CASE MNEMONIC: KUWAIT
CASE NAME: The Economic and Environmental Impact of the
Gulf War on Kuwait and Persian Gulf
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1. The Issue
During the Persian Gulf War from the fall of late 1990 to early 1991, Iraq embarked on a systematic destruction of Kuwait's oil industry, and Iraqi forces set fire to 789 individual Kuwaiti oil wells. The attendant results were catastrophic both from an economic and ecological standpoint. Kuwait's economy suffered a precipitous drop in export revenues immediately after the Gulf War, due to the inability to make up the production differences from the damaged oil wells. The ecological landscape of Kuwait and the Persian Gulf was irrevocably damaged due to the destruction unleashedsed by the burning oil wells, and it may be generations before this environment is restored to its pre-war balance. This case study examines the impact of the Gulf War on the Kuwaiti economic and ecological systems.
Prior to Iraq's invasion in August 1990, Kuwait was one of the most prosperous nations in the world, due to its small population (roughly 1.7 million) and its inordinate oil reserves (Kuwait controlled ten percent of the world's oil reserves) which generated billions and billions of export revenues. Kuwait's staggering wealth before the Iraqi invasion was due to the rise in global oil prices during the mid-1970s and the steadily increasing production of Kuwait's oil reserves of 94,525 billion barrels.
By the eve of the Iraqi invasion, Kuwait had set production quotas to almost 1.9 million barrels per day, which coincided with a sharp drop in the price of oil. By the summer of 1990, Kuwaiti overproduction had become a serious point of contention with Iraq, as it needed to service almost $70 billion in debt it had accrued as a result of financing the Iran-Iraq War. While Iraqi officials continued to warn Kuwait that it would not tolerate the artificial depression of oil prices due to Kuwaiti overproduction, Kuwait did not heed these admonitions. Some analysts have speculated that one of Saddam Hussein's main motivations in invading Iraq was to punish the ruling al-Sabah family in Kuwait for not stopping its policy of overproduction.
The Iraqi invasion of Kuwait in August 1990 became a seminal event in modern Middle Eastern history, and became the first time that an Arab nation usurped the territorial integrity of a fellow Arab state. The Gulf crisis also became the watershed event for the post-Cold War era, as many believed that it would be close to impossible to craft a truly global coalition to combat Iraqi aggression in the Persian Gulf. During the coalition buildup of Desert Shield, much was made over the potential use of Iraq's putative weapons of mass destruction (WMD) arsenal and the concomitant effects of such weapons. In addition, some experts predicted that the coalition was in for a protracted battle, due to the numerical strength of the Iraqi armed forces and due to Saddam Hussein's penchant for accepting high casualties in combat, a prospect that most coalition members were not willing to even contemplate.
At the beginning of the crisis, little attention was devoted to the potential impact of a sustained, combined arms form of warfare on the regional environment. However, many environmentalists and concerned scientists soon began to discuss the potential ramifications of such activity, given the the scale of the oil holdings in the Kuwaiti theater of operations (KTO). By December 1990, experts began to postulate as to the exact magnitude a deliberate plan of eco-terrorism by Iraq, and analyses varied that this action would cause the release of anywhere from three million to almost ten million barrels of oil per day. Dr. Paul Crutzen, a top scientist at the Max Planck Institute in Germany, estimated that the sustained burning of ten million barrels of oil per day for one hundred days would effectuate environmental hazards on an order of magnitude greater than any prior man-made environmental disaster. He postulated that such a campaign would produce a blanket of soot and smoke that would cover half of the northern hemisphere. After the first oil wells were discovered ablaze in January 1991, Carl Sagan stated "'We think the net effects will be very similar to the explosion of the Indonesian volcano Tambora in 1815, which resulted in the year 1816 being known as the year without a summer.'" Sagan was concerned that the resulting soot and plumes from the oil fires would wreak havoc on the monsoon patterns in southern and central Asia, thereby shutting off rains and leaving hundreds of millions of people in the region with nothing to harvest.
Dire predictions such as these were generated on the basis data generated from the computer modeling data of the ecological results of a Soviet-American nuclear exchange, or the concept which became known as "nuclear winter".
