International Developments

in 1984



Chapter 2. International Developments in 1984


1.  East-West Relations

East-West relations have seen serious discord and tension in recent years, yet there have been some moves to improve relations and resolve the deadlock, from the middle of 1984. However, the problems in East-West relations today are extremely complex, and there continues to be a major gap between expectations and realities, for the time being.


A.  Tension in East-West Relations and the Search for Improved Relations

a.  East-West relations were in a difficult situation in early 1984. In November 1983, the Soviet Union unilaterally walked out of the INF (Intermediate Nuclear Forces) negotiations, and in December of the same year the START (Strategic Arms Reduction Talks) went into indefinite recess. These developments closed the formal channels for dialogue and negotiations between the United States and the Soviet Union on nuclear arms control in today's East-West relations where stability has been sustained by nuclear deterrence.

In the first half of 1984, the Soviet Union refused to respond to the call of the United States for an early resumption of the arms control negotiations, maintaining instead her position that the removal of the U.S. INF missiles deployed in Western Europe was a prerequisite for resuming talks. During this period, the Soviet Union showed hard posture, by steadily increasing deployment of SS-20s, by deploying SS-22s in the German Democratic Republic and Czechoslovakia as a counter measure to American INF deployment, and by announcing on May 8 that Soviet athletes would not take part in the Los Angeles Olympic Games.


b.  Around mid-year, United States initiatives produced some progress as seen in the negotiations for a cultural agreement, the modernization of the hot-line between Washington and Moscow, and consular matters, and there appeared movement toward improvement, at least in bilateral relations.

While maintaining its drive to restore power and prestige, the United States emphasized a policy of expediting progress in bilateral relations with the Soviet Union as well as in arms control. In the face of steady deployment of United States INFs in Western Europe as scheduled and of demonstration of Western solidarity such as shown at the London Summit in June, the Soviet Union was forced to modify its hard-line stance and seek new policies toward the West, taking this new situation into account.

In the arms control field, the Soviet Union, perhaps cautions of the United States' preparedness for its Strategic Defense Initiative (SDI), began to place increasing emphasis on the issue of space weapons and proposed on June 29 that the two countries meet in Vienna in September to begin talks on preventing the militarization of outer space. In response, the United States promptly expressed its readiness to discuss arrangements under which the INF and START talks could be resumed and to discuss and seek agreement on negotiating approaches which could lead to limitations on anti-satellite weapons. However, the proposed talks did not take place in September because the Soviet Union insisted on a moratorium on space weapons development, and testing as a prerequisite to the talks and because the Soviet Union was reluctant to resume the INF and START talks.


B.  Agreement on Starting New Arms Control Negotiations


a.  In his address to the United Nations General Assembly on September 24, President Reagan took a flexible stance in proposing a broad umbrella framework for the future talks on arms control issues between the United States and the Soviet Union. This flexibility was also evident in the President Reagan's late-September quasi-summit talks with Soviet Foreign Minister Gromyko.

In response, the Soviet side showed a somewhat positive attitude as seen in General Secretary Chernenko's October 16 interview with the Washington Post. After President Reagan was reelected by a large majority on November 6, the United States and the Soviet Union announced on November 22 that they had agreed to enter into new negotiations on the whole range of questions concerning nuclear and outer-space weapons and that Secretary of State Shultz and Foreign Minister Gromyko would meet in Geneva in early January 1985.


b.  The following factors may be pointed out as being behind the U.S.-U.S.S.R. agreement to enter into new arms control negotiations.


o   Given the present security structure, neither the United States nor the Soviet Union can stand holding no dialogue and thus having unstable relations for a long time. At the same time, both nations need to rally their allies and international opinion, and they are unable to ignore the calls for stabilization in East-West relations and the resumption of arms control negotiations.

o   In the face of President Reagan's reelection, the Soviet Union moved away from all-out criticism of the Reagan administration toward a search for concessions from the United States through negotiations. In view of the fact that the previous Soviet hardline policies, including the breaking off of arms control negotiations, had perversely served only to strengthen Western solidarity, the Soviet Union found it better to try to split the West by appealing to Western opinion with a positive stance toward negotiations.

o   On the assumption that the United States moves related to the SDI might seriously threaten the strategic balance, the Soviet Union has employed all possible means to block the SDI, and they found that arms control negotiations could be effectively used for that end.

o   Both the United States and the Soviet Union are subject to economic difficulties and constraints which made it impossible to take a negative attitude toward arms control negotiations.


