangers we face now in
dealing with North Korea's nuclear programs, the dangers will be
compounded two or three years from now if North Korea actually is able
to produce enough plutonium to fabricate nuclear weapons at a rate of
about a dozen a year--a number which is compatible with the size of the
facilities we see being constructed.
 
It is not satisfactory to say, as some have argued, that we could accept
such a program and seek to deter North Korea from actual use of its
nuclear arsenal as we deterred the Soviet Union during the Cold War.
For even assuming that we could reliably deter actual use of North
Korea's nuclear weapons, an unchecked nuclear capability--coupled with
North Korea's large conventional military forces--could  put North Korea
in a position to subject South Korea to extortion in establishing its
terms for unification.  It could undermine the security of the whole
Northeast Asia region and tempt other countries to seek their own
nuclear weapons in self-defense.  And, as I have mentioned, a nuclear
North Korea could be in a position to export nuclear technologies and
weapons to terrorist or rogue regimes around the world, unleashing a
nightmare spread of nuclear threats.  Thus, the North Korean nuclear
weapons program is, in the long term, a problem not just for the region
but for the entire world.  These considerations make doing nothing an
untenable option.
 
At the other end of the spectrum would be the application of military
pressure, but even limited application of military pressure entails the
risk of a large-scale war.  Although we will not rule out any option for
all time, this course should only be considered when all other
possibilities have been exhausted.
 
That leads us, then, to President Clinton's strategy, which is diplomacy
combined with military preparedness.  The objectives of the President's
strategy are quite clear:  We want North Korea to comply fully with the
nuclear Non-Proliferation Treaty and the South-North Denuclearization
Accord.  The overall goal is a non-nuclear Korean Peninsula and a strong
international non-proliferation regime.
 
What Is at Stake.
 
I believe it is important to understand just what is at stake.  First
and foremost is the denuclearization of the Korean Peninsula.  This is a
win-win scenario for both the North and the South.  It is obvious what
is at stake for the South.  Less obvious is what is at stake for the
North.
 
The answer is a hell of a lot.  The United States, after close
consultation with the Republic of Korea and Japan, has agreed to pursue
a broad and thorough approach in negotiations with North Korea, if we
get back to the negotiating table.  What "broad and thorough" means in
non-diplomatic jargon is that the United States is fully prepared to
discuss with the North not just the nuclear issue that is of concern to
us but the full range of issues of concern to them and to us--
diplomatic, political, economic, and security.  It also means that we
are ready to move rapidly to resolve these issues and not get bogged
down in endless haggling over minor issues.
 
We invite North Korea to join the community of nations, and we're
prepared to work with North Korea to help make that happen.  Thus, North
Korea is at a crossroads not just on the nuclear issue but also on the
future of its relations with the rest of the world.  We strongly urge
North Korea to take the responsible path--to cooperate and forgo its
nuclear ambitions.
 
If doing the right thing doesn't motivate North Korea, then perhaps a
simple cost-benefit analysis will.  If the North is willing to live up
to its international and bilateral nuclear obligations, we have made it
clear that both we and our allies are prepared to move toward more
normal political and economic relations with the North.  That means
much-needed economic assistance for its moribund economy and gradual
integration into the wider Asian community.  The North would no longer
find itself internationally isolated and increasingly impoverished.  Its
security posture would actually be much improved.  All of these benefits
would help North Korea and its people much more than any nuclear weapons
program.  This is a truly positive vision, and we hope that the North
will embrace it.
 
Kim Il Sung recently declared that North Korea has no nuclear bombs, no
desire to make nuclear bombs, and no secrets about such activities.
There is an easy way for him to convince the world of this--by
fulfilling North Korea's commitments to the IAEA, letting the
inspections go forward, and implementing the North-South accord to
denuclearize the peninsula.
 
Diplomatic Efforts.  Achieving our diplomatic goal--a nuclear-free
Korean Peninsula without conflict--will require solidarity with our
allies.  We've been working with great energy to build an international
coalition through the United Nations to address the North Korean nuclear
problem.  We've also been working closely with South Korea and Japan and
consulting with Russia, China, and others that have a stake in
preserving regional stability and preventing nuclear proliferation.  On
my recent trip, I discussed this issue with the leaders in South Korea
and Japan, including the President of South Korea and the Prime Minister
of Japan.  I can report full solidarity with both of these important
allies.  This is absolutely essential.  If North Korea were to perceive
any daylight between our positions, it would harm our negotiations, and
it could tempt North Korea toward military options.
 
To focus our efforts, the Assistant Secretary of State for Politico-
Military Affairs, Robert Gallucci, has been designated the interagency
coordinator for Korea.  He is the point man for dealing with the North
Koreans, and he joined me in my meetings with the South Koreans and the
Japanese--a sign of the close relationship between our diplomatic
efforts and our military preparedness.  As we view our diplomatic
efforts in light of the alternatives I have described, we must make
every effort to see that this strategy succeeds.  That means that in
dealing with a country such as North Korea we should expect our
negotiations to be difficult, often confrontational, and probably
protracted.  To be successful, we will have to be clear and firm in our
goals and objectives, flexible and creative in our negotiating tactics--
and remain calm through it all.
 
Critics who often call for what may seem to be a quick and easy solution
or who deplore the give and take essential to any negotiation will
certainly be frustrated.  And those who deny the reality or severity of
the problem and, consequently, the acceptability of taking any risk to
contain and reverse it also will be unhappy.  But those who bear
responsibility both for making policy and for its consequences should,
for the good of the nation, weather the criticism and vigorously pursue
this diplomatic course.
 
President Clinton has correctly noted that our goal is not endless
discussions but certifiable compliance.  If the international community
cannot convince North Korea to honor its nonproliferation commitments,
the UN Security Council again will take up the issue, and the North will
face increasing pressure in the form of sanctions.
 
In particular, if North Korea were to break the continuity of
safeguards-- for example, by refusing to allow adequate IAEA monitoring
of the spent fuel rods it will remove from the 25-megawatt reactor--the
issue would return to the United Nations, where the U.S. and others
would consider appropriate steps, including sanctions.  I believe that
such an approach will be supported by the Republic of Korea and the
world community.
 
We believe this response would be commensurate with the problem posed by
North Korea's refusal, and it would be done with no intention of being
provocative.  However, North Korea has stated that the imposition of
sanctions would be equivalent to a declaration of war.  This is probably
another example of excessive North Korean rhetoric, but, as Secretary of
Defense, I have a responsibility to provide for the adequate readiness
of U.S. military forces in the face of such threats.
 
Force Readiness.  Our forces have been, are, and will be ready to meet
any contingency.  It is vital that we continue to maintain a strong U.S.
and South Korean defense capability on the peninsula to dissuade the
North from acting rashly.  We cannot take any chances on this.  We have
to be prepared to help South Korea defend itself, as we have for more
than 40 years.  Based on my recent trip, I can report that we are fully
prepared to do so.
 
I note that the bulk of South Korea's defense comes from South Korea.
Today it fields a potent military force of about 650,000 active duty
personnel backed up by more than 200,000 ready reservists.  Last week, I
visited the First Infantry Division of the South Korean Army, which is
located at the tip of the spear, as they say, between Seoul and the
Demilitarized Zone.  I can say with some personal confidence that South
Korea's forces are well trained, well led, and highly motivated.  Their
equipment is generally of high quality, and they have important
modernization programs well underway.
 
These Republic of Korea forces are supplemented by about 100,000 U.S.
military forces in the Western Pacific, including a well-trained, well-
equipped, and highly professional military force in South Korea of about
37,000 personnel.  Their job is to help deter North Korean aggression,
to help defend South Korea if deterrence fails, and to build South
Korea's defense capabilities through combined training.  It is a tough,
demanding job that for most of our forces over there means a year's
separation from their families.
 
I also met with some of our forces during my trip--in particular, the
2nd Infantry Division of the U.S. Army and commanders from the 7th Air
Force and 10th Fighter Wing of the U.S. Air Force.  These units are at
the peak of readiness and are training constantly, and we are giving
them the tools to perform their mission.  We have underway a systematic
modernization program for our forces in Korea.  This program includes
equipment such as the Patriot system, which we recently deployed to
provide us with a point-defense system to protect targets such as
airfields and ports against the Scud missile threat.  I met with the
battalion commander and his staff last week at one of the new sites at
which the equipment was being installed.  The Patriot batteries are all
now operational, ready to defend designated areas.  In addition, we are
replacing the Cobra attack helicopter with AH-64 Apaches, we are
replacing the M-113 armored personnel carriers with Bradley fighting
vehicles, and we're significantly increasing our intelligence assets.
 
All of this gives the combined U.S.-Republic of Korea forces a
formidable military capability, but they would still be outnumbered by
North Korean forces.  Therefore, should conflict occur or even seem
imminent, the U.S. forces now in Korea would be swiftly reinforced by
U.S. combat aircraft and additional U.S. naval and ground forces.  These
reinforcements are intended to deal directly and rapidly with threats
posed to the in-country forces.
 
The primary threats to the combined U.S.-Republic of Korea forces are
the large concentration of North Korean tanks and artillery and the
numerical advantage in forward-deployed infantry forces combined with
the tactical advantage of a short-warning attack.  U.S. and Republic of
Korea forces, on the other hand, have a distinct advantage in tactical
air, in training, command and control, and in the potential for
reinforcement.
 
During my visit, I discussed with the combined forces commander, General
Gary Luck, the strategy he has developed to maximize our advantages and
offset the advantages of the North Koreans.  For obvious reasons, I
cannot discuss the details of this strategy, but I can tell you that I
have developed complete confidence both in our commanders and in the
strategy they have developed.
 
Team Spirit Exercises.  During the last few months, much has been made
of the U.S.-South Korean exercise called Team Spirit.  The Team Spirit
exercises are purely defensive.  They improve our ability to defend
South Korea by testing our ability to reinforce, re-equip, and resupply
U.S. and South Korean forces in the event of an attack from the North.
They are part of an extensive and continuing program of U.S.-South Korea
cooperation and joint activity for military preparedness.  Successive
U.S. administrations have agreed with their South Korean counterparts on
supporting Team Spirit, but they have also recognized that it can be an
appropriate subject of diplomacy in the context of progress on the
nuclear issue.
 
For example, Team Spirit '92 was cancelled to encourage the progress in
the nuclear negotiations with North Korea.  Team Spirit '93 was held as
scheduled.  Team Spirit '94 was put on the negotiating table last
February as part of a complex package to induce North Korea to live up
to its IAEA and North-South dialogue commitments.  When North Korea
reneged on those commitments, we decided--with the Republic of Korea--to
reschedule Team Spirit.  It could be suspended again if there is
satisfactory progress on the outstanding issues.  Absent that progress,
however, Team Spirit '94  will be held this November.
 
North Korea has no reasonable basis to regard such measures as
provocative.  In fact, they are all strictly defensive measures intended
to protect South Korea and our forces from an unprovoked attack, and
they are entirely capable of providing that protection.  There can be no
doubt that the combined U.S.-Republic of Korea forces would decisively
and rapidly defeat any attack from the North.
 
Conclusion
 
We must understand that every course of action we could take has
consequences.  Acquiescing now to an active North Korean nuclear program
would invite a future crisis.  Taking military action now would invite
an immediate crisis.  Even the course we've chosen--a course which
combines diplomacy with military preparedness--is not entirely free of
risk.  It is possible that North Korea could misperceive these efforts
as provocations.  We must face that possibility, comparing that risk to
the far greater risk of letting North Korea develop the capability of
producing a nuclear arsenal or the risk inherent in not maintaining the
readiness of our forces.
 
The Chinese have a proverb--maintain an army for a thousand days in
order to employ it for one day.  I would modify that by saying that we
want to maintain a sufficient defense so that they never will be
employed, because we all recognize that a war would result in heavy
casualties and widespread destruction.
 
With this posture, I have confidence that we can achieve a non-nuclear
Korean Peninsula without a war.  Certainly, we will not initiate a war
with North Korea.  Moreover, we will not provoke a war with North Korea
by rash actions now or later.  But we will not invite war by neglecting
appropriate defense preparations.  We have fought one devastating war on
the Korean Peninsula in this century; we do not want to fight another.
Arguably, the North Koreans initiated their attack in 1950 because they
miscalculated the political will of the United States and because they
observed a lack of military preparedness in the South.
 
Today there can be no confusion about the solidarity between the United
States and South Korea and the resolve of the United States to defend
South Korea.  There also can be no confusion about the military
preparedness of the combined U.S.-Republic of Korea military forces and
their ability to decisively defeat any attack from the North.
Therefore, we and North Korea should put our priority on removing this
nuclear program, which threatens the peace and stability in Korea, and
then focus on building an economically strong peninsula based on this
stability.(###)
 
 
 
 
ARTICLE 3:
 
Promoting Democracy and Prosperity in Central Asia
Acting Secretary Talbott
Address at the U.S.-Central Asia Business Conference, Washington, DC,
May 3, 1994 (Introductory remarks deleted)
 
What I would like is to focus on in my remarks on the broader goals and
strategy of the Clinton Administration's foreign policy--and the place
that the Republics of Central Asia play in our thinking about the world
as a whole.
 
