The Top Ten Stories You Missed in 2004

While the world’s attention was riveted on the U.S. presidential election and the ongoing conflict in Iraq, several other less-noticed events occurred in 2004 that will have a lasting impact in the years ahead. Find out what you missed in this exclusive overview by the FP editors.

Nous Sommes Tous Chinois The Eurotaxman Cometh Not Iraqification, but Kurdification Putin to Kvashnin: Youre Fired! North KoreaNot Quite Dead Pakistans Musharraf Stays in Uniform Busting the Bunker Busters Warding off the Oil Curse Playing it Seif A Wounded Military 1. Nous Sommes Tous Chinois

Whenever Taiwan holds an election, Beijing puts on a show of military might to demonstrate that, one way or another, Taiwan will remain part of China. Prior to Taiwans first direct presidential election in 1996, China lobbed missiles that landed within 50 miles of Taiwans coast. Last March, four days before the Taiwanese elections, China carried out a naval exercise off the coast of Taiwanits largest-ever joint military exercise with a foreign power. Who was Chinas partner in intimidation? France. Also in 2004, the French government began lobbying the European Union (EU) to lift the arms embargo placed on China after the Tiananmen Square massacre in 1989. So, what explains Frances newfound fraternit with China? France clearly sees China as a counterbalance to the U.S. hyperpower; French President Jacques Chirac says that France and Chinas global partnership is founded first of all on a common vision of the worlda multipolar world. France is also keen to gain from the economic action in China and believes that lifting the arms embargo would allow its defense contractors to win lucrative contracts from the Chinese military. Small surprise that in 2004 the French celebrated The Year of China in France.

2. The Eurotaxman Cometh

The European Parliament made headlines when it rejected Italian politician Rocco Buttiglione for the post of EU justice commissioner due to his strict Catholic views on social issues such as abortion. But amid this culture war, a far more important development received scant attention: The replacement of Latvian Ingrida Udre as taxation commissioner. The parliament took exception to her belief in the benefits of low taxation and tax competition between member states and raised concerns over alleged financial irregularities in her past. Her replacement? Hungarian socialistand former CommunistLaszlo Kovacs, who favors the creation of a common consolidated corporate taxation base. His appointment is sure to spark tensions between Brussels and Europes low-tax economies, such as Britain and Ireland, and strengthen the hand of countries that want to raise corporate taxes throughout the EU.

3. Not Iraqification, but Kurdification

When trouble flared in the Iraqi town of Mosul in late November, the only Iraqi troops that U.S. forces trusted to help restore order were Kurdish, according to reports in the BBC and the New York Times. With strong memories of their suffering under Saddam Hussein, the Kurds feel far less conflicted than Iraqs Arabs about joining the United States to fight remnants of the Baathist regime. Yet, U.S. reliance on the Kurds to police ethnically mixed towns such as Mosul could exacerbate tensions in Iraq. Juan Cole, a Middle East expert at the University of Michigan, fears a backlash against the Kurds among Shiite and Sunni Iraqis in the near future.

4. Putin to Kvashnin: Youre Fired!

On July 19, 2004, Russian President Vladimir Putin fired the armys chief of staff, Gen. Anatoly Kvashnin, and replaced him with Yuri Baluyevsky, a general who is more supportive of Putins long-runningand so far unsuccessfulstruggle to reform the military. Since becoming president, Putin has sought to purge the Russian military of its Cold War mindset and retool it for counterinsurgency operations. The military establishment, however, has resisted change, and it still maintains a war-fighting capability oriented toward fighting NATO, as opposed to militants within Russias own borders. And, despite Putins call for an end to the draft in 2001, it still exists, and conscripts will continue serving in Chechnya until 2006. Until Putin can push his reforms through, Russia will likely have little success in defeating insurgencies in secessionist regions such as Chechnya. The ineptitude of elite military units during the Beslan hostage crisis in September 2004when 80 percent of the hostages were killed or wounded during the storming of a school held by Chechen militantsreveals just how much work still needs to be done.

5. North KoreaNot Quite Dead

The politics are stable, the economy is developing, and the leaders are thinking seriously about economic reform. This was Chinese Vice Foreign Minister Wu Daweis assessment of North Korea after his visit in September. Yes, you did read that right: North Korea. The country, whose economic collapse has been anticipated for more than a decade, embarked on a series of economic reformsincluding the introduction of privately run farmers markets in 2002that appear to be bearing fruit. Last year, North Korea recorded its highest level of merchandise imports since the collapse of the Soviet Union. And in November, the United Nations reported the country had its best harvest in a decade. Foreign businesses such as DHL have begun to invest in the Hermit Kingdom. There are even reports of a supermarket opening in the near future. North Korea isnt about to become the next Asian Tiger, but those who are counting on an economic meltdown to avert a nuclear standoff had better start contemplating a Plan B.

