1990s and 2000s

International Politics

· Downfall of Soviet Union; End of the Cold-War

· Extension of Democracy

· Rise of Anti-Americanism and Dissolution of Trans-Atlantic Alliances

· United Nations and the International Community

· Population and Migration

· Nuclear Proliferation and Weapons of Mass Destruction (WMD)

· International Conflicts

Downfall of Soviet Union; End of the Cold-War

Effects

· Third world countries can no longer secure loans by aligning with the US or USSR, but must become self-sufficient

· The US & Russia could no longer justify high taxes for defense spending.

· Causes many border disputes: Yugoslavia (Kosovo), Russia/Chechnya, Indonesia.

· U.S. is seen as the last remaining super-power, which leads to more conflict with European allies who worry about US hegemony

· Over half the population in the Soviet Union is impoverished in a country where poverty was non-existent; life expectancy drops drastically; and GDP is halved.

· A period of unprecedented prosperity in the West, especially in the United States, ensues

· A wave of democratization occurs throughout Latin America, Africa, and Eastern Europe.

· Cold War institutions such as NATO found new roles.

· Space exploration is decreased in both the United States and Russia as a result of the competitive pressure of the space race

· 1990 U.S.-Soviet summit reaches accord on armaments. Western Alliance ends cold war and proposes joint action with Soviet Union and Eastern Europe. Leaders of 34 nations in Europe and North America proclaim a united Europe

· 1991 Warsaw Pact dissolves. Bush and Gorbachev negotiate a second Strategic Arms Limitation Treaty (STARTII).

· 1999 Czech Republic, Poland, and Hungary join NATO

· 2004 Largest expansion of NATO to date, allowing Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia into the organization

Extension of Democracy

· One-half of the world's population now lives in countries that have multiparty electoral systems that respect basic human rights - the highest level in history.

· During the past three decades, more than 80 countries in Central Europe, East Asia, Latin America, and parts of sub-Saharan Africa have all notched gains in political and civil rights and more than 30 military dictatorships have been replaced by civilian governments.

· The breakup of the former Soviet Union in 1991 precipitated a move toward Western system democracies not only within the borders of the former Soviet Union but also within former "client" states.

Monarchies:	Constitutional Monarchy	Traditional Monarchy	Absolute Monarchy
Republics:	Democracy	Restricted Democratic Practice	Authoritarian Regime
			Totalitarian Regime
Non-Sovereign:	Protectorate	Colonial Dependency	Empire

Rankings in the 2004 UN Human Development Index

Rise of Anti-Americanism and Dissolution of Trans-Atlantic Alliances

· The U.S. is seen, particularly by France and Germany, as being the sole remaining “hyperpower” which increasingly acts unilaterally, particularly under the Bush administration

· Since Third world countries can no longer secure loans by aligning with the US or USSR they become more independent

· 1993 The European Union is formed

· Pentagon's Planning Guidance for the Fiscal Years 1994 – 1999: "Our first objective is to prevent the re-emergence of a new rival... we must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role."

· 1999-2001 Trade disputes over banana importation between the US and EU known as the Banana Wars erupt. They are eventually settled by the WTO

· 2001 The Bush administration and US Congress refuse to ratify the Kyoto Protocol global warming treaty

· 2001 The September 11 attack by Al-Queda on America. The US invades Afghanistan with UN support

· 2001 The Bush administration imposes 3-year steel tariffs on imported steel, but lifts them in December 2003. The European Union in response lifted its threat of trade sanctions, averting the specter of a trade war.

· 2002 The US refuses to ratify the International Criminal Court

· 2002 U.S. abandons the 31-year-old Antiballistic Missile (ABM) treaty

· 2003 After France and Russia threaten to veto any use of military force against Iraq, the US invades Iraq with a “coalition of the willing” consisting of the UK, Spain, and Portugal, however public opinion in those countries is against the war

· 2004 Reports surface that government and individuals in France and Russia had been receiving oil vouchers from Saddam Hussein in return for support against the US

· China's rapid military buildup in coastal provinces facing Taiwan, China's reluctance to let its currency appreciate more than a few hundredths of a percent each week, and China's rising trade surplus with the United States raise tensions between the two countries, but growing trade favors a stable relationship.

· The U.S. has opposed an international ban on private ownership of military weapons, including assault rifles and grenade launchers. The United States would not agree to limit the supply of small arms to governments or to restrict their supply to individuals because it "believes that the responsible use of firearms is a legitimate aspect of national life."

· Experts say public diplomacy hasn’t been a priority for the United States since the Soviet Union collapsed in 1991. Public diplomacy entails the efforts—international publications, broadcasts, cultural, and educational exchanges—to shape public perceptions of the United States abroad, whereas traditional diplomacy is a government-to-government exercise conducted between officials behind closed doors. During World War II, President Roosevelt established Voice of America, a radio service that today broadcasts news and cultural programs in dozens of languages to some 94 million listeners worldwide each week. One of our greatest exports [during this period] was jazz. Local foreign newspaper editors critical of U.S. policy no longer get visits from a press attaché, let alone invitations to visit the United States, but instead receive mass-produced email messages assembled thousands of miles away.

Population

· The world population growth rate, in percentage terms, had been climbing steadily since the Second World War (bar a two-year drop in 1959-60 caused by Mao Xedong). But in the mid 1960s it stopped rising. And by 1974 it was falling significantly. The global population growth itself kept on rising for a while, but even that peaked in 1989, and then began falling steadily. Demographers, who had been watching the exponential rise with alarm, now forecast that the population will peak below ten billion not long after 2050.

· Russia's population is expected to fall by 22% between 2005 and 2050, Ukraine's by a staggering 43%. Japan has started to shrink and others, such as Italy and Germany, will soon follow. Even China's population will be declining by the early 2030s, according to the UN, which projects that by 2050 populations will be lower than they are today in 50 countries.

· In developing countries, the number of children born per woman has fallen from six to three in 50 years. It will have reached replacement-level fertility (where deaths equal births) by 2035. The fastest-growing populations in the world over the next 50 years will be those of Burkina Faso, Mali, Niger, Somalia, Uganda and Yemen. All except in Yemen are in Africa.

· Vaccines and antibiotics led to major gains in life expectancy in Latin America and East Asia in the 20th century; these regions achieved in only four decades improvements that took Europe almost 150 years.

· In 10,000 years, the earth's population has doubled ten times. Most of the calories that made that increase possible have come from three plants: maize, rice and wheat. The oldest, most widespread and until recently biggest of the three crops is wheat. The tonnage (though not the acreage) of maize harvested in the world began consistently to exceed that of wheat for the first time in 1998; rice followed suit in 1999.

· Cities worldwide have been growing more rapidly. Some of this growth has occurred in the developed world—Las Vegas, for example. But the most dramatic increase has been in the Third World. The 1990s with globalization saw huge population migrations within developing countries, such as China, from rural areas to cities. 80% of economic growth is expected to occur in cities. Almost all the world's population growth over the next 30 years will take place in the cities of developing countries. By the year 2030, for the first time in history, 60% of the world's people will be living in cities

o A megacity has more than ten million inhabitants. In 1995 there were 14; in 2015 there will be 21. And the ranking will have shifted: Today the five largest cities are Tokyo, Mexico City, São Paulo, New York City, and Mumbai (Bombay), and in 2015 they will probably be Tokyo, Dhaka, Mumbai, São Paulo, and Delhi.

Size of Countries Based on Population

Migration

· Roughly 175 million people were living outside their country of birth or citizenship in 2000, up from 154 million in 1990. Of this population, 60% reside in developed regions. In the United States, where nearly half of the foreign population entered the country in just the previous decade, the number of illegal immigrants jumped from 2.5 million in 1989 to 8.5 million in 2000. The foreign population in 17 European countries rose from 15.8 million in 1988 to 21.7 million in 1998. Foreign workers continue to represent more than 50 % of the labor force in the oil-exporting Persian Gulf countries.

· On balance the freer movement of people generally enhances development. The easier it is for a Vietnamese laborer to work in Japan, the more Nike will have to pay her to sew clothes in the company's Vietnamese factories. Migrants also send home sums large enough to constitute a major economic force in many developing countries

· Remittances: People who move from poor countries to rich ones usually earn more in their new homes and send money back to support their families. . For example, remittances account for 13 % of El Salvador's gdp--more than aid, investment, or tourism.

· “Brain Drain”: Migration of highly educated workers – such as engineers, physicians, and professors - from developing countries to the industrialized world.

o 80% of the world's foreign students come from Asian countries.

o The impact on poor countries when professionals leave is complex. For instance, the exodus of doctors and nurses from Ghana and South Africa has devastated these countries. However, sometimes professionals gain skills abroad and then move back home: Returning Indian expatriates are playing a big role in that country's software and services boom. Even when professionals remain abroad, they often retain links with industry and research at home.

o In the 1990s the US relaxes immigration laws and 200,000 Indians find high-tech jobs in Silicon Valley

o 80 % of Indian migrants in industrialized countries have a university degree, compared to only 2.5 % in India.

o Higher education, however, doesn't guarantee a higher paying job. In Hong Kong, 61 % of Filipino workers have high school diplomas yet more than 94 % are employed in low-paying jobs, such as cleaning houses.

· Presidential candidates in Latin America have campaigned amongst expatriate communities in the United States. In the Philippines—where 20 % of the electorate lives overseas -citizens abroad can vote in national elections. This is seen as a tool for political reform, since overseas workers “cannot be bought or intimidated by unscrupulous politicians.”

· Migration is influencing international politics. Following the 1991 Gulf War, the Gulf countries expelled workers from Jordan and Yemen, particularly Palestinians, for supporting then Iraqi President Saddam Hussein. India's reluctance to support a U.S.-led attack against Iraq in 2003 was predicated, in part, on the presence of millions of Indian expatriates that live and work in the Gulf region. Faced with a sharp economic contraction during the Asian financial crisis, Malaysia and Thailand booted Indonesian workers, exacerbating Indonesia's economic woes and increasing political tensions among the members of the Association of Southeast Asian Nations. In 2000, Israel drastically reduced the number of work permits for Palestinians and instead imported roughly a quarter of a million foreign workers, mostly from East Asia and Africa. Palestinians in the West Bank and Gaza saw their gross national income per capita decline by about 30 % in 2001 and 2002 combined.

