E 968 CONGRESSIONAL RECORD — Extensions of Remarks May 9, 1995

organizations is essential to our national interests. However, if our requests are not met,

we will act to preserve U.S. leadership where

it counts most.

Let us share with you some of our

thoughts and actions as we prepare for that

possibility:

First, we are continuing to closely scrutinize peacekeeping budgets, especially as we

take factors from Presidential Decision Directive 25 (PDD–25) into consideration. For

example, we limited operations in Georgia

and Tajikistan to a small number of military

observers, a relatively inexpensive means of

maintaining a UN monitoring presence. The

UN Mission for the Referendum in Western

Sahara (MINURSO) has continued longer

than we expected and has encountered several delays in achieving its objectives. Recently, however, the parties have demonstrated a commitment to the process and

real gains have been made in registering and

identifying potential voters, the first step

necessary for holding the referendum. We

agree with you that we cannot continue to

support an operation that does not accomplish its goals and is not cost-effective. We

will review MINURSO’s progress in all areas

to determine if it should be terminated or if

an extension should be granted and a referendum can be successfully held.

Second, we are examining the ways and

means of withdrawing from some organizations whose activities are of lesser priority

to us.

Third, we are pushing for UN agency and

other international organization budgets for

the coming biennium that are below the zero

real growth rate we have historically supported.

Fourth, we are actively reviewing options

for reducing waste, decreasing costs and improving performance through the possible

consolidation of agencies and programs

where that is possible.

Fifth, we are opposing the scheduling

under UN auspices of new global conferences

or summits (and note that each of the conferences this Administration has participated in was scheduled prior to 1993).

Finally, we are prepared to signal to organizations in which we continue to participate that U.S. withdrawal from some is possible if they are unwilling to undertake needed reforms.

In the context of considering how we can

pare down our contributions while limiting

damage to our leadership, it is important to

recognize that in the case of most UN organizations, we are obligated either by the

terms of the treaty or other international

agreement establishing the organization or

by general principles of international law to

pay assessment through calendar year 1996,

even if we notify our intent to withdraw

now. We also remain similarly obligated for

arrears from previous withholdings.

We note, as well, that a number of the activities you cite specifically in your letter

fall within the core programs of the UN Secretariat; these are not separate organizations from which we can ‘‘withdraw.’’ Any

decision on our part to reduce our contributions in an amount equal to our share of

such an activity would simply be carried on

the books by the UN as an arrearage to the

organization as a whole. This underlines the

importance of gaining UN member support

and understanding for any actions that we

might take.

Many UN activities are important to us; so

is the success of the organization as a whole.

There is a grave risk that substantial budget

reductions will harm our leverage and leadership within the UN system. We must be

frank about the possibility that substantial

damage to our interests will result. Nowhere

is this more clearly illustrated than with

peacekeeping operations which provide us

options in between doing nothing and going

it alone. The strategy of this Administration

is to make the case for our budget as persuasively as we can, and to develop a plan for

minimizing harm to our interests should the

reductions nevertheless occur. In doing so,

we want to emphasize that Congress must

allow us to decide where to cut and not tie

our hands by earmarking funds. We welcome

your support and counsel with respect to this

strategy.

As a matter of policy, we want to see a

leaner, less-costly, more productive United

Nations. We are making progress in this direction. Our prospects will be better, however, if it is clear to our allies and those

around the world that our emphasis is on

helping international organizations to work

better, rather than on reducing costs to ourselves regardless of consequences. One approach reflects the essence of leadership; the

other retreats from it.

It is not possible to paint a comprehensive

picture of our thinking on this important

issue in one letter. Accordingly, we would be

happy to discuss this with you in more detail

or put together a briefing team to meet with

you at your convenience.

Thank you again for your provocative and

timely letter, and for your continued leadership and support.

Sincerely,

WENDY R. SHERMAN,

Assistant Secretary,

Legislative Affairs.

COMMITTEE ON

INTERNATIONAL RELATIONS,

HOUSE OF REPRESENTATIVES,

Washington, DC, April 7, 1995.

