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World: Analysis from Washington -- A Dangerous Convergence




Washington, 17 June 1998 (RFE/RL) -- Three apparently separate trends -- an economic crisis spreading outward from Asia, a rampant nationalism in many countries, and a growing number of ever more divisive regional conflicts -- are converging to make the world a far more dangerous place than it has been at any time since the end of the Cold War.

In seeking to cope, both governments and analysts have tended to focus on these trends individually, deploying economic assets to deal with the Asian crisis, sanctions and other expressions of disapproval to cope with the rise of nationalism, and a flurry of international meetings to try to prevent local conflicts from dividing the great powers.

But as these trends come together and thus reinforce one another, such an approach is almost certain to prove even less effective than it has been up to now. More than that, it may create an explosive cycle in which the steps taken to deal with one set of problems may have the effect of making another set of problems even more difficult and dangerous.

Despite optimistic prognostications in the past that the international financial community could contain and overcome the economic and financial difficulties in Asia, the situation there and its impact on other countries and other sectors has if anything grown worse in recent days.

Speaking at a conference in Melbourne this week, a senior World Bank official suggested that the situation in Asia was so severe that he was prepared to describe it as a "depression," a term world leaders and banking officials have strenuously avoided because of its links to the world crisis of the 1930s.

But Jean-Michel Severino was prepared to go even further. "This depression," he said, "could be very long-lasting if it is not handled very, very carefully."

As if in confirmation of his remarks, the Japanese yen and most regional stock markets continued their steep declines this week. The Chinese government indicated that it hoped to avoid devaluing its national currency lest that set off a new spiral of economic decline. And Beijing also reported that foreign direct investment in China had fallen in the first quarter.

These economic difficulties have already rippled through the emerging markets in Russia and elsewhere leading foreign investors to be more cautious about investing there and putting pressure on these governments to seek assistance from the World Bank or International Monetary Fund.

These difficulties have begun to affect markets in Europe and the United States. And these demands for help have been greeted with increasing skepticism by governments and peoples who themselves feel threatened.

But these economic difficulties have also helped to power increasingly nationalistic behavior by governments abroad and nativist attitudes by populations at home. Both India and Pakistan exploded nuclear devices precisely because they felt their national interests threatened, regardless of the view of the international community.

And in another example of this trend, North Korea announced on Tuesday that it had sold and would continue to sell missiles to countries prepared to pay for them. Pyongyang's reason? It needs the money now to deal with its own difficulties.

Moreover, a variety of governments around the world have sold strategic goods to countries willing to pay often in disregard of the security consequences. While such steps may bring profits to businesses at home, they almost invariably make the world less secure and more dangerous.

And this economic nationalism has been accompanied by an increasingly ugly nativism. Not only did the anti-immigrant One Nation party do well in regional elections in Australia last Saturday, but even President Bill Clinton warned in a speech that the increasing number of immigrants, despite the contributions they have and will make, could pose problems for the United States.

Speaking at Portland State University last week, Clinton noted that "unless we handle this well, immigration of this sweep and scope could threaten the bonds of our union."

The impact of the linkages between economic difficulties and nationalism are being further exacerbated by the ties of both to a series of regional conflicts that threaten to divide the major powers in ways that could trigger broader conflicts, especially when countries are angry for what may appear to be separate economic and national reasons.

In what could be a harbinger of the future, leaders of the Russian parliament this week indicated that they will put off any consideration of the START II arms reduction agreement if NATO takes any unilateral action in Kosova. And Russian military commanders have openly complained that the Western alliance had misled them on its intentions concerning Yugoslavia.

And consequently, unless managed carefully, a regional conflict could grow into a larger one, just as has happened in the past.

Consequently, as they come together, these three trends -- economic, national and geopolitical -- represent both a challenge and a threat, a challenge to the international community to devise new and more comprehensive policies and a threat of even more serious developments if that community and the countries which make it up fail to do so.

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