6. Pakistans Musharraf Stays in Uniform Last year, Pakistani President Pervez Musharraf pledged to resign as army chief of staff at the end of 2004 and retain only his civilian position of president. Instead, he chose to keep both jobsa decision that was rubberstamped by Pakistans Parliament in October. The issue has sparked fierce debate in Pakistan. Musharraf supporters argue that the effort to combat al Qaeda requires a robust chief executive, while detractors worry about the erosion of democracy. Moreover, the move may signal a break with the coalition of Islamist parties, the MMA, with which he has allied in the past. In 2003, the MMA pushed through a constitutional amendment legitimizing Musharrafs rule in exchange for his promise to step down as Army chief. Now that hes reneged on the deal, the MMA has vowed to fight against Musharrafs retention of both posts. The military has long been Pakistans strongest institution, and these developments are likely to keep it that way. But Musharraf is less popular than ever, having sparked a strange bedfellows backlash among both Islamists and democracy advocates. 7. Busting the Bunker Busters

The Bush administrations Nuclear Posture Review of January 2002 emphasizes the need to develop bunker busters to enhance the ability to eliminate underground military or nuclear facilities (such as those found in Iran and North Korea). According to the White House, such low-yield nuclear weapons would give the United States greater flexibility in eliminating targets without massive fallout. Critics saw the development of this new class of nuclear warheads as an obstacle to convincing other nations to abandon their nuclear weapons programs. Last November, the opponents of the new nukes got their wish when the U.S. Congress eliminated funding for research into the missile warheads. But if administration backers are correct, the funding cut may have emboldened rogue regimes to simply hide their weapons underground to evade U.S. air power and deprived Washington of a crucial weapon in its arsenal against the remaining members of the axis of evil.

8. Warding off the Oil Curse

Although the Boston Red Sox undid their curse in dramatic fashion, the West African country of Chad is quietly trying to undo the oil curse that plagues many developing countries. Chad became an oil exporter and in July received its first $38 million in oil revenues. Oil resources routinely fuel government corruption and civil conflict and undermine economic development. But, as part of a deal with the World Bank, which helped fund the pipeline that transfers the Chadian oil to market, 80 percent of the oil revenue will be spent on health, education, and infrastructure for its mostly poor population, and 10 percent will be invested for future generations. The governments expenditures will face the scrutiny of a watchdog committee that includes individuals from civil society and government, and most of the money will be held by the World Bank in a London account to preempt graft. The arrangement may not work outone nongovernmental organization already complained that the oversight board receives inadequate resources. But if it does, it could be a powerful model for other countries who are rich in resources and poor in everything else.

9. Playing it Seif

When Libya gave up nuclear weapons in late 2003, some pundits claimed that the U.S.-led war in Iraq changed Col. Muammar el-Qaddafis mind, while others hailed the breakthrough as a product of patient carrot and stick diplomacy. But in 2004 it became clear that another Qaddafi might be calling the shots: Seif al-Islam Gaddafi, Muammars second son. The 32-year-old actively lobbied his father to end Libyas standoff with the West, give up weapons of mass destruction, and open the countrys economy. They both want to keep the country in the family, and Seif wants Libya to be a normal countryno more funding terrorism, developing nuclear weapons, or being isolated economically, says John Pike, director of In March 2004, Seif publicly chastised Arab governments for badmouthing the Bush administrations Greater Middle East Initiative to promote democracy, saying instead of shouting and criticizing the American initiative, you have to bring democracy to your countries. He also said Libyan Jews who were persecuted decades ago are entitled to compensation and urged them to return to Libya; his father later echoed the proposal. Seif insists that he is not preparing to take over the reins from his father, but he has clearly carved out a significant role. In March 2004, he told reporters that British Prime Minister Tony Blair would soon visit Libya; only later did London confirm. He conducted the negotiations over weapons of mass destruction with British and U.S. intelligence, and he arranged to have members of the U.S. Congress visit Libya in January 2004.

10. A Wounded Military

Around 800,000 U.S. military troops have served in either Iraq or Afghanistan since Sept. 11, 2001. On top of being overstretched, the general health of the military may be deteriorating. More than 9,300 servicemen and women have been wounded, and there have been more than 14,400 Army medical evacuations in Iraq. At 7 to 1, the ratio of wounded to dead is the highest of any conflict in recent memory; in Vietnam, it was around 3 to 1. Wounded soldiers today have a much better chance of surviving than in the pastimproved medical technology and body armor enable soldiers to endure injuries that would have killed them in previous wars. Priceless lives are saved, but the human cost of debilitating injuries and the financial cost of treatment and rehabilitation may loom large in years to come. Steve Robinson, executive director of the National Gulf War Resource Center, calculates that if a 24-year-old married male soldier with one child were to develop post-traumatic stress disordera condition that, together with depression and anxiety, afflicts about 1 in 6 soldiers returning from Iraq, according to the New England Journal of Medicinehe or she could receive compensation payments of more than $2,400 per month for the rest of his or her life.

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