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Congressional Testimony
February 22, 2000
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 6934 words
HEADLINE:
TESTIMONY February 22, 2000 STANELY O. ROTH ASSISTANT SECRETARY OF STATE EAST
ASIAN AND PACIFIC AFFAIRS SENATE FOREIGN RELATIONS EAST ASIAN
AND PACIFIC AFFAIRS EAST ASIAN HOTSPOTS
BODY:
By
Stanley 0. Roth Assistant Secretary of State For East Asian and Pacific Affairs
February 22, 2000 Mr. Chairman, thank you for the opportunity to testify before
your subcommittee this afternoon, and thank you particularly for choosing to
begin the legislative year with an overview of developments in the region. I
hope this hearing will establish a broad framework as we deal with particular
issues across the region in the coming year. At this time last year, an overview
of the region would have been cast in tones of measured pessimism. The
continuing effects of the financial crisis seemed to offer the inevitable
prospect of a long and difficult recovery. Talk of a coming Pacific century
seemed to be an inconvenient relic of another time. Instead, regional leaders
were pre-occupied with the consequences of economic crisis and the potential for
political instability. Some spoke darkly of a lost generation. But that
pessimism has largely disappeared in the wake of the surprising economic
recovery in most of the region. So I thought it would be appropriate, Mr.
Chairman, to begin my testimony with some gomment about the regional economy.
After that I will briefly review some salient developments in countries of
particular importance to U.S. interests in the region. Economic Recovery This
past year has seen a remarkable recovery from the Asian financial crisis. It
was, by any measure, the major regional development of the past year. Two of the
countries worst hit by the crisis - Thailand and the Republic of Korea - posted
robust GDP growth figures of five and ten percent respectively. Other countries,
including China and the Philippinest also ended the year with higher GDP growth
than had been predicted at the beginning of the year. Inflation was reduced
substantially across the region. With returning growth came renewed optimism. To
be sure, we are not back to pre-crisis economic levels. Clearly there are
challenges remaining. The financial crisis was a harsh reminder that economies
must be transparent and, financial institutions must lend responsibly. Market
discipline and the rule of law must be strengthened to curb the corruption and
cronyism that were responsible, at least in part, for the economic suffering of
the recent past. Some Asian leaders and economists have ruefully suggested that
the recovery may have come too soon, that in some countries the recovery may
dissipate the motivation to make reforms that are still required to ensure the
long-term health of the economy. In addition, workers in a number of countries
have yet to regain the standard of living they had enjoyed during the previous
boom times. Even in Korea, the fastest recovering economy, unemployment is still
higher than it was before the crisis. Where workers have secured new jobs, many
are earning less than they did before, while prices have risen. The social
safety nets, which were so clearly and painfully absent during the financial
crisis, have yet to be put in place in A number of countries. Finally, it should
be recognized that there are two wild cards, which could slow or even derail the
regional recovery. If U.S. economic growth should falter or Japan's economy take
a severe downturn, this could significantly reduce markets and investment
sources important to regional recovery. The Revival of Regional Institutions
When they faced economic difficulties, countries in the region quite
understandably turned inwards. As their economies have revived, there has been
an equally understandable renewal of interest in regional institutions, such as
APEC and ASEAN. To cite just one example, the ASEAN summit in Manila last
November was the occasion for a successful "ten plus three" meeting between
ASEAN, China, Japan and Korea which offered an opportunity for an unstructured
dialogue on both economic and security issues which concern both Northeast and
Southeast Asian nations. Alliance Partnerships With that, let me turn to some of
the specific countries and bilateral relationships that I know are of interest
to the Committee. Let me begin with the alliance partnerships, which have been
the firm bedrock of U.S. interests in the region since World War II. And, let me
offer an unequivocal assessment: our alliance partnerships have never been
stronger, have never been more important than they are today. Japan No
relationship is more important to the stability of the Asian Pacific region than
the U.S.-Japan alliance. This statement has become such a mantra that we
sometimes skip past it, but we cannot afford to do so for one simple reason: our
security depends on it. Our bilateral security relationship with Japan is as
strong as it has ever been, and our bases in Japan remain fundamental to our
strategic presence in Asia. Japan is host to 47,000 U.S. troops, second only to
Germany, and is home to the only carrier group home ported outside the United
States We have worked hard with the Obuchi government to strengthen the
U.S.-Japan security alliance. We agreed on revising the Defense Guidelines to
enable us to cooperate more effectively in response to a regional crisis. We
agreed to fund joint research on Theater Missile Defense (TMD). With the 2000
