usinfo.state.gov 20 February 2003

Washington – The U.S. trade deficit jumped 21.5 percent in 2002 to a record $435,200 million, reflecting continued weakness in the global economy and a strong U.S. dollar.

Throughout the year rising imports, particularly for such consumer goods as pharmaceuticals and video equipment, combined with slumping U.S. exports to set the stage for the widening gap, the Commerce Department reported February 20. Services exports, long a strong sector in the U.S. economy, rose just 4 percent during the year.

The growing trade gap was led primarily by higher bilateral deficits with Western Europe, China and Mexico. The largest increase, $24,481 million or almost 38 percent, to $89,218 million was with Western Europe. The imbalance with China jumped $20,019 million, or 24 percent, to $103,115 million. Imports from China increased to $125,200 million, only exceeded by goods coming in from U.S. neighbors Canada and Mexico.

The department also reported a new record monthly deficit -- a seasonally adjusted $44,200 million in December -- up 10.5 percent from the previous month. The December gap showed a goods deficit of $48,400 million and a services surplus of $4,100 million. Exports decreased 2.6 percent to $81,200 million while imports increased 1.7 percent to $125,400 million. A $2,200 million plunge in capital goods exports was the largest factor contributing to the December export decline.

Economists say that continued large U.S. deficits are yet another sign that the United States remains the engine for global growth. Despite repeated calls by Bush administration officials and by the previous U.S. administration for actions in Europe and Japan to spur growth, U.S. expansion continues to outpace that of its major trading partners.

The department reported that in 2002 U.S. exports of goods were down $35,600 million, or 5.5 percent, from 2001. Imports of goods were up $22,600 million, or close to 2 percent, from 2001. Among the exports that have declined most were capital goods, primarily computer accessories, telecommunication equipment and semiconductors; consumer goods; and industrial supplies and materials. The largest increases in the imports were registered in consumer goods, mostly pharmaceuticals, household goods and video equipment, and cars and auto parts and engines.

Exports of services went up $11,100 million from 2001, propelled mostly by increases in "other private services" such as business, professional, technical, insurance and financial services, and in royalties and license fees. Imports of services also went up $30,900 million, or 14 percent, boosted mostly by surges in other private services, direct defense expenditures and royalties and license fees.

Following are some key figures:

U.S. GOODS AND SERVICES EXPORTS, IMPORTS AND TRADE BALANCE Millions of dollars, on a balance of payments basis, seasonally adjusted

                  Trade
                balance        Exports         Imports

Jan.-Dec. 2000 -378,681 1,064,239 1,442,920 Jan.-Dec. 2001 -358,290 998,022 1,356,312 Jan.-Dec. 2002 -435,216 972,995 1,408,211

December 2001 -27,279 77,477 104,756 December 2002 -44,242 81,186 125,427

U.S. GOODS EXPORTS, IMPORTS AND TRADE BALANCE Millions of dollars, on a balance of payments basis, seasonally adjusted

                  Trade
                balance        Exports         Imports

Jan.-Dec. 2000 -452,423 771,994 1,224,417 Jan.-Dec. 2001 -427,165 718,762 1,145,927 Jan.-Dec. 2002 -484,353 682,586 1,166,939

December 2001 -31,534 54,991 86,525 December 2002 -48,366 55,575 103,940

U.S. SERVICES EXPORTS, IMPORTS AND TRADE BALANCE Millions of dollars, on a balance of payments basis, seasonally adjusted

                  Trade
                balance        Exports         Imports

Jan.-Dec. 2000 73,742 292,245 218,503 Jan.-Dec. 2001 68,875 279,260 210,385 Jan.-Dec. 2002 49,137 290,409 241,272

December 2001 4,255 22,486 18,231 December 2002 4,124 25,611 21,487

U.S. GOODS EXPORTS, IMPORTS AND TRADE BALANCE, BY COUNTRY Millions of dollars, on a Census basis, not seasonally adjusted

              Bilateral        2002            2002
                balance        exports         imports

Total -470,104 693,517 1,163,621

North America -86,962 258,360 345,322 Canada -49,760 160,829 210,590 Mexico -37,202 97,531 134,732

Western Europe -89,218 157,080 246,298 Euro Area -66,878 105,844 172,722 European Union -82,368 143,747 226,115 Austria -1,394 2,424 3,817 Belgium 3,508 13,343 9,835 Finland -1,907 1,537 3,444 France -9,389 19,019 28,408 Germany -35,852 26,628 62,480 Italy -14,201 10,089 24,290 Netherlands 8,471 18,344 9,864 Spain -452 5,226 5,678 Sweden -6,133 3,154 9,287 United Kingdom -7,617 33,253 40,870 Other EU -17,401 10,741 28,142