In the post-Cold War era, the working principles that have shaped
America--democracy and market economics--are gaining ever broader
acceptance around the globe.  The victory of freedom is not just
ideological--it has important practical benefits as well.  People on
every continent--in countries ranging from Chile to South Africa, from
Poland to South Korea--have over recent years and decades come to the
conclusion, based on their own hard experience, that democracy and
markets are the most productive ways to organize their lives.
 
Market democracy makes not only for prosperous citizens but for safe
neighbors as well.  History shows us that market democracies tend not to
go to war with one another; they tend not to sponsor terrorist acts
against each other; and they are more likely to be reliable trading
partners, to protect the global environment, and to respect
international law.  In short, market democracies are the kind of friends
and stable partners that the U.S. Government and U.S. businesses seek
throughout the world.
 
But while democracy and market economics are ascendant in this new era,
they are not yet everywhere triumphant.  In many nations which have
begun the transition, these systems are still only half-formed and
fragile.  Everyone in this room today is well aware that the transition
to market democracy will not be easy for any of the nations of Central
Asia--nor, indeed, for any of the nations emerging from the former
Soviet Union and Warsaw Pact.  There will be stumbles and setbacks along
the way.  In Tajikistan, for instance, there will be little progress on
the economic or  political front until the civil war in that country is
ended.
 
In the West, we also recognize that the legacy of 70 years of communist
repression will not be overcome instantly.  But for their part, the
leaders of Central Asia must recognize that if their states are to join
the community of democratic nations, there must be steady progress
toward free and fair elections; respect for the right of citizens to
form political parties; and for freedom of speech, press, and religion.
With each of the nations of Central Asia, as well as all other countries
of the world, our bilateral relations will be significantly affected by
how these nations respect--and protect--the basic rights and freedoms of
their citizens.  During this long transition period, we will stay with
the reformers and we will be as persistent and patient as they are.  And
we are optimistic about their eventual success.  That is because the
common denominator of democracy and the market-- freedom--has universal
appeal.
 
The end of the Cold War has brought about a moment of immense democratic
and entrepreneurial opportunity.  We must not waste it.  We must not
lose it.  That is why the United States is pursuing a variety of
mutually reinforcing policies and programs whose goal is to nurture,
protect, and sustain market democracies throughout the world.  In
particular, we are focusing on those areas of the globe where success in
one country or region will have an influence on surrounding areas.  Our
support for reform in Russia reflects that strategy as do our efforts on
behalf of a multiracial democracy in South Africa.  The theory here is
simple:  If reform succeeds in Russia, it is more likely to succeed
among Russia's neighbors.  By the same token, if racial harmony and
democracy come to South Africa, that country could go from being a
pariah on the continent to a model for others to make the transition.
This same thinking underlies our support for the development of market
democracy in the New Independent States of Central Asia.
 
Central Asia is a gateway to three regions that are of great strategic
importance to the United States:  To the east lie China and the rest of
Asia; to the south lie Iran, Afghanistan, and the Islamic world; to the
west and north lie Russia and Europe.  Moreover, in its own right,
Central Asia is a region of vast natural and human resources offering
the potential for the prosperity of its own people and benefits for
American entrepreneurs with the foresight to do business there.  The
mineral deposits in Uzbekistan alone are estimated to have a market
value of $3 trillion, and Turkmenistan produces 85 billion cubic meters
of natural gas a year.
 
As I said, in addition to natural resources, there are also immense
human resources.  I'm thinking of the research skills available from the
pool of scientists affiliated with the many prominent institutions that
were part of the former Soviet Academy of Sciences system.  We here in
Washington think of President Akayev as the "Thomas Jefferson" of
Kyrgyzstan, and of Central Asia--and that's not just because he can
quote from the writings of one of our own Founding Fathers.  After
hearing him engage Vice President Gore in a long and animated
conversation about the potential of the information superhighway, I
realized that President Akayev has more than a bit of Benjamin Franklin
in him as well.  If his vision--and that of the other reformers--
prevails, Central Asia will be a growing export market.  This is a
region as large as Western Europe, with a population of 50 million that
will increase to 100 million by the year 2010.
 
Thus, the Clinton Administration is eager to promote U.S. trade with
Central Asia not only because it promotes our foreign policy goals, but
because such trade will create profits and jobs here at home.
 
The Administration wants to be sure that American business is
competitive in Central Asia--that we don't lose in the global
competition with Japan, Germany, South Korea, the People's Republic of
China, Turkey, Pakistan, and Iran--all of whom have begun serious
efforts to develop business ties to the region.
 
For all these reasons, the Clinton Administration is using funds
appropriated by Congress under the Freedom Support Act to assist
economic reform throughout Central Asia.  Much of our assistance is
aimed at helping central and local governments remove the regulatory and
legal obstacles to government divestiture and the formation of private
capital.  In addition, we are helping the governments of the region
develop tax, budget, and monetary policies that will lead to economic
growth and stable currencies.
 
These are essential factors for would-be investors.  In addition to our
bilateral support programs, we have been working through the IMF and
World Bank to foster stable markets in Central Asia.  In this regard, we
are heartened that Kazakhstan and Kyrgyzstan have taken the additional
steps recommended by the IMF to privatize  the state sector and reduce
budget deficits.  By so doing, both were able to reach standby
arrangements that provide the balance-of-payments support for their
international trade.  We are strongly encouraging the Government of
Uzbekistan to work closely with the IMF to undertake the fundamental
political reforms that will allow a similar standby arrangement for that
nation.
 
We have also leveraged our assistance money to bring in support to the
region from our allies.  For instance, the joint U.S.-Israeli assistance
program, operating in four Central Asian countries, provides technical
assistance in agriculture; the joint U.S.-Turkey assistance program
focuses on health and family planning issues; and the joint U.S.-Japan
program provides urgently needed vaccines for children and needles and
syringes to the Kyrgyz Republic and to Turkmenistan.  During his visit
to Almaty in October, Secretary Christopher announced that we will
establish and manage a $150-million enterprise fund.  It will provide
desperately needed capital to the small-business owners who are building
Central Asia's economies from the ground up.  Entrepreneurs are on the
cutting edge of the changes we want to encourage, and this enterprise
fund promises to produce substantial results.
 
But the American Government, by itself, cannot provide the hard-currency
capital and management expertise in anything like the quantity that the
business people of the region require.  That can only come from our
private sector.  Only through cooperation with the firms represented
here today--and other firms like them--can the U.S. Government do what
needs to be done.  The $150 million we have targeted for the Central
Asian enterprise fund is a considerable sum, particularly in this era of
concern over Federal budget deficits.  But it is only enough to prime
the pump.  The big money will come from the big companies--on the
magnitude of the $3 billion that U.S. companies such as Chevron and
Philip Morris have already pledged to invest in Central Asia during the
next few years.  And with 300 American firms visiting Kazakhstan since
February--that's in addition to the 70 that are already established
there--that $3-billion figure will multiply several times in the coming
years.
 
Now, to be sure, American companies are not investing in the region for
reasons of altruism; they're doing it because it makes good business
sense.  By the same token, our Administration is investing in the region
because it makes good foreign policy sense, good national security
sense.  That is, we are investing in the region for reasons that go to
the heart of what we see as America's vital national interests.  By
nurturing and sustaining private enterprise, we see ourselves as helping
not only the centerpiece of economic reform, but also one of the key
building blocks of democratization and collective security as well.
 
As President Clinton has said, "Free markets not only enrich people,
they empower them."  As more people in Central Asia become property
owners and shareholders, they will seek a greater voice in the political
decisions that are made in their communities and their nations.  And, as
the peoples of the region gain their voice, consolidate their
independence, stabilize their economies, and trade with other countries,
the world will become a safer place.  If we really take advantage of all
the opportunities that are before us, the profits for American business-
-and prosperity for the peoples of Central Asia--will eventually match
the standards of Central Asian hospitality--the highest standards in the
world. (###)
 
 
 
 
ARTICLE 4:
 
Fact Sheets:  Central Asian Republics
 
Kazakhstan
 
U.S.-Kazakhstan Relations
 
The dissolution of the Soviet Union in December 1991 brought an end to
the Cold War and created the opportunity to build bilateral relations
with the New Independent States (NIS) as they began a political and
economic transformation.  The United States recognized Kazakhstan's
independence on December 25, 1991.  It was the first country to open an
embassy in the capital, Almaty, in January 1992.  The U.S. Ambassador to
Kazakhstan is William Harrison Courtney, who assumed the post on August
31, 1992.
 
In January 1992, the U.S. initiated the Coordinating Conference on
Assistance to the New Independent States in response to the humanitarian
emergencies facing these states.  The resulting Operation Provide Hope
provided desperately needed food, fuel, medicine, and shelter.
 
The cornerstone of the continuing partnership with Kazakhstan and the
other NIS is the Freedom for Russia and the Emerging Eurasian
Democracies and Open Markets (FREEDOM) Support Act, enacted in October
1992, which directly addresses their military, political, and economic
transformation.   On September 30, 1993, a new $2.45-billion assistance
package for the NIS, funded with a combination of fiscal year (FY) 1994
and 1993 supplemental appropriations, was passed by Congress and signed
into law by President Clinton.  It will continue to address political
and economic transformation and humanitarian needs.
 
Through December 1993, the U.S. has provided about $55 million in
humanitarian assistance and $32 million in technical assistance to
Kazakhstan (not including Nunn-Lugar assistance to dismantle nuclear
weapons--see "Military Issues").  The focus of U.S. assistance to
Kazakhstan is support for its transition to democracy and to a market
economy and provision of humanitarian assistance.
 
Kazakhstani President Nursultan Nazarbayev made his first official visit
to Washington, DC, May 18-20, 1992.  In October 1993, Secretary of State
Warren Christopher visited Kazakhstan, followed by Vice President Gore
in December 1993.  During President Nazarbayev's second visit in
February 1994, he signed, with President Clinton, the Charter on
Democratic Partnership emphasizing  a common commitment to democratic
values, human rights, and the rule of law.  The two countries also
agreed to broaden consultation on the transition of military forces to
civilian control and the conversion of defense facilities to peacetime
use.  President Clinton pledged to provide additional humanitarian and
technical assistance, commercial agricultural credit guarantees, Nunn-
Lugar assistance for the safe dismantlement of nuclear weapons, and U.S.
investment resources valued at about $311 million.
 
Humanitarian Assistance.
 
Under Operation Provide Hope, launched in February 1992, the U.S. has
delivered to Kazakhstan medical supplies valued at $8.4 million and
excess Department of Defense food commodities valued at about $2
million.  Under the Medical Assistance Initiative, administered by
Project HOPE--a private voluntary organization--more than $13 million in
medical assistance has been delivered.  About $1 million in emergency
medicines and supplies have been delivered under the Emergency Medicines
Initiative.  In FY 1994, the U.S. Department of Agriculture (USDA) is
providing more than $7 million in food aid to vulnerable groups in
Kazakhstan.  In addition, USDA has approved $15 million for Kazakhstan
in GSM-102 export credit guarantees.
 
Assistance To Support the Transition to a Market Economy.
 
The U.S. has established a Central Asia regional enterprise fund to help
new and existing small and medium-sized private enterprises become
commercially viable in a free-market environment.  Technical assistance
and training programs have been provided in privatization, agribusiness
and agricultural development, environmental issues, tax policy, banking,
housing, telecommunications, private sector development, defense
conversion, international trade and investment, energy efficiency, coal
mine safety, maternal and child health, environmental health, and health
care financing.  A medical partnership has been established between a
coalition of Tucson-area health care providers and four hospitals in
Almaty.  The Peace Corps is conducting programs in Kazakhstan with a
focus on  small business development.
 
Assistance To Support the Transition to Democracy
 
Technical assistance and training programs have been provided in
political party training, voter education, election administration,
public administration, civic education, rule of law, legal reform and
education, review of draft legislation and the constitution, human
rights, tolerance and pluralism, independent media, foreign policy,
diplomacy, university administration, civic education, and English-
language training.  Many Kazakhstani students have participated in
higher-education exchange programs.  The U.S. has provided translation
and publication services for books and  articles.
 
Bilateral Economic Relations.
 