C.  The Start of the New Arms Control Negotiations and the Issues Involved


a.  In early January 1985, the U.S. Secretary of State Shultz and Soviet Foreign Minister Gromyko met to frame the arrangements for the new arms control negotiations. They agreed that the negotiations would be on the complex of questions concerning space weapons and nuclear weapons (both strategic and intermediate-range) with all of these questions considered and resolved in their interrelationship. It was agreed that the objective of the negotiations would be to work out effective agreements aimed at preventing an arms race in space and terminating it on earth, limiting and reducing nuclear arms, and strengthening the strategic stability. They agreed that the negotiations would be conducted in three negotiating groups (strategic nuclear arms, intermediate-range nuclear arms, and space arms). The first round of negotiations started in Geneva on March 12.


b.  It may be too early, however, to become optimistic about the prospects for substantive results even though negotiations are now underway between the United States and the Soviet Union.

The arms control issues under negotiation are extremely complex and include many intractable elements. There is a wide divergence between the United States and Soviet basic positions on the issues, whether on strategic nuclear arms, intermediate-range nuclear arms, or space arms. There is also a wide divergence of views on the linkage among the areas at issue. Thus it will not be easy to solve the substantive issues of arms control.

Political developments within the Soviet Union are also worth noting. The inauguration of the Gorbachev administration in March 1985 capped a rapid turnover among the top leadership in recent years, from Brezhnev to Andropov from Andropov to Chernenko and now from Chernenko to Gorbachev. As a result, there are heightened hopes that Gorbachev's rise to power may, as indicated by the energetic round of talks he held on the occasion of Chernenko's funeral, make it possible to break the deadlock in East-West relations.

Nevertheless, the Gorbachev administration is not yet as strong as the administrations that concluded the SALT-1 and ABM treaties in 1972 and the SALT-II treaty in 1979. It is thus likely that the Gorbachev administration will concentrate for the time being upon consolidating its political power through reshuffling party personnel. It is still doubtful, given the increasing tendency toward conservatism in the Soviet Union, whether or not that administration is ready to make the necessary concessions needed to reach a compromise of any significance with the United States. 

This is clearly shown in the Soviet stance on arms control issues, remains virtually unchanged. The Soviet's strong reaction toward the SDI can be seen in the context that they use the SDI as a leverage, along with the INF issue, to shake public opinion in the West.

The basic Soviet stance regarding East-West relations is seemingly based upon the assumption that determined persistence in their unyielding position will bring the West around and gain them political and economic concessions. It is therefore necessary to keep a close and calm watch on the Soviet Union's carrot-stick foreign policy.


2.  Relations among the United States, the Soviet Union, and China in the Asia-Pacific Region


A.  Significance of the Asia-Pacific Region to the United States and the Soviet Union

With the continuing East-West tension and regional conflicts and discord, both the United States and the Soviet 'Union have become increasingly aware of the importance of the Asia-Pacific region. 

Behind this awareness lies, first of all, the fact that this vigorous and vital region has enjoyed the most dynamic development anywhere in the world. Even though the rest of the world has been in prolonged recession in the wake of the oil crises, this region has achieved satisfactory economic development. Recently, the United States' trade with the Asia-Pacific region has exceeded that with Europe, and the gap is widening. At the same time, the demographic and economic center of gravity in the United States has been shifting from the East coast to the West coast.


Total U.S. Two-way Trade by Area


It may also be pointed out that the Soviet Union has continued to strengthen its nuclear and conventional forces in the Far East and that its Pacific fleet has grown to be the largest in quality and quantitity, now equal to its North Atlantic fleet. This buildup in the Soviet Pacific fleet appears to be closely linked to the Soviet awareness of the strategic importance of SLBMs (Submarine-Launched Ballistic Missiles) and its emphasis upon Far Eastern waters as a strategic site for deploying SLBM forces against the United States. As a result of these Soviet moves, the United States has become aware that the Far East is a region directly linked to its own national security. Thus, the Far East is now, from a strategic viewpoint, an extremely important region both to the United States and the Soviet Union.

With this changing situation, and with the Chinese move on the independent policy, there has been slight change perceived in Sino-American and Sino-Soviet relations since the late 1970s.


B.  Sino-American Relations

Relations between the United States and China were basically good in 1984, as shown by Premier Zhao Ziyang's January visit to the United States and President Reagan's April visit to China.

