YEAR IN REVIEW 1997: MILITARY-AFFAIRS: SPECIAL REPORT

SPECIAL REPORT: Combating the Land Mine Scourge by Douglas L. Clarke U.S. Secretary of State Warren Christopher has called them "weapons of mass destruction in slow motion"--the 110 million land mines buried in 68 countries stretching from Cambodia to Costa Rica. The United Nations has estimated that they kill or maim roughly 20,000 people each year. Most of the casualties are innocent civilians, many of them children, because practically all of the mines in place today have no self-destruction or neutralization features. They remain deadly hazards long after a conflict has ended or the lines of confrontation have moved. With some 23 million land mines buried in its sands, Egypt has more unexploded mines than any other country. Many of these date from World War II, and the others are from the 1948, 1956, 1967, and 1973 Arab-Israeli wars. The most densely mined country is Bosnia and Herzegovina, where there are an average of 152 mines per square mile. As international publicity and abhorrence to these indiscriminate killers have grown, so have the public and private efforts to remove the mines already planted and to ban or at least severely restrict their use in the future. Land mines fall into two broad categories: those that target tanks, trucks, and heavy vehicles and those designed to kill or injure people. Antimine efforts have focused on this latter group, commonly known as antipersonnel mines. Compared with the magnitude of the task, these efforts have been almost insignificant. Twenty times as many new mines are laid each year as are cleared. Many of the countries that are the most heavily mined--Afghanistan, Angola, Cambodia, Mozambique--are also among the poorest in the world, and the social and economic price they pay is enormous. Afghanistan is thought to have 10 million unexploded mines, one for every two members of the population. Some 15 million mines are scattered throughout Angola, a country with 70,000 amputees from land mine explosions and where much of the agricultural land is unusable because of mines. Opponents of land mines placed high hopes that the first review conference of the 1980 Geneva Convention on Inhumane Weapons would result in an outright ban on antipersonnel land mines, but they were quickly disappointed. The conference met three times in late 1995 and early 1996, but it was obvious from the beginning that too few parties supported an outright ban. In the end the conference did agree on some important changes. The rewritten convention, which deals with antipersonnel mines, will apply in civil as well as international conflicts. The delegates mandated a transition from "dumb" to "smart" antipersonnel mines; except for those planted in mapped and guarded areas, mines must be equipped with devices that will render them permanently harmless after 120 days. As some existing mines are made out of plastic or wood and can be detected only by slow and dangerous probing by hand, the conference also directed that future mines have a metal mass of at least eight grams. Parties to the convention were given nine years to bring their stockpiles up to these standards. Disappointed that antipersonnel mines were not outlawed entirely by the review conference, its critics also complained that the delegates failed to approve a verification or enforcement regime for the convention and had failed to effectively block the trade in land mines. Critics also argued that the fuzzy definition of antipersonnel mines agreed upon by the conference opened the door for the use of antitank mines against personnel as technological advances blur the distinctions between the two types of mines. The convention had made no stipulations with regard to antitank mines. UN Secretary-General Boutros Boutros-Ghali told the delegates they had ignored the "groundswell in public opinion" against mines and warned them that by the time of the next review conference, in 2001, "an additional 50,000 human beings will have been killed and a further 80,000 injured by land mines." Canada served as host for a conference in October on antipersonnel mines attended by 50 countries. It adopted a declaration calling for the earliest-possible agreement on a global ban, but many crucial nations, including Russia and most Middle Eastern countries, did not sign it, and China did not even attend. Land mine opponents hoped that unilateral and regional actions by governments might be more successful in the long run than the global approach exemplified by the Convention on Inhumane Weapons. In March 1995 Belgium became the first country to enact a law completely banning the manufacture, trade, use, and stockpiling of antipersonnel mines. That same year South Africa announced a permanent ban on the export of antipersonnel mines, while France established a moratorium on their production. In April 1996 Germany renounced the use of antipersonnel mines by its armed forces and said that it planned to destroy the remaining mines of that kind. In September Italy, one of the largest producers of land mines, pledged to renounce the production and export of these weapons and thus became the 33rd nation with a moratorium on the export of antipersonnel mines. In his 1994 UN General Assembly address, U.S. Pres. Bill Clinton called for the eventual elimination of antipersonnel land mines, an appeal he repeated at the UN in September 1996. In March 1996 the U.S. announced a unilateral ban on the use of "dumb" antipersonnel mines and pledged to destroy its stockpile of such weapons by the end of 1999. It made a significant exception to this new policy, however; it would not apply in Korea, where such "dumb" mines would be used to "defend the United States and its