Hon. WARREN CHRISTOPHER,

Secretary of State, Department of State, Washington, DC.

DEAR MR. CHAIRMAN. I write to urge you to

continue to give your personal attention to

the issue of reforming the United Nations.

I know you face many crises every day,

and there is much which demands your attention. But U.N. reform has become a serious and urgent issue because of pending Congressional budget cuts for the U.N.

I believe this Administration generally has

the right policy on U.N. reform. I also commend the Administration for the efforts undertaken thus far, such as establishing an office of Inspector General at the United Nations. Your efforts to put U.N. reform on the

agenda for the upcoming summit in Halifax

is an excellent way to demonstrate our seriousness of purpose on this issue. We need to

keep pushing for concrete action to implement our U.N. reform policy.

It is quite possible if not likely that hundreds of millions of dollars are going to be

cut from the U.N. budget, both assessed and

voluntary. Supporters of the U.N. and peacekeeping will not be able to stop these cuts,

and I doubt the Administration can veto

them at the end of the day.

The Congress will be faced with the tough

choice of either cutting indiscriminately

across the board, or deciding which U.N. programs are most important to us, and trying

to save those programs by de-funding or

withdrawing from those which are less important.

I believe the second option is the proper

one. It is better to have a smaller, more effective United Nations than a crippled and

ineffective United Nations.

Reforming the U.N. is so tough that it will

require sustained, high-level attention. Ambassador Albright, who is doing an excellent

job in a critical assignment, needs your continued, full support and the support of the

President on U.N. reform.

I would urge you to take the following

steps.

First, the G–7 reform initiative is a good

step, but this step needs to be tightly focused, and coordinated with US/UN reform

efforts. The state Department might want to

consider some sort of Task Force on U.N. reform, perhaps on an inter-agency basis.

Second, the Administration must decide

its priorities in the U.N. assessed and voluntary budgets, and communicate those to

Congressional Democrats. I would suggest

that we closely examine whether we still

need UNCTAD, UNIDO, the regional U.N.

economic commissions, the ILO, and the

FAO. The funding crisis is reaching the point

where we must consider withdrawal from, or

de-funding of, some of these activities.

Third, we must be prepared to push for a

stronger U.N. Inspector General. He should

have authority over the whole U.N. system,

as well as adequate, trained staff and a reasonable budget. And, his reports must be

made available, unchanged, to Members

States. This has not yet happened, to my

knowledge.

Fourth, we must give greater scrutiny to

U.N. peacekeeping budgets. And, you must

consider whether we can continue to vote for

operations, which are very expensive and

have operated for years without tangible

progress, such as MINURSO in the Western

Sahara.

All of these efforts will require close coordination with other major donor countries,

as you have recognized through the G–7 initiate. We must continue working hard with

those countries in order to make these reforms happen.

We will likely face these issues in a HIRC

markup in early May. If the Administration

doesn’t decide on its priorities and let Democrats try to help you support them, Republicans will make these decisions for you. The

only line of defense against those who want

to destroy the U.N. is to reform it. But it

must be real reform in order to get votes for

U.N. funding.

I appreciate your consideration of this letter, and I stand ready to work with you in

any way I can to help make these reforms

happen. I would stress once again the gravity

and urgency of these problems, and urge that

we press ahead on U.N. reform efforts.

With best regards,

Sincerely,

LEE H. HAMILTON,

fRanking Democratic Member.

SOCIAL SECURITY CONTINUING

DISABILITY REVIEW ACCOUNT

ACT OF 1995

HON. ANDREW JACOBS, JR. OF INDIANA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Mr. JACOBS. Mr. Speaker, I am today introducing the Social Security Continuing Disability Review Account Act of 1995. A summary of

the legislation prepared by the minority staff of

the Social Security Subcommittee follows.

The goal of the legislation is to protect the

integrity of the Social Security Disability Insurance program. It would do this by increasing

the availability of funds for conducting Continuing Disability Review [CDRs]—so that people who are no longer disabled can be reviewed and removed from the disability rolls.