European Free Trade Association -6,324 9,422 15,746 Norway -4,423 1,407 5,830 Switzerland -1,600 7,782 9,382 Other EFTA -300 233 533 Other Western Eur. -526 3,910 4,437

Eastern Europe, Former Soviet Reps. -8,283 6,599 14,883 Hungary -1,951 688 2,639 Poland -414 687 1,101 Former Sov. Reps. -4,503 4,113 8,615 Russia -4,426 2,399 6,825 Other FSR -76 1,714 1,791 Other E.Europe -1,416 1,112 2,528

Pacific Rim -215,005 178,561 393,567 Australia 6,606 13,084 6,478 China -103,115 22,053 125,168 Japan -70,055 51,440 121,494 Newly Industrialized Countries -22,073 69,823 91,896 Hong Kong 3,283 12,612 9,328 South Korea -12,979 22,596 35,575 Singapore 1,429 16,221 14,793 Taiwan -13,805 18,394 32,199 Other Pacific Rim -26,369 22,162 48,531

South/Central -17,902 51,643 69,544 America Argentina -1,595 1,591 3,185 Brazil -3,403 12,409 15,812 Colombia -2,018 3,589 5,606 Other S/C America -10,886 34,054 44,940

OPEC -34,482 18,852 53,334 Indonesia -7,063 2,581 9,644 Nigeria -4,907 1,057 5,964 Saudi Arabia -8,364 4,778 13,143 Venezuela -10,662 4,447 15,108 Other OPEC -3,486 5,989 9,475

Other countries -36,397 28,956 65,353 Egypt 1,514 2,866 1,352 South Africa -1,502 2,525 4,027 Other -36,410 23,564 59,974

NOTE: Data on a Census basis reflect movement of goods into and out of the United States through U.S. Customs Service stations. Balance-of-payments basis data adjust Census data to include products that bypass Customs, such as exports of military aircraft and imports of electricity from Canada.

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)

This site is produced and maintained by the U.S. Department of State's Office of International Information Programs (usinfo.state.gov). Links to other Internet sites should not be construed as an endorsement of the views contained therein.

usinfo.state.gov 20 February 2003

(Nebraska Senator Chuck Hagel at Kansas State University) (3270)

Making allusions to Winston Churchill's famous "Iron Curtain" speech of 1946, U.S. Senator Chuck Hagel said February 20 that the United States today "stands at a pinnacle of power" and again bears a heavy burden for securing a better world, but cannot do so alone.

In a speech at Kansas State University in Manhattan, Kansas, February 20, Hagel said "The first priority for America is to protect its citizens. But to do so we must build and sustain global institutions and alliances that share our interests and values." He quoted former president Franklin Roosevelt's Secretary of the Interior Harold Ickes, who said the United States "cannot live in the world alone, without friends and without allies."

Hagel, a Nebraska Republican, said that terrorism is "a war unlike any we have ever known," and victory will require extensive cooperation among like-minded governments. "We must build relationships upon this common denominator of common interests," he said. "America cannot defeat terrorism alone."

The measure of America's success, Hagel said, will be its ability to build lasting and flexible coalitions, which he called "the only assured means of long-term security for future generations." The current situation, for Hagel, "is about much more than Iraq. We are setting the tone for America's role in the world for the next decade and beyond."

Patience and steadiness are keys, he said. "America must remain on a steady course and turn the Saddam Hussein threat into an opportunity to empower alliances and institutions committed to disarmament in Iraq, North Korea, Iran and elsewhere. ... America must balance its determination with patience and not be seen as in a rush to war."

The United States, Hagel said, "must steer away from actions that could produce unintended results of fracturing those very institutions that have helped keep the peace since World War II." It should make the effort, he said, to obtain a further U.N. Security Council resolution that "threatens serious consequences for Iraq's continued defiance of U.N. resolutions."

"This responsible course will maximize the force of world opinion and bring it to our side," Hagel said.

Following is the text of Hagel's prepared remarks:

(begin text)

"America's Purpose in the World" U.S. Senator Chuck Hagel Alfred M. Landon Lecture, Kansas State University February 20, 2003

I would like to thank President Wefald and the students, faculty, and alumni of Kansas State University for this invitation to speak to you today as part of the Alfred M. Landon Lecture Series. Governor Landon understood the complexity of America's role in a dynamic world, evidenced by his 1966 inaugural speech in this lecture series, "New Challenges in International Relations." He represents the finest tradition of American public service that we have come to expect from Kansas and its elected representatives.