By February 1991, reports indicated that up to 190 oil wells had been set ablaze by Iraqi occupation forces in Kuwait, and after the coalition forces ejected Iraqi troops from the KTO in mid March 1991, almost 800 oil wells had been given similar treatment. It was soon estimated that six million barrels of oil were burning per day circa March 1991 in Kuwait, and the initial assessment of the environmental impact was staggering. Concerns ranged from across a wide variety of environmental disasters. The amount of soot generated was one such cause of concern, as one gram of soot can block out two-thirds of the light falling over an area of eight to ten square meters. Accordingly, scientists calculated that the release of two million barrels of oil per day could generate a plume of smoke and soot which would cover an area of half of the United States. Weather patterns and climactic conditions could have carried such a plume great distances so as to severely hamper agricultural production in remote areas of the world.Go to MONTREAL case
Another concern centered around the effects of the height of such a smoke plume, where upon reaching a specified height (35,000 to 40,000 feet) and temperature (400 degrees Celsius), such a plume would cause a serious erosion of the ozone layer which could be highly hazardous to plant and animal life. Scientists attempted to draw attention to the potential effects of acid rain from the Kuwaiti oil fires. Kuwaiti crude contains 2.44% sulfur and .14% nitrogen, and it was estimated that the daily sulfur dioxide and nitrous oxide emissions would be between 750 and 10,000 tons per day, thereby causing inordinate damage to agricultural production in the region.
In February 1992 a Wall Street Journal article offered data from a scientific that rebutted the fatalistic projections made directly after the war. While the article noted that the Kuwaiti oil fires significantly impaced the Persian Gulf, their scope was not as deleterious to other regions of the world. The study estimated that the fires produced almost 3,400 metric tons of soot per day, which was significantly lower than earlier projections. The researchers found that the smoke never rose more than six kilometers into the atmosphere, even though smoke plumes traveled 1,600 kilometers. However, the Kuwaiti smoke plumes were short-lived in the atmosphere because they were dissipated by clouds and precipitation. The study noted that the rate of sulfur dioxide emissions from the oil fires amounted to 57% of that from all U.S. electric utilities. In addition, the dissemination of other gases such as carbon monoxide, ozone, and oxides such as nitrogen and carbon dioxide, were "well below typical urban levels" in the United States.
Despite the findings of this study, the magnitude of the damage to the Gulf ecosystem continued to flow in to researchers and scientists. Perhaps the greatest fear from the Kuwaiti oil fires was effect of the vast amount of raw crude that seeped into the Persian Gulf. The Gulf already comprised one of the most fragile ecosystems on the planet, and prior to the Iraqi invasion this ecosystem was attempting to recover from the damage inflicted upon it during the Iran-Iraq War.
As a result of the Iraqi scorched earth policy, it was estimated that 250 million gallons of oil - more than 20 times the amount spilled in the Exxon Valdez disaster in Alaska - flowed into the Gulf, causing irreperable harm to the biological diversity and physical integrity of the Gulf. Oil soaked over 440 miles of Saudi Arabia's coastline. Due to the Gulf's sluggish circulation system, it will take years before the oil is swept away by the natural forces of the water. Go to EXXON case
By November 1991 the last of the burning oil wells had been capped, but the scale of damage to the Kuwaiti economy and ecological environment was just beginning to be assessed. Hundreds of miles of the Kuwaiti desert were left uninhabitable, due to the accumulation of oil lakes and of soot from the burning wells. The impact of the oil spillage on the biodiversity of the Gulf has yet to be fully assessed, yet based on the biologics that inhabitated the region prior to the Gulf War, it can be adduced that they are now at serious risk. One to two million of migratory birds visit the Gulf each year on their way to northern breeding grounds, and it has been documented that thousands of comorants, migratory birds indigenous to the Gulf region, died as a result of exposure to oil or from polluted air.