The bill authorizes the Social Security Administration [SSA] to use a portion of the benefit savings it derives from conducting CDRs
May 9, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 969

to conduct additional CDRs. Under the proposal, the benefit savings from removing those

who are no longer disabled from the disability

rolls are credited to a newly established CDR

account in the disability insurance [DI] trust

fund. It would operate as follows:

No later than September 1 of each year, the

Commissioner of Social Security would estimate the present value of DI trust fund savings for all future years resulting from cessation of benefit payments during the prior

year based on CDRs. the Commissioner

would certify these savings to the managing

trustee of the DI trust fund.

Upon receiving the Commissioner’s certification, the managing trustee would transfer to

the CDR account from amounts otherwise in

the DI trust fund a portion of these estimated

savings. This amount would vary depending

on the CDR account balance but could not exceed 50 percent of estimated savings. No later

than September 15 of each year, the Commissioner would certify to the managing trustee

the expenditures required to perform mandated CDRs during the coming fiscal year.

These expenditures would include the cost of

staffing, training, purchase of medical and

other evidence, and processing related to appeals and overpayments.

Upon commencement of the fiscal year, the

managing trustee would make available to the

Commissioner from the CDR account, to the

extent that funds were available, the amount

that the Commissioner certified as necessary

to perform mandated CDRs during that year.

These funds could then be used by the Social

Security Administration to perform the required

CDRs.

SLOVENIA: A MODEL FOR

EASTERN EUROPE

f

HON. JAMES L. OBERSTAR OF MINNESOTA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Mr. OBERSTAR. Mr. Speaker, on February

16 I stood on the floor of this House, during

debate on the NATO expansion bill, and

asked that any efforts to bring Eastern Europe

into the Western community not ignore the

former Yugoslav Republic of Slovenia.

A country of just over 2 million people, independent for less than 4 years, Slovenia has

successfully thrown off the economic shackles

of the Socialist Yugoslav system and is leading the newly emergent countries of Eastern

Europe and the Balkan States in conversion to

a free and open market economy.

In per capita terms, Slovenia is the 20th

largest exporter in the world, exporting over $7

billion in goods each year, which accounts for

60 percent of Slovenia’s GNP. Slovenia now

enjoys a lively trade with the United States,

shipping $229 million worth of goods to the

United States each year and importing some

$180 million in United States goods annually.

It is with great pride, then, Mr. Speaker, as

a Slovenian-American, that I return to the floor

today to bring my colleagues more accolades

over Slovenia’s accomplishments. This time,

the praise comes from none less than the

Journal of Commerce, which headlined an

April 6 editorial ‘‘A Model for Eastern Europe.’’

I commend this article to my colleagues and to

the leadership of our various executive branch

departments. I ask that you remember to include Slovenia and its hard working, enterprising people when making decisions on our

country’s future relationship with the transitional economies and governments which

have replaced the former Communist regimes

of Eastern and central-southeastern Europe.

[From the Journal of Commerce, April 6,

1995]

A MODEL FOR EASTERN EUROPE

(By Timothy Ashby)

Eastern Europe has had its share of bad

news recently. Painful economic reforms and

factional strife in Russia, political turmoil

in Poland, continuing ethnic warfare in parts

of former Yugoslavia—all have made Western businessmen cautious about trade and

investment in the region.

Yet one small country, Slovenia, has

emerged as an economic and political model

for the old socialist bloc. Slovenia’s accomplishments over the past year read like a

wish list for its neighbors.

1994 exports were more than 14% greater

than the previous year, and now account for

60.4% of gross domestic product. Manufacturing production increased 6.8% last year while

unemployment fell 1.5%.

The tolar, Slovenia’s national currency,

appreciated 11% against the deutsche mark

in 1994. The country has a very low debt service ratio of only 5.5%.

At $6,957, Slovenia has the highest GDP per

head of all former socialist bloc republics in

Eastern Europe, nearly twice that of the

Czech Republic. GDP grew more than 5% in

1994 and the country enjoyed a healthy current account surplus of $2.6 billion at the end

of last year.

Foreigners made direct investments of

$72.3 million last year.

Three factors account for Slovenia’s success. The first is its geographical location.