Former Kansas Senators Nancy Landon Kassebaum Baker and Bob Dole are friends whom I greatly admire and look to as role models in the U.S. Senate. I am proud to serve with my friends and colleagues Pat Roberts and Sam Brownback, two of the most effective members of the Senate. Except for the Kansas State Wildcats football team, I remain an unabashed fan of all good things from Manhattan!

Allow me to begin my lecture by recalling a speech at a Midwestern college at another critical time in our history. Almost 57 years ago, on March 5, 1946, at Westminster College in Fulton, Missouri, not far from here, Winston Churchill, with President Harry Truman at his side, gave one of the greatest speeches of our time. The speech's power and majesty are not limited to time and place, although Churchill's warning of a Soviet "Iron Curtain" in Europe vividly captured the Communist threat of that era.

That day in Fulton Churchill also conveyed something unique and special about America's role in the world. He said:

"...The United States stands at this time at the pinnacle of world power. It is a solemn moment for the American democracy. For with this primacy in power is also joined an awe-inspiring accountability to the future. As you look around you, you must feel not only the sense of duty done, but also you must feel anxiety lest you fall below the level of achievement. Opportunity is here now, clear and shining, for both our countries. To reject it or ignore it or fritter it away will bring upon us all the long reproaches of the aftertime."

With new eras come new challenges, and today America again stands at a pinnacle of power and again bears a heavy burden for securing a better tomorrow, for our citizens and for all the peoples of the world. At this critical juncture, the success of our actions will be determined not by the extent of our power, but by an appreciation of its limits. America must approach the world with a sense of purpose in world affairs that is anchored by our ideals, a principled realism that seeks not to re-make the world in our image, but to help make a better world.

We must avoid the traps of hubris and imperial temptation that comes with great power. Our foreign policy should reflect the hope and promise of America tempered with a mature wisdom that is the mark of our national character. In this new era of possibilities and responsibilities, America will require a wider lens view of how the world sees us, so that we can better understand the world, and our role in it.

Just as Churchill pointed out in 1946, when historic opportunities for leadership are before us, they cannot be rejected, ignored, or frittered away. There would have been grave consequences for the world if America had shrunk from her responsibilities in 1946, as there will be grave consequences if America shrinks from today's challenges. We stand today on the verge of military conflict in Iraq and a long-term engagement with the Middle East that offers as much peril as promise. We also face an urgent threat from North Korea, and the potential for nuclear war between India and Pakistan. The AIDS epidemic in Africa, Russia and Asia poses one of the most deadly and urgent threats to all humanity. And we cannot overlook our own hemisphere, where Colombia and Venezuela face continued violence and instability.

The complexities of an interconnected world give us little margin for error in dealing with these great international challenges. The first priority for America and all sovereign nations is to protect its citizens. But to do so we must build and sustain global institutions and alliances that share our interests and values. Harold Ickes, Secretary of the Interior under President Franklin Roosevelt, put it powerfully in a speech on May 18, 1941, when he said, in response to those who urged America to stay out of World War II, that American support for Britain was, "the sort of enlightened selfishness that makes the wheels of history go around. It is the sort of enlightened selfishness that wins victories. Do you know why? Because we cannot live in the world alone, without friends and without allies."

Then as now, the serious obligations of world leadership come with a price. Bearing the burdens and costs of leadership in defeating global terrorism, countering proliferation by nations and terrorist networks, and ending poverty and hunger in the world are investments in our own security, as well as in the stability and security of the world. Security at home cannot be separated from dangers abroad.

The war against international terrorism and its sponsors is a war unlike any we have ever known. There is no battlefield, no clash of armies. It is a war fought in the shadows and recesses of the world. Terrorism breeds among the hopeless and the alienated, in societies where democracy and economic opportunity are out of reach for most people. Military power alone will not end this scourge of mankind. Victory will require extensive international cooperation in the intelligence, economic, diplomatic, law enforcement and humanitarian fields. It will require a seamless network of cooperation between America and her allies.

Terrorism and the proliferation of weapons of mass destruction are the enemies of all peoples -- not just Americans. We must build relationships upon this common denominator of common interests. America cannot defeat terrorism alone.

America's ability to build lasting and flexible coalitions will be the measure of our success, the only assured means of long-term security for future generations. As we consider our next steps in Iraq, we cannot lose sight of the wider-lens view of what is before us, that this is about much more than Iraq. We are setting the tone for America's role in the world for the next decade and beyond. At this critical time, our policies and our rhetoric should not create distance between America and her allies. If that is the price of waging war in Iraq, then victory, in the long run, in the war on terrorism, in the Middle East, on the Korean peninsula, and against weapons of mass destruction, will not be ours. And as Churchill reminded us, the "aftertime," the long run, is what measures victory.