· Migrants sometimes finance militant causes, be it Irish-Americans making donations to the Irish Republican Army or Sri Lankans in Canada sending money to the Liberation Tigers of Tamil Eelam, Congo, Afghanistan, as well as for stateless peoples (Palestinians, Kurds, and pre-independence Eritreans and East Timorese). Elsewhere, in places such as Armenia and Croatia, remittances underwrote long-distance nationalism, which boosted hard-line regimes and complicated efforts to resolve regional conflicts.

· Slavery: There are more slaves today than were seized from Africa in four centuries of the trans-Atlantic slave trade. There are an estimated 27 million men, women, and children in the world who are enslaved—physically confined, forced to work, or in some way treated as property.

Aging Population

· Population support ratio: Working population (18-65):Elderly population (over 65).

o Worldwide: 1950 12:1, 2000 8:1, 2050 4:1

· All over the world, voting participation of older citizens is greater than that of younger citizens. As a result, the priorities of older voters increasingly shape politics. This trend is most clearly evident in Japan. The reason is simple: The peak age of Japan's baby boom is ten years older than America's — and 15 years older than Europe's. Japan is simply the first of the industrialized countries to manifest the effects of aging on politics, policy and economic growth.

· Public benefit spending demands for the elderly in Japan, France, Germany, and Italy are projected to grow from 15 to 28 percent of the GDP in the next 40 years.

Nuclear Proliferation and Weapons of Mass Destruction (WMD)

· Current nuclear powers: Israel, Pakistan, India, South Africa, USA, UK, France, China and Russia (and North Korea?).

· Efforts to produce nuclear weapons are being pursed by Iran, North Korea. Libya renounced its effort in 2003.

· Experts worry that nuclear material--including 600 metric tons of highly enriched uranium and plutonium--are still left in the former Soviet Union

· 1972 The Biological Weapons Convention banning biological weapons.

· 1991 China accepts the Nuclear Nonproliferation Treaty

· 2002 U.S. and Russia reach arms agreement to cut nuclear arsenals by up to two-thirds over the next 10 years

· 2002 U.S. abandons the 31-year-old Antiballistic Missile (ABM) treaty

· Iran’s Nuclear Program

· North Korea’s Nuclear Program

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International Economics

· Globalization: an increase in global trade and foreign investment occurs. This leads to global GDP growth.

· Capitalism spreads as the USSR dissolves and many other countries abandon socialism

· The Asian Financial Crisis occurs in 1997-1998 and spreads rapidly around the world

· The World Trade Organization is formed

· Regional trading blocks develop, most notably the European Union and NAFTA

· Asia’s economies develop rapidly in the 1990s, then recover quickly following the 1997 financial crisis.

o China is the economic engine of East Asia, where 40% of exports now stay within the region

o China has become a magnet for multinational companies seeking low-cost manufacturing platforms. Although foreign direct investment (FDI)—outside investors building factories or buying local companies—fell almost everywhere since 2000, it’s increased in China. Economists debate whether China’s growth will be a stimulus for the rest of the world or come at other countries’ expense. But in the US a backlash has already developed, in part because in 2002 the U.S.-China bilateral deficit was $103 billion.

· 2001 The WTO meets in Qatar to initiate new round of global trade talks

· 2002 The Euro replaces national currencies of Germany, France, and 10 other European nations

· 2005 Much of the developing world, especially Asia, is in its best financial shape in memory. Emerging markets' foreign exchange holdings are bulging and the risk premium for their debt is falling. Former crisis spots like Thailand, Malaysia, Russia, and India are posting healthy economic growth, surging exports, sound budgets and healthier banks. With important exceptions, such as Venezuela, Argentina, and Ecuador, even most of Latin America sports decent budget and current-account numbers.

· 2005 Rising oil prices become a major concern in the world economy

· China has almost single-handedly sparked a global commodity price boom that has been a godsend to resource rich regions like Latin America.

· America's huge deficits (balance-of-payments and fiscal) which are approaching a combined $1 trillion, could eventually threaten global financial stability.

· Europe's recovery has lagged badly, especially in Germany.

Triumph of free-market capitalism over communism

· In 1975 8% of countries have free-market economies, in 1997 28% do.

· Because of the development of global markets inefficient centrally-run governments could not compete with capitalist countries. They could redistribute income but not increase income or standards of living. Capitalism becomes the only viable system Differences between political parties in western countries decrease as socialist and communist parties accept the necessity of capitalism.

· Free-market capitalism is embraced fully by US, UK, Hong Kong, Taiwan; partially by Germany, Japan, and France; less by South Korea, Thailand, Indonesia, Egypt, India, and China. Not at all in some rich countries supported by natural resources (Saudi Arabia) or isolationist regimes (North Korea, Cuba, Sudan, Afghanistan, Iraq, Iran). The transition is easier for countries with history of capitalism – eg Poland – than Russia and Albania where organized crime and pyramid schemes occur.

Energy

· 1990s After oil prices peak during the Persian Gulf War, oil prices remain relatively low for the rest of the decade

· 2000s Energy prices -- already pushed higher by the Iraq War, sharply increasing demand from China and India, and production bottlenecks -- spiked when Hurricanes Katrina and Rita disrupted refining and distribution capacity. Average gasoline prices topped $3 a gallon.

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Science & Technology

Information Revolution

· Result of advances in: Computers/microchips, Compression technology (storage), Miniaturization, Digitization, Telecommunications, Satellites, Fiber Optics, the Internet

· Facilitates Globalization

Internet

Telecommunications

Digitization

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Conflicts

Europe

· The breakup of the Soviet Union leads to:

o Ethnic strife in areas of previous Soviet domination, some of which involve Europe and NATO

Kosovo

o Shifting of and competition for alliances between Russia, China, and the West (the US and Europe) in Eastern Europe and Asia

Middle East

· Control of oil producing regions, militant Islam, and pursuit of nuclear weapons leads to:

Persian Gulf War

Operation Iraqi Freedom

War on Terrorism

Afghanistan

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Countries/Regions

North America

· 1992 NAFTA – The North American Free Trade Agreement comes into effect

· While trade between Canada and the US has soared 135% since 1988, several trade disputes remain. Chief among them is the US’ 27% duty on Canadian softwood lumber, which has been going on since 1982. American wheat growers are challenging the system Canada uses to sell its grain. At the heart of the lumber dispute is land ownership. Softwood in the US is generally harvested from private land. In Canada, lumber companies generally pay fees to chop down trees on land owned by the provinces. Hog producers say Canadian swine are being shipped to the United States at unfairly low prices. And the border has been closed to Canadian cattle ever since a calf in Alberta was found in 2003 to have mad cow disease. The US has challenged Nafta, W.T.O., and regional bodies’ decisions that found Canadian lumber exports are not harming American mills.

United States

· 1989 U.S. troops invade Panama, seeking capture of Gen. Manuel Noriega.

· 1991 Persian Gulf War

· 1993 NAFTA is approved by Congress

· 1999-2000 Internet stock boom. 2000 March: Stock market begins decline. Stock overvaluation is at its peak

· 2000 George W. Bush is elected President.

· September 11, 2001: World Trade Center Attacks. War on terrorism begins. October: Afghanistan is invaded and the Taliban government overthrown

· 2003 March 19 Operation Iraqi Freedom begins when the U.S. launches cruise missile strikes, attempting to target Hussein and Iraqi leaders in Baghdad.

· 2006 Republicans lose control of the U.S. House of Representatives and Senate to Democrats

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Canada

· 1989-1993 Prime Minister Brian Mulroney begins to reduce the size of government, cuts federal transfers to the provinces

· 1990 National sales tax is passed, Canadians begin to buy goods in the U.S. to avoid it.

· 1992 NAFTA passed.

· 1994-1999 Jean Chretien, head of the Liberal Party, becomes prime minister. Critics fear NAFTA will increase U.S. economic domination and move Canadian jobs to Mexico, but by 1999 NAFTA has opened new markets for Canadian goods without job flight.

· 1995 Quebec voters reject separation from Canada by a narrow 50.4 % majority.

· 2000-2003 Canada has moved from a manufacturing economy to one based on services. Liberals retain federal-level control.

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Central and South America

· The Washington Consensus program, which emphasizes privatization, open markets, fiscal discipline and a follow-the-dollar impulse, and is favored by the I.M.F. and United States officials, became a force in the 1980's and 1990’s. This was after a long period in which Latin American governments, many autocratic, experimented with nationalistic economic nostrums like import-substitution and protectionism. These could not deliver sustained growth and the region was left on the edge of economic implosion. With the new policies of the 1980's came a surge toward democracy, a rise of technocrats as leaders and, in the last 20 years, a general acceptance of stringent austerity measures prescribed by the I.M.F. and the World Bank. Country after country was told to make far-reaching changes, from selling off utilities to cutting pension costs. In return, loans and other aid were offered. But the results were dismal. Poverty rose, rather than fell; inequality remained a curse. Real per capita growth in Latin America since 1980 has barely reached 10 percent. Meanwhile, many Latin Americans lost faith in traditional political parties that were seen as corrupt vehicles for special interests. That led to uprisings that toppled presidents like Bolivia's Gonzalo Sánchez de Lozada and Ecuador's Lucio Gutiérrez; it also spawned demagogues who blame free-market policies for everything without offering detailed alternatives.

· 2005 Argentina's president, Néstor Kirchner, announced that his government would this month prepay its entire debt of $9.8 billion to the International Monetary Fund. This followed a similar announcement by Brazil two days earlier. Mr Kirchner has blamed the IMF for Argentina's economic collapse in 2001-02.