As a result of the exchange of visits between the two leaders, the Accord on Industrial and Technological Cooperation, the Taxation Treaty, and other agreements were signed. With the stabilization of Sino-American relations, their economic relations saw further development in both trade and investment. Steady progress was also made in the military field as seen in Defense Minister Zhang Aiping's June visit to the United States, Secretary of the Navy Lehman's August visit to China, and Joint Chiefs of Staff Chairman Vessey's January 1985 visit to China.

Taiwan issue may still be cited as the most stumbling block to improved Sino-American relations. Repeatedly expressing its dissatisfaction with the United States' Taiwan Relations Act and its arms transfer to Taiwan, China has called for the United States to observe its three communiques with China (the Shanghai Communique, the Joint Communique on the Establishment of Diplomatic Relations, and the Joint Communique on Gradually Reducing and Finally Resolving the Issue of U.S. Arms Sales to Taiwan, issued on August 17, 1982). It may be difficult for China to yield on the Taiwan issue since China maintains that this issue is a matter of national sovereignty. China seems unlikely to want to see any major deterioration in its relations with the United States. Recently, China has indicated that the "one country, two systems" formula, that was used to resolve the Hong Kong issue, might also be applicable to Taiwan, and the U.S. attitude on this idea remains to be seen.

There are two points that are important to gaining a proper perspective on Sino-American relations: the fact that the Soviet Union remains an important element in Chinese security and the likelihood that China will pursue a policy of greater cooperation with the West based upon the recognition that the United States and other Western countries have much to offer for its modernization. Accordingly, Sino-American relations will proceed favorablly even though some differences will be existent between Chinese independent policy and the U.S. foreign policy.


C.  Sino-Soviet Relations

The Deputy Foreign Minister level talks, resumed in October 1982 with the purpose of improving Sino-Soviet relations, continued to be held in Beijing and Moscow alternately; the fourth session in March 1984, the fifth in October 1984, and the sixth in April 1985. In non-political fields, there was a gradual broadening of the relations as seen in the trade expansion, the increase in the number of student exchanges, sports exchanges, cultural exchanges, and the exchanges of various experts.

Chinese Vice Premier Wan Li visited Moscow in February for General Secretary Andropov's funeral, and met with First Deputy Premier Aliyev. In September, Chinese Foreign Minister Wu Xueqian and Soviet Foreign Minister Gromyko met on the occasion of the United Nations General Assembly and announced their agreement to continue the political dialogue at all levels.

First Deputy Premier Arkhipov's visit to China, originally scheduled for May, finally took place in December. Deputy Premier Arkhipov met with Premier Zhao and other Chinese leaders and signed three agreements-on economic and technical cooperation, on scientific and technological cooperation, and on the establishment of a joint committee for economic, trade, and scientific and technical cooperation.

In his inaugural address to a special plenary session of the Communist Party Central Committee in March 1985, General Secretary Gorbachev expressed his positive position on improving relations with China, saying that the Soviet Union earnestly hopes for improved relations with China and that this is quite possible so long as reciprocity is ensured.

Chinese Vice Premier Li Peng visited Moscow for the funeral of General Secretary Chernenko and met with General Secretary Gorbachev. The meeting indicated a subtle change in the Chinese stance toward the Soviet Union as follows: Vice Premier Li conveyed a message to Gorbachev from Chinese General Secretary Hu Yaobang; he did not refer to the so-called "three conditions;" he called the Soviet Union a socialist country for the first time since the outbreak of the Sino-Soviet conflict; he expressed hopes for improved political relations.

However, it is assumed that basic differences remained unsolved in the subsequent Deputy Foreign Minister level talks over China's "three conditions" (that the Soviet Union cease its support for the Vietnamese invasion of Cambodia, withdraw its troops from Afghanistan, and reduce its forces on the Sino-Soviet border and withdraw those in Mongolia). At the same time, there has been no change in the Chinese position of support for the resistance forces in Cambodia and Afghanistan fighting against Vietnam and the Soviet Union respectively.


3.  Regional Issues

Because East-West relations are a key factor in the international situation overall, developments in East-West relations have a major impact upon regional issues all over the world. At the same time, regional issues are themselves tied to East-West relations and, with their peculiarities, are destabilizing factors in the international situation overall.