America must remain on a steady course and turn the Saddam Hussein threat into an opportunity to empower alliances and institutions committed to disarmament in Iraq, North Korea, Iran, and elsewhere. Today, America stands nearly alone in proclaiming the urgency of the use of force to disarm Saddam Hussein. In Europe and in many corners of the globe, America is perceived as determined to use force in Iraq to the exclusion of world opinion or the interests of our allies, even those allies who share our concerns about Saddam Hussein's weapons programs. America must balance its determination with patience and not be seen as in a rush to war. As David Ignatius wrote in a recent Washington Post column, "A nation heading into war needs prudence and good judgment. America's best generals, people such as Grant and Marshall and Eisenhower, were at once cautious and decisive. Their greatness lay in the fact that they never lost sight of the long-term interests of the United States."

America must steer away from actions that could produce the unintended results of fracturing those very institutions that have helped keep peace since World War II. Allowing a rush to war in Iraq to create divisions in those institutions and alliances that will help sustain American security and world stability is a short-sighted and dangerous course of action.

In order for America to address the differences between ourselves and our allies, we must understand those differences. We don't enhance our relationships and bridge differences by impugning the motives of our friends. Let us not forget, they too are democracies. They too are accountable to their people and respond to the judgment of their citizens. Isn't that the essence of our noble purpose as democratic governments? We must listen and learn, then forge a coalition based upon our common interests.

The diplomatic challenges before us should not weaken our resolve to obtain a second U.N. resolution that threatens serious consequences for Iraq's continued defiance of U.N. resolutions. While time may be short, the diplomatic option has not yet played out. It will take more hard work, and the military option should remain on the table.

The world has additional time, and we should not short-circuit what has begun through legitimate United Nations channels. This responsible course will maximize the force of world opinion and bring it to our side.

American purpose requires more than the application of American power to rid Iraq of its weapons of mass destruction, although that will be our first priority. War, if it is necessary, should be a means, and not an end, to achieve a plan of action to encourage conflict resolution and peaceful change in Iraq and throughout the Middle East.

Iraq cannot be considered in a vacuum, detached from the politics and culture of both its region and the Muslim world. Using military force to disarm Saddam Hussein will bring change to Iraq and to the region, but we cannot foresee the nature of that change. What comes after Saddam Hussein? The uncertainties of a post-Saddam, post-conflict Middle East should give us pause, encourage prudence, and force us to recognize the necessity of coalitions in seeing it through.

America will need to remain in Iraq and the Middle East to help lead this post-Saddam transition. This will require adroit diplomacy, long-term commitment and dynamic coalition building. There is no other way. Regime change in Iraq will not alone be the endgame for a region devoid of democratic institutions, economic development, and effective regional organizations. It must be seen as only the beginning of a long transitional period towards stability, development, and individual freedom for millions who have never known the hope and promise of an open and free society.

How do we meet these opportunities and challenges now before us? Allow me to suggest five priorities for U.S. policy towards Iraq which will be critical to helping support and sustain stability and prosperity in the Middle East in the years ahead.

First, a post-Saddam transition in Iraq must focus on security, economic stability and creating the conditions for democratic change. We should put aside the mistaken delusion that democracy is just around the corner. Or that by force of arms we can remove Saddam and simultaneously place Iraq on the path to democracy by overlaying a blueprint for democracy on the region.--.a so-called "Democratic Domino Effect." The spadework of building a free Iraq will take time. General Anthony Zinni, Special Advisor to the Secretary of State and former Commanding General, U.S. Central Command, reminded the Senate Foreign Relations Committee last week that, with regard to Iraq, "there will not be a spontaneous democracy so the reconstruction of the country will be a long, hard course regardless of whether a modest vision of the end state is sought or a more ambitious one is chosen." The end of Saddam Hussein's regime will be all to the good, but building nations and democracy in the Middle East or anywhere is complicated and difficult, and success is never assured. We can try to help create the conditions for democratic change. But we must assume that it will not come quickly or easily.

Second, the United States should place its operations in a post-Saddam Iraq under a United Nations umbrella as soon as possible. A conspicuous American occupation force in Iraq or in any Arab or Muslim country would only fuel anti-Americanism, nationalism and resentment. By working through the United Nations, America will neutralize the accusations that a war in Iraq is anti-Muslim or driven by oil or American imperialism.