· 2005 The UN Economic Commission for Latin America and the Caribbean said that the region's economy grew by 4.3% this year, down from 5.8% last year. Unusually, this year as last, the growth was combined with a current-account surplus, thanks to an increase in export volumes and prices, and in remittances.

· In the late 1990s a leftist movement that took hold in Latin America, where nearly 300 million of the continent's 365 million people live in countries with left-leaning governments. Hugo Chávez of Venezuela is its most extreme example. Brazil's president, Luiz Inácio Lula da Silva, by contrast, is a former labor leader who emphasizes poverty reduction but also practices fiscal austerity and gets along with Wall Street. The Morales government is the first indigenous administration in Bolivia's 180-year history. Uruguay has been pragmatic on economic matters, but has had increasingly warm relations with Venezuela. In Mexico, the leftist who is thought to have a good chance to be the next president, Andrés Manuel López Obrador, has distanced himself from Mr. Chávez. What these leaders share is a strong emphasis on social egalitarianism and a determination to rely less on the Washington Consensus.

The Carribean

Haiti

· Haiti is the poorest country in the Western Hemisphere and the fourth poorest country in the world. 50% of the country's wealth is owned by 1% of the population. Life expectancy is 52 years for women and 48 for men. Unemployment is about 70%. About 85% of the population live on less than $1 per day. 60% of the country's trade is with the USA. The manufacture of baseballs, textiles, cheap electronics, and toys, the country's sugar, bauxite and sisal are all controlled by USA companies. The country has a debt of $1,134,000 million. About 40% of this debt stems from loans from the USA to the Duvalier dictators.

· 1990 Haiti elects leftist priest Jean-Bertrand Aristide as president in first democratic election.

· 1991 Haitian troops seize the presidency in a military coup.

· 1994 Aristide returns to power, US troops arrive to participate in the change of government. General Raoul Cedras is flown by the USA to exile. Several generals involved in torture and killing end up living in the USA.

· 2002 The US controlled the president's security until Secretary of State Colin Powell informed Jean-Bertrand Aristide that the US would not protect him and he would have to resign and leave or be killed. Aristide takes exile in the Central African Republic. Aristide was accused by the USA of becoming dictatorial even though he had abolished the (USA created) army in 1995. The Caribbean Community (CARICOM) and the African Union call for a formal investigation into Aristide's removal. The new Prime Minister is Gerard Latortue, who had lived in Florida (USA) for 14 years.

· 2004 Haiti rebellion: Jean-Bertrand Aristide resigns as president of Haiti. The chief justice of the Haitian Supreme Court, Boniface Alexandre, is sworn in as interim president

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Cuba

· 1990-1993 The withdrawal of Soviet support ($6 billion annually) plunges Cuba into a severe recession. Castro rations food and energy and cuts public services and employees. He also opens Cuba to tourism, legalizes the dollar, and sanctions self-employment for about 150 occupations, including restaurant owner.

· 1994-1995 Cuba's economic slump ends. Tough times spark demonstrations in Havana and another wave of migration. Some 30,000 Cubans set sail for the U.S. The dollar becomes the primary currency, and tourism surpasses sugar as the main source of dollars. To keep the economy afloat, Cuba courts foreign investment in the form of joint ventures with the Cuban government.

· 1996-1998 The downing of two civilian planes by Cuban fighter pilots kills three U.S. citizens and speeds congressional approval of the Helms-Burton Act, which punishes those who "traffic" in property expropriated from U.S. citizens. The legislation discourages some of Cuba's foreign investors. After inviting the pope to Cuba, Castro reinstates Christmas as a national holiday and frees 300 prisoners.

· 1999-2000 Annual economic growth exceeds 5 %, thanks to tourism and foreign investment. President Clinton authorizes limited food sales and expands two-way exchanges of academics, athletes, and scientists. Cuban culture and music become fashionable in the United States and Europe.

· 2001-2003 U.S. political and business leaders pressure the Bush administration to ease sanctions against Cuba, but the embargo stands. Cubans ratify a constitutional amendment to make the socialist political and economic system permanent. The state employs 75 % of workers; the private sector remains minimal. Living standards are well below the 1989 level, and illegal migration to the U.S. continues.

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Central America

· 2004 CAFTA Central American Free Trade Agreement (CAFTA) passed. Import only total $17 billion, and 80% of Central American imports into the US were already duty-free. However in the US certain industries, particularly the sugar industry, resisted.

Mexico

· President Salinas reduced trade barriers and began to privatize the remaining government-owned businesses and negotiate debt restructuring with foreign banks, capping this with negotiation of NAFTA.

· 1993 Mexico joins NAFTA. Under pressure from the United States, Mexico begins to address its environmental issues, especially along the countries' shared border. Thousands of companies build factories in northern Mexico to export merchandise to the US. 1 million new jobs are created in the north, while the south continues to stagnate. Many Mexicans from the south move to the northern border region to find jobs

· 1994 Zapatista guerillas begin to fight the government in the Southern state of Chiapas

· 1994 The leading presidential candidate is assassinated

· 1994 Because of social unrest and assassinations, foreign capital begins to flee Mexico. An economic crisis develops due to this and government overspending. The U.S. Treasury staves off the economic crisis with a $20-billion aid program, preventing Mexico from defaulting on its international debt. Mexico bonds drop in value. US extended the loan with Mexican oil reserves as collateral. Mexico pays back the debt early.

· 1995 President Salinas flees the country amid a rash of political assassinations and corruption charges. His handpicked successor, Ernesto Zedillo Ponce de Leon, instituted a variety of political and economic reforms

· 1997 National elections were considered the fairest in Mexico's history. The PRI lost control of the lower house of the legislature for the first time in seven decades. It also failed to win the first elections for mayor of Mexico City to be held since 1928. In 1998, PRI candidates won 7 of the year's 10 governor's races. Although troubles in Chiapas continued, the democratization of the Mexican political process was reflected in the fact that many of the PRI gubernatorial candidates were chosen in primary elections.

· 2000 The PRI loses its first presidential election since 1917, and opposition candidate Vicente Fox of the right-wing National Action Party (PAN) wins the presidential election in what were considered the most free and fair elections in Mexico’s history. He vowed to end political corruption, create jobs, and continues the free-market policies of his predecessor and announced an ambitious agenda of democratic reforms that included efforts to make the Mexican military and government more accountable; he also moved to restart peace talks with the Zapatista guerrillas in the state of Chiapas. Fox's party also won the largest number of seats in the legislature, but not an absolute majority. Another opposition party, the leftist Party of the Democratic Revolution, retained control of the mayoralty of Mexico City.

· Since its 1995 peso crisis, Mexico has tightened public finances, curbed short-term borrowing, and nurtured a thriving domestic capital market. Once known for releasing sporadic or partial financial data, Mexico is now one of the developing world's most transparent borrowers.

· Mexico is highly dependent economically on the United States, which buys 88 percent of its exports including petroleum, cars, and electronics equipment. The Fox administration has worked closely with the Bush administration on trade and economic reform

· 2006 Felipe Calderón, the centre-right candidate, wins the presidential election over leftist Andrés Manuel López Obrador by only 0.58%, or 244,000 votes. Obrador charges vote fraud and challenges the results in court.

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Guatemala

· 1990 An American businessman living in Guatemala stumbles on the military's drug trafficking activities and is kidnapped and killed. In response, George Bush cuts off military aid to Guatemala and publicly criticizes the regime. Secretly, Bush continues to send CIA funds to the military to allow them to continue their activities.

· 1990 The International Human Rights Federation reports that 300 children are kidnapped every year, taken to secret nurseries and sold for adoption at $ 10,000 per child. A human farm is found containing children between the ages of 11 days to 4 months. The director of the farm admits that the children "were sold to American or Israeli families whose children needed organ transplants at the cost of $ 75, 000 per child".

Nicaragua

· 1990 Nicaragua has elections. Using the National Endowment for Democracy (NED), the USA spends $ 9 million on the opposition National Opposition Union’s successful election campaign, as the Sandinistas are voted out. Violeta Barrios de Chamorro of the N.O.U. is inaugurated as Nicaraguan president.

· 2006 Daniel Ortega, former Sandinista president, is re-elected preident

· Nicaragua has seen improvement in its economy since it began free-market reforms in 1991, after years of economic neglect under the Sandinista regime of 1979-90.

· Nicaragua is, after Haiti, the second-poorest country in the Americas. Although poverty is slowly falling, in 2001 46% of the population lived on less than $386 a year according to the World Bank.

Costa Rica

· Costa Rica has enjoyed stability unusual among its neighbors, with strong democratic institutions and an orderly pattern of government succession. Costa Rica is relatively prosperous, less stratified along class and ethnic lines than many Latin American countries, and has a stable middle class. Its lack of an army has spared it from experiencing the military rule of other countries in the region.

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South America

Columbia

· FARC is Colombia’s largest and best-equipped rebel group, with around 12,000-18,000 members—it is also one of the world’s richest and most powerful guerrilla armies. FARC is responsible for most of the ransom kidnappings in Colombia; the group targets wealthy landowners, foreign tourists, and prominent international and domestic officials. Experts estimate that FARC takes in $200 million to $400 million annually—at least half of its income—from the illegal drug trade. The smaller ELN, which operates mainly in northeastern Colombia, has about 4,000 members. The two groups are rival forces, and FARC now represents a direct threat to ELN.

· Plan Colombia, the United States’ multi-billion dollar initiative to equip the Colombian military to eradicate coca (the plant from which cocaine is made), targets regions controlled by FARC and ELN. A third Colombian group on the State Department’s terrorist list is the United Self-Defense Forces of Colombia (AUC), which comprises several right-wing paramilitary groups supported by wealthy landowners, drug cartels and segments of the Colombian military. AUC forces have assassinated leftist guerrillas, politicians, activists and other Colombian civilians. Because Colombia’s government has little control of any territory outside the country’s major cities, all three organizations have been able to expand their operations and prosper by trading in cocaine, opium, oil, gold and emeralds.

· 1999 President Andres Pastrana cedes control of almost half the country to FARC.

