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Momentous events elsewhere in 2001 provide a contrast with newly-peaceful East Timor.
Early in the year, well before 11 September, the US and other OECD economies were slowing down with Japan already mired in recession. Even oil-rich states began to labour, following the slump in oil prices that followed the terrorist attacks, with their devastating impact on air travel and tourism. By the end of the year most countries had become affected, casting a mood of gloom and uncertainty over the immediate future of the world economy. The year ended with the sensational collapse of Argentina’s economy, with concerns about the position of Brazil, and there are still few signs of recovery in Japan. Not all national economies have suffered. Russia, China, India, South Korea, the Netherlands, and Australia seem to have weathered the storm. Predictions for Australia in 2002 are generally cautiously optimistic but in the short term it may have some difficult times.
America’s political reorientation after the Republican election victory and the 11 September attack, has troubled her friends, especially in respect of defence and environmental issues. Americans not only shifted to the right; the US also became more nationalistic and inward looking. Its war against terrorism was not to save the world, but Americans. On issues like human rights the US became the odd man out, declining to support the setting up of an international criminal court, a move that international terrorism should have made more urgent.
On the positive side is the marked improvement in major power relationships – with the notable exception of relations between India and Pakistan. Relations between the US, Russia and China improved during the year, despite some provocative actions by the Bush administration, such as the spy plane’s forced landing in Hainan Island and Washington’s abrogation of the ABM Treaty, which nettled the Russians. The Treaty was of course out of date, but it still enshrined the principle of mutual restraint. Fortuitously, however, a spin-off of the terrorist attacks on the US was the forging of closer bonds between the US, Russia, China and India, with Islamic extremists as their new-found common enemy.
The United Nations’ fortunes were mixed during the year. Its influence in Washington evidently declined as Republicans in general have in recent years not been strong supporters of the world body, especially its environmental and human rights agendas. In Afghanistan it was effectively sidelined to a rubber stamp role although the UN was responsible for sensitive negotiations towards an acceptable coalition government. It may in the future play an important role in picking up the pieces of a nation devastated by decades of war and internal conflict. The UN’s Transitional Administration in East Timor continued, however, to be a success story, and arguably the UN’s outstanding achievement in peacekeeping and nation building, for which Dr Kofi Annan and the world body were this year awarded the Nobel Peace Prize.
There were no wars in Latin America, despite ongoing economic problems, nor in the Pacific and East Asia. However, bitter local conflict continued in Indonesia – principally in Sulawesi and Aceh – and in the southern Philippines.
By contrast, East Timor, where I spent much of the year, became one of Southeast Asia’s most peaceful places. The militia threat subsided, the economy improved and the nation’s democratic institutions are now in place. Timor’s first free elections took place peacefully, bringing into existence a Constitutional Assembly, which is now working its way through the nation’s Constitution. It also led to a major step towards independence, the formation of a de facto East Timorese Government (under United Nations tutelage) based on the election outcome. Full independence will come in five months time, on 20 May 2002.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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