Kosovo awaiting another spark

Last June NATO aircraft concluded a 78-day bombing campaign against Serbia. Although the bombing was designed to weaken communication centers and munitions depots, innocent civilians were killed in the nearly three-month pounding. A no-back-down strategy by NATO caused Serbian president Slobodan Milosevic to end his violent crackdown against ethnic Albanians in Kosovo.

But are the problems over for the Serbians and Kosovars? Hardly. NATO forces will have to remain to keep the fragile peace in Kosovo. Centuries of religious and cultural prejudices won't be erased overnight.

A New Middle East accord?

In 1998 former Israeli president Benjamin Netanyahu, Palestinian leader Yasser Arafat and Jordan's late King Hussein signed an agreement to further defuse tensions in Israel. At stake was an additional 13 percent of West Bank territory, which would be exchanged for a Palestinian end to anti-Israeli terrorism. As a U.S. official put it: "If we don't get this, we are heading toward a train wreck."

Israeli voters have since replaced Mr. Netanyahu with Ehud Barak, an Israeli leader considered to be less hawkish and more conciliatory. President Clinton, Palestinian leader Yasser Arafat and Israel's Prime Minister Ehud Barak met in Oslo, Norway, in November to address such contentious issues as Palestinian entity, the status of Jerusalem, the future of Jewish settlements and the fate of millions of Palestinian refugees.

Mr. Arafat hopes to acquire a state for the Palestinians, virtually all of the West Bank and part of Jerusalem, while Barak seeks to resolve the 50-year conflict with the Palestinians. Culture-bound animosities and time will determine the effectiveness and longevity of the latest agreement.

To begin to understand where these tensions began, one must go back to the age of the patriarch Abraham and his two sons, half brothers Ishmael and Isaac (Genesis 16-17). Scripture tells us the deep-seated tensions between the Jews and Arabs, now nearly 4,000 years old, will be resolved, but only at the coming of the Messiah. In the meantime, strife is likely to continue between the Jews and Arabs, only occasionally interrupted by well-intentioned peace accords.

Regional dynamics

Regional economic dynamics have more than a ripple effect on other international communities. What if, for example, the ripples turn into a tsunami? Will events set the stage for a new world order, one that could manage the many regional problems mankind has faced throughout the 20th century?

William Greider, in his book One World, Ready or Not, writes of fickle regional dynamics playing on the international economy. He posits that no entity on the world scene, including the United States, controls or can control a "fictional global economy" (1997, pp. 17-19).

How will economic trends play out over the months and years? Many news reports focus on three regions whose economies affect virtually all nations. What is taking place in these areas, and how will developments there affect the rest of the world?

Russia: A superpower's collapse

On Dec. 25, 1991, President Mikhail Gorbachev of the Soviet Union televised his resignation speech. Before he returned to his office, the Soviet flag over the Kremlin was replaced by a Russian one.

Eight years later the American news media have almost forgotten the incredible dissolution of the Soviet bloc. The West may have won the Cold War, but a fire remains in the belly of Mother Russia, the dominant province of the former union.

Consider: Russia turned to a parliamentary-style governmental system, but a democratic process doesn't mature overnight. (Consider that the United States has practiced democracy for over 200 years, and its history is noticeably besmirched by major mishaps.) Habitually communist for 70 years, Russia faces enormous difficulties trying to make democracy work. Corruption is rife. Remarkably, the media appear to naively assume this former communist behemoth of a confederation must conduct itself democratically overnight.

Along with the corruption of some among Russia's leadership, few employers can pay their employees a fair wage (if any wage at all), a problem that penetrates to the heart of the Russian armed forces. Add to this the harsh Russian winters, difficult in the best of times. This means the basic needs of food and shelter are not always met. History teaches us that, under such conditions, nations usually turn to leaders who promise food and comfort in exchange for the carte blanche of dictatorial power.

In late October The Associated Press noted that the former Soviet republics are united by their common violence. The article focused on the assassination of Armenia's prime minister, noting that violence has erupted between secular governments and religious movements as well as between political opponents. Growing political polarization threatens the hope of democracy in the former Soviet bloc, with radical groups taking root in the growing economic desperation since the 1991 Soviet collapse.

Besides Armenia, violent incursions have been undertaken by a radical Islamic group into Kyrgyzstan as well as a militant Islamic offensive in Dagestan (which drew Russia back into war with separatist Chechnya). Earlier in 1999, terrorists unleashed car-bomb attacks against several government buildings in Uzbekistan. The problems seem endless for the former Soviet countries.

Huge stocks of weapons proliferate throughout the former Soviet empire, and soldiers, who have combat experience but are unemployed and feel alienated from society, try to make their living with the help of guns. Financially, Russia has come close to bankruptcy and still teeters on the edge of economic collapse. The United States and Germany have helped Russia, but not without vested interests.

Geopolitically, former president Mikhail Gorbachev lectured the West that Russia should be considered a part of a greater Europe. He reminded his audience that, in centuries past, Eastern Europe stretched all the way to the Urals, the north-south mountain range in Russia.

What if the resource-rich western part of Russia is absorbed into greater Europe? Could the European Community eventually stretch from the Atlantic to the Urals, from the Baltics to the Balkans? How powerful would such a political, economic and military alliance become? This combine would surely dramatically alter the world's balance of power.

Japan: Linchpin of Asian recovery

The powerful island nation of Japan is one of the most industrious. Unlike North America, Europe or Russia, Japan has no more room in which to expand. There simply is no more wiggle room for this ambitious and industrious people.