The United States seeks to promote self-sustaining economic reforms in
Kazakhstan by encouraging trade and investment by U.S. companies.  A
trade agreement between the U.S. and Kazakhstan, which came into effect
in February 1993, provides for reciprocal most-favored-nation treatment
and will create commercial opportunities for U.S. business and for
emerging Kazakhstani enterprises.  The agreement facilitates business by
allowing free operation of commercial representation in each country and
offers strong protection of intellectual property rights.  A bilateral
investment treaty (BIT), signed in May 1992 and entered into force in
December 1993, provides legal protection and assurances for U.S.
investors, including treatment at least as favorable as that given to
domestic enterprises--guarantees of unrestricted transfer, non-
performance requirements, and full access to binding arbitration in case
of disputes with the host government.  In October 1993, Kazakhstan
signed a treaty with the U.S. on the avoidance of double taxation.
 
An Overseas Private Investment Corporation (OPIC) agreement, which will
encourage U.S. private investment by providing direct loans and loan
guarantees and by assisting with project-investor financing, entered
into force on May 19, 1992.  OPIC is providing $3 million in insurance
and $80 million in financing and insurance to two U.S. companies for oil
and exploration projects in Kazakhstan.  The U.S. Eximbank also is
operating for short-term coverage.
 
Military Issues.
 
Kazakhstan has accepted all relevant arms control obligations of the
former Soviet Union.  On May 23, 1992, the United States signed the
Lisbon protocol to the Strategic Arms Reduction Treaty (START) with
Kazakhstan, Russia, Belarus, and Ukraine (those states on whose
territory strategic nuclear weapons of the former Soviet Union are
located).  The protocol makes the four states parties to the START
treaty and commits all the signatories to reductions in strategic
nuclear weapons within the 7-year period provided for in the treaty.  In
December 1993, Kazakhstan ratified the nuclear Non-Proliferation Treaty
(NPT).  President Nazarbayev presented President Clinton with
Kazakhstan's instrument of accession to the NPT, confirming its
adherence to the NPT as a non-nuclear weapons state.  On December 13,
1993, the U.S. and Kazakhstan signed an umbrella agreement that provides
the legal framework for the provision of Nunn-Lugar funds for the safe
and secure dismantlement (SSD) of nuclear weapons and five SSD
implementing documents that commit the U.S. to provide about $85 million
to assist Kazakhstan with the dismantlement of nuclear weapons on its
territory and related activities.  In March 1994, an additional
agreement was signed that will provide Kazakhstan $15 million to assist
in the process of converting defense industries to civilian purposes.
 
On June 5, 1992, Kazakhstan and seven other NIS countries signed the
Conventional Armed Forces in Europe (CFE) Treaty, which establishes
limits on categories of tanks, artillery, armored combat vehicles,
combat aircraft, and combat helicopters, and provides for the
destruction of weaponry in excess of these limits.
On July 2, 1992, the Parliament of Kazakhstan ratified the START and CFE
agreements.  On November 9, 1992, the CFE Treaty entered into force.
 
Kazakhstan opposes proliferation of nuclear, biological, or chemical
weapons or related technologies.  It maintains a defensive military
force and is not a significant exporter of conventional weapons.
 
Political Conditions
 
The Supreme Soviet (parliament) declared independence from the former
Soviet Union on December 16, 1991.  In the December 1991 presidential
elections, President Nursultan Nazarbayev ran unopposed and received 98%
of the vote.  Parliamentary elections were held in March 1994.
 
There are three legally registered political parties:  the Socialist
Party (formerly the Communist Party); the Social Democratic Party (which
broke away from the Communist Party before independence); and the
People's Unity Movement, with which President Nazarbayev is affiliated.
There are several unregistered opposition political parties and numerous
smaller interest or social groups.  The government has refused to
register any party whose platform it believes will foment ethnic
tensions.  The Nevada-Semipalatinsk anti-nuclear movement played an
important role in the recent ban on nuclear tests in the republic.  In
January 1993, the Supreme Soviet adopted a new constitution which vests
most authority in the president.  It  includes substantial protection
for individuals, including members of non-Kazakh ethnic groups. However,
the transition to democracy has been affected by ethnic tensions.
Although Kazakhs comprise only about 40% of the population, they
increasingly are predominant in the government and in higher positions
in state enterprises.  Kazakhstan's language law, due to take effect in
1995, declares Kazakh as the official language of the state and Russian
as the language of inter-ethnic communication.
 
Freedom of assembly and religion are guaranteed by law; prior approval
by local authorities is required to hold a demonstration.  Organizations
which conduct public meetings also must register with the government.
The Committee for National Security (formerly the Committee for State
Security--KGB) can deny permission to travel outside the country.  The
press is increasingly pluralistic, with a large number of unofficial
publications and radio and television companies.  The government,
however, has maintained control over some media outlets, such as state
radio and television.
 
Kazakhstan's system of state-sponsored trade unions is inherited from
the Soviet period.  Under the current constitution, workers may form or
join unions.  To obtain legal status, an independent union must apply
for registration with the local judicial authority and with the Ministry
of Justice, often a long and difficult process.  The Independent Trade
Union Center claims to represent more than 350,000 members.  The right
to organize and bargain collectively is limited, since most industry
remains state-owned.
 
Kazakhstan's legal system is based on the Soviet court system but is
undergoing reform.  The President recommends nominees for Supreme Court
and provincial judgeships, which then must be approved by the Supreme
Soviet.  In July 1992, the Supreme Soviet established an 11-member
Constitutional Court, whose function is to interpret the constitution,
resolve conflicts between regions, and decide inter-ethnic problems.
 
Foreign Relations
 
Kazakhstan joined the Commonwealth of Independent States (CIS) in
December 1991.  It is a strong proponent of dialogue and cooperation
among CIS states.  It supports regional and international efforts to
resolve peacefully the conflict in Tajikistan and also has contributed
to efforts to achieve a peaceful settlement of the conflict between
Armenia and Azerbaijan.
 
Kazakhstan became a member of the Conference on Security and Cooperation
in Europe (CSCE) in January 1992 and the United Nations and of the North
Atlantic Cooperation Council in March 1992.  It is committed to
observing international legal obligations and human rights commitments
under CSCE.
 
Economic Outlook
 
With an area equal to about one-third that of the U.S. and a population
of about 17 million, Kazakhstan is the largest of the Central Asian
republics.    It has made some progress in restructuring its economic
system through a program of steady reform.  It has liberalized prices;
prepared legislation on banking, privatization, and bankruptcy;
undertaken tax reform; implemented trade reform; liberalized investment
laws; and begun the process of privatization.  The privatization law,
currently under review, permits private ownership in most sectors of the
economy with the exception of farming, which remains communally owned.
 
In November 1993, the Government of Kazakhstan introduced a new
currency, the "tenge," which sharply restricted the money supply and
ushered in sharp price increases.  At the same time, however, the
government issued a list of price controls for essential commodities,
although at new, higher levels.
 
Kazakhstan is a member of  the International Monetary Fund (IMF), the
World Bank, the European Bank for Reconstruction and Development, and
the Asian Development Bank.  Kazakhstan reached agreement on a systemic
transformation facility with the IMF in July 1993 and drew its first
tranche of $83.5 million.  In December 1993, IMF Managing Director
Camdessus signed letters of intent for a standby agreement.  Kazakhstan
will receive an additional $167 million-- up to its full quota--in 1994.
 
It also is laying the legal foundation for foreign trade and investment.
A National Council for Economic Reform, which includes the ministers of
economy and finance and the chair of the National Bank, has been created
to oversee reform of the country's economy.  Despite this measure,
unemployment continues to rise, industrial production is declining, and
purchasing power has fallen significantly.
 
Kazakhstan accounted for 26% of the former Soviet Union's agricultural
production and has significant deposits of oil, gas, coal, iron, and
other minerals.  This natural resource wealth, including gold production
estimated at $200 million annually, makes it a potentially promising
market for U.S. investors.  Kazakhstan and Chevron Corporation announced
in April 1993 the formation of a joint venture company, Tengizchevroil,
to develop the Tengiz and Korolev oil fields on the northeastern Caspian
Sea coast.  This is the largest foreign joint venture of any kind in the
NIS to date and will provide the Kazakhstani Government substantial
revenues.  Philip Morris has signed an agreement for the largest foreign
privatization in the former Soviet Union.  It will work with Kazakhstan
in tobacco cultivation, manufacturing, and processing.
 
Kazakhstan's net output accounts for 4% of total output of the former
Soviet republics.  About 23% of the population is engaged in
agriculture.  Major products are wool, grain, and meat.  The northern
area of the country produces up to one-third of all wheat grown in the
territory of the NIS.
 
Kazakhstan was a Soviet industrial center during and after World War II,
when the U.S.S.R. moved industry east of the Urals to protect it from
Nazi invasion.  Mining and quarrying play a major role in Kazakhstan's
economy.  Abundant mineral resources--which include oil, natural gas,
metals, gold, and coal--provide the bulk of the republic's limited hard
currency.  Kazakhstan produces about 19% of coal and 10% of iron ore
production in the NIS.
 
Environmental Issues
 
Kazakhstan is interested in working with the international community on
environmental issues and has participated in conferences on regional
environmental problems, especially the Aral Sea.  The $15-million
initiative that the U.S. is spearheading will help alleviate
environmental effects of desiccation of the Aral Sea Basin and
facilitate regional cooperation.  Kazakhstan has established a Ministry
of Environment and has introduced a pollution fee system which taxes air
and water pollution emissions and solid waste disposal and channels the
resulting revenues to environmental protection activities.
 
Principal Government Officials
 
President: Nursultan Nazarbayev
Foreign Minister:  Kanat Saudabayev  (###)
 
 
 
 
Kazakhstan at a Glance
 
The origins of the Kazakh people are uncertain, but traditional
similarities indicate that they may have descended from the Mongol
Golden Horde.  Kazakhs founded a great nomadic empire under Burunduk
Khan and his son, Kasym Khan, who ruled from 1488 to 1518.  Later, the
empire broke into smaller groups called khanates.  The region was
incorporated into the Russian empire by 1848.
 
A Kazakh nationalist movement arose in the early 20th century.  The
Soviet Army occupied Kazakhstan from 1919 to 1920 before it became a
republic in 1921.  After 1927, the Soviets forcibly settled the Kazakhs,
diluting nationalistic sentiment by resettling large groups of Russians
and Ukrainians into the region, especially during the 1950s.
 
Kazakhstan covers about 2.7 million square kilometers (about four times
the size of Texas).  Ethnic Kazakhs make up 18% of the population of the
capital (Almaty) and 50% of the surrounding countryside.  According to
1991 estimates, total population was 16.5 million.  Ethnic Kazakhs
comprise about 40% of the country's population; Russians, about 38%.
Germans, Ukrainians, Koreans, and other groups make up the remainder.
(###)
 
 
 
 
Kyrgyz Republic
 
U.S.-Kyrgyz Relations
 
The dissolution of the Soviet Union in December 1991 brought an end to
the Cold War and created the opportunity to build bilateral relations
with the New Independent States (NIS) as they began a political and
economic transformation.  The U.S. recognized the independence of the
Kyrgyz Republic (also known as Kyrgyzstan) on December 25, 1991, and was
the first country to open an embassy in its capital, Bishkek, in
February 1992.  U.S. Ambassador Edward Hurwitz assumed his post on
September 3, 1992.
 
In January 1992, the U.S. initiated the Coordinating Conference on
Assistance to the New Independent States in response to the humanitarian
emergencies facing these states.  The resulting Operation Provide Hope
provided desperately needed food, fuel, medicine, and shelter.
 
The cornerstone of the continuing U.S. partnership with the Kyrgyz
Republic and the other NIS is the Freedom for Russia and Emerging
Eurasian Democracies and Open Markets (FREEDOM) Support Act, enacted in
October 1992, which directly addresses their military, political, and
economic transformation.  On September 30, 1993, a $2.45-billion
assistance package for the NIS, funded with a combination of FY 1994 and
1993 supplemental appropriations, was passed by Congress and signed into
law by President Clinton.  For FY 1992 and 1993, the U.S. provided about
$124 million in humanitarian assistance and $12 million in technical
assistance to the Kyrgyz Republic.  The focus of U.S. assistance to the
Kyrgyz Republic is support for its transition to democracy and to a
market economy and provision of humanitarian assistance.
 
Kyrgyz President Askar Akayev visited the United States May 15-22, 1993.
He met with President Clinton, Vice President Gore, Secretary of State
Christopher, and other senior government officials.  During the visit,
Foreign Minister Karabayev and Secretary Christopher signed a bilateral
assistance agreement, which provides a legal framework for U.S. aid
activities.  Vice President Gore visited the Kyrgyz Republic in December
1993, where he exchanged an instrument of accession to the bilateral
investment treaty and launched a joint agricultural commission.
 
Humanitarian Assistance.
 
In response to the March 6, 1994, land-slide disaster, the U.S. provided
more than $125,000 for emergency relief.  Between October 1993 and March
1994, a U.S.-Japan immunization program provided the Kyrgyz Republic
with vaccines, syringes, and cold chain equipment valued at more than $1
million.  The U.S. delivered emergency shelters and medical supplies
worth about $200,000 and three World Health Organization medical kits to
victims of the August 1992 earthquake.
 