The fishing industry in the Gulf was deleteriously affected by the oil spillage into the Gulf, which was important due to the fact that it is one of the most vibrant productive activties in the region after the production of oil. As an example of the vibrancy of this industry, prior to the Iraqi invasion of Kuwait the Gulf had yielded harvests of marine life of up to 120,000 tons of fish a year; after the oil spillage, these numbers significantly dropped. In addition to this degredation to an economic activity, many people living on the Gulf coast depend on fishing as purely a subsistence activity, and the oil spillage has disrupted the spawning of shrimp and fish. Other species effected by the oil spillage included green and hawksbill turtles (already classified as endangered species), leatherback and loggerhead turtles, dugongs, whales, dolphins, migratory birds like comorants and flamingoes, and sea snakes. Go to TED case on Green Turtles
Interestingly, environmentalists have recently raised concerns that 'normal' pollution in the Gulf (caused by frequent spillages of oil and emissions of dirty ballast from passing tankers) poses a greater environmental threat than any damage inflicted by the Kuwaiti oil fires. Official statistics indicate that the Gulf is polluted by 1.14 million tons of oil per year (equivalent to 25,000 barrels of oil per day), which is dispersed by 40 percent of the more than 6,000 oil tankers which transverse the Gulf each year. Abdul-Rahman al-Awadi, executive secretary of the Regional Organization for the Marine Environment (ROPME) lamented "'If we go on like this, we won't need a war to complete the destruction of our marine environment - normal (tanker) operations will do it.'"
Another concern raised about the spillage of oil into the Gulf stemmed from the overall reliance on water in the region. Seventy to ninety percent of the populace depend on desalination plants for fresh water supplies, and the oil spillage threatened the precious desalination plants, as well as power plants and industrial facilities all along the Gulf coast. As to the direct impact on human health, health experts noted that the residual effects of hydrocarbons in the air or in peoples' bodies would precipitate a dramatic increase in lung cancer and birth defects across the region in as little as fifeteen years. Other scientists predicted that Kuwait's death rate could rise by as much as ten percent within a short time frame. There has been intense speculation in the United States that the mysterious "Gulf War Syndrome", which currently affects almost 10,000 U.S. troops who served in the Gulf, may have been caused by the release of chemicals from the burning oil wells.
In 1993 Farouq al-Baz, director of Boston University's Center for Remote Sensing, stated that more than 240 oil lakes had been discovered in the Kuwaiti desert. He added "'Birds, plants and marine life are still suffering from the effects of the war and damage to the desert itself could persist for decades.'" In addition, the mixture of sand and oil residue in the Kuwaiti desert created large areas which effectively had been reduced to semi-asphalt surfaces.
By the fall of 1995, disturbing reports were filed from Kuwait claiming that sunken Iraqi warships filled with chemical munitions off the coast of Kuwait posed a serious and urgent threat to the regional environment. While the Kuwaiti government did not directly mention the chemical munitions on the sunken Iraqi ships (due for political reasons, and for a lack of hard data confirming the existence of such munitions), the Kuwaitis dispatched a Dutch salvage team to investigate these allegations. After learning of such reports, environmentalists began to fear the possible polution of the Gulf from the chemical munitions, and expressed their concern over the potential impact on the Gulf desalinization plants.
In addition to these concerns, experts also warned that up to 100,000 tons of crude oil could be released from the Amuriyan, a sunken Iraqi tanker in the northern Gulf. The Amuriyan lies half-submerged in about 120 feet of international waters almost 15 miles northeast of Kuwait's Bubiyan Island in the northern Gulf, close the Shatt al-Arab estuary.
By September 1995, Kuwait filed a $385 million claim against Iraq for compensation for environmental damage due to Iraq's occupation of Kuwait. More specifically, Kuwait submitted five claims to the United Nations for environmental damages covering health, costal areas, maritime environment, ground water resources, and desert environmental damages.
While the environmental impact of the Iraqi scorched earth policy has been well documented, the economic impact of this Iraqi policy has not been as well investigated. At the most basic level, the Iraqi acts severly deflated the Kuwaiti economy for almost a two year period from early 1991 to late 1992, as the Kuwaiti oil industry suffered a massive drop in production due to the destruction imposed on so many oil wells. Table 1 reflects the impact the Gulf War had on the Kuwaiti oil industry.
Table 1 Source: International Financial Statistics, August 1995
Table 2 displays the precipitous drop in the Kuwaiti Gross Domestic Product (GDP) and Gross National Product (GNP) from the loss of oil revenues as a result of the Gulf War.
Table 2 Source: International Financial Statistics, August 1995
Kuwait's GDP increased from 1993 to 1995 as a result of the resurgence of its oil industry. Oil exports are once again on the rise after they hit an all time low between 1990-1991, and Kuwait expects to produce three million barrels per day by 2005. Kuwait currently produces almost two and one half million barrels per day. In spite of the current strength of the Kuwaiti oil industry, Kuwait has accumulated almost $40 billion in external debt in order to finance the cost of internal reconstruction. Prior to the Gulf War, Kuwait's public debt hovered at a more manageable amount of eight billion dollars.
