The Gazette from Montreal, Quebec, Quebec, Canada on July 30, 1976 · 19
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The Gazette from Montreal, Quebec, Quebec, Canada · 19

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Montreal, Quebec, Quebec, Canada
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Friday, July 30, 1976
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19
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9 Our preamble to spark real debate? The GAZETTE. Montreal. Fri.. July 30. 1976 Dawdling By PETER CALAMAI LONDON - A Canadian-drafted preamble will be among the key issues as the Law of the Sea Conference reconvenes Monday at the United Nations. Despite 26 weeks of meetings since December, 1973, the third Law of the Sea Conference has not produced a treaty governing the five-sevenths of the globe covered by water. It has not even produced any real negotiations among the 150 nations taking par'c, perhaps because a diplomatic blunder over fisheries or underwater minerals could harm some nations more than a strategic mistake on the battlefield. Despite the lack of a treaty, or even any negotiations, the need for a preamble was obvious to some diplomats. They reason that the mere scent of true bargaining over a preamble will begin a "psychological movement" towards a complete treaty. To some expert observers, such strate-gems underline the degradation of noble principles which launched the United Nations on its quest for a modern law of the sea. Among the most critical and disillusioned is the father of those principles of mankind's common heritage, former Maltese ambassador to the UN Arvid Pardo, now a university professor. End of road for Japan's Bulldozer By KEYES BEECH TOKYO Four years ago when he became prime minister, Kakuei Tanaka was the hottest political property in postwar Japan. A country boy with little formal schooling, he was a breezy, self-made millionaire with a reputation for getting things done that won him the nickname "Computerized Bulldozer." A radical departure from the old-school-tie ruling class that had dominated Japanese politics for 30 years, he was acclaimed by press and public as a fresh face up from the ranks, a man of the people, a fitting leader for the second largest economic power in the non-communist world. "Go, Kakuei-san, go," trumpeted his affectionate admirers. He went, all right. Two years ago, he was forced to resign on charges that he had bought his way to the top of the political heap. Even so, he remained a power in Japan's faction-ridden ruling Conservative party. Tip of iceberg Now the gravel-voiced former prime minister had come to the end of the road, his world in ruins. He was in jail, charged with -accepting $1.6 million of the $12 million that the Lockheed Aircraft Corp. has admitted pouring into Japan to promote the sale of its airplanes. Nearly everybody except Tanaka's followers seemed happy that the fast-moving, wheeler-dealer politician bad at last been nailed. "He should have been in jail a long time ago," growled a Tokyo taxi driver, summing up the sentiments of what seemed to be the majority. "But we have a long way to go. The Lockheed affair is only the tip of the iceberg." The Lockheed payoff scandal, first exposed by a U.S. Senate committee six months ago, has rocked Japan to its political foundation and is described by the Japanese media as this country's Watergate. "The difference is that Japan's Nixon is in jail," a Japanese editor said happily. "This makes up in part for the fact that this Nicholas von Hoffman Default by debtor nations could bring down the world's WASHINGTON - Do we have an international version of the New York City default situation in the making? The poorest countries, the non-oil exporting nations of the Third World, are $100 billion in debt with much of it coming due between now and 1980. Interest and repayment on principle amounts to 15 per cent of all the money the countries earn from their exports. They might be able to handle such steep payments except that not only the oil they buy but the manufactured goods and food they import have jumped in price while the raw material commodities they export have collapsed in value. You aren't being set up here for a bleeding heart pitch to give more money to the lazy natives. In fact, the United States doesn't give away much money any more, and that is a major cause of the problem. Private banks have been lending these countries money. Emma Rothschild, in a splendidly lucid treatment of this subject in the May 27 and June 24 issues of The New York Review of Books, notes that 64 per cent of Chase Manhattan Bank's profits tost year came from its foreign operations. Thus a de sea law parley cloaks a "This is not a constitutional convention to devise a law of the sea but instead a