The Iran-Iraq conflict, for example, is not simply a matter for the two belligerents but, as seen in the attacks on tankers, has been running the risk of imperiling neighboring countries and even countries outside of the region. Likewise, the tension and instability in Nicaragua and elsewhere in Central America may be an instance of a regional conflict's spilling over outside of the region to become a conflict within the context of East-West relations.

Despite various efforts to break the deadlocks, the military conflicts that have developed in recent years in Cambodia, Afghanistan, Iran-Iraq, and elsewhere continued with no prospects for settlement in 1984. The path of regional conflicts toward political settlement is strewn with difficulties, since there exist some factors serving to prolong the conflicts despite the obvious wish of some parties for peaceful solution.


A.  Asia and the Pacific


a.  The situation was strained on and around the Korean Peninsula in 1983 with the downing of the Korean Airlines jetliner in September and the Rangoon incident in October. 1984 saw some new developments between North and South including the resumption of the dialogues, however.

Prominent among these developments were the delivery of North Korean relief assistance for flood sufferers in the Republic of Korea in September, the Inter-Korean Economic Talks in November, and the preliminary meeting for the Inter-Korean Red Cross Conference in November.

The Republic of Korea and North Korea were also active in cultivating closer relations with the other countries concerned. First of all, President Chun Doo Hwan made an official visit to Japan in September, for the first time as an incumbent head of state of the Republic of Korea. Symbolizing and accelerating that the two countries embarked on a mature and firm relations, this visit was also significant in that the two countries agreed on working for the relaxation of tensions on and around the Peninsula. Relations between the Republic of Korea and the United States were strengthened with President Reagan's visit to Korea in November 1983 and President Chun's visit to the United States in April 1985.

There were also frequent exchanges of high-level visits between China and North Korea in 1984 as seen in General Secretary Hu Yaobang's visit to North Korea in May and Chairman Kim Il Sung's visit to China in November. Likewise, North Korea's relations with the Soviet Union were strengthened with those events, such as Chairman Kim Il Sung's visit to the Soviet Union in May.

It is also worth noting that progress was made in relations between the Republic of Korea and China in sports exchanges and other non-political fields.

Domestically, the Republic of Korea had a comparatively quiet year under steady policies of President Chun's leadership, including the implementation of measures to restore campus autonomy and the removal of the restrictions on political activities by some people. In the general election held in February 1985, the newly formed New Korea Democratic Party emerged as the leading opposition party while the ruling Democratic Justice Party maintained a stable majority and the Cabinet was reshuffled.

In North Korea, there were conspicuous moves to pave the way for Kim Jong Il's succession while economically the joint venture law was enacted in September.

It is generally felt that deep-rooted mutual distrust will prevent any rapid progress in the north-south dialogue. However, it is hoped that the successive dialogues between the principals and the efforts made by the other countries concerned will lead to substantive results and contribute to a relaxation of tension in that area.


b.  In China, the leadership led by Deng Ziaoping, Hu Yaobang, and Zhao Ziyang continued in 1984 to pursue policies centering on economic construction in search of China's four modernizations.

The thirty-fifth anniversary of the foundation of the People's Republic of China was celebrated on October 1, 1984. With the success in agricultural reform over the past few years, the Third Pleneum of the Twelfth Congress adopted the Decision of the Central Committee on Reform of the Economic Structure and economic reforms were initiated with the emphasis on urban sectors. The party consolidation started in late 1983 entered its second phase in late 1984, gradually shifting its focus onto local level.

A settlement was worked out on Hong Kong issue under the "one country, two systems" formula, and Premier Zhao and British Prime Minister Thatcher signed a Joint Declaration on the Question of Hong Kong in December to be effective in May, 1985.


c.  The situation in Cambodia was at an impasse in 1984.

ASEAN continued its diplomatic efforts in search of the Comprehensive Political Settlement focused on the withdrawal of Vietnamese forces and respect for the Cambodian people's right of self-determination. On the other side, Vietnam launched a major dry-season military offensive against bases in the Thai-Cambodian border area from November 1984 through March 1985, thereby wiping out Democratic Cambodian bases, and aimed at achieving recognition of the present situation in Cambodia as a fait accompli.

Tension continued along the Sino-Vietnamese border with no moves seen for improved relations. At the same time, the Soviet Union has continued to build up its military presence at Cam Ranh Bay. 