Third, America should encourage the convening of a regional conference to deal with outstanding Iraqi and regional security issues. The Middle East has a lack of regional political institutions to deal with conflict prevention and resolution. The end of Saddam Hussein's regime will not necessarily mean the end of long-standing border disputes between Iraq and its neighbors -- Turkey, Iran, and Kuwait -- disputes that predate Saddam Hussein. Stability in northern Iraq is not assured, given the potential for conflict between Turkey and Iraq's Kurdish parties. A regional conference, arranged under United Nations auspices, would play an important role in building confidence among the states of the region so that future conflicts can be prevented.

Fourth, America must act immediately to re-start the Israeli-Palestinian peace process. There will be no lasting peace between Israel and her Arab neighbors without America taking the lead to broker a settlement. As President George H.W. Bush did after the first Gulf War, any military action in Iraq should be accompanied by a renewed American initiative to help settle the Israeli-Palestinian conflict. The road to peace in the Middle East does not end in Baghdad. Long-term stability in the Middle East depends on progress toward Israeli-Palestinian peace. There is no other way. We must work with our Quartet partners -- Russia, the European Union, and the United Nations-- as well as Israel, the Palestinians, and our Arab allies, to put the peace effort back on track. Every day that passes without active American mediation contributes to the radicalization of Palestinian and Arab politics, and the likelihood of greater terrorism visited on Israel.

Fifth, America should create partnerships with the governments and peoples of the Arab world to take the necessary steps to help them open up their political systems and economies, such as the Middle East Partnership Initiative proposed by President Bush to encourage democratic, educational, and economic reforms. Senator Joseph Lieberman and I will soon introduce legislation to promote private sector development and educational reform in the Middle East. For too long the governments of this region have deferred or opposed governmental and societal reform.

Former Secretary of State Henry Kissinger, paraphrasing [19th-century German Chancellor Otto von] Bismarck, once said that, "Modern politics too often produces an orgy of self-righteousness amidst a cacophony of sounds." If we do not complement our disarmament efforts in Iraq with a program of peaceful change in the Middle East, our policies may encourage the perception of a hard-edged American security doctrine that offers little more than self-righteous ideology. That would result in many in the Arab and Muslim worlds seeing their interests as being compromised to American power. Instead of contributing to stabilization and democratization in the Middle East, just the opposite could occur. A war in Iraq could intensify the radicalization of the region's politics.

America's purpose in the world requires a commitment to a kind of principled realism that promotes our values, strengthens international institutions, builds coalitions, and recognizes what is possible. The opportunities for helping create a better world are as real today as any time in our history, just as they were when Churchill spoke at Westminster College 57 years ago.

Opportunities for moments of reflection during times of great decisions are fleeting, but they are crucial, in order to place the events of today in an important perspective. Churchill, Truman, Marshall and other world leaders understood the magnitude of challenges the world would face in the second half of the 20th century. We face comparable challenges today, and we can learn from history.

It was America's investment in international institutions such as the United Nations, The World Bank, The International Monetary Fund, NATO, and others which helped maintain world stability and prevent world wars. These and other multinational institutions have given structure and force to global consensus and commitment to face the challenges of our time. America has helped build and reinforce these institutions with a judicious use of its power. All nations and institutions are imperfect, but the world today is more hopeful and more just because America and our friends took this responsible and far-sighted course of coalitions of common interest and multilateral institutions.

What distinguishes America is not our power, for the world has known great power. It is America's purpose and our commitment to making a better life for all people. That is the America the world needs to see: a wise, thoughtful and steady nation, worthy of its power, generous of spirit, and humble in its purpose.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)

This site is produced and maintained by the U.S. Department of State's Office of International Information Programs (usinfo.state.gov). Links to other Internet sites should not be construed as an endorsement of the views contained therein.

COMPILED FROM NEWS DISPATCHES

February 20, 2003 Vatican Files on Nazis The first documents from newly opened Vatican archives dealing with the Roman Catholic Church's relations with Germany on the eve of World War II are beginning to emerge, including a letter seeking papal intervention against the Nazis written by a famed Jewish convert to Catholicism, Edith Stein. The letter's existence has been known for decades - Stein wrote about it before she was killed at Auschwitz in 1942 - but its text was published for the first time yesterday in the Italian paper Corriere della Sera. Other documents from the era are also coming to light, including one some historians say proves the Vatican did intervene on behalf of the Jews: a document from 1933 that shows the Vatican ordered its diplomats in Germany to warn Hitler's government not to persecute Jews. The documents have become available following the Vatican's decision to open its prewar archives to scholars years ahead of schedule to deflect criticism that it was silent in the face of the Holocaust.

