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Western Press Review: Euro-Zone Unity, The Russian Economy, And The Middle East

Prague, 3 January 2002 (RFE/RL) -- Commentary in the Western press today looks at a variety of topics. Among them are economic unity and divergence in the euro-zone; Russia's improving economic performance in 2001 and what remains to be tackled; the universal benefits of increasing health aid to poor nations; and the situation in the Middle East.


In a contribution to "The New York Times," U.S. economics professor Robert Dunn says that the arrival of the euro single currency does not guarantee the success of European monetary union. "There is one enormous problem," he says. "This union creates a single monetary policy for a group of quite different national economies that often experience divergent business-cycle patterns."

The patterns of economic ups and downs remain diverse in euro-zone countries, writes Dunn. He says: "The designers of the monetary union thought that the imposition of a single monetary policy, combined with free trade among the members, would cause cyclical conditions to converge quickly, producing a unified group of economies. [While] this may eventually occur, so far evidence of such convergence remains rather scarce."

Dunn writes: "Even if the economies of the original European monetary union members become more similar in their cyclical behavior, it will take far longer for the convergence to include the new member nations expected to come in within the next 10 or 15 years. The chances for consensus on the Governing Council, however thin now, will become far more distant with more members representing divergent national economies. And the larger nations, like Germany, France and Italy, might well resent the power of representatives from much smaller nations to outvote them on monetary policy."


An editorial in "The Wall Street Journal Europe" looks at Russia's economic performance over the past year. It says that although the Russian economy is growing at an impressive rate, the next task is to improve the living standards of the Russian people. The editorial goes on to suggest ways in which Russian President Vladimir Putin might ensure long-term financial stability. It writes: "Continued reform of the tax system to create incentives for enterprises to move out of the black sector would be a help. Mr. Putin could also resolve [to] reform the banking sector [and] work to free Russia's judiciary from political influence, so that Russian and foreign enterprises, as well as individuals, can be ensured a fair and timely hearing. He could resolve to improve corporate governance in Russia," which the paper says is "an essential condition for growth and investment."

Some of these goals will require legislation, says the paper, but much can also be accomplished through leading by example. A government that is transparent and which "does not meddle in private-sector interests [will] grow in credibility and stature and inspire the confidence of investors both at home and abroad," says the paper. "That, in turn, will drive up not only Russia's markets, but more importantly, the living standards of Russians themselves."


In Belgium's daily "Le Soir," staff writer Serge Dumont writes from Tel Aviv that the rigid stance of Israeli Prime Minister Ariel Sharon is drawing increasing criticism from within his own government. The scheduled return of U.S. Middle East envoy Anthony Zinni to the region today has exacerbated tensions between the moderate majority and the minority within the Israeli government, says Dumont. Israeli Foreign Minister Shimon Peres considers conditions to be sufficient to begin implementing the Mitchell and Tenet plans -- which specifically call for the progressive withdrawal of Israeli forces from the territories along with renewed antiterrorist measures by the Palestinian Authority. But Dumont says that Prime Minister Sharon "continues [to] demand 'seven days of total calm' before considering anything."

The tension within the government has created two camps, says Dumont. On one side, Sharon's camp considers Palestinian leader Yasser Arafat to be in league with terrorists and no longer legitimate; on the other, the entourage of Foreign Minister Peres believes Arafat will once again become an interlocutor for Israel, when he completes the dismantling of the extremist groups. Dumont says the level of violence in Israel has undeniably decreased since Arafat called a cease-fire on 16 December. But Sharon "continues to act as if nothing had happened," he remarks.


An editorial in "The New York Times" looks at a recent study commissioned by the World Health Organization (WHO) and says that "a dramatic increase in health spending by both rich and poor nations would produce huge economic and human benefits." The paper notes that the Commission on Macroeconomics and Health "asks rich countries to spend an extra one-tenth of 1 percent of their economies on the health of the poor." For the U.S., it says, "this would mean doubling current health aid, an extra $10 billion a year. If all wealthy countries cooperated, it would add $38 billion a year to health spending by 2015. The commission argues that if that money went to poor nations that also spent more and improved their health-care systems, these countries would see at least $360 billion a year in economic gains, lifting millions of people out of poverty. And [8] million lives a year would be saved."

"The New York Times" says that improving the health of poor countries would be an investment with payoffs for wealthy nations as well. "A more prosperous and stable Third World would experience fewer conflicts and disasters," it writes, and would eventually spend more money buying foreign exports. But the paper says despite such economic advantages, "the chance to save lives and reduce poverty should be incentive enough."


In the German paper "Die Welt," Hildegard Stausberg considers the appointment of Argentina's most recently installed president -- the fifth in two weeks. Eduardo Duhalde has political experience, she says, which "is good and important at a time when Argentina is sinking into general chaos." But on the other hand, Stausberg notes that Duhalde, as a former vice president and governor, bears considerable responsibility for the current discredited establishment. Now Duhalde is faced with the task of salvaging whatever he can and has openly administered the "bitter pill of declaring Argentina's bankruptcy."