The political situation in the Philippines was a focus of attention again in 1984. In the National Assembly (Batasang Pambansa) election in May, the opposition parties scored major gains even though the ruling party ultimately held on to its majority. In October, the board investigating the Aquino assassination released its report implicating a number of military figures, and formal indictments were handed down in January 1985. President Marcos seemed in poor health for a period in the autumn. Communist insurgents sharply stepped up their activities mainly in rural areas.


d.  In Southwest Asia, attention was focused on the situation in the wake of the October assassination of India's Prime Minister Indira Gandhi.

Rajiv Gandhi, Indira Gandhi's elder son, succeeded to the premiership and held a general election which was a long pending question in late December. He scored an unprecedented victory and consolidating his position on the strength of the sympathy vote, his own clean image, and popular hopes for a strong and stable central government.

India's relations with the Soviet Union were marked by several visits back and forth, including Defense Minister Ustinov's visit to India in March 1984 and Prime Minister Rajiv Gandhi's later visit to the Soviet Union. In India's relations with the United States, a number of American officials visited India after the new Prime Minister's inauguration, including high officials of Department of Defense and Commerce Secretary Baldridge, who signed a memorandum of understanding on technological transfer during his stay. In June 1985, Prime Minister Gandhi visited the United States.

Relations between India and Pakistan have cooled since late 1984 over the Sikh issue and other issues. Although Prime Minister Gandhi took a positive attitude on improved relations with neighboring countries in his inaugural address, India continues to be very concerned that Pakistan is procuring sophisticated weaponry and is working to develop a nuclear capability.

In Pakistan, President Haq won an overwhelming vote of confidence in the referendum of December 1984 and will continue to rule for another five years. However, Soviet General-Secretary Gorbachev took a tough attitude when President Haq went to Moscow in March 1985 for General-Secretary Chernenko's funeral, saying Soviet-Pakistani relations will continue to suffer so long as Pakistan continues to meddle in Afghanistan.


e.  In Australia, a general election was held in December 1984 with Prime Minister Hawke's ruling Labor Party maintaining its hold on the government. Prime Minister Hawke pursued the diplomacy with an emphasis on the Asia-Pacific area, visiting Hong Kong, Japan, China, the Republic of Korea, Singapore, and Malaysia.

In New Zealand, the Labor Party came to power in the July general election after eight years in opposition, but relations with the United States have been strained over the issue of port calls by the U.S. nuclear-capable vessels.


2.  The Americas


a.  In the United States, President Reagan defeated his Democratic opponent, Walter Mondale, by a decisive margin to win reelection in the November 6 Presidential election.

Among the factors which were considered to have contributed to President Reagan's reelection are the economic recovery, broad public endorcement of his concept for restoring American might and credibility, and his own personal popularity. In his second term, the Reagan administration has started to draw upon this public mandate to tackle such economic issues as the budget deficit, trade, and tax reform and such external issues as arms control negotiations with the Soviet Union.


b.  In Canada, former Minister of Finance Turner was selected to head the Liberal Party in June after Prime Minister Trudeau announced that he was resigning after a total fifteen years at the helm of state.

Prime Minister Turner held a general election in September. However, the strong popular desire for change and some mistakes in the Turner campaign resulted in a sweeping victory for the Progressive Conservatives led by Brian Mulroney. Prime Minister Mulroney announced that his foreign policy would put its emphasis on closer relations with the United States and NATO and that his domestic policies would focus on improving relations between the federal and provincial governments, reducing the budget deficit, and revitalizing the economy.


c.  The situation in Central America grew tenser in 1984.

The Contadora group (Columbia, Mexico, Panama, and Venezuela) continued to work for a peaceful settlement of Central American issues in 1984. In September, the group proposed its revised draft Agreement for Peace and Cooperation in Central America to the five countries of Costa Rica, El Salvadore, Guatemala, Hondorus, and Nicaragua.

Working on the basis of this proposal, four of the five countries (Costa Rica, El Salvadore, Guatemala, and Hondorus) adopted a Document of the Observations and called for some modifications on security issues. In early 1985, meeting were held of plenipotentiaries from the Contadora group and the five Central American countries to work out the final details on the draft agreement.

Building upon the momentum generated by Secretary of State Shultz's June visit to Nicaragua, direct negotiations were held between the United States and Nicaragua nine times before being suspended in January 1985. From late 1984 on, tension between the two countries was intensified over the presidential election in Nicaragua, United States support for Nicaraguan anti-government forces, and other issues. In May 1985, the United States announced economic sanctions against Nicaragua.


d.  The Latin American countries saw some signs of economic recovery in 1984 even as they continued to suffer from their cumulative external debts, inflation, and other economic difficulties.