· 2001 Government backed paramilitaries enter two villages and 18 people are killed, 9 of them children. The Colombian government is a recipient of massive military aid from the USA. An enquiry links this massacre (and another massacre in Santo Domingo in 1998) to security forces protecting oil operations of the USA company, Occidental Petroleum (OXY). American pilots working for AirScan, a US security firm contracted by OXY to protect oil operations, provide key strategic information to the security forces. OXY is drilling on the indigenous homeland of the U'wa. OXY call on the military police to break up a non-violent road blockade leading to OXY's drill site. Three children die in the attack and scores are injured. OXY pays $1 for every barrel of oil produced, which goes directly to the military. 25% of Colombian soldiers are devoted to protecting foreign oil installations.

· 2002 Colombian forces began retaking the FARC-controlled zone after failed peace talks.

Venezuela

· About 50 percent of Venezuela's oil exports go to the United States—10 percent of all American oil imports—and many of Venezuela's refineries, which serve international oil companies like Chevron Texaco, Exxon, and Conoco Philips, produce gas especially for American markets and U.S. environmental regulations. Further linking the two countries, in the 1990s, Petroleos de Venezuela, S.A., Venezuela's national oil company, purchased Houston-based CITGO, one of the world's leading oil refiners.

· 1998 Hugo Chavez, a former army colonel who led a failed 1992 coup, wins the presidential elections on a platform promising anti-corruption measures, social and political reform.

· 2000 Chavez introduces a new constitution that enabled him to call and win another election. Chavez now enjoys a strong majority in parliament, but has had to beat back a number of attempts to remove him from office. In In 2004, the opposition instigated a referendum to remove Chavez from power but Chavez won the referendum with a 58 percent majority and the opposition was left severely weakened.

· 2000 Venezuelan President Hugo Chavez meets with Iraqi President Saddam Hussein in Baghdad as part of a tour of OPEC member states.  Chavez is the first head of state to visit Saddam Hussein since the 1990 Iraqi invasion of Kuwait

· 2001 Chavez introduces new laws—including land and oil industry reforms—that led to a widespread uprising against his government.

· 2002 Thousands of workers at Venezuelan state oil company PdVSA strike to protest President Chavez. Chavez threatens to militarize PdVSA's operations. A general strike begins, shutting down stores and factories. On April 12, Chavez is ousted by the country's military. PdVSA operations start up again, but rioting begins again the following day. On April 14, Interim President Carmona announces that he has resigned following large, and sometimes violent, pro-Chavez protests and a lack of support among many military officers. Several hours later, Hugo Chavez returns to power in Caracas and states that he never resigned the presidency. Later in the year business and labor groups resume strikes in order to obtain an early referendum on the rule of Chávez. This has a serious adverse impact on the Venezuelan economy, but no agreement between President Chávez and the opposition forces leading the strike is reached after a month. Chavez had offended the US by establishing good relations with Iraq and Cuba and by expressing sympathy with dissidents in Colombia. Chávez also convinced the OPEC cartel to cut production in order to raise international oil prices. His visit to Saddam Hussein and refusal to allow the US military to fly over Venezuelan airspace angered the US. Although the US publicly welcomes his overthrow, there is no evidence of any direct involvement in the coup by the US.

· 2003 The Venezuelan government splits state oil company PdVSA into two separate entities to limit the power of Caracas-based executives who have joined in the strike

· Chavez has managed to grab his neighbors' attention through the creation of Telesur, a new regional television channel that gets its funding from Caracas. News reports allege he has also supported radical movements from Nicaragua to Bolivia, including Colombia's FARC terrorists. Chavez also signaled his desire to redirect some of his oil exports away from the United States to China, announced his intention to import nuclear power technology from Argentina, and made a decision to seek aircraft and other military supplies from Russia.

· 2005 Chávez has targeted more than 700 plants, particularly in the food industry, that are idle or not operating at capacity for possible expropriation. The President is also going after rich landowners. Authorities recently began taking control of 21 large ranches spread over hundreds of thousands of acres. Chávez has threatened to hand part of the land to poor Venezuelans unless owners legally document their ownership and show that their spreads are being productively used. In another shock to investors, Chávez disclosed plans to review -- and possibly revoke -- mining concessions and create a national mining company.

· 2006 Oil companies with operating contracts in Venezuela, such as Chevron and BP, have been ordered to set up joint ventures controlled by state oil company Petróleos de Venezuela (PDVSA), and royalties have been hiked from 17% to 30. Venezuela’s government has seized control of two foreign-run oilfields. Chávez has confirmed that foreign companies will play a reduced role in the country’s energy industry. →

· Chavez is using Venezuela's wealth to win support in South America. His Petrocaribe initiative offers 196,000 barrels of oil a day to 13 Caribbean countries -- including 98,000 to Cuba alone -- with long-term financing options. He has set up the Petrosur alliance with Venezuela, Brazil, and Argentina to work on joint oil exploration and development. A similar alliance could be forged with Colombia, Peru, Bolivia, and Ecuador.

· Annual foreign direct investment has fallen from $5 billion in 1998 to $1.5 billion last year

· From 1928 to 1970, Venezuela was the largest oil exporter in the world. The country ranks fifth now.

· In Venezuela, just 2 percent of the population owns 60 percent of the arable land. Because of this disparity, land reform is one of President Hugo Chávez's biggest projects. When Venezuela gained its independence from Spain in the early 1800s, most landowners were of Spanish descent and were wealthy. In the disorder following independence, many were able to increase their land holdings. By the time the fledgling government got around to issuing land titles, these landowners held most of Venezuela's fertile lands, and the lower classes were left with little or nothing. Chávez vows to bring parity by implementing land reform by a law that sets limits on the size of landholdings, levies taxes on unused property as an incentive to spur agricultural growth, redistributes unused, primarily government-owned, land to peasant families, and expropriates fallow land from large, private estates for the purpose of redistribution. (Landowners are to be compensated for their land at market value.) Peasants and cooperatives who receive land must make it productive and, after three years, can obtain legal ownership. They must also receive training in modern agricultural techniques.

Peru

· There are two main rebel groups operating in Peru , both leftist: the Maoist Shining Path (known in Spanish as Sendero Luminoso) and the Cuban-inspired Tupac Amaru Revolutionary Movement (Movimiento Revolucionario Tupac Amaru). In the 1980s and early 1990s, vicious terrorist attacks were daily occurrences across Peru .Their attacks terrorized Peru for decades before they were beaten back in a 1990s crackdown.

· Shining Path, established in the late 1960s by the Abimael Guzman, is a militant Maoist group that seeks to install a peasant revolutionary authority in Peru. The group took up arms in 1980, and its ranks once numbered in the thousands. Tupac Amaru has fewer than 100 members today. In the past, the two groups have fought each other for members and for the “taxes” that they both collect from cocaine smugglers operating in jungle areas under rebel control. Peru is the world's second-largest producer of cocaine (after Colombia), and such “taxes” are a major source of revenue for the insurgents.

· 1992 President Alberto Fujimori waged an aggressive and highly successful campaign against Shining Path and Tupac Amaru. Fujimori, originally an elected leader, seized near-dictatorial powers, with military support, and disbanded Peru’s congress and courts. Within a few years, Fujimori had captured most of the leaders of the rebel groups, and terrorism subsequently declined sharply. Thousands of Peruvians were convicted of terrorism-related charges and sentenced to life imprisonment by military courts. Human rights activists accuse the Peruvian military of committing widespread human rights abuses during the crackdown, including the jailing of thousands of innocent Peruvians.

· 2003 Peru’s constitutional court struck down the anti-terror laws enacted under Fujimori and as a result more than 1,900 jailed members of the Shining Path have been given the right to request retrials in civilian court, including the group’s leader former university professor Abimael Guzman—who was captured and jailed in 1992. The group, which now has only several hundred members remaining, operates mainly in jungle areas.

Argentina

· 1990-1994 President Menem spurs economic growth through deregulation and privatization in the utilities, transportation, and infrastructure, and pegs the peso to the U.S. dollar. Charges of corruption and political infighting plague politics.

· 1995-1999 During Menem's second term, his austerity program proves increasingly unpopular. A series of economic shocks, including devaluation in Brazil, puts the economy into recession.

· 1999 Opposition candidate Fernando de la Rúa wins the presidency

· 2000-2001 The economy is further affected by the economic slowdown in the US. External debt interest is crippling. Corruption scandals continue. Argentina faces riots and 20 % unemployment. De la Rua resigns in the face of economic collapse.

· 2002-2003 Peronist President Eduardo Duhalde devalues the Argentine peso, which had previously been pegged to the dollar. A new wave of civic unrest ensues; the banking system fails, poverty spreads, and Argentina defaults several times on its debt. Duhalde reaches a last-ditch agreement for IMF standby support.

· 2005 Argentina's president, Néstor Kirchner, who won office in 2003, announced that Argentina would sever all ties with the International Monetary Fund, which he blames for much of the country's long economic decline, by swiftly paying back its $9.9 billion debt to the fund.

Bolivia

· 1989-1993 Zamora elected president. He continues neoliberal reforms. Cocaine trafficking contributes illegally to the economy. Social tensions explode in a series of forcefully suppressed revolts

· 1994-1997 Sánchez de Lozada, architect of the shock therapy program, is elected president and enacts political decentralization, granting municipalities more control over revenues. Heeding international concern for the environment, the government implements a coca-eradication program. Banzer returns as president after more civil disturbances, promising greater social equity.

· 1998-1999 The Brazilian and Asian financial crises bring Bolivia's slow economic growth nearly to a halt. Bolivia participates in a World Bank/International Monetary Fund debt reduction initiative for heavily indebted countries.

· 2000-2003 The government deploys soldiers to stop protests. Indian and coca growers' movements gain popularity. An ailing Banzer resigns; his vice president takes over. Former president Gonzalo Sánchez de Lozada returns to the office in 2002.