G-8 Summit scheduled to take place next July in Okinawa, the Obuchi government
has also been working hard to resolve U.S. basing issues on the island,
particularly the relocation of the Marine Airstation in Futenma. On November 22,
Okinawa Governor Inamine announced his support for relocating this base to a
less crowded site in northern Okinawa. On December 28 the Japanese cabinet
formally approved the Futenma relocation. The U.S.-Japan cooperation on a range
of foreign policy issues remains a key aspect of our partnership. Japan has
played a critical role in KEDO. It has agreed to fund a significant portion of
the costs of the light water reactor, which KEDO will build at Yongbyon in North
Korea, and it has joined in cementing a firm resolute trilateral approach with
South Korea and the U.S. toward North Korea. In Southeast Asia, Japan assisted
both Thailand and Indonesia in responding to the Asian Financial Crisis. Japan
has also supported the referendum process in East Timor and helped fund the
redevelopment of East Timor and its transition to nationhood. A Japanese
official now serves as the Deputy UNSYG Special Rep for the UN Transitional
Authority in East Timor under De Mello. Outside the region, Japan has provided
political and financial backing for peace implementation and reconstruction
efforts in Kosovo and is a major supporter of the Middle East Peace Process. In
short, Japan's interests are global in scope, and as close allies, the U.S. and
Japan share many of the same goals and work together on a broad range of issues.
Let me turn now to issues that we and Japan are working to resolve, but let me
underscore that these issues occur within the context of a strong and vibrant
relationship. On the security side of the ledger, we must complete successfully
negotiations begun earlier this month at the working-level to renew the
five-year Special Measures Agreement, one of ' the two key components of Japan's
Host Nation Support (HNS) for our troops stationed in Japan. Japan provides the
most generous HNS of our allies, some $4.5 billion. This is not merely a
financial contribution, but, as Amb. Foley noted in an op ed in "The Asahi
Shimbun" last week, it is Japan's investment in its own security and in the
stability of the region in which it lives and which is essential to its economic
well-being. On the economic side, the health of the Japanese economy remains a
continuing concern both for the government of Japan and for its trade and
investment partners, including the United States. Despite continuing fiscal
stimulus efforts by the Obuchi government, domestic demand remains weak, and
Japan's economy continues to sputter. Japan's economic malaise was an important
factor in our record high bilateral trade deficit in 1999, as Japanese demand
for our exports remained depressed, while our strong economy continued to absorb
their imports. We 'continue to urge Japan to use all tools for domestic
demand-led growth, including fiscal and monetary policy, deregulation and
restructuring, and more openness to foreign direct investment. We are
particularly concerned about prospects for telecommunications liberalization,
which would generate new jobs and business formation in Japan and opportunities
for US firms; in high level negotiations, we are asking Japan to cut telecom
interconnection rates, to increase competition in the marketplace. - The
Republic of Korea Later this year we will begin commemorating the fiftieth
anniversary of the Korean War. This anniversary finds our relationship with the
Republic of Korea closer than it has ever been. I discussed earlier Korea's
remarkable economic recovery. Here I would like to focus on our continued and
growing cooperation in managing the threat posed by North Korea. Dealing with
the threat of North Korean nuclear and missile proliferation is one of the
greatest challenges we face in East Asia. Thanks to the Agreed Framework and the
Korean Energy Development Organization (KEDO), the very dangerous nuclear
facilities at- Yongbyon are frozen and under international inspections. South
Korea and Japan have both assumed the vast bulk of the cost of the light water
reactor (LWR) project. It is essential that the U.S. continue to fund our
contribution to KEDO for heavy fuel oil. Only then will this freeze remain in
place. However, a year ago, we faced a new crisis: North Korea's launch of a
Taepodong missile over Japan in August 1998. Intelligence had also indicated
that North Korea might be developing an underground nuclear site in violation of
its Agreed Framework obligations. Amb. Chuck Kartman engaged in intense
negotiations with North Korea to gain access to that suspect site to deal with
our concerns. As you know, our determined pursuit of our concerns regarding the
underground site resulted in access to it last year, and confirmation that it
did not contain a reactor or nuclear processing facility, nor was it suitable to
house either one. We will return to the site again this year. Over the past
year, we undertook a fundamental review of. our policy towards the DPRK. Thanks
to the leadership of former Defense Secretary Bill Perry and State Department
Counselor Ambassador Wendy Sherman, we have created a new framework for our
approach to North Korea, built upon the principle that the U.S. remains ready to
markedly improve its ties with the DPRK, but only as the DPRK deals-with issues
of concern to the U.S., particularly in the missile and nuclear areas.
