Trouble & Attitude 1/Trouble and Attitude - Issue 01.iso/pc/pctext/ewrepa2.txt

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NEPAL. The snap elections called by Prime
Minister G. P. Koirala led to emergence of the
Communist Party of Nepal (CPN) and its electoral
front, United Marxist-Leninists (UML), as the
largest political party in this Himalayan country.
In second place is Koirala's Nepali Congress Party
(NCP), followed by the Rashtriya Prajatantra
Party (RPP). The CPN/UML is expected to con-
tinue trying to form a governing coalition and
elected Manmohan Adhikari as leader of the
parliamentary CPN/UML. He stated his determi-
nation to form a minority government if neither
the NCP nor the RPP respond positively to his
invitation to join a coalition government.

PAKISTAN. In the latest round of religious
extremism between Sunni and Shi'a Muslims, two
masked men drove up to a Sunni mosque last

Saturday as 50 members of the congregation were
preparing for afternoon prayers and threw a
Russian-made grenade into their midst, killing
two and critically wounding seven others among a
total of 20 victims. Sunnis blamed an extremist
Shi'a group for the attack and interpreted it as
revenge for an attack by Sunni militants on a bus
the previous day in which seven Shi'a were killed
and 14 others wounded near the town of Jhelum
in Punjab. The Shi'a were returning from a
meeting in Lahore called by a radical Shi'ite
organization.


▀PALAU. In October, this mid-Pacific archipe-
lago 500 miles southeast of the Philippines with a
mere 13,000 indigenous inhabitants received for-
mal independence. It came after three decades of
Japanese occupation followed by a half century of
U.S. occupation and trusteeship that left the
islanders highly Americanized. The 14 tumultu-
ous years of bargaining included the assassination
of one president, the suicide of a second and
eight separate plebiscites before the Palauans
agreed to accept the U.S.-drafted Compact of
Free Association that gives Washington exclusive
military access to its waters, a right to operate
two military bases there for a half century and to
be responsible for Palau's defense.

Palau imports 80 percent of its food and con-
sumer goods, mainly from the United States.
Over the next 15 years, Palau will receive $450
million in U.S. aid. But after 2009, the aid will
drop off sharply. The government of President
Kuniwo Nakumura must decide how to control the
influx of immigrant labor from the Philippines
and other countries that depress wages and how to
achieve economic independence and the support-
ing infrastructure before the money runs out.


▀TAIWAN. The shelling of China's Mainland
by Taiwanese military forces stationed on Little
Quemoy, part of an island group off the southern
coast of Fujian opposite Xiamen, was described as
an accident by Taipei's Defense Ministry, which
apologized to Beijing for the shelling that injured
four villagers near Xiamen and said it would pay
compensation. Some skeptical Asian diplomats
suggest the incident may have been an effort to
send a message of determination to Beijing by
sectors of Taiwan's military alarmed that relations
are developing too quickly.

The incident served to focus Beijing's attention
on Taiwan's overall military strength - and to the
fact that on the Tung Ying islands near Matsu,
another island, Taipei has stationed surface-to-
surface missiles with a range of 125 miles, placing
most of this coastal province within range. Assis-
tant Secretary of State Winston Lord says Taiwan
will be allowed to buy defensive military equip-
ment worth more than $560 million. Beijing still
presses for annulment of the U.S. Taiwan Rela-
tions Act,which it sees as violating the 1982
U.S.-PRC Joint Communiqué and for all govern-
ments to break relations with Taiwan, with the
Vatican the latest to feel such pressure.
last year's moderate earthquake. ▄


The Mafia Wins



The American public is still probably unaware
that a major U.N. conference on crime took place
in the southern Italian city of Naples last week.
The conference would have been without much
international publicity if Italian prime minister
Silvio Berlusconi had not been informed that he
himself was to be investigated for corruption -
while making a speech on that very topic to the
World Ministerial Conference on Organized
Transnational Crime, convened by the Economic
and Social Council. [See page 8.]

There were other glaring contradictions.
Naples was an intriguing site for a conference on
international organized crime. Delegates and
journalists arriving at Rome's international airport
were unable to rent cars to drive to the Naples
gathering. Just as with a variety of East Euro-
pean regions, Naples and southern Italy in general
is "off-limits" to car rentals because the risk of
theft is too high. Furthermore, the inflated hotel
and restaurant prices - high season rates in
November - palpably included payments to ensure
that the Camorra - the local organized crime
syndicate - allowed the cleaning up of the garbage
in the streets and the provision of clean laundry
daily to the hotels. The Camorra also cooperated
by maintaining services with a high moral tone.
Private enterprise in personal services was cur-
tailed. Hotel concierges explained that the very
attractive and physically outstanding young
women parading in the corridors were all close
relatives of the local godfathers.

