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SAUDI ARABIA is undergoing the most serious population changes in its history. With modern medicine and conveniences, the birth rate is up and the mortality rate is down, resulting in an astounding average annual population growth of 3.4%. The number of working-age Saudis has swelled from 7.3 million to 9.8 million in just five years. But not everything is going well. Half of the population is under 18. Economic growth is only 2.2%. Annual per capita income, which in 1980 was $15,700 and about 110% of the US, is now only $5,700 (about 20% of the booming US).--Stephen V Cole

ARMY MUST CHANGE OR DIE: With another massive defense review in the offing, Deputy Secretary of Defense John Hamre has issued a stern warning to the Army, saying that it "cannot simply be what it was, and think that it is going to be relevant for this new, complex world that is emerging". This was seen as a warning to sharply reduce the size of the Army and convert its divisions into quickly deployable brigades with high-speed vehicles and long-range weapons. The Army is fighting back, insisting that it is the most relevant of US forces since it carries the lion's share of overseas missions and deployments such as peacekeeping, nation building, and deterrence. Army generals insist that their new digital divisions will answer Hamre's call, but insiders at the top levels say that digitization will not be enough in itself.--Stephen V Cole

GERMAN BUDGET CUTS: Massive across-the-board cuts in the German budget will hit defense particularly hard. Leftwing politicians are already pronouncing two key armored vehicle programs to be "dead issues", but the Army and industry insist that they expect the contracts to go through because the vehicles are needed. The GTK is intended to provide a vehicle with large internal volume for various rear area tasks (command posts, medical, supply, maintenance) while the KRK-Fuchs (an upgrade of the Fuchs 8-wheel APC is needed for peacekeeping forces.--Stephen V Cole