The debtor countries of Latin America met three times and called for a political dialogue between the debtor and creditor countries in the belief that their cumulative external debts entailed not simply economic problems but also social and political difficulties.

Progress was seen in the long-term Latin American trend to democracy as Uruguay elected a civilian president in November 1984 and Brazil elected its first civilian president in 21 years in January 1985.


3.  Europe

Political developments in Europe were varied reflecting the fluid state of East-West relations in 1984.


a.  United States' INFs went under deployment as scheduled in West Germany, the United Kingdom, and Italy. In Belgium, deployment of cruise missiles began in March 1985. In the Netherlands, on the other hand, it was announced in June 1984 that, as a result of a Parliamentary resolution, the final decision on when to start deployment of cruise missiles in the Netherlands would not be made until November 1985.

On the SDI proposed by President Reagan, West European countries have started studies in close consultation with the United States and other allies on its political and strategic implications, the research participation possibilities, and a host of other factors. In frontier technology, France proposed in April 1985 that the European countries should have their own Eureka (European Research Coordination Action) project.


b.  The sense of peril was heightened in East Europe by the deployment of American INFs in Western Europe and the Soviet nuclear missile buildup in the German Democratic Republic and Czechoslovakia.

The East European countries moved toward independent diplomatic approaches to Western Europe in an effort to encourage the international climate for peace and to cope with their economic difficulties. Even so, the fact that the scheduled visits to the Federal Republic of Germany by East German General Secretary Honnecker and Bulgarian General Secretary Zhivkov were postponed indefinitely indicated anew that the East European foreign policy initiatives are possible only when they are acceptable to the Soviet Union.


c.  In the Soviet Union, General Secretary Chernenko died in March 1984, only thirteen months after taking office. There was considerable interest in who his successor would be, particularly because of the rapid turnover in the Soviet leadership from Brezhnev to Andropov to Chernenko. Yet immediately after his death, it was announced that a relatively young (54) Politburo member named Gorbachev had been selected as General Secretary.

The Gorbachev administration announced that it would maintain continuity in Soviet domestic and foreign policies. Domestically, it is assumed the administration will work on the long-standing goal of economic reconstruction, following Andropov's policies with personnel reschuffles, strengthened discipline, and experimental economic projects. In foreign policy, Gorbachev made it clear that there would be no basic change in Soviet foreign policy saying in his inaugural address that the strategies recently drawn up by the Central Committee would remain unchanged. While the emphasis will be on domestic policies for the time being, the Gorbachev foreign policy is expected to attach great importance to reconstruction of its relations with the United States, and to the relations with Eastern Europe, Afghanistan, China, India, and other neighboring countries.


4.  Middle East and Africa


a.  After his military defeat in the power struggle within the PLO, Chairman Arafat, in pursuit of restoring his leadership, strove to strengthen relations with Jordan and Egypt in 1984. In November 1984, he controve to hold a meeting of the Palestine National Congress (PNC) in Amman without the participation of middle-road or anti-Arafat factions.

In February 1985, Chairman Arafat and King Hussein reached the so-called Hussein-Arafat agreement paving the way for the settlement of the Palestine question. This agreement was an attempt to achieve peace in the Middle East through an Israeli troop withdrawal from the occupied territories in accordance with the United Nations Resolutions. This agreement drew attention in that it could be interpreted as formal, albeit tacit, PLO's recognition of Security Council Resolution 242.

Acting upon this agreement, President Mubarak of Egypt proposed in late February, on the eve of his March visit to the United States, that a joint Jordanian-Palestinian delegation should first enter into dialogue with the United States and later enter into negotiations with Israel.


b.  In Lebanon, the whole-nation Karami Cabinet was formed in April 1984 including the leaders of all the major factions. This Cabinet quickly moved to reestablish and maintain public order and to seek the withdrawal of Israeli forces. However, there was a gradual deterioration in public order, as illustrated by the bombing of the United States Embassy in September, with the result that negotiations with Israel on the withdrawal of Israeli forces came to a standstill. In January 1985, Israel unilaterally decided on a three-stage withdrawal from Lebanon. As soon as the first-stage withdrawal began, however, fighting escalated among the various factions for leadership over the military vacuum following Israel's withdrawal. In April, fighting spread to Beruit and the situation developed seriously into Karami's announcement of his resignation (even though this was later withdrawn). Within all of this, the Shias gained influence.


c.  The Iran-Iraq conflict remained at an impasse in 1984, although there were Iran's ground offensive in February leading up to the attacks on tankers in the Gulf from March on and climaxing in May and June and to the attacks by both sides on the other's civilian population centers in June.