Muslim Leader Expelled Norway said yesterday that it planned to expel the founder of a radical Kurdish Islamic group who is suspected by Washington of having links to the Iraqi government and the al-Qaida terrorist network. Mullah Krekar, leader of Ansar al-Islam, was given two weeks to leave Norway and three weeks to appeal the ruling. Krekar has denied he or his group has any links to terrorism. Officials said they wanted Krekar, who has had refugee status in Norway since 1991, sent to Kurdish-held northern Iraq. Amnesty International called the plan irresponsible, saying Oslo should test its suspicions that Krekar has links to terrorism in court rather than send him home.

S. Korea Tightens Security A subway fire that killed more than 125 people Tuesday in South Korea is forcing officials to strengthen safety measures on trains. Officials with the subway system in Taegu, the country's third-largest city, promised to install emergency lighting, increase the number of exit signs, make car interiors flame-resistant and heighten security. The city government also said it would increase the number of guards, set up security cameras and quickly run a series of fire drills in subway stations. Police, meanwhile, said the blaze was ignited by a suicidal man who did not want to die alone. Kim Dae-han, 56, who was hospitalized with light burns, told authorities "he decided to die with others in a crowded place," said police Lt. Cho Doo-won.

Sex Abuse Lawsuits Upheld A judge refused yesterday to dismiss more than 400 sexual abuse lawsuits against the Boston Archdiocese, rejecting arguments that the Constitution bars the courts from interfering with church operations. The lawsuits allege church officials were negligent in their supervision of priests accused of molesting children. Church lawyers had argued that the court does not have jurisdiction over cases involving the relationship between a church supervisor and a priest because that involves church policy, which is protected by the First Amendment guarantee of freedom of religion. But Superior Court Judge Constance Sweeney said: "The cases ... do not lure the court into involving itself in church doctrine, faith, internal organization or discipline." Sweeney dismissed claims that church supervisors were negligent in their ordination of a priest or their failure to remove a priest from the priesthood, saying those were "purely ecclesiastical matters." She also rejected arguments that because a priest is a priest 24 hours a day, church supervisors can be held liable for anything he does.

Killings Not Political Venezuela reeled yesterday from the killings of three dissident soldiers and a protester opposed to President Hugo Chávez, as police and grieving relatives split over whether the homicides were political. Police said about 12 unidentified armed men kidnapped the four victims Saturday as they were leaving a protest. The last two bodies were found Tuesday. Police said the motive for the killings appeared to be revenge, not politics. They cited an alleged scuffle between the slain soldiers and a fellow protester, who has become the lead suspect. Relatives of the victims slammed the probe as corrupt and said the four were clearly killed for their protests against Chávez.

www.haveeru.com.mv Wednesday, 19 February 2003  

KUALA LUMPUR, Feb 19 (AFP) - One hundred and fourteen nations begin a conference in the Malaysian capital Kuala Lumpur Thursday, preparing to deliver a resounding 'No' to a US-led war on Iraq.

Most of the countries grouped in the Non-Aligned Movement (NAM) carry little clout of their own, but they hope their official voices will be heard alongside those of millions of ordinary people protesting the war around the world.

The NAM states are mostly poor and militarily weak, although two of them -- India and Pakistan -- are nuclear powers and another, North Korea, is believed to be able to produce nuclear weapons within months, if it doesn't have them already.

The others range from Afghanistan, with its new government installed courtesy of a US-led war, to Iraq itself, Washington's latest target in its military reaction to the September 11 terrorist attacks on the US.

In fact, the whole of George Bush's renowned "Axis of Evil" will be represented -- Iran, Iraq and North Korea.

Long-time foe from ideological battles past, Fidel Castro of Cuba, will also be there when the summit gets under way on Monday and Tuesday next week, after kicking off with meetings of senior officials and ministers beginning Thursday.

But most of the 114 nations are small players on the world stage, struggling countries on the fringes of power in Asia, Africa and Latin America.

Recognising this, the host prime minister, Malaysia's Mahathir Mohamad, said in a television interview ahead of the conference: "We have no military and financial strength but we can join the world movement to oppose war on moral grounds."

Mahathir acknowledged that the big powers rarely listened to the voice of NAM, but said they would now be forced to do so after millions of people -- many in developed countries -- took to the streets last weekend in anti-war protests.

He said one focus of the summit would be to drive home the point that big countries should not resort to military action to change a government they did not like.

"We do not agree that the government of a country not suitable to big countries be changed by military means through a pre-emptive strike. If this thing is allowed to happen, maybe other countries will also suffer the same fate in the future," he said.

However, it is not only a fear of the world being reshaped to its liking by the lone superpower that galvanises the incoming leader of the NAM, which was originally formed during the Cold War as an alternative to the Western and Eastern power blocs.

