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SMALL BIZ SUPPLEMENT August 13 Table of Contents


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AUGUST 13, 2001

International Outlook
Edited by Rose Brady


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Northern Ireland: The Clock Is Ticking for Blair

Fixing Russian Schools

Air France's Big Payout


Northern Ireland: The Clock Is Ticking for Blair

It's the moment of truth for the Northern Ireland peace process. The much-hailed Good Friday Agreement of 1998 is in danger of falling apart. The pact spelled out a settlement to end three decades of strife and establish a power-sharing agreement between the Catholic and Protestant communities in the province. Its collapse would set back years of careful negotiating by the British and Irish governments.

A halt to the peace process would also raise the specter of renewed violence in Northern Ireland, and possibly on the British mainland. Already, rioting and sectarian shootings are again becoming commonplace. "It is a very dangerous situation--the two communities are more polarized than they were" before the agreement, says Billy Hutchinson, a former paramilitary leader who now sits in the Northern Ireland Assembly, the regional legislature elected as a result of the Good Friday pact.

IMPASSE. The crisis is coming to a head. British Prime Minister Tony Blair faces an Aug. 12 deadline for a decision on the future of the Northern Ireland government--unless there's a breakthrough in the standoff that has developed between the Ulster Unionists, the province's largest party, and Sinn Fein, the political arm of the Irish Republican Army. At issue is whether the IRA will hand over its hidden caches of arms or at least permanently disable them. Northern Ireland's top politician, First Minister and Ulster Unionist leader David Trimble, sparked the crisis by resigning his government post on July 1 to protest IRA delays in handing over its weapons.

Blair and his Irish counterpart, Bertie Ahern, have been struggling to come up with a formula that could end the standoff. Otherwise, Blair will either have to reimpose direct rule by Britain or call new Northern Ireland Assembly elections. Neither of those options is attractive: Blair is eager to lower Britain's profile in Northern Ireland, not boost it. And calling new elections risks lifting the fortunes of hard-line parties on both sides of the political divide--Ian Paisley's Democratic Unionist Party and Sinn Fein. That would make forging political compromises in a new government even more difficult.

But Blair's and Ahern's proposals may be rejected. Unveiled on Aug. 1, they look bound to disappoint the unionists because they skirt the issue of weapons. Instead, they focus mainly on measures designed to appeal to the IRA, such as reform of the largely Protestant police force and dismantling British army posts. The hope, say insiders, is that the IRA will now respond with a statement on how it is going to disarm.

Trimble is also gambling that his threat to scuttle the regional government will shame the IRA into making concessions. But without such a gesture, says a Trimble aide, the Ulster Unionist leader will soon push for a review of the Good Friday agreement. He is likely to press for Sinn Fein, which now holds two posts in the regional government, to be barred from such positions as long as the IRA refuses to disarm.

If the Good Friday agreement does come apart, that would dash the best hope for peace in the province in decades. What is troubling about this contretemps is that the province's leaders are putting their constituents' welfare at risk to achieve their own political aims. Not only do the residents of the province fear more shootings and violence, but the prospect of more strife could hit the local economy, which has prospered as businesses welcomed peace with investment. Blair had hoped to count peace in Northern Ireland as one of his great achievements. He has a long way to go.

By Stanley Reed in London


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GLOBAL WRAPUP
Fixing Russian Schools

Without a fresh infusion of funds, Russia's tattered educational system threatens to collapse, warns a top-level working group directed by President Vladimir V. Putin to produce a rescue plan. It will take some $18 billion just to bring the basement-level salaries of school teachers up to the $100-per-month average wage of all Russian workers. Dealing with other problems, such as rundown schools and shortages of resources, could take billions more.

One idea to raise money: sell university slots to overseas students to bring in as much as $3 billion annually. The most promising target is The number of Chinese students attending Russian universities is expected to increase from the current level of 10,000 to 100,000 within the next three years. Putin himself is expected to decide soon whether to levy new taxes to provide additional support for Russian education.


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GLOBAL WRAPUP
Air France's Big Payout

It was a record settlement for an airplane crash in Europe: Air France has agreed to pay $150 million to the families of the 100 passengers who were killed when its Paris-to-New York Concorde flight crashed on July 25 a year ago. The company settled with the families after their lawyers threatened to file suit in the U.S., where a jury might have been expected to award an even bigger payout for pain and suffering.

The settlement comes as Air France prepares to resume Concorde flights in October. British Airways, which also grounded its Concorde flights, plans to start up service again in September.




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