GAH! Jules, that article!

Sorry, but I must protest just a bit:
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The countries above Australia are all UN Security Council permanent members -- Britain (21 wars), France (19), US (16) and Russia-USSR (9).
This would indicate that the USSR was a (comparatively) peaceful place though not tens of thousands, not hundreds of thousands, but millions upon millions died in the forced labor gulag. The nation that brewed so many germs in the ‘Stans for decades that we are obliged to send them massive aid to clean it up today. Stalin had actual execution quotas for his own citizens during this "peaceful" time. Of course Iraq just glows, too. Only a couple of wars in the past few decades...though one of those wars lasted about a decade, utilized chemical weapons and took a million lives. Oh, but those awful Brits and French! Such is the problem with eliminating context, and duration for that matter...
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But the report is likely to attract criticism from the US for attributing the decline of war not to the final US victory in the Cold War but to a post-1992 upsurge in UN preventative diplomacy and peacekeeping missions.
Why the upsurge in peacekeeping activity? Gee...that would be the end of the cold war (and what ended that? Hm…I’d say that had a wee bit to do with US involvement). During the cold war no one bothered with silly diversion expenditures like UN peacekeeping missions. For the most part, they sat at home, waiting. The military draft was still in force in much of Europe a that time.
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Professor Mack, who was director of the strategic planning unit in the office of UN Secretary-General Kofi Annan from 1998 to 2001, cites several examples, including a sixfold increase in UN efforts to prevent wars from starting, a fourfold increase in UN peacemaking missions to end unresolved conflicts and an elevenfold increase in the number of states made subject to UN sanctions.
I might agree with this, if there is anyone in the room who could list exactly what wars the UN has prevented from starting. In what hot spot is the UN currently promoting peace and tranquility, which would otherwise be overwhelmingly violent? Let’s list all of the UN historical and/or currently sanctioned states. There aren’t many. Afghanistan, Angola, Cote d’Ivoire, the Democratic Republic of the Congo, Ethiopia and Eritrea, Haiti, Iraq, Liberia, Libya, Rwanda, Sierra Leone, Somalia, South Africa, Southern Rhodesia, Sudan and the former Yugoslavia. How many of those countries escaped violence as this article would indicate? Add to that the insult that many of those required peacekeeping forces were provided by the governments that are counted in the above war tally. What a monumentus leap of logic to suggest that the UN sending in the forces is "promoting peace" while simultaneously maintaining that the nations from which those forces came are "promoting war" for providing them.

Okay, Whew! Had to say that. I'll answer the questions now. :
Do you share my cautious optimism at the apparent decline of large-scale international conflict?I am not certain that this is entirely cause for optimism as asymmetrical warfare (like terrorism) is increasing. I believe that the there is likely to be an upsurge in violence under the new dynamic, rather than the opposite. We are also seeing an upsurge in internal violence (link at the bottom of my post).
But on that note, I do think that large-scale conflicts are on the decline. The reason is the cost to gains equation. There aren’t many spoils of large-scale war, which was the case in the past. A country has little to gain by invading another (the Iraq was cost hundreds of Billions, for instance) after which the invading government is held responsible for reconstruction costs and stability. Most victories are phyrric (sp?). South Korea, for example, cannot afford a war with the north. It would bankrupt them (and us for that matter). They cannot absorb the North's economy. On the other hand, technological trends make it possible for smaller groups to attain military effectiveness. Asymetrical warfare is likely to continue in the future, with smaller groups (and radical fringes) blackmailing larger ones, and radical groups aren't necessarily dissuaded by the threat of mass retaliation as would be the case for most stable governments. This is a potentially destabilizing situation and could make for a more dangerous world. The “cold war “was actually a very peaceful time by historical standards. Our (US) troops have been deployed more times since the end of the cold war than they ever were during that several-decades-long period. Historically that is the megapolitical pattern for decline.
To what factors do you attribute the shift away from country-vs-country conflicts towards internal conflicts, insurrections and terrorism? Power is devolving (the number of governments in the world has tripled since World War II), and smaller groups are able to gain military effectiveness. This pattern has been played out historically. The stirrup led to feudalism. Gunpowder led to the ascension of the European empire and the birth of the USA. Nuclear weapons led to the cold war and superpowers. Now, small (in some cases radical) factions are gaining momentum and if the pattern continues the larger the government, the more vulnerable they are. It's the cycle of centuries. Sorry to be a downer, just being logical as I see it. Maybe I'm wrong.
What can our leaders (and us) do to continue this downward trend and extend it into smaller-scale and more anarchic conflicts, including terrorism? Not much. Husband up our resources and play smart, and accept the new paradigm and take measures to prevent and undermine it.
Edited to add: I just started reading the recent
Human development report. Take a look at figure 5.1 and the astronomical number of internal conflicts. The time period between the late 1940s to 1975 looks serene by comparison to what happened after. The world today is a violent place, though the conflicts are mainly internal.