VII. FOREIGN POLICY

From the time I assumed office four years ago this month, I have stressed

the need for this country to assert a leading role in a world undergoing

the most extensive and intensive change in human history.

My policies have been directed in particular at three areas of change:

--the steady growth and increased projection abroad of Soviet military

power, power that has grown faster than our own over the past two decades.

--the overwhelming dependence of Western nations, which now increasingly

includes the United States, on vital oil supplies from the Middle East.

--the pressures of change in many nations of the developing world, in Iran

and uncertainty about the future stability of many developing countries.

As a result of those fundamental facts, we face some of the most serious

challenges in the history of this nation. The Soviet invasion of

Afghanistan is a threat to global peace, to East-West relations, and to

regional stable flow of oil. As the unprecedented relations, an and

overwhelming vote in the General Assembly demonstrated, countries across

the world, and particularly the nonaligned, regard the Soviet invasion as a

threat to their independence and security. Turmoil within the region

adjacent to the Persian Gulf poses risks for the security and prosperity of

every oil importing nation and thus for the entire global economy. The

continuing holding of American hostages in Iran is both an affront to

civilized people everywhere, and a serious impediment to meeting the

self-evident threat to widely-shared common interests, including those of

Iran.

But as we focus our most urgent efforts on pressing problems, we will

continue to pursue the benefits that only change can bring. For it always

has been the essence of America that we want to move on, we understand that

prosperity, progress and most of all peace cannot be had by standing still.

A world of nations striving to preserve their independence, and of peoples

aspiring for economic development and political freedom, is not a world

hostile to the ideals and interests of the United States. We face powerful

adversaries, but we have strong friends and dependable allies. We have

common interests with the vast majority of the world's nations and

peoples.

There have been encouraging developments in recent years, as well as

matters requiring continued vigilance and concern:

--Our alliances with the world's most advanced and democratic states from

Western Europe through Japan are stronger than ever.

--We have helped to bring about a dramatic improvement in relations

between Egypt and Israel and an historic step towards a comprehensive

Arab-Israeli settlement.

--Our relations with China are growing closer, providing a major new

dimension in our policy in Asia and the world.

--Across southern Africa from Rhodesia to Namibia we are helping with the

peaceful transition to majority rule in a context of respect for minority

as well as majority rights.

--We have worked domestically and with our allies to respond to an

uncertain energy situation by conservation and diversification of energy

supplies based on internationally agreed targets.

--We have unambiguously demonstrated our commitment to defend Western

interests in Southwest Asia, and we have significantly increased our

ability to do so.

--And over the past four years the U.S. has developed an energy program

which is comprehensive and ambitious. New institutions have been

established such as the Synthetic Fuels Corporation and Solar Bank. Price

decontrol for oil and gas is proceeding. American consumers have risen to

the challenge, and we have experienced real improvements in consumption

patterns.

The central challenge for us today is to our steadfastedness of purpose. We

are no longer tempted by isolationism. But we must also learn to deal

effectively with the contradictions of the world, the need to cooperate

with potential adversaries without euphoria, without undermining our

determination to compete with such adversaries and if necessary confront

the threats they may pose to our security.

We face a broad range of threats and opportunities. We have and should

continue to pursue a broad range of defense, diplomatic and economic

capabilities and objectives.

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