· 2003-2005 Leftist protests brought down two presidents in 2003 and 2005. U.S. officials have accused Venezuela and Cuba of using Bolivian opposition leader Evo Morales, a former coca farmer, as a proxy to turn Bolivia into a Marxist, anti-American state. The ongoing cultivation of the coca leaf, used to make cocaine, has also caused tensions between Bolivia and the United States. But Bolivia has seen real growth since market reforms began in 1980: infant mortality has been nearly halved, adult literacy has soared, life expectancy has grown from fifty-two years to sixty-four years, and GDP has more than doubled

· 2006 Morales abruptly nationalizes the country's vast oil and natural gas reserves and infrastructure. He transferred all privately owned assets in the hydrocarbon sector to the Bolivian state oil company, YPFB, and gave foreigners 180 days to renegotiate their contracts. Companies like Brazil's Petrobras—which has invested $1.5 billion in Bolivia—and Britain's BG Group, Total of France, and the Spanish-Argentine conglomerate Repsol, will have to give 82% of their earnings to the government. No one has more at stake than Brazil, which built a huge pipeline to pump Bolivian gas thousands of miles across the South American jungle and invested $1 billion in wells and refineries. Nearly half of the natural gas Brazil burns today comes from Bolivian wells. Future development is a question mark for dozens of industries that had converted to gas-burning machinery on the promise of bountiful supplies from the Andes. Petrobras has announced it was suspending further investments in Bolivia.

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Ecuador

· In the late 1990s, when Ecuador experienced its worst economic downturn in the century, more than a quarter of a million people left the country.

· 2005 President Lucio Gutierrez declared a state of emergency in the capital city and dissolved the Supreme Court. He later flees after Congress voted to sack him amid growing protests.

Brazil

· 1990-1994 President Collor fails to provide clean government or economic growth. He privatizes several industries, but inflation and opposition rise. Accused of corruption, he is impeached.

· 1995-1996 Cardoso is elected president. His popularity soars as the Real Plan of 1994, combined with an economic policy that welcomes foreign investment, brings economic growth.

· 1997-1998 The Asian financial crisis spreads to Brazil. Brazil’s stock market drops 50%, requiring an IMF bailout. Brazil has to raise interest rates to 40% to attract capital. Cardoso is reelected despite massive capital flight and financial turmoil sparked by financial crises in Russia and Asia.

· 1999-2003 A devaluation and carefully planned-out stabilization measures ease Brazil out of its financial crisis. The economy recovers in part, and measures are put in place to control public spending. Political infighting, corruption scandals, and an energy crisis shake Cardoso's popularity. Economic conditions worsen in 2002.

· 2002 Veteran populist Luiz InácioLula da Silva, union leader and founder of the leftist Worker’s Party, becomes president with popular support. He has trouble carrying out land and income redistribution to the poor but applies economic austerity programs in line with the IMF. Mr. da Silva has been cultivated by the Bush administration in the hope that he would soften his economic policies and serve as a moderating influence in Latin America, despite his alliance with such leftist leaders as Fidel Castro and Hugo Chávez of Venezuela. American officials say that strategy has worked, and that under Mr. da Silva Brazil has hewed to a pro-capitalist, pro-investment and fiscally conservative line. Mr. da Silva sent Brazilian forces as peacekeepers to Haiti under the aegis of the United Nations to keep order after the forced resignation of President Jean-Bertrand Aristide.

· 2004 Brazil's opposition to unlimited nuclear inspections sought by the IAEA raises concerns that it might embolden other nations like Iran and North Korea to reject IAEA inspections, but the US maintains warm relations with de Silva

· Lula has become more centrist since he was elected president in 2002. He seems committed to fiscal discipline and free markets despite a corruption scandal that threatened to bring down Lula’s government

Chile

· 1989-1992 A plebiscite vote removes Pinochet from power and elections replace him with Aylwin, beginning the transition to democracy, addressing human rights violations and promoting labor reform. An export boom leads to record GDP growth.

· 1993-1999 Frei Ruiz-Tagle continues Aylwin's economic and social policies. Pinochet is arrested in London and charged with human rights violations. The global financial crisis of 1998 strongly affects Chile's export-dependent economy.

· 2000-2003 Chile elects a third Socialist Concertación president, Ricardo Lagos, by a slim margin. Maintains stability through the global slowdown, but unemployment remains high. Pinochet is stripped of his immunity but is eventually deemed unfit for trial.

· Chile’s economy is one of the most open in the world. The leftist government has struck trade deals with countries across Europe, Asia, and North America, and the country has seen consistently strong growth, including a GDP increase of 6 percent last year.

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Europe

European Union

· 1990s France resists adopting US computer standards, and as a result Europe has no indigenous computer makers.

· 1990 The European Exchange Rate Mechanism is begun. All member countries agreed to keep their currency value within set limits linked to the German mark. As a consequence they were forced to adopt the anti-inflation policies of the German Bundesbank.

· 1992 Britain's withdrawal from the Exchange Rate Mechanism (ERM)

· 1993 The Maastricht Treaty takes effect, creating the European Union

· 1994 The “Chunnel” opens, linking France and England

· 1999 European Monetary Union begun. It requires a single currency (the Euro) and financial standards. Improved corruption & fiscal policy in countries like Italy

· 2002 Jan. 1: The Euro currency debuts in twelve European countries.

· 2004 10 nations - Poland, the Czech Republic, the Slovak Republic, Slovenia, Hungary, Estonia, Latvia, Lithuania, Cyprus, and Malta - join the 15 member European Union

· 2004 European heads of state signed in Rome the Treaty and Final Act establishing the first European Constitution.

• The Constitution is based on the EU's two primary existing treaties, the Treaty of Rome of 1957 and the Maastricht treaty of 1992, The process started in 2001 when the European Convention was established to produce a draft of the Constitution, which was eventually published in July 2003. After protracted negotiations during which disputes arose over the proposed framework for qualified majority voting, the final text of the proposed Constitution was agreed upon in June 2004. The constitutional treaty was signed by representatives of the member states in 2004, and is now in the process of ratification by all of the member states.

· 2005 The French and the Dutch both reject the EU constitution in referenda, prompting other countries to postpone their ratification procedures and leaving the Constitution with a highly uncertain future. Although a majority of EU countries have approved the treaty, unanimity is required before it can enter into force.

· 2007 Romania and Bulgaria join the European Union, bringing the total number of member states to 27..

· The European Council agreed that it could decide to begin formal accession negotiations with Turkey.

Immigration

· Turkey is still epitomized by its highest-profile export to the EU—the Gastarbeiter. That's German for "guest worker," specifically those who are Turkish. During the 1960s and '70s, in the heyday of Europe's economic boom, these poor, uneducated Anatolian peasants flooded into Germany, France and Austria, clustering in ethnic communities isolated from the social mainstream. The influx peaked decades ago and has since dwindled to a trickle. Yet even today they remain the symbol of Europeans' hesitance to accept Turkey into their Union. If admitted, Turkey would be the most populous member of the European Union. French Prime Minister Jean-Pierre Raffarin warned that a "river of Islam" threatens to overwhelm traditional European culture.

· The European Union is plagued by illegal immigration from North Africa and Eastern Europe. It has no common asylum policy, but most nations want greater control over the flow of migrants and asylum seekers.

· 2005 Rioting by Muslim youths begins in the suburbs of Paris then spreads to the rest of France and other EU countries

European Economics

· Despite record growth in world trade, Europe is growing slowly. With internal demand weak and economic activity reliant on exports, little improvement is likely in Europe, and Germany.

· 1998 The European Central Bank (ECB) is established in Frankfurt am Main, Germany. It is the central bank of the eurozone, in charge of monetary policy for the 12 countries that use the euro currency. The European System of Central Banks (ESCB) is comprised of the European Central Bank (ECB), and the national central banks of the 25 member-states of the European Union.

· The U.S. dollar has fallen by 40% relative to the euro since late 2000. The most immediate consequence is that Europe will be flooded by U.S. exports. Europe's legendary rigidities in labor markets, burdensome business regulations, and closed corporate ownership have hamstrung the ability of many European companies to react effectively to changes in the global economy. Managers in Europe will face unprecedented pressures to cut costs, policymakers to save and create jobs, and union leaders to protect the generous benefits they have secured for their members over the years. From macroeconomic policy and deregulation to labor market flexibility and changes in corporate ownership and governance, continental Europe faces a daunting reform agenda

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Great Britain

· 1990 Margaret Thatcher resigns as British prime minister; John Major succeeds her

· 1990 Britain joins the Exchange Rate Mechanism.

· 1992 Britain signs the Maastricht Treaty on closer integration among members of the European Union, but Britain's traditional European skepticism leads to significant opt-out clauses, particularly on currency and social issues.

· 1992 Britain's withdrawal from the Exchange Rate Mechanism (ERM) has a damaging political impact, but effectively ends the country's longest recession since the 1930s. On September 16 the UK's prime minister and chancellor tried all day to prop up a failing pound. They raised interest rates from 10% to 12%, then to 15%, and authorized the spending of billions of pounds to buy up the sterling being frantically sold on the currency markets. But the measures failed to prevent the pound falling lower than its minimum level in the ERM. Britain did not rejoin after the day which became known as "Black Wednesday".

· 1996 Prince Charles and Princess Diana agree on divorce. 1997 Princess Diana, 36, is killed in a Paris car crash

· 1997 Tony Blair completes centrist remake of the Labor Party with resounding election victory. He continues Thatcher's monetarist-style policies and agrees on harnessing the power of markets, but he restores full employment as a goal.

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British

Commonwealth

1998

2001 Tony Blair and Labor win a sweeping reelection, promoting incremental reforms but maintaining overall market orientation. The economy still outperforms much of Europe but is affected by the global slowdown.

· 2001 The European Commission banned all British milk, meat and livestock exports following the UK's first outbreak of foot-and-mouth disease for 20 years.

· 2003 Blair supports the U.S. campaign against Iraq, sending troops despite mixed public opinion.

· 2004 Blair announces a referendum on the European Union Constitution. Previously he had said that a public vote was not necessary since it would not infringe on Britain’s sovereignty, but had to change his position in the face of public opinion.