Significantly, as we pursued the policy initiatives recommended by Dr. Perry,
North Korea agreed to suspend long-range missile testing while we carry on
high-level talks to improve relations with Pyongyang. We have also laid the
groundwork for the visit to Washington by a high- level DPRK official -- a visit
which we expect will fix the dates for renewed talks aimed at eliminating the
DPRK's long-range missile program, and new talks aimed at dealing with our
remaining concerns about their nuclear weapons program. At every step along the
way, we are consulting closely with our ROK allies, as well as with Japan,
building a solid structure of greatly enhanced allied coordination and
cooperation. The new policy approach we have developed is the product of that
unprecedentedly close coordination. None of the progress we have made would have
been possible without the visionary leadership of President Kim Dae Jung. Taking
office in the midst of Korea's unprecedented economic crisis, h ' e has not only
led Korea through the challenges of economic recovery and restructuring, he has
also undertaken a resolute engagement policy designed to expand contacts
with-the DPRK and seek reconciliation with Pyongyang. U.S. policy strongly
supports and complements ROK efforts to engage North Korea in a process that
holds the hope of reducing tensions, defusing distrust and misunderstanding,
promoting dialogue, and enhancing stability on this troubled peninsula.
Ultimately, the problems of peace and security on the Korean Peninsula must and
should be resolved by Koreans. Pyongyang should be clear that we and our allies
are serious in desiring to engage positively and build new ties. But we and
others who seek better ties with the DPRK are under no illusions. Whether we are
able to make further progress on these issues will depend on the North's
willingness to engage seriously with us and to honor its commitments, including
its Agreed Framework obligations. We have extended a hand of cooperation to
Pyongyang. We trust the DPRK will have the wisdom to grasp it. 0 the Philippines
our security alliance with the Republic of the Philippines is among our oldest
in the Pacific, and 1999 saw a significant revitalization of this relationship.
On June 1, 1999, the Visiting Forces Agreement between the Philippines and the
United States entered into force. Due in no small part to the strong support of
Philippine President Estrada, the VFA has made it possible for us to resume
normal military-to-military contacts, including numerous ship visits and
exercises. Last month, our two countries held the first large-scale joint
exercise since 1993, one which involved over 2,500 U.S. military personnel. The
Philippines has played an important part in the international effort to assist
in East Timor. It provided 750 troops for INTERFET. Now, a Philippine general,
Jaime Los Santos has taken command of the military component of UNTAET. The
Philippine military requires significant modernization, yet faces very real
funding constraints. We have agreed to help assess the Philippines' defense
needs so that it can plan a cost- effective acquisition and training program
over the next several years. We have already provided a number of excess defense
articles, including coastal patrol craft and trucks. For the last two years, we
have allocated $1 million in FMF for the Philippines, and we are seeking an
increase in FMF to $2 million for FY 01. This will support the Philippines' need
for modern equipment as it expands its participation in peacekeeping while
providing for its external defense and internal security in the face of an
ongoing Communist insurgency. - Australia Australian-American cooperation is so
consistently strong that it is hard for it to generate the kind of public
attention it deserves. Australia has been by our side in every battlefield from
Korea to Desert Storm. This past year, Australia demonstrated once again why it
is such a valuable partner and leader in the region. When violence erupted in
East Timor in September, Australia stepped forward to organize and provide the
bulk of the personnel for the multinational force that was sent to East Timor
under the authorization of the UN Security Council. By its actions, Australia
provided a role model about how nations can take the lead in responding to
crises in their own region. Expressions of support for Australia's initiative by
you, Mr. Chairman, and others in the Congress were much deserved and, I believe,
much appreciated. Thailand Thailand was the first country to be hit by the Asian
Financial Crisis, and the economic crisis led to a political crisis. one of the
strongest democracies in the region, the Thai responded by installing a new
government committed to making the tough economic choices necessary to enable
recovery. Over the past two years, the government of Chuan Likphai has won
international praise for its willingness to press forward with the reforms
necessary to ensure renewed growth and greater prosperity for all Thai. Prime
Minister Chuan has also led his country into a more active role on the
international stage. We are pleased that Thai Deputy Prime Minister Supachai
will succeed Mike Moore as Director General of the WTO in 2002. We have also
welcomed Thailand's participation and leadership in INTERFET for which it
