Panama will permit the United States to continue to use Howard Air Force Base as a drug interdiction center. This means, in effect, that U.S. forces will continue to be able to guarantee the security of the Panama Canal zone, putting to rest fears that were raised by the 1976 treaty turning the Canal over to Panamanian authorities.

With elections scheduled for October, Nicaragua's Sandinistas are moving ahead in the polls. Given declining U.S. interest in the region since the fall of communism, and the probable commitment of Cuban resources, the return of the Sandinistas is possible.

According to a report released by Hong Kong's Trade Development Council, the next wave of foreign direct investment in China is expected to be targeted at the central and western provinces. This is in keeping with Beijing's desire to reduce economic disparities between the coastal and the interior provinces. The shift is already underway.

The decade ending 2005 will be marked by two contradictory trends. On one hand it will be a period of unprecedented global economic prosperity and growth. On the other hand, it will become a period of increasing fragmentation and tension in the international system.