Through Operation Provide Hope, launched in February 1992, the United
States provided food valued at about $800,000, and medicines, vaccines,
and medical supplies worth $5.6 million to the Kyrgyz Republic.  An
immunization program for more than 500,000 infants in Central Asia,
including Kyrgyzstan, was completed in 1992.  The Medical Assistance
Initiative, administered by Project HOPE--a private voluntary
organization--has shipped about $9.3 million in medical assistance.
Medicines valued at about $2.5 million have been delivered under the
Emergency Medicines Initiative.  An excess, 1,000-bed Department of
Defense hospital consisting of medical supplies and equipment valued at
$15 million was turned over to Bishkek in April 1993.    In 1994, the
Department of Agriculture (USDA) expects to provide about 88,000 metric
tons of food aid, valued at  almost $30 million.
 
Assistance To Support the Transition to a Market Economy.
 
The U.S. will provide $30 million in FY 1994 to support an enterprise
fund for Central Asia to assist privatization.  Technical assistance and
training programs have been provided in privatization, tax policy and
administration, monetary and banking policy, bank supervision,
bankruptcy, international trade and investment, consumer protection,
democracy and economic development, business, energy efficiency, labor
management, immunization planning and policy, public health
surveillance, maternal and child health, and housing reform.  Through
USDA's Farmer-to-Farmer program, U.S. volunteers work with local farmers
and agribusinesses to assist with private-sector marketing and
processing and distribution systems in an effort to increase private
farm production and income.  A health industry investment mission for
Central Asia was conducted in the Kyrgyz Republic in September 1993.  A
medical partnership has been established between the University of
Kansas Medical Center and two Kyrgyz hospitals.
 
Assistance To Support the Transition to Democracy.
 
Training and technical assistance have been provided in assessments of
the Kyrgyz Republic constitution; judicial and legal systems; lawmaking
for democracy; executive branch organization; parliamentary exchanges
covering constitutionalism, law, and local and state government;
diplomatic training; pluralism; election law; political party training;
building political consensus for economic reform; independent media;
function of cultural groups and arts organizations in a free-market
economy; university administration; and educational exchanges.  A U.S.
university affiliation grant has been awarded to the University of
Kansas and the Kyrgyz Technical University.  Assistance has been
provided in the translation, publication, and/or distribution of
information on democracy and free-market economics.  Peace Corps
volunteers are working in the Kyrgyz Republic with a focus on English-
language training.
 
Bilateral Trade Relations.
 
A trade agreement providing reciprocal most-favored-nation status
entered into force on August 21, 1992.  An Overseas Private Investment
Corporation agreement, which will encourage U.S. private investment by
providing direct loans and loan guarantees, became effective on May 8,
1992.  An investment treaty entered into force in December 1993.  The
two countries currently are negotiating a tax treaty.  The Export-Import
Bank offers short-term credit for investment in the Kyrgyz Republic.
 
Political Conditions
 
President Askar Akayev, running unopposed, won 95% of the vote in the
October 1991 elections.  He won a vote of confidence in a national
referendum held in January 1994.  A reformer and ally of former Soviet
President Mikhail Gorbachev, he was named president in November 1990 by
the Supreme Soviet, which had amended the constitution to provide for a
presidential system of government.  Presidential elections are scheduled
for 1996.
 
A political party structure still is developing, but there are a number
of small parties represented in the Supreme Soviet.  President Akayev is
not affiliated with any party.  The Communist Party was suspended by the
President in 1991, but former communist officials are active in
politics.
 
The government has endorsed a basic program of multi-party democracy,
rule of law, respect for human rights, protection of the rights of
minorities, religious freedom, recognition of the right of ownership of
private property, and rapid conversion to a free-market economy.
Although Kyrgyz comprise more than 50% of the population, the country
has more than 80 ethnic groups.  President Akayev and his government
have sought to foster Kyrgyz national identity, while reassuring ethnic
minorities.
 
Elections to the Supreme Soviet, or legislature, were held in 1990,
prior to independence, and it remains dominated by former communists.
The government supports political activity, and opposition groups are
free to organize.  A new constitution, passed by the legislature on May
5, 1993, includes protection for individuals, including members of non-
Kyrgyz ethnic groups.  The new constitution declares Kyrgyz to be the
national language but guarantees no discrimination for the use of other
languages.  The judicial system retains many of the laws and procedures
of the Soviet period but is undergoing reform.
 
On July 2, 1992, the Supreme Soviet passed a law supporting freedom of
the press but also establishing guidelines proscribing publication of
certain in-formation, such as material advocating violence or expressing
religious or ethnic intolerance.  There has been very little censorship
of the press, but government ownership of all radio and television
facilities and its influence with many publications has raised concern
about media independence.
 
Legislation adopted in February 1992 includes provisions protecting the
right to form trade unions.  The Federation of Independent Trade Unions
of the Kyrgyz Republic is the sole successor to the former official
trade unions and remains the only union organization.  An April 1992 law
recognized the right of unions to negotiate for improved wages and
working conditions.  Although wages continue to be set by government
decree in most sectors, many factories have begun systems of bonuses and
other incentives in keeping with the government's commitment to develop
a market economy.
 
The Kyrgyz Republic has nationalized the military forces of the Common-
wealth of Independent States (CIS) on its soil.   The government is
considering disbanding the military, replacing it with a national guard
and adopting a policy of neutrality.
 
Foreign Relations
 
The Kyrgyz Republic is a member of the CIS, the United Nations, the
Conference on Security and Cooperation in Europe (CSCE), the North
Atlantic Cooperation Council, the International Labor Organization, and
the Organization of the Islamic Conference.  It favors close relations
with the United States as well as with other CIS members, including
Russia.
 
It has declared its intention to observe international legal obligations
and CSCE human rights commitments.  A human rights conference was  held
in Bishkek in December 1992.  Kyrgyzstan supports regional and
international efforts to resolve peacefully the conflict in neighboring
Tajikistan.
 
Economic Conditions
 
The Kyrgyz Republic has made significant progress in restructuring its
economic system and has implemented legislation on disposal of state-
owned property, privatization, joint ventures, foreign trade and
investment, and free economic zones.  During 1992,  its economic
transition resulted in increased unemployment and inflation.  On May 10,
1993, the Kyrgyz Republic introduced its own currency, called the "som."
On May 13, 1993, the Kyrgyz Republic became the first of the NIS to
receive a full standby arrangement from the International Monetary Fund
(IMF) and to draw from the new IMF program to assist economies in
transition.  In February 1994, it hosted the first CSCE economic seminar
on promoting small and medium-sized businesses in transition economies.
 
Agriculture dominates the Kyrgyz economy, accounting for more than 50%
of the nation's gross national product and providing employment for the
majority of the work force.  The Kyrgyz historically are nomadic
pastoralists, and raising livestock remains the core of the country's
agricultural economy.  About 85% of the land is used for grazing, most
for sheep and goat herding.  Wool, fruits, vegetables, and sugar
production are important.  There also is some cattle production.
 
Most of the republic's industrial base, including one technologically
sophisticated "super factory," is located in Bishkek.  Less than half of
production is devoted to heavy industry, of which 27% is machine-
building.  Light industry accounts for 29% and food processing for 21%
of total production.  The Kyrgyz Republic produces electric motors,
livestock equipment, refrigerators, furniture, cement, paper, and
bricks.  The country is targeting leather, wool, food processing, and
tobacco for further development.
 
Kyrgyzstan is known historically for textile production.  It produces
cotton, wool, and high-grade silks, which also are exported.  Since the
republic has limited reserves of oil, coal, and natural gas, it imports
most of its fossil fuels.  It does, however, have an abundant supply of
hydroelectric power from several major plants and some potential to
export significant amounts of this power.
 
Site of the former Soviet Union's largest and most productive gold mine,
the Kyrgyz Republic claims to have the world's fourth-largest proven
gold reserves.  It also has significant deposits of strategic rare-earth
metals, and the Kyrgyz polymetallic complex is the leading producer of
such metals in Eurasia.  Prospects for develop- ment of rare-earth
resources have led to considerable interest from foreign investors.  It
also has enormous deposits of antimony and mercury; the Khaydarkan
Refinery is the largest mercury-producing facility in the world.  The
former Soviet Union's original uranium mines and its first uranium
processing facility are located here.  The country is considered to have
significant uranium deposits, along with major deposits of high-quality
construction materials such as basalt, marble, and other ornamental
stones.
 
The Kyrgyz Republic actively promotes foreign investment.  The U.S.
provides support and guidance to American firms interested in trade and
investment.  Morrison-Knudsen, for example, is developing gold deposits
through a joint venture.  Firms from other countries also are active.
Goldstar Corporation of South Korea has established manufacturing
facilities; Turkish and Polish firms have invested in fur and sheepskin
processing plants; a joint venture with Liechtenstein has been set up
for silk processing; and an Italian firm has started a food processing
operation for tomato paste.  The public and private sectors in the
United States, South Korea, Turkey, Italy, Spain, and Israel have
provided loans and credits.
 
The Kyrgyz Republic is a member of the International Monetary Fund, the
World Bank, and the European Bank for Reconstruction and Development.
In 1992, it became a member of the Economic Cooperation Organization--an
Islamic economic bloc which includes six states of the former U.S.S.R.
and Afghanistan, Iran, Pakistan, and Turkey.
 
Environmental Issues
 
The Kyrgyz Government is working with the U.S. and the international
community on environmental issues and has participated in conferences on
regional environmental problems.  It has expressed interest in
international assistance for the protection of Issyk Kul Lake, one of
its premier tourist sites.  It has a small Ministry of the Environment.
 
Principal Government Officials
 
President:  Askar Akayev
Prime Minister: Apas Djumagulov
Foreign Minister: Roza Otunbayeva (###)
 
 
 
 
Kyrgyz Republic at a Glance
 
In the 10th century AD, nomadic tribes known as Kyrgyz migrated from the
northern plains into present-day Kyrgyzstan.  By the 16th century, they
dominated other inhabitants.  Between the 17th and 19th centuries, they
were overrun by invading groups and, in 1876, were absorbed into the
Russian Empire.  Soon after, Russians and other Slavs moved into the
region, settling grazing lands formerly used by Kyrgyz nomads.
 
The assignation of the best lands to the Russian colonizers led to a
revolution in 1916, during which the Kyrgyz suffered heavily.  Nearly
one-third fled to China.  At the time, the czarist government did not
recognize the area as a separate political entity and included the
Kyrgyz, along with other Central Asian nationalities, in Russian
Turkestan.  However, after the Bolshevik Revolution, the Kara-Kyrgyz
Autonomous Oblast was formed.  The Kyrgyz Autonomous Soviet Socialist
Republic was established in 1926, and Kyrgyzstan became a union republic
in 1936.  It declared independence from the U.S.S.R. on August 31, 1991.
 
Kyrgyzstan is located in the center of the Asian land mass and has an
area of 199,000 square kilometers.  It is primarily a mountainous
country.  Its border with China in the southeast includes Pobedy
(Victory) Peak and Khan Tengi Peak, two of the highest peaks in the
territory of the New Independent States.  Bishkek, the capital, is the
largest city in the republic, with a population of nearly 616,000.
 
The Kyrgyz are a Muslim Turkic-speaking pastoral people with definite
Mongol strains.  In 1989, some 2.5 million Kyrgyz lived in the former
Soviet Union, most of them in the Kyrgyz Republic.  From 1979 to 1989,
the Kyrgyz population grew at 4.4% annually, while the Russian
population decreased by the same amount.  By 1991, Kyrgyzstan's
population was estimated at 4.6 million.  Kyrgyz constitute some 52% of
the population, Russians 22%, and Uzbeks 13%.  The rest are Ukrainians,
Germans, Tatars, and other groups.  Russian and Kyrgyz are the most
widely spoken languages.  Dominant religions are Sunni Muslim and
Russian Orthodox.  (###)
 
 
 
 
Tajikistan
 
U.S.-Tajikistan Relations
 
The dissolution of the Soviet Union in December 1991 brought an end to
the Cold War and created the opportunity to build bilateral relations
with the New Independent States (NIS) as they began a political and
economic transformation.  The United States recognized Tajikistan on
December 25, 1991, and opened an embassy in the capital, Dushanbe, in
March 1992.  The ambassador to Tajikistan is Stanley Tuemler Escudero,
who assumed the post August 17, 1992.
 
In January 1992, the U.S. initiated the Coordinating Conference on
Assistance to the New Independent States in response to the humanitarian
emergencies facing these states.  The resulting Operation Provide Hope,
launched in February 1992, provided desperately needed food, fuel,
medicine, and shelter.
 