complicated wrangle over the permissible extension of national prerogative," Pardo told a seminar here this week. Crude translation: the new law of the sea is the biggest land grab since imperial powers carved up Africa. Freedom of navigation The biggest grabber of all 150 nations is Canada which, under the legal regime most likely to be adopted, will swell by half again the area of the globe over which it exercises some exclusive functional jurisdiction. Canada's reasons for "nationalizing" an area of the seabed larger than all but a half-dozen countries have been exhaustively publicized with displays and even a touring Newfoundland schooner. The arguments were forcefully repeated at the seminar by diplomats heading the Norwegian and Indian delegations to the sea law conference. To India's Dr S. P Jogota, the genesis was political and economic rather than legal The idea of an exclusive 200-mile fisheries zone was proposed as compensation for nations lacking a wide continental shelf which could be exploited for offshore petroleum or gas. KAKUEI TANAKA . . . 'Japan's scandal had to be exposed in the United States rather than our own country." While the finger of suspicion had long pointed at Tanaka, his arrest was a stunning surprise to Japanese and foreign observers who had not expected the law enforcement net to land so big a fish, at least not at this stage of the investigation. ' His arrest was expected to counter a growing cynicism that many Japanese feared would undermine the country's democratic system. It also came at a time when many Japanese had come to suspect that the United States was in cahoots with Japan's conservative politicians to cover up the Lockheed schandal for fear it would destroy the ruling Liberal Democratic party. Fifteen others, including officials of one of Japan's biggest trading companies and All Nippon Airways, seventh largest airline, in the world in terms of passengers carried, have been arrested in connection with the scandal. fault by the debtor nations can have an immediate impact on Americans. Nor is default just a theoretical possibility. In the past year Argentina, Chile and Zaire haven't been able to make their monthly payments and have .had to renegotiate their obligations exactly like New York City. The Marines land This isn't the first time American banks have lent money to foreign countries only to learn they should have found better, more reliable borrowers. This happened almost regularly with a number of Caribbean countries around the turn of the century. What the U.S. used to do then was send the Marines in, seize the custom houses and collect the import duties to satisfy the banks' debts. Using the Marines as a debt collection agency has gone out of style, at least temporarily. Moreover, occupying a country the size of Argentina or Zaire on behalf of the Bank of America or some such has certain practical drawbacks. Even economic coercion has its limits. The U.S. can force debtor countries to take the steps necessary to repay the loans lltfllli (Sovereignty over continental shelf mineral resources rests upon a 1958 treaty embodying the geological fiction that the continental shelf is the "natural prolongation of the land mass." In 20 years of debate, experts have been unable to define where such "natural prolongation" ends.) The 200-mile fisheries zone (which a few impetuous nations simply annexed as territorial sea) automatically raised the question of traditional freedom of navigation, says Jago-ta. Thus the two central issues of the Law of the Sea Conference were launched. Norway's Jens Evensen leans to a legalistic interpretation, the view also favored by Canada's chief negotiator Alan Beesley. The latter's expertise is highly regarded in law of the sea circles. To them, the driving factor in maritime law is the vacuum, the absence of any international law to regulate the maritime conduct of technological societies capable of gross polluting, overfishing and minerals exploitation. Evensen cites the 12-mile territorial sea, new legal concepts of transit passage, recognition of archipelagic states, the 200-mile economic zone and other concepts as "dramatic political developments." These legal advances will not be enshrined in a treaty after the six-week session in New York. At least one further ses Nixon is in jail,' said editor Tanaka, however, was the first politician to be arrested and while other arrests may follow, his detention was viewed as the denouement of the Lockheed scandal. He was held on suspicion of violating Japan's foreign exchange law in accepting the Lockheed money from the Marubeni Trading Co., Lockheed's agent in Japan. This was only a holding charge. A more serious charge of bribery is expected to be filed against him. Prosecutors said Tanaka had admitted receiving the money