[Mohoender]

On April 24, countries in the SCO further sign the Treaty on Reduction of Military Forces in Border Regions at Moscow. Slightly later, these same SCO members sign the Treaty of Good-Neighborliness and Friendly Cooperation, adding a political dimention to their cooperation in both civilian and military fields. Article 9 (When a situation arises in which one of the contracting parties deems that peace is being threatened and undermined or its security interests are involved or when it is confronted with the threat of aggression, the contracting parties shall immediately hold contacts and consultations in order to eliminate such threats) is effectively understood to be a defense pact by the West and the new alliance becomes known as the Shanghai Pact. Reactions are immediate: UK doesn’t hand sovereignty of Hong Kong to the PRC on July 1 (The first Sino-Western Crisis) and suspend plans to reduce its military. The French governement slightly raises military expenditures (It brings them back to 3.7% of its GDP), launches the long delayed second nuclear aircraft carrier and plan to further expend the navy. Sweden starts to modernize the equipments that had been put in storage and Germany, collaborating with Ukraine make the refiting program of 1993 a reality. In the meantime, the Italian National Conference last from January to March and results in a full recognition of the de facto situation while US diplomats succeed in bringing Albania, Greece and Macedonia to the discussion table. As a result, these three countries sign a mutual border agreement they think would provide some regional stability to the Balkans.

Not far away, in Albania, after failure of a pyramid investment schemes and the loss of $1.2 billion invested by the population, thousands of citizens gather daily, demanding reimbursement. Protests soon turn violent in the south, especially around the port city of Vlora, where numerous residents arm themselves with weapons looted from army barracks. President Sali Berisha declares a state of emergency, but rioting and destruction spread throughout the country, gripping the capital, Tirana, for two weeks. Finally, anarchy sweeps across the country and the southern half of Albania falls under the control of rebels and criminal gangs. On March 11, the members of the Socialist Party win a major victory when their leader Bashkim Fino is appointed prime minister. However, the transfer of power does not stop unrest and, fearing the spread of unrest outside Albania's borders, the United Nations authorize a force of 7,000 to direct relief efforts and to restore order. After the unrest, over 3,000,000 guns are missing, they soon appear on the international market and many are transfered to the Kosovo Liberation Army (UçK).

USSR proposes to recognize Ukraine independence in return for recognition of the Crimean Soviet Republic and for the transfer of all nuclear devices that had fallen under control of the Ukrainian government. Ukraine is reluctant to accept as this agreement implies that it definitely gives up claims on Crimea but, undermined by corruption, organized crime and a 60% reduction of its GDP, it finally accepts, gaining recognition from all Shanghai Pact members in October.

In Asia, tensions remain high between the two Koreas but as far as this year is concerned no agressive actions are taken by either Pyongyang or Seoul. Both regimes limit their actions to reinforcing their respective positions on the 38th parallel. China experiences a growing stability as the level of living improves while Japan economy continue to worsen. A 2.4% budget surplus in 1991 had turned to a deficit of 4.3% by 1996 and appears to move toward 10% by next year, with the national debt to GDP ratio reaching 100%.

In the Middle East, Grand Ayatollah Muhammad Muhammad Sadiq al-Sadris assassinated on February 19 in an obvious attempt to destabilize the Islamic Republic of Iraq. Whatever, this move proves unproductive as he is replaced by his son Muqtada al-Sadr, a radical leader of only 24.

Finally, the First Congo War comes to an end in May when Laurent-Désiré Kabila enters Kinshasa, procalmes himself President and changes the name of the country to Democratic Republic of Congo. The situation in South Africa worsens again and it slowly enters a civil war with heavy fightings taking place in the eastern half of the country.