The delegates were not confused. The Belgian
justice minister, Melchior Wachelet spoke on the
"complementarity of global and regional
approaches" to crime fighting, while members of
his delegation handed out copies of a Brussels
police report that pinpointed the neighboring
Netherlands as the drug center of Europe.

With ministerial delegations present from 140
countries and a number of non-governmental
organizations attending, including countries with
well-known illegal opium, heroin and cocaine
industries - basic production of the raw materials
and/or major trafficking centers - some observers
considered that all the major international organ-
ized crime syndicates had their eyes and ears at
the meeting.

There were varied interests. A number of
African ministers saw the main organized criminal
syndicates as those smuggling diamonds, gold,
ivory or endangered animal parts like rhino horn.
The same smuggling syndicates that handle dia-
monds also handle ivory or gold and other com-
modities, and the drug trade is expanding.

Other reports handed out dealt with the Rus-
sian, Hungarian and Latvian drug railroads. The
Russian delegation did a complete turnaround that
may surprise America's Federal Bureau of Investi-
gation that opened an anti-crime liaison office in


Moscow this summer. Moscow's spokesmen
declaimed on the complete absence of organized
crime, what they generally term mafias, in Rus-
sia, contradicting the many statements on the
threat posed by the internationally active Russian
mafias made over the past three years by senior
members of President Boris Yeltsin's government.
This time, the Russians asserted that reports of
organized criminal corruption and gang activity in
their country were merely "disinformation" from
the West designed to impede the flow of Western
funding of the country's development.

Other Internal Affairs, National Security and
Justice ministers from the Commonwealth of
Independent States (CIS) and former Warsaw Pact
members from Eastern Europe were more frank
and forthcoming about acknowledging the prob-
lem of internationally active criminal networks
within their borders. Ukraine's Deputy Interior
Minister Yuri F. Kravchenko said the impact of
organized transnational criminals hit hard on
countries undergoing a transition from state-run
economies to market systems and that narcotics
smuggling to and through Ukraine was a serious
problem. Likewise, Belarus National Security
Minister Vladimir Egorov agreed that countries of
the CIS that were undergoing economic transitions
were especially threatened. He frankly conceded
that large criminal organizations had "corrupt links
with state authorities" in sectors including banking
and law enforcement, that smuggling and counter-
feiting were great problems, that heroin and
opium were smuggled from Asia to Europe via
Belarus, and that organized crime "was gaining
control of managerial and business structures."

Georgian First Deputy President Vakhtang
Goguadze agreed that the question of organized
crime was of particular interest to the former
Soviet republics. He added, "With criminal groups
now playing with nuclear materials and atomic
power stations, no mercy should be shown," an
evident reference to the efforts publicized during
the conference of the United States to move a
plutonium stockpile from Kazakhstan to a U.S. air
base to prevent it from falling into Iranian hands.

Many old wounds were reopened by the
assembled diplomats, all keenly aware of their
neighbors failings, if not their own. For example,
French Minister of Justice Pierre Mehaignerie
then issued a clarion call for the "greatest interna-
tional cooperation" in fighting organized crime.
He especially focused on the offshore banking
industry, which he said should be attacked with
the same vigor as is applied to the supporters of
international terrorism. British delegates took
immediate offense, defending their offshore banks
on the Isle of Man and the Channel Islands. As
for the contingent from the countries of the
Caribbean region, they became apoplectic. Off-
shore banks did, at least, provide the Italians with
an opportunity to highlight Guernsey as an inter-
national crime blackspot, rather than Naples. ▄



Berlusconi's Bombs



Unless this month sees a sudden change in public
sentiment, the first month of the New Year may
bring a new government to Italy. Within the next
five weeks, two time bombs that have been tick-
ing since Prime Minister Silvio Berlusconi took
office last March could explode.

The first bomb likely to detonate under the
billionaire magnate targets his direction of the
Fininvest empire, which Berlusconi said last week
that he was now, at last, prepared to sell. At the
same time, he announced that he would float his
television interests on the Rome stock exchange.