The cornerstone of the continuing U.S. partnership with Tajikistan and
the other NIS is the Freedom for Russia and Emerging Eurasian
Democracies and Open Markets (FREEDOM) Support Act, enacted in October
1992, which directly addresses their military, political, and economic
transformation.  On September 30, 1993, a new $2.45-billion assistance
package for the NIS, funded with a combination of FY 1994 and 1993
supplemental appropriations, was passed by Congress and signed into law
by President Clinton.  It will continue to address political and
economic transformation and humanitarian needs.
 
Through December 1993, U.S. assistance to Tajikistan has been about $73
million in humanitarian assistance and $4 million in technical
assistance.  The focus of U.S. assistance is the provision of
humanitarian assistance and support for Tajikistan's transition to
democracy and to a market economy.
 
Humanitarian Assistance.
 
The U.S. has taken an active role in providing humanitarian assistance
and in coordinating an international response to the civil war and a
series of natural disasters.  The U.S. provided more than $9 million to
meet non-food and supplemental food needs of Tajikistani refugees and
internationally displaced persons most affected by civil strife.  An
additional $1.2 million was provided for food, fuel, and medical
supplies in the Pamir region.
 
In response to 1993 spring flooding, the U.S. shipped 1,400 tents along
with blankets and food kits with a value of $1.8 million.  The U.S. also
gave a $246,000 grant to better enable  local governments in Central
Asia to respond to emergency humanitarian crises.  In September 1993,
$275,000 was provided for repair of a hydroelectric plant.  In August
1993, $800,000 was provided for water and sanitation cleanup in response
to a cholera outbreak and $700,000 for emergency feeding operations and
protection requirements.
 
Operation Provide Hope delivered food worth $1.1 million and medicines,
vaccines, and medical supplies valued at $5.8 million; under the Medical
Assistance Initiative, Project HOPE--a private voluntary organization--
has shipped more than $4.7 million in medical assistance to Dushanbe.
Under the Emergency Medicines Initiative, about $500,000 in emergency
medicines and medical supplies, 30 World Health Organization basic
medical kits, and 3 supplemental emergency kits were delivered to
Dushanbe.  The U.S. completed a program to immunize about 500,000
infants in four states of Central Asia, including Tajikistan, with
follow-up technical assistance in need assessments.  An immunization
policy workshop was conducted.
 
In FY 1994, the U.S. Department of Agriculture expects to provide more
than 20,000 metric tons of food aid, valued at about $30 million.  In
addition, the U.S. Agency for International Development expects to
provide about $6 million in food aid targeted to the nutritional needs
of children and pregnant and post-partum women.
 
Assistance To Support the Transition to a Market Economy.
 
Training and technical assistance programs have been provided in
entrepreneurship, small business development, market economy, tax law
and collection, agribusiness, and environmental and maternal and child
health.  The U.S. will provide $30 million in FY 1994 to support an
enter- prise fund for Central Asia to assist privatization.
 
Assistance To Support the Transition to Democracy.
 
Training and technical assistance programs have been provided in
building political consensus for economic reform, rule of law,
diplomacy, and independent media.  Educational exchange programs play an
important role in these areas.
 
Bilateral Economic Issues.
 
An Overseas Private Investment Corporation agreement entered into force
on June 25, 1992.  A bilateral trade agreement came into force in
November 1993.
 
Military Issues.
 
Tajikistan has declared its willingness to accept all the relevant arms
control obligations of the former Soviet Union.  It has stated its
intention to accede to the nuclear Non-Proliferation Treaty as a non-
nuclear weapons state.  It has no nuclear, biological, or chemical
capabilities.
 
Political Conditions
 
Tajikistan declared independence on September 9, 1991.  In November
1991, Rakhman Nabiyev, a former Communist Party official, won
presidential elections held under an amended Soviet-era constitution
which declared Tajikistan to be a secular, multi-party republic with a
presidential system of government.
 
In November 1992, after a three-month period of intensive fighting among
regional and clan factions, Nabiyev submitted his resignation to the
legislature, which then abolished the positions of president and vice
president and adopted a parliamentary form of government, with Imomili
Rakhmanov as Chairman of Parliament and Head of State.
 
The political situation in Tajikistan remains fragile.  The January 24,
1993, summit of the Commonwealth of Independent States (CIS) passed a
resolution to form a Collective Peacekeeping Force (CPF) composed of
regional CIS forces to stabilize the situation in Tajikistan.  The CPF
is expected to remain in Tajikistan throughout 1994.  The UN Security
Council voted on April 23, 1993, to send a political and humanitarian
mission to Tajikistan to facilitate reconciliation and return of
refugees.  The first round of UN-brokered negotiations among
representatives of the Tajik Government and opposition took place in
Moscow in April 1994.
 
The last full parliamentary elections were held in February 1990.  By-
elections were held in 1993 to fill vacant seats.  A new constitution
was published in April 1994.  A referendum on the constitution and form
of government, followed by elections, is expected in late 1994.  In May
1993, the Supreme Court of Tajikistan banned three opposition parties
for actively working to overthrow the government.  Since that date,
several new parties have organized.
 
Following Tajikistan's declaration of independence, freedom of speech,
press, and expression expanded greatly.  The Rakhmanov Administration
has created an information office under the joint administration of the
Council of Ministers and the Parliament Presidium to coordinate the flow
of information to the state-controlled media.
 
The Committee for State Security (KGB) and the Ministry of the Interior
share responsibility for security and public order.  According to the
Law on Social Organization and the Law on Trade Union Rights and
Activity, all citizens are guaranteed the right of association.  The
communist-era Confederation of Trade Unions remains the dominant labor
organization, although it no longer is affiliated with the Communist
Party.
 
A new, national army is responsible for border defense. According to the
constitution, church and state are separate in Tajikistan, and religious
freedom is guaranteed by the Law on Freedom of Faith and Religious
Organizations of December 1990.  Although about 90% of the population is
Muslim, there is no official discrimination against other religions.
Freedom of speech and association also are guaranteed, although a permit
to demonstrate is required.
 
Foreign Relations
 
On December 21, 1991, Tajikistan became a member of the Commonwealth of
Independent States.  Tajikistan also belongs to the United Nations, the
Conference on Security and Cooperation in Europe, and the North Atlantic
Cooperation Council.
 
The current government is committed to respecting international legal
obligations and CSCE human rights commitments.  It has been an active
participant in regional dialogues and peace-making efforts and has
supported international efforts to resolve peacefully its internal
conflict.  A CSCE mission opened in Tajikistan in February 1994 with a
mandate to foster dialogue and confidence-building measures among
parties to the dispute and to promote human rights, the development of
democratic institutions, and the rule of law.
 
Economic Outlook
 
Progress in implementing an economic reform program has been slowed by
unsettled political conditions.  The civil war damaged the economic
infrastructure, limited industrial and agricultural production, and led
to serious food shortages.  Little progress has been made toward
establishing a market economy.
 
Tajikistan is the only Central Asian country that has not left the ruble
zone and issued an independent currency, but Russia's reluctance to
provide desperately needed rubles is increasing the likelihood that
Tajikistan will do so.
 
Tajikistan has one of the lowest standards of living and is one of the
most rural of the New Independent States.  Under the former U.S.S.R.,
its net output in all major sectors was less than 1.5% of the total for
all republics.  About 40% of the population is engaged in agriculture
and forestry and 20% in industry and construction.  Much of its
territory is high mountains, from which it obtains minerals and
hydroelectric power, which are the foundation of its economy.
 
Since the country has little capacity for processing raw materials,
these are exported.  Agricultural products and exports include cotton,
fruits and vegetables, and silk.  Tajikistan imports consumer goods,
clothing textiles, and food from other republics.
 
Tajikistan encourages foreign investment to help rebuild its economy.
Its reform program aims to develop  small and medium enterprises, while
continuing state support for large enterprises.  A major effort will be
made to develop non-ferrous metallurgy.
 
Tajikistan is a member of the European Bank for Reconstruction and
Development.  In 1992, it became a member of the Economic Cooperation
Organization--an Islamic economic bloc linking six Islamic states of the
former U.S.S.R., and Afghanistan, Iran, Pakistan, and Turkey.  It is a
member of the International Monetary Fund and the World Bank.
 
Environmental issues
 
Tajikistan has not undertaken any significant environmental protection
programs.  (###)
 
 
Principal Government Officials
 
President:  Imomili Rakhmanov
Prime Minister:  Abdujalil Samadov
Minister of Foreign Affairs:  Rashid Alimov  (###)
 
 
 
 
Tajikistan at a Glance
 
Located in Central Asia, Tajikistan's neighbors are China, Afghanistan,
Uzbekistan, and Kyrgyzstan.  Pakistan is only 20 miles away and is
separated from Tajikistan by a narrow corridor of Afghanistan.  Tajiks
are ethnically Persian, unlike most of the Central Asians, who are
ethnically Turkic.
 
The capital, Dushanbe, was founded in 1922 on the site of the village of
Dush.  From 1929 to 1961, the city was known as Stalinabad.  Most Tajiks
live in rural qishlags of 200-700 homes.  In mountainous areas, qishlags
generally consist of 15-20 homes.
 
The Tajiks are descended from one of the most ancient settled societies
in Central Asia, and archaeological remains date back to at least 3000
BC.  Modern Tajik is related closely to the Farsi dialect spoken in Iran
and Afghanistan; there are about 4 million Tajiks in Tajikistan and
Uzbekistan, with another 4 million in Afghanistan.
 
In ancient times, the kingdoms of Bactria and Sogdiana were tributary
states of the Persian Empire.  In 329 BC, Alexander the Great conquered
the region, followed by Arab invaders in the 7th century AD, who
converted the people to Sunni Islam.  In the 10th century, Turkic
invaders replaced the Arabs.
 
Although other invasions followed--notably the Mongols in 1221--the
Tajiks developed an impressive culture.  The magnificent ruins at
Bukhara and Samarkand, today inside the bound-aries of Uzbekistan, are
products of Tajik culture, and the Tajiks have made notable
contributions to Persian literature since the 10th century AD.  In the
mid-15th century, Tajikistan was conquered by the nomadic Uzbeks and was
part of the emirate of Bukhara until Afghans conquered it in the mid-
18th century.
 
In the 1860s, Russia gained control of some Tajik territory. An attempt
after the 1917 revolution to absorb the country triggered the Basmachi
revolt in 1922.  Although the rebels operated in some parts of the
country until 1931, the area became a Soviet republic of the U.S.S.R. in
1929.  Despite Soviet rule, the Tajiks retained their Islamic heritage,
and the Soviet invasion of Afghanistan in 1980 caused much local unrest.
Tajikistan declared independence on September 9, 1991.
 
According to 1990 estimates, the population of Tajikistan is about 6
million comprised mostly of Tajiks (62%), Uzbeks (24%), and Russians
(8%). (###)
 
 
 
 
Turkmenistan
 
U.S.-Turkmenistan Relations
 
The dissolution of the Soviet Union in December 1991 brought an end to
the Cold War and created the opportunity to build bilateral relations
with the New Independent States (NIS) as they began a political and
economic transformation.  The United States opened an embassy in the
capital, Ashgabat, in March 1992.  The U.S. Ambassador to Turkmenistan
is Joseph S. Hulings III, who assumed the post on August 17, 1992.
 
In January 1992, the U.S. initiated the Coordinating Conference on
Assistance to the New Independent States in response to the humanitarian
emergencies facing these states.  The resulting Operation Provide Hope
provided desperately needed food, fuel, medicine, and shelter.
 
The cornerstone of the continuing U.S. partnership with Turkmenistan and
the other NIS is the Freedom for Russia and Emerging Eurasian
Democracies and Open Markets (FREEDOM) Support Act, enacted in October
1992, which directly addresses their military, political, and economic
transformation.  On September 30, 1993, a new $2.45-billion assistance
package for the NIS, funded with a combination of FY 1994 and 1993
supplemental appropriations, was passed by Congress and signed into law
by President Clinton.  It will continue to address political and
economic transformation and humanitarian needs.
 
Through December 1993, U.S. assistance provided to Turkmenistan has been
about $110 million in humanitarian assistance and $3 million in
technical assistance.  The focus of U.S. assistance is provision of
humanitarian assistance and support for Turkmenistan's transition to
democracy and to a market economy.
 
Humanitarian Assistance.
 
Through Operation Provide Hope, launched in February 1992, the U.S.
provided food worth about $626,000 and medicines, vaccines, and medical
supplies valued at $5.3.  Under the Medical Assistance Initiative,
Project HOPE--a private voluntary organization--has shipped about $3.3
million in medical assistance to Ashgabat and Tashauz.
 
Medicines worth $461,062 have been provided under the Emergency
Medicines Initiative.  The U.S. also funded the provision by the
American Red Cross, in cooperation with the American Hospital
Association, of medicines and medical supplies valued at about $4.5
million.  The American Red Cross also has contributed $500,000 to enable
local Red Crescent societies in Central Asia to increase regional
services.
 