Lying at the crossroads of Western and Eastern Europe, Slovenia borders European

Union members Italy on the west, Austria on

its northern border, Hungary to the northeast and the Republic of Croatia to the east

and south. Slovenia also has a coast on the

Adriatic Sea, where the major Port of Koper

serves as a gateway for international seaborne trade with all of Central Europe.

The second factor is political stability.

Prime Minister Janez Drnovsek presides over

a Western European-style coalition government. Slovenia is a healthy young democracy, with parties in its Parliament running

the gamut from Christian Democrats and

Greens to reformist communists.

Despite rivalry between the parties, an unusually high degree of consensus over economic policy has been achieved, a fact foreign investors find reassuring. All sides are

committed to the transformation to a Western-style market economy, but also to maintaining a strong social safety net and to

forcing money-losing state enterprises to become competitive in the private sector.

Slovenia’s carefully conceived strategy for

creating a modern free market economy is

the third reason for its success. The government has adopted a gradualist approach to

economic restructuring, striking a pragmatic middle ground between the Czech Republic’s shock therapy methods and the meandering reforms undertaken by some former

Soviet republics.

To lessen the political and social impact of

widespread redundancies, privatization has

been undertaken at a slower pace than in

other former socialist countries. The government occasionally intervenes and provides

help to ailing companies by guaranteeing finance-for-debt rescheduling in return for

moderation in dividend distribution and

wage increases.

By the end of 1994, a quarter of all

Slovenia’s state-owned enterprises had been

privatized. The process will be accelerated

during 1995 to achieve the goal of placing

50% to 65% of public assets in private hands.

Preference is given to privitization via management and employee buyouts. While initially criticized by some as a method that

would do little to attract foreign capital and

technology, many privatized companies have

established joint ventures both domestically

and internationally. As a result, Slovenia

has not suffered from a lack of investment in

new plant and capital equipment.

Domestic savings play a major role in the

modernization of Slovenia’s industrial sector. The growth in all areas of demand has

stimulated a continuous expansion in industrial capacity. Much of this is fueled by the

capital city’s Ljubljana Stock Exchange,

which together with the rest of the private

financial services sector contributes 3.2% of

the country’s GDP. Slovenia’s growing number of financial institutions, as well as its

beautiful Alpine landscape, justify its nickname, ‘‘the Switzerland of Eastern Europe.’’

Compared to many of its neighbors, where

red tape can seriously impede foreign direct

investment, Slovenia has implemented one

of the least restrictive investment climates

in Eastern Europe. Foreign investments in

any form enjoy full national treatment—

that is, they have the same status as Slovene

legal entities. All sectors of the economy are

open to foreigners operating through joint

ventures. Legal entities established and registered in Slovenia, even if they have 100%

foreign ownership, may own real estate. The

Slovenian Parliament is considering legislation to change real estate and other business-related laws to harmonize them with

the EU.

With a 30% flat tax on corporate profits,

Slovenia has one of the lowest tax burdens in

Europe. The tax rate is further reduced to

20% in the case of reinvestment, which actually lowers the tax rate to 24%. All foreign

investors are guaranteed free transfer of

profits and repatriation of invested capital,

while no restrictions are placed on foreign

shareholders in Slovene enterprises who

want to transfer their profits abroad in foreign currency.

Germany, Austria and Italy now account

for 65.9% of all Slovenian foreign investment. Businessmen in these countries see

great profit potential in Slovenia because of

its proximity to major markets, its political

stability and the high probability that it will

become an early member of both the European Union and NATO. U.S. businesses,

which account for less than 1% of FDI in Slovenia, have not yet awakened to these investment opportunities. Even Australia,

which contributed 2.3% of the country’s foreign direct investment in 1994, invested more

in Slovenia—with a population of only 2 million—than in giant but strife-torn Russia.

Slovenia’s lesson for other developing

countries is that political and economic stability can only be attained by a true commitment to democracy and the creation of a

free market. As Slovenia rapidly approaches

the time when it will be ready for membership in the European Union and NATO, its

eastern and western neighbors can point to

it as an example of one of the world’s great

success stories.