The move was overdue. The billionaire
hands-on magnate, who was elected to bring clean
government, now looks like a part of the problem.
As the prime minister was chairing a U.N. con-
ference on organized crime in Naples [see page 7]
the senior investigating magistrate from Milan,
Judge Antonio Di Pietro, issued the media tycoon
with an avviso di garanzia, a notice that he was to
be investigated. Berlusconi's defenders point to
Di Pietro's old political alliances and complain
that his action covered Italy with ridicule. His
supporters claim that because he is a seasoned
prosecutor, he would only have acted if he had
uncovered new, convincing evidence that Berlus-
coni knew and had authorized illegal payments of
about $100,000 to tax inspectors - common prac-
tice in Italy until 1992 - similar to those that
Paolo Berlusconi, the prime minister's brother,
admitted authorizing on at least two occasions.

Berlusconi responded to the Milan magistrate
by denying any wrong-doing on television, while
adding that the Rome magistrates were investigat-
ing the upcoming marketing of his TV empire. He
also sent a team of inspectors to Milan to examine
the "inquisitorial methods" used to obtain confes-
sions from more than 3,000 corruption suspects
during the past two years. Annoyed that the
state-run RAI channels did not run the full
seven-minute version of his "protestations of
innocence" videotape, he refused to answer RAI
journalists' questions. Worse, Berlusconi called
urgently for a new law which would end "distor-
tion of the news."

This feud is being cast as a political vendetta
against the state itself. Quite properly, questions
are being asked as to the motives of the investi-
gating magistrates. Not only did they calculatedly
embarrass their country in Naples last week, but
they repeated a tactic seen last July when the
unfortunate Berlusconi was at the G-7 economic
summit. That was when the "Clean Hands" mag-
istrates moved against his brother. Each time
these embarrassing actions took place, the Italian
currency market went into a turmoil - and some-
one made a great deal of money. While the
magistrates insist that they are simply doing a
very difficult job, the country's appeal courts, late
this week moved to curtail some of their powers.




The second bomb is contained in Italy's fight
against bankruptcy that, if it is to be won,
requires the passage early next year of an
austerity budget. To secure passage of such a
budget, the Berlusconi coalition government has to
be intact. Probably, of equal difficulty in
achievement is the government's need to assuage
organized labor, which believes that the austerity
budget singles out trade unions in cuts to welfare
and pension benefits. A general strike, planned
this week by the Italian General Confederation of
Labor (CGIL) was averted by Berlusconi making
concessions to them, further weakening the credi-
bility of his government.

Far from being healthy, the ruling coalition of
the Forza Italia [Go Italy], the chaotic, populist
Northern League and the National Alliance could
be decomposing. Berlusconi's own party took a
trouncing in last month's local elections. Yet, this
week the coalition closed ranks around the embar-
rassed cavaliere, with promises of federalist
options being given to the League's Umberto
Bossi and the government's general fears of social
unrest erupting against an austerity budget. At
this time, the most stable member of the ruling
coalition appears to be Gianfranco Fini, leader of
"post-fascist" - National Alliance.

Fini, 42, is playing the loyal lieutenant to the
prime minister, saying that without Berlusconi
there would be no government while at the same
time fighting hard for the 1995 budget that could
save Italy from bankruptcy. The Fini strategy is
to portray himself as heir-apparent to Berlusconi
should he resign. Fini's standing in the polls has
increased making him potentially the dominant
figure in the coalition and the next kingmaker.

There are no rivals among the Fininvest execu-
tives who have become Berlusconi's ministers or
from the ranks of the Northern League other than
the controversial former Catholic student activist
Irene Pivetti, 32, who is now speaker of the
Chamber of Deputies and the favorite of Presi-
dent Oscar Luigi Scalfaro. Fini's ambitions
depend on his success in persuading Scalfaro not
to dissolve parliament if Berlusconi goes or to
impose an "institutional" government of techno-
crats as an interim measure. To this end, Fini is
playing a subtle hand to intimidate Scalfaro by
implicating him heavily in slush-fund frauds run
by the former intelligence services from which
more than $50 million was embezzled.

Scalfaro, 76, has made no secret of his dislike
for Berlusconi and hopes to construct a govern-
ment from the Popular Party [the former Christian
Democrats] and the ex-Communist Party of the
Democratic Left with even some help from the
Northern League. Obviously such a coalition
would exclude both Fini and Berlusconi who,
despite their problems, still retain the support of
those who see the problems as "old politicians
seeking to oust new politicians." ▄


The End of NATO?