Mahathir, a Muslim, is a bitter critic of Islamic extremism and has supported the US-led war on terrorism, but he has warned repeatedly that an attack on Iraq would create more anger among Muslims and thus more recruits to terrorist ranks.

He made it clear that despite the myriad problems facing the developing world, such as globalisation, debt and HIV/AIDS, Iraq would dominate discussions at the NAM meeting.

While there will be some support for Washington, from countries such as the Philippines where US troops are helping the fight against Islamic guerrillas, Mahathir had no hesitation in predicting the outcome of the debate.

Asked what would be contained in the summit's final declaration, he replied: "Certainly it is about our anti-war stand."

That stand will likely be endorsed by a second meeting immediately after the NAM summit. Malaysia has called an "informal" meeting of members of the 57-nation Organisation of the Islamic Conference, most of which are also NAM states, for February 26.

NON-ALIGNED MOVEMENT: A FACTFILE

KUALA LUMPUR, Feb 19 (AFP) - The Non-Aligned Movement (NAM), which holds its 13th summit in the Malaysian capital on February 24-25, groups 114 member states.

Originally conceived as an alternative to the Western and Eastern blocs during the Cold War, it now aims to represent the political and economic interests of developing countries.

The movement had its origins in the Asia-Africa Conference held in Bandung, Indonesia in 1955, which brought together leaders of 29 states, mostly former colonies, to discuss common concerns and to develop joint policies in international relations.

Indian Prime Minister Jawaharlal Nehru, along with Indonesia's Soekarno and Egypt's Gamal Abdel Nasser, led the meeting, which examined the problems of resisting the pressures of the major powers, maintaining independence and opposing colonialism and neo-colonialism.

The first Conference of Non-Aligned Heads of State or Government, at which 25 countries were represented, was convened at Belgrade in September 1961, largely through the initiative of Yugoslavian President Tito.

Subsequent summits have been held in: Cairo 1964, Lusaka 1970, Algiers 1973, Colombo 1976, Havana 1979, New Delhi 1983, Harare 1986, Belgrade 1989, Jakarta 1992, Cartagena de Indias 1995, Durban 1998.

Issues such as globalisation, South-South and North-South co-operation, the debt crisis and international trade, investment flows and disarmament have been high on the movement's agenda.

The last few summits also saw issues such as transnational crime, international drug trafficking and HIV/AIDS being addressed.

The Kuala Lumpur summit is expected to be dominated by debate on a possible United States-led war on Iraq, which is a member of the movement.

MEMBER STATES:

Afghanistan, Algeria, Angola, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belize, Benin, Bhutan, Bolivia, Botswana, Brunei, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Chile, Colombia, Comoros, Congo, Cote d'Ivoire, Cuba, Cyprus, Democratic People's Rep of Korea, Democratic Republic of the Congo, Dominican Republic, Djibouti, Ecuador, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Honduras, India, Indonesia, Iran, Iraq, Jamaica, Jordan, Kenya, Kuwait, Laos, Lebanon, Lesotho, Liberia, Libya, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Nepal, Nicaragua, Niger, Nigeria, Oman, Pakistan, Palestine (PLO), Panama, Papua New Guinea, Peru, Philippines, Qatar, Rwanda, Saint Lucia, Sao Tome and Principe, Saudi Arabia, Senegal, Seychelles, Sierra Leone, Singapore, Somalia, South Africa, Sri Lanka, Sudan, Suriname, Swaziland, Syria, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkmenistan, Uganda, United Arab Emirates, United Republic of Tanzania, Uzbekistan, Vanuatu, Venezuela, Vietnam, Yemen, Zambia, Zimbabwe.

NKOREA TO COME UNDER PRESSURE OVER NUKES AT NAM SUMMIT

KUALA LUMPUR, Feb 19 (AFP) - North Korea will come under pressure to drop its nuclear weapons programme when it attends the upcoming summit of the 114-nation Non-Aligned Movement (NAM), host nation Malaysia indicated Wednesday

The issue would "definitely" be discussed and Malaysia would try to persuade North Korea to end its quest for nuclear capability, Foreign Minister Syed Hamid Albar told a news conference.

"As far as NAM is concerned, I will be able to state Malaysia's stand: We think there should be a total ban on nuclear weapons," he said in reply to a question.

North Korean Foreign Minister Paek Nam-Sun will represent Pyongyang at the NAM conference, which begins with preparatory meetings Thursday and culminates in a meeting of heads of government on Monday and Tuesday next week.

Along with North Korea, the other two legs of US President George Bush's "axis of evil" -- Iraq and Iran -- will also be present at the summit, which is expected to condemn any unilateral military action against Baghdad.