· The City of London, one of 33 boroughs that make up London, is the world’s largest financial centre. It is home to Europe’s biggest stock-market, is the world’s leading marketplace for currency trading, and is the international headquarters of most big banks. The City’s recent history has been dominated by two big trends: the move from informal to formal financial regulation and its revival as a major financial centre.

· The Corporation of London, the local authority that controls the City of London, dates to the 12th century. The Corporation is unique in that it doubles as a local authority and as a vast property company. Most of its assets are held by two privately held trust funds, City's Cash and Bridge House Estates. City's Cash owns more than a quarter of the land in the square mile of the City of London itself, as well as prime chunks of London's West End. Picked up in 1629 for £200, this includes a good proportion of what is now the capital's smartest shopping street, Bond Street. Its income-earning properties are valued by the Corporation at just over £1 billion. The second privately held trust fund, Bridge House Estates, dating back to 1097, has traditionally paid for the upkeep of the four London bridges that the Corporation owns, including London and Tower bridges. Under threat from the politicians, the Corporation converted the fund into a charity in 1995. Unlike any other local authority, the Corporation is run by a Lord Mayor and 122 members of the Court of Common Council. And there are still Aldermen and Sheriffs, usually elected by a show of hands. But it is the archaic nature of the current franchise for the common councillors, dating from the 1850s, that has attracted ridicule over the years. Rather than one person, one vote, there is a business vote, confined to non-resident business owner-occupiers and tenants, as well as people in partnerships, such as lawyers. Incorporated companies do not get a vote. That means that most of the banks and large companies that make up the modern City are disenfranchised.

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Wales

· Government financing and central planning have helped reverse the decline of the Welsh language. Road signs and official public documents are written in both Welsh and English, and schoolchildren are required to learn both languages. Welsh is now spoken by more than a half million of the country’s three million people. Nearly 600,000 people, roughly a fifth of the population, can speak Welsh, the beneficiaries of a nationalist movement that has used language as a rallying cry since the 1960s. The old language bubbles up in schools, pubs, grocery stores, and on television. The English name for Wales comes from the Anglo-Saxon word wealas, meaning foreigners

Scotland

· 1999 The first meeting of the new Scottish Parliament as a devolved legislature. Parliament was reconstituted as a body that has the power to pass laws and has limited tax-varying capability. Another of its jobs is to hold the Scottish Executive to account. The "devolved matters" over which it has responsibility include education, health, agriculture, and justice. A degree of domestic authority, and all foreign policy, remains with the UK Parliament.

· The Scottish Parliament has passed laws giving free personal care to the elderly, free nursery places to three- and four-year-olds, free bus travel and central heating to pensioners, abolished tuition fees for university students, brought in a fairer voting system for local government, reformed land tenure and set up a mental-health system.

Ireland

· Almost 3,500 people on both sides have died since the Troubles began in 1969. Religious violence, harassment, and intimidation typically flare up during the summer “marching season,” when hard-line Protestants don bowlers and orange sashes and parade through Catholic neighborhoods to celebrate centuries-old battlefield victories. Between 1968 and 1998, loyalist paramilitaries killed an estimated 864 civilians (most of them Catholic), compared with an estimated 728 civilians (most of them Protestant) killed by the IRA. Experts say loyalist groups have often acted out of religious hatred, while the IRA has more often targeted British security officers—killing more than 1,000 of them.

· Historically, there were two main Northern Ireland paramilitary organizations: the Ulster Volunteer Force (UVF), founded in 1966, and the larger Ulster Defence Association (UDA), founded in 1971. The UVF and the UDA cooperated closely for much of the 1990s, but this association dissolved amid a violent feud in 2001. At its peak in the 1970s, the UDA had some 40,000 members, but the UVF and the UDA today are thought to be only several hundred strong.

· 1993 Downing Street Declaration: British Government accepts the right of the people of Ireland to self-determination.

· 1994 IRA declares cease-fire in Northern Ireland. Later Ulster Protestants declare cease-fire

· 1996 Cease-fire breaks down after Britain's Conservative government refuses to allow Sinn Fein to join all-party talks

· 1997 IRA cease-fire resumes; talks begin in Belfast.

· 1998 Landmark peace settlement, the Good Friday Accord, reached in Northern Ireland.

· 1999 New Northern Ireland government begins self-rule for first time in 25 years.

· 2000 Feb.: Britain ends self-rule in Northern Ireland after Irish Republican Army misses disarmament deadline. June: Britain restores parliamentary powers to Northern Ireland after Sinn Fein agrees to disarm.

· 2001 Oct.: IRA announces that it has begun to dismantle its weapons arsenal

· 2002 Government suspended in Northern Ireland in protest of suspected IRA spy ring

· 2005 The Provisional IRA issues a statement formally ordering an end to the armed campaign it has pursued since 1969 and ordering all its units to dump their arms.

· The country's corporate tax rate of 12.5% on corporate and capital-gains profits has been a major factor in the recent success of its economy

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France

· 1989-1993 High unemployment, the rise of the extreme-right National Front, and tight immigration policies fuel racial tensions. Mitterrand's popularity plummets

· 1991 France agrees to sign 1968 Nuclear Nonproliferation Treaty

· 1993 Mitterand appoints Édouard Balladur of the opposition Rally of the French People (RPF) as prime minister.

· 1994-1996 Balladur resigns when he is implicated in one of a series of political scandals. Paris is rocked by a rash of terrorist bombings believed to be the work of Algerian Islamic fundamentalists.

· 1995 France explodes nuclear device in Pacific; wide protests ensue

· 1996 Jacques Chirac, running as the "man of the people," is elected president.

· 1997-2001 The government loses support when President Chirac launches nuclear tests in the Pacific and Socialist Prime Minister Lionel Jospin fails to live up to campaign promises made to labor. Economic growth remains moderate, but stronger than that of most European nations

· 2002-2003 President Chirac is reelected when all mainstream parties unite around him, after extreme rightist Jean-Marie Le Pen earns a runoff spot in the 2002 election. The left is routed in parliamentary elections. France is the best performing of the larger European economies. The government proposes greater decentralization of power to the regions.

· 2005 After two Muslims youth are shot while being chased by police, Muslim rioters sew disorder in the streets for 2 weeks, burning thousands of cars, targeting businesses, schools and churches with gasoline bombs, and firing ammunition at the police. Rioting begins in the Paris suburbs and spreads throughout France.

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Spain

· ETA is a Basque leftist group that uses terrorism in hopes of forming an independent Basque state. ETA stands for Euskadi ta Askatasuna, which means “Basque Fatherland and Liberty”. Spain has long fought ETA and opposes an independent Basque homeland, though its 1978 constitution designated an autonomous Basque region with responsibility for education, health care, policing and taxation.

· Of the nearly half a million illegal migrants that come to Europe every year, one-fourth come via Spain. The EU puts pressure on Spain to monitor it coast close to North Africa

· 2003 Spain’s president Jose Maria Aznar supports the US invasion of Iraq despite Spanish popular opposition

· 2004 March 11 Terrorist bombings in Madrid kill 192 people three days before national elections. In the election Socialist Jose Luis Rodriguez Zapatero wins and immediately after being sworn in announces the withdrawal of Spain's contingent of 1,300 troops from Iraq

· 2006 The ETA declares a permanent cease-fire

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Italy

· Italy’s economy has shrunk by 4% since 1999 after adjusting for inflation. Along with Germany and France, the nation has been struggling with weak consumer spending, waning productivity and rising government deficits. But unlike its neighbors, Italy lacks robust large corporations that can export their way out of trouble. When Italian manufacturers ran into competitive problems in the past, there used to be an easy fix: currency devaluation, which made Italian exports cheaper relative to those of other countries. But that solution is no longer a panacea, because Italy swapped the lira for the euro, which has risen against most other currencies.

Germany

· 1990 Oct.: Reunification. The move is so popular that Kohl returns to power easily, but problems soon emerge as a free market wrestling with high unemployment tries to absorb a rusted-out command economy.

· 1990 The CIA secretly removes the archives of the Stasi, East Germany's secret police. Despite requests from Germany for the return of the material, the US keeps the documents for 9 years. In 1999 most, but not all, of the documents are returned.

· 1991-1997 Germany must carry out economic reforms required for the European Union even as it wrestles with absorbing the East. European integration pushes the privatization agenda, a politically difficult policy because of people's fear of losing jobs in a time of high unemployment.

· 1998 An SPD-Green center-left coalition brings Gerhard Schröder to power with pledges of economic and social reform and deficit-cutting. But unemployment remains high, and growth is sluggish.

· 2002-2003 The German economy is stagnant. Chancellor Schroeder narrowly wins reelection in 2002, based partly on Anti-Americanism. The German government and public adopt a marked opposition to a U.S. war on Iraq. The domestic scene is dominated by unemployment and malaise.

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Austria

· 2000 Austria is at center of European dispute after conservative People's Party forms coalition with the far-right Freedom Party, headed by xenophobe Jörg Haider

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Poland

· 1990 "Shock therapy" used in Bolivia is repeated successfully in Poland; Lech Walesa wins Poland’s runoff presidential election.

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Hungary

· 1990 A center-right coalition government wins the first free parliamentary election, begins free-market reforms, privatization. Prices rise as subsidies are cut. Exports to the former Soviet bloc drop, unemployment rises, and the GDP declines by about 18%.

· 1994-1997 Decline in living standards is the major issue and socialists gain power. The government continues reform and privatization, adopting an austerity program to reduce debt, deficits, and public spending. The moves are painful, but by 1997 results are evident: GDP grows by 4.6 % that year.

· 1998 Center-right coalition again takes power. Heavy winter snows, spring flooding, and conflict in neighboring Kosovo put pressure on the country's budget. The economy slows, though the GDP in 1999 is still a robust 4.5 %.

· 1999 The country becomes a full NATO member.

· 2000-2003 Monetary policy drives down inflation with high interest rates; after the currency, the forint, is fully liberalized, it attracts speculators, pushing up exchange rates and pressuring Hungary's vital export earnings. About half of GDP now originates in the private sector. Former finance minister Peter Medgyessy leads a Socialist Party government. Hungary is confirmed to join the European Union in 2004.