Kuwait has suffered severe economic and environmental dislocations as a resultof Iraq's scorched earth policy during its occupation of Kuwait during the Gulf War. The forecast for the recovery of Kuwait's economy appears optimistic, given the increased productive capacity of the oil industry. However, it may be years, if not generations, before the full extent of the damage to the physical integrity of the region and to human, animal, and plant life, is fully assessed. These environmental costs may have repercussions not only for the region, but for other countries in central and south Asia. For example, some scientists have speculated that a 1994 cyclone in Bangladesh which killed 100,000 people was precipitated due to climactic changes from the Kuwait oil fires. The conflagration in Kuwait demonstrates the danger in conducting large scale modern combat in an environmentally fragile area, and shows how vulnerable all oil-producing nations are to this type of environmental and economic disaster in the future.
At a bare minimum, the Kuwaiti environmental disaster has galvanized Gulf policymakers to pay closer attention to the potential economic and environmental ramifications of conflict in their region. Kuwait and the other Gulf Cooperation Council (GCC) member states have sought to tighten existing environmental regulations so as to preclude any similar environmental disasters in the future. In November 1995, the GCC states met to discuss the prospects for unifying their environmental laws, drafting new uniform standards for environmental protection, and setting up environmental safeguards in the Gulf.
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Key Words: OIL PERSIAN
Javed Ali, Comparative and Regional Studies, Middle East
5. Discourse and Status: DISagreement and COMPlete
6. Forum and Scope: KUWAit and UNILateral
While there is no dedicated forum for Kuwait to air its grievances against Iraq, it has been able to damage claims to a United Nations Gulf War Compensation Committee.
7. Decision Breadth: Immediate effects on KUWAit; residual effects on other GULF countries.
8. Legal Standing: LAW
As mentioned above, while there is no specific treaty that covers Iraq's actions against Kuwait, Kuwait has been able to submit claims to a UN compensation committee. In addition, the GCC nations have met in an attempt to coordinate environmental regulations for the entire region, and have attempted to establish environmental safeguards throughout the region.
9. Geographic Locations
Geographic Domain: MIDEAST
Geographic SITE: PERSIAN gulf
Geographic Impact: KUWAit
10. Sub-National Factors
The oil fires in Kuwait have severely damaged the economic and environmental infrastructure of Kuwait, and the damage assessments are only now being calculated.
11. Types of Habitat
HABITAT TYPE: OCEAN
KEY PRODUCTS: Aquatic and marine life, coral reefs, migratory birds, snakes, turtles, etc.
IV. TRADE CLUSTER
12. Type of Measure: NAPP
There is no type of trade measure in effect as a result of the Kuwaiti oil fires.
13. Direct vs. Indirect Impacts: INDirect
14. Relation of Trade Measure to Resource Impact
Directly Related to Product:
15. Trade Product Identification: OIL
16. Economic Data
2.5 million barrels of oil per day, accounting for roughly 95% of $12.337 billion in export revenue (1995 data).
Kuwait has a labor force of roughly 570,00, almost 70% of which is comprised of non-Kuwaiti foreign nationals (who depend on their relatively generous salaries to remit back to their families in other Arab nations or in various South Asian countries like Bangladesh, Pakistan, the Philippines, and Thailand). The Kuwaiti oil fires caused a precipitous drop in foreign worker remittances to their homelands, which in turn caused their families to suffer from a lack of sustained income.
17. Impact of Trade Restriction
In direct damage costs, Kuwait calculates that it suffered $170 billion in losses, and that this figure may rise to as high as $700 billion. In order to pay for reconstruction costs while Kuwait suffered a precipitous decline in oil revenues from August 1990 to early 1992, Kuwait has amassed an enormous $70 billion dollar debt, an almost tenfold increase from its prewar debt of $8 billion.
It will take years, if not generations, to assess the environmental damage costs of the Kuwaiti oil fires, and in September 1995 Kuwait just recently submitted a $385 million environmental damage claim against Iraq to the UN.