Between October 1993 and March 1994, a U.S.-Japan immunization support
program provided Turkmenistan with vaccines, technical assistance,
syringes, and cold chain equipment valued at about $900,000.  An
immunization program for more than 500,000 infants in Central Asia,
including Turkmenistan, was completed.  It included donations of cold
chain equip- ment and supplies, follow-up technical assistance, and an
immunization policy workshop.
 
In FY 1994, the U.S. Department of Agriculture (USDA) is providing $10
million in concessional loans to the Government of Turkmenistan for the
purchase of agricultural commodities.  In addition, USDA has approved $5
million in export credit guarantees under the GSM-102 program.
 
Assistance To Support the Transition to a Market Economy.
 
The U.S. will provide $30 million in FY 1994 to support an enterprise
fund for Central Asia that will assist privatization.  Technical
assistance and training programs have been provided in market economy,
economics, agriculture and agribusiness, and maternal and child health.
The U.S. cooperates with Turkey on technical assistance projects in the
health field.  A hospital partnership was established in April 1993
between the Cleveland Clinic Foundation and the Medical Consultative
Center in Ashgabat.  Partial funding has been provided for a study on
upgrading an oil refinery and for a study of several telecommunications
projects.  The U.S. and Israel cooperate on the implementation of a
program for joint technical assistance and training in agricultural
development projects and cooperative scientific research.
 
Assistance To Support the Transition to Democracy.
 
Representatives from Turkmenistan have participated in programs in
building consensus for economic reform, municipal government, executive-
legislative relations, leadership and organizational skill development,
tolerance and pluralism, foreign policy process and diplomatic training,
independent media, and academic exchanges.  The Peace Corps is working
in Turkmenistan with a focus on English-language training.
 
Bilateral Trade Issues.
 
A trade agreement entered into force in October 1993.  The U.S. and
Turkmenistan are consulting on bilateral investment and tax treaties.
An Overseas Private Investment Corporation (OPIC) agreement, which will
encourage U.S. private investment by providing direct loans and loan
guarantees and by assisting with project-investor matching, entered into
force on June 26, 1992.
 
Military Issues.
 
Turkmenistan has accepted all relevant arms control obligations of the
former Soviet Union, and has pledged to accede to the nuclear Non-
Proliferation Treaty as a non-nuclear weapons state.  Under a bilateral
security arrangement with Russia, it will disband most of its existing
military forces.  It has no nuclear, biological, or chemical
capabilities.  Turkmenistan has expressed interest in the North Atlantic
Treaty Organization's Partnership for Peace  initiative.
 
Political Conditions
 
Turkmenistan declared independence on October 27, 1991, following a
referendum that received 94% support.  Saparmurad Niyazov, head of the
Communist Party since 1985 and President of the Republic of Turkmenistan
since the creation of the post in 1990, was elected President of the new
state in a direct election on June 21, 1992.  His term of  office
expires in 2002.  The parliament, also elected in 1990 under the
communist system, will remain in office until the next scheduled
elections in 1995.  The government is dominated by members of the former
Communist Party, which has been renamed the Democratic Party and is the
only registered political party.
 
The 1992 constitution declares Turkmenistan to be a secular democracy in
the form of a presidential republic.  It establishes the branches of
government as the Presidency, the National Assembly, the Cabinet of
Ministers, the Supreme Court, and the Supreme Economic Court.  The Halk
Maslahaty (People's Council) is an advisory body which includes these
groups plus 60 popularly elected members and local government officials.
It has some authority to ratify treaties.
 
The constitution vests a disproportionate share of power in the
presidency.  The president effectively makes all policy decisions,
appoints government officials, and determines which legislation will be
considered by the National Assembly.
 
The government publicly has stated its commitment to democratic and
economic reform and recognizes that progress in pursuing such reform is
necessary for successful relations with the West.  However, it is
concerned that democratic reforms may lead to political chaos and has
been moving very slowly to initiate change.  It maintains strict control
over opposition political parties and the media, rarely permitting
criticism of policy or officials.  Unregistered organizations, including
political parties, cannot hold demonstrations or meetings.
 
Although the constitution guarantees freedom of religion, religious
congregations are required to register with the government.  Turkmen are
primarily Muslim.  In an effort to foster a renewed sense of
nationalism, the government has tended to favor ethnic Turkmen,
especially in employment practices.  The constitution designates Turkmen
as the official language, while also guaranteeing use of other
languages.  While Islam did not play an important role during the Soviet
era, the revival of Turkmen nationalism is linked to a resurgence of
Islam.
 
The court system includes a Supreme Court, provincial courts,  district
and city courts, and a Supreme Economic Court, which decides cases
between state economic concerns and ministries.  The president appoints
all judges for a term of five years without legislative review, except
the Chairman of the Supreme Court, and has sole authority to remove
them.   The new constitution, adopted in 1992, theoretically established
judicial independence; in effect, the judiciary is subordinate to the
president.
 
Travel within the country and the former Soviet Union generally is
unhindered but the government has restricted movement by political
critics to prevent the dissemination of unfavorable commentary.  Travel
outside the area of the NIS requires an exit visa.
 
The Committee on National Security (KNB) assumed the responsibilities of
the former Soviet Committee for State Security; its personnel and
operations remain the same.
 
Turkmenistan's Federation of Trade Unions is inherited from the Soviet
era.  The right to collective bargaining is not protected by law.  The
Ministry for Economics and Finance prepares general guidelines for wages
and sets wages in health care and the arts.  Annual negotiations between
the trade union and management determine wages and benefits for each
enterprise, but the workers' ability to bargain is limited.
 
The government recently concluded an accord with Russia, agreeing to
cooperate on military and security issues and to place most of the
Turkmen armed forces under unified command.
 
Foreign Relations
 
On December 21, 1991, Turkmenistan became a member of the Commonwealth
of Independent States (CIS).  On January 22, 1993, Turkmenistan refused
to endorse a draft CIS charter creating closer political and economic
ties among members.  President Niyazov has argued against greater
integration of CIS members and the establishment of a CIS coordinating
role.
 
Turkmenistan also is a member of the United Nations, the Conference on
Security and Cooperation in Europe, and the North Atlantic Cooperation
Council.
 
Economic Outlook
 
The government has moved slowly on economic reform, limiting
privatization efforts and reserving 80% of oil, natural gas, minerals,
and most of agriculture for state ownership.  A series of laws on
foreign investment, banking, property ownership, and intellectual
property rights were passed in 1992 but these have not translated into
significant support for economic reform.  The issuance of its
independent currency in 1993, the manat, has increased the need for the
government to move decisively on controlling government spending,
promoting foreign investment, and instituting a number of other long-
awaited reforms.
 
Turkmenistan is largely desert and has the second-smallest population in
the CIS.  Irrigation--in particular the Karakum Canal--allows
cultivation of a significant amount of cotton.  Other major products are
wool, grapes, and vegetable oil.  It produces much natural gas and is
mostly self-sufficient in energy; the gas field of Sovetabad is today a
major source.  The country produces 5% of the natural gas in the
Commonwealth and 1% of its oil.  Western Turkmenistan has fisheries and
fish processing (beluga sturgeon, prized for caviar, is found in the
Caspian region) and chemical and mining industries.  The country is one
of the least industrialized in the Commonwealth; less than 10% of its
labor force is engaged in industry, and it imports large quantities of
food, clothing, and consumer goods.
 
Turkmenistan is a member of the International Monetary Fund, the World
Bank, and the European Bank for Reconstruction and Development.  In
1992, it became a founding member of the Economic Cooperation
Organization--an Islamic economic bloc which includes six Islamic states
of the former U.S.S.R. and Afghanistan, Iran, Pakistan, and Turkey.
 
Environmental Issues
 
While Turkmenistan has one of the most highly developed systems of
nature preserves of the Central Asian states, it also has one of the
most serious environmental problems.  Continued development of the
Karakum Canal exacerbates existing water pollution, pesticide residue,
and water-table problems in the region.  The resulting ecological
devastation is contaminating the Aral Sea and the surrounding area,
creating a dry seabed which has become a source of toxic windstorms and
is endangering the local population.
 
Principal Government Officials
 
President and Prime Minister:  Saparmurad Niyazov
Minister of Foreign Affairs:  Khalikberdi Atayev  (###)
 
 
 
Turkmenistan at a Glance
 
Located in Central Asia, Turkmenistan extends from the Caspian Sea on
the west to Uzbekistan and the Amu Darya River on the east.  Bordered on
the north by Kazakhstan and on the south by Afghanistan and Iran, it is
the southern-most of the former Soviet republics.  Primarily desert,
Turkmenistan has an arid climate and extreme temperature fluctuations.
The capital and largest city, Ashgabat, is in the south at the foot of
the Kopet Dag mountains, which rise along the border with Iran.  The
population is concentrated there and in the Amu Darya Valley in the
northeast.  Ashgabat was founded in 1881 as a fortress.
 
Most Turkmens are Sunni Muslims.  Their society is patrilinear, with
extended families made up of parents, unmarried children, and married
sons.  Many women in Turkmenistan weave woolen carpets which feature
distinctive colors and patterns.
 
Aside from the Turkmens (72% of the population), there are Uzbeks (9%),
Russians (9%), and Kazakhs.  From 1979 to 1989, the Turkmen population
grew at 3.5% annually; the Russian population decreased by 3%.  Forty
percent of Turkmenistan's people speak Russian fluently; 75% speak
Turkmen, which is the official language.  The country is 488,000 square
kilometers.  The 1990 population was 3.6 million, just more than 1% of
the Commonwealth's population.
 
The origin of the Turkmens is uncertain, but they were known to be
pastoral and nomadic until their conquest by czarist Russia in the 19th
century.  The Turkmen Soviet Socialist Republic was established in 1924.
Turkmenistan declared its independence on October 27, 1991.(###)
 
 
 
 
Uzbekistan
 
U.S.-Uzbekistan Relations
 
The dissolution of the Soviet Union in December 1991 brought an end to
the Cold War and created the opportunity to build bilateral relations
with the New Independent States (NIS) as they began a political and
economic transformation.  The U.S. recognized the independence of
Uzbekistan on December 25, 1991, and opened an embassy in the capital,
Tashkent, in March 1992.  The U.S. Ambassador is Henry Lee Clarke, who
assumed the post on August 24, 1992.
 
In January 1992, the U.S. initiated the Coordinating Conference on
Assistance to the New Independent States in response to the humanitarian
emergencies facing these states.  The resulting Operation Provide Hope
provided desperately needed food, fuel, medicine, and shelter.
 
The cornerstone of the continuing partnership with Uzbekistan and the
other NIS is the Freedom for Russia and Emerging Eurasian Democracies
and Open Markets (FREEDOM) Support Act, enacted in October 1992, which
directly addresses their military, political, and economic
transformation.  On September 30, 1993, a new $2.45-billion assistance
package for the NIS, funded with a combination of FY 1994 and 1993
supplemental appropriations, was passed by Congress and signed into law
by President Clinton.  It will continue to address political and
economic transformation and humanitarian needs.
 
Through December 1993, the U.S. has provided about $17 million in
humanitarian assistance and $13 million in technical assistance to
Uzbekistan.  The focus of U.S. assistance is support for its transition
to democracy and to a market economy and provision of humanitarian
assistance.
 
Humanitarian Assistance.
 
Through Operation Provide Hope, launched in February 1992, the U.S.
delivered food valued at more than $500,000 and medicines, vaccines, and
medical supplies valued at $5.5 million to Uzbekistan to meet critical
emergency needs.  Medicines worth more than $500,000 have been delivered
under the Emergency Medicines  Initiative.  The American Red Cross has
received $500,000 to enable local Red Crescent societies in the Central
Asian republics to increase regional services.  The U.S. also completed
a program to immunize more than 500,000 infants in four states of
Central Asia, including Uzbekistan.  Cold chain equipment and other
supplies were donated, as well as follow-up technical assistance and
workshops on cold chain equipment and immunization policy.  Under the
Medical Assistance Initiative, administered by Project HOPE--a private
voluntary organization--$4.8 million in medical assistance has been
provided.  In response to an explosion at an oil well in spring 1992,
the U.S. airlifted fire-fighting equipment to Tashkent.
 
In FY 1994, the U.S. Department of Agriculture is providing about $4.2
million in food aid, distributed by a U.S. private voluntary
organization to vulnerable groups in Uzbekistan.
 
Assistance To Support the Transition to a Market Economy.
 