Earlier Wednesday, in an abrupt departure from its strident attacks of recent months, North Korea toned down its rhetoric over the nuclear crisis and stressed its goal of reforming its struggling economy.

North Korea also denied it was resorting to brinkmanship tactics and using the nuclear standoff as a means of seeking concessions in negotiations with Washington.

The statement followed North Korea's aggressive warning Tuesday that it was ready to pull out of the armistice agreement that ended the 1950-53 Korean War and has helped keep the peace for half a century on the Korean peninsula.

The crisis erupted in October after the United States accused North Korea of running a secret uranium-enrichment program and later cut off fuel aid to the energy-starved regime.

Pyongyang responded by expelling UN inspectors and reactivating a mothballed plant capable of producing weapons-grade plutonium.

The case has been passed on to the UN Security Council which can impose an array of sanctions on North Korea, a move which Pyongyang says would be tantamount to a declaration of war.

The NAM was formed during the Cold War as an alternative to the Western and Eastern power blocs, and has been seen as increasingly irrelevant since the collapse of the Soviet Union.

Most members are poor, developing countries, but Malaysia has indicated it believes international terrorism and the crisis over Iraq have given the movement a new role in world politics.

Apart from the "axis of evil", NAM includes some 50 of the 57 members of the Organisation of the Islamic Conference (OIC).

MALAYSIA DRAWS FLACK FOR USING BMWS, MERCEDES AT NAM SUMMIT

KUALA LUMPUR, Feb 19 (AFP) - The Malaysian government has come under fire for buying more than 150 Mercedes Benz and BMW cars for VIPs attending next week's Non-Aligned Movement (NAM) summit instead of using the national car, Proton.

"They should not have sacrificed our international pride and prestige in having a national car," Lim Kit Siang, chairman of the opposition Chinese-based Democratic Action Party told AFP Wednesday.

"By using BMWs and Mercedes, they are admitting our Protons are not up to international standards."

Most ordinary Malaysians are virtually forced to buy Protons -- a pet project of Prime Minister Mahathir Mohamad -- because of huge tariffs slapped on imported models.

But the organisers of the summit recently took delivery of 66 brand new BMWs worth 50 million ringgit and 86 Mercedes 350 series worth millions of dollars.

Eleven of the cars are bomb and bulletproof, apparently for the less popular heads of government among the 114 NAM member states.

Local newspapers have published letters from indignant Malaysians criticising the purchase of the foreign cars.

"We always talk about being proud of Malaysian-made products, but when it is critical that we show it, we fail miserably," said one.

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The world's largest pension fund, US-based Calpers, has ruled out investing in some of the world's main emerging economies, citing worries over stability and business ethics.

Among the countries rejected by Calpers are China, India, Indonesia and Russia, and the fund also dashed hopes that it might begin putting money into Malaysia and Thailand.

Calpers, which manages the retirement funds of Californian public employees, has some $133bn in assets, including some $1.8bn in emerging markets.

It has traditionally taken a lead in ethical investments, and is highly influential within the US fund management industry.

In and out

In all, Calpers has rejected 12 major developing economies, also including Morocco, Sri Lanka, Egypt, Pakistan, Colombia and Venezuela.

Pakistan is off the list...

Last year, Calpers stunned investors in Malaysia, the Philippines and Thailand by deciding to pull out pending this latest decision.

Some had expected it to move cautiously back into south-east Asia, but the Calpers board has now voted to tighten its investment criteria.

At the same time, Calpers gave the green light to 14 countries, chiefly in Eastern Europe and Latin America.

Informed decisions

Calpers last year began to consider civil liberties, press freedom and political risk in making investments, after deciding that stable, liberal countries would yield better long-term returns.

To this end, it has hired California-based Wilshire Consulting to draw up a scoring system for target countries.

In this decision, the fund has actually exceeded the severity of Wilshire's recommendations.

Aside from pure moral criteria, Calpers is also especially interested in accounting transparency, traditionally a major headache for investors in countries such as Russia or China.

The policy has occasionally gone awry - after ruling out investment in the Philippines last year, Calpers had to backtrack, admitting the decision had been made on the basis of mistaken information.

Ups and downs

Nor is the policy yet proven in terms of investment success.

The 14 markets Calpers has cleared for investment have lost some 8% in dollar terms since end-2001, against an average gain of more than 13% from the countries excluded.

Pakistan and Russia, for example, have been especially strong performers in the past couple of years.

Among the countries given the green light, only the Czech Republic, with a 46% stock market gain since the end of 2001, has delivered really impressive returns.

Others, such as Brazil, Argentina and Turkey, have fared disastrously.