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#10
World faces biggest challenge since Cold War
-study By Paul Majendie

LONDON, Oct 18 (Reuters) - The U.S.-led coalition against terrorism faces the world's most daunting challenge since the Cold War, a leading think-tank said on Thursday.

"A new strategic era has dawned," the International Institute for Strategic Studies (IISS) said in its annual report on the "Military Balance" around the globe, changed forever by last month's suicide attacks on New York and Washington.

"The political, financial and diplomatic challenges in prosecuting this campaign are enormous. The geopolitical challenges are huge," the Institute said.

For the coalition has to perform a delicate balancing act -- introducing a new regime in Afghanistan, supporting a fragile Pakistan and keeping the Middle East peace process alive.

All this has to be done with a new set of coalition partners that "will demand of the U.S. and its allies a form of hyper-engagement in world politics not seen since the height of the Cold War."

Gone are the old certainties for the United States.

"The most militarily capable nation in the world has been attacked on its own soil with devastating effect," it said.

And now the United States has a new invisible enemy which is "neither the old Soviet Union nor a potentially resurgent China."

Talks between India and Pakistan on the future of Kashmir promised much but delivered little, it noted. In addition, Pakistan faces the daunting prospect of a flood of Afghan refugees.

The Institute painted an equally grim picture elsewhere.

The think-tank said optimism in the Balkans proved short-lived and now more than 50,000 peacekeeping troops are tied down there.

"The same number of Russian federal troops are involved in the conflict in Chechnya, which is now in its third year and shows no real signs of stopping," the IISS said.

CONCESSIONS FOR RUSSIA

Giving the coalition backing has given Russian President Vladimir Putin a heaven-sent opportunity to win concessions from Washington over prosecuting Moscow's campaign in Chechnya.

And the report noted: "The Kremlin feels justified in its claim that there is a crescent of terror from the Balkans to the Far East."

The Institute doubted if the much-touted European Rapid Reaction Force would reach its "headline goal" by the year 2003 -- 60,000 troops being deployed within 60 days for up to a year.

The finger of blame was pointed at the European members of NATO for not coming up with the military investment. In air and sealift capabilities, NATO was almost totally reliant on U.S. muscle.

The outlook for Africa -- from the Congo to Somalia -- was bleak. Sub-Saharan Africa alone accounted for about half the world's 60,000 war casualties in the year to August 2001.

Singling out the struggles in Indonesia and the Philippines against separatists, it said there was considerable potential for regional instability in southeast Asia. Fatalities in Sri Lanka have already topped 6,000 this year.

In such an uncertain world, defence spending looked set to rise. Any peace dividends from the end of the Cold War are just a memory.

"Even before September 11, available budgets for 2001 suggested that this year's global military expenditure would be higher than in 2000 when it was $804 billion." the IISS said.

In the international arms trade, new orders rose in 2000 for the third year running and the United States accounted for almost half the global deliveries.

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