The U.S. will provide $30 million in FY 1994 to support an enterprise
fund for Central Asia that will assist privatization.  Technical
assistance and training programs have been provided in the fields of
privatization, market economy, entrepreneurship and small business
development, the U.S. state and federal tax system, financial
consultations, tax policy and economic advisement, agribusiness and
agricultural development, training and research, labor and management
relations, international trade and investment, environmental health,
maternal and child health, and medical information systems.  A hospital
partnership program between the University of Illinois Hospital and
Tashmen Medical Institute No. 2 was established in December 1992.  The
Peace Corps is working in Uzbekistan with a focus on English-language
training.
 
Assistance To Support the Transition to Democracy.
 
Technical assistance and training programs have been provided on rule of
law, review and assessment of the constitution, election law and
criminal law, law enforcement training, foreign policy, diplomacy,
tolerance and pluralism, leadership and organizational skills, building
a political consensus for economic reform, independent media, English-
language training, the U.S. educational system, university
administration, and academic exchanges.
 
Bilateral Trade Relations.
 
An Overseas Private Investment Corporation agreement with Uzbekistan,
which  encourages U.S. private investment by providing direct loans and
loan guarantees and by assisting with project-investor matching, entered
into force on October 28, 1992.  A trade agreement guaranteeing
reciprocal most-favored status to the products of each country was
signed on November 5, 1993, and entered into force on January 13, 1994.
On March 1, 1994, a bilateral assistance agreement and an open lands
agreement were signed.  A bilateral investment treaty and a treaty for
the avoidance of double taxation are under discussion.  The U.S. Export-
Import Bank has made available short-term financing insurance for U.S.
investments to assist businesses to export goods and services to
Uzbekistan.  It also made the first preliminary commitment based on
sovereign risk in the NIS to Uzbekistan.
 
Military Issues.
 
Uzbekistan has accepted relevant arms control obligations of the former
Soviet Union.  It has acceded to the nuclear Non-Proliferation Treaty as
a non-nuclear weapons state.  It is organizing the Uzbek National Army,
a force of about 35,000.
 
Political Conditions
 
Uzbekistan declared its independence on August 31, 1991.  Islam Karimov,
the First Secretary of the Communist Party under Soviet rule, was
elected President of the Republic of Uzbekistan in December 1991.  He
and the highly centralized executive branch dominate the political
scene.  Despite the government's official goal of creating a multi-party
democracy, little progress has been made in Uzbekistan's transition from
Soviet authoritarianism toward a more pluralistic democracy.  The
People's Democratic Party of Uzbekistan (PDP),  successor to the
Communist Party, remains the dominant party.   Its members include the
majority of the Supreme Soviet, elected in February 1990 for five-year
terms.  Only one other party, the Fatherland Progress Party, legally
exists in Uzbekistan.  An adviser to President Karimov created this
party, apparently to give some semblance of a multi-party system.
 
To control the political arena, political parties, like all other social
groups, are required to officially register with the government.  It
denied registration to some political groups and other associations and
has required groups that were already registered to re-register,
effectively closing down the Erk (Freedom) and Birlik (Unity) parties,
the most serious opposition groups.
 
Compared to the Soviet era, Uzbekistan has made some progress in passing
progressive legislation.  In December 1992, parliament adopted a new
constitution establishing specific rights for individuals and groups and
enacted legislation defining citizenship and minority rights and
protecting religious freedom.  The new constitution also prohibits
censorship.
 
New legislation gives workers the right to create and join trade unions
and declares all unions independent of the state's administrative and
economic bodies.  These new laws eliminate the union's role in state
planning and in enterprise management, emphasize their responsibility
for "social protection," and empower unions to bargain collectively but
not to strike.
 
Despite the new legislation, the security services remain instruments
for maintaining government control over society and are responsible for
various human rights abuses.  In fact, security forces moved government
observance of human rights backward in 1993 compared to 1992.  Security
forces suppressed opposition political parties and movements by
frequently detaining or arresting opposition activists on trumped-up
charges.  In 1993, the government tried two political dissidents on
charges of insulting the President's honor.  Although both trials ended
in guilty verdicts, the defendants were released under presidential
amnesty.
 
The government prohibits unsanctioned public meetings and bans
demonstrations.  Although expressly prohibited by the constitution,
press censorship continues.  In March 1994, security forces arrested
eight Erk members and charged them with distributing anti-government
literature.  The atmosphere of repression reduces freedom of expression
and makes it increasingly difficult to criticize the government.
 
Foreign Relations
 
Uzbekistan is a member of the Commonwealth of Independent States and a
supporter of close political and economic ties among its members.  It
also is a member of the United Nations, the North Atlantic Cooperation
Council, and the Conference on Security and Cooperation in Europe
(CSCE).  In early 1994, the U.S. successfully encouraged Uzbekistan to
assign a permanent representative to the CSCE in Vienna and to open a
human rights dialogue in the CSCE to help improve its performance in
this area.
 
Uzbekistan supports regional and international efforts to resolve the
conflict in Tajikistan.  It has agreed to participate in a peace-keeping
force.
 
Economic Outlook
 
Uzbekistan is committed to a gradual transition to a market economy in
order to avoid social disruption.  In November 1993, after Russia
expelled it from the ruble zone, Uzbekistan issued the "som" coupon as
an interim currency until conversion to a permanent currency later in
1994.  Monetary financing of a government deficit resulting from
continued subsidies of energy products, basic consumer goods, and state
firms has fueled high rates of inflation.
 
Uzbekistan is the most populous of the Central Asian states and Uzbeks
are the third-largest ethnic group in the former Soviet Union after
Russians and Ukrainians.  It is the world's fourth-largest producer of
cotton and has developed a chemical industry based on the by-products of
cotton processing.  Its economy has suffered from an over-dependence on
cotton production and from the effects of severe environmental damage
near the Aral Sea.
 
Uzbekistan produces significant amounts of natural gas and is expanding
its oil and gas sector.  It also is an important region for raising
cattle, sheep, and silkworms and has large reserves of gold, copper,
lead, zinc, and tungsten.  A significant uranium producer in the NIS,
Uzbekistan suspended exports to the U.S. in 1992 in the face of a
dumping suit brought by U.S. uranium companies.  It may be allowed
limited uranium exports in the future.  Uzbekistan depends on nearby
states for virtually all industrial and some food products.
 
With its rich and diverse natural resource base, the Government of
Uzbekistan has high hopes for foreign investment and joint ventures.
The government has announced a number of reform measures to attract
foreign investment but continues to control international trade through
strict regulation of import and export licensing.
 
Although the government maintains control of the majority of large
enterprises in key sectors of its economy, it has begun to promote
privatization.  A privatization committee established in October 1992
has made progress in privatizing small businesses in the retail,
services, and light industry sectors.  Privatization also has continued
apace in the real estate sector, with nearly all single- family housing
now in private hands.  In early 1994, the Uzbekistan Government
successfully concluded the first two in a series of privatization
auctions designed to transfer state corporations to the private sector.
 
Uzbekistan is a member of the International Monetary Fund, the World
Bank, and the European Bank for Reconstruction and Development.  The
Government of Uzbekistan became a signatory to the Convention on
Settlement of Investment Disputes Between States and Nationals of Other
States in March 1994.  In 1992, it joined the Economic Cooperation
Organization--an Islamic economic bloc which includes six Islamic states
of the former U.S.S.R. and Afghanistan, Iran, Pakistan, and Turkey.
 
Environmental Issues
 
Uzbekistan has participated in conferences on regional environmental
issues and has proposed the creation of a Central Asian organization to
resolve environmental problems of the Aral Sea.  It has established the
Fund for Ecology and Health of Uzbekistan, which is designed to increase
public consciousness and understanding of environmental problems, a
Ministry of Energy and Electricity, and a Ministry of Minerals and Water
Resources.  On April 20, 1994, the Government of Uzbekistan signed a
memorandum of understanding with the U.S. for a USAID-sponsored Aral Sea
project covering potable water and environmental education.
 
The country suffers serious environmental problems as a result of its
cotton monoculture, which caused agri-chemical pollution, and it is
actively seeking additional international assistance to address this
issue.
 
Principal Government Officials
 
President:  Islam Karimov
Prime Minister:  Abdulhashim Mutalov
Foreign Minister:  Saidmukhtar Saidkasimov  (###)
 
 
 
 
Uzbekistan at a Glance
 
Located in the heart of Central Asia between the Amu Darya and Syr Darya
Rivers, Uzbekistan long has been a center of Muslim culture.  Conquered
by Muslim Arabs in the 7th century AD, its territory was overrun by the
Mongols in 1220.  In later centuries, separate Muslim city-states with
strong ties to Persia emerged.  Russian trade with Uzbekistan grew
during the 16th and 17th centuries, and in 1865, Russia occupied
Tashkent.
 
By the end of the 19th century, all the territory that constitutes the
present Central Asian republics had been brought under Russian rule.
Rivalry between Russia and Britain was contained by having Afghanistan
as an independent buffer state and by agreeing that East Turkestan was
under Chinese control.  The Russians destroyed the Khanate of Kokand,
but left the Khanates of Khiva and Bukhara under native emirs as
protectorates.  Russia placed the rest of Central Asia under colonial
administration, invested modestly in development of infrastructure,
promoted cotton growing, and encouraged settlement of Russian colonists.
 
In 1924, following the establishment of Soviet power, the Soviet
Socialist Republic of Uzbekistan was founded from the territories of the
Khanates of Bukhara and Khiva and portions of the Fergana Valley that
had constituted the Khanate of Kokand until the Russian conquest in
1867, when they were included in the Governorate-General of Turkestan.
The Uzbek nationality was consolidated out of the core Muslim Turkic
urban and settled agricultural population that had previously been
called "Turkestani" or "Sart."  Uzbekistan declared its independence on
August 31, 1991.
 
According to 1992 estimates, the population of Uzbekistan is 21.5
million.  Its territory is 477,000 square kilometers.  (###)
 
 
 
 
ARTICLE 5:
 
Fact Sheet:  Georgia
 
U.S.-Georgia Relations
 
The dissolution of the Soviet Union in December 1991 brought an end to
the Cold War and created the opportunity to build bilateral relations
with the New Independent States (NIS) as they began a political and
economic transformation.  The U.S. recognized the independence of
Georgia on December 25, 1991, and opened an embassy in the capital,
Tbilisi, in April 1992.  The U.S. Ambassador to Georgia is Kent N.
Brown, who assumed the post on August 14, 1992.
 
In January 1992, the U.S. initiated the Coordinating Conference on
Assistance to the New Independent States  in response to the
humanitarian emergencies facing these states.  The resulting Operation
Provide Hope provided desperately needed food, fuel, medicine, and
shelter.
 
The cornerstone of the continuing U.S. partnership with Georgia and the
other NIS is the Freedom for Russia and Emerging Eurasian Democracies
and Open Markets (FREEDOM) Support Act, enacted in October 1992, which
directly addresses their military, political, and economic
transformation.  On September 30, 1993, a new $2.45-billion assistance
package for the NIS, funded with a combination of fiscal year (FY) 1994
and 1993 supplemental appropriations, was passed by Congress and signed
into law by President Clinton.  It will continue to address political
and economic transformation and humanitarian needs.
 
Through December 1993, the U.S. has provided about $268 million in
humanitarian assistance and $11 million in technical assistance to
Georgia.  The focus of U.S. assistance is provision of humanitarian
assistance and support for Georgia's transition to democracy and to a
market economy.
 
Humanitarian Assistance.
 
The U.S. began planning an emergency winter assistance program for
Georgia in spring 1993.  Following Chairman Shevardnadze's appeal to
leaders of the Group of Seven industrialized nations in July 1993,
additional assistance was programmed to meet the needs of displaced
persons fleeing the fighting in Abkhazia.  In response to these
emergencies, the U.S.:
 
--   Dispatched 19 emergency flights to Tbilisi from October to December
1993, delivering more than $10 million in food, medicines, and medical
supplies;
 
--  Dispatched a team of experts to Tbilisi in December 1993 to address
the public health problems resulting from the failing water and sewer
systems;
 
--   Dispatched a team of energy experts to Tbilisi in December 1993 to
assist the Government of Georgia in developing a contingency plan for
dealing with possible energy shortfalls during the winter;
 
--  Provided $3.2 million for American private voluntary organizations
to assist the most vulnerable groups in Georgia with food, fuel,
blankets, and medicines during the coming winter;
 
--  Contributed $1 million each to the International Committee of the
Red Cross and the UN High Commissioner for Refugees to meet the
immediate needs of displaced persons fleeing Abkhazia;
 
--  Contributed $1.6 million to the UN World Food Program (WFP) to help
resolve continuing transportation problems that have delayed the
delivery of urgently needed food assistance to all the countries of the
Caucasus region;
 
--  Pledged $300,000 worth of butter oil and transport costs toward the
UN World  Food Program Appeal for Georgia;
 
--  Provided $500,000 to WFP for the transportation of food parcels to
newly displaced persons; and
 
--  Made available $25,000 for the immediate purchase and delivery of
blankets and locally produced food following the September 1993
declaration of a state of disaster by the U.S. Ambassador to Georgia.
 