provided the deputy commander. We are looking forward to Thailand hosting the
ASEAN Regional Forum and Post-Ministerial Conference Meetings this summer. Other
Countries in the Region - China To put it simply, U.S.-China relations went
through difficult times in 1999. Despite enormous efforts and high expectations
on both sides, it proved impossible to conclude a WTO bilateral agreement at the
time of Premier Zhu Rongjils visit last April. In May, U.S. planes accidentally
bombed the Chinese Embassy in Belgrade; Chinese demonstrators damaged a number
of U.S. diplomatic facilities in China. The combination of these two events led
to increased bilateral tensions and the suspension of much of our engagement
efforts. President Clinton's meeting with President Jiang in Auckland in
September turned the tide and provided the impetus for the conclusion of the WTO
bilateral on November 15. This was followed by our December 15 agreement on
handling property issues connected with the bombing, helping to close that
regrettable chapter. On January 10 of this year, President Clinton announced the
Administration's determination to win permanent normal trade
relations for China, stating the obvious but essential fact: "Bringing
China into the WTO is a win-win decision. It will protect our prosperity, and it
will promote the right kind of change in China." We look forward to working with
the Congress in coming months to make that win-win a reality. With bilateral
relations on a positive course, we are working to engage China in a number of
areas of fundamental national interest to the United States. Deputy Secretary of
State Strobe Talbot, led an impressive group -- including Under Secretary of
Defense Slocombe, Vice Chairman of the Joint Chiefs of Staff General Ralston and
Deputy National Security Advisor Steinberg -- to Beijing last week for a
strategic dialogue with senior Chinese officials. They discussed our respective
strategic views of the world, including regional issues such as the Korean
peninsula, Indonesia, and the strategic equation in South Asia as well as our
concerns over the proliferation of weapons of mass destruction. While we should
not have any illusions about our differences on some of these subjects, I think
it is worth remembering that China believes its national interests, like our
own, are best served by a world where stability and security are the norm. We
are also carefully resuming our military-military contacts with China, in a
manner consistent with US national interests. It is important that our military
leaders are able to clearly understand one another, avoid potential problems
from lack of communication and be in a position to work together in areas where
we have mutual interests, such as avoiding incidents at sea. Within this overall
context, I should be clear that I am not in any way trying to minimize the
significant problems that remain. Clearly there remain difficulties in our
relationship with China. With regard to human rights, for example, we have
regularly and vigorously expressed our concern with China's violation of
internationally recognized standards of human rights. On January 11, the
Administration announced that the United States would sponsor a resolution at
the UN Commission of Human Rights when it meets in Geneva in March. We took this
step because of the clear evidence that China's human rights record has
deteriorated seriously over the past year. At this point, Mr. Chairman, let me
offer a few points about Taiwan and cross-straits relations. I want to
underscore once more the three principles that underlie the Administration's
position on cross-Strait relations: Our "one China" policy is unchanged; - We
have an abiding interest that there be a peaceful approach by both sides to
resolving differences; and, - We support dialogue as the best way for
differences between the two sides to be resolved. With that, let me review
briefly some other issues regarding Taiwan. First, the Administration supports
Taiwan's accession to the WTO on its merits, and we hope both Taiwan and the PRC
will accede this year. Second,, Taiwan is in the midst of an open democratic and
energetic campaign to select a successor for Li Teng-hui as president. It is a
fascinating and encouraging example of the democratic process at work. All three
candidates have expressed their support for stable cross-strait relations. I
hope that whoever wins -- and, of course, the PRC's leaders as well -- will set
a high priority on restoring a meaningful cross- strait dialogue. Such a
dialogue, more than any military equipment, is the key to Taiwan's stability and
security. At the same time, there should be no doubt that the Administration
will continue its faithful implementation of the security, arms sales, and other
provisions of the Taiwan Relations Act. The efforts of some to amend this
successful framework for our unofficial relations with Taiwan are not merely
unnecessary, they actually weaken Taiwan's security. That is why, Mr. Chairman,
like you, the Administration is strongly opposed to the Taiwan Security
Enhancement Act. Indonesia As you and I have discussed before, Mr. Chairman,
Indonesia is a country of considerable importance to U.S. interests in the Asia
Pacific region. The past twelve months have witnessed a successful transition
from an authoritarian regime toward a pluralistic, representative democracy.