The mood of the North Atlantic Treaty Organiza-
tion (NATO) headquarters staff in Brussels this
week is reminiscent of soldiers regrouping after
battle: shell shocked, counting the wounded, not
mentioning the dead. There were two major
capitulations this week, one to Bosnia's Serbs, the
other to Moscow. Bosnia is an opportunity missed
as the Serbs move on to their final solution and
debate centers on how NATO can extricate itself
safely, but without honor, from the region. By a
variety of technical means and as a sop to Boris
Yeltsin's generals, NATO's eastern expansion, the
"Partners for Peace," once again will be delayed
with Foreign Minister Andrei Kozyrev confound-
ing the Alliance by vehemently demanding addi-
tional "clarifications" at the moment of signing.

As one analyst noted, NATO's raison d'être
was to keep the Russians out of Europe, to keep
the Germans down and the Americans in. With
the collapse of the Soviet Union the first reason
was negated. Germany, if not a superpower, are
certainly a European colossus with ambivalent
policies towards its neighbors, who in turn are
increasingly suspicious of Bonn's intentions.
Meanwhile, the increasingly isolationist Americans
disdain an active military presence.

America's Cold War policies have been crumb-
ling since the fall of the Berlin wall, encouraging
isolationism to bloom. The Clinton administration
came to power on a specifically anti-foreign
affairs platform. Still, despite the disappearance
of the former Soviet threat, the disintegration of
Yugoslavia and eruption of the Balkan civil strife
illustrate that Western Europe badly needs to hold
on to NATO. Politics, like nature, abhors a
vacuum. Absent NATO, regional powers are
drawn into jockeying for position using their
Balkan clients as pawns. For its part, the United
States has a vital interest in European stability.

However, three concurrent developments have
unraveled NATO's security structure. First, the
American recession of the early 1990s caused
large numbers of white-collar workers to lose
their jobs. The recovery that began in 1992
brought additional permanent lay-offs. Second,
the leadership of both the Republican and Demo-
cratic parties changed in the last two years to
younger non-interventionists. The Republicans,
represented by Senator Phil Gramm and incoming
House Speaker Newt Gingrich, chose as the 1994
election issues lower taxes, crime and morality.

The third development was Germany's success
in having Britain and France recognize Croatia,
significant for German domestic and historical
reasons. London and Paris yielded against their
better judgement. Later, the recognition and
subsequent rejection of Bosnia showed what little
strategic thought had gone into these policies.
There followed a series of failed policy initiatives:
a one-sided arms embargo, humanitarian aid,
no-fly zones and air strikes. NATO looks totally


inept when working under a U.N. Security Coun-
cil that has no policy. Throughout the recent
crisis, Britain and France have taken sides against
the United States. The result could be increasing
cynicism in the United States about the value of
European allies leading to the dismantling of
NATO. And in Europe, there are calls for a
single European response to situations such as the
Balkan crisis without involving the United States.

There is a common belief in Europe that
America is drifting away despite Washington's
attempt to renegotiate its engagement through the
Conference for Security and Cooperation in
Europe (CSCE), whose 53-nation summit Presi-
dent Clinton will attend next week in Budapest.
Yet as the CSCE develops, so NATO moves into a
political limbo. The CSCE summit will under-
score the question as to whether or not NATO can
define its own future or remain, indeed a viable
organization. The CSCE has no credible military
arm and neither do Europe's other multilateral
political and economic organizations.

One reason for the muddle in Bosnia is that
Western decision-makers suppose that Russia is
mystically linked through the Orthodox Church to
the Serbs. The truth is that Moscow's link to
Serbia is through the Russian military, which had
close ties to Yugoslavia. With Great Power views
despite Russia's current economic embarrassment
and retrenchment, the Russian generals are stre-
nuously against the expansion of NATO influence
anywhere in Central and Eastern Europe starting
with the Balkans and oppose every peace plan and
most initiatives. As long as this attitude persists,
as long as Russia remains a member of the U.N.
Security Council and as long as NATO submits to
U.N. control, Russian generals will have more say
in these European crises than U.S. politicians and
will be able to maintain the former Warsaw Pact
states as a de-militarized zone.

Out of fear of upsetting an uncertain and
unstable Russia, it appears that the United States
and the European allies are equally willing to
trade in NATO for a policy of appeasing Moscow.
The Russians are skilled practitioners of the art of
the mood swing and tantrum to keep the West off
balance, as Foreign Minister Andrei Kozyrev
demonstrated yesterday. Yet keeping the Kremlin
happy is tantamount to incremental surrender.