The U.S. also provided transportation for the delivery of donated fuel
to meet energy shortages and a recent delivery of medicines and
blankets.
 
Operation Provide Hope, launched in February 1992, has delivered food
valued at $1 million and medical supplies and equipment valued at $12.9
million to Georgia to meet emergency needs.  Under the Medical
Assistance Initiative, Project HOPE--a private voluntary organization--
has delivered about $9.7 million in humanitarian aid.  The most recent
delivery, in April 1994, was valued at about $1 million.  An additional
delivery valued at about $1 million is planned for mid-May 1994.  Under
the Emergency Medicines Initiative, $2.5 million in primarily insulin,
anesthesia, and medical supplies have been delivered.  The U.S. made
available about $1-million worth of vials of insulin and syringes in
response to a request for insulin.  The U.S. provided two hospitals in
Tbilisi with components of a Department of Defense trauma hospital
valued at $15 million.  Between October 1993 and March 1994, a U.S.-
Japan immunization program provided Georgia with vaccines, technical
assistance, syringes, and cold chain equipment valued at more than $1
million.
 
In FY 1994, the U.S. Department of Agriculture is providing about
136,000 metric tons of food aid valued at about $38 million.  The U.S.
Agency for International Development expects to provide an additional
$10 million in food aid specially targeted to the nutritional needs of
children and pregnant and post-partum women.
 
Assistance To Support the Transition to a Market Economy.
 
Technical assistance and training has been provided in macroeconomics,
entrepreneurship, small business, democracy and the market economy,
promotion of agricultural development, agribusiness, labor management
relations, international trade and investment, and vaccine assessments.
A medical partnership has been established between several medical
institutions in Atlanta, Georgia, and a hospital in Tbilisi.
 
Assistance To Support the Transition to Democracy.
 
Technical assistance and training programs have been provided in
regional security issues and global objectives, foreign policy,
diplomacy, grassroots democracy, tolerance and pluralism, rule of law,
public administration, telecommunications, independent media, English-
language training, university administration, and leadership and
community development.  Georgians have participated in higher-education
exchange programs in the U.S.
 
Bilateral Trade Relations.
 
A  trade agreement granting reciprocal most-favored-nation status to the
products of each country was signed on March 1, 1993, and came into
force on August 13, 1993.  An Overseas Private Investment Corporation
agreement entered into force on June 27, 1992.  On March 7, 1994, the
U.S. and Georgia signed a bilateral investment treaty.  The Export-
Import Bank does not have operations in Georgia.
 
Military Issues.
 
Following ratification by Georgia and seven other NIS, the Conventional
Armed Forces in Europe Treaty entered into force on November 9, 1992.
The treaty establishes comprehensive limits on key categories of
military equipment, such as tanks, artillery, armored combat vehicles,
combat aircraft, and combat helicopters and provides for the destruction
of weaponry in excess of those limits.
 
Georgia does not have nuclear, chemical, or biological weapons.  The
government is negotiating with Russia regarding the disposition of
weapons and military facilities of the former Soviet Union located on
its territory.  On March 7, 1994, Georgia acceded to the nuclear Non-
Proliferation Treaty as a non-nuclear weapons state.  On March 23, 1994,
it joined the North Atlantic Treaty Organization's Partnership for Peace
initiative.
 
Political Conditions
 
Georgia declared its independence on August 23, 1991.  In January 1992,
Zviad Gamsakhurdia, popularly elected president in 1991, was overthrown
by opponents of his increasingly dictatorial regime.  A military council
of insurrection leaders assumed power and imposed a state of emergency.
In March 1992,  former First Secretary of the Georgian Communist Party
Eduard Shevardnadze returned to Georgia to head--with both executive and
legislative authority--the four-person State Council, which replaced the
military council.  The State Council pledged to restore democratic
institutions, lifted restrictions on freedom of the press, and committed
itself to holding parliamentary elections.
 
On October 11, 1992, voters elected a new parliament, with Eduard
Shevardnadze as chairman.  The parliament passed legislation making
Shevardnadze head of state and expanding its authority to review the
work of government ministers.  Georgia has not yet adopted a new
constitution with a formal distribution of powers.
 
Freedom of religion and for internal and foreign travel is unrestricted.
Freedom of speech and press is limited.  The practice of self-censorship
is widespread, with the continuing "crisis situation" cited as cause for
avoiding criticism of government policies.  The right to peaceful
assembly also is limited.  Demonstrations were banned until June 1992,
when the State Council passed legislation requiring registration with
local authorities prior to an event.  Supporters of former President
Gamsakhurdia refused to comply with regulations and were dispersed by
force.
 
Employees have the right to form or join trade unions.  A confederation
of independent trade unions has replaced the centralized Soviet system.
Wages still are established primarily by the state.
 
Progress toward democracy has been slowed by continued unrest among
Ossetian and Abkhazian minorities and by past challenges to Tbilisi's
control by supporters of the late Gamsakhurdia.  In 1990, South Ossetia
declared independence from Georgia with the aim of uniting with North
Ossetia (part of Russia).  In response to South Ossetia's efforts to
secure independence, Georgia revoked its status as an autonomous
province.  Armed conflict abated with the signing of an accord in June
1992 establishing a cease-fire and a tripartite (Russian, Georgian, and
Ossetian) peace-keeping force in the region.  Although the cease-fire
essentially has been observed, isolated acts of violence continue.
 
In the autonomous region of Abkhazia, political tensions resulted in a
resolution by the Abkhazian minority of the regional parliament, which
restored the constitution of 1925 under which Abkhazia was a separate
republic of the Soviet Union.  In effect, this meant it seceded from
Georgia.  The Georgian State Council ruled the resolution null and void.
Following the August 1992 kidnaping of 11 Georgian officials by
supporters of former President Gamsakhurdia, the government dispatched
an armed force, allegedly with the concurrence of local authorities, on
the grounds that the officials were being held in Abkhazia. Hostilities
erupted when Abkhazian guards clashed with Georgian forces.
 
On August 27, 1992, Foreign Minister Chikvaidze appealed to the
Conference on Security and Cooperation in Europe for a fact-finding
mission.  At a meeting  in Moscow on September 3, 1992, an agreement was
signed committing the parties to negotiate for a peaceful resolution of
the dispute.  In October 1992, the UN Security Council approved a UN
observer mission to assist in achieving a settlement.  On November 13,
1992, UN Secretary General Boutros-Ghali urged UN Security Council
members to exert pressure on Georgia and Abkhazia to establish a cease-
fire and resume peace negotiations in keeping with the September
agreement.
 
On December 13, 1992, Georgian and Abkhaz leaders signed a cease-fire
agreement to withdraw heavy weapons from all areas of conflict.  This
effort and another cease-fire (which went into effect on May 20, 1993)
were unsuccessful.  On July 27, 1993, a comprehensive cease-fire
agreement, brokered by the Russian Federation, was signed by
representatives of Georgia, Abkhazia, and Russia.
 
By September 14, 1993, the political and economic situation in Georgia
had so deteriorated that Chairman Shevardnadze resigned in protest at
parliament's having blocked his choice of ministerial appointees.  Two
days later, he accepted parliament's request that he return to office.
The conditions for his return included a two-month suspension of
parliament and authority for Shevardnadze to rule by decree temporarily.
 
On September 16, 1993, the Abkhaz separatists broke the July cease-fire
and attacked the regional capital of Sukhumi.  The uneven implementation
of the cease-fire conditions gave the Abkhaz separatists a clear
military advantage, which they used in the offensive.  Volunteer Russian
Federation combatants reportedly participated in far greater number than
Abkhazians.  The city fell on September 27, 1993.
 
The separatist forces committed widespread atrocities against the
Georgian civilian population, a minority in the Abkhaz region.  The
separatists then systematically drove ethnic Georgians from Abkhazia,
forcing at least 150,000 to leave during the next month.
 
With UN assistance, the Abkhaz and Georgians signed a cease-fire
agreement in December 1993; in January 1994, they renewed that pledge
not to use force.  Neither of these agreements held.  Violence escalated
in early February 1994, prior to resumption of UN-sponsored
negotiations.  Local Georgian fighters occasionally raided across the de
facto Abkhaz-Georgia border and skirmished with Abkhaz troops.  Local
Svanetian Georgians in the mountains of southeastern Abkhazia defended
their positions until the Abkhaz intensified their military effort
against them in late March, including use of artillery.
 
As of  early April 1994, fighting continued in the mountain area, along
with skirmishing on the Abkhaz border with the rest of Georgia.  Three
rounds of peace negotiations, which resumed in late November 1993 under
the aegis of the UN, have not resolved the basic underlying political
issues which divide the Georgians and Abkhazians.
 
Foreign Relations
 
Georgia is a member of the United Nations, the Conference on Security
and Cooperation in Europe, the North Atlantic Cooperation Council, and
the Commonwealth of Independent States.
 
Economic Conditions
 
For three years, the Georgian economy has been in a decline precipitated
by the breakup of the Soviet Union and exacerbated by civil conflict.
Georgia had depended on other former Soviet republics for most of its
raw materials and energy supplies.  After falling by 60% in 1991-92, net
material product continued to decline sharply in 1993.  Georgia
introduced a coupon currency in April 1993 and left the ruble zone in
July 1993.  The coupon rapidly lost value due to expansionary monetary
and fiscal policies.  In 1992, the Georgian Government enacted wide-
ranging reforms--price liberalization, tax reform, and privatization--
but these slowed in 1993 as the government focused on its political
difficulties.
 
Georgia is densely populated and is fairly heterogeneous (about 70% of
the population are Georgians).  It produces crops not grown in other
former Soviet republics, such as tea and citrus fruits.  Numerous rivers
provide water for irrigation and hydroelectric power.  It has a well-
developed industrial base, and a diversified and mechanized agriculture.
The private sector produces a large percentage of its agricultural
output.  Products include iron, steel, and manganese and cotton, silk,
and woolen fabrics.  Bamboo, tung oil, eucalyptus, tobacco, and citrus
fruits are produced near the Black Sea.  Vineyards in the eastern region
produce wines that are exported to Europe and America.
 
Georgia is a member of the International Monetary Fund and the World
Bank.  It is not a member of the General Agreement on Tariffs and Trade.
Its application for membership in the European Bank for Reconstruction
and Development is under review.
 
Environmental Issues
 
Georgia has established a Ministry of Environment and introduced a
pollution fee system which taxes air and water pollution emissions and
solid waste disposal and channels resulting revenues to environmental
protection activities.  It has expressed interest in regional and
international cooperation on environmental issues.
 
Principal Government Officials
 
Chairman of Parliament:Eduard Shevardnadze
Prime Minister:  Otar Patsatsia
Foreign Minister:Alexander Chikvaidze   (###)
 
 
 
 
Georgia at a Glance
 
Located in the Caucasus Mountains on the southeastern shores of the
Black Sea, Georgia is one of the smallest of the former Soviet
republics.  The area became part of the Roman Empire by 65 BC, and
Georgia converted to Christianity in the 4th century AD.
 
For the next 3 centuries, it was involved in the conflicts between the
Byzantine and Persian Empires.  After AD 654, Arab caliphs established
an emirate in Tiflis (Tbilisi).  In the early 11th century, King Bagrat
united all the principalities of eastern and western Georgia into one
state.
 
Under Queen Tamara (1184-1213), Georgia reached its zenith of power; its
realm stretched from Azerbaijan on the east to Circassia to the
northwest, forming a pan-Caucasian empire.  From 1220 onward, Mongols
and others invaded the area and took control of the eastern region.  The
fall of Constantinople to the Ottoman Turks in 1453 further isolated
Georgia from Western Christendom, and the next three centuries witnessed
repeated invasions by the Turks and Persians, leading to the partition
of the country between Turkish sultans and Persian shahs.  A few
outstanding rulers, such as Vakhtang VI (1711-24), kept the national
spirit alive.
 
In 1801, Czar Alexander I annexed Georgia to the Russian empire,
ensuring a measure of order and stability.  Georgians played a vital
role in the 1917 revolution, and, after the overthrow of Alexander
Kerensky, an independent Menshevik government was set up in Georgia
under the presidency of Noe Zhordania.  The Red Army crushed that
government in 1921.  From 1922 to 1936, Georgia, with Armenia and
Azerbaijan, formed the Trans-caucasian Soviet Socialist Republic.  The
Soviet constitution of 1936, however, dissolved that federation and
established the Georgian Soviet Socialist Republic.  Georgia declared
its independence on August 23, 1991.
 
The territory of Georgia is 70,000 square kilometers.  According to 1991
estimates, the population of Georgia is 5.5 million.  Two-thirds of the
people are Georgians; minorities include Armenians, Russians, and
Azerbaijanis.  (###)
 
END OF DISPATCH VOL 5, NO 19

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