Stausberg says that this bankruptcy has been common knowledge for some time, and Duhalde's remedy is a reversion to "Peronism"-- which means going back to the roots of state control. This kind of populism may bring short-term results, but in the long run will lead into a blind alley, says Stausberg. She writes: "What Argentina needs is an in-depth reform of its entire political apparatus, which is the most expensive in the world." It is questionable whether Duhalde has the courage to undertake such a project, she says. In this chaotic situation, prominent representatives are supporting him. Stausberg sees hope for improvement if the young, up-and-coming governors who have already launched reforms in the provinces are given a political chance.


An editorial in Britain's "Financial Times" also looks at the ongoing economic crisis in Argentina. It notes that Duhalde is expected to announce a new economic program tomorrow, which is likely to include scrapping the peso's one-to-one link with the dollar. But such a move would be "far too hasty," says the paper. "The new government must avoid populist gestures or ill-considered decisions. These are certain to exacerbate the lack of confidence in the policies and institutions of the country. [The] new plan must instead be fully thought out, comprehensive and workable," it says.

The paper goes on to suggest that any new plan must contain three main elements. The first is "clarification of the default." The government "should now suspend debt service abroad for an extended period," it says. The second is a new currency regime. Argentina must now "float the peso [or] dollarize," it writes. The third element is to reopen the banking system, says the paper. "The government has to find some way to restore access to deposits."

If the government comes up with a workable plan, the paper says, "the outside world must help." But only if the new president comes up with a "coherent plan" can he expect help from the rest of the world, it concludes.


A commentary in the "Sueddeutsche Zeitung" discusses the international security force to be deployed in Afghanistan. Turkey is largely expected to assume leadership of the force after Britain's initial command. "Ankara considers itself honored and Berlin is relieved," says the paper.

The limelight for the Turks sounds attractive, but there is little cause for rejoicing, it says, as Turkey demands a heavy price in dollars and euros. Turkey is aware of its value as the only Muslim NATO partner, which offers it a leading role in Kabul. The paper says that Turkey is exploiting the situation, and expects Germany to pay the price for not being forced to participate in an unpopular security force.


A "New York Times" editorial today looks at renewed tension between India and Pakistan, and says that after three weeks of increasing strain following the 13 December attack on India's parliament, Pakistani President Pervez Musharraf has taken several welcome steps to reduce the threat of war. The paper says that after years of denying that Pakistan's government was affiliated with Kashmiri separatist groups -- one or more of which are suspected to be behind that December attack -- Pakistani officials are now acknowledging that these groups have operated with government aid and encouragement.

The paper says India is "understandably skeptical" of Pakistan's recent conciliatory actions. But it adds: "India should recognize, however, that General Musharraf has already done more than many would have thought possible only a few months ago."

The editorial continues: "India has yet to recognize that it cannot use force alone to crush the aspirations among Kashmiris for independence or even greater self-government. Suppressing the local will by arms is likely only to drive Kashmiris further into the embrace of Pakistan. It is up to India now to take General Musharraf's welcome gesture, build on it, and bring both countries back from the brink of a war that would be catastrophic for the region and for the world."


In a contribution to "The Washington Post," U.S.-Belarus relations analyst Mark Lenzi says that the United States and NATO nations must "wake up to what is happening in NATO's backyard: Belarus is quietly acting as a leading supplier of lethal military equipment to Islamic radicals -- with terrorists and militant organizations in the Middle East, Balkans and Central Asia often the recipients." Lenzi says Belarus has also been a key partner of Iraq in its efforts to rebuild and modernize its air-defense capability.

Lenzi says the authoritarian Belarusian president, Alyaksandr Lukashenka, "feels he has a free hand to sell arms to nations and groups that are unfriendly to the West, because the European Union and the United States do not recognize him as the legitimate Belarusian head of state anyway. Threats of U.S.-led economic sanctions or other diplomatic 'sticks' against Belarus hold little weight, since the country is already isolated."

Lenzi writes: "It is only thanks to cheap energy subsidies from Russia that the Belarusian economy remains afloat. Since Russia is the only country that has the necessary economic and political influence on Belarus, it is imperative that Washington use its new relationship with Moscow to encourage the Russians to exert their leverage on Belarus to cease covert arms sales to rogue states and terrorist groups."


In a contribution to the "International Herald Tribune," author and professor Robert Hunter Wade of the London School of Economics says that the United States exercises near-absolute hegemony over a vastly unequal world -- and that this will ultimately undermine even its own interests. Wade says the U.S. helps maintain a global system such that, "without having to throw [its] weight around more than occasionally, normal market forces bolster [its] economic preeminence," allowing U.S. citizens "to consume far more than they themselves produce." The U.S. also practices what Wade calls a "single-minded unilateralism in international relations." Often U.S. global clout "has been used solely in the interests of its richest citizens and most powerful corporations."

In supervising this international framework, Wade says the U.S. wants "international organizations that look like cooperatives of member states and carry the legitimacy of multilateralism, but are financed in a way that allows [the U.S.] to control them."

Wade goes on to say that the widening disparity between the world's rich and poor helps breed anger and radical movements born of desperation. Now the idea has emerged that the U.S. should be attacked directly, Wade observes. He writes: "The United States and its allies can stamp out specific groups by force and bribery. But in the longer run, the structural arrangements that replicate a grossly unequal world have to be redesigned."

(RFE/RL's Dora Slaba contributed to this report.)