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Czechoslovakia/Czech Republic

· 1990-1991 Reformers win landslide victories in the first free election since 1946. Economic reforms begin, including price liberalizing and privatization. Signs of economic improvement appear, but with the end of the communist economic alliance, manufacturers lose their traditional markets.

· 1992 Citizens receive vouchers for investment in state-owned companies

· 1992-1993 The North tolerates reforms better than the South. Slovak calls for autonomy block government's functioning. Czech and Slovak leaders agree the regions will separate.

· 1993 Jan.1: the Czech Republic and the Republic of Slovakia are peacefully established. Vaclav Havel elected as Czech president, free marketeer Klaus becomes the Czech Republic's prime minister.

· 1994-1999 To attract foreign business, the Czech government revamps legal and administrative structures governing investment. Promoting privatization, it issues citizens vouchers that can be invested in any state-owned company. The economy grows at first, but transformation is bumpy.

· 1997 Czech Republic enters a recession.

· 1998 Havel is reelected president; Zeman is appointed prime minister.

· 2000-2003 Economic policy aims to follow European Union norms. Investment and consumption increase, and growth resumes.

· 2002 A centrist coalition takes office led by Vladimir Spidla. The country suffers devastating floods. The EU extends its formal invitation: The Czech Republic will join in 2004.

· 2003 Vaclav Havel leaves the ceremonial presidency; parliament struggles to choose a successor

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Balkans

Yugoslavia

· 1990 Yugoslav Communists end 45-year monopoly of power

· 1991 Slovenia and Croatia declare independence. With 90% of its population ethnic Slovenians, Slovenia is able to break away with only a brief period of fighting. Because 12% of Croatia's population is Serbian, however, Yugoslavia fights hard against its secession for the next four years. Croatia evicts most of its Serbian population.

· 1992 Jan. Macedonia declares independence.

• April Bosnia and Herzegovina declares independence. Bosnia is 43% Muslim, 31% Serbian, and 17% Croatian. Bosnia erupts into war. By the time a tenuous peace is achieved in 1995, the country has been partitioned into three areas.
• April Serbia and Montenegro form the Federal Republic of Yugoslavia, with Slobodan Milosevic as its leader. This new government, however, is not recognized by the United States as the successor state to the former Yugoslavia.
• Sept. The UN expels Serbian-dominated Yugoslavia

· 1994 Jan. Serbs' heavy weapons pound Sarajevo. Oct.: Clinton orders the Bosnian arms embargo ended

· 1995 May Fighting escalates in Bosnia and Croatia. Nov.: Bosnia, Serbia, and Croatia sign the Dayton Peace Accord to end the war in Bosnia.

· 1996 In the southern Serbian province of Kosovo, the militant Kosovo Liberation Army (KLA) begins attacking Serbian policeman. Thousands march in Belgrade in continuing protest against president's annulment of election results.

· 1998 March Milosevic sends troops to Kosovo to quash unrest in the province. A guerrilla war breaks out.

· 1999 March After peace talks fail, NATO carries through on its threat to launch airstrikes on Serbian targets.

· 2000 In the face of trade sanctions from the U.S. and other nations, the Serbian economy continues to deteriorate and dissent spreads. Montenegro discusses separating from Serbia. Sept: Opposition leader Vojislav Kostunica wins elections. Milosevic refuses to release the results, demanding a runoff election. Oct.: A general strike is called, and one million people flood Belgrade and attack the Parliament building. Milosevic steps down. Kostunica takes office. U.S., European Union lift economic sanctions.

· 2001 Milosevic is arrested, turned over to the UN International Criminal Tribunal. He is the first head of state to face an international war-crimes court.

· 2003 Yugoslavia is replaced with a loose federation called Serbia and Montenegro, to placate Montenegro's stirrings for independence, and allows for a referendum on independence to occur in three years' time.

· 2006 Montenegro declares independence after a referendum gains a 55% majority

Macedonia

· 1992 Jan. Macedonia declares independence from Yugoslavia.

· 2001 The long-simmering resentment of Macedonia's ethnic Albanians erupts into violence. After six months of fighting, a peace agreement is signed between rebels and the Macedonian government

Romania

· Gypsies (Roma): A thousand years ago they left India, although no one knows exactly why. Europe is now home to 8 to 12 million Gypsies, with more than a million others scattered worldwide. Until the mid-19th century, Gypsies were held as slaves in parts of present-day Romania. Different groups of slaves had different names, reflecting the kinds of jobs they performed. For example, the Papineshti were goose herders (papin is Romany for “goose”). Those names still identify clans among descendants of Gypsy slaves, many of whom now live in the United States. Of course, members of the Papineshti clan are no longer goose herders, since there’s not much demand for that skill. But some members of the Kalderash (coppersmith) clan—once makers of metal pots—are now in the business of scrap metal.

Bulgaria

· 1990 The National Endowment of Democracy, a US organisation that funds American foreign policy objectives, pours $1.5 million into the election campaign and selected newspapers in an attempt to defeat the Bulgarian Socialist Party (BSP). The BSP wins the election. 1991 The NED injects more money into the election, a government acceptable to the USA is elected

Albania

· 1991 Communist government resigns

· 1997 State of anarchy occurs when a third of the population loses its savings because of pyramid schemes. Civil war ensues.

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Baltic Republics

· Estonia was a neglected Soviet province that sent timber, taxes, and military draftees to Moscow, receiving little in return. Today, the 1.4 million Estonians have embraced capitalism so eagerly that the streets of Tallinn, the capital, are lit up all night long with the neon portals of a dozen casinos.

Russia

· 1990 Feb.: Soviet Communists relinquish sole power. Nov.: Gorbachev assumes emergency powers

· 1991 Lithuania, Estonia, and Latvia win independence

· 1991 June: The Russian Republic elects Boris Yeltsin president in its first-ever direct elections.

· Aug. 19-21: A hard-line communist coup attempts to depose Soviet President Mikhail Gorbachev. Yeltsin plays a crucial role in returning him to power two days later, earning broad popular support.

· Dec. 25: Gorbachev resigns his position as president of the USSR, signifying the demise of the Soviet Union. The former Soviet republics (including Russia) become independent states.

· 1992 Price controls end; privatization of Russia's state industries begins under Anatoly Chubais

· June Yeltsin names Yegor Gaidar acting prime minister of Russia. Gaidar is never confirmed by parliament.

· Dec. In the face of parliamentary opposition to Gaidar's reforms, Yeltsin fires him and appoints businessman Viktor Chernomyrdin prime minister.

· 1993 Oct.: Yeltsin's forces crush a revolt in Russian Parliament. Dec.: A national referendum approves a new Russian constitution, which increases the power of the president. Nationalists are well-represented in the newly elected Duma.

· 1995 The rapid liquidation of Russia’s government assets and the quick introduction of capitalism leads to the concentration of wealth in a few businessmen’s hands. The oligarchs, as they are known, amass their fortunes during Yeltsin's presidency, when the Russian economy operates on bribery and coercion. The oligarchs regarded themselves as the real government of Russia; they can easily dismiss and replace government ministers.

Yeltsin and his supporters, needing the support of the oligarchs in the coming elections, concoct a back-room deal known as ''loans for shares.'' In exchange for some of Russia's most valuable companies the business oligarchs throw their political muscle behind Yeltsin.

· 1996 Despite suffering a heart attack, Yeltsin defeats communist Gennady Zyuganov in presidential elections

· 1998 Economic Crisis. Russian manufacturing is of poor quality, and tax collection is insufficient. Russia is dependent on oil revenues for income. After Asian financial crisis hits, demand for crude oil falls. Russia raises interest rates from 20 to 70%. Russian investors and lenders estimate their losses at $100 billion

· March Yeltsin sacks his entire cabinet, including Chernomyrdin. He names liberal former Energy Minister Sergei Kiriyenko acting prime minister. The Duma twice rejects Kiriyenko's nomination, but confirms him, under the threat of dissolution, in a third vote.

• May-June Stock & bond markets plunge, interest rates increase to 150%. The IMF, busy rescuing SE Asia, is unwilling to loan more to Russia without economic reforms. Duma rejects IMF reforms for bailout package.

· Aug.: Russia defaults on bonds and devalues the ruble without warning and the central bank chairman resigns. Duma calls for Yeltsin’s resignation. Yeltsin fires Kiriyenko and re-nominates Chernomyrdin Prime Minister. The Duma twice rejects his nomination. Rather than risk a third vote (and the possible dissolution of the Duma), Yeltsin nominates Yevgeny Primakov, foreign minister and former KGB official, as a compromise candidate. The Duma confirms the relatively conservative Primakov in September.

· 1999 May Yeltsin fires Primakov, ostensibly because of the need for more energetic leadership. The nomination of Interior Minister Sergei Stepashin, a Yeltsin loyalist, as Primakov's replacement suggests to many that Primakov had become too powerful for the President's comfort. Stepashin is easily confirmed by the Duma. The Duma votes down five counts of impeachment brought against Yeltsin.

· Aug.: Stepashin is fired without explanation. Yeltsin nominates Vladimir Putin, former KGB official, head of the FSB, and secretary of the Russian Security Council. Yeltsin also designates Putin heir-apparent to the presidency.

