In the Magazine

In China today, economic reform continues apace. Political liberalization, however, remains essentially frozen -- as it has been since the tragic suppression of student demonstrations in the spring of 1989. The massive student protests, which filled Beijing's Tiananmen Square and other public places in cities throughout China, were meant to push the country's authoritarian rulers toward political reform. They failed.

Washington faces two enormous tasks in forming economic policy: it must preserve U.S. economic supremacy while defusing the bitter resentment that America's clout provokes abroad. A grand bargain with developing countries is badly needed. For starters, America should slash its trade barriers in agriculture and textiles in return for a global accord on intellectual-property rights.

The U.S. military dominates the world, holding a qualitative edge over friend and foe alike. But that edge may now be slipping. Although the armed forces themselves remain sharp, the institutions that support them are in trouble. Bad management and low morale have weakened America's security establishment and may soon undermine the nation's military power. Washington must make major changes, and fast.

Last autumn's fresh outbreak of violence between Palestinians and Israelis has shaken an assumption that has reigned since the 1993 Oslo peace accords: that negotiations and interim agreements can lay the roadwork for a lasting peace. Now Oslo's delegitimization has swayed public opinion in Israel and the occupied territories away from compromise and toward more radical solutions.

Recent political transitions in Belgrade and Zagreb have created a historic chance to make lasting peace in the Balkans. Torn by ethnic strife for a century and a half, the region must now choose between disintegration into ever-smaller ethnic states and integration into the European Union. The EU must actively facilitate the latter, or the Balkans could suffer another round of bloody war.

Doomsayers predict that globalization will weaken national governments. They should bite their tongues. Global governance will of course grow in step with economic integration. But it will actually express and promote, rather than suppress, the interests of nation-states.

In international politics, transnational interest groups are gaining clout -- but they lack an institution to represent them. Civil society must make its many voices heard. The global era needs a global parliament.