In early 1985, Iraqi forces launched an ambitious albeit limited offensive and conducted aerial strikes against Iranian urban centers including the attack on Ahwas on March 4. In retaliation, Iran launched missile attacks on Baghdad. Both countries staged fierce attacks on the other's cities. In April, the United Nations Secretary General visited both countries and the situation appeared calmer for a time. However, the situation again became strained when Iraq resumed aerial bombing, charging that Iran was behind the May 25 attempt to assassinate the Amir of Kuwait and that Iran had rejected the Ramadan ceasefire.


d.  In Africa, the drought-caused food crisis grew even worse.

While earlier droughts had been centered primarily in the Sahel region, this drought has afflicted all of Africa, including eastern and southern Africa. United Nations and other reports tell of about 150 million people threatened with malnutrition or starvation in Africa.

On the Namibian question, South Africa and Angola reached a de facto ceasefire agreement in February 1984 to the effect that South African forces in Angola withdrew under the supervision of the South Africa-Angola Joint Monitoring Commission. South African troops started their gradual withdrawal toward the Namibian border and completed it in April 1985.

In South Africa, the new Constitution carne into effect and the tricameral Parliament of whites, coloreds, and Indians was inaugurated. However, even the new Constitution does not grant suffrage to the blacks who make up over 70% of the country's population.

On the issue of Chad, no satisfactory solution is yet in sight despite the September accord between France and Lybia on military withdrawal and the preparatory meeting for the Conference on National Reconciliation in October.

At the twentieth Assembly of Heads of State and Government of the Organization for African Unity (OAU) held in Addis Ababa in November 1984, Morocco announced its secession from the OAU.


4.  World Economic Trends

On the basis of the global recovery started in 1983, the industrialized countries gained a foothold in 1984 for a take off from the recession and inflation which had persisted since the second oil crisis. This economic recovery (real GNP growth of 4.9% forecast for the OECD member countries) contributed to world political stability.

The United States economy, which has been the prime force in the current recovery, is expected to continue to grow at a moderate rate. This growth, however, has been slowing in the face of the U.S. major budgetary and trade deficits, and there is some concern over the economy's prospects. Europe is generally on the way to recovery, but still suffers from serious unemployment and delays in structural adjustment.

With the recovery in the industrialized countries, things looked slightly better for the developing countries, especially the newly industrializing countries (NICs) of Asia, as they expanded their exports. The worst has been averted on the cumulative debt problems in Latin America as a result of efforts by both the debtor countries and the creditor countries, including multiyear rescheduling. However, there are still major disparities in the developing countries' economic recoveries. The low-income countries of Africa in particular still face numerous difficulties with the stagnation in commodity exports and the increasingly grave impact of the drought.

The glut in the international oil market persisted during 1984, partly because the non-OPEC countries expanded production. There were a number of conspicuous developments which showed rising market forces and even structural change in the oil market, such as sharp increase of spot trading, the growing futures market, the demand shift to heavier crudes due to upgraded refinery facilities, and exports of petroleum products by the OPEC countries. Under the circumstances, OPEC reduced its production ceiling at its October meeting (from 17.5 million barrels per day to 16 million barrels per day), made minor changes in the price differentials to respond to market changes, and introduced an auditing system at the December 1984 and January 1985 meetings. However, OPEC is still losing its share in the oil supply to the Free World (to 40.3% as of 1984).

World trade marked a sharp 9% volume expansion in 1984, but this was accompanied by major expansion in current account imbalances (the United States running a $101.6 billion current account deficit in 1984). At the same time, protectionist pressures persisted with industrial and regional disparities in the recovery and with lingering unemployment. Thus the leaders of the industrialized countries agreed at the OECD Ministerial Meeting in April 1985 and the Bonn Summit in May 1985 on the need in coordinated efforts to effectively implement appropriate macroeconomic policies, structural readjustment, and market-opening efforts, as well as to initiate a New Round of multilateral trade negotiations at an early date to preserve and strengthen the free trading system.


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