The Republican capture of Congress may halt
this drift toward appeasement. The Clinton-
Strobe Talbott "Russia First" policy may give way
to a tougher stance. If NATO is to survive,
Russia's breaches of the terms of the Treaty on
Conventional Forces in Europe, for example,
should be made into a major issue; and treaties of
accession for Poland and other East European
states must be concluded quickly, despite Russian
objections. Moscow's goal is the same as Bill
Clinton's - to promote the toothless CSCE as
NATO's successor. ▄



EUROPE






▀AUSTRIA. Weeks after being hit with big
losses in October's parliamentary elections, Chan-
cellor Franz Vranitzky's Social Democratic (SPÖ)
government was further weakened by a bribery
scandal. The award of a contract for a radar
system to the French parastatal Thomson CFS is
said to have involved payment of large "commis-
sion" - in cash stowed in a durable "Samsonite
case" - to a leading member of the prime minis-
ter's party.

Last week, Vranitzky's Social Democrats and
the conservative People's Party led by Erhard
Busek, agreed to form a new coalition govern-
ment. However, they are not likely to regain
their popularity via their new program for large
cuts in government spending for social programs.
The Social Democrats are being denounced by the
trade unions, their former allies. The People's
Party is alienating its business and farm sectors by
calling for cuts in subsidies.

The big winner in the parliamentary election -
and very likely long term - was the fiercely
nationalist Freedom Party headed by the charis-
matic Jörg Haider. His party gained nearly all
the seats lost by the two established parties. The
Social Democrats dropped from 80 to 65 seats in
parliament; the People's Party fell from 60 to 52
seats in the 183-seat parliament.


▀FRANCE. Budget balancing in Saudi Arabia
does not mean a complete moratorium on arms
purchases. In Casablanca last week, after the deal
was confirmed via a telephone conversation
between French Prime Minister Edouard Balladur
and King Fahd, French Defense Minister François
Leotard and his Saudi counterpart, Prince Sultan
Bin-Abd-al-Aziz, signed a $3.6 billion contract
under which Riyadh will acquire two F-3000-S
anti-aircraft frigates and a corresponding weapons
system from France. As part of the total package,
France will build Saudi Arabia a naval base and
train some 700 Saudi naval personnel.

The two 420-foot frigates are to be armed with
sea-to-sea missiles and sea-to-air missiles,
100-mm cannon and advanced radar systems. In
addition to training Saudi naval personnel, the
French will build schools, maintenance and repair
workshops, and provide technical assistance to
keep the ships operational. This was the second
major defense contract between France and Saudi
Arabia this year. In February, one worth $1.7
billion was signed to modernize four frigates and
two supply ships sold to the Saudis in 1980.


▀HUNGARY. The chairman of Hungary's
Central Bank, Peter Akos Bod, announced his
resignation saying that disputes of a political
nature with the government of Prime Minister


Gyula Horn disrupted his everyday responsibili-
ties. Bod's criticisms of the government, led by
the former Communists, he said, were based on
his expertise regarding fiscal matters. Bod has
been a strong supporter of a balanced budget and
said he considers the Horn government's deficit
too large. Bod added that those not accustomed to
the democratic way of thinking presumed he had
political motives in his criticisms.


▀ITALY. More evidence of the degree of cor-
ruption in Italy's governmental institutions was
provided this week when Italian law-enforcement
authorities announced they had made a break-
through in the investigation of a violent terrorist
cabal called the Falange Armata [Armed Phalanx].

This organization, taking its name partly from
Franco's Spanish rightists, has taken responsibility
for numerous acts of terrorism including 15 kill-
ings and a series of armed robberies starting in
1988. The members of the Falange Armata
arrested to date are police officers, including a
pair of brothers, stationed in Bologna and the
Emilia Romagna region, an area controlled by the
former Communist Party of Italy. An investiga-
tion is underway to determine if the Falange cell
was officially sanctioned by high-level police or
former government officials who may have used
the police assassins to destabilize a Communist
stronghold and to establish how extensive its
police membership may have been.

ROMANIA. The chairman of Romania's
UNICEF National Committee in Bucharest, Vir-
giliu Radulian, said recently that "Romania's
social protection policy ranks last among all nine
East European countries." The result, he said, was
that 72 percent of the country's children live in
absolute poverty and that Romania faces "demo-
graphic collapse."

TURKEY. The resignation of Foreign Minister
Mumtaz Soysal, 65, who was appointed to this
position in July, may remove dissention within
Prime Minister Tansu Çiller's government. Soysal
had an erratic career. He is a member of the
Social Democratic People's Party, the junior
member of the governing right-left coalition. The
army jailed him for more than a year in the early
1970s saying he was a communist propagandist.
He was a university lecturer on constitutional law
and served as a deputy president of Amnesty
International.