allies from armed aggression across the Korean Demilitarized Zone." Many military authorities questioned the military utility of mines, but this U.S. policy strongly implied otherwise. Other countries saw a useful role for these weapons. Both China and Finland advocated "reasonable limits" rather than an outright ban and pointed to the defensive nature of mines along a border. Chile employed mines to combat drug merchants crossing the mountains. Whatever the prospects are for restricting or banning the manufacture and use of land mines, the herculean task of removing the millions of mines already in place remains. It took Germany three years and $175 million to clear the last 1,100 mines along the old border between the former East and West Germanys, a remnant of the more than 1.5 million mines once planted there. Furthermore, most of the countries plagued by mines are at the other end of the economic and technological spectrum from Germany, and they need international help. The UN and its agencies are operating demining programs in Afghanistan, Angola, Bosnia and Herzegovina, Cambodia, Croatia, El Salvador, Mozambique, Nicaragua, and Somalia. The Organization of American States is seeking to clear all land mines from Central America by 2000 (there are an estimated 170,000 mines in Nicaragua, Honduras, Guatemala, and Costa Rica) and in May announced an initiative that could lead to the world's first land-mine-free zone. New technologies are being sought to make demining quicker and safer. Sniffer dogs are being used by some countries to detect the vapours given off by the mines' explosives. Lasers, infrared sensors, and ground-penetrating radars are also being used to locate mines. Superman has even been called in to help the effort in Bosnia; in a comic book in Serbo-Croatian, distributed by the U.S. government, the superhero teaches children about the dangers of land mines. Douglas L. Clarke, a retired captain in the U.S. Navy, is a military analyst and author of The Missing Man: Politics and the MJA. Economic Affairs NATIONAL ECONOMIC POLICIES United States. Having achieved a soft landing in 1995, the U.S. economy avoided slipping into a recession in 1996. Partly as a result of the easing of monetary conditions that began in mid-1995, economic activity picked up in 1996 and reached 4.7% in the second quarter. A slowdown in the summer put the economy on course for a sustainable growth rate and led to GDP growth for the year of 2.3%--a little ahead of 1995. (Table I.) Economic growth was sustained by a recovery in domestic demand, in particular personal consumption. During the first half of the year, consumers spent freely with the aid of easily available credit. Having grown at a fast rate of 4%, consumer spending cooled in the second half as debt levels rose to record levels and fears of higher interest rates resurfaced. In contrast, government spending remained flat. Investment, both business and housing, staged a recovery and grew by around 6%. Business investment reflected the ending of the inventory overhang and an improvement in manufacturing output (see Graph II). Capacity utilization rose to 83%, close to its post-World War II average. As long-term interest rates (Graph IV) rose in the autumn, there was some evidence of a slowdown in both industrial output and the rate of business investment. Continuing economic growth enabled further gains to be made in reducing unemployment (Table III). In November the U.S. jobless rate stood at 5.3%, compared with 5.5% a year earlier. The December rate remained unchanged. Since 1992, 10 million jobs had been created, more than Pres. Bill Clinton promised during his campaign that year. Four million of these jobs had been created since the beginning of 1995, and, unlike in previous years, two-thirds were in sectors paying above-average wages. Despite full employment, inflation remained subdued. (See Graph I.) In November the core inflation rate, excluding food and energy, was running at 2.7%, compared with 3% a year earlier. Economic observers were surprised by the lack of upward pressures on prices (Table II) despite the jobless rate's falling well below 6% (often regarded as the threshold for accelerating inflation). Structural changes in the labour market and stagnation in real wages were seen as possible reasons. The combination of robust domestic demand with a stronger dollar (Graph I) halted the improvement in the trade balance. On the basis of incomplete data, the trade balance was heading for a $175 billion deficit--much higher than the previous year's deficit of $108 billion. The current account was likely to remain largely unchanged as a result of higher capital inflows into the U.S. and a smaller deficit on investment income. Economic policy during 1996, both monetary and fiscal, remained largely neutral. While it did not provide any stimulus to the economy, the primary goal of economic policy makers remained one of ensuring that the noninflationary growth was sustained. As the economy responded to lower interest rates (Graph III)--introduced between July 1995 and February 1996--and activity rates picked up, the monetary authorities kept the base rates under review. In the wake of the 4.7% GDP growth in the second quarter and continued growth in employment, independent observers started worrying that interest rates might have to be raised soon to counter the threat of future higher inflation. The Fed took the view that there was no need for higher interest rates, as economic growth would be moderating spontaneously, the inflation risk remained low, and lower levels of unemployment were sustainable without triggering higher wage rates. The economic indicators available at the close of the year pointed to this judgment's