After Japan's unconditional surrender in 1945, the nation was forbidden to maintain a standing army. This proved to be an economic boon. With America to protect them, the Japanese could focus their energies on their economy. For decades Japan experienced spectacular economic growth, but now its nationalistic tradition has contributed heavily to global financial problems.

Newsweek writer Ellyn Spragins observed: "Having waited so long to take action, the country's leaders now face major political upheaval before they can address their dilapidated banking system. Some observers think Japan could veer into a depression. That would be a disaster. But even a less disastrous scenario—-such as continued gridlock—will seriously hobble global growth and corporate earnings" (Oct. 5, 1998).

Still, as of late October 1999, Japan's economy was showing signs of life after suffering through the nation's worst downturn in 50 years. The economy grew for two quarters in a row, and the jobless rate was easing from record highs. Japan's economy is still uncertain, but the signs are encouraging.

Keep an eye out on Japan's banking management. At stake is a stronger yen, which slows Japanese exports. The Bank of Japan's governor, Masaru Hayami, refuses to print money that could help prevent the yen from rising. Stocks have fallen to a record low, but production is rising. Some forecasters think Japan will stay in its recession until 2001 as Japanese companies shrink investment to more normal levels (The Economist, Sept. 11, 1999, p. 75).

Japan is seminal to future Asian financial markets. It can also have an immense impact on the West, especially the United States and Europe.

Europe and the euro

Oldsters and the older baby-boomers remember the world immediately after World War II. Europe lay in ruins. The Marshall Plan helped lift a devastated Western Europe out of its post-war rubble. The European work ethic helped speed the Western Europe's remarkable economic recovery. Not so for Eastern Europe.

The Soviet bear dug its claws deep into Europe's backside, spreading an iron curtain to hide and exploit the Eastern European nations. National identities, personal independence and religious freedoms were quashed. Each Eastern European country had to put its back to the collective wheel and produce for the communist regime.

But from 1989 to 1991 the world witnessed the unthinkable: the seemingly impossible dissolution of the Soviet bloc and its governmental and economic systems. Freedom proved to be wildly contagious. Like falling dominoes, nearly every former Eastern European nation asserted its independence and right to self-rule.

Since then West and East Germany have united, but not without financial and economic differences and difficulties. Many Eastern European nations still struggle with the implementation of democracy, the production of essential goods, and money enough to provide even basic wages for employees. East Germans notice the difference between the affluence of West Germany and their own meager existence. Unified Germany tries to offset this by pouring money into what was once East Germany. One unpopular way of doing this was assessing West Germans a 5 percent surtax.

Other countries throughout Europe, especially those of the former Soviet bloc, look to the European Union for their economic salvation. Jane Bryant Quinn wrote on Europe's coming new legal tender, the euro: "[By] 2002, citizens will have to give up their francs, lire, Deutsche marks and pesetas in favor of Euro bills and coins. Prices will be quoted in Euros, no matter which of the countries you're in" (Newsweek, Oct. 26, 1998, p. 63).

Ms. Quinn expects Euroland will precipitate huge changes. Corporations will move to less-expensive countries. Prices might fall as consumers shop the Continent. Small banks and businesses might combine with larger or more-efficient ones. Factories likely will consolidate. A much broader capital market might encourage entrepreneurialism. "And by the way," she wrote, "don't worry that the Euro will undermine the dollar. A financially stronger Europe is better for all concerned" (ibid.). But are we speaking short or long term?

One year later The Economist (Oct. 23, 1999) published "Survey: The European Union." In this enlightening survey, Robert Cottrell writes that "the European Union will soon live up to its name, bringing in more countries of Europe and becoming more united." He shows that the European Parliament is slowly but systematically being replaced by the EU governments, in his view a good thing because they do things rather than mostly talk.

After World War II, France assumed the leadership of Western Europe. Germany, crippled by war guilt, naturally took a back seat to France. All that has changed. Germany has grown rich over the decades, and since 1989 it has become the most populous among the European nations. Teutonic confidence has returned. Last August Chancellor Gerhard Schröder declared that Germany "has every interest in considering itself as a great power in Europe." Mr. Cottrell thinks that, if any country is to lead a future Europe, it can be only Germany.

Speaking of the inversion of the Franco-German balance in post-war Europe, the same writer offers five recent fundamental shifts.

First, Germany has regained its self-confidence.

Second, the recent NATO police actions in Kosovo caused Europeans (and especially Germany) to consider a pressing need for a European standing army (Europeans taking care of their own business).

Third is the introduction of a new common currency, the euro. In 2002, notes and coins will replace all national equivalents. This will encourage the formation of a single European economy and market.

Fourth concerns a weakening of the European Parliament, giving place to the European Council (heads of contributing governments) and a council of ministers (instead of ordinary ministers).

The fifth shift is the natural enlargement of the EU from 15 to 20 new members (or possibly more), most coming from Central and Eastern Europe. Of this Mr. Cottrell writes: "This will turn the EU from a rich-country club into a true European Union."

Does the EU's future bode well for America in 10 years and beyond? Europe, though now a friend of the United States, may, by unforeseen circumstances, find itself a foe, especially if a global depression should suddenly be triggered or a trade war develops. U.S. News & World Report (July 14, 1997, p. 34) reminds its readers that Europe's history is filled with dictators: from Napoleon and Bismarck to Mussolini and Hitler. In the 1930s economic turmoil brought on by the Great Depression helped propel Adolf Hitler into power in Germany'.

Will Europe find itself an unwitting foe to the United States? Will Germany become the undisputed leader of a European superpower, a confederation of nations so great it could lead the free world? Finally, will this great superpower-to-be become the biblically prophesied final revival of the ancient Roman Empire? GN