The competitive effect of the Kuwaiti oil fires on Kuwait has also yet to be clearly assessed. Kuwait's pre-war production levels fell from 1.9 million barrels per day after the Iraqi invasion. It was only until mid 1992 that the Kuwaiti oil industry was able to launch a vigorous revitalization program. Current production stands at roughly 2.5 million barrels per day, and the Kuwaitis estimate that by 2005, it can sustain levels of three million barrels per day.
18. Industry Sector: OILGAS
19. Exporters and Importers:KUWAit and other GULF countries
V. ENVIRONMENT CLUSTERS
20. Environmental Problem Type: POLA, POLL, POLS
The Kuwaiti oil fires generated a host of environmental crises, which effected the air, land, and water in Kuwait and around the Gulf. The burning oil wells released harmful gases and oxides into the atmosphere, and generated enormous smoke plumes that carried soot and ashes over great distances (almost 1,600 kilometers). The oil fires caused almost one and one half billion barrels of oil to flow in to the Persian Gulf, which covered almost 440 miles of Gulf coastline. The contamination of the Gulf threatened the existence of a diverse expanse of animal life,
21. Number of Species A wide variety of flora and fauna are at risk due to the oil spillage and pollution in the Gulf caused by the Kuwaiti oil fires. A partial list includes various types of turtles, fish, migratory birds, whales, dugongs, and coral reefs.
22. Impact and Effect
Impact: EXTREMELY HIGH
Effect: 10s of Years, if not entire generations
23. Urgency and Lifetime
1. Urgency: EXTREMELY HIGH
2. Lifetime of Species:
24. Substitutes: CONSERVATION
Timely conservation efforts may lessen the deleterious impact of the Kuwaiti oil fires, but the degree will be minimal at best, since the majority of the damage has been inflicted. It is only the residual effects that can now only either be controlled or prevented.
The broadening of the Kuwaiti export base, so as to halt its overreliance on the production and export of oil, may help to mitigate any future environmental disasters in the future. This message can be transmitted to most of the Arab OPEC nations, who continue to rely almost singularly on oil revenues to finance development and generate government revenues. However, such a transition may not be imminent, due to the fact that such a diversification policy would entail widespread economic changes (e.g., privatization) and political changes (e.g., democratization) that are currently untenable.
VI. OTHER FACTORS
25. Culture: YES
Iraq's deliberate act of aggression and eco-terrorism against Kuwait was a seminal event in modern Arab history, for it represented the first invasion of one sovereign Arab state against another. The possibility of such an event was heretofore dismissed as impossible, given the cultural affinity between all Arabs. Therefore, while individual Arab states may have had grievances vis-�-vis each others, most Arabists predicted that such differences would never manifest themselves through armed combat. Saddam Hussein broke this Arab cultural taboo, and his act of aggression against his fellow Arab Kuwaitis came a serious shock to any lingering notions of pan-Arab unity (if there was any resonance of this left by the time of the Gulf War). Prior acts of Iraqi of profligate acts of violence against Iranians and Kurds did not alarm fellow Arabs, since these peoples were not Arab, and Saddam Hussein had championed himself as the "Sword of the Arabs". Moreover, Hussein's brutal repression of his own Arab countrymen was tolerated, for every nation in the region repressed internal dissent, each to a varying degree.
26. Human Rights: YES
Iraq's aggression against Kuwait was a violation of the UN Charter, and for causing an act of "aggressive war", Saddam Hussein could have been indicted as a war criminal. Furthermore, during its occupation of Kuwait, Iraq forces engaged in the systematic denial of human rights to Kuwaiti citizens, as thousands, were murdered, tortured, abused, raped, jailed, and looted. As Iraq's commander in chief, Saddam Hussein bears direct responsibility for these actions.
Iraq's systematic campaign of eco-terrorism also amounted to a flouting of human rights, as tens of thousands of innocent civilians suffered the deleterious effects from the Kuwaiti oil fires. The most tragic aspect of the oil fires are the residual effects that will continue to manifest themselves for years, if not generations, in Kuwait, the Gulf, and around other parts of the world.