Successful parliamentary elections in June and the selection of President
Abdurrahman Wahid in October enabled Indonesia's first democratic government to
take office since the 1950s. The new government came into office with the
broad-based legitimacy necessary to begin to confront Indonesia's daunting
economic and political difficulties. No one ever expected that President Wahid
or his new government would be able to resolve all of Indonesia's problems in
the first 100 days, or even 1000 days. With that caveat, the Government has made
a promising start in a number of areas: - President Wahid has successfully
asserted civilian control of the military. The suspension of General Wiranto
from the cabinet to await possible legal action for his role in East Timor is
only the most dramatic sign of this important transformation. - Indonesia signed
a memorandum of agreement for a new IMF program with the IMF on January 20,
2000, leading to the release of a new tranche of IMF funding, and coinciding
with renewed disbursements from the World Bank. - President Wahid freed
virtually all the remaining political prisoners from the Soeharto era by
December 1999, a total of 196 prisoners. - In Aceh, the government has initiated
a complex negotiating process with some of the many different factions demanding
a new political arrangement for that troubled province. While the outcome of the
process is uncertain, the government deserves considerable credit for seeking to
resolve these difficulties through negotiation rather than repression. -In all
of these areas, significant challenges remain ahead, but the crucial first steps
have been taken, and I am convinced that Indonesia's prospects are positive. The
U.S. has a profound interest in seeing a successful democratic transition in
Indonesia -- a fact reflected in the Secretary having identified Indonesia as
one of the world's four priority emerging democracies. Nor is our commitment
merely rhetoric. The President welcomed President Wahid to the Oval Office
shortly after he assumed the Presidency. UN Ambassador Holbrooke and Secretary
of Treasury Summers have both visited Indonesia since President Wahid took
office. In response to the urgency and importance of the need, U.S. bilateral
assistance to Indonesia is being increased to $125 million for FY 2000. The bulk
of this assistance will likely be used to help strengthen Indonesia's nascent
democratic institutions. We are awaiting the recommendations of an inter- agency
team that visited Indonesia in January to gauge how this U.S. investment can
most effectively accomplish this and other goals. Helping the Indonesians build
an effective and just judicial system, promote civil society, spur continued
economic reform, and professionalize national and local parliaments will be
among our priority concerns. Mr. Chairman, I recently had the honor to testify
regarding East Timor before this subcommittee in joint session with its HIRC
counterpart, so I will generally leave any concerns you might have on that
subject to question and answer. There is, however, one issue affecting our
future relations with Indonesia, which must be considered in the context of
Indonesia's actions in East Timor. That is the issue of accountability for past
atrocities. The President suspended U.S. military-to-military relations with
Indonesia last September because of our concern over the actions of the
Indonesian military in East Timor. Subsequently, as you know, the provision of
certain types of military assistance was conditioned by the Leahy language
contained in section 589 of the Foreign Operations Appropriation for FY 2000.
Until these conditions can be met, there will remain significant constraints on
our ability to have a full normal relationship with Indonesia. Concluding
Remarks In the interest of time, I have not sought to comprehensively cover all
of the countries within my jurisdiction, including some that I know are of
interest to members of this Committee. I would be happy in the question and
answer period to redress this selective focus to encompass all of the countries
of the Asia Pacific region.
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