• Oct.: Stock market commissioner quits saying the government is not interested in enforcing security laws

· 2000

· Putin becomes President. Putin convenes a meeting at the Kremlin in which he told the oligarchs that they could hold onto their shadily acquired businesses but would no longer be permitted to meddle in politics. He is surrounds himself with advisers who worked in military or intelligence posts during the Soviet era -- the so-called siloviki, many in the K.G.B. Putin's economic team is much more friendly to Western ways than his national-security team is. His senior economic adviser, Andrei Illarionov is so enamored with free trade that he has described the Kyoto Protocol as an ''international Auschwitz'' against economic growth;

· Russian Orthodox Church bestows sainthood on Czar Nicholas and 1,000 others killed by Communists

· 2004

• Putin is reelected with more than 70% of the vote. Russians rewarded Putin for bringing a sense of stability to their lives after the chaos of the Yeltsin era; most Russians don't seem to mind the erosion of civil liberties, or the war in Chechnya, or his nearly complete control of television news and the murders of 14 journalists since 2000.
• Sept.: A siege by militants at a school in the Russian town of Beslan leaves 338 hostages dead

· Since Vladimir Putin became president in 2000, Russia has in many ways been a remarkable success. Thanks largely to high oil prices, its economy has grown by an average of 6.5% a year. Living standards have improved and a sizeable middle class has emerged. The stock market has boomed. Russia is running a huge current-account surplus, it is paying off the last of its debt and the ruble has just been made fully convertible. At the summit Russia also hopes to surmount the last hurdles to its joining the World Trade Organization.

· The raids on Russia's constitution are incremental but no less insidious. The 5% threshold to win seats in the Duma, already set high enough to keep out all the liberal parties at the 2003 election, will be raised to 7% for the parliamentary poll later this year. Parties are barred from forming coalitions to get over it. Candidates may come only from party lists; in the previous system half were directly elected by district (that enabled Mr Ryzhkov, for example, to survive). Candidates can be debarred for “extremism”; that includes slandering a public official. Minimum turnout rules have also been scrapped, as has the option of voting “against all”. So boycotts and protest votes can no longer be used to register dissent.

· Along with United Russia, the blindly loyal majority block, the next Duma will most likely have a Communist rump and the Liberal Democrats: a largely comical faux-nationalist outfit also loyal to the Kremlin. The main “opposition” party may be a new one called A Just Russia, created by the Kremlin last year to appeal to left-wing and nationalist voters.

Vladimir Putin

· Putin has consolidated the state's grip over national television, turned the upper house of parliament into an appointed body, vitiated the power of locally elected regional governors, effectively seized control of the courts, and developed a form of state capitalism that tolerates private companies only if they are subservient to the state's agenda.

· The defining feature of Putin's tenure has been his war against the oligarchs, especially Mikhail Khodorkovsky, president of the Russian oil company Yukos, who made the mistake of opposing legislation to raise corporate taxes and financing the anti-Putin opposition in the presidential elections. Khodorkovsky is on trial for fraud, embezzlement and tax evasion and faces a 10-year jail term and Yukos, has been hit with a tax bill of $3 billion, and the government is threatening to seize its most valuable assets. Putin, eager to punish billionaires who oppose his rule, has chosen to make an example of Khodorkovsky, though Khodorkovsky is not the first to face Putin's selective wrath. Boris Berezovsky, a billionaire power broker in Moscow chose exile in London, and Vladimir Gusinsky, a media baron, was forced to sell his empire at fire-sale prices and is exile in Israel.

· This slow transformation into a one-party state may raise concern in the West, but it is largely supported by the people. Popular legitimacy comes from genuine elections, with real choices and more-or-less honest vote counting--even though Russia lacks an independent court system and free media. The Russians don't miss Yeltsin's pseudo democracy, marked by turmoil, decay, and loss of prestige. They welcome Putin's commitment to order, his efforts to enhance national pride, and his reining in the oligarchs to bring about a fairer distribution of income.

· But there has been a cost. Greater state control and diminished respect for the rule of law have inadvertently created the very conditions that encourage corruption, a situation neatly summarized by Putin's former economic adviser, Andrei Illarionov, as one in which bureaucrats "tend to make decisions that have a higher rate of return for themselves, not for the country." Still, Russia's achievements are real. Private property is widely accepted, the Communist Party has no chance of returning to power, the bureaucracy has been cut, and military spending is down from about 30 percent of GNP to about 3 percent.

· It is in foreign policy that the changes in Russia are most worrisome. Witness Putin's attempt to steal Ukraine's presidential election, his interference in Abkhazia and Moldova, his support for the dictatorship in Belarus, his sale to the extremist Iranian regime not only of a nuclear power plant but also of antiaircraft weapons that could be deployed against the West, his willingness to open a dialogue with Hamas terrorists when he stonewalled Chechen Islamic terrorists, and the anti-American rhetoric accompanying his missile testing.

Economics

· Three-quarters of state enterprises have been fully or partly transferred to individual owners in a corrupt privatization drive.

· Most of Russia’s economic activity is centered in Moscow, where a sizable middle class has emerged. Yet vibrant businesses also have taken root in many other cities, including Novosibirsk, Nizhniy Novgorod, St. Petersburg, Samara, and Yekaterinburg. Often the most successful enterprises are in spheres of activity that scarcely existed in the Soviet Union, such as computer software, sophisticated food processing and packaging, restaurants, and advertising. Ironically, the collapse of the ruble in 1998—which made imports prohibitively expensive—boosted domestic production. That increase, coupled with higher prices for Russian oil and gas, has at last halted the country’s economic slide; the economy grew by 5% in 1999 and by 8% in 2000.

· The official salaries of most Russian workers hover around a hundred dollars a month, although many earn some undeclared income on the side. An estimated 20 million of Russia’s 145 million people live below the official poverty line of $31 a person a month. Tax evasion is epidemic, and an estimated 25 to 40% of the economy is conducted underground. And every year super-rich Russians ships an estimated $25 billion out of the country to foreign banks, much of it from the sale of Russia’s abundant natural resources.

· Most of the population of the planet’s largest country is packed into its west and along the Trans-Siberian Railroad. The government divides the country into seven districts. Many of Russia’s valuable natural resources are in the remote north, creating rare islands of relative prosperity such as Yamal-Nenets, rich in oil and gas, and Sakha, source of 98 % of Russia’s diamonds.

· International arbitration courts have ruled in favor of a long list of Western businessmen who lost investments through what they believe were arbitrary decisions by the Russian government in the 1990s. All say that in the early days of post-Soviet liberalization and joint ventures, Russian partners, competitors or government agencies seized Westerners' assets after the investment became valuable. U.S.-based Subway Sandwiches and Kola Salmon Fishing, Canada's Archangel Diamond Corp., and the American former owners of the Moscow Country Club are among those still seeking big compensation for seized assets.

Russian Oil and Gas

· Russian oil and gas sector’s new paradigm is state domination. For example, the government’s 2003 arrest of Mikhail Khodorkovsky, formerly Russia’s richest man and head of the country’s second-largest oil company Yukos, sent shockwaves through the market. Gazprom, the state-controlled gas behemoth, recently acquired Sibneft, Russia’s fifth-largest oil firm, and now enjoys a near monopoly on the country’s gas production and vast network of pipelines. Moscow’s maneuvers have validated charges that Russia’s economy is unhealthily tied to oil.

· Russian oil production rose 50% since 1999, thanks to an influx of investment and rising oil prices. Russia is the second-largest exporter of oil after Saudi Arabia; energy revenues account for 20% of Russia's economy and the bulk of its exports. Growth reached 7%, and foreign-currency reserves surpassed $80 billion. Many Russians no longer feel the threat of abject poverty and the government aims for a doubling of GDP by 2013. More billionaires now live in Moscow (33) than in New York (31)

· The growing economy has not broken up the country’s state-run conglomerates, which are similar to South Korea’s government-owned, inefficient chaebols. Also adversely affecting Russia's wealth gap is corruption - a Moscow-based pro-democracy organization estimates businessmen pay $316 billion in bribes each year. The good news is that businesses big and small appear to be paying their taxes more and individual Russians are also increasingly paying their taxes, thanks in part to a simplified 13 percent personal-income flat tax instituted in 2000. Adjusted for inflation, income tax revenues have risen by 15%.

· Russia holds the world’s largest proven natural-gas reserves, which are nearly twice the size of the next-largest reserves in Iran. Russia is also the world’s largest exporter of natural gas and the second-largest exporter of oil. Oil and gas make up roughly two-fifths of all Russian exports, leaving many investors wary of investing in such a resource-dependent market.

· The bulk of Russia’s oil reserves lie in Western Siberia. A good portion is also found on Sakhalin Island, a body of land north of Japan that formerly housed Soviet prisoners. There are two joint, start-up projects underway: Sakhalin-1 and Sakhalin-2, the former led by ExxonMobil, the latter by Royal Dutch/Shell. Both projects are part of what’s known as “production-sharing agreements,” which means that foreign oil firms put up the investment capital while the Russian government gets a share of the revenues and retains rights over the oil and gas reserves. Sakhalin-2 began in 1999. The trouble with these projects, including those in Western Siberia, is getting the product to market. Russia is short on deep-sea water ports. Russia produces roughly seven million barrels of oil per day, but can only ship around four million via major pipelines. The rest must be transported by rail or river. Much of it goes to Europe. It is shipped by tanker via the Black Sea, though Russia and Germany have signed a deal to build a pipeline under the Baltic Sea by 2010. The rest of the oil goes to the United States or East Asia. One project that would have boosted oil exports to the United States, a pipeline connecting Western Siberia’s fields with Murmansk, one of Russia’s unfrozen deep-sea water ports, was recently shelved. Another, aimed at quenching China’s growing thirst for oil, has gone through: the Taishet-Nakhodka pipeline, a $12 billion project signed earlier this year that will provide 80 million tons of crude per year to East Asia, 30 million of which will go to China.

· Russian gas companies have put a renewed emphasis on liquefied natural gas (LNG). Sakhalin-2’s backers have already pre-sold 80 percent of its predicted LNG over the next twenty years to Japan, South Korea, and North America.

Russia and the Former Soviet Union

· The Kremlin's reaction to the surge of "colored revolts" that swept through the region in recent years was panic. That revolutionary wave - which began with Georgia's 2003 Rose Revolution and continued with Ukraine's Orange Revolution - seemed unstoppable just a year ago, when Krygyz President Askar Akayev was overthrown. But the inability of new leaders to fulfill revolutionary pledges, together with the failure of popular pressure to effect change in other Soviet satellite states, has opened the way for Moscow to reassert its influence in the region.