being accurate. Fiscal policy, having achieved a reduction in the U.S. budget deficit in the last three years, was largely neutral in 1996. Clinton's proposals for fiscal 1997 (beginning Oct. 1, 1996) allowed for only a slight growth in spending on many programs, with the exception of health care and similar mandatory programs. Japan. The long-awaited economic recovery in Japan ran out of steam after an exceptionally strong performance in the first quarter (Graph II). The recovery that got under way in the second half of 1995 accelerated in the winter, leading to a 3% growth over the previous quarter (an annualized growth of 12.7%)--the strongest growth in more than 20 years. While the surge in activity was boosted by exceptional factors, there was no denying the strength of the underlying trend. This led to an upward revision of economic forecasts to 4.25%, putting Japan at the top of the economic growth league among major economies. In the event, economic activity lost momentum and the next quarter registered a decline, followed by a minuscule rise in the third quarter. Despite this uneven performance, GDP in Japan was estimated to have grown by about 3.7% during 1996 as a whole--the best performance in five years.(Table I.) The strong recovery early in the year reflected the large stimulus provided by the lower interest rates and public-investment programs announced in April and September 1995. The subsequent slowdown was attributable to the effect of these measures fading away. Domestic demand was the main driving force supported by strong growth in investment. Consumer spending, which was boosted by gains in disposable income, lost momentum in the second half of the year. Sales of automobiles, personal computers, and such high-tech equipment as mobile phones, car navigation systems, and digital cameras registered good gains. Sales in supermarkets and some department stores remained relatively weaker. Housing investment grew robustly, stimulated by prospects of higher interest rates later in the year and the planned rise in the consumption tax in April 1997. The commercial construction industry benefited from the huge injections of public-works investment in the economy and the reconstruction of Kobe after the 1995 earthquake. Spending on plant and equipment strengthened during the year, reflecting improved business confidence and record-low interest rates. (For short-term interest rates, see Graph III; for long-term interest rates, see Graph IV.) Although business investment grew by 5% over the year, compared with 10% for private housing, as the year drew to a close, the trend of the former was pointing upward while the latter was decidedly downward. Against the background of a recovery in economic activity, fiscal policy remained largely neutral and monetary policy was accommodating. There were no pump-priming emergency packages that had been repeatedly used in past years to stimulate the economy. On the contrary, policy makers began anticipating a tightening in 1997 on the assumption of sustained recovery. In June the Cabinet approved a rise in the consumption tax from 3% to 5%, effective from April 1997. Interest rates remained at a record low but would have risen before the year-end had rapid economic growth been sustained. Maintaining interest rates at low levels was deemed by the authorities to be beneficial to the banking system, which had not recovered from the problems caused by "nonperforming" loans. Several bills were passed to bolster the role of regulatory and supervisory bodies to forestall future collapse of financial institutions, but these could not prevent further bankruptcies among financial institutions. The $9 billion bankruptcy of Nichiei Finance in late October marked the largest collapse in Japan's corporate history. This would have resulted in further claims on the deposit insurance scheme and added to the government's already large deficit, which had risen to 5% of GDP--an unsustainable level against the low-inflation and low-growth economic backdrop. As unemployment is usually a lagging indicator, the uneven recovery did not halt the inexorable rise in Japanese unemployment (Table III). The unemployment rate reached a new peak of 3.5% in May, its highest since 1953, and fell to 3.4% in November. This looked low in comparison with rates in the U.S. and Europe, but it was significantly understated because of the way Japanese statistics were calculated. Despite the rise in unemployment, wages rose in 1996. The spring shunto round of wage negotiations resulted in a weighted average pay raise of 2.86%. Although the nominal gains were low in both 1995 and 1996, the minimal increase in the consumer price index (Table II) resulted in a good real rise. Despite the currency value's (Graph V) weakening from 80 yen to the dollar in April 1995 to 113 to the dollar in autumn 1996, there was little evidence that inflation was picking up. Following a 0.3% fall in the first quarter, the subsequent rise resulted in a 0.2% increase overall. Given the sharp rise in import prices in yen terms, inflation (Graph I) was expected to upturn significantly in 1997. The slowdown in domestic demand, coupled with the decline in the value of the yen, resulted in a slowdown in the growth of imports. Compared with a 16% overall rise in 1995, imports toward the end of 1996 were 3% up on the year before (both in yen terms). Exports rose by 3%, but export growth was held back by sluggish growth in many OECD countries. Because of the depreciating yen, Japan's trade surplus and the current-account balance declined in dollar terms. The trade surplus was heading for $100 billion ($135 billion in 1995), compared with a $75 billion current-account surplus ($111 billion in 1995).