from Hiro Hiyama, former head of Marubeni, and distributing it among his political followers. The policeman's knock on Tanaka's door came at 6:30 a.m. Tuesday after the former prime minister had spent a restless night. As he was driven off to a detention centre, Tanaka mused to a prosecutor accompanying him: "Times changed. Be sure and take care of yourself." Chicago Daily News but runs the risk of inciting mutiny in the affected populations. The screamings coming from New York City would be as nothing compared to what might happen abroad in those places where there is no fat to cut. The total amount of money owing to the banks of the rich nations doesn't represent a terrifying fraction of their assets. They could write off a high percentage of these loans without getting into serious trouble except for the way they lent the money. Most of it is in a mysterious currency known as Eurodollars. Eurodollars are debts and credits outside the United States for which somebody theoretically could demand actual greenbacks. There are also units of bookeeping currency called Euromsrks and Europyen; that is, obligations outside of West Germany and Japan that can be cashed in back home in Bonn or Tokyo. The rub is that nobody knows how much Eurodebt is floating around the world. The complexity of this interlocking debt structure makes the riddle of DNA look like the daily crossword puzzle. Rothschild cites, "for example a loan to a vast land sion will be necessary before the diplomats can possibly reach consensus. Consensus is essential because a package of maritime laws falls apart if unacceptable to either superpower or any significant bloc of countries. However, the superpowers are nearly satisfied. The U.S. only needs to assure it can take advantage of its technological leadership in exploiting mineral-rich nodules on the deep ocean floor. The Soviets are insisting on the duty of coastal states to allow others to fish any surplus fish within the 200-mile zone. Every drop of ocean None of the major blocs is violently unhappy, except the land-locked and those with coasts on inland seas or otherwise geographically disadvantaged. Little is likely to emerge for these 50 nations because their only bargaining clout is negative a veto. The real loser, however, is the marine environment, dumping ground for the most pernicious poisons. In the final trade-offs behind the conference's closed doors, the marine environment has few champions willing to sacrifice potential ocean wealth for cleaner water. "You can find man's fingerprint in every After Amin Six officers lurk in things if leader topples in Uganda By JAMES FOX NAIROBI - The Kenyans, who a week ago had adopted a more conciliatory attitude to President Idi Amin of Uganda, now believe the time may be ripe to exert the extra pressure needed to topple him even though they have the greatest apprehensions about his possible successors. The Kenya government feels that since 1 the Entebbe raid, Amin's position has become increasingly shaky. A source who recently travelled from Kampala, the Ugandan capital, described the president's position as "zero, even negative, among almost all classes of Ugandans." The source said that the real threat to Amin was from his own tribe, whose elders had warned him even before the Organization of African Unity summit in Mauritius this month that he should stand down as Uganda's president after giving up the OAU chairmanship. The Uganda army is suffering, severe problems of morale, although the expressions of discontent are said not to be directed at Amin himself. The Nairobi Daily Nation has written of "mutinies" in the army. One of the difficulties in evaluating contenders for Amin's crown is that even experienced Uganda-watchers in Nairobi had only a hazy knowledge of them. Those in a position of power on the defense council come from the same background as the president the Kakwa tribe or adjacent tribal areas of Western Nile province. Like him they have risen from humble beginnings in the pre-inde-pendence King's African Rifles. The most obvious in terms of rank is Major General Mustapha Adriki, the army chief-of-staff. Like most of the officers surrounding the president, Adriki comes from the Western Nile province, the same tribal area, and the same Moslem, Nubian background. Although Adriki is described as "dangerous and almost illiterate," observers nevertheless believe he could run the country after Tehran Bank provided by the Cayman Island branch of the Crocker National Bank of San Francisco, three Dutch subsidiaries of Japanese companies and 15 other institutions." In another recent deal the Ljublianska icq) Banka of Slovenia. Yugoslavia, in conjunction with a New York investment firm, brought forth a note issue expressed in Kuwaiti dinars, that is Eurodinars. Yes, you