27. Trans-Boundary Issues: YES
The devastating effects of the Kuwaiti oil fires have not been limited to Kuwaiti proper, as the entire Gulf physical landscape and ecosystem has been negatively impacted. As stated above, almost 440 miles of Gulf coastline has been soaked with oil from the burning wells, and the smoke plumes generated from the fires carried up to 1,600 kilometers. Some scientists have calculated that the Kuwaiti oil fires precipitated climactic changes were significant enough to cause environmental turbulence, such as the 1994 cyclones in Bangladesh that killed over 100,000 people. It will takes years to calculate the precise trans-national effect of the Kuwait oil fires.
28. Relevant Literature
Cable News Network (CNN) Transcript #358. "Scientists Say Persian Gulf Shoreline Still Devastated", May 11, 1993.
CIA World Factbook, 1995 (Washington, D.C.: Central Intelligence Agency, 1995).
Cooper, John. "Kuwait: Project Plans Add to Oil Asset Value", Middle East Economic Digest, April 14, 1995.
Ersan, Inal. "Much Gulf War Pollution Cleared but Leaks Pose Risk", Reuters, August 24, 1995.
Kemp, Penny. "For Generations to Come" in Phyllis Bennis and Michael Moushabec, Beyond the Storm (Brooklyn, New York: Olive Branch Press, 1991), p. 327.
Mardini, Ahmad. "Gulf Environment: Gulf Takes a Unified Stand on Environment", Inter Press Service, September 11, 1995.
Naj, Amal Kumar. "Kuwait - Oil Well Fires Did Little Damage>
Reuters. "Kuwait Environment Still Scarred by Gulf War", October 27, 1993.
Reuters. "Kuwait Oil Output Nears Pre-Gulf War Levels", December 26, 1993.
Reuters. "Kuwait Cabinet Debates Reports on Gulf Chemicals", September 24, 1995.
Reuters World Service. "Kuwait to Ask UN to Help Check Iraqi Sunk Boats", September 25, 1995.
United Press International (untitled), November 1, 1995.
The Xinhua News Agency. "Kuwait Claims 385 Million Dollars for Environmental Damage", September 5, 1995.
Zimmer, Carl. "Ecowar", Discover, January 1992, p. 37.
Penny Kemp, "For Generations to Come" in Phyllis Bennis and Michael Moushabec, Beyond the Storm (Brooklyn, New York: Olive Branch Press, 1991), p. 327.
"Kuwait Oil Output Nears Pre-Gulf War Levels", Reuters, December 26, 1993.
Kemp, op. cit., p. 327.
Carl Zimmer, "Ecowar", Discover, January 1992, p. 37.
Ibid., p. 38.
Kemp, op, cit., p. 327.
Ibid., pp. 327.
Ibid., pp., 327-328.
Amal Kumar Naj, "Kuwait - Oil Well Fires Did Little Damage To the Global Environment, Study Says", The Wall Street Journal, May 15, 1992.
Ibid., p. 332.
Zimmer, op. cit, pp. 38-39.
Kemp, op. cit., pp. 332-333.
See Inal Ersan, "Much Gulf War Pollution Cleared but Leaks Pose Risk", Reuters, August 24, 1995.
Kemp, op. cit., p. 333.
"Scientists Say Persian Gulf Shoreline Still Devestated", Cable News Network (CNN) Transcript #358, May 11, 1993.
"Kuwait Environment Still Scarred by Gulf War", Reuters, October 27, 1993.
"Kuwait Cabinet Debates Reports on Gulf Chemicals", Reuters, September 24, 1995.
"Kuwait to Ask UN to Help Check Iraqi Sunk Boats", Reuters World Service, September 25, 1995.
See United Press International (untitled), November 1, 1995.
The total cost of Kuwait's direct damage compensation claims against Iraq are valued at up to $170 billion, and these costs do not cover the cost of Kuwait's liberation and reconstruction. Kuwait has estimated that the direct damage value of Kuwait's losses sustained during the Iraqi occupation may reach $700 billion. See "Kuwait Claims 385 Million Dollars for Environmental Damage", The Xinhua News Agency, September 5, 1995.
John Cooper, "Kuwait: Project Plans Add to Oil Asset Value", Middle East Economic Digest, April 14, 1995.
CIA World Factbook, 1995 (Washington, D.C.: Central Intelligence Agency, 1995).
See Ahmad Mardini, "Gulf Environment: Gulf Takes a Unified Stand on Environment", Inter Press Service, September 11, 1995.
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