read it right. Communist nations play these capitalist banking games, too. Cuba and North Korea are Eurodollar borrowers. Foreign policy operation If the debt structure goes down, the socialists may go' plop right along with the capitalists. The difficulty is that nobody knows how strong or how weak all this wild lending is. We don't have a very clear idea of how many billions are involved, although everybody agrees it's mucho, molto, beaucoup de b'jeks. If it seems impossible that the banks don't know the amount of all the loans outstanding, you must remember that banks, when left unregulated, can create money by the process of lending the same dollar over and over again. That's what's happened. grab drop of water from the open ocean," says Dr. Ed Goldberg of the Scripps Institution of Oceanography. Since no poweriul sector is unhappy (North American mining interests are cosily protected by agreement to artifically maintain high prices of nickel, copper and cobalt) most observers are optimistic that a law of the sea treaty will emerge next year. Canada will be particularly gratified by this timing since there will be less chance .. for criticism of the federal governments-hypocrisy in declaring a 200-mile fishery zone unilaterally, an action we condemned without" fail when previously performed by other nations. Perhaps individual Canadians should not . ,.f-be quite as gratified, Pardo suggests. , The favored new law of the sea, by not ... , being equitable, will create more serious and complicated problems than it resolves. .v",.; "We might be better without a new) ... treaty. The nationalization of most of ocean space by coastal nations would still continue, .r." but it would be out in the open and at.-" least it would not be legal." j - ., But who is Arvid Pardo? Just a dreamer .... who spoke once about the oceans as the!(K "common heritage of mankind." Not now, said the maritime lawyers, come back in 200 years. Southam News Services a fashion simply because he is one of the few persons capable of barking fierce orders at Ugandan soldiers. Another undoubtedly powerful figure is Brigadier Moses Ali, the first army officer to become minister of finance, although how "key" the post is open to question. In Uganda there has not been a central bank report since 1971, and since that time no statistics have been produced for the balance of payments or currency reserves. Then there is Colonel Juma, who Amin appointed last week to take charge of a tribunal to try six persons accused of subversion. Two other key figures are Col. Ali Powili and Lt. Col. Isaac Maliyamungu. The first, who joined the King's African Rifles in 1946, originally was given the job of clearing Kampala of the friends of the overthrown presu dent, Milton Obote. For this, Powili formed : the public safety unit of the police. Reputation for murder nit. He quickly acquired a reputation for tor-., ture and murder as, on Amin's orders, he began to slaughter Uganda's intellectual elite!.. He became director of training and recruits, ment of the police force. In April, he was sent on compulsory leave for quarreling with , a fellow officer but became close to Amin again after the June attempt on the president's life. .,' "v Maliyamungu's importance stems from his tipping off Amin that Obote, the deposed president, had ordered his arrest. Amin subsequently rallied loyal troops to consolidate, the 1971 coup. Maliyamungu has a reputation , for absolute ruthlessness. , V Finally, there is Maj. Gen. Francis Nyangweso, now minister of culture. He was : a lieutenant-colonel in 1971. He has been an Olympic boxer, is educated and is a Roman. . Catholic. These factors seem to have bin- , dered his army career. London Sunday Times money markets The original real dollar upon which the Eurodollar speculation is built has been passed around among so many banks and relent so often, nobody is any longer able to keep track of it. Heavy defaults by Third World nations could be the event that might cause lenders ' to call in their loans and bring the interna-tional money markets down. We have had so little experience with this sort of thing we don't even know how government intervention j would operate to stabilize the mess. We don't know what effect this could have on the U.S. domestic banking system. We do know that if American .bankers were forced to play by the same rules in their foreign operations that the law makes them play by at home, they could never have gotten into this swamp. ., i; We don't know it yet, but we may soon learn that lending money to foreign govern- -ments is essentially a foreign policy function that can't be turned over to private banking institutions without great risk and high cost to U.S. taxpayers. Copyright, King Features

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